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):May 26, 1999
BEAR STEARNS ASSET BACKED SECURITIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 333-9532 13-3836437
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
245 Park Avenue
New York, New York 10167
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (212) 272-4095
Item 5. Other Events.
Filing of the Sale and Servicing Agreement, the Trust Agreement, the Indenture,
the Home Loan Purchase Agreement and the Administration Agreement
In connection with the offering of the United National Bank Home Loan
Owner Trust 1999-1 Home Loan Asset-Backed Notes, Series 1999-1, on March 26,
1999, Bear Stearns Asset Backed Securities, Inc. (the "Depositor") entered into
(i) a Sale and Servicing Agreement dated as of March 1, 1999 (the "Sale and
Servicing Agreement"), by and among the Depositor, as depositor, United National
Home Loan Owner Trust 1999-1, as Issuer (the "Issuer"), United National Bank, as
Seller (the "Seller"), Advanta Mortgage Corp. USA, as Servicer and U.S. Bank
National Association, as Indenture Trustee (the "Indenture Trustee"), (ii) a
Trust Agreement dated as of March 1, 1999 (the "Trust Agreement"), by and among
the Depositor, Wilmington Trust Company, as Owner Trustee and U.S. Bank National
Association, as Co-Owner Trustee, (iii) an Indenture dated as of March 1, 1999
(the "Indenture"), between the Issuer and Indenture Trustee, (iv) a Home Loan
Purchase Agreement dated as of March 1, 1999 (the "Purchase Agreement"), between
the Seller and Depositor, and (v) a Administration Agreement dated as of March
1, 1999 (the "Administration Agreement"), by and among the Issuer, U.S. Bank
National Association, as Administrator and United National Bank, as
Co-Administrator. The Trust Agreement is annexed hereto as Exhibit 4.1, the
Indenture is annexed hereto as Exhibit 4.2, the Sale and Servicing Agreement is
annexed hereto as Exhibit 10.1, the Administration Agreement is annexed hereto
as Exhibit 10.2 and the Purchase Agreement is annexed hereto as Exhibit 10.3.
Item 7. Financial Statements, Pro Forma Financial
(c) Exhibits
The following are filed herewith. The exhibit numbers
correspond with Item 601 of Regulations S-K.
Exhibit No. Description
4.1 Trust Agreement
4.2 Indenture
10.1 Sale and Servicing Agreement
10.2 Administration Agreement
10.3 Home Loan Purchase Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BEAR STEARNS ASSET BACKED
SECURITIES, INC.
By: /s/ Matthew E. Perkins
Name: Matthew E. Perkins
Title: Vice President
Dated: April 16, 1999
Exhibit Index
Exhibit Page
- ------- ----
4.1 Trust Agreement [ ]
4.2 Indenture [ ]
10.1 Sale and Servicing Agreement [ ]
10.2 Administration Agreement [ ]
10.3 Home Loan Purchase Agreement [ ]
TRUST AGREEMENT
among
BEAR STEARNS ASSET BACKED SECURITIES, INC.,
as Depositor
WILMINGTON TRUST COMPANY,
as Owner Trustee
and
U.S. BANK NATIONAL ASSOCIATION,
as Co-Owner Trustee
Dated as of March 1, 1999
UNITED NATIONAL HOME LOAN ASSET-BACKED SECURITIES, SERIES 1999-1
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.01.Capitalized Terms...........................................1
Section 1.02.Other Definitional Provisions...............................3
ARTICLE II
ORGANIZATION
Section 2.01.Name........................................................3
Section 2.02.Office......................................................4
Section 2.03.Purposes and Powers.........................................4
Section 2.04.Appointment of Owner Trustee................................4
Section 2.05.Initial Capital Contribution of Owner Trust Estate..........4
Section 2.06.Declaration of Trust........................................5
Section 2.07.Liability of the Owners.....................................5
Section 2.08.Title to Trust Property.....................................5
Section 2.09.Situs of Trust..............................................5
Section 2.10.Representations and Warranties of the Depositor.............5
Section 2.11.Federal Income Tax Allocations..............................6
ARTICLE III
THE CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01.Initial Ownership...........................................7
Section 3.02.The Certificates............................................7
Section 3.03.Execution, Authentication and Delivery of Certificates......7
Section 3.04.Registration of Transfer and Exchange of Certificates.......8
Section 3.05.Mutilated, Destroyed, Lost or Stolen Certificates...........9
Section 3.06.Persons Deemed Owners.......................................9
Section 3.07.Access to List of Owners' Names and Addresses...............9
Section 3.08.Maintenance of Office or Agency.............................9
Section 3.09.Appointment of Paying Agent................................10
Section 3.10.[RESERVED].................................................10
Section 3.11.[RESERVED].................................................10
Section 3.12.[RESERVED].................................................10
Section 3.13.Definitive Certificates....................................10
Section 3.14.Restrictions on Transfer...................................11
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.01.Certain Restrictions.......................................14
Section 4.02.Action by Owners with Respect to Certain Matters...........17
Section 4.03.Action by Owners with Respect to Bankruptcy................17
Section 4.04.Restrictions on Owners' Power..............................17
Section 4.05.Majority Control...........................................17
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.01.Certificate Distribution Account...........................17
Section 5.02.Application of Trust Funds.................................18
Section 5.03.Method of Payment..........................................20
Section 5.04.Segregation of Moneys; No Interest.........................21
Section 5.05.Capital Contributions......................................21
Section 5.06.Accounting and Reports to the
Certificateholders, the Owners, the
Internal Revenue Service and Others.......................21
Section 5.07.Signature on Returns Tax Partner...........................22
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01.General Authority..........................................22
Section 6.02.General Duties.............................................22
Section 6.03.Action upon Instruction....................................22
Section 6.04.No Duties Except as
Specified in this Agreement, the Basic Documents
or in Instructions.........................................23
Section 6.05.No Action Except Under Specified
Documents or Instructions..................................24
Section 6.06.Restrictions...............................................24
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.01.Acceptance of Trusts and Duties............................24
Section 7.02.Furnishing of Documents....................................25
Section 7.03.Representations and Warranties.............................25
Section 7.04.Reliance; Advice of Counsel................................26
Section 7.05.Not Acting in Individual Capacity..........................27
Section 7.06.Owner Trustee Not Liable for Certificates or Home Loans....27
Section 7.07.Owner Trustee May Own Certificates and Notes...............27
Section 7.08.Licenses...................................................28
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.01.Owner Trustee's Fees and Expenses..........................28
Section 8.02.Indemnification............................................28
Section 8.03.Payments to the Owner Trustee..............................29
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
Section 9.01.Termination of Trust Agreement.............................29
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.01. Eligibility Requirements for Owner Trustee............30
Section 10.02. Resignation or Removal of Owner Trustee...............30
Section 10.03. Successor Owner Trustee...............................31
Section 10.04. Merger or Consolidation of Owner Trustee..............32
Section 10.05. Appointment of Co-Trustee or Separate Trustee.........32
ARTICLE XI
MISCELLANEOUS
Section 11.01. Supplements and Amendments............................33
Section 11.02. No Legal Title to Owner Trust Estate in Owners........34
Section 11.03. Limitations on Rights of Others.......................35
Section 11.04. Notices...............................................35
Section 11.05. Severability..........................................35
Section 11.06. Separate Counterparts.................................35
Section 11.07. Successors and Assigns................................35
Section 11.08. No Petition...........................................36
Section 11.09. No Recourse...........................................36
Section 11.10. Headings..............................................36
Section 11.11. Governing Law.........................................36
EXHIBITS
EXHIBIT A Form of Class A-IO Certificate
EXHIBIT B Form of Class B Certificates
EXHIBIT C Form of Residual Interest Certificate
EXHIBIT D Form of Certificate of Trust
EXHIBIT E [RESERVED]
EXHIBIT F1 Form of Investment Letter
EXHIBIT F2 Form of Investment Letter
EXHIBIT G Form of ERISA Transfer Affidavit
TRUST AGREEMENT, dated as of March 1, 1999, among Bear Stearns Asset
Backed Securities, Inc., a Delaware corporation, as Depositor (the
"Depositor"), Wilmington Trust Company, a Delaware banking corporation, as
Owner Trustee (the "Owner Trustee") and U.S. Bank National Association, a
national banking association, as Co-Owner Trustee (the "Co-Owner Trustee").
ARTICLE I
DEFINITIONS
Section 1.01 Capitalized Terms. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
Agreement: This Trust Agreement, as the same may be amended and
supplemented from time to time.
Business Trust Statute: Chapter 38 of Title 12 of I the Delaware
Code, 12 Del. Codess.3801 et seq., as the same may be amended from time to
time.
Certificate: The Class A-IO, Class B-1, Class B-2, Class B-3, Class
B-4 or Residual Interest Certificate.
Certificate Distribution Account: The meaning assigned to such term
in Section 5.01.
Certificate of Trust: The Certificate of Trust in the form of Exhibit
D to be filed for the Trust pursuant to Section 3810(a) of the Business Trust
Statute.
Certificate Register and Certificate Registrar: The register
mentioned and the registrar appointed pursuant to Section 3.04.
Certificateholder or Holder: A Person in whose name a Certificate is
registered.
Corporate Trust Office: 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, DE 19890-0001; or at such other
address in the State of Delaware as the Owner Trustee may designate by notice
to the Owners, or the principal corporate trust office of any successor Owner
Trustee (the address (which shall be in the State of Delaware) of which the
successor owner trustee will notify the Owners).
ERISA: The Employment Retirement Income Security Act of 1974, as
amended.
Expenses: The meaning assigned to such term in Section 8.02.
Holder: The person in whose name a Certificate is registered in the
Certificate Register.
Non-U.S. Person: Any person other than a U.S. Person, as defined
herein.
Owner: The Holders of the Certificates.
Owner Trust Estate: The Collateral (as defined in the Indenture),
including the contribution of $1 referred to in Section 2.05 hereof.
Paying Agent: The Co-Owner Trustee or any successor in interest
thereto or any other paying agent or co-paying agent appointed pursuant to
Section 3.09 and authorized by the Issuer to make payments to and distributions
from the Certificate Distribution Account, including payment of principal of or
interest on the Certificates on behalf of the Issuer.
Percentage Interest: With respect to a Certificate of any class, the
portion of the Certificates of such Class as a whole evidenced by such single
Certificate, expressed as a percentage rounded to five decimal places,
equivalent to a fraction, the numerator of which is the Class Principal Balance
(or, in the case of the Class A-IO Certificates, Class Notional Balance)
represented by such single Certificate of such Class as of the Closing Date and
the denominator of which is the Original Certificate Principal Balance (or in
the case of the Class A-IO Certificates, the aggregate Class Notional Balance
of the Class A-IO Certificates as of the Closing Date) of such Class. The
Residual Interest Certificate will be issued as a single Certificate evidencing
100% of the Percentage Interest thereof.
Plan: The meaning assigned to such term in Section 3.14.
Prospective Owner: The meaning set forth in Section 3.14(a).
Sale and Servicing Agreement: The Sale and Servicing Agreement dated
as of the date hereof, among the Trust, the Depositor, the Seller, the
Indenture Trustee, the Co-Owner Trustee, the Custodian and the Servicer, as
such may be amended or supplemented from time to time.
Secretary of State: The Secretary of State of the State of Delaware.
Treasury Regulations: 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.
Trust: The trust established by this Agreement.
U.S. Person: A person who is (i) a citizen or resident of the United
States; (ii) a corporation (or entity treated as a corporation for tax
purposes) created or organized in the United States or under the laws of the
United States or of any state including, for this purpose, the District of
Columbia; (iii) a partnership (or entity treated as a partnership for tax
purposes) organized in the United States or under the laws of the United States
or of any state including, for this purpose, the District of Columbia (unless
provided otherwise by future Treasury regulations); (iv) an estate whose income
is includible in gross income for United States income tax purposes regardless
of its source; or, (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control all substantial decisions of the
trust. Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury Regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Section 1.02 Other Definitional Provisions. (a) Capitalized terms
used herein and not otherwise defined herein have the meanings assigned to them
in the Sale and Servicing Agreement or, if not defined therein, in the
Indenture.
(b) 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.
(c) 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. 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.
(d) 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".
(e) 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.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated
therein; references to a Person are also to its permitted successors and
assigns.
ARTICLE II
ORGANIZATION
Section 2.01 Name. The Trust created hereby shall be known as "United
National Home Loan Owner Trust 1999-1," in which name the Owner Trustee, on
behalf of the Trust, shall have the power and authority and is hereby
authorized to conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and sue and be sued.
Section 2.02. Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office.
Section 2.03. Purposes and Powers. The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture, to authorize,
execute, issue and deliver the Certificates pursuant to this
Agreement and to sell such Notes;
(ii) with the proceeds of the sale of the Notes, to pay the
organizational, start-up and transactional expenses of the Trust and
to pay the balance to the Depositor;
(iii) to assign, grant, transfer, pledge, mortgage and convey
the Owner Trust Estate pursuant to the Indenture and to hold, manage
and distribute to the Certificateholders pursuant to the terms of the
Sale and Servicing Agreement and this Agreement any portion of the
Owner Trust Estate released from the lien of, and remitted to the
Trust pursuant to, the Indenture or the Sale and Servicing Agreement;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be 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
(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 and payments to the Owners 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 2.04 Appointment of Owner Trustee. The Depositor 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. The Owner
Trustee is hereby authorized to file the Certificate of Trust with the
Secretary of State.
Section 2.05. Initial Capital Contribution of Owner Trust Estate. The
Depositor 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 Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account. The Holder of
the Residual Interest Certificates 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 2.06. 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 Owners, 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. The provisions of this Agreement shall be
construed, and the affairs of the Trust shall be conducted, so as to achieve
treatment of the Trust for federal income tax purposes as (i) an entity that is
disregarded for federal income tax purposes if the Certificates are owned by a
single beneficial Owner, (ii) a grantor trust through which the Class A-IO
Certificate shall be accounted for as a participation in the Home Loans if the
Class A-IO Certificate is held by someone other than the Residual Interest
Certificateholder and all of the other Certificates are held by a single Owner,
or (iii) a partnership, to the extent the Certificates other than Class A-IO
Certificate are owned by more than one beneficial Owner. Effective as of the
date hereof, the Owner Trustee shall have all rights, powers and duties set
forth herein and in the Business Trust Statute with respect to accomplishing
the purposes of the Trust. The Trust shall not elect to be treated as an
association taxable as a corporation for any income or franchise tax purpose.
Section 2.07. Liability of the Owners. Subject to Sections 2.05 and
5.02(d), no Owner shall have any personal liability for any liability or
obligation of the Trust.
Section 2.08. Title to Trust Property. (a) Subject to the Indenture,
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 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, the Co-Owner Trustee and/or a separate trustee, as the case
may be.
(b) The Owners shall not have legal title to any part of the Owner
Trust Estate. No transfer by operation of law or otherwise of any interest of
the Owners shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of any part of
the Owner Trust Estate.
Section 2.09 Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware,
except with respect to the Co-Owner Trustee. The Trust shall not have any
employees; provided, however, that nothing herein shall restrict or prohibit
the Owner Trustee from having employees within or without the State of
Delaware. Payments will be received by the Trust only in Delaware, and payments
will be made by the Trust only from Delaware or New York, except with respect
to the Co-Owner Trustee. The only office of the Trust will be at the Corporate
Trust Office in Delaware.
Section 2.10. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee:
(i) The Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
(ii) The Depositor 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
property or the conduct of its business shall require such
qualifications.
(iii) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Depositor has
full power and authority to sell and assign the property to be sold
and assigned to and deposited with the Trust and the Depositor 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
Depositor by all necessary corporate action.
(iv) 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 articles of incorporation or by-laws of the Depositor, or any
indenture, agreement or other instrument to which the Depositor 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 Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any Federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties.
(v) There are no proceedings or investigations pending or notice
of which has been received in writing before any court, regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties: (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Depositor of
its obligations under, or the validity or enforceability of, this
Agreement.
(vi) The representations and warranties of the Depositor in
Section 3.06 of the Sale and Servicing Agreement are true and
correct.
Section 2.11 Federal Income Tax Allocations. So long as all of the
Certificates are held by a single Holder, the Trust shall be treated as an
entity that is disregarded for federal income tax purposes and the Owner of the
Certificates shall be treated as owning the Certificates subject to the debt.
If the Class A-IO Certificate is held by someone other than the Residual
Interest Certificateholder and all of the other Certificates are held by a
single Owner, the Class A-IO Certificate shall be accounted for as a
participation in the Home Loans through a grantor trust.
To the extent the Certificates other than Class A-IO Certificate are
owned by more than one beneficial Owner, the Trust shall be treated as a
partnership whose assets are the Home Loans, exclusive of the rights of the
Class A-IO Certificate to certain interest amounts, that are subject to the
liabilities of the Notes. A Certificateholder, other than a Class A-IO
Certificateholder or the Residual Interest Certificateholder, shall be treated
as receiving a guaranteed payment and allocated income equal to the amount of
its stated Certificate Rate and its share of losses resulting in a write-down
of its balance. The Residual Interest Certificateholder, in addition to any
income, shall be allocated taxable income equal to the stated rate of interest
on the Certificates (other than the Residual Interest Certificate) that it
holds plus an amount of net income or loss not otherwise allocated. All excess
liabilities shall be allocated to the Residual Interest Certificateholder as
provided for in Treas. Reg. Section 1.752-3. Unless otherwise required, any
discount on a Certificate other than a Class A-IO Certificate or the Residual
Interest Certificate shall result in additional allocation of income equal to
the discount that would accrue if the Certificate were treated as a debt
instrument for federal income tax purposes.
ARTICLE III
THE CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01 Initial Ownership. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.05 and until the
issuance of the Certificates, the Depositor shall be the sole Owner of the
Trust.
Section 3.02. The Certificates. The Certificates (other than the
Class A-IO Certificates) shall be issued in minimum denominations of $250,000
and integral multiples of $1,000 in excess thereof. Class A-IO Certificates
shall be issued in minimum Percentage Interests of 20%. The Residual Interest
Certificate shall be issued as a single Certificate in definitive, fully
registered form, representing 100% of the Percentage Interest in such
Certificate. The Certificates shall be executed in the name of and on behalf of
the Trust by manual or facsimile signature of an Officer of the Owner Trustee
and the Owner Trustee shall have power and authority, and is hereby authorized
and empowered, in the name and on behalf of the Trust, to authorize, execute,
authenticate, issue, and deliver the Certificates. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be valid and binding obligations of the Trust, 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 an Owner, and shall be
entitled to the rights and subject to the obligations of an Owner hereunder and
under the Sale and Servicing Agreement, upon such transferee's acceptance of a
Certificate duly registered in such transferee's name pursuant to Section 3.04.
Section 3.03 Execution, Authentication and Delivery of Certificates.
Concurrently with the initial sale of the Home Loans to the Trust pursuant to
the Sale and Servicing Agreement, the Owner Trustee in the name and on behalf
of the Trust, shall have power and authority, and is hereby authorized and
empowered to, and shall, cause the Certificates of each Class representing 100%
of the Percentage Interests of the beneficial ownership in the Trust to be
executed, authenticated, issued and delivered or upon the written order of the
Depositor, signed by its chairman of the board, its president or any vice
president, without further corporate action by the Depositor, in authorized
denominations. Thereupon, such Certificates(s) shall be duly authorized,
validly issued, and entitled to the benefits of this Agreement. 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 or B, executed
by the Owner Trustee or the Administrator, as the Owner Trustee's
authenticating agent, by manual or facsimile 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 3.04. 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 3.08, 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 Administrator shall be the
initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to Section 3.08, the Owner Trustee shall
execute, authenticate and deliver (or shall cause the Administrator as its
authenticating agent to authenticate and deliver), in the name of the
designated transferee or transferees, one or more new Certificates in
authorized denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent. At the option
of an Owner, Certificates may be exchanged for other Certificates of authorized
denominations of a like aggregate amount upon surrender of the Certificates to
be exchanged at the office or agency maintained pursuant to Section 3.08.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Owner or his attorney duly authorized in writing. In addition,
each Certificate presented or surrendered for registration of transfer and
exchange must be accompanied by a letter from the Prospective Owner certifying
as to the representations set forth in Section 3.14(a) and (b). Each
Certificate surrendered for registration of transfer or exchange shall be
canceled and disposed of by the Owner Trustee in accordance with its customary
practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of
Certificates.
The preceding provisions of this Section notwithstanding, the Owner
Trustee shall not make and the Certificate Registrar shall not register
transfer or exchanges of Certificates for a period of 15 days preceding the due
date for any payment with respect to the Certificates.
Section 3.05 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b) there
shall be delivered to the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice 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, or the Administrator as the Owner Trustee's
authenticating agent, shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and denomination. In connection with the issuance of
any new Certificate under this Section, 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 ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 3.06. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee or the Certificate
Registrar 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 Section 5.02 and for all other
purposes whatsoever, and neither the Owner Trustee nor the Certificate
Registrar shall be bound by any notice to the contrary.
Section 3.07. Access to List of Owners' Names and Addresses. The
Owner Trustee shall furnish or cause to be furnished to the Issuer and the
Depositor, within 15 days after receipt by the Owner Trustee of a request
therefor from the Issuer, the Depositor or the Indenture Trustee in writing, a
list, in such form as the Servicer, the Depositor or the Indenture Trustee may
reasonably require, of the names and addresses of the Owners as of the most
recent Record Date. If three or more Certificateholders or one or more Holders
of Certificates together evidencing not less than 25% of the aggregate
Certificate Principal Balance of the Certificates 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 Owner, by receiving and holding a Certificate, shall
be deemed to have agreed not to hold any of the Depositor, the Certificate
Registrar, the Co-Owner Trustee or the Owner Trustee accountable by reason of
the disclosure of its name and address, regardless of the source from which
such information was derived.
Section 3.08. Maintenance of Office or Agency. The Owner Trustee
shall maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Certificates and the Basic Documents may be
served. The Owner Trustee initially designates the Administrator's office in
New York as its principal corporate trust office for such purposes. The Owner
Trustee shall give prompt written notice to the Certificateholders of any
change in the location of the Certificate Register or any such office or
agency.
Section 3.09. Appointment of Paying Agent. The Owner Trustee hereby
appoints the Co-Owner Trustee as Paying Agent under this Agreement. The Paying
Agent shall make distributions to Certificateholders from the Certificate
Distribution Account pursuant to Section 5.02 hereof and Section 5.05 of the
Sale and Servicing Agreement and shall report the amounts of such distributions
to the Owner Trustee. The Paying Agent shall have the revocable power to
withdraw funds from the Certificate Distribution Account for the purpose of
making the distributions referred to above. In the event that the Co-Owner
Trustee shall no longer be the Paying Agent hereunder, the Owner Trustee shall
appoint a successor to act as Paying Agent (which shall be a bank or trust
company). The Owner Trustee shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Owner Trustee to execute and deliver
to the Owner Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Owner Trustee that as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Owners in trust for the benefit of
the Certificateholders entitled thereto until such sums shall be paid to such
Owners. The Paying Agent shall return all unclaimed funds to the Owner Trustee,
and upon removal of a Paying Agent, such Paying Agent shall also return all
funds in its possession to the Owner Trustee. The provisions of Sections 7.01,
7.03, 7.04 and 8.01 shall apply to the Co-Owner Trustee also in its role as
Paying Agent, for so long as the Co-Owner Trustee shall act as Paying Agent
and, to the extent applicable, to any other paying agent appointed hereunder.
Any reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise. Notwithstanding anything herein to
the contrary, the Co-Owner Trustee and the Paying Agent shall be the same
entity as the Indenture Trustee under the Indenture and the Sale and Servicing
Agreement unless an Indenture Event of Default has occurred and is continuing
and the Indenture Trustee determines that a conflict of interest exists or will
exist if the Indenture Trustee continues to act as Co-Owner Trustee and Paying
Agent. In such event, the Co-Owner Trustee and the Paying Agent shall resign
and the Owner Trustee shall assume the duties and obligations of the Co-Owner
Trustee and the Paying Agent hereunder and under the Sale and Servicing
Agreement.
Section 3.10. [RESERVED]
Section 3.11. [RESERVED]
Section 3.12. [RESERVED]
Section 3.13. Definitive Certificates. The Residual Interest
Certificate will be a single Certificate in definitive, fully registered form.
The Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Owner Trustee, as
evidenced by its execution thereof.
Section 3.14. Restrictions on Transfer. The provisions of paragraphs
(a) through (f) below shall apply to each transfer or proposed transfer of a
Certificate other than a transfer by the Depositor to an affiliate thereof that
is a U.S. Person or to United National Bank or an affiliate thereof that is a
U.S. Person.
(a) Each prospective purchaser and any subsequent transferee of a
Certificate (each, a "Prospective Owner") other than the Depositor, an
affiliate thereof, United National Bank or an affiliate thereof shall represent
and warrant, in writing, to the Owner Trustee and the Certificate Registrar and
any of their respective successors that:
(i) Such Person is duly authorized to purchase the Certificates
and its purchase of investments having the characteristics of the
Certificates is authorized under, and not directly or indirectly in
contravention of, any law, charter, trust instrument or other
operative document, investment guidelines or list of permissible or
impermissible investments that is applicable to the investor.
(ii) Such Person understands that each holder of a Certificate,
by virtue of its acceptance thereof, assents to the terms, provisions
and conditions of the Trust Agreement (as defined herein).
(b) Each Prospective Owner other than the Depositor, an affiliate
thereof, United National Bank or an affiliate thereof of a Certificate, shall
represent and warrant, in writing, to the Owner Trustee and the Certificate
Registrar and any of their respective successors that:
(i) Such Person is a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"), and is aware that the seller of the such
Certificate may be relying on the exemption from the registration
requirements of the Securities Act provided by Rule 144A and is
acquiring such Certificate for its own account or for the account of
one or more qualified institutional buyers for whom it is authorized
to act.
(ii) It understands that such Certificates have not been
registered under the Securities Act, and that, if in the future it
decides to offer, resell, pledge or otherwise transfer such
Certificates, such Certificates may be offered, resold, pledged or
otherwise transferred only (A) pursuant to a Registration Statement
which has been declared effective under the Securities Act, or (B)
for so long as such Certificates are eligible for resale pursuant to
Rule 144A under the Securities Act, to a person whom the seller
reasonably believes is a "qualified institutional buyer" as defined
in Rule 144A under the Securities Act that is purchasing such
Certificates for its own account or for the account of a qualified
institutional buyer to whom notice is given that the transfer is
being made in reliance on Rule 144A, in each case in compliance with
the requirements of the Trust Agreement. It also understands that an
employee benefit plan subject to ERISA or Section 4975 of the Code,
and entities using the assets of any such employee benefit plan, are
prohibited from acquiring the Certificates (except to the extent that
an exemption from such prohibition is available, as described
herein).
(iii) Such person understands that each Certificate bears a
legend to the following effect:
THE INTEREST IN THE TRUST REPRESENTED BY THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR
INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF
(INCLUDING PLEDGED) BY THE HOLDER HEREOF ONLY TO (I) A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT
PURSUANT TO RULE 144A OR (II) A PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF
SUCH A PERSON WITHIN THE MEANING OF RULE 3a-7 OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (INCLUDING, BUT
NOT LIMITED TO, THE DEPOSITOR, AN AFFILIATE THEREOF, UNITED
NATIONAL BANK OR AN AFFILIATE THEREOF) IN A TRANSACTION
THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. NO PERSON IS
OBLIGATED TO REGISTER THIS CERTIFICATE UNDER THE ACT OR ANY
STATE SECURITIES LAWS.
NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST
HEREIN SHALL BE MADE TO ANY PERSON UNLESS THE OWNER TRUSTEE
HAS RECEIVED A CERTIFICATE FROM THE TRANSFEREE TO THE
EFFECT THAT SUCH TRANSFEREE (I) IS A UNITED STATES PERSON
WITHIN THE MEANING OF SECTION 7701(a) OF THE CODE; (II) IS
NOT A PERSON WHICH IS AN EMPLOYEE BENEFIT PLAN, TRUST OR
ACCOUNT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR
SECTION 4975 OF THE CODE OR A GOVERNMENTAL PLAN, DEFINED IN
SECTION 3(32) OF ERISA SUBJECT TO ANY FEDERAL, STATE OR
LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE (ANY SUCH PERSON
BEING A "PLAN") AND (III) IS NOT AN ENTITY, INCLUDING AN
INSURANCE COMPANY SEPARATE ACCOUNT OR GENERAL ACCOUNT,
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A
PLAN'S INVESTMENT IN THE ENTITY.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF UNLESS, PRIOR TO SUCH DISPOSITION, THE PROPOSED
TRANSFEREE DELIVERS TO THE OWNER TRUSTEE AND THE
CERTIFICATE REGISTRAR A CERTIFICATE STATING THAT SUCH
TRANSFEREE (A) AGREES TO BE BOUND BY AND TO ABIDE BY THE
TRANSFER RESTRICTIONS APPLICABLE TO THIS CERTIFICATE; (B)
IS NOT AN ENTITY THAT WILL HOLD THIS CERTIFICATE AS NOMINEE
TO FACILITATE THE CLEARANCE AND SETTLEMENT OF SUCH SECURITY
THROUGH ELECTRONIC BOOK-ENTRY CHANGES IN ACCOUNTS OF
PARTICIPATING ORGANIZATIONS; AND (C) UNDERSTANDS THAT IT
MUST TAKE INTO ACCOUNT ITS PERCENTAGE INTEREST OF THE
TAXABLE INCOME RELATING TO THIS CERTIFICATE.
(c) No transfer of a Certificate shall be made to any Person unless
the Owner Trustee has received a certificate from the transferee, substantially
in the form of Exhibit G hereto, to the effect that such transferee (i) is not
a person which is an employee benefit plan, trust or account subject to Title I
of ERISA or Section 4975 of the Code or a governmental plan, defined in Section
3(32) of ERISA subject to any federal, state or local law which is, to a
material extent, similar to the foregoing provisions of ERISA or the Code (any
such person being a "Plan"), (ii) is not an entity, including an insurance
company separate account or general account, whose underlying assets include
Plan assets by reason of a Plan's investment in the entity and (iii) such a
person is a U.S. Person.
(d) By its acceptance of a Certificate, each Prospective Owner agrees
and acknowledges that no legal or beneficial interest in all or any portion of
any Certificate may be transferred directly or indirectly to an entity that
holds securities as nominee to facilitate the clearance and settlement of such
securities through electronic book-entry changes in accounts of participating
organizations (a "Book-Entry Nominee").
(e) Subject to paragraph (f) below, the Owner Trustee shall not
execute, and shall not countersign and deliver, a Certificate in connection
with any transfer thereof unless the transferor shall have provided to the
Owner Trustee a certificate, substantially in the form attached as Exhibit F1
to this Agreement, signed by the transferee, which certificate shall contain
the consent of the transferee to any amendments of this Agreement as may be
required to effectuate further the foregoing restrictions on transfer of the
Certificate to book-entry nominees, and an agreement by the transferee that it
will not transfer a Certificate without providing to the Owner Trustee a
certificate substantially in the form attached as Exhibit F1 to this Agreement.
(f) Notwithstanding paragraph (e) above, in the event that the
Depositor, an affiliate thereof, United National Bank or an affiliate thereof
pledges, mortgages, assigns or otherwise grants any security interest in the
Certificate to any person (each, a "Pledgee"), the Owner Trustee may execute,
countersign and deliver a Certificate to such Pledgee, provided that such
Pledgee shall have delivered to the Owner Trustee a Certificate signed on
behalf of the Pledgee substantially in the form attached as Exhibit F2 to this
Agreement.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.01 Certain Restrictions. (a) With respect to the following
matters, the Owner Trustee shall not take action, and the Owners shall not
direct the Owner Trustee to take any action unless at least 30 days before the
taking of such action, the Owner Trustee shall have notified the Owners in
writing of the proposed action and the Owners shall not have notified the Owner
Trustee in writing prior to the 30th day after such notice is given that such
Owners have withheld consent or the Owners have provided alternative direction
with respect to the following matters:
(i) the initiation of any claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the collection
of the Home Loans) and the compromise of any action, claim or lawsuit
brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of the Home Loans);
(ii) 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);
(iii) the amendment or other change to this Agreement or
any Basic Document in circumstances where the consent of any
Noteholder is required;
(iv) the amendment or other change to this Agreement or any
Basic Document in circumstances where the consent of any Noteholder
is not required and such amendment materially adversely affects the
interest of the Owners;
(v) the appointment pursuant to the Indenture of a
successor Note Registrar, Paying Agent or Indenture Trustee or
pursuant to this Agreement of a successor Certificate Registrar, or
the consent to the assignment by the Note Registrar, Paying Agent or
Indenture Trustee or Certificate Registrar of its obligations under
the Indenture or this Agreement, as applicable;
(vi) the consent to the calling or waiver of any default of
any Basic Document;
(vii) the consent to the assignment by the Indenture
Trustee or Servicer of their respective obligations under any Basic
Document;
(viii) except as provided in Article IX hereof, dissolve,
terminate or liquidate the Trust in whole or in part;
(ix) merge or consolidate the Trust with or into any other
entity, or convey or transfer all or substantially all of the Trust's
assets to any other entity;
(x) cause the Trust to incur, assume or guaranty any
indebtedness other than as set forth in this Agreement;
(xi) do any act that conflicts with any other Basic
Document; (xii) do any act which would make it impossible to carry on
the ordinary business of the Trust as described in Section 2.03
hereof;
(xiii) confess a judgment against the Trust;
(xiv) possess Trust assets, or assign the Trust's right to
property, for other than a Trust purpose;
(xv) cause the Trust to lend any funds to any entity; or
(xvi) change the Trust's purpose and powers from those set
forth in this Trust Agreement.
In addition, the Trust shall not commingle its assets with those of any
other entity. The Trust shall maintain its financial and accounting books and
records separate from those of any other entity. Except as expressly set forth
herein, the Trust shall pay its indebtedness, operating expenses from its own
funds, and the Trust shall not pay the indebtedness, operating expenses and
liabilities of any other entity. The Trust shall maintain appropriate minutes or
other records of all appropriate actions and shall maintain its office separate
from the offices of the Depositor and United National Bank.
(b) The Trust and each Certificateholder shall comply with the
following covenants:
(i) Neither the Owner Trustee nor any Certificateholder
shall cause the funds and other assets of the Trust to be commingled
with those of any other individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
(ii) Neither the Owner Trustee nor any Certificate holder
shall cause the Trust to be, become or hold itself out as being
liable for the debts of any other party, and neither the Trust nor
any Certificateholder shall act as agents for each other. The Trust
shall not guarantee the indebtedness of or make loans to any
Certificateholder. No Certificateholder may guarantee the
indebtedness of or make loans to the Trust or hold itself out as
being liable for the debts of the Trust.
(iii) Neither the Owner Trustee nor any Certificateholder
shall cause the Trust (A) to act other than solely in its Trust name
and through its duly authorized officers or agents in the conduct of
its business, (B) to prepare all Trust correspondence otherwise than
in the Trust name, (C) to conduct its business other than so as not
to mislead others as to the identity of the entity with which they
are conducting business; and no Certificateholder will be involved in
the day-to-day management of the Trust.
(iv) The Owner Trustee shall maintain on behalf of the
Trust all business trust records and books of account of the Trust
and neither the Owner Trustee nor any Certificateholder shall cause
the Trust to commingle its business trust records and books of
account with the corporate records and books of account maintained by
any Certificateholder or the Owner Trustee on behalf of the Trust
shall reflect the separate existence of the Trust. The books of the
Trust may be kept (subject to any provision contained in any
applicable statutes) inside or outside the State of Delaware at such
place or places as may be designated from time to time by the Owner
trustee.
(v) The Trust shall take such formalities as may be
necessary to authorize all of its actions as may be required by law.
(vi) The Owner Trustee shall cause the Trust to (1) conduct
its business in an office separate from that of each
Certificateholder, (2) maintain stationery separate from that of each
Certificateholder, (3) except as expressly set forth herein, to pay
its indebtedness, operating expenses, and liabilities from its own
funds, and not to pay the indebtedness, operating expenses and
liabilities of any other entity, (4) observe all statutory
formalities under the Business Trust Statute, and (5) keep in full
effect its existence, rights and franchises as a business trust under
the laws of the State of Delaware.
For accounting purposes, the Trust shall be treated as an entity
separate and distinct from any Owner. The pricing and other material terms of
all transactions and agreements to which the Trust is a party shall be
intrinsically fair to all parties thereto. This Agreement is and shall be the
only agreement among the parties thereto with respect to the creation,
operation and termination of the Trust.
The Owner Trustee shall not have the power, except upon the direction
of the Owners, and to the extent otherwise consistent with the Basic Documents,
to (i) remove or replace the Servicer or the Indenture Trustee, (ii) institute
proceedings to have the Trust declared or adjudicated a bankruptcy or
insolvent, (iii) consent to the institution of bankruptcy or insolvency
proceedings against the Trust, (iv) file a petition or consent to a petition
seeking reorganization or relief on behalf of the Trust under any applicable
federal or state law relating to bankruptcy, (v) consent to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator (or any similar
official) of the Trust or a substantial portion of the property of the Trust,
(vi) make any assignment for the benefit of the Trust's creditors, (vii) cause
the Trust to admit in writing its inability to pay its debts generally as they
become due, (viii) take any action, or cause the Trust to take any action, in
furtherance of any of the foregoing (any of (ii) through (viii) above, a
"Bankruptcy Action"). So long as the Indenture remains in effect, no
Certificateholder shall have the power to take, and shall not take, any
Bankruptcy Action with respect to the Trust or direct the Owner Trustee to take
any Bankruptcy Action with respect to the Trust.
Section 4.02 Action by Owners with Respect to Certain Matters. The
Owner Trustee shall not have the power, except upon the direction of a majority
of the Percentage of Interest of the Owners, to (a) remove the Administrator
under the Administration Agreement pursuant to Section 9 thereof, (b) appoint a
successor Administrator pursuant to Section 9 of the Administration Agreement,
(c) remove the Servicer under the Sale and Servicing Agreement pursuant to
Section 10.01 thereof, (d) redeem the Notes and purchase the Certificates
pursuant to Section 11.02 of the Sale and Servicing Agreement or (e) sell the
Home 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 a majority by Percentage Interest of the Owners.
Section 4.03. Action by Owners with Respect to Bankruptcy. The Owner
Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Owners and the delivery to the Owner Trustee by each such Owner of a
certificate certifying that such Owner reasonably believes that the Trust is
insolvent.
Section 4.04. Restrictions on Owners' Power. The Owners 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 2.03 nor shall the Owner Trustee be obligated to follow any
such direction, if given.
Section 4.05 Majority Control. Except as expressly provided herein,
any action that may be taken and any direction that may be given by the
Certificateholders under this Agreement or under the Sale and Servicing
Agreement may be taken or given only by the Certificateholders of each Class
evidencing more than 50% of the aggregate Percentage Interests of all of the
Certificates of such Class at the time such action is taken or such direction
is given. Except as expressly provided herein, any written notice of the
Certificateholders delivered pursuant to this Agreement shall be effective only
if signed by Holders of Certificates evidencing more than 50% of the aggregate
Percentage Interests of the Certificates of each Class at the time of the
delivery of such notice.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.01 Certificate Distribution Account. All of the right,
title and interest of the Co-Owner Trustee or Owner Trustee in all funds on
deposit from time to time in the Certificate Distribution Account and in all
proceeds thereof shall be held for the benefit of the Owners and such other
persons entitled to distributions therefrom. Except as otherwise expressly
provided herein or in the Sale and Servicing Agreement, the Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee or Co-Owner Trustee for the benefit of the Owners.
The Certificate Distribution Account shall be subject to and
established and maintained in accordance with the applicable provisions of the
Sale and Servicing Agreement and this Agreement, including, without limitation,
the provisions of Section 5.05 of the Sale and Servicing Agreement.
Section 5.02 Application of Trust Funds. (a) Subject to Section
5.02(b), on each Payment Date, the Owner Trustee or Co-Owner Trustee shall
direct the Paying Agent to distribute to the Holders of the Certificates, from
amounts on deposit in the Certificate Distribution Account the following
distributions in the following order of priority:
(i) to the Holders of the Class A-IO Certificates, the
Class A-IO Certificateholder's Interest Distribution Amount for such
Payment Date;
(ii) to the Holders of the Class B-1 Certificates, the
Class B-1 Certificateholder's Interest Distribution Amount for such
Payment Date;
(iii) to the Holders of the Class B-2 Certificates, the
Class B-2 Certificateholder's Interest Distribution Amount for such
Payment Date;
(iv) to the Holders of the Class B-3 Certificates, the
Class B-3 Certificateholder's Interest Distribution Amount for such
Payment Date;
(v) to the Holders of the Class B-4 Certificates, the Class
B-4 Certificateholder's Interest Distribution Amount for such Payment
Date;
(vi) to the Holders of the Class B-1 Certificates, to the
extent of the Regular Principal Payment Amount, the amount necessary
to reduce the Class Principal Balance thereof to the Class B-1
Optimal Principal Balance for such Payment Date;
(vii) to the Holders of the Class B-2 Certificates, to the
extent of the Regular Principal Payment Amount, the amount necessary
to reduce the Class Principal Balance thereof to the Class B-2
Optimal Principal Balance for such Payment Date;
(viii) to the Holders of the Class B-3 Certificates, to the
extent of the Regular Principal Payment Amount, the amount necessary
to reduce the Class Principal Balance thereof to the Class B-3
Optimal Principal Balance for such Payment Date;
(ix) to the Holders of the Class B-4 Certificates, to the
extent of the Regular Principal Payment Amount, the amount necessary
to reduce the Class Principal Balance thereof to the Class B-4
Optimal Principal Balance for such Payment Date;
(x) to the Holders of the Class B-1 Certificates, the
applicable Deferred Amounts, until any accrued Allocable Loss Amount
in respect of such Class has been paid in full;
(xi) to the Holders of the Class B-2 Certificates, the
applicable Deferred Amounts, until any accrued Allocable Loss Amount
in respect of such Class has been paid in full;
(xii) to the Holders of the Class B-3 Certificates, the
applicable Deferred Amounts, until any accrued Allocable Loss Amount
in respect of such Class has been paid in full;
(xiii) to the Holders of the Class B-4 Certificates, the
applicable Deferred Amounts, until any accrued Allocable Loss Amount
in respect of such Class has been paid in full;
(xiv) to the Servicer, any amounts due pursuant to Section
9.01(a) of the Sale and Servicing Agreement;
(xv) to the Co-Administrator, any fees or expenses of the
Co-Administrator pursuant to Section 3 of the Administration
Agreement; and
(xvi) to the Holder of the Residual Interest Certificate,
the remainder.
(b) Notwithstanding Section 5.02 (a), on any Payment Date, if the
Cumulative Losses exceed and continue to exceed (i) with respect to the Due
Period starting March 2002 and ending February 2003, 8.50% of the Original Pool
Principal Balance; (ii) with respect to the Due Period starting March 2003 and
ending February 2004, 11.25% of the Original Pool Principal Balance; (iii) with
respect to the Due Period starting March 2004 and ending February 2005, 13.00%
of the Original Pool Principal Balance and (iv) with respect to the Due Period
starting March 2005 and ending February 2006, 14.00% of the Original Pool
Principal Balance, then distributions on the Certificates will be made in the
following order of priority:
(i) to the Holders of the Class A-IO Certificates, the
Class A-IO Certificateholder's Interest Distribution Amount for such
Payment Date;
(ii) to the Holders of the Class B-1 Certificates, the
Class B-1 Certificateholder's Interest Distribution Amount for such
Payment Date;
(iii) to the Holders of the Class B-2 Certificates, the
Class B-2 Certificateholder's Interest Distribution Amount for such
Payment Date;
(iv) to the Holders of the Class B-3 Certificates, the
Class B-3 Certificateholder's Interest Distribution Amount for such
Payment Date;
(v) to the Holders of the Class B-4 Certificates, the Class
B-4 Certificateholder's Interest Distribution Amount for such Payment
Date;
(vi) to the Holders of the Class B-1 Certificates, the
Regular Principal Payment Amount or portion thereof, until the Class
Principal Balance thereof has been reduced to zero;
(vii) to the Holders of the Class B-2 Certificates, the
Regular Principal Payment Amount or portion thereof, until the Class
Principal Balance thereof has been reduced to zero;
(viii) to the Holders of the Class B-3 Certificates, the
Regular Principal Payment Amount or portion thereof, until the Class
Principal Balance thereof has been reduced to zero;
(ix) to the Holders of the Class B-4 Certificates, the
Regular Principal Payment Amount or portion thereof, until the Class
Principal Balance thereof has been reduced to zero;
(x) to the Holders of the Class B-1 Certificates, the
applicable Deferred Amounts, until any accrued Allocable Loss Amount
in respect of such Class has been paid in full;
(xi) to the Holders of the Class B-2 Certificates, the
applicable Deferred Amounts, until any accrued Allocable Loss Amount
in respect of such Class has been paid in full;
(xii) to the Holders of the Class B-3 Certificates, the
applicable Deferred Amounts, until any accrued Allocable Loss Amount
in respect of such Class has been paid in full;
(xiii) to the Holders of the Class B-4 Certificates, the
applicable Deferred Amounts, until any accrued Allocable Loss Amount
in respect of such Class has been paid in full; and
(xiv) to the Servicer, any amounts due pursuant to Section
9.01(a) of the Sale and Servicing Agreement; (xv) to the
Co-Administrator, any fees or expenses of the Co-Administrator
pursuant to Section 3 of the Administration Agreement and; (xvi) to
the Holder of the Residual Interest Certificate, the remainder.
(c) On each Payment Date, the Owner Trustee shall cause the Paying
Agent to send to each Holder of a Certificate the statement provided to the
Owner Trustee by the Indenture Trustee pursuant to Section 6.01 of the Sale and
Servicing Agreement with respect to such Payment Date.
(d) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to an owner, such tax shall reduce the
amount otherwise distributable to the Owner in accordance with this Section.
The Owner Trustee or the Co-Owner Trustee is hereby authorized and directed to
retain from amounts otherwise distributable to the Owners sufficient funds for
the payment of any tax that is legally owed by the Trust (but such
authorization shall not prevent the Owner Trustee from contesting any such tax
in appropriate proceedings, and withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings). The amount of any withholding
tax imposed with respect to an Owner shall be treated as cash distributed to
such Owner at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
Owner), the Owner Trustee or the Co-Owner Trustee may in its sole discretion
withhold such amounts in accordance with this paragraph (c). In the event that
an Owner wishes to apply for a refund of any such withholding tax, the Owner
Trustee or the Co-Owner Trustee shall reasonably cooperate with such owner in
making such claim so long as such Owner agrees to reimburse the Owner Trustee
for any out-of-pocket expenses incurred.
Section 5.03 Method of Payment. Distributions required to be made to
Owners on any Payment Date shall be made to each Owner of record on the
preceding Record Date either by wire transfer, in immediately available funds,
to the account of such Holder at a bank or other entity having appropriate
facilities therefor, if such Owner shall have provided to the Certificate
Registrar appropriate written instructions at least five Business Days prior to
such Payment Date and such Holder's Certificates in the aggregate evidence a
denomination of not less than (i) for the Class A-IO Certificates, $10,000,000
of Class Notional Balance and (ii) for all Classes of Certificates other than
the Class A-IO Certificates, $1,000,000, or, if not, by check mailed to such
Owner at the address of such holder appearing in the Certificate Register.
Section 5.04. Segregation of Moneys; No Interest. Subject to Sections
4.01 and 5.02, moneys received by the Owner Trustee or the Co-Owner Trustee
hereunder and deposited into the Certificate Distribution Account will be
segregated except to the extent required otherwise by law or the Sale and
Servicing Agreement and shall be invested in Permitted Investments at the
direction of the Holder of the Residual Interest Certificate. Neither the Owner
Trustee nor the Co-Owner Trustee shall be liable for payment of any interest in
respect of such moneys.
Section 5.05. Capital Contributions. Any Certificateholder may make a
capital contribution to the Trust to enable the Trust to carry out instructions
of such Certificateholder (as provided in Section 4.02 hereof) or to enable the
Trust to take actions specified herein or in the Sale and Servicing Agreement.
The Co-Owner Trustee shall establish a separate trust account designated as the
Capital Account for each Certificateholder for the deposit of such capital
contributions. If one or more Certificateholders make capital contributions in
the amount of the Termination Price to enable the Trust to redeem the Notes and
purchase the Certificates in order to terminate the Sale and Servicing
Agreement pursuant to Section 11.02 thereof, the Home Loans and other items
redeemed pursuant to such termination, or the proceeds from the sale thereof,
as directed by the Certificateholder(s) that made such capital contribution,
shall be credited to the Capital Account of such Certificateholder(s) and shall
be distributed to such Certificateholder(s). If any Certificateholder makes a
capital contribution to enable the Trust to take any other action, any proceeds
that result from such action in an amount up to the amount of the capital
contribution shall, if so directed by the Certificateholder, be credited to
such Certificateholder's Capital Account and shall be distributed to the
Certificateholder that made such capital contribution.
Section 5.06 Accounting and Reports to the Certificateholders, the
Owners, the Internal Revenue Service and Others. The Owner Trustee or the
Co-Owner Trustee shall (a) maintain (or cause to be maintained) the books of
the Trust on a calendar year basis on the accrual method of accounting, and
such books shall be maintained separate from those of any other entity and
reflect the separate interest of the Trust, (b) deliver to each Owner, as may
be required by the Code and applicable Treasury Regulations, such information
as may be required (including Schedule K-1) to enable each Owner to prepare its
federal and state income returns, (c) file such tax return relating to the
Trust (including a partnership information return, IRS Form 1065), and 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 partnership for federal income tax
purposes, (d) cause such tax returns to be signed in the manner required by law
and (e) collect or cause to be collected any withholding tax as described in
and accordance with Section 5.02(c) with respect to income or distributions to
Owners. The Owner trustee shall not make the election provided under Section
754 of the Code.
Section 5.07 Signature on Returns Tax Partner. The Owner Trustee
shall sign on behalf of the Trust the tax returns of the Trust unless
applicable law requires an Owner to sign such documents, in which case such
documents shall be signed by the Residual Interest Certificateholder.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01 General Authority. The Owner Trustee is authorized and
directed to execute and deliver or cause to be executed and delivered the
Notes, the Certificates and the Basic Documents to which the Trust is to be a
party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party and any
amendment or other agreement or instrument described in Article III, in each
case, in such form as the Depositor 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 the Notes and the
Certificates.
Section 6.02. General Duties. It shall be the duty of:
(a) 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 Owners, 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 to the extent the Administrator, the Co-Owner
Trustee or the Co-Administrator has agreed in the Administration Agreement or
this Agreement, respectively, to perform any act or to discharge any duty of
the Owner Trustee or the Trust hereunder or under any Basic Document, and the
Owner Trustee shall not be held liable for the default or failure of the
Administrator, the Co-Owner Trustee or the Servicer to carry out its
obligations under the Administration Agreement or this Agreement, respectively;
and
(b) the Co-Administrator to obtain and preserve, the Issuer's
qualification to do business in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of the
Indenture, the Notes, the Collateral and each other instrument and agreement
included in the Trust Estate.
Section 6.03 Action upon Instruction. (a) Subject to Article IV and
in accordance with the terms of the Basic Documents, the Owners may by written
instruction direct the Owner Trustee in the management of the Trust but only to
the extent consistent with the limited purpose of the Trust. Such direction may
be exercised at any-time by written instruction of the Owners pursuant to
Article IV.
(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.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or under any Basic Document, the Owner Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Owners requesting instruction from the Owners 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 Owners 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 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 Owners, 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
Owners requesting instruction and, 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 Owners,
and shall have no liability to any Person for such action or inaction.
Section 6.04 No Duties Except as Specified in this Agreement, the
Basic Documents or in Instructions. The Owner Trustee shall not have any duty
or obligation to manage, make any payment with respect to, register, record,
sell, dispose of, or otherwise deal with the Owner Trust Estate, or to
otherwise take or refrain from taking any action under, or in connection with,
any document contemplated hereby to which the Owner Trustee is a party, except
as expressly provided by the terms of this Agreement, any Basic Document or in
any document or written instruction received by the Owner Trustee pursuant to
Section 6.03; and no implied duties or obligations shall be read into this
Agreement 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
Securities and Exchange 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 that are not related to the
ownership or the administration of the Owner Trust Estate.
Section 6.05. 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 6.03.
Section 6.06 Restrictions. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for Federal income tax
purposes. The Owners shall not direct the Owner Trustee to take action that
would violate the provisions of this Section.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.01 Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement and the
Basic Documents. The Owner Trustee also agrees to disburse all moneys actually
received by it constituting part of the Owner Trust Estate upon the terms of
the Basic Documents and this 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 or gross negligence or
(ii) in the case of the inaccuracy of any representation or warranty contained
in Section 7.03 expressly made by the Owner Trustee. In particular, but not by
way of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
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 in accordance with the instructions of the
Administrator or the Owners;
(c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights 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) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(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 Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate or for or in respect of the validity
or sufficiency of the Basic Documents, 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 any Noteholder or to any
Owner, 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 Co-Owner Trustee, the Co-Administrator, the Administrator,
the Seller, 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 of the Trust under this Agreement or the
Basic Documents that are required to be performed by the Co-Owner Trustee under
this Agreement or the Sale and Servicing Agreement, the Co-Administrator or the
Administrator under the Administration Agreement, 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 any
of the Owners, unless such Owners 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 or willful misconduct in
the performance of any such act provided, that the Owner Trustee shall be
liable for its negligence or willful misconduct in the event that it assumes
the duties and obligations of the Co-Owner Trustee under the Sale and Servicing
Agreement pursuant to Section 10.05 hereof.
Section 7.02 Furnishing of Documents. The Owner Trustee shall furnish
(a) to the Owners 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 and (b) to Noteholders promptly upon written request
therefor, copies of the Sale and Servicing Agreement, the Administration
Agreement and the Trust Agreement.
Section 7.03. Representations and Warranties. (a) Wilmington Trust
Company hereby represents and warrants to the Depositor, for the benefit of the
Owners, that:
(i) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware. It
has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement.
(ii) 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.
(iii) 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 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.
(b) U.S. Bank National Association hereby represents and warrants to
the Depositor, for the benefit of the Owners, that:
(i) It is a banking corporation duly organized and validly
existing in good standing under the laws of the United States. It has
all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement.
(ii) 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.
(iii) 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 Minnesota law, governmental
rule or regulation governing the banking or trust powers of the
co-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.
Section 7.04 Reliance; Advice of Counsel. (a) Neither Owner Trustee
nor the Co-Owner Trustee shall incur any 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 or the Co-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 or the Co-Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter
and such certificate shall constitute full protection to the Owner Trustee or
the Co-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 and the Co-Owner Trustee (i) may act directly or
through its agents or attorneys pursuant to agreements entered into with any of
them, and neither the Owner Trustee nor the Co-Owner Trustee shall be liable
for the conduct or misconduct of such agents or attorneys if such agents or
attorneys shall have been selected by the Owner Trustee or the Co-Owner Trustee
with reasonable care, and (ii) may consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it. Neither
Owner Trustee nor the Co-Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written opinion
or advice of any such counsel, accountants or other such persons and not
contrary to this Agreement or any Basic Document.
Section 7.05 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 7.06. Owner Trustee Not Liable for Certificates or Home
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 Depositor, 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 and as specified in
Section 7.03) or the Notes, or of any Home Loans or related documents. Neither
the Owner Trustee nor the Co-Owner Trustee shall have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Home Loan, or the perfection and priority of any security interest created
by any Home 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 Owners under this Agreement or the
Noteholders under the Indenture, including, without limitation: the existence,
condition and ownership of any Mortgaged Property; the existence and
enforceability of any insurance thereon; the existence and contents of any Home
Loan on any computer or other record thereof; the validity of the assignment of
any Home Loan to the Trust or of any intervening assignment; the completeness
of any Home Loan; the performance or enforcement of any Home Loan; the
compliance by the Depositor, the Seller or the Servicer with any warranty or
representation made under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any action of the
Administrator, the Indenture Trustee or the Servicer or any subservicer taken
in the name of the Owner Trustee or the Co-Owner Trustee.
Section 7.07. Owner Trustee May Own Certificates and Notes. The Owner
Trustee or the Co-Owner Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates or Notes and may deal with the
Depositor, the Administrator, the Indenture Trustee, the Seller and the
Servicer in banking transactions with the same rights as it would have if it
were not Owner Trustee or the Co-Owner Trustee.
Section 7.08. Licenses. The Co-Administrator shall cause the Trust to
use its best efforts to obtain and maintain the effectiveness of any licenses
required in connection with this Agreement and the Basic Documents and the
transactions contemplated hereby and thereby until such time as the Trust shall
terminate in accordance with the terms hereof.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.01 Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Depositor and the
Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
Holder of the Residual Interest Certificate 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.
Section 8.02. Indemnification. (a) The Holder of the Residual
Interest Certificate shall be liable as primary obligor for, and shall
indemnify the Owner Trustee (in its individual and trust capacities) and the
Co-Owner Trustee and its successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits,
and any and all reasonable costs, expenses and disbursements (including
reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or the Co-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 or the Co-Owner Trustee
hereunder, except only that the Holder of the Residual Interest Certificate
shall not be liable for or required to indemnify an Indemnified Party from and
against Expenses arising or resulting from any of the matters described in the
third sentence of Section 7.01. The indemnities contained in this Section 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 Holder of the Residual
Interest Certificate, which approval shall not be unreasonably withheld.
(b) The liabilities and indemnities contained in Section 8.01 and
Section 8.02 are for the benefit of the Owner Trustee, in its individual
capacity, and shall not be construed as imposing any liabilities on any
Certificateholders or any affiliate thereof for any expense or liability of the
Trust to third parties. The Certificateholders shall have no liabilities for
the expenses of the Trust (except as provided in Section 8.01 and in this
Section 8.02 with respect to the Owner Trustee in its individual capacity) and
all such expenses and liabilities shall be payable solely from the assets of
the Trust.
Section 8.03 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.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
Section 9.01 Termination of Trust Agreement. (a) This Agreement
(other than Article VIII) and the Trust shall terminate and be of no further
force or effect on the earlier of: (i) the satisfaction and discharge of the
Indenture pursuant to Section 4.01 of the Indenture and the termination of the
Sale and Servicing Agreement pursuant to Article XI thereof; and the final
distribution after proceeds of the Trust Estate in accordance with the terms of
the Indenture and this Agreement; and (ii) the expiration of 21 years from the
death of the last survivor of the descendants of Joseph P. Kennedy (the late
ambassador of the United States to the Court of St. James's). The bankruptcy,
liquidation, dissolution, death or incapacity of any Owner, shall not (x)
operate to terminate this Agreement or the Trust, nor (y) entitle such Owner'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.
(b) The Certificates shall be subject to an early redemption or
termination at the option of the Residual Interest Certificateholder, and if
the Residual Interest Certificateholder does not exercise such option within 30
days, then the Servicer in the manner and subject to the provisions of Section
11.02 of the Sale and Servicing Agreement. Notwithstanding the provisions in
the Sale and Servicing Agreement, the Certificateholders may elect by a
majority vote of the Outstanding Amount of the Certificates, to receive the
Home Loans and other items of the Trust Estate, in lieu of cash, after all
other amounts have been paid to the Noteholders, the Servicer, the Indenture
Trustee, the Owner Trustee and the Co-Owner Trustee upon termination of the
Sale and Servicing Agreement.
(c) Except as provided in Sections 9.01(a) and (b), none of the
Depositor, or any Owner shall be entitled to revoke or terminate the Trust.
(d) Notice of any termination of the Trust, specifying the Payment
Date upon which the Certificateholders shall surrender their Certificates to
the Paying Agent for payment of the final distributions and cancellation, shall
be given by the Co-Owner Trustee or the Owner Trustee to the Certificateholders
and the Rating Agencies mailed within five Business Days of receipt by the
Co-Owner Trustee or the Owner Trustee of notice of such termination pursuant to
Section 9.01(a) or (b), which notice given by the Co-Owner Trustee or the Owner
Trustee shall state (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 Paying Agent therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Payment Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Paying
Agent therein specified. The Co-Owner Trustee or the Owner Trustee shall give
such notice to the Certificate Registrar (if other than the Owner Trustee) and
the Paying Agent at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Certificates, the Paying Agent shall cause to
be distributed to Certificateholders amounts distributable on such Payment Date
pursuant to Section 5.05 of the Sale and Servicing Agreement.
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 Co-Owner Trustee or 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
Co-owner Trustee or 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 by the Co-Owner Trustee or the Owner Trustee
to the Holder of the Residual Interest Certificates.
(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 10.01 Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; authorized to exercise corporate
powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or state authorities; and
having (or having a parent which has) a short-term debt rating of at least
"A-1" or the equivalent by, or which is otherwise acceptable to, each Rating
Agency. 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 10.02.
Section 10.02. 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 Administrator, the Co-Administrator and
the Indenture Trustee. Upon receiving such notice of resignation, the
Administrator shall promptly appoint a successor Owner Trustee 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. If no
successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent jurisdiction for
the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Administrator, 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 Administrator may remove the Owner
Trustee. If the Administrator shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Administrator shall
promptly appoint a successor Owner Trustee by written instrument in duplicate,
one copy of which instrument shall be delivered to the outgoing Owner Trustee
so removed and one copy to the successor Owner Trustee and payment of all fees
owed to the outgoing Owner Trustee.
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 10.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Administrator shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
Section 10.03 Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Administrator 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 Administrator 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 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Administrator shall mail notice of the successor of such
Owner Trustee to all Owners, the Indenture Trustee, the Noteholders and the
Rating Agencies. If the Administrator fails 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
Administrator.
Upon acceptance of appointment by a successor Owner Trustee, such
successor Owner Trustee shall file an amendment to the Certificate Trust with
the Secretary of State of Delaware reflecting the change in trustee identity.
Section 10.04 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
10.01, 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 10.05. Appointment of Co-Trustee or Separate 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,
and for the purpose of performing certain duties and obligations of the Owner
Trustee with respect to the Trust and the Certificates under the Sale and
Servicing Agreement, the Administrator and the Owner Trustee acting jointly
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the Owner Trustee 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 Administrator and the Owner Trustee may consider necessary or desirable.
If the Administrator shall not have joined in such appointment within 25 days
after the receipt by it of a request so to do, the Owner Trustee 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 10.01 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.03.
The Owner Trustee hereby appoints the Indenture Trustee as Co-Owner
Trustee for the purpose of establishing and maintaining the Certificate
Distribution Account and making the distributions therefrom to the Persons
entitled thereto pursuant to Section 5.06 of the Sale and Servicing Agreement.
The Owner Trustee and the Co-Owner Trustee each agree that upon the occurrence
and continuation of an Indenture Event of Default and a determination by the
Indenture Trustee that a conflict of interest exists or will exist if the
Indenture Trustee continues to act as Co-Owner Trustee, the Co-Owner Trustee
shall resign and the Owner Trustee shall assume the duties and obligations of
the Co-Owner Trustee under the Sale and Servicing Agreement and this Agreement,
including without limitation, the obligations of the Co-Owner Trustee as Paying
Agent pursuant to Section 3.09 hereof.
Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provision 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; provided that Co-Owner
Trustee, in performing its duties and obligations under the Sale and
Servicing Agreement, may act separately in its capacity as Co-Owner
Trustee without the Owner Trustee joining in such Acts.
(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 Administrator 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 the separate trustees and co-trustees, as if
given to each of them. Every instrument appointing any separate trustee or
co-trustee, other than this Agreement, shall refer to this Agreement and to the
conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of appointment, shall be vested with the estates 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 Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its Agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment
of a new or successor trustee.
The Co-Owner Trustee, in its capacity as Co-Owner Trustee, shall not
have any rights, duties or obligations except as expressly provided in this
Agreement and the Sale and Servicing Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Supplements and Amendments. This Agreement may be
amended by the Depositor and the Owner Trustee and with prior written notice to
the Rating Agencies, but without the consent of any of the Noteholders or the
Owners or the Indenture Trustee, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions in
this Agreement or of modifying in any manner the rights of the Noteholders or
the Owners; provided, however, that such action shall not adversely affect in
any material respect the interests of any Noteholder or Owner. An amendment
described above shall be deemed not to adversely affect in any material respect
the interests of any Noteholder or Owner if (i) an opinion of counsel is
obtained to such effect, or (ii) the party requesting the amendment satisfies
the Rating Agency Condition with respect to such amendment.
This Agreement may also be amended from time to time by the Depositor
and the Owner Trustee, with the prior written consent of the Indenture Trustee,
the Holders of Notes evidencing more than 50% of the Outstanding Amount of the
Notes, and the Holders of Notes evidencing more than 50% of the Outstanding
Amount of the Certificates, 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, the Rating Agency Condition has been
satisfied by the party requesting the amendment; provided further, however,
that 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 the Home
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 Class Principal Balance of the
Certificates or the Percentage Interests required to consent to any such
amendment, in either case of clause (a) or (b) without the consent of the
holders of all the outstanding Notes and 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 Owners, 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 thereof. The manner of obtaining such
consents (and any other consents of Owners 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. 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 11.02 No Legal Title to Owner Trust Estate in Owners. The
Owners shall not have legal title to any part of the Owner Trust Estate. The
Owners shall be entitled to receive distributions with respect to their
undivided ownership interest therein only in accordance with Articles V and IX.
No transfer, by operation of law or otherwise, of any right, title, or interest
of the Owners 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 11.03. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Owner Trustee, the Depositor,
the Owners, the Administrator and, to the extent expressly provided herein, 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 11.04. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days
after mailing if mailed by certified mail, postage prepaid (except that notice
to the Owner Trustee shall be deemed given only upon actual receipt by the
Owner Trustee), at the following addresses: (i) if to the Owner Trustee, its
Corporate Trust Office; (ii) if to the Depositor, Bear Stearns Asset Backed
Securities, Inc., 245 Park Avenue, New York, New York 10167, Attention:
Asset-Backed Securities Group; (iii) if to the Co-Owner Trustee, U.S. Bank
National Association, 180 East Fifth Street, St. Paul, Minnesota 55101,
Attention: Corporate Trust Department; or, as to each such 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 an Owner shall be
given by first-class mail, postage prepaid, at the address of such Owner as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Owner receives such notice.
Section 11.05 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 11.06. 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 11.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Depositor, the Owner Trustee and its successors and each Owner and its
successors and permitted assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by an Owner shall bind
the successors and assigns of such Owner.
Section 11.08. No Petition. The Owner Trustee, by entering into this
Agreement, each Owner, by accepting a Certificate, and the Indenture Trustee
and each Noteholder by accepting the benefits of this Agreement, hereby
covenant and agree that they will not at any time institute against the
Depositor or the Trust, or join in any institution against the Company, the
Depositor or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or law in connection with any obligations
relating to the Certificates, the Notes, this Agreement or any of the Basic
Documents.
Section 11.09. No Recourse. Each Owner by accepting a Certificate
acknowledges that such Owner's Certificate represents a beneficial interest in
the Trust only and does not represent an interest in or an obligation of the
Seller, the Depositor, the Servicer, the Administrator, the Owner Trustee, the
Co-Owner Trustee or any Affiliate thereof (other than the Trust) 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.
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.
BEAR STEARNS ASSET BACKED
SECURITIES, INC., Depositor
By: /s/ Matthew Perkins
------------------------------
Name: Matthew Perkins
Title: Managing Director
WILMINGTON TRUST COMPANY,
as Owner Trustee
By: /s/ Norma P. Closs
----------------------------
Name: Norma P. Closs
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, not in
its individual capacity but solely as
Co-Owner Trustee
By: /s/ Donna L. Nordstrom
----------------------------
Name: Donna L. Nordstrom
Title: Assistant Vice President
EXHIBIT A
Form of Class A-IO Certificate
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT UPON SATISFACTION OF THE CONDITIONS
IN SECTION 3.14 OF THE TRUST AGREEMENT. THIS CERTIFICATE IS ISSUED IN THE
PERCENTAGE INTEREST SET FORTH BELOW.
THE INTEREST IN THE TRUST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY
OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER
HEREOF ONLY TO (I) A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE ACT PURSUANT TO RULE 144A OR (II) A U.S. PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN
THE MEANING OF RULE 3a-7 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(INCLUDING, BUT NOT LIMITED TO, THE DEPOSITOR, AN AFFILIATE THEREOF, UNITED
NATIONAL BANK OR AN AFFILIATE THEREOF) IN A TRANSACTION THAT IS REGISTERED
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO
REGISTER THIS CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS.
NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST HEREIN SHALL BE MADE
TO ANY PERSON UNLESS THE OWNER TRUSTEE HAS RECEIVED A CERTIFICATE FROM THE
TRANSFEREE TO THE EFFECT THAT SUCH TRANSFEREE (I) IS A UNITED STATES PERSON
WITHIN THE MEANING OF SECTION 7701(a) OF THE CODE; (II) IS NOT A PERSON WHICH
IS AN EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR
SECTION 4975 OF THE CODE OR A GOVERNMENTAL PLAN, DEFINED IN SECTION 3(32) OF
ERISA SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL
EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (ANY SUCH
PERSON BEING A "PLAN") AND (III) IS NOT AN ENTITY, INCLUDING AN INSURANCE
COMPANY SEPARATE ACCOUNT OR GENERAL ACCOUNT, WHOSE UNDERLYING ASSETS INCLUDE
PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS,
PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE OWNER TRUSTEE
AND THE CERTIFICATE REGISTRAR A CERTIFICATE STATING THAT SUCH TRANSFEREE (A)
AGREES TO BE BOUND BY AND TO ABIDE BY THE TRANSFER RESTRICTIONS APPLICABLE TO
THIS CERTIFICATE; (B) IS NOT AN ENTITY THAT WILL HOLD THIS CERTIFICATE AS
NOMINEE TO FACILITATE THE CLEARANCE AND SETTLEMENT OF SUCH SECURITY THROUGH
ELECTRONIC BOOK-ENTRY CHANGES IN ACCOUNTS OF PARTICIPATING ORGANIZATIONS; AND
(C) UNDERSTANDS THAT IT MUST TAKE INTO ACCOUNT ITS PERCENTAGE INTEREST OF THE
TAXABLE INCOME RELATING TO THIS CERTIFICATE.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER,
THE DEPOSITOR, THE SERVICER, THE OWNER TRUSTEE, THE CO-OWNER TRUSTEE, THE
INDENTURE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
PRINCIPAL SHALL NOT BE PAYABLE IN RESPECT OF THIS CERTIFICATE. INTEREST IS
CALCULATED ON THIS CERTIFICATE BASED ON THE NOTIONAL AMOUNT SPECIFIED HEREIN.
EXCEPT AS SET FORTH IN THE TRUST AGREEMENT, HOLDERS OF CLASS A-I0 CERTIFICATES
HAVE NO VOTING RIGHTS UNDER THE TRUST AGREEMENT.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
CLASS A-IO ASSET-BACKED CERTIFICATES
Original Notional Balance of the Class A-IO Percentage Interest:
Certificates: $
Interest Rate: Variable
evidencing a fractional undivided interest in United National Home Loan Owner
Trust 1999-1 (the "Issuer" or the "Trust"), the property of which consists
primarily of the Home Loans.
This Certificate is payable solely from the Trust Estate, and does not represent
an obligation of or interest in the Depositor, the Seller, the Owner Trustee,
the Co-Owner Trustee, the Indenture Trustee, the Servicer or any of their
respective Affiliates. This Certificate is not guaranteed or insured by any
governmental agency or instrumentality or by the Depositor, the Seller, the
Issuer, the Owner Trustee, the Co-Owner Trustee, the Indenture Trustee, the
Servicer or any of their respective Affiliates. None of the Depositor, the
Seller, the Owner Trustee, the Indenture Trustee, the Servicer or any of their
respective Affiliates will have any obligation with respect to any Certificate
or other obligation secured by or payable from payments on the Certificates.
This certifies that __________________ is the registered owner of the Percentage
Interest of the Class Notional Balance evidenced by this Certificate (as set
forth on the face hereof) in certain distributions with respect to the Trust
Estate, which consists primarily of the Home Loans. The Trust is governed by a
trust agreement dated as of March 1, 1999 (the "Trust Agreement"), among the
Depositor, Wilmington Trust Company, as owner trustee (the "Owner Trustee") and
U.S. Bank National Association, as co-owner trustee (the "Co-Owner Trustee"), a
summary of certain of the pertinent provisions of which is set forth below.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the indenture dated as of March 1, 1999 (the
"Indenture"), between the Issuer and the U.S. Bank National Association, as
indenture trustee (the "Indenture Trustee"). The Holder hereof is entitled to
receive distributions of interest distributable, if any, on this Certificate.
This Class of Certificates bears interest on its outstanding Class Notional
Balance at a variable Interest Rate as set forth in the Trust Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which the Holder of this Certificate by
virtue of the acceptance hereof assents, and by which such Certificateholder is
bound.
Pursuant to the terms of the Trust Agreement, a distribution will be made on the
25th day of each month or, if such day is not a Business Day, the immediately
succeeding Business Day (each, a "Payment Date"), commencing in April 1999, to
the Person in the name of which this Certificate is registered at the close of
business on the last day (or if such day is not a Business Day, the immediately
preceding Business Day) of the month immediately preceding the month of such
distribution (each, a "Record Date"), in an amount equal to the pro rata portion
evidenced by this Certificate (based on the Percentage Interest stated on the
face hereon) of the amount of interest required to be distributed to Class A-IO
Certificateholders on such Payment Date. Distributions on this Certificate will
be made as provided in the Trust Agreement by the Certificate Paying Agent by
wire transfer or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon.
Except as otherwise provided in the Trust Agreement and notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained by the Certificate Registrar for such purpose in The City of New
York. The Class Notional Balance hereof will change to the extent provided in
the Trust Agreement and the other Basic Documents.
(a) No transfer of a Certificate shall be made to any Person unless
the Owner Trustee has received a certificate from the transferee, substantially
in the form of Exhibit G to the Trust Agreement, to the effect that such
transferee (i) is a United States person within the meaning of Section 7701(a)
of the Code, (ii) is not a person which is an employee benefit plan, trust or
account subject to Title I of ERISA or Section 4975 of the Code or a
governmental plan, defined in Section 3(32) of ERISA subject to any federal,
state or local law which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code (any such person being a "Plan") and (iii) is
not an entity, including an insurance company separate account or general
account, whose underlying assets include Plan assets by reason of a Plan's
investment in the entity.
Each Certificateholder, by its acceptance of a Certificate, agrees that it will
look solely to funds on deposit in the Certificate Distribution Account that
have been released from the Lien of the Indenture for payment hereunder, and
that the Owner Trustee in its individual capacity is not personally liable to
any Certificateholder for any amount payable under any Certificate or the Trust
Agreement or, except as expressly provided in the Trust Agreement, subject to
any liability under the Trust Agreement.
Each Certificateholder, by its acceptance of a Certificate, covenants and agrees
that such Certificateholder will not at any time institute against the Depositor
or the Issuer, or join in any institution against the Depositor or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
Proceedings, or other Proceedings under any federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates, the
Notes, the Trust Agreement or any other Basic Document.
The Trust Agreement may be amended by the Depositor, the Owner Trustee and the
Co-Owner Trustee and with prior written notice to the Rating Agencies, but
without the consent of any of the Noteholders or the Certificateholders or the
Indenture Trustee, to cure any ambiguity, to correct or supplement any
provisions in the Trust Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in the Trust
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not adversely
affect in any material respect the interests of any Noteholder or
Certificateholder.
The Trust Agreement also permits the amendment from time to time by the
Depositor, the Owner Trustee and the Co-Owner Trustee, with the prior written
consent of the Indenture Trustee, the Holders of Notes evidencing more than 50%
of the Outstanding Amount of the Notes, and the Holders of Certificates
evidencing more than 50% of the Outstanding Class Principal Balance of the
Certificates, 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, the Rating Agency Condition has been satisfied by the party requesting
the amendment; provided further, however, that 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 the Home 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 Class Principal Balance of the Certificates or the
Percentage Interests required to consent to any such amendment, in either case
of clause (a) or (b) without the consent of the holders of all the outstanding
Notes and Certificates.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained in The City of New
York, accompanied by a written instrument of transfer in form satisfactory to
the Certificate Registrar duly executed by the Holder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one or
more new Certificates of authorized denominations evidencing a like aggregate
Percentage Interest will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is the Indenture
Trustee.
The Class A-IO Certificates are issuable only in minimum Percentage Interests of
20%. As provided in the Trust Agreement and subject to certain limitations set
forth therein, the Certificates are exchangeable for new Certificates of
authorized denominations, as requested by the Certificateholder surrendering the
same. This Certificate is issued in the Percentage Interest set forth above.
Except as provided in the Trust Agreement, the Class A-IO Certificates have no
voting rights under the Trust Agreement.
No service charge will be made for any such registration of transfer or
exchange, but the Owner Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or governmental charge payable in
connection therewith. The Owner Trustee, the Certificate Paying Agent, the
Certificate Registrar and any agent of the foregoing may treat the Person in the
name of which this Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Co-Owner Trustee, the Certificate
Paying Agent, the Certificate Registrar or any such agent shall be affected by
any notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws
of the State of Delaware.
The Trust Agreement (other than Article IX thereof) and the Trust shall
terminate and be of no further force or effect upon the satisfaction and
discharge of the Indenture and the termination of the Sale and Servicing
Agreement and final distribution of all moneys or other property or proceeds of
the Trust Estate in accordance with the terms of the Indenture and the Trust
Agreement. The bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not (i) operate to terminate the Trust Agreement or the
Trust, (ii) entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to pursue any Proceeding for a partition or winding up of
all or any part of the Trust or the Trust Estate or (iii) otherwise affect the
rights, obligations and liabilities of the parties thereto. Notwithstanding any
other provision of the Trust Agreement, in no event will the Trust continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James's, living on the date of the Trust Agreement.
Unless the certificate of authentication hereon shall have been executed by an
authorized officer of the Owner Trustee, or an authenticating agent by manual
signature, this Certificate shall not be entitled to any benefit under the Trust
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually
or in facsimile, by its Authorized Officer, as of the date set forth below.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as Owner
Trustee
By:______________________________
Authorized Signatory
Dated: March __, 1999
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates designated above and referred to in the
within-mentioned Trust Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee,
By:___________________________________
Authorized Signatory
or____________________________________
as Authenticating Agent of the Trust
By:___________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
to transfer such Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
_________________________________*/
Signature Guaranteed:
_________________________________*/
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the Certificate
Paying Agent:
Distribution shall be made by wire transfer in immediately available funds to
for the account of ___________, account number ___________, or, if
mailed by check, to _________.
Applicable statements should be mailed to __________.
By:______________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
EXHIBIT B
FORM OF CLASS B-__ CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES AND TO CERTAIN
OTHER CLASSES OF CERTIFICATES AS DESCRIBED IN THE TRUST AGREEMENT.
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT UPON SATISFACTION OF THE CONDITIONS
IN SECTION 3.14 OF THE TRUST AGREEMENT. THIS CERTIFICATE IS ISSUED IN THE
PERCENTAGE INTEREST SET FORTH BELOW.
THE INTEREST IN THE TRUST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY
OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER
HEREOF ONLY TO (I) A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE ACT PURSUANT TO RULE 144A OR (II) A U.S. PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN
THE MEANING OF RULE 3a-7 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(INCLUDING, BUT NOT LIMITED TO, THE DEPOSITOR, AN AFFILIATE THEREOF, UNITED
NATIONAL BANK OR AN AFFILIATE THEREOF) IN A TRANSACTION THAT IS REGISTERED
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO
REGISTER THIS CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS.
NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST HEREIN SHALL BE MADE
TO ANY PERSON UNLESS THE OWNER TRUSTEE HAS RECEIVED A CERTIFICATE FROM THE
TRANSFEREE TO THE EFFECT THAT SUCH TRANSFEREE (I) IS A UNITED STATES PERSON
WITHIN THE MEANING OF SECTION 7701(a) OF THE CODE; (II) IS NOT A PERSON WHICH
IS AN EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR
SECTION 4975 OF THE CODE OR A GOVERNMENTAL PLAN, DEFINED IN SECTION 3(32) OF
ERISA SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL
EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (ANY SUCH
PERSON BEING A "PLAN") AND (III) IS NOT AN ENTITY, INCLUDING AN INSURANCE
COMPANY SEPARATE ACCOUNT OR GENERAL ACCOUNT, WHOSE UNDERLYING ASSETS INCLUDE
PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS,
PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE OWNER
TRUSTEE AND THE CERTIFICATE REGISTRAR A CERTIFICATE STATING THAT SUCH
TRANSFEREE (A) AGREES TO BE BOUND BY AND TO ABIDE BY THE TRANSFER RESTRICTIONS
APPLICABLE TO THIS CERTIFICATE; (B) IS NOT AN ENTITY THAT WILL HOLD THIS
CERTIFICATE AS NOMINEE TO FACILITATE THE CLEARANCE AND SETTLEMENT OF SUCH
SECURITY THROUGH ELECTRONIC BOOK-ENTRY CHANGES IN ACCOUNTS OF PARTICIPATING
ORGANIZATIONS; AND (C) UNDERSTANDS THAT IT MUST TAKE INTO ACCOUNT ITS
PERCENTAGE INTEREST OF THE TAXABLE INCOME RELATING TO THIS CERTIFICATE.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER,
THE DEPOSITOR, THE SERVICER, THE OWNER TRUSTEE, THE CO-OWNER TRUSTEE, THE
INDENTURE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
No.
Class Principal Balance:
First Payment Date: Percentage Interest: %
Final Scheduled Payment Date:
Interest Rate:
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
CLASS B-__ ASSET-BACKED CERTIFICATES
evidencing a fractional undivided interest in United National Home Loan Owner
Trust 1999-1 (the "Issuer" or the "Trust"), the property of which consists
primarily of the Home Loans.
This Certificate is payable solely from the Trust Estate, and does not represent
an obligation of or interest in the Depositor, the Seller, the Owner Trustee,
the Co-Owner Trustee, the Indenture Trustee, the Servicer or any of their
respective Affiliates. This Certificate is not guaranteed or insured by any
governmental agency or instrumentality or by the Depositor, the Seller, the
Issuer, the Owner Trustee, the Co-Owner Trustee, the Indenture Trustee, the
Servicer or any of their respective Affiliates. None of the Depositor, the
Seller, the Owner Trustee, the Indenture Trustee, the Servicer or any of their
respective Affiliates will have any obligation with respect to any Certificate
or other obligation secured by or payable from payments on the Certificates.
This certifies that __________________ is the registered owner of the Percentage
Interest of the Class Principal Balance evidenced by this Certificate (as set
forth on the face hereof) in certain distributions with respect to the Trust
Estate, which consists primarily of the Home Loans. The Trust is governed by a
trust agreement dated as of March 1, 1999 (the "Trust Agreement"), among the
Depositor, Wilmington Trust Company, as owner trustee (the "Owner Trustee") and
U.S. Bank National Association, as co-owner trustee (the "Co-Owner Trustee"), a
summary of certain of the pertinent provisions of which is set forth below.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the indenture dated as of March 1, 1999 (the
"Indenture"), between the Issuer and the U.S. Bank National Association, as
indenture trustee (the "indenture Trustee"). The Holder hereof is entitled to
receive distributions of principal and interest distributable, if any, on this
Certificate. This Class of Certificate bears interest on its outstanding Class
Principal Balance at the Interest Rate set forth above as set forth in the Trust
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which the Holder of this
Certificate by virtue of the acceptance hereof assents, and by which such
Certificateholder is bound.
Pursuant to the terms of the Trust Agreement, a distribution will be made on the
25th day of each month or, if such day is not a Business Day, the immediately
succeeding Business Day (each, a "Payment Date"), commencing in April 1999, to
the Person in the name of which this Certificate is registered at the close of
business on the last day (or if such day is not a Business Day, the immediately
preceding Business Day) of the month immediately preceding the month of such
distribution (each, a "Record Date"), in an amount equal to the pro rata portion
evidenced by this Certificate (based on the Percentage Interest stated on the
face hereon) of the amount, if any, required to be distributed to Class B-__
Certificateholders on such Payment Date. Distributions on this Certificate will
be made as provided in the Trust Agreement by the Certificate Paying Agent by
wire transfer or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon.
Except as otherwise provided in the Trust Agreement and notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained by the Certificate Registrar for such purpose in The City of New
York. The Certificate Balance hereof will change to the extent of the
distributions allocable to principal or as otherwise provided in the Trust
Agreement or the other Basic Documents. Further, the Class Principal Balance of
the Class B-__ Certificates may be reduced by the application of Allocable Loss
Amounts as provided in the Sale and Servicing Agreement.
(b) No transfer of a Certificate shall be made to any Person unless
the Owner Trustee has received a certificate from the transferee, substantially
in the form of Exhibit G to the Trust Agreement, to the effect that such
transferee (i) is a United States person within the meaning of Section 7701(a)
of the Code, (ii) is not a person which is an employee benefit plan, trust or
account subject to Title I of ERISA or Section 4975 of the Code or a
governmental plan, defined in Section 3(32) of ERISA subject to any federal,
state or local law which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code (any such person being a "Plan") and (iii) is
not an entity, including an insurance company separate account or general
account, whose underlying assets include Plan assets by reason of a Plan's
investment in the entity.
Each Certificateholder, by its acceptance of a Certificate, agrees that it will
look solely to funds on deposit in the Certificate Distribution Account that
have been released from the Lien of the Indenture for payment hereunder, and
that the Owner Trustee in its individual capacity is not personally liable to
any Certificateholder for any amount payable under any Certificate or the Trust
Agreement or, except as expressly provided in the Trust Agreement, subject to
any liability under the Trust Agreement.
The Holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Indenture and to such rights of
certain other Classes of Certificates as set forth in the Trust Agreement.
Each Certificateholder, by its acceptance of a Certificate, covenants and agrees
that such Certificateholder will not at any time institute against the Depositor
or the Issuer, or join in any institution against the Depositor or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
Proceedings, or other Proceedings under any federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates, the
Notes, the Trust Agreement or any other Basic Document.
The Trust Agreement may be amended by the Depositor, the Owner Trustee and the
Co-Owner Trustee and with prior written notice to the Rating Agencies, but
without the consent of any of the Noteholders or the Certificateholders or the
Indenture Trustee, to cure any ambiguity, to correct or supplement any
provisions in the Trust Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in the Trust
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not adversely
affect in any material respect the interests of any Noteholder or
Certificateholder.
The Trust Agreement also permits the amendment from time to time by the
Depositor, the Owner Trustee and the Co-Owner Trustee, with the prior written
consent of the Indenture Trustee, the Holders of Notes evidencing more than 50%
of the Outstanding Amount of the Notes, and the Holders of Certificates
evidencing more than 50% of the Outstanding Class Principal Balance of the
Certificates, 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, the Rating Agency Condition has been satisfied by the party requesting
the amendment; provided further, however, that 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 the Home 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 Class Principal Balance of the Certificates or the
Percentage Interests required to consent to any such amendment, in either case
of clause (a) or (b) without the consent of the holders of all the outstanding
Notes and Certificates.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained in The City of New
York, accompanied by a written instrument of transfer in form satisfactory to
the Certificate Registrar duly executed by the Holder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one or
more new Certificates of authorized denominations evidencing a like aggregate
Percentage Interest will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is the Indenture
Trustee.
The Certificates (other than the Class A-IO and the Residual Interest
Certificates) are issuable only in minimum denominations of $250,000 and in
integral multiples of $1,000 in excess thereof. As provided in the Trust
Agreement and subject to certain limitations set forth therein, the Certificates
are exchangeable for new Certificates of authorized denominations, as requested
by the Certificateholder surrendering the same. This Certificate is issued in
the Percentage Interest set forth above.
No service charge will be made for any such registration of transfer or
exchange, but the Owner Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or governmental charge payable in
connection therewith. The Owner Trustee, the Certificate Paying Agent, the
Certificate Registrar and any agent of the foregoing may treat the Person in the
name of which this Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Co-Owner Trustee, the Certificate
Paying Agent, the Certificate Registrar or any such agent shall be affected by
any notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws
of the State of Delaware.
The Trust Agreement (other than Article IX thereof) and the Trust shall
terminate and be of no further force or effect upon the satisfaction and
discharge of the Indenture and the termination of the Sale and Servicing
Agreement and final distribution of all moneys or other property or proceeds of
the Trust Estate in accordance with the terms of the Indenture and the Trust
Agreement. The bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not (i) operate to terminate the Trust Agreement or the
Trust, (ii) entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to pursue any Proceeding for a partition or winding up of
all or any part of the Trust or the Trust Estate or (iii) otherwise affect the
rights, obligations and liabilities of the parties thereto. Notwithstanding any
other provision of the Trust Agreement, in no event will the Trust continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James's, living on the date of the Trust Agreement.
Unless the certificate of authentication hereon shall have been executed by an
authorized officer of the Owner Trustee, or an authenticating agent by manual
signature, this Certificate shall not be entitled to any benefit under the Trust
Agreement or be valid for any purpose.
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.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
Dated: March ___, 1999 By:_____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By:______________________________________
Authorized Signatory
or ______________________________________
as Authenticating Agent of the Trust
By:______________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
to transfer such Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
_____________________________*/
Signature Guaranteed:
_____________________________*/
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the Certificate
Paying Agent:
Distribution shall be made by wire transfer in immediately available
funds to for the account of ___________, account number ___________, or, if
mailed by check, to _________.
Applicable statements should be mailed to __________.
By:_________________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
EXHIBIT C
FORM OF RESIDUAL INTEREST CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES AND TO THE
OTHER CLASSES OF CERTIFICATES AS DESCRIBED IN THE TRUST AGREEMENT.
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT UPON SATISFACTION OF THE CONDITIONS
IN SECTION 3.14 OF THE TRUST AGREEMENT. THIS CERTIFICATE IS ISSUED IN THE
PERCENTAGE INTEREST SET FORTH BELOW.
THE INTEREST IN THE TRUST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY
OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER
HEREOF ONLY TO (I) A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE ACT PURSUANT TO RULE 144A OR (II) A U.S. PERSON INVOLVED IN THE ORGANIZATION
OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN THE MEANING OF
RULE 3a-7 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (INCLUDING, BUT NOT
LIMITED TO, THE DEPOSITOR, AN AFFILIATE THEREOF, UNITED NATIONAL BANK OR AN
AFFILIATE THEREOF) IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS
CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS.
NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST HEREIN SHALL BE MADE
TO ANY PERSON UNLESS THE OWNER TRUSTEE HAS RECEIVED A CERTIFICATE FROM THE
TRANSFEREE TO THE EFFECT THAT SUCH TRANSFEREE (I) IS A UNITED STATES PERSON
WITHIN THE MEANING OF SECTION 7701(a) OF THE CODE; (II) IS NOT A PERSON WHICH IS
AN EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF
THE CODE OR A GOVERNMENTAL PLAN, DEFINED IN SECTION 3(32) OF ERISA SUBJECT TO
ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE (ANY SUCH PERSON BEING A "PLAN") AND
(III) IS NOT AN ENTITY, INCLUDING AN INSURANCE COMPANY SEPARATE ACCOUNT OR
GENERAL ACCOUNT, WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A
PLAN'S INVESTMENT IN THE ENTITY.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS,
PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE OWNER TRUSTEE
AND THE CERTIFICATE REGISTRAR A CERTIFICATE STATING THAT SUCH TRANSFEREE (A)
AGREES TO BE BOUND BY AND TO ABIDE BY THE TRANSFER RESTRICTIONS APPLICABLE TO
THIS CERTIFICATE; (B) IS NOT AN ENTITY THAT WILL HOLD THIS CERTIFICATE AS
NOMINEE TO FACILITATE THE CLEARANCE AND SETTLEMENT OF SUCH SECURITY THROUGH
ELECTRONIC BOOK-ENTRY CHANGES IN ACCOUNTS OF PARTICIPATING ORGANIZATIONS; AND
(C) UNDERSTANDS THAT IT MUST TAKE INTO ACCOUNT ITS PERCENTAGE INTEREST OF THE
TAXABLE INCOME RELATING TO THIS CERTIFICATE.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER,
THE DEPOSITOR, THE SERVICER, THE OWNER TRUSTEE, THE CO-OWNER TRUSTEE, THE
INDENTURE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
No.
First Payment Date: Percentage Interest: ___%
Final Scheduled Payment Date:
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
RESIDUAL INTEREST CERTIFICATE
evidencing a fractional undivided interest in United National Home Loan Owner
Trust 1999-1 (the "Issuer" or the "Trust"), the property of which consists
primarily of the Home Loans.
This Certificate is payable solely from the Trust Estate, and does not represent
an obligation of or interest in the Depositor, the Seller, the Owner Trustee,
the Co-Owner Trustee, the Indenture Trustee, the Servicer or any of their
respective Affiliates. This Certificate is not guaranteed or insured by any
governmental agency or instrumentality or by the Depositor, the Seller, the
Issuer, the Owner Trustee, the Co-Owner Trustee, the Indenture Trustee, the
Servicer or any of their respective Affiliates. None of the Depositor, the
Seller, the Owner Trustee, the Indenture Trustee, the Servicer or any of their
respective Affiliates will have any obligation with respect to any Certificate
or other obligation secured by or payable from payments on the Certificates.
This certifies that __________________ is the registered owner of the entire
Percentage Interest evidenced by this Certificate (as set forth on the face
hereof) in certain distributions with respect to the Trust Estate, which
consists primarily of the Home Loans. The Trust is governed by a trust agreement
dated as of March 1, 1999 (the "Trust Agreement"), among the Depositor,
Wilmington Trust Company, as owner trustee (the "Owner Trustee") and U.S. Bank
National Association, as co-owner trustee (the "Co-Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. Capitalized
terms used herein that are not otherwise defined shall have the meanings
ascribed thereto in the indenture dated as of March 1, 1999 (the "Indenture"),
between the Issuer and the U.S. Bank National Association, as indenture trustee
(the "indenture Trustee"). The Holder hereof is entitled to receive
distributable amounts, if any, on this Certificate. This Certificate does not
bear interest and does not have a Class Principal Balance. This Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which the Holder of this Certificate by virtue of the acceptance
hereof assents, and by which such Certificateholder is bound.
Pursuant to the terms of the Trust Agreement, a distribution will be made on the
25th day of each month or, if such day is not a Business Day, the immediately
succeeding Business Day (each, a "Payment Date"), commencing in April 1999, to
the Person in the name of which this Certificate is registered at the close of
business on the last day (or if such day is not a Business Day, the immediately
preceding Business Day) of the month immediately preceding the month of such
distribution (each, a "Record Date"), in an amount equal to the pro rata portion
evidenced by this Certificate (based on the Percentage Interest stated on the
face hereon) of the amount, if any, required to be distributed to the Residual
Interest Certificateholder on such Payment Date. Distributions on this
Certificate will be made as provided in the Trust Agreement by the Certificate
Paying Agent by wire transfer or check mailed to the Certificateholder of record
in the Certificate Register without the presentation or surrender of this
Certificate or the making of any notation hereon.
Except as otherwise provided in the Trust Agreement and notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained by the Certificate Registrar for such purpose in The City of New
York.
(c) No transfer of a Certificate shall be made to any Person unless
the Owner Trustee has received a certificate from the transferee, substantially
in the form of Exhibit G to the Trust Agreement, to the effect that such
transferee (i) is a United States person within the meaning of Section 7701(a)
of the Code, (ii) is not a person which is an employee benefit plan, trust or
account subject to Title I of ERISA or Section 4975 of the Code or a
governmental plan, defined in Section 3(32) of ERISA subject to any federal,
state or local law which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code (any such person being a "Plan") and (iii) is
not an entity, including an insurance company separate account or general
account, whose underlying assets include Plan assets by reason of a Plan's
investment in the entity.
Each Certificateholder, by its acceptance of a Certificate, agrees that it will
look solely to funds on deposit in the Certificate Distribution Account that
have been released from the Lien of the Indenture for payment hereunder, and
that the Owner Trustee in its individual capacity is not personally liable to
any Certificateholder for any amount payable under any Certificate or the Trust
Agreement or, except as expressly provided in the Trust Agreement, subject to
any liability under the Trust Agreement.
The Holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Indenture and to such rights of
the other Classes of Certificates as set forth in the Trust Agreement.
Each Certificateholder, by its acceptance of a Certificate, covenants and agrees
that such Certificateholder will not at any time institute against the Depositor
or the Issuer, or join in any institution against the Depositor or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
Proceedings, or other Proceedings under any federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates, the
Notes, the Trust Agreement or any other Basic Document.
The Trust Agreement may be amended by the Depositor, the Owner Trustee and the
Co-Owner Trustee and with prior written notice to the Rating Agencies, but
without the consent of any of the Noteholders or the Certificateholders or the
Indenture Trustee, to cure any ambiguity, to correct or supplement any
provisions in the Trust Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in the Trust
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not adversely
affect in any material respect the interests of any Noteholder or
Certificateholder.
The Trust Agreement also permits the amendment from time to time by the
Depositor, the Owner Trustee and the Co-Owner Trustee, with the prior written
consent of the Indenture Trustee, the Holders of Notes evidencing more than 50%
of the Outstanding Amount of the Notes, and the Holders of Certificates
evidencing more than 50% of the Outstanding Class Principal Balance of the
Certificates, 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, the Rating Agency Condition has been satisfied by the party requesting
the amendment; provided further, however, that 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 the Home 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 Class Principal Balance of the Certificates or the
Percentage Interests required to consent to any such amendment, in either case
of clause (a) or (b) without the consent of the holders of all the outstanding
Notes and Certificates.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained in The City of New
York, accompanied by a written instrument of transfer in form satisfactory to
the Certificate Registrar duly executed by the Holder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one or
more new Certificates of authorized denominations evidencing a like aggregate
Percentage Interest will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is the Indenture
Trustee.
This Residual Interest Certificate is issuable only as a single certificate
evidencing a 100% Percentage Interest herein. As provided in the Trust Agreement
and subject to certain limitations set forth therein, the Certificates are
exchangeable for new Certificates of authorized denominations, as requested by
the Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Owner Trustee or the Certificate Registrar may require payment
of a sum sufficient to cover any tax or governmental charge payable in
connection therewith. The Owner Trustee, the Certificate Paying Agent, the
Certificate Registrar and any agent of the foregoing may treat the Person in the
name of which this Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Co-Owner Trustee, the Certificate
Paying Agent, the Certificate Registrar or any such agent shall be affected by
any notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws
of the State of Delaware.
The Trust Agreement (other than Article IX thereof) and the Trust shall
terminate and be of no further force or effect upon the satisfaction and
discharge of the Indenture and the termination of the Sale and Servicing
Agreement and final distribution of all moneys or other property or proceeds of
the Trust Estate in accordance with the terms of the Indenture and the Trust
Agreement. The bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not (i) operate to terminate the Trust Agreement or the
Trust, (ii) entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to pursue any Proceeding for a partition or winding up of
all or any part of the Trust or the Trust Estate or (iii) otherwise affect the
rights, obligations and liabilities of the parties thereto. Notwithstanding any
other provision of the Trust Agreement, in no event will the Trust continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James's, living on the date of the Trust Agreement.
Unless the certificate of authentication hereon shall have been executed by an
authorized officer of the Owner Trustee, or an authenticating agent by manual
signature, this Certificate shall not be entitled to any benefit under the Trust
Agreement or be valid for any purpose.
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.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
By: ______________________________________
Authorized Signatory
DATED: March __, 1999
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By:______________________________________
Authorized Signatory
or ______________________________________
as Authenticating Agent of the Trust
By:______________________________________
Authorized Signatory
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: ___________________________*/
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 Note 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 Note Registrar, which requirements include membership or
participation in 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 Securities Exchange Act of 1934, as amended.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the Certificate
Paying Agent:
Distribution shall be made by wire transfer in immediately available funds to
for the account of ___________, account number ___________, or, if
mailed by check, to _________.
Applicable statements should be mailed to __________.
By:__________________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
EXHIBIT D
CERTIFICATE OF TRUST OF
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
THIS Certificate of Trust of United National Home Loan Owner Trust 1999-1 (the
"Trust"), is being duly executed and filed by the undersigned, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. Code, ss.
3801 et seq.) (the "Act").
1. Name. The name of the business trust formed hereby is United National
Home Loan Owner Trust 1999-1.
2. Delaware Trustee. The name and business address of the trustee of the
Trust in the State of Delaware is Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001.
Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective on March
26, 1999.
IN WITNESS WHEREOF, the undersigned, has duly executed this Certificate of
Trust in accordance with Section 3811(a) of the Act.
Wilmington Trust Company,
not in its individual
capacity but solely as
Owner Trustee under a Trust
Agreement dated as of March 1, 1999.
By:________________________________
Name:
Title:
EXHIBIT E
[RESERVED]
EXHIBIT F1
FORM OF INVESTMENT LETTER
_________________
[date]
UNITED NATIONAL BANK U.S. Bank National Association
180 E. Fifth Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Administration
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Re: United National Home Loan Owner Trust 1999-1 (the "Issuer")
Asset Backed Securities, Series 1999-1
Ladies and Gentlemen:
Reference is hereby made to the Trust Agreement (the "Trust Agreement") among
Bear Stearns Asset Backed Securities, Inc., as Depositor, Wilmington Trust
Company, as Owner Trustee, and U.S. Bank, National Association, as Co-Owner
Trustee, dated as of March 1, 1999. This letter is delivered to you in
connection with the transfer of the [Class __][Residual Interest] Certificate
(the "Certificates") by ____________________________________ (the "Transferor")
to (the "Transferee") and in accordance with Section 3.14(d) of the Trust
Agreement. Capitalized terms used but not defined herein have the meanings set
forth in the Trust Agreement.
The undersigned, on behalf of and as an officer of the Transferee, HEREBY
CERTIFIES as follows:
1. The undersigned (a) is a duly authorized officer of the Transferee,
and the Transferee is an entity that is duly organized and existing under the
laws of the jurisdiction of formation, (b) is duly authorized to purchase the
Certificates and its purchase of investments having the characteristics of the
Certificates is authorized under, and not directly or indirectly in
contravention of, any law, charter, trust instrument or other operative
document, investment guidelines or list of permissible or impermissible
investments that is applicable to the investor, and (c) understands that each
holder of a Certificate, by virtue of its acceptance thereof, assents to the
terms, provisions and conditions of the Trust Agreement.
2. The Transferee hereby acknowledges that no transfer of the
Certificate may be made unless such transfer is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and applicable state securities laws, or is made in accordance with the
Securities Act and such laws.
3. The Transferee understands that the Certificate has not been and will
not be registered under the Securities Act and may be offered, sold, pledged or
otherwise transferred only to a person whom the seller thereof reasonably
believes is (A) a qualified institutional buyer (as defined in Rule 144A under
the Securities Act) or (B) a Person involved in the organization or operation of
the Trust or an affiliate of such Person, in a transaction meeting the
requirements of Rule 144A under the Securities Act and in accordance with any
applicable securities laws of any state of the United States. The Transferee
understands that the Residual Interest Certificate bears a legend to the
foregoing effect.
4. The Transferee understands that such Certificates have not been
registered under the Securities Act, and that, if in the future it decides to
offer, resell, pledge or otherwise transfer such Certificates, such Certificates
may be offered, resold, pledged or otherwise transferred only (A) pursuant to a
Registration Statement which has been declared effective under the Securities
Act, or (B) for so long as such Certificates are eligible for resale pursuant to
Rule 144A under the Securities Act, to a person whom the seller reasonably
believes is a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act that is purchasing such Certificates for its own account or for
the account of a qualified institutional buyer to whom notice is given that the
transfer is being made in reliance on Rule 144A, in each case in compliance with
the requirements of the Trust Agreement. It also understands that an employee
benefit plan subject to ERISA or Section 4975 of the Code, and entities using
the assets of any such employee benefit plan, are prohibited from acquiring the
Certificates (except to the extent that an exemption from such prohibition is
available, as described herein).
(i) 5. The Transferee understands that each Certificate
bears a legend to the following effect:
THE INTEREST IN THE TRUST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THIS CERTIFICATE
MAY BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF
(INCLUDING PLEDGED) BY THE HOLDER HEREOF ONLY TO (I) A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE ACT, IN A
TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE ACT PURSUANT TO RULE 144A OR (II) A PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A
PERSON WITHIN THE MEANING OF RULE 3a-7 OF THE INVESTMENT COMPANY ACT
OF 1940, AS AMENDED (INCLUDING, BUT NOT LIMITED TO, THE DEPOSITOR, AN
AFFILIATE THEREOF, UNITED NATIONAL BANK OR AN AFFILIATE THEREOF) IN A
TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS
CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS.
NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST HEREIN
SHALL BE MADE TO ANY PERSON UNLESS THE OWNER TRUSTEE HAS RECEIVED A
CERTIFICATE FROM THE TRANSFEREE TO THE EFFECT THAT SUCH TRANSFEREE (I)
IS A UNITED STATES PERSON WITHIN THE MEANING OF SECTION 7701(a) OF THE
CODE, (II) IS NOT A PERSON WHICH IS AN EMPLOYEE BENEFIT PLAN, TRUST OR
ACCOUNT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE OR A
GOVERNMENTAL PLAN, DEFINED IN SECTION 3(32) OF ERISA SUBJECT TO ANY
FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO
THE FOREGOING PROVISIONS OF ERISA OR THE CODE (ANY SUCH PERSON BEING A
"PLAN") AND (III) IS NOT AN ENTITY, INCLUDING AN INSURANCE COMPANY
SEPARATE ACCOUNT OR GENERAL ACCOUNT, WHOSE UNDERLYING ASSETS INCLUDE
PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
UNLESS, PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO
THE OWNER TRUSTEE AND THE CERTIFICATE REGISTRAR A CERTIFICATE STATING
THAT SUCH TRANSFEREE (A) AGREES TO BE BOUND BY AND TO ABIDE BY THE
TRANSFER RESTRICTIONS APPLICABLE TO THIS CERTIFICATE; (B) IS NOT AN
ENTITY THAT WILL HOLD THIS CERTIFICATE AS NOMINEE TO FACILITATE THE
CLEARANCE AND SETTLEMENT OF SUCH SECURITY THROUGH ELECTRONIC
BOOK-ENTRY CHANGES IN ACCOUNTS OF PARTICIPATING ORGANIZATIONS; AND (C)
UNDERSTANDS THAT IT MUST TAKE INTO ACCOUNT ITS PERCENTAGE INTEREST OF
THE TAXABLE INCOME RELATING TO THIS CERTIFICATE.
6. The Transferee is acquiring the Certificate for its own account
for investment and not with a view to offer, sell or distribute the Certificate
in any manner that would violate Section 5 of the Securities Act or any
applicable state securities laws.
7. The Transferee is a "qualified institutional buyer" as defined
in Rule 144A under the Securities Act, and is aware that the Transferor of the
Certificate may be relying on the exemption from the registration requirements
of the Securities Act provided by Rule 144A and is acquiring such Certificate
for its own account or for the account of one or more qualified institutional
buyers for whom it is authorized to act.
8. The Transferee will not authorize nor has it authorized any person to
make any public offering or general solicitation by means of general advertising
or to take any other action that would constitute a sale or distribution of the
Certificate under the Securities Act, in violation of Section 5 of the
Securities Act or any state securities law, or that would require registration
or qualification pursuant thereto.
9. If the Transferee sells or otherwise transfers the registered
ownership of such Certificate, the Transferee will comply with the restrictions
and requirements with respect to the transfer of the ownership of the
Certificate under the applicable provisions of the Trust Agreement, and the
Transferee will obtain from any subsequent purchaser or transferee substantially
the same certifications, representations, warranties and covenants as required
under the Trust Agreement in connection with such subsequent sale or transfer
thereof, including a certificate substantially in the form hereof.
10. The Transferee hereby indemnifies each of the Issuer, the Indenture Trustee
and the Transferee Trustee against any liability that may result if the
Transferee's transfer of a Certificate (or any portion thereof) is not exempt
from the registration requirements of the Securities Act and any applicable
state securities laws or is not made in accordance with such federal and state
laws. Such indemnification of the Issuer, the Transferee Trustee and the
Indenture Trustee shall survive the termination of the Trust Agreement.
11. The Transferee hereby consents to any amendments to the Trust Agreement as
may be required to effectuate further the restrictions on transfer of the
Certificate to Book-Entry Nominees set forth in the Trust Agreement.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be executed on
its behalf, pursuant to the authority of its Board of Directors, by its duly
authorized signatory as of the date first set forth above.
[NAME OF TRANSFEREE]
By:____________________________
Name:
Title:
EXHIBIT F2
FORM OF INVESTMENT LETTER
[DATE]
UNITED NATIONAL BANK U.S. Bank National Association
180 E. Fifth Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Administration
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Re: United National Home Loan Owner Trust 1999-1 (the "Issuer")
Asset Backed Securities, Series 1999-1
Ladies and Gentlemen:
Reference is hereby made to the Trust Agreement (the "Trust Agreement") among
Bear Stearns Asset Backed Securities, Inc., as Depositor, Wilmington Trust
Company, as Owner Trustee, and U.S. Bank, National Association, as Co-Owner
Trustee, dated as of March 1, 1999. This letter is delivered to you in
connection with the transfer of the [Class __][Residual Interest] Certificate
(the "Certificates") by ____________________________________ (the "Transferor")
to (the "Transferee") and in accordance with Section 3.14(d) of the Trust
Agreement. Capitalized terms used but not defined herein have the meanings set
forth in the Trust Agreement.
The undersigned, on behalf of and as an officer of the Transferee, HEREBY
CERTIFIES as follows:
1. The undersigned (a) is a duly authorized officer of the Transferee,
and the Transferee is an entity that is duly organized and existing under the
laws of the jurisdiction of formation, (b) is duly authorized to purchase the
Certificates and its purchase of investments having the characteristics of the
Certificates is authorized under, and not directly or indirectly in
contravention of, any law, charter, trust instrument or other operative
document, investment guidelines or list of permissible or impermissible
investments that is applicable to the investor, and (c) understands that each
holder of a Certificate, by virtue of its acceptance thereof, assents to the
terms, provisions and conditions of the Trust Agreement.
2. The Transferee hereby acknowledges that no transfer of the
Certificate may be made unless such transfer is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and applicable state securities laws, or is made in accordance with the
Securities Act and such laws.
3. The Transferee understands that the Certificate has not been and will
not be registered under the Securities Act and may be offered, sold, pledged or
otherwise transferred only to a person whom the seller thereof reasonably
believes is (A) a qualified institutional buyer (as defined in Rule 144A under
the Securities Act) or (B) a Person involved in the organization or operation of
the Trust or an affiliate of such Person, in a transaction meeting the
requirements of Rule 144A under the Securities Act and in accordance with any
applicable securities laws of any state of the United States. The Transferee
understands that the Residual Interest Certificate bears a legend to the
foregoing effect.
4. The Transferee understands that such Certificates have not been
registered under the Securities Act, and that, if in the future it decides to
offer, resell, pledge or otherwise transfer such Certificates, such Certificates
may be offered, resold, pledged or otherwise transferred only (A) pursuant to a
Registration Statement which has been declared effective under the Securities
Act, or (B) for so long as such Certificates are eligible for resale pursuant to
Rule 144A under the Securities Act, to a person whom the seller reasonably
believes is a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act that is purchasing such Certificates for its own account or for
the account of a qualified institutional buyer to whom notice is given that the
transfer is being made in reliance on Rule 144A, in each case in compliance with
the requirements of the Trust Agreement. It also understands that an employee
benefit plan subject to ERISA or Section 4975 of the Code, and entities using
the assets of any such employee benefit plan, are prohibited from acquiring the
Certificates (except to the extent that an exemption from such prohibition is
available, as described herein).
(ii) 5. The Transferee understands that each Certificate
bears a legend to the following effect:
THE INTEREST IN THE TRUST REPRESENTED BY THIS CERTIFICATE
HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY OFFERED
OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE
HOLDER HEREOF ONLY TO (I) A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE ACT, IN A TRANSACTION THAT
IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE ACT PURSUANT TO RULE 144A OR (II) A PERSON INVOLVED IN
THE ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE
OF SUCH A PERSON WITHIN THE MEANING OF RULE 3a-7 OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (INCLUDING, BUT
NOT LIMITED TO, THE DEPOSITOR, AN AFFILIATE THEREOF, UNITED
NATIONAL BANK OR AN AFFILIATE THEREOF) IN A TRANSACTION THAT
IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO REGISTER
THIS CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS.
NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST
HEREIN SHALL BE MADE TO ANY PERSON UNLESS THE OWNER TRUSTEE
HAS RECEIVED A CERTIFICATE FROM THE TRANSFEREE TO THE EFFECT
THAT SUCH TRANSFEREE (I) IS A UNITED STATES PERSON WITHIN
THE MEANING OF SECTION 7701(a) OF THE CODE, (II) IS NOT A
PERSON WHICH IS AN EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975
OF THE CODE OR A GOVERNMENTAL PLAN, DEFINED IN SECTION 3(32)
OF ERISA SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (ANY SUCH PERSON BEING A
"PLAN") AND (III) IS NOT AN ENTITY, INCLUDING AN INSURANCE
COMPANY SEPARATE ACCOUNT OR GENERAL ACCOUNT, WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S
INVESTMENT IN THE ENTITY.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF UNLESS, PRIOR TO SUCH DISPOSITION, THE PROPOSED
TRANSFEREE DELIVERS TO THE OWNER TRUSTEE AND THE CERTIFICATE
REGISTRAR A CERTIFICATE STATING THAT SUCH TRANSFEREE (A)
AGREES TO BE BOUND BY AND TO ABIDE BY THE TRANSFER
RESTRICTIONS APPLICABLE TO THIS CERTIFICATE; (B) IS NOT AN
ENTITY THAT WILL HOLD THIS CERTIFICATE AS NOMINEE TO
FACILITATE THE CLEARANCE AND SETTLEMENT OF SUCH SECURITY
THROUGH ELECTRONIC BOOK-ENTRY CHANGES IN ACCOUNTS OF
PARTICIPATING ORGANIZATIONS; AND (C) UNDERSTANDS THAT IT
MUST TAKE INTO ACCOUNT ITS PERCENTAGE INTEREST OF THE
TAXABLE INCOME RELATING TO THIS CERTIFICATE.
6. The Transferee is acquiring the Certificate for its own account for
investment and not with a view to offer, sell or distribute the Certificate in
any manner that would violate Section 5 of the Securities Act or any applicable
state securities laws.
7. The Transferee is a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act, and is aware that the Transferor of the
Certificate may be relying on the exemption from the registration requirements
of the Securities Act provided by Rule 144A and is acquiring such Certificate
for its own account or for the account of one or more qualified institutional
buyers for whom it is authorized to act.
8. The Transferee will not authorize nor has it authorized any person to
make any public offering or general solicitation by means of general advertising
or to take any other action that would constitute a sale or distribution of the
Certificate under the Securities Act, in violation of Section 5 of the
Securities Act or any state securities law, or that would require registration
or qualification pursuant thereto.
9. If the Transferee sells or otherwise transfers the registered
ownership of such Certificate, the Transferee will comply with the restrictions
and requirements with respect to the transfer of the ownership of the
Certificate under the applicable provisions of the Trust Agreement, and the
Transferee will obtain from any subsequent purchaser or transferee substantially
the same certifications, representations, warranties and covenants as required
under the Trust Agreement in connection with such subsequent sale or transfer
thereof, including a certificate substantially in the form hereof.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be executed on
its behalf, pursuant to the authority of its Board of Directors, by its duly
authorized signatory as of the date first set forth above.
[NAME OF TRANSFEREE]
By:__________________________
Name:
Title:
EXHIBIT G
FORM OF ERISA TRANSFER AFFIDAVIT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the ____________ of __________________ (the
"Investor"), a [corporation duly organized] and existing under the laws of
___________________, on behalf of which he makes this affidavit.
2. The Investor either (i) is not a person which is an employee benefit
plan, trust or account subject to Title I of ERISA or Section 4975 of the Code
or a governmental plan, defined in section 3(32) of ERISA subject to any
federal, state or local law which is, to a material extent, similar to the
foregoing provisions of ERISA or the Code (any such person being a "Plan") or
(ii) is not an entity, including an insurance company separate account or
general account, whose underlying assets include Plan assets by reason of a
Plan's investment in the entity.
3. The Investor hereby acknowledges that under the terms of the Trust
Agreement (the "Agreement") among Bear Stearns Asset-Backed Securities, Inc., as
Depositor, and Wilmington Trust Company, as Owner Trustee, and U.S. Bank
National Association, as co-owner trustee, dated as of March 1, 1999, no
transfer of the Certificates (as defined in the Agreement) shall be permitted to
be made to any person unless the Seller and Owner Trustee have received a
certificate from such transferee in the form hereof.
IN WITNESS WHEREOF, the Investor has caused this instrument to
be executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of ______________________, 199___.
[Investor]
By:__________________________
Name:
INDENTURE
between
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1,
as Issuer
and
U. S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee
Dated as of March 1, 1999
UNITED NATIONAL HOME LOAN ASSET-BACKED NOTES,
SERIES 1999-1
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions...............................................1
Section 1.02. Incorporation by Reference of Trust Indenture Act.........6
Section 1.03. Rules of Construction.....................................6
ARTICLE II
THE NOTES
Section 2.01. Form......................................................7
Section 2.02. Execution, Authentication and Delivery....................7
Section 2.03. Registration; Registration of Transfer and Exchange.......8
Section 2.04. Mutilated, Destroyed, Lost or Stolen Notes................9
Section 2.05. Persons Deemed Owners....................................10
Section 2.06. Payment of Principal and Interest; Defaulted Interest....10
Section 2.07. Cancellation.............................................11
Section 2.08. [RESERVED]...............................................11
Section 2.09. Release of Collateral....................................11
Section 2.10. Book-Entry Notes.........................................12
Section 2.11. Notices to Clearing Agency...............................13
Section 2.12. Definitive Notes.........................................13
Section 2.13. Tax......................................................13
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal and Interest........................14
Section 3.02. Maintenance of Office or Agency..........................14
Section 3.03. Money for Payments To Be Held in Trust...................14
Section 3.04. Existence................................................16
Section 3.05. Protection of Collateral.................................16
Section 3.06. Opinions as to Collateral................................17
Section 3.07. Performance of Obligations; Servicing of Home Loans......17
Section 3.08. Negative Covenants.......................................18
Section 3.09. Annual Statement as to Compliance........................19
Section 3.10. Covenants of the Issuer..................................19
Section 3.11. Restricted Payments......................................19
Section 3.12. Treatment of Notes as Debt for Tax Purposes..............20
Section 3.13. Notice of Events of Default..............................20
Section 3.14. Further Instruments and Acts.............................20
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture..................20
Section 4.02. Application of Trust Money...............................21
Section 4.03. Repayment of Moneys Held by Paying Agent.................21
ARTICLE V
REMEDIES
Section 5.01. Events of Default........................................22
Section 5.02. Acceleration of Maturity; Rescission and Annulment.......23
Section 5.03. [RESERVED]...............................................23
Section 5.04. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.......................23
Section 5.05. Remedies; Priorities.....................................25
Section 5.06. Optional Preservation of the Collateral..................26
Section 5.07. Limitation of Suits......................................27
Section 5.08. Unconditional Rights of Noteholders To
Receive Principal and Interest..........................27
Section 5.09. Restoration of Rights and Remedies.......................27
Section 5.10. Rights and Remedies Cumulative...........................28
Section 5.11. Delay or Omission Not a Waiver...........................28
Section 5.12. Control by Noteholders...................................28
Section 5.13. Waiver of Past Defaults..................................28
Section 5.14. Undertaking for Costs....................................29
Section 5.15. Waiver of Stay or Extension Laws.........................29
Section 5.16. Action on Notes..........................................29
Section 5.17. Performance and Enforcement of Certain Obligations.......30
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee..............................30
Section 6.02. Rights of Indenture Trustee..............................31
Section 6.03. Individual Rights of Indenture Trustee...................32
Section 6.04. Indenture Trustee's Disclaimer...........................32
Section 6.05. Notice of Default........................................32
Section 6.06. Reports by Indenture Trustee to Holders..................32
Section 6.07. Compensation and Indemnity...............................32
Section 6.08. Replacement of Indenture Trustee.........................33
Section 6.09. Successor Indenture Trustee by Merger....................34
Section 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee......................................35
Section 6.11. Eligibility; Disqualification............................36
Section 6.12. Preferential Collection of Claims Against Issuer.........36
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer To Furnish Indenture Trustee Names
and Addresses of Noteholders...........................36
Section 7.02. Preservation of Information; Communications to
Noteholders............................................36
Section 7.03. Reports by Issuer........................................36
Section 7.04. Reports by Indenture Trustee.............................37
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money......................................37
Section 8.02. Payments and Distributions...............................38
Section 8.03. Monthly Statements.......................................39
Section 8.04. Delivery of Monthly Statements...........................39
Section 8.05. Release of Collateral....................................39
Section 8.06. Opinion of Counsel.......................................39
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders...40
Section 9.02. Supplemental Indentures with Consent of Noteholders......41
Section 9.03. Execution of Supplemental Indentures.....................42
Section 9.04. Effect of Supplemental Indenture.........................42
Section 9.05. Conformity with Trust Indenture Act......................42
Section 9.06. Reference in Notes to Supplemental Indentures............42
Section 9.07. Amendments to Trust Agreement............................43
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption..............................................43
Section 10.02. Form of Redemption Notice...............................43
Section 10.03. Notes Payable on Termination Date; Provision
for Payment of Indenture Trustee.......................44
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc...............44
Section 11.02. Form of Documents Delivered to Indenture Trustee........45
Section 11.03. Acts of Noteholders.....................................46
Section 11.04. Notices, etc. to Indenture Trustee, Issuer
and Rating Agencies....................................47
Section 11.05. Notices to Noteholders; Waiver..........................47
Section 11.06. [RESERVED]..............................................48
Section 11.07. Conflict with Trust Indenture Act.......................48
Section 11.08. Effect of Headings and Table of Contents................48
Section 11.09. Successors and Assigns..................................48
Section 11.10. Severability............................................48
Section 11.11. Benefits of Indenture and Consent of Noteholders........48
Section 11.12. Legal Holidays..........................................48
Section 11.13. Governing Law...........................................48
Section 11.14. Counterparts............................................49
Section 11.15. Recording of Indenture..................................49
Section 11.16. Issuer Obligations......................................49
Section 11.17. No Petition.............................................49
Section 11.18. Inspection..............................................49
SCHEDULE I Schedule of Home Loans
EXHIBIT A Forms of Notes
INDENTURE dated as of March 1, 1999, between United National Home
Loan Owner Trust 1999-1, a Delaware business trust (the "Issuer"), and U.S.
Bank National Association, a national banking association, as trustee and not
in its individual capacity (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 Notes:
GRANTING CLAUSE
Subject to the terms of this Indenture, the Issuer hereby Grants to
the Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit
of the holders of the Notes, all of the Issuer's right, title and interest in
and to: (i) the Trust Estate (as defined in the Sale and Servicing Agreement);
(ii) the Sale and Servicing Agreement (including the Issuer's right to cause
the Seller to repurchase Home Loans from the Issuer under certain circumstances
described therein); (iii) all present and future claims, demands, causes of
action and choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing; (iv) the Trust Accounts, all amounts and property in the Trust
Accounts from time to time, and the Security Entitlements to all Financial
Assets credited to the Trust Accounts from time to time and (v) all other
property of the Trust from time to time (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in
this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the holders
of the Notes, acknowledges such Grant, accepts the trusts hereunder and agrees
to perform the duties required of it in this Indenture to the best of its
ability to the end that the interests of the holders of the Notes may be
adequately and effectively protected. The Indenture Trustee agrees and
acknowledges that the Home Loan Files will be held by the Custodian for the
benefit of the Indenture Trustee in St. Paul, Minnesota. The Indenture Trustee
further agrees and acknowledges that each other item of Collateral that is
physically delivered to the Indenture Trustee will be held by the Indenture
Trustee in St. Paul, Minnesota.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions. Except as otherwise specified herein or as
the context may otherwise require, (i) capitalized terms used but not otherwise
defined herein have the respective meanings set forth in the Sale and Servicing
Agreement for all purposes of this Indenture and (ii) the following terms have
the respective meanings set forth below for all purposes of this Indenture.
Act: The meaning specified in Section 11.03(a).
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Authorized Officer: With respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any Vice President or more
senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified on
the list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
Book-Entry Notes: A beneficial interest in any Class of Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.10.
Certificate Depository Agreement: The meaning specified in Section
1.01 of the Trust Agreement.
Certificate of Trust: The certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
Collateral: The meaning specified in the Granting Clause of this
Indenture.
Corporate Trust Office: The principal office of the Indenture Trustee
at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located at
180 East Fifth Street, St. Paul, Minnesota 55101; Attention: Corporate Trust
Department, or at such other address as the Indenture Trustee may designate
from time to time by notice to the Noteholders and the Issuer, or the principal
corporate trust office of any successor Indenture Trustee at the address
designated by such successor Indenture Trustee by notice to the Noteholders and
the Issuer.
Default: Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
Definitive Notes: The meaning specified in Section 2.12.
Depository Institution: Any depository institution or trust company,
including the Indenture Trustee, that (a) is incorporated under the laws of the
United States of America or any State thereof, (b) is subject to supervision
and examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated in the highest rating category by each Rating Agency, or is otherwise
acceptable to each Rating Agency.
Event of Default: As specified in Section 5.01.
Executive Officer: With respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; and with respect to any partnership, any general partner
thereof.
Grant: Mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm
pursuant to this 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 moneys 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.
Holder or Noteholder: The Person in whose name a Note is registered
on the Note Register.
Indenture Trustee: U.S. Bank National Association, a national banking
association, as Indenture Trustee under this Indenture acting on behalf of the
Noteholders, or any successor indenture trustee under this Indenture.
Independent: When used with respect to any specified Person, that
such Person (a) is in fact independent of the Issuer, any other obligor on the
Notes, the Seller 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 Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any 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 11.01, made by an
Independent appraiser or other expert appointed by 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 this Indenture and that the signer is Independent within the
meaning thereof.
Issuer: United National Home Loan Owner Trust 1999-1 until a
successor replaces it and, thereafter, the successor and, for purposes of any
provision contained herein 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.
Maturity Date: With respect to each Class of Notes, the applicable
maturity date set forth below:
Class Maturity Date
A March 25, 2025
M-1 March 25, 2025
M-2 March 25, 2025
Note Depository Agreement: The agreement dated March 26, 1999, among
the Issuer, the Administrator, the Indenture Trustee and The Depository Trust
Company, as the initial Clearing Agency, relating to the Book-Entry Notes.
Note Owner: With respect to a Book-Entry Note, the Person who is the
beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
Note Register and Note Registrar: The respective meanings specified
in Section 2.03
Officer's Certificate: A certificate signed by any Authorized Officer
of the Issuer or the Administrator, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01, and
delivered to the Indenture Trustee.
Opinion of Counsel: One or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be employees of or
counsel to the Issuer and who shall be satisfactory to the Indenture Trustee,
which opinion or opinions shall be addressed to the Indenture Trustee, as
Indenture Trustee, and shall comply with any applicable requirements of Section
11.01 and shall be in form and substance satisfactory to the Indenture Trustee.
Outstanding: With respect to any Note and as of the date of
determination, any Note theretofore authenticated and delivered under this
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 Paying Agent in trust for the related
Noteholders (provided, however, that if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision for such notice has been made,
satisfactory to the Indenture Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any
such Notes are held by a bona fide purchaser; provided, 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 Seller 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 the Indenture Trustee
knows to be so owned 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
pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons.
Outstanding Amount: The aggregate of the Note Principal Balances of
all Notes Outstanding on the date of determination.
Paying Agent: The Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.11
and is authorized by the Issuer to make payments to and distributions from the
Note Payment Account, including payment of principal of or interest on the
Notes on behalf of the Issuer.
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 2.04 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.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Rating Agency Condition: With respect to any action to which a Rating
Agency Condition applies, that each Rating Agency shall have been given 10 days
(or such shorter period as is acceptable to each Rating Agency) prior notice
thereof and that each of the Rating Agencies shall have notified the Seller,
the Servicer and the Issuer in writing that such action will not result in a
reduction or withdrawal of the then current rating of the Notes or the
Certificates.
Registered Holder: The Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
Sale and Servicing Agreement: The Sale and Servicing Agreement dated
as of March 1, 1999, among the Issuer, United National Bank, as Seller, Advanta
Mortgage Corp. USA, as Servicer, and the U.S. Bank National Association, as
Indenture Trustee, Co-Owner Trustee and Custodian as such may be amended or
supplemented from time to time.
Schedule of Home Loans: The listing of the Home Loans set forth in
Schedule A, as supplemented as of any date on which a Deleted Home Loan has
been repurchased from the Trust or substituted with a Qualified Substitute Home
Loan pursuant to Section 3.05 of the Sale and Servicing Agreement.
State: Any one of the 50 States of the United States of America or
the District of Columbia.
Termination Date: In the case of a redemption of the Notes pursuant
to Section 10.01 or a payment to Noteholders pursuant to Section 10.03.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
Section 1.02. Incorporation by Reference of 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.
"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 and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
Section 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented (as provided in such
agreements) and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated
therein; references to a Person are also to its permitted successors
and assigns.
ARTICLE II
THE NOTES
Section 2.01. Form. The Notes shall be designated as the "United
National Home Loan Owner Trust 1999-1 Asset Backed Notes". The Notes of each
Class, in each case together with the Indenture Trustee's certificate of
authentication, shall be in substantially the forms set forth in Exhibit A,
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 thereof. 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.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods, all as determined by the officers
executing such Notes, as evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibit A are part of the terms
of this Indenture.
Section 2.02. 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 manual or
facsimile.
Notes bearing the manual 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 upon Issuer Order authenticate and
deliver Class A Notes for original issue in an aggregate principal amount of
$112,893,000, Class M-1 Notes for original issue in an aggregate principal
amount of $14,368,000 and Class M-2 Notes for original issue in an aggregate
principal amount of $14,368,000. The aggregate principal amount of Class A
Notes, Class M-1 Notes and Class M-2 Notes outstanding at any time may not
exceed such respective amounts except as provided in Section 2.04.
The Notes that are authenticated and delivered by the Indenture
Trustee to or upon the order of the Issuer on the Closing Date shall be dated
the Closing Date. All other Notes that are authenticated after the Closing Date
for any other purpose under the Indenture shall be dated the date of their
authentication. The Notes (other than the Class A-1 Notes) shall be issuable as
registered Notes in the minimum denomination of $250,000 and integral multiples
of $1,000 in excess thereof, except that one Note of each Class may be issued
in any denomination in excess of the minimum denomination.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
Section 2.03. Registration; Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in which the
Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee initially shall be the "Note
Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of 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, and the Indenture Trustee shall have the right to
rely upon a certificate executed on behalf of the Note Registrar by an
Executive 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 of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(a) of the UCC are met the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall be
entitled to obtain from the Indenture Trustee, in the name of the designated
transferee or transferees, one or more new Notes of the same Class in any
authorized denominations, of a like aggregate principal amount. At the option
of the Holder, Notes may be exchanged for other Notes of the same Class in any
authorized denominations, of 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, if the requirements of Section 8-401(a) of the UCC
are met the Issuer shall execute, and the Indenture Trustee shall authenticate
and the Noteholder shall be entitled to obtain from the Indenture Trustee, the
Notes which the Noteholder making the exchange is entitled to receive.
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.
Any Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee 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, which requirements include membership or
participation in the Securities Transfer Agent's 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.
No service charge shall be made to a Noteholder for any registration
of transfer or exchange of Notes, but the Issuer 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 2.04 or Section 9.06 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to such
Note.
Section 2.04. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Indenture Trustee such security
or indemnity as may be required by it to hold the Issuer and the Indenture
Trustee 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 Sections 8-405 and 8-406
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 of the
same Class; 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, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when
so due or payable or upon the Termination 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 and the Indenture
Trustee 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.
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 2.05. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if
any, on such Note and for all other purposes whatsoever, whether or not such
Note be overdue, and none of the Issuer, the Indenture Trustee or any agent of
the Issuer or the Indenture Trustee shall be affected by notice to the
contrary.
Section 2.06. Payment of Principal and Interest; Defaulted Interest.
(a) The Notes of each Class shall accrue interest at the applicable Interest
Rate, and such interest shall be payable on each Payment Date as specified
therein, subject to Section 3.01. All interest payments on each Class of Notes
shall be made pro rata to the Noteholders of such Class entitled thereto. Any
installment of interest or principal payable on any Note shall be paid on the
applicable Payment Date to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date (or, in the case of payment
of Deferred Amounts, to the Person in whose name such Note was most recently
registered, if such Note has previously been surrendered to the Indenture
Trustee for final payment) 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 2.12, 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, except for the final installment of principal payable with
respect to such Note on a Payment Date or on the Maturity Date (and except for
the Termination Price ), which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.03.
(b) The principal of each Note shall be payable in installments on
each Payment Date as provided in the forms of the Notes set forth in Exhibit A.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
together with the amount of any Deferred Amounts in respect of each Class of
Notes shall be due and payable, if not previously paid, on the earlier of (i)
the Maturity Date, (ii) the Termination Date or (iii) the date on which an
Event of Default shall have occurred and be continuing, if the Indenture
Trustee or the Holders of at least 66 2/3% of the Outstanding Amount of the
Most Senior Class of Notes have declared the Notes to be immediately due and
payable in the manner provided in Section 5.02. All principal payments on each
Class of Notes shall be made pro rata to the Noteholders of such Class entitled
thereto. 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 an early
termination of the Notes as provided in Section 10.01 shall be mailed to
Noteholders as provided in Section 10.02.
(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 Interest Rate in any lawful manner. 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 a notice that
states the special record date, the payment date and the amount of defaulted
interest to be paid.
Section 2.07. Cancellation. 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. The Issuer shall
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. 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 2.08. [RESERVED]
Section 2.09. Release of Collateral. (a) Subject to the provisions of
Section 11.01 and the terms of the Basic Documents, the Indenture Trustee shall
release property from the lien of this Indenture only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel,
certificates in accordance with TIA Sections 3.14(c) and 3.14(d)(1), and
Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1)
or an Opinion of Counsel in lieu of such Independent Certificates to the effect
that the TIA does not require any such Independent Certificates; provided that
no such Independent Certificates or Opinion of Counsel in lieu of such
Independent Certificates shall be necessary in respect of property released
from the lien of the Indenture in accordance with the provisions hereof if such
property consists solely of cash.
(b) The Issuer or the Servicer, on behalf of the Issuer, shall be
entitled to obtain a release from the lien of this Indenture for any Home Loan
and the related Mortgaged Property at any time (i) after a payment by the
Seller or the Issuer of the Purchase Price of the Home Loan, (ii) after a
Qualified Substitute Home Loan is substituted for such Home Loan and payment of
the Substitution Adjustment, if any, (iii) after liquidation of the Home Loan
in accordance with Section 4.02 of the Sale and Servicing Agreement and the
deposit of all Liquidation Proceeds and Insurance Proceeds thereon in the
Collection Account, (iv) upon the payment in full of the Home Loan or the sale
or other disposition of the related Mortgaged Property, or (v) as contemplated
by Section 11.02(b) of the Sale and Servicing Agreement. Any such release other
than as contemplated by Section 11.02(b) of the Sale and Servicing Agreement or
pursuant to clause (iii) or (iv) of the preceding sentence shall be subject to
the condition that the Issuer shall have delivered to the Indenture Trustee an
Issuer Request (A) identifying the Home Loan and the related Mortgaged Property
to be released, (B) requesting the release thereof, (C) setting forth the
amount deposited in the Collection Account with respect thereto, (D) certifying
that the amount deposited in the Collection Account (x) equals the Purchase
Price of the applicable Home Loan, in the case of a release pursuant to clause
(i) above, (y) equals the Substitution Adjustment related to the Qualified
Substitute Home Loan and the Deleted Home Loan released pursuant to clause (ii)
above, or (z) equals the entire amount of Insurance Proceeds and Liquidation
Proceeds received with respect to such Home Loan and the related Mortgaged
Property in the case of a release pursuant to clause (iii) above. Any such
release pursuant to clause (iv) of the second preceding sentence shall be
subject to the Servicer's compliance with the provisions of Section 7.02 of the
Sale and Servicing Agreement.
(c) The Indenture Trustee shall, if requested by the Servicer,
temporarily release or cause the Custodian on such terms and conditions as the
Indenture Trustee deems reasonable, to temporarily release to the Servicer the
Home Loan File pursuant to the provisions of Section 7.02 of the Sale and
Servicing Agreement upon compliance by the Servicer with the provisions thereof
provided that the Home Loan File shall have been stamped by the Indenture
Trustee to signify the Issuer's pledge to the Indenture Trustee under the
Indenture.
Section 2.10. 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, the initial Clearing
Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the
nominee of the initial Clearing Agency, and no Owner thereof will receive a
Definitive Note representing such Note Owner's interest in such Note, except as
provided in Section 2.12. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to such Note Owners pursuant to
Section 2.12:
(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;
(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 pursuant to the Note
Depository Agreement. Unless and until Definitive Notes are issued
pursuant to Section 2.12, 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; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the 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.
Section 2.11. 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 such Note Owners pursuant to
Section 2.12, 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 such Note Owners.
Section 2.12. Definitive Notes. If (i) the Administrator 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 Book-Entry
Notes and the Administrator is unable to locate a qualified successor, (ii) the
Administrator 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 an Event of Default herein or in the Sale and Servicing
Agreement, Owners of the Book-Entry Notes representing beneficial interests
aggregating at least a majority of the Outstanding Amount of such Notes advise
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 such Note
Owners, then the Clearing Agency shall notify all Note Owners and the Indenture
Trustee of the occurrence of such event and of the availability of Definitive
Notes to Note Owners requesting the same. Upon surrender to the Indenture
Trustee of the typewritten 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
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.
Section 2.13. Tax. The Issuer has entered into this Indenture, and
the Notes will be issued, with the intention that, for all purposes including
federal, state and local income, single business and franchise tax purposes,
the Notes will qualify as indebtedness of the Issuer secured by the Collateral.
The Issuer, by entering into this Indenture, and each Noteholder, by its
acceptance of a Note (and each Note Owner by its acceptance of an interest in
the applicable Book-Entry Note), agree to treat the Notes for federal, state
and local income, single business and franchise tax purposes as indebtedness of
the Issuer.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal and Interest. The Issuer will duly
and punctually pay (or will cause to be duly and punctually paid) the principal
of and interest on the Notes in accordance with the terms of the Notes and this
Indenture. Without limiting the foregoing, unless the Notes have been declared
due and payable pursuant to Section 5.02 and monies collected by the Indenture
Trustee are being applied in accordance with Section 5.05(b), subject to and in
accordance with Section 8.02(a), the Issuer will cause to be distributed all
amounts on deposit in the Note Payment Account on a Payment Date deposited
therein pursuant to the Sale and Servicing Agreement for the benefit of the
Notes of each Class, to the Holders thereof. 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.
The Notes shall be non-recourse obligations of the Issuer and shall
be limited in right of payment to amounts available from the Collateral as
provided in this Indenture. The Issuer shall not otherwise be liable for
payments of the Notes, and none of the owners, agents, officers, directors,
employees, or successors or assigns of the Issuer shall be personally liable
for any amounts payable, or performance due, under the Notes or this Indenture.
If any other provision of this Indenture shall be deemed to conflict with the
provisions of this Section 3.01, the provisions of this Section 3.01 shall
control.
Section 3.02. Maintenance of Office or Agency. The Issuer will or
will cause the Administrator to maintain in the Borough of Manhattan, The City
of New York, an office or agency where Notes may be surrendered for
registration of transfer or exchange, 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 Administrator to serve as its agent for the
foregoing purposes and to serve as Paying Agent with respect to the Notes. 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 3.03. Money for Payments To Be Held in Trust. All payments of
amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Collection Account pursuant to Section 8.02(a) shall
be made on behalf of the Issuer by the Indenture Trustee or by the Paying
Agent, and no amounts withdrawn from the Collection Account and deposited in
the Note Payment Account for payment on the Notes shall be paid over to the
Issuer except as provided in this Section.
Any Paying Agent shall be appointed by Issuer Order with written
notice thereof to the Indenture Trustee. Any Paying Agent appointed by the
Issuer shall be a Person who would be eligible to be Indenture Trustee
hereunder as provided in Section 6.11. The Issuer shall not appoint any Paying
Agent (other than the Indenture Trustee) which is not, at the time of such
appointment, a Depository Institution.
The Issuer will cause each Paying Agent other than the Administrator
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such 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 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 Paying Agent;
(iv) immediately resign as a 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 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; provided,
however, that with respect to withholding and reporting requirements
applicable to original issue discount (if any) on the Notes, the
Issuer shall have first provided the calculations pertaining thereto
to the Indenture Trustee.
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 Paying Agent to pay to the Indenture Trustee all sums
held in trust by such 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
Paying Agent. Upon such payment by any Paying Agent to the Indenture Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Subject to applicable laws with respect to escheat of funds or
abandoned property, any money held by the Indenture Trustee or any 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 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 Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Indenture Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense and direction of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in The City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee shall also adopt and employ,
at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
Section 3.04. Existence. (a) 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 Agreement, the Securities and the
Collateral.
(b) Any successor to the Owner Trustee appointed pursuant to Section
11.02 of the Trust Agreement shall be the successor Owner Trustee under this
Indenture without the execution or filing of any paper, instrument or further
act to be done on the part of the parties hereto.
(c) Upon any consolidation or merger of or other succession to the
Owner Trustee, the Person succeeding to the Owner Trustee under the Trust
Agreement may exercise every right and power of the Owner Trustee under this
Indenture with the same effect as if such Person had been named as the Owner
Trustee herein.
Section 3.05. Protection of Collateral. The Issuer will, from time to
time, execute and deliver all such supplements and amendments hereto and all
such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) provide further assurance with respect to the Grant of all
or any portion of the Collateral;
(ii) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) preserve and defend title to the Collateral and the rights
of the Indenture Trustee and the Noteholders in such Collateral
against the claims of all persons and parties. The Issuer hereby
designates the Administrator its agent and attorney-in-fact to
execute any financing statement, continuation statement or other
instrument required to be executed pursuant to this Section 3.05.
Section 3.06. Opinions as to Collateral. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements,
as are necessary to perfect and make effective the lien and security interest
of this Indenture and reciting the details of such action, or stating that, in
the opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before February 15 in each calendar year, beginning in
2000, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has 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 is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe 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 until February 15th of the following
calendar year.
Section 3.07. Performance of Obligations; Servicing of Home 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 Collateral 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
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the assistance
of other Persons (including, without limitation, the Administrator under the
Administration Agreement) to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Indenture Trustee in an Officer's Certificate of the Issuer shall be deemed to
be action taken by the Issuer. Initially, the Issuer has contracted with the
Administrator 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 Collateral, including but not
limited to (i) 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 and (ii) recording or causing to be recorded
all Mortgages, Assignments of Mortgage, all intervening Assignments of Mortgage
and all assumption and modification agreements to the extent such documents are
required to be recorded by the terms of the Sale and Servicing Agreement, in
each case in accordance with and within the time periods provided for in this
Indenture and/or the Sale and Servicing Agreement, as applicable. 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 and the Holders of at least a
majority of the Outstanding Amount of the Notes.
(d) If the Servicer is terminated or resigns in accordance with the
Sale and Servicing Agreement, a successor Servicer shall be appointed as
provided in Section 10.02 of the Sale and Servicing Agreement.
(e) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Holders of a majority of the Outstanding Amount of
the Notes (i) amend, modify, waive, supplement, terminate or surrender, or
agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any Collateral (except to the extent otherwise
provided in the Sale and Servicing Agreement) or (ii) waive timely performance
or observance by the Servicer or the Seller under the Sale and Servicing
Agreement. If any such amendment, modification, supplement or waiver shall be
so consented to by such Holders, the Issuer agrees, promptly following a
request by the Indenture Trustee, to execute and deliver, in its own name and
at its own expense, such agreements, instruments, consents and other documents
as the Indenture Trustee may deem necessary or appropriate in the
circumstances.
Section 3.08. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(a) except as expressly permitted by this Indenture, the Home Loan
Purchase Agreement or the Sale and Servicing Agreement, sell, transfer,
exchange or otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Collateral, unless directed to do so by the
Indenture Trustee;
(b) 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 Collateral;
(c) engage in any business or activity other than as permitted by the
Trust Agreement or other than in connection with, or relating to, the issuance
of Notes pursuant to this Indenture, or amend the Trust Agreement as in effect
on the Closing Date other than in accordance with Section 11.01 thereof;
(d) issue debt obligations under any other indenture;
(e) incur or assume any indebtedness or guaranty any indebtedness of
any Person, except for such indebtedness as may be incurred by the Issuer in
connection with the issuance of the Notes pursuant to this Indenture;
(f) dissolve or liquidate in whole or in part or merge or consolidate
with any other Person;
(g) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance (other
than the lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Collateral 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 any of the Mortgaged Properties
and arising solely as a result of an action or omission of the related Obligor)
or (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 Collateral;
(h) take any other action or fail to take any action which may cause
the Issuer to be taxable as (a) an association pursuant to Section 7701 of the
Code and the corresponding regulations or (b) as a taxable mortgage pool
pursuant to Section 7701(i) of the Code and the corresponding regulations.
Section 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year 1999), 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 its 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 its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
Section 3.10. Covenants of the Issuer. All covenants of the Issuer in
this Indenture are covenants of the Issuer and are not covenants of the Owner
Trustee. The Owner Trustee is, and any successor Owner Trustee under the Trust
Agreement will be, entering into this Indenture solely as Owner Trustee under
the Trust Agreement and not in its respective individual capacity, and in no
case whatsoever shall the Owner Trustee or any such successor Owner Trustee be
personally liable on, or for any loss in respect of, any of the statements,
representations, warranties or obligations of the Issuer hereunder, as to all
of which the parties hereto agree to look solely to the property of the Issuer.
Section 3.11. 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 segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Servicer, the Indenture Trustee, the Owner Trustee and the
Securityholders as contemplated by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement or the Trust Agreement and
(y) payments to the Indenture Trustee pursuant to the Administration Agreement.
The Issuer will not, directly or indirectly, make or cause to be made payments
to or distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
Section 3.12. Treatment of Notes as Debt for Tax Purposes. The Issuer
shall, and shall cause the Administrator to, treat the Notes as indebtedness
for all federal and state tax purposes.
Section 3.13. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event
of Default hereunder, each default on the part of the Servicer or the Seller of
its obligations under the Sale and Servicing Agreement and each default on the
part of the Seller of its obligations under the Home Loan Purchase Agreement.
Section 3.14. Further Instruments and Acts. Upon request of the
Indenture Trustee, 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.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.03,
3.04, 3.05, 3.08, and 3.10, (v) the rights, obligations and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.07 and the obligations of the Indenture Trustee under Section
4.02) 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:
(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 2.06 and (ii) Notes for
whose 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
3.03) have been delivered to the Indenture Trustee for cancellation;
or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation:
a. have become due and payable,
b. will become due and payable within one year of the
Maturity Date, or
c. 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 the Issuer, in the case of a., b. or c. above, 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 (including
Deferred Amounts to the extent required to be paid hereunder)
not theretofore delivered to the Indenture Trustee for
cancellation when due to the applicable final scheduled
Payment Date or Termination Date (if Notes shall have been
called for redemption pursuant to Section 10.01), as the case
may be;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by the
TIA or the Indenture Trustee) an Independent Certificate from a firm
of certified public accountants, each meeting the applicable
requirements of Section 11.01(a) and, subject to Section 11.02, each
stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied
with.
Section 4.02. Application of Trust Money. All moneys deposited with
the Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held
in trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent, as
the Indenture Trustee may determine, to the Holders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
Section 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any 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 3.03 and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
ARTICLE V
REMEDIES
Section 5.01. Events of Default. (a) "Event of Default," wherever
used herein, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) default for a period in excess of five days in the payment
of any interest on any Note when the same becomes due and payable or
default in the payment of the entire Principal Balance (including any
Deferred Amounts to the extent required to be paid hereunder) of any
Note on the Maturity Date;
(ii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant
or agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture, the
Sale and Servicing Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have
been incorrect in any material respect as of the time when the same
shall have been made, and such default shall continue or not be
cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 30 days after there
shall have been given, by registered or certified mail, to the Issuer
by the Indenture Trustee or to the Issuer and the Indenture Trustee
by the Holders of at least 25% of the Outstanding Amount of the
Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and
stating that such notice is a notice of Default hereunder;
(iii) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Collateral in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Collateral, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or
order shall remain unstayed and in effect for a period of 60
consecutive days; or
(iv) the commencement by the Issuer of a voluntary case under
any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer
to the entry of an order for relief in an involuntary case under any
such law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Collateral, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer
generally to pay its debts as such debts become due, or the taking of
any action by the Issuer in furtherance of any of the foregoing.
(b) The Issuer shall deliver to the Indenture Trustee, within five
days after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (iv) above, its status and what
action the Issuer is taking or proposes to take with respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee may, and at the direction or upon the prior written
consent of the Holders of at least 66 2/3% of the Outstanding Amount of the
Most Senior Class of Notes shall declare all the Notes to be immediately due
and payable, by a notice in writing to the Issuer, and upon any such
declaration the unpaid principal amount of such Notes, together with accrued
and unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Holders of at least 66 2/3% of the Outstanding Amount of the Most Senior Class
of Notes, by written notice to the Issuer and the Indenture Trustee, may rescind
and annul such declaration and its consequences if the Issuer has paid or
deposited with the Indenture Trustee a sum sufficient to pay:
(a) all payments of principal of and interest on the Notes and all
other amounts that would then be due hereunder or upon such Notes if the Event
of Default giving rise to such acceleration had not occurred; and
(b) all sums paid or advanced by the Indenture Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel; and
(c) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been cured or
waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.03. [RESERVED]
Section 5.04. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in
the payment of the principal of or any installment of the principal of any Note
when the same becomes due and payable, the Issuer will, upon demand of the
Indenture Trustee pay to the Indenture Trustee, for the benefit of the Holders
of the Notes, the whole amount then due and payable on such Notes for principal
and interest, with interest on the overdue principal and, to the extent payment
at such rate of interest shall be legally enforceable, on overdue installments
of interest at the rate borne by the Notes and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust may, and shall, at the direction of the Holders of at least 66
2/3% of the Outstanding Amount of the Most Senior Class of Notes, institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon such Notes and collect in the manner provided
by law out of the property of the Issuer or other obligor upon such Notes,
wherever situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, and shall, at the direction of the Holders of at least 66 2/3% of
the Outstanding Amount of the Most Senior Class of Notes, as more particularly
provided in Section 5.05, in its discretion, proceed to protect and enforce its
rights and the rights of the Noteholders, by such appropriate Proceedings as
the Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Collateral, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, by intervention in
such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee (except as a result of
negligence or bad faith)), and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee,
a standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Noteholders and
the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar
official in any such Proceeding is hereby authorized by each of such
Noteholders to make payments to the Indenture Trustee and, in the
event that the Indenture Trustee shall consent to the making of
payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by
the Indenture Trustee and each predecessor Indenture Trustee except
as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or Proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of
the expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
Section 5.05. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing the Indenture Trustee may do one or more of the
following (subject to Section 5.06):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes monies adjudged
due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Collateral;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee or the Noteholders; and
(iv) sell the Collateral or any portion thereof or rights or
interest therein in a commercially reasonable manner, at one or more
public or private sales called and conducted in any manner permitted
by law; provided, however, that the Indenture Trustee may not sell or
otherwise liquidate the Collateral following an Event of Default,
unless (A) the Holders of 100% of the Outstanding Amount of the Notes
consent thereto, (B) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to discharge in full
all amounts then due and unpaid upon such Notes for principal
(including any Deferred Amounts) and interest or (C) the Indenture
Trustee determines that the Collateral will not continue to provide
sufficient funds for the payment of principal of (including any
Deferred Amounts) and interest on the Notes as they would have become
due if the Notes had not been declared due and payable, and the
Indenture Trustee obtains the consent of Holders of at least 66 2/3%
of the Outstanding Amount of the Notes. In determining such
sufficiency or insufficiency with respect to clauses (B) and (C), the
Indenture Trustee may, but need not, obtain and rely upon an opinion
of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to
the sufficiency of the Collateral for such purpose.
If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the order and
priority set forth in Section 8.02(a).
The Indenture Trustee may fix a record date and payment date for any
payment to be made to the Noteholders pursuant to this Section. At least 15 days
before such record date, the Indenture Trustee shall mail to each Noteholder and
the Issuer a notice that states the record date, the payment date and the amount
to be paid.
Section 5.06. Optional Preservation of the Collateral. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded
and annulled, the Indenture Trustee may, but need not, elect to maintain
possession of the Collateral. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
interest and, ultimately, principal on and any Deferred Amounts with respect to
the Notes, and the Indenture Trustee shall take such desire into account when
determining whether or not to maintain possession of the Collateral. In
determining whether to maintain possession of the Collateral, the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Collateral
for such purpose.
Section 5.07. 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: (a) such Holder has previously given written
notice to the Indenture Trustee of a continuing Event of Default;
(b) the Holders of not less than 66 2/3% of the Outstanding Amount of
the Most Senior Class of Notes shall have made written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(e) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders of not
less than 66 2/3% of the Outstanding Amount of the Most Senior Class of Notes.
It is understood and intended that no one or more Holders of Notes
shall have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the rights of
any other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Holders of not less than
50% of the Outstanding amount of the 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 5.08. 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/or interest on, if
any, and Deferred Amounts, if any, on such Note on or after the Maturity Date
(or, in the case of redemption, on or after the Termination 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 5.09. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted. Section 5.10. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy. Section 5.11.
Delay or Omission Not a Waiver. No delay or omission of the Indenture Trustee
or any Holder of any Note to exercise any right or remedy accruing upon any
Default or Event of Default shall impair any such right or remedy or constitute
a waiver of any such Default or Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be. Section 5.12. Control by Noteholders. The Holders representing
not less than a majority of the Outstanding Amount of the Notes shall have the
right to direct the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided
that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) subject to the express terms of Section 5.05, any direction to
the Indenture Trustee to sell or liquidate the Collateral shall be by Holders
of Notes representing not less than 100% of the Outstanding Amount of the
Notes;
(c) if the conditions set forth in Section 5.06 have been satisfied
and the Indenture Trustee elects to retain the Collateral pursuant to such
Section, then any direction to the Indenture Trustee by Holders of Notes
representing less than 100% of the Outstanding Amount of the Notes to sell or
liquidate the Collateral shall be of no force and effect;
(d) subject to the voting requirements with respect to an Event of
Default; and
(e) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of the Noteholders set forth in this
Section, subject to Section 6.01, 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 Noteholders not consenting to such action.
Section 5.13. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders representing not less than 66 2/3% of the Outstanding Amount of the
Most Senior Class of Notes may waive any past Default or Event of Default and
its consequences except a Default (a) in the payment of interest on or
principal of any of the Notes or (b) in respect of a covenant or provision
hereof that cannot be modified or amended without the consent of the Holder of
each Note, as applicable. In the case of any such waiver, the Issuer, the
Indenture Trustee and the Holders of the Notes shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
Section 5.14. 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 any Noteholder, or group of
Noteholders, 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 (including any Deferred
Amounts) 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 Termination Date).
Section 5.15. 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 5.16. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Collateral or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.05(b).
Section 5.17. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Issuer's expense, the Issuer shall take all such lawful action as the Indenture
Trustee may request to compel or secure the performance and observance by the
Seller and the Servicer, as applicable, of each of their obligations to the
Issuer under or in connection with the Sale and Servicing Agreement or by the
Seller of its obligations under or in connection with the Home Loan Purchase
Agreement, 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
Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and
Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing or by telephone, confirmed in writing promptly thereafter) of the
Holders of at least 66 2/3% of the Outstanding Amount of the Most Senior Class
of Notes shall, exercise all rights, remedies, powers, privileges and claims of
the Issuer against the Seller or the Servicer under or in connection with the
Sale and Servicing Agreement, or against the Seller under or in connection with
the Home Loan Purchase Agreement, including the right or power to take any
action to compel or secure performance or observance by the Seller or the
Servicer, as the case may be, 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 or the Home Loan
Purchase Agreement, as the case may be, and any right of the Issuer to take
such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(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 to the requirements of this Indenture.
(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; and
(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.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to this Section.
(e) 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.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent permitted by law or the terms
of this Indenture or the Sale and Servicing Agreement.
(g) 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 adequate indemnity against such risk or liability is
not reasonably assured to it; provided, however, that the Indenture Trustee
shall not refuse or fail to perform any of its duties hereunder solely as a
result of nonpayment of its normal fees and expenses and further provided that
nothing in this Section 6.01(g) shall be construed to limit the exercise by the
Indenture Trustee of any right or remedy permitted under this Indenture or
otherwise in the event of the Issuer's failure to pay the Indenture Trustee's
fees and expenses pursuant to Section 6.07. In determining that such repayment
or indemnity is not reasonably assured to it, the Indenture Trustee must
consider not only the likelihood of repayment or indemnity by or on behalf of
the Issuer but also the likelihood of repayment or indemnity from amounts
payable to it from the Collateral pursuant to Section 6.07.
(h) 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.
Section 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed
or presented by the proper person. The Indenture Trustee need not investigate
any fact or matter stated in any such 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 an Officer's Certificate or an 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 (i) 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 such action or omission by
the Indenture Trustee does not constitute willful misconduct, negligence or bad
faith; or (ii) any willful misconduct or gross negligence on the part of the
Custodian.
(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 with 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.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity other than as Indenture Trustee
or Co-Owner Trustee may, and in its capacity as Indenture Trustee or Co-Owner
Trustee may not, 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 Paying Agent, Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture
Trustee must comply with Section 6.11.
Section 6.04. 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 or the Notes or the Issuer's use of the proceeds
from the Notes, or 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 6.05. Notice of Default. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail to each Noteholder notice of the Default within 90
days after it occurs. Except in the case of a Default in payment of principal
(including any Deferred Amounts) of or interest on any Note (including payments
pursuant to the mandatory redemption provisions of such 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 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such Holder to prepare its federal and State income tax returns.
Section 6.07. Compensation and Indemnity. As compensation for its
services hereunder, the Indenture Trustee shall be entitled to receive, on each
Payment Date, the Indenture Trustee's Fee, payable pursuant to Section 8.02
(which compensation shall not be limited by any law on compensation of a
trustee of an express trust), and shall be entitled to reimbursement 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, if any, of the Indenture Trustee's agents, counsel, accountants and
experts. The Issuer agrees to cause the Seller to indemnify the Indenture
Trustee against any and all loss, liability or expense (including attorneys'
fees) incurred by it in connection with the administration of this trust and
the performance of its duties hereunder. The Indenture Trustee shall notify the
Issuer and the Seller promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer and the Seller shall
not relieve the Issuer of its obligations hereunder. The Issuer shall or shall
cause the Seller to defend any such claim, and the Indenture Trustee may have
separate counsel and the Issuer shall or shall cause the Seller to pay the fees
and expenses of such counsel. Neither the Issuer nor the Seller need reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee to the extent attributable the Indenture Trustee's own
willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses in connection with occurrence of a Default specified in
Section 5.01(a)(iii) or (iv) with respect to the Issuer, the expenses are
intended to constitute expenses of administration under Title 11 of the United
States Code or any other applicable federal or State bankruptcy, insolvency or
similar law.
Section 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section. The Indenture Trustee may
resign at any time by so notifying the Issuer. The Holders of a majority in
Outstanding Amount of the Notes may remove the Indenture Trustee by so
notifying the Indenture Trustee and may appoint a successor Indenture Trustee.
The Issuer shall remove the Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(d) 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 "resigning or removed Indenture
Trustee"), the Issuer shall promptly appoint a successor Indenture Trustee that
satisfies the eligibility requirements of Section 6.11.
The resigning or removed Indenture Trustee agrees to cooperate with
the Seller, the Trust, the Servicer and any successor Indenture Trustee in
effecting the termination of the resigning or removed Indenture Trustee's
responsibilities and rights hereunder and shall promptly provide such successor
Indenture Trustee all documents and records reasonably requested by it to
enable it to assume the Indenture Trustee's functions hereunder. Any successor
Indenture Trustee shall have all the rights, powers and duties of the Indenture
Trustee under this Indenture.
The resigning or removed Indenture Trustee shall Grant to the
successor Indenture Trustee the Collateral, including, without limitation, all
of the Home Loan Files, the related documents and statements held by it
hereunder, and the Seller, the Servicer, the Issuer and the resigning or
removed Indenture Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Indenture Trustee all such rights,
powers, duties and obligations.
The successor Indenture Trustee shall deliver a written acceptance of
its appointment to the resigning or removed Indenture Trustee, the Servicer,
the Seller and the Issuer. The successor Indenture Trustee shall mail a notice
of its succession to Noteholders. The resigning 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 60 days
after the retiring Indenture Trustee resigns or is removed, the resigning or
removed Indenture Trustee, the Issuer or the Holders of a majority of the
Outstanding Amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee. 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.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.07 shall continue for the benefit of the retiring Indenture Trustee.
Section 6.09. 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;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall provide
the Rating Agencies prior written notice of any such transaction.
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 Collateral may at the time be located,
the Indenture Trustee shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of
the Trust Estate, and to vest in such Person or Persons, in such capacity and
for the benefit of the Noteholders, such title to the Collateral, or any part
thereof, 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 6.08 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
Collateral or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and (iii) the
Indenture Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Indenture and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, jointly
with the Indenture Trustee, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. 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 recently published annual report of
condition and it or its parent shall have a long-term debt rating of "A" or
better by S&P and Fitch or "A2"by Moody's or shall otherwise be acceptable to
each of Fitch, Moody's and S&P. 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 311(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.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee not more than five days after each Record Date, a list, in
such form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
Section 7.02. 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 of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
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 7.01 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 7.03. 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 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)
that 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 the 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 7.03(a) and by rules and regulations prescribed from
time to time by the Commission. (b) Unless the Issuer otherwise
determines, the fiscal year of the Issuer shall end on December 31 of
each year.
Section 7.04. Reports by Indenture Trustee. If required by TIA
Section 313(a), within 60 days after each September 1, beginning with September
1, 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 securities
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 securities exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. 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. The
Indenture Trustee shall apply all such money received by it as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Collateral, the Indenture Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article V.
Section 8.02. Payments and Distributions. (a) On each Payment Date
and on any Termination Date, to the extent funds are available in the Note
Payment Account, the Indenture Trustee shall make the following payments
(except as provided in Section 5.05(b)):
(i) to the Servicer, an amount equal to the Servicing
Compensation (net of any amounts retained prior to deposit into the
Collection Account pursuant to Section 5.01(b)(1) of the Sale and
Servicing Agreement) and all unpaid Servicing Compensation from prior
Due Periods, to the extent not previously paid pursuant to the Sale
and Servicing Agreement;
(ii) to the Indenture Trustee, for any amounts due under Section
6.07, and to the Owner Trustee, for any amounts due under Section
8.01 of the Trust Agreement;
(iii) to the Holders of the Class A Notes, the Class A
Noteholders' Interest Payment Amount for such Payment Date;
(iv) to the Holders of the Class M-1 Notes, the Class M-1
Noteholders' Interest Payment Amount for such Payment Date;
(v) to the Holders of the Class M-2 Notes, the Class M-2
Noteholders' Interest Payment Amount for such Payment Date;
(vi) to the Holders of the Class A Notes, from the Regular
Principal Payment Amount, the amount necessary to reduce the Class
Principal Balance thereof to the Class A Optimal Principal Balance
for such Payment Date;
(vii) to the Holders of the Class M-1 Notes, from the Regular
Principal Payment Amount, the amount necessary to reduce the Class
Principal Balance thereof to the Class M-1 Optimal Principal Balance
for such Payment Date;
(viii) to the Holders of the Class M-2 Notes, from the Regular
Principal Payment Amount, the amount necessary to reduce the Class
Principal Balance thereof to the Class M-2 Optimal Principal Balance
for such Payment Date;
(ix) to the Holders of the Class M-1 Notes, the applicable
Deferred Amounts, until any accrued Allocable Loss Amount has been
paid in full; and
(x) to the Holders of the Class M-2 Notes, the applicable
Deferred Amounts, until any accrued Allocable Loss Amount has been
paid in full;
(b) [RESERVED]
(c) On each Payment Date and the Termination Date, to the extent of
the interest of the Indenture Trustee in the Certificate Distribution Account
(as described in Section 5.05 of the Sale and Servicing Agreement), the
Indenture Trustee hereby authorizes the Owner Trustee, the Co-Owner Trustee or
the Paying Agent, as applicable, to make the distributions from the Certificate
Distribution Account as required pursuant to Section 5.05 of the Sale and
Servicing Agreement.
Section 8.03. Monthly Statements. No later than each Servicing Report
Date, the Servicer will deliver to the Indenture Trustee and the Seller the
Servicing Report. The Indenture Trustee shall use the Servicing Report to (i)
generate the Monthly Statement by no later than the Determination Date and (ii)
determine any information necessary to make payments pursuant to Section 8.02
of the Indenture and Section 5.02 of the Trust Agreement.
Section 8.04. Delivery of Monthly Statements. On each Payment Date,
the Indenture Trustee shall deliver the Monthly Statement with respect to such
Payment Date to DTC and the Rating Agencies. Section 8.05. Release of
Collateral. (a) The Indenture Trustee may, and when required by the provisions
of this Indenture or the Sale and Servicing Agreement shall, execute
instruments to release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in a manner and under circumstances
that are not inconsistent with the provisions of this Indenture 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 to (i) the Certificateholders pursuant to Section
5.05 of the Sale and Servicing Agreement and (ii) the Servicer pursuant to
Section 8.02(a)(i) hereof have been paid, release any remaining portion of the
Collateral 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 Trust Accounts. The Indenture Trustee shall release property from the lien
of this Indenture pursuant to this Subsection 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 11.01.
Section 8.06. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.05(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, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of the
Noteholders 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 Collateral. 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 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to
the Rating Agencies, the 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;
(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 that 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 of 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 Noteholder but with prior
consent of the Rating Agencies, 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 Noteholders 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 9.02. 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, and with the consent of the
Holders of not less than a majority of the Outstanding Amount of the Notes,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, or reduce or increase the principal amount thereof, or
reduce the interest rate thereon or the Termination Price with respect thereto,
change the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Collateral to payment of
principal of or interest on the Notes, or change any place of payment where, or
the coin or currency in which, any Note or the interest thereon is payable, or
impair the right to institute suit for the enforcement of the provisions of
this Indenture requiring the application of funds available therefor, as
provided in Article V, to the payment of any such amount due on the Notes on or
after the respective due dates thereof (or, in the case of redemption, on or
after the Termination Date);
(b) 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;
(c) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(d) 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 Collateral pursuant to Section 5.04;
(e) 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;
(f) 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 to affect the rights of the
Holders of Notes to the benefit of any provisions for the mandatory redemption
of the Notes contained herein; or
(g) 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 Collateral or,
except as otherwise permitted or contemplated herein, terminate the lien of
this Indenture on any property at any time subject hereto or deprive the Holder
of any Note of the security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture 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.
In connection with requesting the consent of the Noteholders 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. 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. 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 such supplemental
indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The 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 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the 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 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the 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.
Section 9.07. Amendments to Trust Agreement. Subject to Section 11.01
of the Trust Agreement, the Indenture Trustee shall, upon receipt of an Issuer
Order, consent to any proposed amendment to the Trust Agreement or an amendment
to or waiver of any provision of any other document relating to the Trust
Agreement, such consent to be given without the necessity of obtaining the
consent of the Holders of any Notes upon satisfaction of the requirements under
Section 11.01 of the Trust Agreement.
Nothing in this Section shall be construed to require that any Person
obtain the consent of the Indenture Trustee to any amendment or waiver or any
provision of any document where the making of such amendment or the giving of
such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the
subject of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption. The Holder of the Residual Interest
Certificate may, at its option, effect an early redemption of the Notes on or
after the Payment Date on which the Pool Principal Balance declines to 5% or
less of the Original Pool Principal Balance. The Holder of the Residual
Interest Certificate shall effect such early redemption in the manner specified
in and subject to the provisions of Section 11.02 of the Sale and Servicing
Agreement. If the Issuer does not exercise its option to effect an early
redemption of the Notes within 30 days of its right to exercise such option,
then the Servicer may, at its option, effect an early redemption of the Notes
pursuant to Section 11.02 of the Sale and Servicing Agreement.
The Issuer shall furnish the Rating Agencies notice of any such
redemption in accordance with Section 10.02.
Section 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted not later than 10 days
prior to the applicable Termination Date to each Holder of Notes, as of the
close of business on the Record Date preceding the applicable Termination Date,
at such Holder's address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Termination Date;
(ii) the Termination Price; and
(iii) the place where such Notes are to be surrendered for
payment of the Termination Price (which shall be the office or agency
of the Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name of the Issuer and at the expense of the Person redeeming
such Notes. 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 10.03. Notes Payable on Termination Date; Provision for
Payment of Indenture Trustee. The Notes or portions thereof to be redeemed
shall, following notice of redemption as required by Section 10.02 (in the case
of redemption pursuant to Section 10.01), on the Termination Date become due
and payable at the Termination Price and (unless the Issuer shall default in
the payment of the Termination Price) no interest shall accrue on the
Termination Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Termination Price. The Issuer may
not redeem the Notes unless, (i) all outstanding obligations under the Notes
have been paid in full and (ii) the Indenture Trustee has been paid all amounts
to which it is entitled hereunder.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc. (a) 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 (x) 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, (y) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (z) if required by TIA Section 3.14(c), a certificate of an
accountant or, if required by such section, 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 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 or not, in the opinion of each
such signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i) above,
the Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer
of the securities to be so deposited and of all other such securities
made the basis of any such withdrawal or release since the
commencement of the then-current calendar year, as set forth in the
certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Notes, but such
a certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in
the related Officer's Certificate is less than $25,000 or less than
one percent of the then Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof. (iv) Whenever
the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (iii) above, the Issuer
shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property
or securities and of all other property or securities released from
the lien of this Indenture since the commencement of the then-current
calendar year, as set forth in the certificates required by clause
(iii) above and this clause (iv), equals 10% or more of the
Outstanding Amount of the Notes, but such certificate need not be
furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's Certificate
is less than $25,000 or less than one percent of the then Outstanding
Amount of the Notes. Section 11.02. Form of Documents Delivered to
Indenture Trustee. In any case where several matters are required to
be certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or covered
by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the 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 such officer's
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 Seller, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller, the Issuer or the
Administrator, 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 rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the 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 sufficient for any purpose of this Indenture
and (subject to Section 6.01) 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 manner that the Indenture Trustee
deems sufficient.
(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 11.04. Notices, etc. to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or act of Noteholders is to be made upon,
given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed first-class,
postage prepaid to the Issuer addressed to: United National Home Loan Owner
Trust 1999-1, in care of Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890, Attention: Emmet R. Harmon, or
at any other address previously furnished in writing to the Indenture Trustee
by the Issuer or the Administrator. The Issuer shall promptly transmit any
notice received by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to the
applicable address specified in the Sale and Servicing Agreement.
Section 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, 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, and shall not under any circumstance constitute a Default or
Event of Default.
Section 11.06. [RESERVED]
Section 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA 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 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 11.09. 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, co-trustees and agents.
Section 11.10. Severability. 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 and Consent of Noteholders.
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, and
the Noteholders, and any other party secured hereunder, and any other Person
with an ownership interest in any part of the Collateral, any benefit or any
legal or equitable right, remedy or claim under this Indenture. Each Noteholder
and Note Owner, by acceptance of a Note or, in the case of a Note Owner, a
beneficial interest in a Note, consents to and agrees to be bound by the terms
and conditions of this Indenture.
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 Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any
other Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.
Section 11.16. Issuer Obligations. 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 this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder
of a beneficial interest in the Issuer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Article VI, VII and
VIII of the Trust Agreement.
Section 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by its acceptance of a Note and each Note
Owner, by its acceptance of a beneficial interest in a Note, hereby covenant
and agree that they will not at any time institute against the Seller or the
Servicer, or join in any institution against the Seller or the Servicer, 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 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.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By: /s/ Norma P. Closs
--------------------------------------
Name: Norma P. Closs
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ Donna L. Nordstrom
--------------------------------------
Name: Donna L. Nordstrom
Title: Assistant Vice President
STATE OF DELAWARE )
)
COUNTY OF NEW CASTLE )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Norma P. Closs, known to me to
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said WILMINGTON TRUST
COMPANY, not in its individual capacity, but solely as Owner Trustee on behalf
of UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1, a Delaware business trust, and
that such person executed the same as the act of said business trust for the
purpose and consideration therein expressed, and in the capacities therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 24th day of March, 1999.
/s/ Janel R. Havrilla
----------------------------------------------
Notary Public in and for the State of Delaware
My commission expires: February 2, 2001
STATE OF MINNESOTA )
)
COUNTY OF RAMSEY )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared
, known to me to be the person and officer whose name is subscribed
to the foregoing instrument and acknowledged to me that the same was the act of
U.S. BANK NATIONAL ASSOCIATION, a national banking association, and that such
person executed the same as the act of said corporation for the purpose and
consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of
____________, 1999.
Notary Public in and for the State of Minnesota
My commission expires:
SCHEDULE I
(To be Provided at the Closing)
EXHIBIT A
Form of Class A Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO 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.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
CLASS A ASSET-BACKED NOTES
Original Principal Balance of the
Class A Notes: Original Principal Balance of this Note:
Interest Rate: [ ]%
Cut-Off Date: February 28, 1999
Number: CUSIP:
United National Home Loan Owner Trust 1999-1, 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 DOLLARS AND NO/100 ($ ) payable on
each Payment Date in an amount equal to the result obtained by multiplying (i)
a fraction the numerator of which is and the denominator of which is $ by (ii)
the aggregate amount, if any, payable from the Note Payment Account in respect
of principal on the Class A Notes pursuant to Section 8.02(a) of the Indenture
dated as of March 1, 1999, between the Issuer and U.S. Bank National
Association, a national banking association, as Indenture Trustee (the
"Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the earlier of (i) the Payment
Date occurring in [ ] (the "Maturity Date"), (ii) the Termination Date, if any,
pursuant to Section 10.01 of the Indenture, or (iii) the date on which an Event
of Default shall have occurred and be continuing, if the Indenture Trustee or
the Holders of at least 66-2/3% of the Outstanding Amount of the Most Senior
Class of Notes have declared the Notes to be immediately due and payable in the
manner provided in Section 5.02 of the Indenture. Capitalized terms used but
not defined herein shall have the meaning ascribed thereto in the Indenture or
the Sale and Servicing Agreement, as applicable, which Indenture also contains
rules as to construction that shall be applicable herein.
The Issuer will pay interest on the rate per annum shown above on
each Payment Date until the Class A Notes have been paid in full, on the
principal amount of this Note outstanding on the immediately preceding Payment
Date (after giving effect to all payments of principal made on such preceding
Payment Date), subject to certain limitations contained in the last sentence of
Section 3.01 of the Indenture. Interest on this Note will accrue during the
calendar month prior to the applicable Payment Date (each, an "Accrual
Period"). Interest will be computed on the basis of a 360-day year of twelve 30
day months.
Such principal of and interest on this Note shall be paid in the
manner specified on the reserve 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 interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
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.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement
By:________________________________________
Authorized Signatory
Dated: __________, 1999
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Indenture Trustee,
By:______________________________
Authorized Signatory
Dated: __________, 1999
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
This Note is one of a duly authorized issue of Notes of the Issuer,
all issued 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 Trustee and the
Holders of the Notes. To the extent that any provision of this Note contradicts
or is inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supersede such contradictory or inconsistent
provision herein. This Note is subject to all terms of the Indenture.
The Class A Notes (the "Senior Notes") are, and will be, equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture. The rights of the Holders of the Class M-1 and Class M-2 Notes
and the Holders of the Certificates to receive payments or distributions of
interest and principal are, and will be, subordinate to the rights of the
Holders of the Senior Notes to receive payments of interest and principal,
respectively, as provided in the Indenture. The Class Principal Balances of the
Class M-1 and Class M-2 Notes may be reduced by the application of Allocable
Loss Amounts, as provided in the Indenture.
Principal of this Note will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the 25th day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing in April 1999.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Maturity Date and the
Termination Date, if any, pursuant to Section 10.01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default under the
Indenture shall have occurred and be continuing and the Indenture Trustee, at
the direction or upon the prior written consent of the Holders of at least
66-2/3% of the Outstanding Amount of the Most Senior Class of Notes, has
declared the Notes to be immediately due and payable in the manner provided in
Section 5.02 of the Indenture. All principal payments on this Class of Notes
shall be made pro rata to the Holders of Notes of such Class entitled thereto.
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 Registered 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. 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. 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
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile 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.
As provided in the Indenture and the Sale and Servicing Agreement,
this Note may be redeemed in whole, but not in part, at the option of the
Holder of the Residual Interest Certificate, on or after any Payment Date on
which the Pool Principal Balance declines to 5% or less of the Original Pool
Principal Balance, in the manner and to the extent provided in the Indenture
and the Sale and Servicing Agreement.
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, 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 such Holder's 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 the Securities Transfer
Agent's 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 Securities Exchange Act of 1934, as
amended, 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 and 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 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 or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall
be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder and Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic Documents.
Each Noteholder and Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, consents to and agrees
to be bound by the terms and conditions of the Indenture.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer secured by the Collateral. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee 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 none of the Issuer, the Indenture Trustee or 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 Holders of Notes representing a
majority of the Outstanding Amount of the Notes. The Indenture also contains
provisions permitting the Holders of at least 66-2/3% of the Outstanding Amount
of the Most Senior Class of Notes to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or 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 amendment thereof, in certain limited
circumstances, or the waiver of certain terms and conditions set forth in the
Indenture, without the consent of Holders of the Notes issued thereunder.
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 Basic Documents, none of the Issuer in its individual capacity,
the Owner Trustee in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal of or interest on this Note or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The Holder of this Note by its acceptance hereof agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default 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.
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: __________________________________*/
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 Note 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 Note Registrar, which requirements include membership or
participation in 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 Securities Exchange Act of 1934, as amended.
Form of Class M-1 Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO 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.
THIS NOTE IS SUBORDINATE IN RIGHT AND PAYMENT AS DESCRIBED IN THE SALE AND
SERVICING AGREEMENT REFERRED TO HEREIN.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
CLASS M-1 ASSET BACKED NOTES
Original Principal Balance of the
Class M-1 Notes: Original Principal Balance of this Note:
Interest Rate: % Cut-Off Date: February 28, 1999
Number: CUSIP:
United National Home Loan Owner Trust 1999-1, 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 DOLLARS AND NO/100 ($ ) payable on
each Payment Date in an amount equal to the result obtained by multiplying (i)
a fraction the numerator of which is $ and the denominator of which is $ by
(ii) the aggregate amount, if any, payable from the Note Payment Account in
respect of principal on the Class M-1 Notes pursuant to Section 8.02(a) of the
Indenture dated as of March 1, 1999, between the Issuer and U.S. Bank National
Association, a national banking association, as Indenture Trustee (the
"Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the earlier of (i) the Payment
Date occurring in [ ] (the "Maturity Date"), (ii) the Termination Date, if any,
pursuant to Section 10.01 of the Indenture, or (iii) the date on which an Event
of Default shall have occurred and be continuing, if the Indenture Trustee or
the Holders of at least 66-2/3% of the Outstanding Amount of the Most Senior
Class of Notes, have declared the Notes to be immediately due and payable in
the manner provided in Section 5.02 of the Indenture. Capitalized terms used
but not defined herein shall have the meaning ascribed thereto in the Indenture
or the Sale and Servicing Agreement, as applicable, which Indenture also
contains rules as to construction that shall be applicable herein.
The Issuer will pay interest on the rate per annum shown above on
each Payment Date until the Class M-1 Notes have been paid in full, on the
principal amount of this Note outstanding on the immediately preceding Payment
Date (after giving effect to all payments of principal made on such preceding
Payment Date), subject to certain limitations contained in the last sentence of
Section 3.01 of the Indenture. Interest on this Note will accrue during the
calendar month prior to the applicable Payment Date (each, an "Accrual
Period"). Interest will be computed on the basis of a 360-day year of twelve 30
day months. Such principal of and interest on this Note shall be paid in the
manner specified on the reserve 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 interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
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.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
UNITED NATIONAL HOME LOAN OWNER
TRUST 1999-1
By: WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as Owner
Trustee under the Trust Agreement
By:_________________________________
Authorized Signatory
, Dated: __________, 1999
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee,
By:_________________________________
Authorized Signatory
Dated: __________, 1999
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
This Note is one of a duly authorized issue of Notes of the Issuer,
all issued 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 Trustee and the
Holders of the Notes. To the extent that any provision of this Note contradicts
or is inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supersede such contradictory or inconsistent
provision herein. This Note is subject to all terms of the Indenture.
The Class M-1 Notes (the "Class M-1 Notes") are, and will be, equally
and ratably secured by the collateral pledged as security therefor as provided
in the Indenture. The rights of the Holders of the Class M-2 Notes and the
Holders of the Certificates to receive payments or distributions of interest
and principal are, and will be, subordinate to the rights of the Holders of the
Class M-1 Notes to receive payments of interest and principal, respectively, as
provided in the Indenture. The Class Principal Balances of the Class M-1 and
Class M-2 Notes may be reduced by the application of Allocable Loss Amounts, as
provided in the Indenture.
Principal of this Note will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the 25th day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing in April 1999.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Maturity Date and the
Termination Date, if any, pursuant to Section 10.01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default under the
Indenture shall have occurred and be continuing and the Indenture Trustee, at
the direction or upon the prior written consent of the Holders of at least
66-2/3% of the Outstanding Amount of the Most Senior Class of Notes, has
declared the Notes to be immediately due and payable in the manner provided in
Section 5.02 of the Indenture. All principal payments on this Class of Notes
shall be made pro rata to the Holders of Notes of such Class entitled thereto.
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 Registered 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. 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 or by the application of Allocable Loss Amounts 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 Registered
Holder hereof as of the Record Date preceding such Payment Date by notice
mailed or transmitted by facsimile 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.
As provided in the Indenture and the Sale and Servicing Agreement,
this Note may be redeemed in whole, but not in part, at the option of the
Holder of the Residual Interest Certificate, on or after any Payment Date on
which the Pool Principal Balance declines to 5% or less of the Original Pool
Principal Balance, in the manner and to the extent provided in the Indenture
and the Sale and Servicing Agreement.
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, 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 such Holder's 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 the Securities Transfer
Agent's 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 Securities Exchange Act of 1934, as
amended, 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 and 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 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 or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall
be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder and Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic Documents.
Each Noteholder and Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, consents to and agrees
to be bound by the terms and conditions of the Indenture.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer secured by the Collateral. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee 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 none of the Issuer, the Indenture Trustee or 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 Holders of Notes representing a
majority of the Outstanding Amount of the Notes. The Indenture also contains
provisions permitting the Holders of at least 66-2/3% of the Outstanding Amount
of the Most Senior Class of Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or 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 amendment thereof, in certain limited
circumstances, or the waiver of certain terms and conditions set forth in the
Indenture, without the consent of Holders of the Notes issued thereunder.
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 Basic Documents, none of the Issuer in its individual capacity,
the Owner Trustee in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal of or interest on this Note or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The Holder of this Note by its acceptance hereof agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default 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.
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: _________________________*/
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 Note 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 Note Registrar, which requirements include membership or
participation in 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 Securities Exchange Act of 1934, as amended.
Form of Class M-2 Note
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO 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.
THIS NOTE IS SUBORDINATE IN RIGHT AND PAYMENT AS DESCRIBED IN THE SALE AND
SERVICING AGREEMENT REFERRED TO HEREIN.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
CLASS M-2 ASSET BACKED NOTES
Original Principal Balance of
the Class M-2 Notes: Original Principal Balance of this Note:
Interest Rate: % Cut-Off Date: February 28, 1999
Number: CUSIP:
United National Home Loan Owner Trust 1999-1, 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 DOLLARS AND NO/100 ($ ) payable on
each Payment Date in an amount equal to the result obtained by multiplying (i)
a fraction the numerator of which is $ and the denominator of which is $ by
(ii) the aggregate amount, if any, payable from the Note Payment Account in
respect of principal on the Class M-2 Notes pursuant to Section 8.02(a) of the
Indenture dated as of March 1, 1999, between the Issuer and U.S. Bank National
Association, a national banking association, as Indenture Trustee (the
"Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the earlier of (i) the Payment
Date occurring in [ ] (the "Maturity Date"), (ii) the Termination Date, if any,
pursuant to Section 10.01 of the Indenture, or (iii) the date on which an Event
of Default shall have occurred and be continuing, if the Indenture Trustee or
the Holders of at least 66-2/3% of the Outstanding Amount of the Most Senior
Class of Notes, have declared the Notes to be immediately due and payable in
the manner provided in Section 5.02 of the Indenture. Capitalized terms used
but not defined herein shall have the meaning ascribed thereto in the Indenture
or the Sale and Servicing Agreement, as applicable, which Indenture also
contains rules as to construction that shall be applicable herein.
The Issuer will pay interest on the rate per annum shown above on
each Payment Date until the Class M-2 Notes have been paid in full, on the
principal amount of this Note outstanding on the immediately preceding Payment
Date (after giving effect to all payments of principal made on such preceding
Payment Date), subject to certain limitations contained in the last sentence of
Section 3.01 of the Indenture. Interest on this Note will accrue during the
calendar month prior to the applicable Payment Date (each, an "Accrual
Period"). Interest will be computed on the basis of a 360-day year of twelve 30
day months. Such principal of and interest on this Note shall be paid in the
manner specified on the reserve 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 interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
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.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
UNITED NATIONAL HOME LOAN OWNER
TRUST 1999-1
By: WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as Owner
Trustee under the Trust Agreement
By:_________________________________
Authorized Signatory
, Dated: __________, 1999
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee,
By:_________________________________
Authorized Signatory
Dated: __________, 1999
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
This Note is one of a duly authorized issue of Notes of the Issuer,
all issued 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 Trustee and the
Holders of the Notes. To the extent that any provision of this Note contradicts
or is inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supersede such contradictory or inconsistent
provision herein. This Note is subject to all terms of the Indenture.
The Class A Notes (the "Senior Notes") are, and will be, equally and
ratably secured by the collateral pledged as security therefor as provided in
the Indenture. The rights of the Holders of the Class M-1 and Class M-2 Notes
and the Holders of the Certificates to receive payments or distribution of
interest and principal are, and will be, subordinate to the rights of the
Holders of the Senior Notes to receive payments of interest and principal,
respectively, as provided in the Indenture. The Class Principal Balances of the
Class M-1 and Class M-2 Notes may be reduced by the application of Allocable
Loss Amounts, as provided in the Indenture.
Principal of this Note will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the 25th day of each
month or, if any such date is not a Business Day, the next succeeding Business
Day, commencing in April 1999.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Maturity Date and the
Termination Date, if any, pursuant to Section 10.01 of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default under the
Indenture shall have occurred and be continuing and the Indenture Trustee, at
the direction or upon the prior written consent of the Holders of at least
66-2/3% of the Outstanding Amount of the Most Senior Class of Notes, has
declared the Notes to be immediately due and payable in the manner provided in
Section 5.02 of the Indenture. All principal payments on this Class of Notes
shall be made pro rata to the Holders of Notes of such Class entitled thereto.
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 Registered 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. 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 or by the application of Allocable Loss Amounts 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 Registered
Holder hereof as of the Record Date preceding such Payment Date by notice
mailed or transmitted by facsimile 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.
As provided in the Indenture and the Sale and Servicing Agreement,
this Note may be redeemed in whole, but not in part, at the option of the
Holder of the Residual Interest Certificate, on or after any Payment Date on
which the Pool Principal Balance declines to 5% or less of the Original Pool
Principal Balance, in the manner and to the extent provided in the Indenture
and the Sale and Servicing Agreement.
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, 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 such Holder's 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 the Securities Transfer
Agent's 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 Securities Exchange Act of 1934, as
amended, 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 and 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 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 or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall
be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder and Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic Documents.
Each Noteholder and Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, consents to and agrees
to be bound by the terms and conditions of the Indenture.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer secured by the Collateral. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee 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 none of the Issuer, the Indenture Trustee or 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 Holders of Notes representing a
majority of the Outstanding Amount of the Notes. The Indenture also contains
provisions permitting a majority of the Holders of at least 66-2/3% of the
Outstanding Amount of the Most Senior Class of Notes to waive compliance by the
Issuer with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note (or any one or 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 amendment thereof, in certain limited
circumstances, or the waiver of certain terms and conditions set forth in the
Indenture, without the consent of Holders of the Notes issued thereunder.
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 Basic Documents, none of the Issuer in its individual capacity,
the Owner Trustee in its individual capacity, any owner of a beneficial
interest in the Issuer, or any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal of or interest on this Note or performance of, or omission
to perform, any of the covenants, obligations or indemnifications contained in
the Indenture. The Holder of this Note by its acceptance hereof agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default 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.
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:_______________________________*/
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 Note 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 Note Registrar, which requirements include membership or
participation in 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 Securities Exchange Act of 1934, as amended.
SALE AND SERVICING AGREEMENT
among
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1,
as Issuer
UNITED NATIONAL BANK,
as Seller
BEAR STEARNS ASSET BACKED SECURITIES, INC.,
As Depositor
ADVANTA MORTGAGE CORP. USA,
as Servicer
and
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee, Co-Owner Trustee and Custodian
Dated as of March 1, 1999
UNITED NATIONAL HOME LOAN ASSET-BACKED SECURITIES, SERIES 1999-1
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.............................................1
Section 1.02. Other Definitional Provisions..........................23
Section 1.03. Interest Calculation...................................24
ARTICLE II
CONVEYANCE OF THE HOME LOANS
Section 2.01. Conveyance of the Home Loans...........................24
Section 2.02. [RESERVED].............................................25
Section 2.03. Ownership and Possession of Home Loan Files............25
Section 2.04. Books and Records......................................25
Section 2.05. Delivery of Home Loan Documents........................25
Section 2.06. Acceptance by the Custodian of the Home
Loans; Initial Certification by Custodian............29
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Seller...........31
Section 3.02. Representations, Warranties and Covenants
of the Servicer......................................33
Section 3.03. Individual Home Loans..................................34
Section 3.04. [RESERVED].............................................39
Section 3.05. Purchase and Substitution..............................39
Section 3.06. Representations and Warranties of the Depositor........42
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE HOME LOANS
Section 4.01. Duties of the Servicer.................................42
Section 4.02. Liquidation of Home Loans..............................44
Section 4.03. Maintenance of Hazard Insurance;
Property Protection Expenses..........................45
Section 4.04. Maintenance of Mortgage Impairment Insurance
Policy................................................45
Section 4.05. Fidelity Bond; Errors and Omission Insurance...........46
Section 4.06. Title, Management and Disposition of
Foreclosure Property.................................46
Section 4.07. Access to Certain Documentation and
Information Regarding the Home Loans.................47
Section 4.08. Superior Liens.........................................47
Section 4.09. Subservicing...........................................47
Section 4.10. Successor Servicers....................................48
ARTICLE V
ESTABLISHMENT OF ACCOUNTS
Section 5.01. Collection Account, Note Payment Account
and Certificate Distribution Account.................49
Section 5.02. [RESERVED].............................................54
Section 5.03. [RESERVED].............................................54
Section 5.04. [RESERVED].............................................54
Section 5.05. Certificate Distribution Account.......................54
Section 5.06. Trust Accounts; Trust Account Property.................54
Section 5.07. Allocation of Losses...................................59
ARTICLE VI
STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS
Section 6.01. Statements.............................................60
Section 6.02. Reports of Foreclosure and Abandonment of
Mortgaged Property...................................63
Section 6.03. Specification of Certain Tax Matters...................63
ARTICLE VII
GENERAL SERVICING PROCEDURES
Section 7.01. Assumption Agreements..................................63
Section 7.02. Satisfaction of Mortgages and Release of Home
Loan Files............................................64
Section 7.03. Servicing Compensation.................................65
Section 7.04. Annual Statements as to Compliance.....................65
Section 7.05. Annual Independent Public Accountants'
Servicing Report.....................................66
Section 7.06. Right to Examine Servicer Records......................66
Section 7.07. Reports to the Indenture Trustee; Collection
Account Statements...................................66
ARTICLE VIII
REPORTS TO BE PROVIDED
Section 8.01. [RESERVED].............................................67
Section 8.02. Reports to the Commission..............................67
ARTICLE IX
THE SERVICER
Section 9.01. Indemnification; Third Party Claims....................67
Section 9.02. Merger or Consolidation of the Servicer................68
Section 9.03. Limitation on Liability of the Servicer and Others.....68
Section 9.04. Servicer Not to Resign; Assignment.....................69
Section 9.05. Relationship of Servicer to the Issuer and the
Indenture Trustee....................................69
ARTICLE X
DEFAULT
Section 10.01. Servicer Events of Default............................70
Section 10.02. Indenture Trustee to Act; Appointment of Successor....71
Section 10.03. Waiver of Defaults....................................73
Section 10.04. Accounting Upon Termination of Servicer...............73
ARTICLE XI
TERMINATION
Section 11.01. Termination...........................................74
Section 11.02. Optional Termination by the Residual
Interest Certificateholder or the Servicer..........74
Section 11.03. Notice of Termination.................................75
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Acts of Securityholders...............................75
Section 12.02. Amendment.............................................75
Section 12.03. Recordation of Agreement..............................76
Section 12.04. Duration of Agreement.................................76
Section 12.05. Governing Law.........................................76
Section 12.06. Notices...............................................76
Section 12.07. Severability of Provisions............................77
Section 12.08. No Partnership........................................77
Section 12.09. Counterparts..........................................77
Section 12.10. Successors and Assigns................................77
Section 12.11. Headings..............................................77
Section 12.12. Actions of Securityholders............................77
Section 12.13. Reports to Rating Agencies............................78
Section 12.14. Inconsistencies Among Basic Documents.................79
Section 12.15. No Petition...........................................79
Section 12.16. Beneficiaries.........................................79
Section 12.17. Limitation of Liability...............................79
Section 12.18. Seller Obligations....................................79
EXHIBITS
EXHIBIT A Home Loan Schedule
EXHIBIT B Monthly Statement
EXHIBIT C Request for Release
EXHIBIT D [RESERVED]
EXHIBIT E Form of Lost Note Affidavit
This Sale and Servicing Agreement is entered into effective as of
March 1, among United National Home Loan Owner Trust 1999-1, a Delaware
business trust (the "Issuer" or the "Trust"), United National Bank, a national
banking association, as Seller (the "Seller"), Advanta Mortgage Corp. USA, a
Delaware corporation, as Servicer (the "Servicer"), Bear Stearns Asset Backed
Securities, Inc., a Delaware corporation, as Depositor (the "Depositor"), and
U.S. Bank, National Association, a national banking association, as Indenture
Trustee on behalf of the Noteholders (in such capacity, the "Indenture
Trustee") and as Co-Owner Trustee on behalf of the Certificateholders (in such
capacity, the "Co-Owner Trustee") and as Custodian (in such capacity, the
"Custodian").
PRELIMINARY STATEMENT
WHEREAS, the Issuer desires to purchase a pool of Home Loans which
were originated or purchased by the Seller and sold by the Seller to the
Depositor in the ordinary course of business of the Seller;
WHEREAS, the Depositor is willing to sell such Home Loans to the
Issuer; and
WHEREAS, the Servicer is willing to service such Home Loans in
accordance with the terms of this Agreement on behalf of the Trust;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article.
Accepted Servicing Practices: As defined in Section 4.01(a) hereof.
Accrual Period: With respect to each Class of Securities, the
calendar month preceding the month in which the related Payment Date occurs.
Administration Agreement: The Administration Agreement dated as of
March 1, 1999 among the Issuer, the Co-Administrator, the Owner Trustee and
U.S. Bank National Association, as Administrator, as such may be amended or
supplemented from time to time.
Administrator: U.S. Bank National Association, or any successor in
interest thereto, in its capacity as Administrator under the Administration
Agreement.
Aggregate Liquidation Losses: With respect to any Payment Date, the
aggregate losses incurred with respect to Liquidated Home Loans from the
Cut-off Date through the last day of the related Due Period, after giving
effect to the receipt of any related Net Liquidation Proceeds.
Agreement: This Sale and Servicing Agreement and all amendments
hereof and supplements hereto.
Allocable Loss Amount: With respect to each Payment Date, the excess,
if any, of (a) the aggregate of the Class Principal Balances of the Securities
(after giving effect to all payments and distributions on such Payment Date)
over (b) the Pool Principal Balance as of the end of the related Due Period.
Allocable Loss Amount Priority: With respect to each Payment Date,
any Allocable Loss Amount shall be applied in reduction of the Class Principal
Balance, of, first, the Class B-4 Certificates, until its Class Principal
Balance is reduced to zero, second, the Class B-3 Certificates, until its Class
Principal Balance is reduced to zero, third, the Class B-2 Certificates, until
its Class Principal Balance is reduced to zero, fourth, the Class B-1
Certificates, until its Class Principal Balance is reduced to zero, fifth, the
class M-2 Notes, until its class Principal Balance is reduced to zero, and,
sixth, the class M-1 Notes, until its Class Principal Balance is reduced to
zero. No Allocable Loss Amounts will be allocated to the Class A Notes.
Assignment of Mortgage: With respect to each Home Loan, an
assignment, notice of transfer or equivalent instrument sufficient under the
laws of the jurisdiction where the related Mortgaged Property is located to
reflect of record the assignment of the Mortgage with respect to such Home Loan
to the Indenture Trustee for the benefit of the Securityholders.
Available Collection Amount: With respect to each Payment Date, an
amount equal to the sum of (a) all amounts received in respect of the Home
Loans or paid by the Trust or the Seller pursuant to Section 5.01 (b) (i)
(exclusive of amounts not required to be deposited in the Collection Account
pursuant to Section 5.01 (b)(2)(ii) or withdrawn pursuant to Sections 5.01(b)
(2)(ii) or 5.01(d)) during the related Due Period (and, in the case of amounts
required to be paid by the Seller in connection with the purchase or
substitution of a Defective Home Loan, deposited in the Collection Account on
or before the related Determination Date), and (b) with respect to the final
Payment Date, or an early redemption or purchase of the Securities pursuant to
Section 11.02(b), the Termination Price.
Basic Documents: This Agreement, the Indenture, the Home Loan
Purchase Agreement, the Trust Agreement, the Administration Agreement, the Note
Depository Agreement and the documents and certificates delivered in connection
therewith.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking institutions in New York City, New York, San Diego,
California and Salt Lake City, Utah or in the city in which the corporate trust
office of the Indenture Trustee is located are authorized or obligated by law
or executive order to be closed.
Certificate(s): One or more of the Class A-IO Certificates, Class B-1
Certificates, Class B-2 Certificates, Class B-3 Certificates, Class B-4
Certificates and the Residual Interest Certificate.
Certificate Distribution Account: The Account established pursuant to
Section 5.01(a)(3) and maintained pursuant to Section 5.05.
Certificateholder: The holder of any Certificate.
Certificateholder's Interest Carry-Forward Amount: With respect to
any Payment Date, the excess, if any, of the Certificateholder's Monthly
Interest Distribution Amount for the preceding Payment Date and any
Certificateholder's Interest Carry-Forward Amount remaining outstanding with
respect to prior Payment Dates (together with interest on such unpaid amount at
the applicable Interest Rates to the extent permitted by applicable law) over
the amount in respect of interest that was distributed on the Certificates on
such preceding Payment Date.
Certificateholder's Interest Distribution Amount: With respect to any
Payment Date, the sum of the Certificateholder's Monthly Interest Distribution
Amount for such Payment Date and the Certificateholder's Interest Carry-Forward
Amount for such Payment Date; provided, however, that on the Payment Date, if
any, on which the Principal Balance of the Class B-1 Certificates is reduced to
zero through application of the Allocable Loss Amount, the amount of the
Certificateholder's Interest Distribution Amount will be equal to such amount
calculated without giving effect to this proviso, minus the portion, if any, of
the Allocable Loss Amount that otherwise would be applied to any Class of Notes
on such Payment Date in the absence of this proviso.
Certificateholder's Monthly Interest Distribution Amount: With
respect to any Payment Date, the aggregate of interest accrued for the related
Accrual Period at the applicable Interest Rate on the Class Principal Balance
or Class Notional Balance, as applicable, of each Class of Certificates
immediately preceding such Payment Date.
Class: With respect to the Notes and Certificates, all Notes or
Certificates bearing the same class designation, as applicable.
Class A Noteholders' Interest Carry-Forward Amount: With respect to
the initial Payment Date, zero; with respect to each other Payment Date, the
excess (if any) of (A) the Class A Noteholders' Monthly Interest Payment Amount
for the immediately preceding Payment Date and any Class A Noteholders'
Interest Carry-Forward Amount remaining outstanding with respect to prior
Payment Dates (including interest on such outstanding amount at the applicable
Interest Rate to the extent permitted by applicable law), over (B) the amount
in respect of interest that was paid on such Class A Notes on such immediately
preceding Payment Date.
Class A Noteholders' Interest Payment Amount: With respect to any
Payment Date, the sum of the Class A Noteholders' Monthly Interest Payment
Amount for such Payment Date and the Class A Noteholders' Interest
Carry-Forward Amount for such Payment Date.
Class A Noteholders' Monthly Interest Payment Amount: With respect to
each Payment Date, the aggregate of interest accrued for the related Accrual
Period on the Class A Notes at the applicable Interest Rate on the Class
Principal Balance of the Class A Notes immediately preceding such Payment Date.
Class A Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, zero; and with respect to any other Payment Date,
an amount equal 10% of the Pool Principal Balance as of the end of the related
Due Period.
Class A-IO Certificateholders' Interest Carry-Forward Amount: With
respect to the initial Payment Date, zero; with respect to each other Payment
Date, the excess (if any) of (A) the Class A-IO Certificateholders' Monthly
Interest Distribution Amount for the immediately preceding Payment Date and any
Class A-IO Certificateholders' Interest Carry-Forward Amount remaining
outstanding with respect to prior Payment Dates (including interest on such
outstanding amount at the applicable Interest Rate to the extent permitted by
applicable law), over (B) the amount in respect of interest that was paid on
such Class A-IO Certificates on such immediately preceding Payment Date.
Class A-IO Certificateholders' Interest Distribution Amount: With
respect to any Payment Date, the sum of the Class A-IO Certificateholders'
Monthly Interest Distribution Amount for such Payment Date and the Class A-IO
Certificateholders' Interest Carry-Forward Amount for such Payment Date.
Class A-IO Certificateholders' Monthly Interest Distribution Amount:
With respect to each Payment Date, the aggregate of interest accrued for the
related Accrual Period on the Class A-IO Certificates at the applicable
Interest Rate on the Class Notional Balance of the Class A-I-O Certificates
immediately preceding such Payment Date.
Class B-1 Certificateholders' Interest Carry-Forward Amount: With
respect to the initial Payment Date, zero; with respect to each other Payment
Date, the excess (if any) of (a) the Class B-1 Certificateholders' Monthly
Interest Distribution Amount for the immediately preceding Payment Date and any
Class B-1 Certificateholders' Interest Carry-Forward Amount remaining
outstanding with respect to prior Payment Dates (including interest on such
outstanding amount at the applicable Interest Rate to the extent permitted by
applicable law), over (b) the amount in respect of interest that was paid on
the Class B-1 Certificates on such immediately preceding Payment Date.
Class B-1 Certificateholders' Interest Distribution Amount: With
respect to any Payment Date, the sum of the Class B-1 Certificateholders'
Monthly Interest Distribution Amount for such Payment Date and the Class B-1
Certificateholders' Interest Carry-Forward Amount for such Payment Date.
Class B-1 Certificateholders' Monthly Interest Distribution Amount:
With respect to any Payment Date, interest accrued for the related Accrual
Period at the applicable Interest Rate on the Class Principal Balance of the
Class B-1 Certificates immediately preceding such Payment Date.
Class B-1 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class B-1
Certificates, provided that on and after the Payment Date on which the
aggregate Class Principal Balance of the Notes is reduced to zero, the Class
B-1 Optimal Principal Balance for any Payment Date prior to the Stepdown Date
shall be zero; and with respect to any other Payment Date, the Pool Principal
Balance as of the end of the related Due Period minus the sum of (a) the
aggregate of the Class Principal Balances of the Class A Notes, the Class M-1
Notes and the Class M-2 Notes (after taking into account any payments made on
such Payment Date in reduction thereof) and (b) 38% of the Pool Principal
Balance as of the end of the related Due Period.
Class B-2 Certificateholders' Interest Carry-Forward Amount: With
respect to the initial Payment Date, zero; with respect to each other Payment
Date, the excess (if any) of (a) the Class B-2 Certificateholders' Monthly
Interest Distribution Amount for the immediately preceding Payment Date and any
Class B-2 Certificateholders' Interest Carry-Forward Amount remaining
outstanding with respect to prior Payment Dates, over (b) the amount in respect
of interest that was paid on such Class B-2 Certificates on such immediately
preceding Payment Date.
Class B-2 Certificateholders' Interest Distribution Amount: With
respect to any Payment Date, the sum of the Class B-2 Certificateholders'
Monthly Interest Distribution Amount for such Payment Date and the Class B-2
Certificateholders' Interest Carry-Forward Amount for such Payment Date.
Class B-2 Certificateholders' Monthly Interest Distribution Amount:
With respect to any Payment Date, interest accrued for the related Accrual
Period at the applicable Interest Rate on the Class Principal Balance of the
Class B-2 Certificates immediately preceding such Payment Date.
Class B-2 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class B-2
Certificates, provided that on and after the Payment Date on which the
aggregate Class Principal Balance of the Notes and the Class B-1 Certificates
is reduced to zero, the Class B-2 Optimal Principal Balance for any Payment
Date prior to the Stepdown Date shall be zero; and with respect to any other
Payment Date, the Pool Principal Balance as of the end of the related Due
Period minus the sum of (a) the aggregate of the Class Principal Balances of
the Notes and the Class B-1 Certificates (after taking into account any
payments made on such Payment Date in reduction thereof) and (b) 32% of the
Pool Principal Balance as of the end of the related Due Period.
Class B-3 Certificateholders' Interest Carry-Forward Amount: With
respect to the initial Payment Date, zero; with respect to each other Payment
Date, the excess (if any) of (a) the Class B-3 Certificateholders' Monthly
Interest Distribution Amount for the immediately preceding Payment Date and any
Class B-3 Certificateholders' Interest Carry-Forward Amount remaining
outstanding with respect to prior Payment Dates (including interest on such
outstanding amount at the applicable Interest Rate to the extent permitted by
applicable law), over (b) the amount in respect of interest that was paid on
such Class B-3 Certificates on such immediately preceding Payment Date.
Class B-3 Certificateholders' Interest Distribution Amount: With
respect to any Payment Date, the sum of the Class B-3 Certificateholders'
Monthly Interest Distribution Amount for such Payment Date and the Class B-3
Certificateholders' Interest Carry-Forward Amount for such Payment Date.
Class B-3 Certificateholders' Monthly Interest Distribution Amount:
With respect to any Payment Date, interest accrued for the related Accrual
Period at the applicable Interest Rate on the Class Principal Balance of the
Class B-3 Certificates immediately preceding such Payment Date.
Class B-3 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class B-3
Certificates, provided that on and after the Payment Date on which the
aggregate Class Principal Balance of the Notes, the Class B-1 Certificates and
the Class B-2 Certificates is reduced to zero, the Class B-3 Optimal Principal
Balance for any Payment Date prior to the Stepdown Date shall be zero; and with
respect to any other Payment Date, the Pool Principal Balance as of the end of
the related Due Period minus the sum of (a) the aggregate of the Class
Principal Balances of the Notes, the Class B-1 Certificates and the Class B-2
Certificates (after taking into account any payments made on such Payment Date
in reduction thereof) and (b) 28% of the Pool Principal Balance as of the end
of the related Due Period.
Class B-4 Certificateholders' Interest Carry-Forward Amount: With
respect to the initial Payment Date, zero; with respect to each other Payment
Date, the excess (if any) of (a) the Class B-4 Certificateholders' Monthly
Interest Distribution Amount for the immediately preceding Payment Date and any
Class B-4 Certificateholders' Interest Carry-Forward Amount remaining
outstanding with respect to prior Payment Dates (including interest on such
outstanding amount at the applicable Interest Rate to the extent permitted by
applicable law), over (b) the amount in respect of interest that was paid on
such Class B-4 Certificates on such immediately preceding Payment Date.
Class B-4 Certificateholders' Interest Distribution Amount: With
respect to any Payment Date, the sum of the Class B-4 Certificateholders'
Monthly Interest Distribution Amount for such Payment Date and the Class B-4
Certificateholders' Interest Carry-Forward Amount for such Payment Date.
Class B-4 Certificateholders' Monthly Interest Distribution Amount:
With respect to any Payment Date, interest accrued for the related Accrual
Period at the applicable Interest Rate on the Class Principal Balance of the
Class B-4 Certificates immediately preceding such Payment Date.
Class B-4 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class B-4
Certificates, provided that on and after the Payment Date on which the
aggregate Class Principal Balance of the Notes, the Class B-1 Certificates, the
Class B-2 Certificates and the Class B-3 Certificates is reduced to zero, the
Class B-4 Optimal Principal Balance for any Payment Date prior to the Stepdown
Date shall be zero; and with respect to any other Payment Date, the Pool
Principal Balance as of the end of the related Due Period minus the sum of the
aggregate of the Class Principal Balances of the Notes, the Class B-1
Certificates, the Class B-2 Certificates and the Class B-3 Certificates (after
taking into account any payments made on such Payment Date in reduction
thereof).
Class M-1 Noteholders' Interest Carry-Forward Amount: With respect to
the initial Payment Date, the Original Class Balance of the Class M-1 Notes;
with respect to each other Payment Date, the excess (if any) of (a) the Class
M-1 Noteholders' Monthly Interest Payment Amount for the immediately preceding
Payment Date and any Class M-1 Noteholders' Interest Carry-Forward Amount
remaining outstanding with respect to prior Payment Dates, (including interest
on such outstanding amount at the applicable Interest Rate to the extent
permitted by applicable law) over (b) the amount in respect of interest that
was paid on the Class M-1 Notes on such immediately preceding Payment Date.
Class M-1 Noteholders' Interest Payment Amount: With respect to any
Payment Date, the sum of the Class M-1 Noteholders' Monthly Interest Payment
Amount for such Payment Date and the Class M-1 Noteholders' Interest
Carry-Forward Amount for such Payment Date.
Class M-1 Noteholders' Monthly Interest Payment Amount: With respect
to any Payment Date, interest accrued for the related Accrual Period at the
applicable Interest Rate on the Class Principal Balance of the Class M-1 Notes
immediately preceding such Payment Date.
Class M-1 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class M-1 Notes,
provided that on and after the Payment Date on which the Class Principal
Balance of the Class A Notes is reduced to zero, the Class M-1 Optimal
Principal Balance for any Payment Date prior to the Stepdown Date shall be
zero; and with respect to any other Payment Date, the Pool Principal Balance as
of the end of the related Due Period minus the sum of (a) the Class Principal
Balances of the Class A Notes (after taking into account any payments made on
such Payment Date in reduction thereof) and (b) 76% of the Pool Principal
Balance as of the end of the related Due Period.
Class M-2 Noteholders' Interest Carry-Forward Amount: With respect to
the initial Payment Date, the Original Class Balance of the Class M-2 Notes;
with respect to each other Payment Date, the excess (if any) of (a) the Class
M-2 Noteholders' Monthly Interest Payment Amount for the immediately preceding
Payment Date and any Class M-2 Noteholders' Interest Carry-Forward Amount
remaining outstanding with respect to prior Payment Dates, (including interest
on such outstanding amount of the applicable Interest Rate to the extent
permitted by applicable law) over (b) the amount in respect of interest that
was paid on the Class M-2 Notes on such immediately preceding Payment Date.
Class M-2 Noteholders' Interest Payment Amount: With respect to any
Payment Date, the sum of the Class M-2 Noteholders' Monthly Interest Payment
Amount for such Payment Date and the Class M-2 Noteholders' Interest
Carry-Forward Amount for such Payment Date.
Class M-2 Noteholders' Monthly Interest Payment Amount: With respect
to any Payment Date, interest accrued for the related Accrual Period at the
applicable Interest Rate on the Class Principal Balance of the Class M-2 Notes
immediately preceding such Payment Date.
Class M-2 Optimal Principal Balance: With respect to any Payment Date
prior to the Stepdown Date, the Original Class Balance of the Class M-2 Notes,
provided that on and after the Payment Date on which the aggregate Class
Principal Balance of the Class A Notes and the Class M-1 Notes is reduced to
zero, the Class M-2 Optimal Principal Balance for any Payment Date prior to the
Stepdown Date shall be zero, and with respect to any other Payment Date, the
Pool Principal Balance as of the end of the related Due Period minus the sum of
(a) the aggregate of the Class Principal Balances of the Class A Notes and the
Class M-1 Notes (after taking into account any payments made on such Payment
Date in reduction thereof) and (b) 62% of the Pool Principal Balance as of the
end of the related Due Period.
Class Notional Balance: With respect to the Class A-IO Certificates
as of any date of determination will equal the Pool Principal Balance on such
date of determination.
Class Pool Factor: With respect to each Class of Securities and any
Payment Date, the Class Principal Balance or Class Notional Balance thereof
(giving effect to payments thereon on such Payment Date) divided by the
Original Class Balance of such Class.
Class Principal Balance: With respect to each Class of Securities and
any date of determination, the Original Class Balance thereof as reduced by (a)
all amounts previously paid in respect of such Class in reduction of the Class
Principal Balance thereof and (b) any Allocable Loss Amounts previously applied
thereto.
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.
Closing Date: March 26, 1999.
Code: The Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
Collection Account: An account established and maintained by the
Indenture Trustee in accordance with Section 5.01(a)(1).
Combination Loan: A loan, the proceeds of which were used by the
related Obligor in combination to finance property improvements, debt
consolidation, cash-out, or other consumer purposes.
Contract: Each of the manufactured housing installment sale contracts
and installment loan agreements transferred and assigned by the Seller to the
Depositor and by the Depositor to the Trust.
Control: The meaning specified in Section 8-106 of the New York UCC.
Co-Administrator: United National Bank, a national banking
association, in its capacity as the Co-Administrator under the Administration
Agreement, or any successor co-administrator under the Administration
Agreement.
Co-Owner Trustee: U.S. Bank National Association, a national banking
association, in its capacity as the Co-Owner Trustee under the Trust Agreement
acting on behalf of the Certificateholders, or any successor co-owner trustee
under the Trust Agreement.
Credit Score: With respect to the obligor on a home loan (including
the Obligor on a Home Loan), a numerical assessment of default risk with
respect to such obligor, determined based on a methodology developed by Fair,
Isaac and Company.
Cumulative Losses: With respect to any Payment Date, the aggregate
amount of Realized Losses incurred since the Cut-off Date through the end of
the related Due Period.
Custodian: Any custodian appointed by the Indenture Trustee pursuant
to this Agreement, which shall not be affiliated with the Servicer, the
Depositor, any Subservicer, or the Seller. The Indenture Trustee shall be the
initial Custodian.
Cut-Off Date: Close of business on February 28, 1999.
Debt Consolidation Loan: A loan, the proceeds of which were primarily
used by the related Obligor for debt consolidation purposes or purposes other
than to finance property improvements.
Debt Instrument: With respect to any Home Loan, the note, Contract or
other evidence of indebtedness evidencing the indebtedness of an Obligor under
such Home Loan.
Defaulted Home Loan: A Home Loan with respect to which: (a)
foreclosure proceedings have been commenced, (b) any portion of a Monthly
Payment is more than 180 days past due (without giving effect to any grace
period) or (c) the Servicer has determined in good faith in accordance with
Accepted Servicing Practices that all amounts which it expects to receive from
the related Obligor with respect to the Home Loan have been received.
Defective Home Loan: As defined in Section 3.05 hereof.
Deferred Amount: As of any Payment Date, the amount of Allocable Loss
Amounts previously applied in reduction of the Class Principal Balance thereof,
to the extent not previously reimbursed, plus interest accrued thereon at the
applicable Interest Rate from the date when so applied through the end of the
Due Period immediately preceding such Payment Date.
Deleted Home Loan: A Home Loan replaced by or to be replaced by a
Qualified Substitute Home Loan pursuant to Section 3.05 hereof.
Depositor: Bear Stearns Asset Backed Securities, Inc., a Delaware
corporation, and any successor thereto.
Determination Date: With respect to a Payment Date in a given month,
the day of such month that is two (2) Business Days prior to such Payment Date.
DTC: The Depository Trust Company.
Due Date: With respect to any Home Loan, the day of the month on
which the related Monthly Payment is due.
Due Period: With respect to each Payment Date, the calendar month
immediately preceding the month in which such Payment Date occurs, with the
first Due Period commencing on March 1, 1999.
Eligible Account: At any time, an account which is any of the
following: (i) an account maintained with a depository institution (A) the
long-term debt obligations of which are at such time rated by each Rating
Agency in one of their two highest long-term rating categories, or (B) the
short-term debt obligations of which are then rated by each Rating Agency in
their highest short-term rating category; (ii) an account or accounts the
deposits in which are fully insured by either the Bank Insurance Fund or the
Savings Association Insurance Fund of the FDIC; (iii) a trust account (which
shall be a "segregated trust account") maintained with the corporate trust
department of a federal or state chartered depository institution or trust
company with trust powers and acting in its fiduciary capacity for the benefit
of the Indenture Trustee and the Issuer, which depository institution or trust
company shall have capital and surplus of not less than $50,000,000; or (iv) an
account that will not cause any Rating Agency to downgrade or withdraw its
then-current rating(s) assigned to the Securities, as evidenced in writing by
such Rating Agency.
Eligible Servicer: A Person that is qualified to act as Servicer of
the Home Loans under applicable federal and state laws and regulations and who
satisfies the criteria of Section 9.04(b) hereof.
Entitlement Order: The meaning specified in Section 8-102(a)(8) of
the New York UCC (i.e., generally, orders directing the transfer or redemption
of any Financial Asset).
Exchange Act: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation and any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation and any successor
thereto.
Fidelity Bond: As described in Section 4.05 hereof.
Financial Asset: The meaning specified in Section 8-102(a)(9) of the
New York UCC.
Fitch: Fitch IBCA, Inc., or any successor thereto.
FNMA: The Federal National Mortgage Association and any successor
thereto.
Foreclosure Property: Any real or personal property securing a Home
Loan that has been acquired by the Servicer through foreclosure, deed in lieu
of foreclosure or similar proceedings in respect of such Home Loan.
Home Improvement Loan: A loan, the net proceeds of which were or will
be used by the Obligor to finance property improvements.
Home Loan: A Home Improvement Loan, Debt Consolidation Loan, or
Combination Loan that is included in the Home Loan Pool. As applicable, "Home
Loan" shall be deemed to refer to the related Debt Instrument, Mortgage, and
any related Foreclosure Property.
Home Loan File: As defined in Section 2.05.
Home Loan Interest Rate: With respect to any Home Loan, the fixed
annual rate of interest borne by the related Debt Instrument, as shown on the
Home Loan Schedule, as such rate of interest may be modified from time to time
by the Servicer in accordance with Section 4.01(c) hereof.
Home Loan Pool: As of any date, all of the Home Loans that are
subject to the lien of the Indenture as of such date, as identified in the Home
Loan Schedule.
Home Loan Purchase Agreement: The loan purchase agreement dated as of
March 1, 1999, between the Seller, as seller, and the Depositor, as purchaser,
pursuant to which the Depositor has acquired the Home Loans.
Home Loan Schedule: The schedule of Home Loans attached hereto as
Exhibit A, as amended from time to time pursuant to the terms of this
Agreement, such schedule identifying each Home Loan by address of the related
Mortgaged Property, if any, and the name(s) of each Obligor and setting forth
as to each Home Loan the following information: (i) the Principal Balance as of
the Cut-Off Date, (ii) the account number, (iii) the original principal amount,
(iv) the Due Date, (v) the Home Loan Interest Rate, (vi) the first date on
which a Monthly Payment is due under the related Debt Instrument, (vii) the
Monthly Payment, (viii) the maturity date of the related Debt Instrument, (ix)
the remaining number of months to maturity as of the Cut-Off Date and (x) the
product type.
Indenture: The Indenture dated as of March 1, 1999 between the Issuer
and the Indenture Trustee, as such may be amended or supplemented from time to
time.
Indenture Event of Default: Any event of default specified in 5.01 of
the Indenture.
Indenture Trustee: U.S. Bank National Association, a national banking
association, as Indenture Trustee under the Indenture, or any successor
indenture trustee under the Indenture.
Indenture Trustee Fee: The annual fee payable to the Indenture
Trustee, calculated and payable monthly on each Payment Date, except that with
respect to the first Payment Date such monthly amount shall be pro rated for
the first Due Period.
Indenture Trustee Fee Rate: 0.0175% per annum.
Insurance Proceeds: With respect to each Payment Date, an amount
equal to, with respect to any Home Loan, the proceeds paid during the
immediately preceding Due Period to the Servicer by any insurer pursuant to any
insurance policy covering a Home Loan, Mortgaged Property or REO Property or
any other insurance policy that relates to a Home Loan, net of any expenses
incurred by the Servicer in connection with the collection of such proceeds and
not otherwise reimbursed, but excluding the proceeds of any insurance policy
that are to be applied to the restoration or repair of the Mortgaged Property
or released to the borrower in accordance with Accepted Servicing Practices.
Interest Rate: With respect to each Class of Securities, the per
annum rate of interest applicable to Securities of such Class, as specified
below:
Class/Interest Note Rate
-------------- ---------
Class A Notes 6.91%(1)
Class A-IO Certificates (2)
Class M-1 Notes 6.91%(1)
Class M-2 Notes 6.91%(1)
Class B-1 Certificates 6.91%(1)
Class B-2 Certificates 6.91%(1)
Class B-3 Certificates 6.91%(1)
Class B-4 Certificates 6.91%(1)
Residual Interest Certificate N/A
(1) On the Payment Date upon which an optional redemption may be
exercised pursuant to Section 11.02, the Note Rate will increase by 0.50% if
such option is not exercised.
(2) Excess of the Net Weighted Average Rate over 6.91%.
Keystone: The First National Bank of Keystone, a national banking
association.
KMC: Keystone Mortgage Corp., Inc., a West Virginia corporation.
Liquidated Home Loan: A Defaulted Home Loan as to which the Servicer
has determined that all recoverable liquidation and insurance proceeds have
been received, which will be deemed to occur upon the earlier of: (a) the
liquidation of the related Mortgaged Property acquired through foreclosure or
similar proceedings, (b) the Servicer's determination in accordance with
Accepted Servicing Practices that no further amounts are collectible from the
Home Loan and any related collateral securing such Home Loan, or (c) any
portion of a scheduled monthly payment of principal and interest is in excess
of 180 days past due.
Liquidation Proceeds: With respect to a Liquidated Home Loan, any
cash amounts received in connection with the liquidation of such Liquidated
Home Loan, whether through trustee's sale, foreclosure sale or other
disposition, and any other amounts required to be deposited in the Collection
Account pursuant to Sections 4.02 or 4.06, in each case other than
Post-Liquidation Proceeds, Insurance Proceeds and Released Mortgaged Property
Proceeds.
Majority Securityholders: (i) Until such time as the sum of the Class
Principal Balances of all Classes of Securities has been reduced to zero, the
holder or holders of in excess of 50% of the Outstanding Amount of all Classes
of Securities (accordingly, the holder of the Residual Interest Certificate
shall be excluded from any rights or actions of the Majority Securityholders
during such period); and (ii) thereafter, the holder of the Residual Interest
Certificate.
Manufactured Home: A unit of manufactured housing which meets the
requirements of Section 25(e)(10 of the Code, including all accessions thereto,
securing the indebtedness of the Obligor under the related Contract.
Monthly Payment: With respect to a Home Loan, the scheduled monthly
payment of principal and/or interest required to be made by the related Obligor
on the related Home Loan, as set forth in the related Debt Instrument.
Monthly Statement: As defined in Section 6.01(b).
Moody's: Moody's Investors Service, Inc., or any successor thereto.
Mortgage: The mortgage, deed of trust or other security instrument
creating a lien in accordance with applicable law on a Mortgaged Property to
secure the Debt Instrument which evidences a Home Loan.
Mortgaged Property: The property (real, personal or mixed) encumbered
by the Mortgage which secures the Debt Instrument evidencing a Home Loan.
Mortgaged Property State: Each state in which any Mortgaged Property
securing a Home Loan is located as set forth in the Home Loan Schedule.
Most Senior Class: With respect to each Class of Securities, the
following order of seniority; first, the Class A Notes, second, the Class M-1
Notes, third, the Class M-2 Notes, fourth, the Class B-1 Certificates, fifth,
the Class B-2 Certificates, sixth, the Class B-3 Certificates, and seventh, the
Class B-4 Certificates.
Net Liquidation Proceeds: With respect to each Payment Date, an
amount equal to any cash amounts received during the related Due Period from
Liquidated Home Loans, whether through trustee's sale, foreclosure sale,
disposition of REO Property, whole loan sales or otherwise (other than
Insurance Proceeds and Released Mortgaged Property Proceeds), and any other
cash amounts received during the related Due Period in connection with the
management of the Mortgaged Properties from Defaulted Home Loans, in each case,
net of any reimbursements to the Servicer made from such amounts for any
unreimbursed Servicing Advances made and unpaid Servicing Fees relating to such
Liquidated Home Loan, and any other fees and expenses paid in connection with
the foreclosure, conservation and liquidation of the related Liquidated Home
Loans or Mortgaged Properties pursuant to Sections 4.02 and 4.06 hereof.
Net Loan Losses: With respect to a Payment Date, the sum of (A) with
respect to the Home Loans that became Liquidated Home Loans during the
immediately preceding Due Period, an amount (but not less than zero) determined
as of the related Determination Date equal to:
(i) the aggregate uncollected Principal Balances of such
Liquidated Home Loans as of the related Determination Date and
without the application of any amounts included in clause (ii) below,
minus
(ii) the aggregate amount of any recoveries attributable to
principal from whatever source received during any Due Period, with
respect to such Liquidated Home Loans, including any subsequent Due
Period, and including without limitation any Net Liquidation
Proceeds, any Insurance Proceeds, any Released Mortgaged Property
Proceeds, any payments from the related Obligor and any payments made
pursuant to Section 3.05, less the amount of any expenses incurred in
connection with such recoveries; and (B) with respect to any
Defaulted Home Loan that is subject to a modification by the
Servicer, an amount equal to the portion of the Principal Balance, if
any, released in connection with such modification.
Net Weighted Average Rate: With respect to any Accrual Period, the per
annum rate equal to the weighted average (by Principal Balance) of the interest
rates of the Home Loans as of the first day of the related Due Period, as
reduced by the Servicing Fee Rate, the Owner Trustee Fee Rate and the Indenture
Trustee Fee Rate.
New York UCC: The Uniform Commercial Code as in effect in the State
of New York.
Non-Recordation State: Any state with respect to which the Seller
shall have delivered to the Indenture Trustee (and to each Rating Agency, in
the case of any state in which 5% or more by Principal Balance as of the
Cut-Off Date of the Mortgaged Properties are located) on or prior to April 30,
1999 an opinion, memorandum or other written assurance of counsel in a form
reasonably acceptable to the Indenture Trustee (and, where applicable, to each
Rating Agency), to the effect that, as to any Home Loan with respect to which
the related Mortgaged Property is located in such state, recordation of an
Assignment of Mortgage in such state is not necessary to transfer title to the
related Mortgage Note to the Issuer or to pledge to the Indenture Trustee the
issuer's rights under such Mortgage Note in respect of which the Mortgaged
Property is located in such state.
Nonrecoverable Servicing Advance: With respect to any Home Loan, any
Servicing Advance (a) previously made and not reimbursed from proceeds on the
related Home Loan or (b) a Servicing Advance proposed to be made in respect of
a Home Loan or REO Property either of which, in the good faith business
judgment of the Servicer, as evidenced by an Officer's Certificate delivered to
the Indenture Trustee, would not be ultimately recoverable pursuant to this
Agreement.
Note(s): One or more of the Class A Notes, the Class M-1 Notes and
the Class M-2 Notes.
Note Payment Account: The account established pursuant to Section
5.01(a)(2).
Noteholder: A holder of a Note.
Noteholders' Interest Carry-Forward Amount: With respect to any
Payment Date, the excess, if any, of the Noteholders' Monthly Interest Payment
Amount for the preceding Payment Date and any Noteholders' Interest
Carry-Forward Amount remaining outstanding with respect to prior Payment Dates
(together with interest on such unpaid amount at the applicable Interest Rate
to the extent permitted by applicable law), over the amount in respect of
interest that was paid on the Notes on such preceding Payment Date.
Noteholders' Interest Payment Amount: With respect to any Payment
Date, the sum of the Noteholders' Monthly Interest Payment Amount for such
Payment Date and the Noteholders' Interest Carry-Forward Amount for such
Payment Date.
Noteholders' Monthly Interest Payment Amount: With respect to any
Payment Date, the aggregate of interest accrued for the related Accrual Period
at the applicable Interest Rate on the Class Principal Balance of each Class of
Notes immediately preceding such Payment Date.
Obligor: Each obligor on a Debt Instrument.
Officer's Certificate: A certificate delivered to the Indenture
Trustee or the Issuer signed by the President or a Vice President or Assistant
Vice President of the Seller, the Servicer or the Issuer, in each case, as
required by this Agreement.
Original Class Balance: With respect to each Class of Securities, the
original principal balance or notional balance of such Class, as set forth
below:
Original
Principal or
Class Notional Balance
----- ----------------
A $112,893,000
A-IO $205,259,057
M-1 $ 14,368,000
M-2 $ 14,368,000
B-1 $ 24,631,000
B-2 $ 6,158,000
B-3 $ 4,105,000
B-4 $ 28,737,000
Residual Interest Certificate N/A
Original Pool Principal Balance: $205,259,057
Outstanding Amount: As of any date of determination, the aggregate
principal amount of a Class of Securities outstanding as of such date of
determination.
Ownership Interest: As to any Security, any ownership or security
interest in such Security, including any interest in such Security as the
holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial, as owner or as pledgee.
Owner Trustee: Wilmington Trust Company, as owner trustee under the
Trust Agreement, and any successor owner trustee under the Trust Agreement.
Owner Trustee Fee: The annual fee of $2,500 payable to the Owner
Trustee on the Payment Date occurring in March each year during the term of
this Agreement commencing in March, 2000; provided that the initial Owner
Trustee Fee shall be paid on the Closing Date.
Owner Trustee Fee Rate: As of the date of calculation a per annum
rate equal to the Owner Trustee Fee divided by the Pool Principal Balance.
Payment Accounts: The accounts established pursuant to Sections
5.01(a)(2) and 5.01(a)(3).
Payment Date: The 25th day of any month or if such 25th day is not a
Business Day, the first Business Day immediately following such day, commencing
in April 1999 and ending upon termination of this Agreement.
Permitted Investments: Each of the following:
(1) obligations of, or guaranteed as to principal and interest by,
the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(2) a repurchase agreement that satisfies the following criteria: (1)
must be between the Indenture Trustee and either (a) primary dealers on the
Federal Reserve reporting dealer list which are rated in one of the two highest
ratings for short-term unsecured debt obligations by each Rating Agency, or (b)
banks rated in one of the two highest categories for short-term unsecured debt
obligations by each Rating Agency; and (2) the written repurchase agreement
must include the following: securities which are acceptable for the transfer
and are either (I) direct U.S. governments obligations, or (II) obligations of
a Federal agency that are backed by the full faith and credit of the U.S.
government, or FNMA or FHLMC; (b) a term no greater than 60 days for any
repurchase transaction; (c) the collateral must be delivered to the Indenture
Trustee or a third party custodian acting as agent for the Indenture Trustee by
appropriate book entries and confirmation statements and must have been
delivered before or simultaneous with payment (i.e., perfection by possession
of certificated securities); and (d) the securities sold thereunder must be
valued weekly, marked-to-market at current market price plus accrued interest
and the value of the collateral must be equal to at least 104% of the amount of
cash transferred by the Indenture Trustee under the repurchase agreement and if
the value of the securities held as collateral declines to an amount below 104%
of the cash transferred by the Indenture Trustee plus accrued interest (i.e., a
margin call), then additional cash and/or acceptable securities must be
transferred to the Indenture Trustee to satisfy such margin call; provided,
however, that if the securities used as collateral are obligations of FNMA or
FHLMC, then the value of the securities held as collateral must equal at least
105% of the cash transferred by the Indenture Trustee under such repurchase
agreement;
(3) certificates of deposit, time deposits and bankers acceptances of
any United States depository institution or trust company incorporated under
the laws of the United States or any state, including the Indenture Trustee;
provided that the debt obligations of such depository institution or trust
company at the date of the acquisition thereof have been rated by each Rating
Agency in one of its two highest short-term ratings;
(4) deposits, including deposits with the Indenture Trustee, which
are fully insured by the Bank Insurance Fund or the Savings Association
Insurance Fund of the FDIC, as the case may be;
(5) commercial paper of any corporation incorporated under the laws of
the United States or any state thereof, including corporate affiliates of the
Indenture Trustee, which at the date of acquisition is rated by each Rating
Agency in its highest short-term rating category and which has an original
maturity of not more than 365 days;
(6) debt obligations rated by each Rating Agency at the time at which
the investment is made in its highest short-term rating category (or those
investments specified in (iii) above with depository institutions which have
debt obligations rated by each Rating Agency in one of its two highest
short-term ratings);
(7) money market funds which are rated by each Rating Agency at the
time at which the investment is made in its highest short-term rating category,
any such money market funds which provide for demand withdrawals being
conclusively deemed to satisfy any maturity requirements for Permitted
Investments set forth in this Agreement; or
(8) any other demand, money market or time deposit obligation,
security or investment as may be acceptable to each Rating Agency at the time at
which the investment is made; provided that no instrument described in the
foregoing subparagraphs 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 where the interest and principal payments with respect to such
instrument provide 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 in the foregoing subparagraphs may be purchased at a price
greater than par if such instrument may be prepaid or called at a price less
than its purchase price prior to stated maturity.
Person: Any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust, national
banking association, unincorporated organization or government or any agency or
political subdivision thereof.
Pool Principal Balance: As of any Determination Date, the aggregate
of the Principal Balances as of the close of business on the last day of the
immediately preceding Due Period of all Home Loans in the Home Loan Pool as of
the close of such Due Period.
Post-Liquidation Proceeds: As defined in Section 4.02(b).
Principal Balance: With respect to any date of determination and with
respect to any Home Loan or related Foreclosure Property, an amount equal to
the Cut-Off Date principal balance of such Home Loan minus all principal
reductions credited against the Principal Balance of such Home Loan since such
Cut-Off Date through the end of the immediately preceding Due Period. For
purposes of this definition, a Liquidated Home Loan shall be deemed to have a
Principal Balance equal to the Principal Balance of the related Home Loan
immediately prior to the final recovery of related Liquidation Proceeds and a
Principal Balance of zero as of the end of the Due Period in which such Home
Loan becomes a Liquidated Home Loan.
Principal Prepayment: With respect to any Home Loan and with respect
to any Due Period, any principal amount received on a Home Loan in excess of
the scheduled principal amount included in the Monthly Payment due on the Due
Date in such Due Period.
Prospectus: The final Prospectus, dated March 10, 1999, as
supplemented by the Prospectus Supplement.
Prospectus Supplement: The Prospectus Supplement dated March 10,
1999, in connection with the offer and sale of the Notes.
Purchase Price: As defined in Section 3.05 herein.
Qualified Substitute Home Loan: A home loan or home loans substituted
for a Deleted Home Loan pursuant to Section 3.05, which (i) has or have an
interest rate or rates not more than 0.50% lower than the Home Loan Interest
Rate for the Deleted Home Loan, (ii) matures or mature not more than one year
later than and not more than one year earlier than the Deleted Home Loan, (iii)
has or have a principal balance or principal balances (after application of all
payments received on or prior to the date of substitution) equal to or less
than the Principal Balance of the Deleted Home Loan as of such date, (iv) has
or have a lien priority no lower than the Deleted Home Loan, (v) has a related
obligor with a Credit Score equal to or greater than the Credit Score of the
Obligor with respect to the Deleted Home Loan, and (vi) complies or comply as
of the date of substitution with each representation and warranty set forth in
Section 3.03 and is not more than 30 days delinquent as of the date of
substitution for such loan; and (vii) has a related obligor with a Credit Score
at origination of not less than 620. For purposes of determining whether
multiple home loans proposed to be substituted for one or more Deleted Home
Loans pursuant to Section 3.05 are in fact "Qualified Substitute Home Loans" as
provided above, the criteria specified in clauses (i), (ii), (iii), (v) and
(vii) above may be considered on an aggregate or weighted average basis, rather
than on a loan-by-loan basis (e.g., so long as the weighted average Home Loan
Interest Rate of any loans proposed to be substituted is not less than nor more
than one percentage point different from the Home Loan Interest Rate for the
designated Deleted Home Loan or Home Loans and the weighted average Credit
Score of any Qualified Substitute Home Loans cumulatively substituted is equal
to the weighted average Credit Score of the Deleted Home Loans, the
requirements of clauses (i) and (v) above would be deemed satisfied), except
that, with respect to any such substitution, the lowest Credit Score of any
home loan substituted shall not be lower than the lowest Credit Score of the
related Deleted Home Loans.
Rating Agency: Each of Fitch, Moody's and S&P and their respective
successors; provided, however, that if no such organization or successor is any
longer in existence, "Rating Agency" shall be a nationally recognized
statistical rating organization or other comparable person designated by the
Issuer, notice of which designation shall have been given to the Indenture
Trustee, the Depositor and the Servicer.
Ratings: The ratings initially assigned to the rated Securities by
the Rating Agencies, as evidenced by letters from the Rating Agencies.
Realized Losses: With respect to any Home Loan that becomes a
Liquidated Home Loan, the amount by which the Principal Balance thereof
immediately prior to such Home Loan becoming a Liquidated Home Loan exceeds the
proceeds (net of related expenses and reimbursements), including Insurance
Proceeds, that are allocable to principal of such Home Loan, applying such
proceeds first to accrued and unpaid interest, and are received by the Servicer
in connection with the liquidation or the disposition of the related Mortgaged
Property.
Record Date: With respect to each Payment Date, the close of business
on the last Business Day of the calendar month immediately preceding the month
in which such Payment Date occurs.
Regular Payment Amount: With respect to any Payment Date, the lesser
of (a) the Available Collection Amount and (b) the sum of (i) the Noteholders'
Interest Payment Amount, (ii) the Certificateholder's Interest Distribution
Amount and (iii) the Regular Principal Payment Amount.
Regular Principal Payment Amount: With respect to each Payment Date,
an amount equal to the lesser of:
(a) the sum of (i) each scheduled payment of principal collected
by the Servicer in the related Due Period, (ii) all partial and full
principal prepayments applied by the Servicer during such Due Period,
(iii) the principal portion of all Net Liquidation Proceeds, Insurance
Proceeds and Released Mortgaged Property Proceeds received by the
Servicer during such Due Period in respect of any Home Loan, to the
extent received on or prior to the date on which such Home Loan became
a Liquidated Home Loan, (iv) that portion of the Purchase Price of any
repurchased Home Loan allocable to principal and (v) the principal
portion of any Substitution Adjustments required to be deposited in
the Collection Account as of the related Determination Date; and
(b) the aggregate of the outstanding principal balances of the
Securities immediately prior to such Payment Date.
Released Mortgaged Property Proceeds: With respect to any Payment
Date and any Home Loan, the proceeds received by the Servicer in connection
with (a) a taking of an entire Mortgaged Property by exercise of the power of
eminent domain or condemnation or (b) any release of part of the Mortgaged
Property from the lien of the related Mortgage, whether by partial
condemnation, sale or otherwise, which in either case are not released to the
borrower in accordance with applicable law, Accepted Servicing Practices and
this Agreement.
REO Property: A Mortgaged Property that is acquired by the Indenture
Trustee in foreclosure or by deed in lieu of foreclosure.
Residual Interest Certificate: The Residual Interest Certificate
issued pursuant to the Trust Agreement.
Responsible Officer: When used with respect to the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers
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. When used with respect to the Issuer, the Depositor,
the Seller, or the Servicer, the President or any Vice President, Assistant
Vice President, or any Secretary or Assistant Secretary thereof.
S&P: Standard & Poor's Rating Services, a division of The McGraw-Hill
Companies, Inc., or any successor thereto.
Securities Act: The Securities Act of 1933, as amended.
Securities Intermediary: The Person acting as Securities Intermediary
under this Agreement (which is U.S. Bank National Association), its successor
in interest, and any successor Securities Intermediary appointed pursuant to
Section 5.06(d).
Security or Securities: Any of the Notes or the Certificates, as
applicable.
Security Entitlement: The meaning specified in Section 8-102(a)(17)
of the New York UCC.
Securityholder: A Holder of a Note or Certificate, as applicable.
Seller: United National Bank, a national banking association, and any
successor thereto.
Series or Series 1999-1: United National Home Loan Owner Trust
1999-1, Asset Backed Securities, Series 1999-1.
Servicer: Advanta Mortgage Corp. USA as the servicer, or any
successor appointed as herein provided.
Servicer Event of Default: As specified in Section 10.01 hereof.
Servicing Advances: Subject to Section 4.01(b), all reasonable,
customary and necessary "out of pocket" costs and expenses advanced or paid by
the Servicer with respect to the Home Loans in accordance with the performance
by the Servicer of its servicing obligations hereunder, including, but not
limited to, the costs and expenses for (i) the preservation, restoration and
protection of the Mortgaged Property, including without limitation advances in
respect of real estate taxes, hazard insurance premiums, flood insurance
premiums and assessments, (ii) any collection, enforcement or judicial
proceedings, including without limitation foreclosures, collections and
liquidations pursuant to Section 4.02 or other legal actions and costs
associated therewith that potentially affect the existence, validity, priority,
enforceability or collectability of the Home Loans, including collection agency
fees and costs of pursuing or obtaining personal judgments, garnishments,
levies, attachments and similar actions incurred in accordance with Accepted
Servicing Practices, (iii) the conservation, management, liquidation, sale or
other disposition of any Foreclosure Property pursuant to Section 4.06,
including reasonable fees paid to any independent contractor in connection
therewith incurred in accordance with Accepted Servicing Practices, (iv)
advances to keep senior liens current.
Servicing Compensation: With respect to a Payment Date, the Servicing
Fee and other amounts to which the Servicer is entitled pursuant to Sections
5.01(b)(1), 5.01(b)(2), 7.01 and 7.03.
Servicing Fee: As to each Home Loan (including any Home Loan that has
been foreclosed and has become a Foreclosure Property, but excluding any
Liquidated Home Loan), the fee payable monthly to the Servicer on each Payment
Date, which shall be (a) the product of the Servicing Fee Rate and the
Principal Balance of such Home Loan as of the beginning of the related Due
Period (or, in the case of the first Payment Date, the Principal Balance as of
the Cut-Off Date) divided by (b) 12. The Servicing Fee includes any servicing
fees owed or payable to any Subservicer which fees shall be paid from the
Servicing Fee.
Servicing Fee Rate: 0.75%.
Servicing Officer: Any officer of the Servicer or Subservicer
involved in, or responsible for , the administration and servicing of the Home
Loans whose name and specimen signature appears on a list of servicing officer
annexed to an Officer's Certificate furnished by the Servicer or the
Subservicer , respectively, to the Issuer and the Indenture Trustee, on behalf
of the Securityholders, as such list may from time to time be amended.
Servicing Report: A magnetic tape or computer disk providing such
information regarding the Servicer's activities in servicing Home Loans and
information with respect to the Home Loans during the related Due Period as the
Indenture Trustee may reasonably require in order for the Indenture Trustee to
prepare its Monthly Statement.
Servicing Report Date: With respect to a Payment Date in a given
month, the 15th day of such month; provided, however, if such date is not a
Business Day, the next succeeding Business Day.
Stepdown Date: The Payment Date occurring on the later of (i) the
first Payment Date after the Payment Date in March 2002 and (ii) the Payment
Date on which the Class Principal Balance of the Class A Notes, after giving
effect to payments of principal on such Payment Date, is less than or equal to
10% of the Pool Principal Balance as of the end of the related Due Period;
provided, however, if the Aggregate Liquidation Losses for such Payment Date
exceed 28% of the Original Pool Principal Balance, then the Stepdown Date will
be the Payment Date on which the Class Principal Balance of the Class A Notes,
after giving effect to payments of principal on such Payment Date, is less than
or equal to 4% of the Pool Principal Balance as of the end of the related Due
Period.
Subordinate Security: Any Class M-1 Note, Class M-2 Note, Class B-1
Certificate, Class B-2 Certificate, Class B-3 Certificate, Class B-4
Certificate or Residual Interest Certificate.
Subservicer: Any Person with whom the Servicer has entered into a
Subservicing Agreement and who is an Eligible Servicer and who satisfies any
requirements set forth in Section 4.09(a) in respect of the qualifications of a
Subservicer which may be an affiliate of the Servicer.
Subservicing Agreement: Any agreement between the Servicer and any
Subservicer relating to subservicing and/or administration of any or all Home
Loans as provided in Section 4.09(a), copies of which shall be made available,
along with any modifications thereto, to the Issuer and the Indenture Trustee,
except that copies of such agreements between the Servicer and a Subservicer
which is an affiliate of the Servicer need not be provided.
Substitution Adjustment: As to any date on which a substitution
occurs pursuant to Section 3.05, the amount, if any, by which (a) the aggregate
of the Principal Balances after application of principal payments received
through the close of the preceding Due Period of any Qualified Substitute Home
Loans plus any accrued and unpaid interest thereon that is scheduled to be paid
during the Due Period in which such substitution occurs, is less than (b) the
aggregate of the Principal Balances, together with accrued and unpaid interest
scheduled to be paid during the Due Period in which such substitution occurs,
of the related Deleted Home Loans.
Superior Lien: With respect to any Home Loan which is secured by
other than a first priority lien, the mortgage(s) relating to the corresponding
Mortgaged Property having a superior priority lien.
Termination Price: An amount equal to the sum of (i) the then
outstanding aggregate Class Principal Balances of the Securities being redeemed
or purchased plus all accrued and unpaid interest thereon at the applicable
Interest Rates, (ii) any unreimbursed Deferred Amounts owed to a Class of
Notes, (iii) any Servicing Compensation due and unpaid, (iv) any unreimbursed
Servicing Advances including Nonrecoverable Servicing Advances and (v) any due
and unpaid Indenture Trustee Fees, Owner Trustee Fees or Co-Owner Trustee Fees.
Trust: The Issuer.
Trust Account Property: The Trust Accounts, all amounts and
investments (excluding any investment income from such amounts or investments
thereof (net of investment losses)) held from time to time in any Trust Account
or in the Certificate Distribution Account and all proceeds of the foregoing.
Trust Accounts: The Note Payment Account and the Collection Account.
Trust Agreement: The Trust Agreement dated as of March 1, 1999 among
the Depositor, the Co-Owner Trustee and the Owner Trustee, as such may be
amended or supplemented from time to time.
Trust Estate: The assets subject to this Agreement and the Indenture
pledged by the Issuer to the Indenture Trustee, which assets consist of all of
the Depositor's right, title and interest in and to: (i) such Home Loans as
from time to time are subject to this Agreement, as the same may be amended or
supplemented from time to time (including to reflect the removal of Deleted
Home Loans and the addition of Qualified Substitute Home Loans), together with
the Home Loan Files relating thereto and all proceeds thereof (other than
prepayment penalties and prepayment fees with respect to the Home Loans), (ii)
the related Mortgages and security interests in the properties, (iii) all
payments and proceeds received on or with respect to the Home Loans after the
Cut-Off Date, (excluding interest due on the Home Loans on or prior to the
Cut-Off Date) (iv) such assets as from time to time are identified as
Foreclosure Property, (v) all assets and funds as are from time to time
deposited in any Trust Account (excluding any investment income from amounts on
deposit in the Collection Account (net of investment losses)), (vi) all
insurance policies with respect to the Home Loans and any Insurance Proceeds,
(vii) Net Liquidation Proceeds, Post-Liquidation Proceeds and Released
Mortgaged Property Proceeds, and (viii) that certain Home Loan Purchase
Agreement under which the Depositor acquired the Home Loans from the Seller.
Withdrawal Date: With respect to a Payment Date, the Business Day
prior to such Payment Date.
Section 1.02 Other Definitional Provisions. (a) Capitalized terms
used herein and not otherwise defined herein have the meanings assigned to them
in the Indenture and the Trust Agreement.
(b) 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.
(c) 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. 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.
(d) 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; Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation."
(e) 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.
(f) 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 Calculation. Unless otherwise specified, all
calculations of accrued interest and accrued fees shall be made on the basis of
a 360-day year consisting of twelve 30-day months.
ARTICLE II
CONVEYANCE OF THE HOME LOANS
Section 2.01 Conveyance of the Home Loans. (a) As of the Closing
Date, in consideration of the Issuer's delivery of the Securities to the
Depositor or its designee, upon the order of the Depositor, the Depositor, as
of the Closing Date and concurrently with the execution and delivery hereof,
does hereby sell, transfer, assign, set over and otherwise convey to the
Issuer, without recourse, but subject to the other terms and provisions of this
Agreement, all of the right, title and interest of the Depositor in and to the
Trust Estate and the Certificate Distribution Account. The foregoing sale,
transfer, assignment, set over and conveyance does not and is not intended to
result in a creation or an assumption by the Issuer of any obligation of the
Depositor, the Seller or any other Person in connection with the Trust Estate
or under any agreement or instrument relating thereto except as specifically
set forth in the Basic Documents.
(b) As of the Closing Date, the Issuer acknowledges the conveyance to
it by the Depositor of all of the Depositor's right, title and interest in and
to the Trust Estate, receipt of which is hereby acknowledged by the Issuer.
Concurrently with such delivery, the Issuer has pledged to the Indenture
Trustee the Trust Estate, and in exchange for the conveyance to it by the
Depositor of all of the Depositor's right, title and interest in and to the
Trust Estate (i) the Owner Trustee (not in its individual capacity, but solely
as Owner Trustee on behalf of the Issuer) has executed the Notes and (ii) the
Issuer has caused the Indenture Trustee to authenticate and deliver the Notes
to the Depositor or its designee, upon the order of the Issuer. In addition,
concurrently with the delivery to the Issuer of all of the Depositor's right,
title and interest in and to the Trust Estate and in exchange therefor, the
Owner Trustee, pursuant to the instructions of the Depositor, has executed (not
in its individual capacity, but solely as Owner Trustee on behalf of the
Issuer) and caused to be authenticated and delivered the Certificates to the
Depositor or its designee, upon the order of the Depositor.
(c) The Depositor 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 State of New York (which shall have been filed on or before the Closing
Date)) describing the Home Loans and the Cut-Off Date Principal Balances and
naming the Depositor as debtor and the Indenture Trustee as secured party and
any amendments to UCC-1 financing statements as are necessary to perfect and
protect the Trust's, the Indenture Trustee's on behalf of the Noteholders and
the Owner Trustee's on behalf of the Certificateholders' interests in each Home
Loan and the Cut-Off Date Principal Balance and the proceeds thereof and all
other items described in Section 2.01(a).
(d) The Seller 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 State of West Virginia (which shall have been filed on or before the
Closing Date)) describing the Home Loans and the Cut-Off Date Principal
Balances and naming the Seller, as debtor and the Depositor, as secured party
and any amendments to UCC-1 financing statements as are necessary to perfect
and protect from any entity claiming by or through the Seller the Depositor's,
the Trust's, the Indenture Trustee's on behalf of the Noteholders and the Owner
Trustee's on behalf of the Certificateholders' interests in each Home Loan and
the Cut-Off Date Principal Balance and the proceeds thereof and all other items
described in Section 2.01(a).
(e) It is the intention of the parties hereto that the transfers and
assignments contemplated by this Agreement shall constitute a sale of the Trust
Estate from the Depositor to the Issuer and upon the execution of this
Agreement by the parties hereto, the Trust Estate shall no longer be owned by
the Depositor. If the assignment, transfer and conveyance of the Trust Estate
to the Issuer pursuant to this Agreement is held or deemed not to be a sale or
is held or deemed to be a pledge of security for a loan, the Depositor intends
that the rights and obligations of the parties to this Agreement shall be
established by the terms of this Agreement and that, in such event, (i) the
Depositor shall be deemed to have granted to the Issuer a first priority
security interest in the entire right, title and interest of the Depositor in
and to the Trust Estate and all proceeds thereof, and (ii) this Agreement shall
constitute a security agreement under applicable law. Prior to or promptly
after the Closing Date, the Depositor shall cause to be filed a UCC-1 financing
statement with the Secretary of State of Delaware naming the Depositor as
"debtor" and the Issuer as "secured party" and describing the Trust Estate.
Section 2.0 [RESERVED]
Section 2.03. Ownership and Possession of Home Loan Files. Upon the
issuance of the Securities, with respect to the Home Loans, the ownership of
each Debt Instrument, the related Mortgage and the contents of the related Home
Loan File shall be vested in the Issuer, subject to the lien created by the
Indenture in favor of the Indenture Trustee for the benefit of the
Securityholders, although possession of the Home Loan Files will be with the
Custodian.
Section 2.04. Books and Records. The Servicer shall be responsible
for maintaining, and shall maintain, a complete set of books and records for
each Home Loan which shall be clearly marked to reflect the record ownership of
each Home Loan by the Issuer, subject to the lien created by the Indenture in
favor of the Indenture Trustee for the benefit of the Securityholders.
Section 2.05. Delivery of Home Loan Documents.
(a) With respect to each Home Loan, on the Closing Date the Seller
shall have delivered or caused to be delivered to the Custodian each of the
following documents (collectively, the "Home Loan Files"):
(A) With respect to any Home Loan which is not evidenced by a
Contract:
(i) The original Debt Instrument, endorsed "Pay to the order of
U.S. Bank National Association, as Indenture Trustee for the United
National Home Loan Owner Trust 1999-1 Asset Backed Notes, Series
1999-1, without recourse" and signed, by facsimile or manual
signature, in the name of the Seller by a Responsible Officer
thereof, together with all intervening endorsements that evidence a
complete chain of title from the originator thereof to the Seller;
provided that any of the foregoing endorsements may be contained on
an allonge which shall be firmly affixed to such Debt Instrument;
(ii) With respect to each Debt Instrument, either: (A) the
original Mortgage, with evidence of recording thereon, (B) a copy of
the Mortgage certified as a true copy by a Responsible Officer of the
Seller or by the closing attorney, if the original has been
transmitted for recording but has not, at the time of delivery of
this Agreement, been returned or (C) a copy of the Mortgage certified
by the public recording office in those instances where the original
recorded Mortgage has been lost or has been retained by the public
recording office;
(iii) With respect to each Debt Instrument, either (A) the
original Assignment of Mortgage assigned to "U.S. Bank National
Association, as Indenture Trustee for the United National Home Loan
Owner Trust 1999-1 Asset Backed Notes, Series 1999-1" and signed in
the name of the Seller by a Responsible Officer with evidence of
recording thereon, (B) a copy of the Assignment of Mortgage,
certified as a true copy by a Responsible Officer of the Seller where
the original has been transmitted for recording but has not, at the
time of delivery of this Agreement, been returned or (C) a copy of
the Assignment of Mortgage certified by the public recording office
in those instances where the original recorded Assignment of Mortgage
has been lost or has been retained by the public recording office
(provided, however, that where the original Assignment of Mortgage is
not being delivered to the Custodian, such Responsible Officer may
complete one or more blanket certificates attaching copies of one or
more Assignments of Mortgage relating thereto); provided that any
such Assignments of Mortgage may be made by blanket assignments for
Home Loans secured by Mortgaged Properties located in the same
county, if permitted by applicable law; provided, however, that the
recordation of such Assignment of Mortgage shall not be required in
Non-Recordation States;
(iv) With respect to each Debt Instrument, either: (A) originals
of all intervening assignments of the Mortgage, with evidence of
recording thereon, (B) if the original intervening assignments have
not yet been returned from the recording office, a copy of the
originals of such intervening assignments together with a certificate
of a Responsible Officer of the Seller or the closing attorney
certifying that the copy is a true copy of the original of such
intervening assignments or (C) a copy of the intervening assignment
certified by the public recording office in those instances where the
original recorded intervening assignment has been lost or has been
retained by the public recording office; provided that the chain of
intervening recorded assignments shall not be required to match the
chain of intervening endorsements of the Debt Instrument, so long as
the chain of intervening recorded assignments, if applicable,
evidences one or more assignments of the Mortgage from the original
mortgagee ultimately to the person who has executed the Assignment of
Mortgage referred to in clause (iii) above;
(v) for each Home Loan either an original title insurance policy
or a title search or guaranty of title, provided that if any such
original policy of title insurance has not yet been received by the
Seller, the Seller shall have delivered, or cause to be delivered, a
copy of such policy or a title insurance binder or commitment for the
issuance of such policy with respect to the related Mortgaged
Property promptly upon any such document coming into the possession
of the Seller;
(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 Home
Loan;
(viii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage; and
(ix) any insurance policies relating to the Home Loan.
(B)With respect to each Home Loan evidenced by a Contract:
(i) The original Contract stamped as follows: "This Contract has
been assigned to U.S. Bank National Association, as Indenture Trustee
for United National Home Loan Owner Trust 1999-1 Asset-Backed Notes,
or to any successor Indenture Trustee thereunder";
(ii) The original title document for the related Manufactured
Home or a duplicate certified by the appropriate governmental
authority which issued the original thereof or the application for
such title document or, if the laws of the jurisdiction in which the
related Manufactured Home is located do not provide for the issuance
of title documents for manufactured housing, other evidence of
ownership of the related Manufactured Home which is customarily
relied upon in such jurisdiction as evidence of title to a
manufactured housing unit;
(iii) Evidence of one or more of the following types of
perfection of the security interest in the related Manufactured Home
granted by such Contract, as appropriate: (a) notation of such
security interest on the title document, (b) a financing statement
meeting the requirements of the UCC, with evidence of recording
indicated thereon, or (c) such other evidence of perfection of a
security interest in a manufactured housing unit as is customarily
relied upon in the jurisdiction in which the related Manufactured
Home is located;
(iv) The assignment of the Contract to the Indenture Trustee
(which may be in a blanket form that also covers other Contracts);
(v) Any extension, modification or waiver agreements;
(vi) With respect to any Land-and-Home Contract, the original
Mortgage with evidence of recording indicated thereon; provided,
however, that if the Mortgage with evidence of recording thereon
cannot be delivered concurrently with the execution and delivery of
this Agreement solely because of a delay caused by the public
recording office where such Mortgage has been delivered for
recordation, there shall be delivered to the Grantor Trustee a copy
of such Mortgage certified as a true copy in an Officer's
Certificate, which Officer's Certificate shall certify that such
Mortgage has been delivered to the appropriate public recording
office for recordation, and there shall be promptly delivered to the
Grantor Trustee such Mortgage with evidence of recording indicated
thereon upon receipt thereof from the public recording official (or a
true copy thereof certified by an appropriate public official may be
delivered to the Grantor Trustee); and
(vii) With respect to any Land-and-Home Contract, the original
assignment of Mortgage to the Grantor Trustee, in recordable form.
Such assignments may be blanket assignments, to the extent such
assignments are effective under applicable law, for Mortgage Loans
covering Mortgaged Properties situated within the same county. If the
assignment of Mortgage is in blanket form an assignment of Mortgage
need not be included in the individual Mortgage File.
Notwithstanding the foregoing, if the original Debt Instrument with
respect to a Home Loan cannot be located, the Seller may deliver a lost note
affidavit substantially in the form attached as Exhibit E hereto; provided,
that the aggregate of Home Loans as to which lost note affidavits are delivered
shall not exceed 1.0% (by aggregate principal balance) of the Home Loans.
Notwithstanding the foregoing, the Seller shall not be required to
deliver to the Indenture Trustee, as Custodian, on or before the Closing Date
with respect to a Home Loan (a) the original Assignment of Mortgage pursuant to
clause (A)(iii) above or (b) an intervening assignment of the Mortgage from
Keystone or KMC, as the case may be, to the Seller pursuant to clause (A)(iv)
above if, in either case, the Indenture Trustee has agreed to prepare such
Assignment of Mortgage or intervening assignment of the Mortgage, as the case
may be. The Indenture Trustee shall endeavor to prepare and deliver to the
Seller, Keystone or KMC, as applicable, for execution each such Assignment of
Mortgage and intervening assignment of the Mortgage within 30 days following
the Closing Date and in any event shall prepare and deliver each such
Assignment of Mortgage and intervening assignment of the Mortgage no later than
90 days following the Closing Date with respect to each Home Loan for which the
related Home Loan File contains, as of date of the review conducted by the
Custodian pursuant to Section 2.06(a) hereof, the information necessary for the
Indenture Trustee to prepare the Assignment of Mortgage and the intervening
assignment of the Mortgage to the Seller. The Seller shall, and shall use its
best efforts to cause Keystone and KMC to, cooperate with Indenture Trustee in
the prompt execution and return to the Indenture Trustee of each such
Assignment of Mortgage or intervening assignment of the Mortgage, as
applicable, properly prepared by the Indenture Trustee; provided, that all such
executed Assignments of Mortgage and intervening assignments of the Mortgage
described in this paragraph shall be returned to the Indenture Trustee within
10 Business Days of receipt of the same from the Indenture Trustee. With
respect to any Home Loan, the Seller shall be deemed to have satisfied its
obligations under clause (A)(iii) or clause (A)(iv) of this Section 2.05(a) in
regard to the Assignment of Mortgage from the Seller to the Indenture Trustee
or the intervening assignment of the Mortgage from Keystone or KMC, as the case
may be, to the Seller, upon return to the Indenture Trustee of a properly
executed Assignment of Mortgage or intervening assignment of the Mortgage, as
applicable, in accordance with the terms of this paragraph or the following
paragraph. All Assignments of Mortgage (other than those with respect to the
Non-Recordation States) and all intervening assignments of the Mortgage to the
Seller described in this paragraph shall be submitted for recordation by the
Indenture Trustee to the applicable public recording office promptly following
receipt of such documents properly executed by the Seller, Keystone or KMC, as
the case may be, but in no event later than 10 days following the date of
receipt thereof by the Indenture Trustee.
If, as of the date of the review conducted by the Custodian pursuant
to Section 2.06(a) hereof, the Mortgage or other documentation necessary for
the Indenture Trustee to prepare the Assignment of Mortgage and the intervening
assignment of the Mortgage to the Seller is not contained in the Home Loan File
because the Mortgage or other document has not been returned from the
applicable public filing office, the Indenture Trustee shall, within 30 days
following the receipt of such Mortgage or other documentation from the
applicable public filing office, prepare and deliver such Assignment of
Mortgage and intervening assignment of the Mortgage, as the case may be, to the
Seller, and to Keystone or KMC, as applicable, for execution. The Seller shall,
and shall use its best efforts to cause Keystone and KMC to, cooperate with
Indenture Trustee in the prompt execution and return to the Indenture Trustee
of each such Assignment of Mortgage or intervening assignment of the Mortgage,
as applicable, properly prepared by the Indenture Trustee; provided, that all
such executed Assignments of Mortgage and intervening assignments of the
Mortgage to the Seller described in this paragraph shall be returned to the
Indenture Trustee within 10 Business Days of receipt from the Indenture
Trustee. All such Assignments of Mortgage (other than those with respect to the
Non-Recordation States) and all such intervening assignments of the Mortgage to
the Seller described in this paragraph shall be submitted for recordation by
the Indenture Trustee to the applicable public recording office promptly
following receipt of such documents properly executed by the Seller, Keystone
or KMC, as the case may be, but in no event later than 10 days following the
date of receipt thereof by the Indenture Trustee.
With respect to each Home Loan, the Seller shall, within five
Business Days after the receipt thereof, and in any event, within twelve months
of the Closing Date, deliver or cause to be delivered to the Custodian: (i) the
original recorded Mortgage in those instances where a copy thereof certified by
the Seller was delivered to the Custodian; (ii) the original recorded
Assignment of Mortgage, except with respect to Non-Recordation States; (iii)
any original recorded intervening assignments of Mortgage in those instances
where copies thereof certified by the Seller were delivered to the Custodian;
and (iv) the original recorded assumption and modification agreement in those
instances in which a copy was delivered. Notwithstanding anything to the
contrary contained in this Section 2.05, in those instances where the public
recording office retains the original Mortgage or, if applicable, the
Assignment of Mortgage, the intervening assignments of the Mortgage or the
original recorded assumption and modification agreement after it has been
recorded, or where any such original has been lost or destroyed, the Seller
shall be deemed to have satisfied its obligations hereunder with respect to the
delivery of any such document upon delivery to the Custodian of a copy, as
certified by the public recording office to be a true copy of the recorded
original of such Mortgage or, if applicable, the Assignment of Mortgage,
intervening assignments of Mortgage or assumption and modification agreement,
respectively.
The Seller shall not be required to record Assignments of Mortgages
for any Home Loan with respect to which the related Mortgaged Property is
located in a Non-Recordation State, and the delivery of the Assignments of
Mortgages for such Home Loans to the Custodian in recordable form on the
Closing Date or the agreement by the Indenture Trustee to prepare the same
shall constitute full compliance with subsection (b)(A)(iii) above and the
Seller shall retain record title to such Mortgages on behalf of the Indenture
Trustee and the holders of the Securities.
(b) All recordings required pursuant to this Section 2.05 shall be
accomplished by or on behalf of and at the expense of the Seller.
Section 2.06. Acceptance by the Custodian of the Home Loans; Initial
Certification by Custodian. (a) The Custodian shall execute and deliver on the
Closing Date an acknowledgment of receipt of the Home Loan File for each Home
Loan. The Custodian shall hold such documents and any amendments, replacements
or supplements thereto, as well as any other assets included in the Trust
Estate, delivered to the Custodian in trust, upon and subject to the conditions
set forth herein for the benefit of the Securityholders. The Custodian shall
review each Home Loan File within 30 days after the Closing Date (or, with
respect to any Qualified Substitute Home Loan, within 30 days after the
conveyance of the related Home Loan to the Issuer) and shall deliver to the
Seller, the Indenture Trustee, the Issuer and the Servicer an interim
certification to the effect that, as to each Home Loan listed in the Home Loan
Schedule (other than any Home Loan paid in full or any Home Loan specifically
identified in such certification as not covered by such certification), (i) all
documents required to be delivered pursuant to this Agreement are in its
possession, (ii) all documents delivered by the Seller to the Custodian
pursuant to Section 2.05 have been reviewed by the Custodian and have not been
mutilated or damaged and appear regular on their face (handwritten additions,
changes or corrections shall not constitute irregularities if initialed by the
Obligor) and relate to such Home Loan, (iii) based on the examination of the
Custodian, and only as to the foregoing documents, the information set forth on
the Home Loan Schedule accurately reflects the information set forth in the
Home Loan File and (iv) each Debt Instrument has been endorsed as provided in
Section 2.05. Neither the Issuer nor the Custodian shall be under any duty or
obligation (i) to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable,
or appropriate for the represented purpose or that they are other than what
they purport to be on their face or (ii) to determine whether any Home Loan
File should include any of the documents specified in Section 2.05(a)(v). Prior
to the first anniversary of the Closing Date, the Custodian shall deliver to
the Seller, the Indenture Trustee, the Issuer and the Servicer a final
certification evidencing the completeness of the Home Loans in its possession
or control.
(b) If the Custodian, during the process of reviewing the Home Loan
Files, finds any document constituting a part of the Home Loan File which is
not executed, has not been received, is unrelated to any Home Loan identified
in the Home Loan Schedule, does not conform to the requirements of Section 2.05
or does not conform, in all material respects, to the description thereof as
set forth in the Home Loan Schedule, then the Custodian shall promptly so
notify the Servicer, the Indenture Trustee, the Issuer and the Seller. In
performing any such review, the Custodian may conclusively rely on the Seller
as to the purported genuineness of any such document and any signature thereon.
It is understood that the scope of the Custodian's review of the Home Loan
Files is limited solely to confirming that the documents listed in Section 2.05
have been received and further confirming that any and all documents delivered
pursuant to Section 2.05 have been executed and relate to the Home Loans
identified in the Home Loan Schedule. Neither the Issuer nor the Custodian
shall have any responsibility for determining whether any document is valid and
binding, whether the text of any assignment or endorsement is in proper or
recordable form, 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. If a material defect in a document
constituting part of a Home Loan File is discovered, then the Seller shall
comply with the cure, substitution and repurchase provisions of Section 3.05
hereof.
(c) On the Payment Date in December of each year commencing in 1999,
the Custodian shall deliver to the Seller, the Indenture Trustee and the
Servicer a certification listing all Home Loan Files held by the Custodian on
such Payment Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of the Seller. The Seller
hereby represents, warrants and covenants with and to the Issuer, the
Depositor, the Indenture Trustee, the Servicer and the Securityholders as of
the Closing Date:
(a) The Seller is a national banking association duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its creation and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in each
Mortgaged Property State if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the Seller
and perform its obligations as Seller hereunder except where the failure to be
so licensed, qualified or in good standing, either singularly or in the
aggregate, would not have a material adverse effect on its business or its
ability to perform its obligations hereunder; the Seller has the power and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary action of the Seller; this
Agreement evidences the valid, binding and enforceable obligation of the
Seller; and all requisite action has been taken by the Seller to make this
Agreement valid, binding and enforceable upon the Seller in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium and other, similar laws relating to or affecting creditors' rights
generally or the application of equitable principles in any proceeding, whether
at law or in equity.
(b) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Seller makes no such representation or warranty) that
are necessary in connection with the purchase and sale of the Securities and
the execution and delivery by the Seller of this Agreement and the other
related documents to which it is a party, have been duly taken, given or
obtained, as the case may be, are in full force and effect, are not subject to
any pending proceedings or appeals (administrative, judicial or otherwise) and
either the time within which any appeal therefrom may be taken or review
thereof may be obtained has expired or no review thereof may be obtained or
appeal therefrom taken, and are adequate to authorize the consummation of the
transactions contemplated by this Agreement and such other documents on the
part of the Seller and the performance by the Seller of its obligations as
Seller under this Agreement and such other documents to which it is a party.
(c) The consummation of the transactions contemplated by this
Agreement will not result in (i) the breach of any terms or provisions of the
Articles of Association or Bylaws of the Seller, (ii) the breach of any term or
provision of, or conflict with or constitute a default under or result in the
acceleration of any obligation under, any material agreement, indenture or loan
or credit agreement or other material instrument to which the Seller, or its
property is subject, or (iii) the violation of any law, rule, regulation,
order, judgment or decree to which the Seller or its respective property is
subject.
(d) Neither the Prospectus Supplement nor any statement, report or
other document prepared by the Seller and furnished or to be furnished in
connection with the transactions contemplated hereby contains or will contain
any untrue statement of material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading.
(e) There is no action, suit, proceeding or investigation pending or,
to the best of the Seller's knowledge, threatened against the Seller which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Seller in any material impairment of the right or ability of the
Seller to carry on its business substantially as now conducted, or in any
material liability on the part of the Seller which would draw into question the
validity of this Agreement or the Home Loans or of any action taken or to be
taken in connection with the obligations of the Seller contemplated herein, or
which would be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement.
(f) The Seller is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal, state,
municipal or other governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
otherwise) or operations of the Seller or its properties or might have
consequences that would materially and adversely affect its performance
hereunder.
(g) The Seller shall not solicit any refinancing of any of the Home
Loans; provided, that this covenant shall not prevent or restrict either (1)
the Seller from making general solicitations, by mail, advertisement or
otherwise of the general public or persons on a targeted list, so long as the
list was not generated from the Home Loan Schedule or (2) any refinancing in
connection with an Obligor's unsolicited request for refinancing.
(h) The transactions contemplated by this Agreement are in the
ordinary course of business of Seller;
(i) The Seller is not insolvent, nor will it be made insolvent by the
transfer of the Home Loans, nor is it aware of any pending insolvency; and it
did not sell the Home Loans to the Trust with any intent to hinder, delay or
defraud any of its creditors;
(j) The Seller's place of business and chief executive office is in
West Virginia;
(k) The Seller has not caused, permitted, or suffered any financing
statement other than the financing statement naming it as debtor with respect
to the Home Loans to be filed in the Office of the Secretary of State of West
Virginia before the filing of such financing statement; and
(l) None of the Seller, the Depositor, nor the Trust is the Custodian
for the Indenture Trustee.
Section 3.02 Representations, Warranties and Covenants of the
Servicer. The Servicer hereby represents, warrants and covenants with and to
the Seller, the Depositor, the Issuer, the Indenture Trustee and the
Securityholders as of the Closing Date:
(a) The Servicer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware and has all
licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each Mortgaged Property State if
the laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Servicer and perform its obligations as
Servicer hereunder except where the failure to be so licensed, qualified or in
good standing, either singularly or in the aggregate, would not have a material
adverse effect on its business or its ability to perform its obligations
hereunder; the Servicer has the power and authority to execute and deliver this
Agreement and to perform in accordance herewith; the execution, delivery and
performance of this Agreement by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action of the Servicer; this Agreement evidences the valid, binding
and enforceable obligation of the Servicer; and all requisite action has been
taken by the Servicer to make this Agreement valid, binding and enforceable
upon the Servicer in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium and other, similar laws
relating to or affecting creditors' rights generally or the application of
equitable principles in any proceeding, whether at law or in equity;
(b) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses required to be
taken, given or obtained, as the case may be, by or from any federal, state or
other governmental authority or agency (other than any such actions, approvals,
etc. under any state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Servicer makes no such representation or warranty)
that are necessary in connection with the execution and delivery by the
Servicer of this Agreement and the other related documents to which it is a
party, have been duly taken, given or obtained, as the case may be, are in full
force and effect, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise) and either the time within which any
appeal therefrom may be taken or review thereof may be obtained has expired or
no review thereof may be obtained or appeal therefrom taken, and are adequate
to authorize the consummation of the transactions contemplated by this
Agreement and such other documents on the part of the Servicer and the
performance by the Servicer of its obligations as Servicer under this Agreement
and such other documents to which it is a party;
(c) The consummation of the transactions contemplated by this
Agreement will not result in (i) the breach of any terms or provisions of the
charter or by-laws of the Servicer, (ii) the breach of any term or provision
of, or conflict with or constitute a default under or result in the
acceleration of any obligation under, any material agreement, indenture or loan
or credit agreement or other material instrument to which the Servicer or its
property is subject, or (iii) the violation of any law, rule, regulation,
order, judgment or decree to which the Servicer or its property is subject;
(d) All statements contained in the Prospectus Supplement relating to
the Servicer set forth under the caption "THE SERVICER--The Servicer" starting
at the next to last paragraph on page S-24 and continuing through the fourth
paragraph on page S-25 and the last paragraph on page S-25 in the Prospectus
Supplement are accurate in all material respects.
(e) All statements, reports or other documents prepared by the
Servicer to be furnished in connection with the transactions contemplated
hereby will be accurate in all material respects;
(f) There is no action, suit, proceeding or investigation pending or,
to the best of the Servicer's knowledge, threatened against the Servicer which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Servicer or in any material impairment of the right or ability of
the Servicer to carry on its business substantially as now conducted, or in any
material liability on the part of the Servicer or which would draw into
question the validity of this Agreement or the Home Loans or of any action
taken or to be taken in connection with the obligations of the Servicer
contemplated herein, or which would be likely to impair materially the ability
of the Servicer to perform under the terms of this Agreement;
(g) The Servicer is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or other governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
otherwise) or operations of the Servicer or its properties or might have
consequences that would materially and adversely affect its performance
hereunder;
(h) The Servicer shall not solicit any refinancing of any of the Home
Loans; provided, that this covenant shall not prevent or restrict promotions
undertaken by the Servicer or any Affiliate thereof which are directed to the
general public at large, including, without limitation, mass mailing based on
commercially acquired mailing lists, newspaper, radio and television
advertisements. The foregoing shall not constitute solicitation. Nor is the
Servicer prohibited from responding to unsolicited requests or inquiries made
by an Obligor or an agent of an Obligor; provided, further, that the Servicer
may solicit any Obligor for whom the Servicer has received a request for
verification of mortgage from an originator of mortgage loan products similar
to the Home Loans that indicates that such Obligor intends to refinance his or
her Home Loan. In addition, the Servicer may solicit the Obligors for insurance
products; and
(i) The Servicer shall not disclose, sell, transfer, assign or
otherwise dispose of a customer or similar list comprised of the names of the
Obligors under the Home Loans to any third party without the Seller's consent,
unless such list was obtained independently from its role as Servicer.
Section 3.03 Individual Home Loans. The Seller hereby represents and
warrants to the Depositor, the Issuer, the Indenture Trustee, the Servicer and
the Securityholders, with respect to the Home Loans, as of the Closing Date:
(a) The information pertaining to each Home Loan set forth in the
Home Loan Schedule was true and correct in all material respects as of the
Cut-Off Date;
(b) As of the Cut-Off Date, approximately 0.60% of the Home Loans by
Cut-Off Date Principal Balance were 30-59 days delinquent in payment as of the
Cut-Off Date (calculated from Due Date to Due Date with respect to each Home
Loan and without giving effect to any grace period). Approximately 0.36% of the
Home Loans by Cut-Off Date Principal Balance were 60 days or more delinquent in
payment as of the Cut-Off Date (calculated from Due Date to Due Date with
respect to each Home Loan and without giving effect to any grace period). None
of the Home Loans were more than 120 days delinquent in payment as of the
Cut-Off Date (calculated from Due Date to Due Date with respect to each Home
Loan and without giving effect to any grace period). Neither the Seller nor the
relevant approved home loan originator has advanced funds, induced, solicited
or knowingly received any advance of funds from a party other than the Obligor,
directly or indirectly, for the payment of any amount required by the Home
Loan;
(c) The terms of the Debt Instrument and any related Mortgage have
not been impaired, waived, altered or modified in any respect, except by
written instruments reflected in the related Home Loan File; no instrument of
waiver, alteration or modification has been executed, and no Obligor has been
released, in whole or in part, except in connection with an assumption
agreement which assumption agreement is part of the related Home Loan File and
the payment terms of which are reflected in the related Home Loan Schedule;
(d) The Debt Instrument and any related Mortgage are not subject to
any set-off, counterclaim or defense, including the defense of usury or of
fraud in the inducement, nor will the operation of any of the terms of the Debt
Instrument and any related Mortgage, or the exercise of any right thereunder,
render such Mortgage unenforceable, in whole or in part, or subject to any Debt
Instrument or right of rescission, set-off, counterclaim or defense, including
the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;
(e) Any and all material requirements of any federal, state or local
law applicable to the Home Loan (including all origination and collection
practices with respect thereto) have been complied with;
(f) Any related Mortgage has not been satisfied or cancelled in
whole, rescinded or subordinated, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release, cancellation or
rescission;
(g) Any related Mortgage is a valid, subsisting and enforceable lien
on the Mortgaged Property, including the land and all buildings on the
Mortgaged Property;
(h) The Debt Instrument and any related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by general principles of equity;
(i) All parties to the Debt Instrument and any related Mortgage had
legal capacity at the time to enter into the Home Loan and to execute and
deliver the Debt Instrument and any related Mortgage, and the Debt Instrument
and any related Mortgage have been duly and properly executed by such parties;
(j) As of the applicable Cut-Off Date, the proceeds of the Home Loan
have been fully disbursed and there is no requirement for future advances
thereunder, and any and all applicable requirements set forth in the Home Loan
documents have been complied with;
(k) With respect to each Home Loan, immediately prior to the sale,
transfer and assignment to the Depositor, the Seller had good and indefeasible
legal title to the Home Loan, the related Debt Instrument and any related
Mortgage, and the Seller was the sole owner thereof, subject to no liens,
pledges, charges, mortgages, encumbrances or rights of others, except for such
liens as will be released simultaneously with the transfer and assignment of
the Home Loan to the Depositor; and immediately upon the sale, transfer and
assignment contemplated herein, the Trust will hold good title to, and be the
sole owner with respect to the Home Loan, the related Note and any related
Mortgage, subject to no liens, pledges, charges, mortgages, encumbrances or
rights of others;
(l) There is no default, breach, violation or event of acceleration
existing under the Home Loan, the related Debt Instrument and any related
Mortgage and there is 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;
(m) Any related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (B) otherwise by judicial
foreclosure;
(n) Each Home Loan is a fixed rate loan; each Debt Instrument shall
mature within not more than 25 years and 32 days from the date of origination
of the Home Loan; each Debt Instrument is payable in substantially equal
Monthly Payments, with interest payable in arrears, and requires a Monthly
Payment which if paid on the related Due Date is sufficient to amortize the
original principal balance over the original term and to pay interest at the
related Home Loan Rate; and the Debt Instrument does not provide for any
extension of the original term;
(o) The related Debt Instrument is not and has not been secured by
any collateral, except, the lien of the corresponding Mortgage and/or security
interest in the related Manufactured Home, as applicable;
(p) If the related Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, or a valid
substitution of trustee has been recorded or may be recorded and no
extraordinary fees or expenses are or will become payable to the trustee under
the deed of trust, except in connection with default proceedings and a
trustee's sale after default by the Mortgagor;
(q) The Seller has no knowledge of any circumstances or conditions
not reflected in the representations set forth herein, or in the Home Loan
Schedule, or in the related Home Loan File with respect to any related
Mortgage, the related Mortgaged Property or the Obligor which in the opinion of
the Seller could reasonably be expected to materially and adversely affect the
value of the related Mortgaged Property, or the marketability of the Home Loan
or cause the Home Loan to become delinquent or otherwise in default;
(r) There exists a Home Loan File relating to each Home Loan and such
Home Loan File contains all of the original or certified documentation listed
in Section 2.05 for such type of Home Loan. Each Home Loan File has been
delivered to the Custodian. Each document included in the Home Loan File which
is required to be executed by the Obligor has been executed by the Obligor in
the appropriate places. All blanks on any form required to be completed have
been completed;
(s) Each Home Loan is in respect of a home improvement loan, debt
consolidation loan, installment loan agreement or a retail installment sales
contract and each related Mortgaged Property with respect thereto is improved
by a residential dwelling which is the principal residence or an investment of
property of the related Obligor;
(t) If the related Mortgaged Property is in an area identified by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards,
unless the community in which the area is situated is participating in the
National Flood Insurance Program and the regulations thereunder or less than a
year has passed since FEMA notification regarding such hazards, a flood
insurance policy is in effect with respect to such property with a generally
acceptable carrier which complies with Section 102(a) of the Flood Disaster
Protection Act of 1973;
(u) The aggregate Cut-Off Date Principal Balances of the Home Loans
which are multi-units (two to four units) is less than 0.48% of the aggregate
Original Pool Principal Balance;
(v) All costs, fees and expenses incurred in originating, closing or
recording (except as specified in Section 2.05(b)) the Home Loans were paid;
(w) There is no obligation on the part of the Seller or any other
party other than the Obligor to make payments with respect to the Home Loan;
(x) At the time of origination of the Home Loan, each related prior
lien, if any, was not 30 or more days delinquent;
(y) All parties which have had any interest in the Home Loan, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (i) in compliance with any
and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (ii) (A) organized under the laws of such
state, or (B) qualified to do business in such state, or (C) federal savings
associations or national banks having principal offices in such state, or (D)
not doing business in such state;
(z) Any related Mortgage contains an enforceable provision either (i)
requiring the consent of the Mortgagee to assumption of the related Home Loan
upon sale of the Mortgaged Property or (ii) permitting the assumption of the
related Home Loan upon the sale of the Mortgaged Property provided that certain
conditions are satisfied;
(aa) Except with respect to Home Loans where the related Mortgaged
Property is located in the state of Florida, there is no homestead or other
exemption available to the Mortgagor which would materially interfere with the
right to sell the related Mortgaged Property at a trustee's sale or to
foreclose the Mortgage;
(bb) The related Home Loan File with respect to each Home Loan
contains a document reflecting that title to the related Mortgaged Property is
vested at least 50% in the Obligor under such Home Loan;
(cc) Each Mortgaged Property (including each residential dwelling
improvement thereon) is free of damage which materially and adversely affects
the value thereof, other than damage to be corrected pursuant to the Home Loan
with some or all of the proceeds of such Home Loan;
(dd) No Home Loan was adversely selected as to credit risk from the
pool of home improvement loans, debt consolidation loans and manufactured
housing loans owned by the Seller;
(ee) Each Contract, together with the related certificate of title,
creates a valid, subsisting and enforceable first priority security interest in
favor of the Indenture Trustee in the Manufactured Home;
(ff) There is only one original executed Contract, and each original
Contract is in the custody of the Custodian;
(gg) If the related Manufactured Home is located in a state in which
notation of a security interest on the title document is required or permitted
to perfect such security interest, the title document shows, or if a new or
replacement title document with respect to such Manufactured Home is required,
such title document has been applied for and when issued by the applicable
governmental agency, will show, the Seller or Keystone or KMC, as applicable,
as the holder of a first priority security interest in such Manufactured Home.
If the related Manufactured Home is located in a state in which the filing of a
financing statement or the making of a fixture filing under the UCC is required
to perfect a security interest in manufactured housing, such filings or
recordings have been duly made and show the Seller or Keystone or KMC, as
applicable, as secured party;
(hh) Each Contract is secured by a "single family residence" within
the meaning of Section 25(e)(10) of the Code;
(ii) The Home Loans have a weighted average remaining term to
maturity of approximately 242 months;
(jj) All of the Home Loans are "actuarial/interest" Home Loans;
(kk) On the Closing Date, 55% or more (by aggregate Principal
Balance) of the Home Loans do not constitute "real estate mortgages" for the
purpose of Treasury Regulation ss.301.7701(i) - 1(d) under the Code. For this
purpose a Home Loan constitutes a "real estate mortgage" if the Home Loan is an
"obligation principally secured by an interest in real property." For this
purpose an "obligation is principally secured by an interest in real property"
if it satisfies either test set out in paragraph (i) or paragraph (ii) below.
(i) The 80-percent test. An obligation is principally secured by
an interest in real property if the fair market value of the interest in real
property securing the obligation was at least equal to 80 percent of the
adjusted issue price of the obligation at the time the obligation was
originated (or, if later, the time the obligation was significantly modified).
For purposes of this paragraph (i), the fair market value of
the real property interest must be first reduced by the
amount of any lien on the real property interest that is
senior to the obligation being tested, and must be further
reduced by a proportionate amount of any lien that is in
parity with the obligation being tested. The adjusted issue
price of an obligation is its issue price plus the amount of
accrued original issue discount, if any, as of the date of
determination.
(ii) Alternative test. An obligation is principally secured by an
interest in real property if substantially all of the proceeds of the
obligation were used to acquire or to improve or protect an interest in real
property that, at the origination date, is the only security for the
obligation. For purposes of this test, loan guarantees made by the United
States or any state (or any political subdivision, agency, or instrumentality
of the United States or of any state), or other third party credit enhancement
are not viewed as additional security for a loan. An obligation is not
considered to be secured by property other than real property solely because
the obligor is personally liable on the obligation. For this purpose only,
substantially all of the proceeds of the obligations," means 66 2/3% or more
of the gross proceeds.
Section 3.04 [RESERVED]
Section 3.05. Purchase and Substitution. (a) It is understood and
agreed that the representations and warranties set forth in Section 3.03 shall
survive the conveyance of the Home Loans from the Seller to the Depositor and
from the Depositor to the Issuer, the Grant of the Home Loans to the Indenture
Trustee and the delivery of the Securities to the Securityholders. Upon
discovery by the Seller, the Servicer, the Custodian, the Issuer, the Indenture
Trustee or any Securityholder of a breach of any of such representations and
warranties which materially and adversely affects the value of the Home Loans
or the interest of the Securityholders, or which materially and adversely
affects the interests of the Securityholders in the related Home Loan in the
case of a representation and warranty relating to a particular Home Loan
(notwithstanding that such representation and warranty may have been made to
the Seller's best knowledge), the party discovering such breach shall give
prompt written notice to the others. The Seller shall within 60 days of the
earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, or of its discovery or its receipt of notice of a
material defect in a document contained in an Home Loan File as referred to in
the last sentence of Section 2.06(b), promptly cure such breach in all material
respects. If, however, within 60 days after the Seller's discovery of or
receipt of notice of such a breach or defective document, as applicable, such
breach or defective document, as applicable, has not been remedied by the
Seller and such breach or defective document, as applicable, materially and
adversely affects the interests of the Securityholders generally or in the
related Home Loan (the "Defective Home Loan"), the Seller shall on or before
the Determination Date next succeeding the end of such 60 day period either (i)
remove such Defective Home Loan from the Trust Estate (in which case it shall
become a Deleted Home Loan) and substitute one or more Qualified Substitute
Home Loans in the manner and subject to the conditions set forth in this
Section 3.05 or (ii) purchase such Defective Home Loan at a purchase price
equal to the Purchase Price (as defined below) by depositing such Purchase
Price in the Collection Account. In the event the Seller is notified that any
Mortgaged Property was, as of the Closing Date, not free of damage or not in
good repair, regardless of the Seller's knowledge, the Seller shall substitute
or purchase the related Home Loan in accordance with clauses (i) and (ii),
respectively, above. The Seller shall provide the Servicer, the Indenture
Trustee and the Issuer with a certification of a Responsible Officer on the
Determination Date next succeeding the end of such 60 day period indicating
whether the Seller is purchasing the Defective Home Loan or substituting in
lieu of such Defective Home Loan a Qualified Substitute Home Loan. With respect
to the purchase of a Defective Home Loan pursuant to this Section, the
"Purchase Price" shall be equal to the Principal Balance of such Defective Home
Loan as of the date of purchase, plus all accrued and unpaid interest on such
Defective Home Loan to but not including the Due Date in the Due Period in
which such repurchase occurs computed at the applicable Home Loan Interest
Rate, plus the amount of any unreimbursed Servicing Advances, including any
Nonrecoverable Servicing Advances, made by the Servicer with respect to such
Defective Home Loan, which Purchase Price shall be deposited in the Collection
Account (after deducting therefrom any amounts received in respect of such
repurchased Defective Home Loan and being held in the Collection Account for
future payment to the extent such amounts represent recoveries of principal not
yet applied to reduce the related Principal Balance or interest (net of the
Servicing Fee) for the period from and after the Due Date in the Due Period
most recently ended prior to such Determination Date).
Any substitution of Home Loans pursuant to this Section 3.05(a) shall
be accompanied by payment by the Seller of the Substitution Adjustment, if any,
to be deposited in the Collection Account. For purposes of calculating the
Available Collection Amount for any Payment Date, amounts paid by the Seller
pursuant to this Section 3.05 in connection with the repurchase or substitution
of any Defective Home Loan that are on deposit in the Collection Account as of
the Determination Date for such Payment Date shall be deemed to have been paid
during the related Due Period and shall be transferred to the Note Payment
Account to be retained therein or transferred to the Certificate Distribution
Account pursuant to Section 5.01(c).
As to any Home Loan for which the Seller substitutes a Qualified
Substitute Home Loan or Loans, the Seller shall effect such substitution by
delivering (i) to the Issuer a certification executed by a Responsible Officer
of the Seller to the effect that the Substitution Adjustment has been credited
to the Collection Account, and (ii) to the Custodian, the documents
constituting the Home Loan File for such Qualified Substitute Home Loan or
Loans.
(b) The Trust shall have the option, exercisable in its sole
discretion at any time, to deposit monies into the Collection Account pursuant
to Section 5.01(b)(i) and release from the lien of the Indenture any Home Loan
that is delinquent or is in foreclosure or default; provided that any
repurchase pursuant to this paragraph is conducted in the same manner as the
repurchase by the Seller of a Defective Home Loan pursuant to Section 3.05(a).
(c) The Servicer shall deposit in the Collection Account all payments
received in connection with such Qualified Substitute Home Loan or Loans on or
after the beginning of the Due Period in which such substitution occurs. All
payments received with respect to Qualified Substitute Home Loans on or before
the beginning of the Due Period in which such substitution occurs will be
retained by the Seller. The Issuer will be entitled to all payments received on
the Deleted Home Loan on or before the beginning of the Due Period in which
such substitution occurs, and the Seller shall thereafter be entitled to retain
all amounts subsequently received in respect of such Deleted Home Loan. The
Seller shall give written notice to the Issuer, the Servicer and the Indenture
Trustee that such substitution has taken place. Upon such substitution, such
Qualified Substitute Home Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Qualified Substitute Home Loan or Loans, as of the date of
substitution, the covenants, representations and warranties set forth in
Section 3.03. On the date of such substitution, the Seller will deposit into
the Collection Account an amount equal to the related Substitution Adjustment,
if any. In addition, on the date of such substitution, (i) the Issuer shall
cause such Qualified Substitute Home Loan to be pledged to the Indenture
Trustee under the Indenture as part of the Trust Estate and (ii) the Indenture
Trustee shall (A) release the applicable Deleted Home Loan from the lien of the
Indenture, (B) cause the Custodian to release to the Seller the Home Loan File
for such Deleted Home Loan and (C) execute, without recourse, representation or
warranty, and deliver such instruments of transfer and release presented to it
by the Servicer as shall be necessary to transfer such Deleted Home Loan to the
Seller and to evidence such release.
(d) It is understood and agreed that the obligations of the Seller
set forth in this Section 3.05 to cure, purchase or substitute for a Defective
Home Loan constitute the sole remedies of the Depositor, the Issuer, the
Indenture Trustee and the Securityholders hereunder respecting a breach of the
representations and warranties contained in Section 3.03. Any cause of action
against the Seller relating to or arising out of a material defect in a
document contained in an Home Loan File as contemplated by Section 2.06(b) or
arising out of a breach of any representations and warranties made in Section
3.03 shall accrue as to any Home Loan upon (i) discovery of such defect or
breach by any party and notice thereof to the Seller, (ii) failure by the
Seller to cure such defect or breach or purchase or substitute such Defective
Home Loan as specified above, and (iii) demand upon the Seller by the Issuer,
Indenture Trustee or a majority of the Holders of the Outstanding Amount of
Securities for all amounts payable in respect of such Home Loan.
(e) The Issuer shall not have any duty to conduct any affirmative
investigation other than as specifically set forth in this Agreement as to the
occurrence of any condition requiring the repurchase or substitution of any
Home Loan pursuant to this Section or the eligibility of any Home Loan for
purposes of this Agreement.
(f) In connection with a repurchase of or substitution for a Home
Loan pursuant to this Section 3.05, the Seller shall amend the Home Loan
Schedule to reflect (i) the removal of the applicable Deleted Home Loan from
the terms of this Agreement and (ii) if applicable, the substitution of the
applicable Qualified Substitute Home Loan. The Seller shall promptly deliver to
the Issuer, the Servicer and the Indenture Trustee a copy of the Home Loan
Schedule as so amended.
Section 3.06 Representations and Warranties of the Depositor. The
Depositor represents and warrants to the Issuer and the Indenture Trustee on
behalf of the Noteholders:
(i) this Agreement and the other Basic Documents to which the
Depositor is a party have been duly authorized, executed and
delivered by the Depositor and constitute legal, valid and binding
obligations of the Depositor, enforceable against the Depositor in
accordance with their terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity);
(ii) immediately prior to the transfer by the Depositor to the
Issuer of each Home Loan, the Depositor had good and equitable title
to each Home Loan (insofar as such title was conveyed to it by the
Seller) subject to no prior lien, claim, participation interest,
mortgage, security interest, pledge, charge or other encumbrance or
other interest of any nature;
(iii) as of the Closing Date, the Depositor has transferred all
right, title and interest in the Home Loans to the Issuer;
(iv) the Depositor has not transferred the Home Loans to the
Issuer with any intent to hinder, delay or defraud any of its
creditors; and
(v) the Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Delaware, with full corporate power and authority to own its assets
and conduct its business as presently being conducted.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE HOME LOANS
Section 4.01. Duties of the Servicer. (a) Servicing Standard. The
Servicer, as an independent contractor, shall service and administer the Home
Loans and shall have full power and authority, acting alone, to do any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable and consistent with the terms of this
Agreement. Notwithstanding anything to the contrary contained herein, the
Servicer, in servicing and administering the Home Loans, shall employ or cause
to be employed procedures (including collection, foreclosure, liquidation and
Foreclosure Property management and liquidation procedures) and exercise the
same care that it customarily employs and exercises in servicing and
administering loans of the same type as the Home Loans for its own account, all
in accordance with accepted servicing practices of prudent lending institutions
and Servicers of loans of the same type as the Home Loans and giving due
consideration to the Securityholders' reliance on the Servicer (the foregoing
being "Accepted Servicing Practices"). The Servicer has and shall maintain the
facilities, procedures and experienced personnel necessary to comply with the
servicing standard set forth in this subsection (a) and the duties of the
Servicer set forth in this Agreement relating to the servicing and
administration of the Home Loans.
(b) Servicing Advances. In accordance with Accepted Servicing
Practices, the Servicer, or any Subservicer on behalf of the Servicer, shall
make all Servicing Advances in connection with the servicing of each Home Loan
hereunder. Notwithstanding any provision to the contrary herein, neither the
Servicer, nor any Subservicer on behalf of the Servicer, shall have any
obligation to advance its own funds for any delinquent scheduled payments of
principal and interest on any Home Loan or to satisfy or keep current the
indebtedness secured by any Superior Liens on the related Mortgaged Property.
No costs incurred by the Servicer or any Subservicer in respect of Servicing
Advances shall, for the purposes of payments or distributions to
Securityholders, be added to the amount owing under the related Home Loan. The
Servicer shall only make a Servicing Advance with respect to a Home Loan to the
extent that the Servicer determines in its reasonable, good faith judgment that
such Servicing Advance would likely be recoverable, all in accordance with
Accepted Servicing Practices.
(c) Waivers, Modifications and Extensions. Consistent with the terms
of this Agreement, the Servicer may waive, modify or vary any provision of any
Home Loan or consent to the postponement of strict compliance with any such
provision or in any manner grant indulgence to any Obligor if in the Servicer's
reasonable determination such waiver, modification, postponement or indulgence
is not materially adverse to the interests of the Securityholders; provided,
however, unless the Obligor is in default with respect to the Home Loan, or
such default is, in the judgment of the Servicer, reasonably foreseeable, the
Servicer may not permit any modification with respect to any Home Loan that
would change the Home Loan Interest Rate, defer (subject to the following
paragraph) or forgive the payment of any principal or interest (unless in
connection with the liquidation of the related Home Loan) or extend the final
maturity date on the Home Loan. The Servicer may grant a waiver or enter into a
subordination agreement with respect to the refinancing of the indebtedness
secured by a Superior Lien on the related Mortgaged Property, provided that the
Obligor is in a better financial or cash flow position as a result of such
refinancing, which may include a reduction in the Obligor's scheduled monthly
payment on the indebtedness secured by such Superior Lien. The Servicer shall
notify the Issuer and the Indenture Trustee of any modification, waiver or
amendment of any provision of any Home Loan and the date thereof, and shall
deliver to the Custodian for deposit in the related Home Loan File, an original
counterpart of the agreement relating to such modification, waiver or amendment
promptly following the execution thereof. Notwithstanding the preceding
provisions of this subsection (c), the Servicer may modify, vary or waive any
Defaulted Home Loan in a manner that in the reasonable judgment of the Servicer
will be likely to maximize the net proceeds realizable from such Defaulted Home
Loan under the circumstances, including, without limitation, the establishment
of a forbearance plan with the related Obligor and the deferment or forgiveness
of any principal or interest payments due or to become due thereon.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of each Home Loan and the related
Debt Instrument and Mortgage. Consistent with the foregoing, the Servicer may
in its discretion waive or permit to be waived any late payment charge or
assumption fee or any other fee or charge which the Servicer would be entitled
to retain hereunder as Servicing Compensation and extend the due date for
payments due on a Debt Instrument for a period in accordance with Accepted
Servicing Practice, but in no event later than the Maturity Date. In connection
with any partial prepayment, the Servicer may recalculate the amortization
schedule of the related Home Loan to provide for reduced monthly payments over
the remaining term to maturity.
The Servicer may, in a manner consistent with its servicing
practices, permit an Obligor who is selling his principal residence and
purchasing a new residence to substitute the new mortgaged property as
collateral for the related Home Loan. In such circumstances, the Servicer
acknowledges that it intends to, consistent with its Accepted Servicing
Practices, generally require such Obligor to make a partial prepayment in
reduction of the principal balance of the Home Loan to the extent that such
Obligor has received proceeds from the sale of the prior residence that will
not be applied to the purchase of the new residence.
(d) Instruments of Satisfaction or Release. Without limiting the
generality of the foregoing, the Servicer is hereby authorized and empowered to
execute and deliver on behalf of the Issuer, the Indenture Trustee, each
Securityholder, all instruments of satisfaction or cancellation, or of partial
or full release, discharge and all other comparable instruments, with respect
to the Home Loans and with respect to the related Mortgaged Properties. If
reasonably required by the Servicer, the Issuer and the Indenture Trustee shall
furnish the Servicer or any Subservicer with any powers of attorney and other
documents necessary or appropriate to enable the Servicer or any Subservicer to
carry out the servicing and administrative duties under this Agreement.
Section 4.02 Liquidation of Home Loans. (a) In the event that any
payment due under any Home Loan and not postponed pursuant to Section 4.01(c)
is not paid when the same becomes due and payable, or in the event the Obligor
fails to perform any other covenant or obligation under the Home Loan and such
failure continues beyond any applicable grace period, the Servicer shall, in
accordance with the standard of care specified in Section 4.01(a), take such
action as it shall deem to be in the best interest of the Securityholders to
collect or liquidate such Home Loan in default in a manner that in the
reasonable judgment of the Servicer will be likely to maximize the net proceeds
realizable therefrom under the circumstances (including, but without
limitation, the purchase or substitution of such Home Loan pursuant to Section
3.05, or, if no Superior Liens exist on the related Mortgaged Property,
foreclose or otherwise comparably effect ownership in such Mortgaged Property
in the name of the Indenture Trustee for the benefit of Securityholders). The
Servicer shall have the power and authority, exercisable in its sole discretion
at any time, to reach a negotiated settlement with a borrower. The Servicer
shall promptly deposit the Net Liquidation Proceeds or Post-Liquidation
Proceeds, as applicable, from the sale of such Liquidated Home Loans into the
Collection Account in accordance with Section 5.01 of this Agreement. The
Servicer shall give the Indenture Trustee notice of the election of remedies
made pursuant to this Section 4.02. The Servicer shall not be required to
satisfy the indebtedness secured by any Superior Liens on the related Mortgaged
Property or to advance funds to keep the indebtedness secured by such Superior
Liens current. In connection with any collection or liquidation activities, the
Servicer shall exercise collection or liquidation procedures in accordance with
Accepted Servicing Practices.
(b) During any Due Period occurring after a Home Loan becomes a
Liquidated Home Loan, the Servicer shall deposit into the Collection Account
any proceeds received by it with respect to such Liquidated Home Loan or the
related Foreclosure Property ("Post-Liquidation Proceeds").
(c) After a Home Loan has become a Liquidated Home Loan, the Servicer
shall promptly prepare and forward to the Indenture Trustee and the Holder of
the Residual Interest Certificate a liquidation report detailing the following:
(i) the Net Liquidation Proceeds, Insurance Proceeds or Released Mortgaged
Property Proceeds received in respect of such Liquidated Home Loan; (ii)
expenses incurred with respect thereto; (iii) any Net Loan Losses incurred in
connection therewith; and (iv) any Post-Liquidation Proceeds.
Section 4.03 Maintenance of Hazard Insurance; Property Protection
Expenses. The Servicer shall cause to be maintained for each Home Loan fire and
hazard insurance naming the Servicer or its designee as loss payee thereunder
providing extended coverage in an amount which is at least equal to the lesser
of (i) the maximum insurable value of the improvements securing such Home Loan
from time to time and (ii) the combined principal balance owing on such Home
Loan and any mortgage loan senior to such Home Loan. 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 and (ii) the combined
principal balance owing on such Home Loan and any mortgage loan senior to such
Home Loan. Amounts collected by the Servicer under any such policies shall be
deposited in the Collection Account to the extent called for by Section
5.01(b). In cases in which any Mortgaged Property is located in an area
identified in the Federal Register by the Flood Emergency Management Agency as
FLOOD ZONE "A", the hazard insurance to be maintained for the related Home Loan
shall include flood insurance to the extent such flood insurance is available
and the Servicer has determined such insurance to be necessary in accordance
with Accepted Servicing Practices. All such flood insurance shall be in amounts
not less than the lesser of (A) the amount in clause (ii) above and (B) the
maximum amount of insurance available under the National Flood Insurance Act of
1968, as amended. 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 Home 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.
Section 4.04. Maintenance of Mortgage Impairment Insurance Policy. In
the event that the Servicer shall obtain and maintain a blanket policy
consistent with prudent industry standards insuring against fire and hazards of
extended coverage on all of the Home Loans, then, to the extent such policy
names the Servicer or its designee as loss payee and provides coverage in an
amount equal to the aggregate unpaid principal balance on the Home Loans
without coinsurance, and otherwise complies with the requirements of Section
4.05, the Servicer shall be deemed conclusively to have satisfied its
obligations with respect to fire and hazard insurance coverage under Section
4.05, it being understood and agreed that such blanket policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with Section 4.05, and there shall have been a loss which would have
been covered by such policy, deposit in the Collection Account the difference,
if any, between the amount that would have been payable under a policy
complying with Section 4.05 and the amount paid under such blanket policy. Upon
the request of the Indenture Trustee, the Servicer shall cause to be delivered
to the Indenture Trustee a certified true copy of such policy which is
maintained as of the Closing Date with Lloyds of London. In connection with its
activities as servicer of the Home Loans, the Servicer agrees to prepare and
present, on behalf of itself, the Indenture Trustee and Securityholders, claims
under any such policy in a timely fashion in accordance with Accepted Servicing
Practices.
Section 4.05. Fidelity Bond; Errors and Omission Insurance. The
Servicer shall maintain with a responsible company, and at its own expense, a
blanket fidelity bond and an errors and omissions insurance policy in such
amounts as required by, and satisfying any other requirements of, the FNMA and
the FHLMC, with broad coverage on all officers, employees or other persons
acting in any capacity requiring such persons to handle funds, money, documents
or papers relating to the Home Loans ("Servicer Employees"). Any such fidelity
bond and errors and omissions insurance shall protect and insure the Servicer
against losses, including losses resulting from forgery, theft, embezzlement,
fraud, errors and omissions and negligent acts of such Servicer Employees. Such
fidelity bond shall also protect and insure the Servicer against losses in
connection with the release or satisfaction of a Home Loan without having
obtained payment in full of the indebtedness secured thereby. In the event of
any loss of principal or interest on a Home Loan for which reimbursement is
received from the Servicer's fidelity bond or errors and omissions insurance,
the proceeds from any such insurance will be deposited in the Collection
Account. No provision of this Section 4.05 requiring such fidelity bond and
errors and omissions insurance shall diminish or relieve the Servicer from its
duties and obligations as set forth in this Agreement. Upon the request of the
Issuer or the Indenture Trustee, the Servicer shall cause to be delivered to
requesting party a certified true copy of such fidelity bond and insurance
policy.
Section 4.06. Title, Management and Disposition of Foreclosure
Property. The deed or certificate of sale in respect of each Foreclosure
Property shall be taken in the name of the Indenture Trustee for the benefit of
the Securityholders.
The Servicer shall manage, conserve, protect and operate each
Foreclosure Property for the Indenture Trustee and the Securityholders solely
for the purpose of its prudent and prompt disposition and sale. The Servicer
shall, either itself or through an agent selected by the Servicer, manage,
conserve, protect and operate the Foreclosure Property in accordance with
Accepted Servicing Practices. The Servicer shall attempt to sell the same (and
may temporarily lease the same) on such terms and conditions as the Servicer
deems to be in the best interest of the Securityholders. The disposition of
Foreclosure Property shall be carried out by the Servicer at such price, and
upon such terms and conditions, as the Servicer deems to be in the best
interest of the Indenture Trustee and the Securityholders and, as soon as
practicable thereafter, the expenses of such sale shall be paid. The Net
Liquidation Proceeds or Post-Liquidation Proceeds, as applicable, from the
conservation, disposition and sale of the Foreclosure Property shall be
promptly deposited by the Servicer in the Collection Account in accordance with
Section 5.01 of this Agreement and the Indenture, which Net Liquidation
Proceeds or Post-Liquidation Proceeds, as applicable, shall equal all cash
amounts received with respect thereto less the amounts retained and withdrawn
by the Servicer for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and any other fees and expenses incurred in connection with such
Foreclosure Property.
Section 4.07 Access to Certain Documentation and Information
Regarding the Home Loans. The Servicer shall provide to Residual Interest
Certificateholder, the Issuer, the Indenture Trustee on behalf of the
Securityholders and the supervisory agents and examiners of each of the
foregoing access to the documentation regarding the Home Loans required by
applicable state and federal regulations, such access being afforded without
charge but only upon reasonable request and during normal business hours at the
offices of the Servicer designated by it.
Section 4.08. Superior Liens. (a) The Administrator may file (or
cause to be filed) of record a request for notice of any action by a lienholder
under a Superior Lien for the protection of the Indenture Trustee's interest,
where permitted by local law and whenever applicable state law does not require
that a junior lienholder be named as a party defendant in foreclosure
proceedings in order to foreclose such junior lienholder's equity of
redemption. (b) Subject to (a) above, if the Servicer is notified that any
lienholder under a Superior Lien has accelerated or intends to accelerate the
obligations secured by such Superior Lien, or has declared or intends to
declare a default under the related mortgage or promissory note secured
thereby, or has filed or intends to file an election to have any Mortgaged
Property sold or foreclosed, the Servicer shall take, on behalf of the Issuer
and the Indenture Trustee, all reasonable actions that are necessary to protect
the interests of the Securityholders, and/or to preserve the security of the
related Home Loan, including making any Servicing Advances that are necessary
to cure the default or reinstate the Superior Lien. Any Servicing Advances by
the Servicer pursuant to its obligations in this Section 4.08 shall comply with
requirements set forth in Section 4.01(b) hereof.
Section 4.09 Subservicing. (a) The Servicer may, with the prior
written consent of the Indenture Trustee and each Rating Agency, enter into
Subservicing Agreements for any servicing and administration of Home Loans with
any institution which is in compliance with the laws of each state necessary to
enable it to perform its obligations under such Subservicing Agreement and is
an Eligible Servicer; provided, however, such consent shall not be required
with respect to a Subservicer who is an affiliate of the Servicer. The Servicer
shall give prior written notice to the Issuer, the Indenture Trustee of the
appointment of any Subservicer, except an affiliate of the Servicer. The
Servicer shall be entitled to terminate any Subservicing Agreement in
accordance with the terms and conditions of such Subservicing Agreement and to
either directly service the related Home Loans or enter into a Subservicing
Agreement with a successor subservicer which qualifies hereunder.
(b) Notwithstanding any Subservicing Agreement, any of the provisions
of this Agreement relating to agreements or arrangements between the Servicer
and a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Servicer shall remain obligated and primarily liable to the
Issuer, the Indenture Trustee and Securityholders for the servicing and
administering of the Home Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from
the Subservicer and to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the Home Loans. For
purposes of this Agreement, the Servicer shall be deemed to have received
payments on Home Loans when the Subservicer has actually received such payments
and, unless the context otherwise requires, references in this Agreement to
actions taken or to be taken by the Servicer in servicing the Home Loans
include actions taken or to be taken by a Subservicer on behalf of the
Servicer. The Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Servicer by such Subservicer, and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
(c) In the event the Servicer shall for any reason no longer be the
Servicer (including by reason of a Servicer Event of Default), the successor
Servicer, on behalf of the Issuer, the Indenture Trustee, and the
Securityholders pursuant to Section 4.10, shall thereupon assume all of the
rights and obligations of the Servicer under each Subservicing Agreement that
the Servicer may have entered into, unless the successor Servicer elects to
terminate any Subservicing Agreement in accordance with its terms. The
successor Servicer shall be deemed to have assumed all of the Servicer's
interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if the Subservicing Agreements had
been assigned to the assuming party, except that the Servicer shall not thereby
be relieved of any liability or obligations under the Subservicing Agreements.
The Servicer at its expense and without right of reimbursement therefor, shall,
upon request of the successor Servicer, deliver to the assuming party all
documents and records relating to each Subservicing Agreement and the Home
Loans then being serviced. In addition, the Servicer shall prepare and deliver
to the successor Servicer an accounting of amounts collected and held by it at
the time of such transfer. The Servicer shall use reasonable efforts to effect
the orderly and efficient transfer of the Subservicing Agreements to the
assuming party.
(d) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Issuer, the Indenture Trustee and the Securityholders, shall
enforce the obligations of each Subservicer under the related Subservicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims and the pursuit of other appropriate remedies, shall be
in such form and carried out to such an extent and at such time as the
Servicer, in its good faith business judgment, would require were it the owner
of the related Home Loans. The Servicer shall pay the costs of such enforcement
at its own expense, and shall be reimbursed therefor only (i) from a general
recovery resulting from such enforcement to the extent, if any, that such
recovery exceeds all amounts due in respect of the related Home Loan or (ii)
from a specific recovery of costs, expenses or attorneys fees against the party
against whom such enforcement is directed.
(e) Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Home Loans involving a Subservicer in
its capacity as such and not as an originator shall be deemed to be between the
Subservicer and the Servicer alone and none of the Issuer, the Indenture
Trustee or the Securityholders shall be deemed parties thereto or shall have
any claims, rights, obligations, duties or liabilities with respect to the
Subservicer in its capacity as such except as set forth in Section 4.09(c)
above.
Section 4.10. Successor Servicers. In the event that the Servicer is
terminated pursuant to Section 10.01 hereof, or resigns pursuant to Section 9.04
hereof or otherwise becomes unable to perform its obligations under this
Agreement, the Indenture Trustee will become the successor Servicer or will
appoint a successor Servicer in accordance with the provisions of Section 10.02
hereof; provided that any successor Servicer, including the Indenture Trustee,
shall satisfy the requirements of an Eligible Servicer and shall be approved by
each Rating Agency.
ARTICLE V
ESTABLISHMENT OF ACCOUNTS
Section 5.01 Collection Account, Note Payment Account and Certificate
Distribution Account.
(a) (1) Establishment of Collection Account. The Indenture Trustee
shall establish and maintain in the name of the Securities Intermediary the
Collection Account for the benefit of Securityholders, which shall be a
separate Eligible Account and which may be interest-bearing, entitled
"Collection Account, U.S. Bank National Association, as Indenture Trustee, in
trust for the United National Home Loan Owner Trust 1999-1 Asset Backed
Securities, Series 1999-1". The Collection Account may be maintained with the
Indenture Trustee or subject to the following paragraph, any other depository
institution which satisfies the requirements set forth in the definition of
Eligible Account. The creation of any Collection Account other than one
maintained with the Indenture Trustee shall be evidenced by a letter agreement
between the Indenture Trustee and the depository institution. A copy of such
letter agreement shall be furnished to the Indenture Trustee. Funds in the
Collection Account shall be invested in accordance with Section 5.06.
As of the Closing Date, the Collection Account shall be established
with the Indenture Trustee, and thereafter upon written notice to the Issuer,
the Collection Account may be transferred by the Indenture Trustee to a
different depository institution so long as such transfer is to an Eligible
Account. The creation of any such Collection Account shall be evidenced by a
letter agreement between the Indenture Trustee and the depository institution.
(a)(2) Establishment of Note Payment Account. As of the Closing Date,
the Indenture Trustee shall cause to be established and maintained in the name
of the Securities Intermediary a Note Payment Account which shall be pledged to
the Indenture Trustee for the benefit of Securityholders, which shall be a
separate Eligible Account and which may be interest-bearing, which shall be
entitled "Note Payment Account, U.S. Bank National Association, as Indenture
Trustee, in trust for the "United National Home Loan Owner Trust 1999-1 Asset
Backed Notes, Series 1999-1." Funds in the Note Payment Account shall be
invested in accordance with Section 5.06.
(a)(3) Establishment of Certificate Distribution Account. As of the
Closing Date, the Co-Owner Trustee, for the benefit of the Certificateholders,
will establish and maintain in the name of the Securities Intermediary with
U.S. Bank National Association for the benefit of the Owner Trustee or Co-Owner
Trustee on behalf of the Certificateholders a separate Eligible Account, which
while the Co-Owner Trustee holds such account shall be entitled "Certificate
Distribution Account, U.S. Bank National Association, as Co-Owner Trustee, in
trust for the United National Home Loan Owner Trust 1999-1 Asset Backed
Securities, Series 1999-1". Funds in the Certificate Distribution Account shall
be invested in accordance with Section 5.06.
(b) (1) Deposits to Collection Account. The Servicer shall deposit or
cause to be deposited (without duplication) within two (2) Business Days of
receipt thereof in the Collection Account and retain therein in trust for the
benefit of the Securityholders:
(i) all payments on account of principal on each Home Loan
received after the Cut-Off Date;
(ii) all payments on account of interest on each Home Loan
received after the Cut-Off Date;
(iii) all Net Liquidation Proceeds and Post-Liquidation Proceeds
pursuant to Sections 4.02 or 4.06;
(iv) all Insurance Proceeds;
(v) all Released Mortgaged Property Proceeds;
(vi) any amounts payable in connection with the repurchase of
any Home Loan and the amount of any Substitution Adjustment pursuant
to Section 3.05; and
(vii) any amount required to be deposited in the Collection
Account pursuant to the receipt of proceeds from any blanket policy
under Section 4.04, any fidelity bond or errors and omission
insurance under Section 4.05 or the deposit of the Termination Price
in connection with the redemption of the Notes and the purchase of
the Certificates pursuant to Section 11.02.
The Servicer shall be entitled to retain and not deposit into the
Collection Account any amounts received with respect to a Home Loan that
constitute its Servicing Fee, Servicing Advances, Nonrecoverable Servicing
Advances and additional Servicing Compensation.
(b)(2) Withdrawals from Collection Account. (i) Subject to Section
5.01(e), no later than 11:00 a.m. (New York City time) on the Withdrawal Date
with respect to each Payment Date, the Indenture Trustee (based on the
information contained in the Servicing Report and the Monthly Statement for
such Payment Date) shall withdraw the Available Collection Amount with respect
to such Payment Date from the Collection Account and make the deposits set
forth below in Section 5.01(c).
(ii) The Servicer shall have the right to (x) cause the
Indenture Trustee to withdraw the following amounts, or (y) net the
amounts set forth below from collections to be deposited into the
Collection Account:
(A) to reimburse the Servicer for any accrued unpaid
Servicing Fees and for unreimbursed Servicing Advances. The
Servicer's right to reimbursement for unreimbursed Servicing
Advances shall be limited to late collections on the related
Home Loans, including Liquidation Proceeds, Released Mortgaged
Property Proceeds, Insurance Proceeds and such other amounts as
may be collected by the Servicer from the related Obligor or
otherwise relating to the Home Loan in respect of which such
unreimbursed amounts are owed, to the extent not retained;
(B) to reimburse the Servicer for any Nonrecoverable
Servicing Advances to the extent not reimbursed;
(C) to pay the Servicer additional Servicing Compensation
to the extent not retained; and
(D) to pay the Servicer any interest earned on or
investment income earned with respect to funds in the Collection
Account (net of any losses on such investments pursuant to
Section 5.06(b)(2)).
(c) Deposits to the Note Payment Account and Certificate Distribution
Account. The Indenture Trustee shall make the following deposits from the
Available Collection Amount for payment on the related Payment Date, in each
case as specified below and in the following order of priority; provided, that
the Class A Noteholders' Interest Payment Amount and the Class A-IO
Certificateholders' Interest Distribution Amount shall be made on a pro rata
basis:
(1) to the Note Payment Account the amounts required for
payments on such Payment Date pursuant to Section 8.02 of the
Indenture; and
(2) to the Certificate Distribution Account the remaining
portion of the Available Collection Amount for such Payment Date, for
distribution pursuant to Section 5.02 of the Trust Agreement.
Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Collection Account, the Note Payment
Account and the Certificate Distribution Account hereunder until the Class
Principal Balance of each Class of Securities has been reduced to zero, unless
this Agreement has been terminated pursuant to Article XI.
(d) Additional Withdrawals from Collection Account. The Servicer
shall have the right to cause the Indenture Trustee to make the following
withdrawals from the Collection Account, in no particular order of priority:
(1) to withdraw and pay as directed by the Servicer any amount
not required to be deposited in the Collection Account (including,
without limitation, any payments on or proceeds from a Home Loan
received on or prior to the Cut-Off Date which shall be paid to the
Seller), or deposited therein in error;
(2) to withdraw and pay to the Issuer for distribution to the
Residual Interest Certificateholder on each Payment Date with respect
to each Home Loan, any prepayment penalties or prepayment fees
collected on such Home Loan during the related Due Period;
(3) to withdraw and pay to the Seller with respect to each Home
Loan, any interest due and unpaid on such Home Loan on or prior to
the Cut-Off Date; and
(4) to clear and terminate the Collection Account in connection
with the termination of this Agreement.
(e) Additional Withdrawals from Collection Account Following Early
Redemption or Termination. No later than 11:00 a.m. (New York City time) on the
Withdrawal Date on which an early redemption or purchase pursuant to Section
11.02(b) is to occur, to the extent of the Available Collection Amount, the
Indenture Trustee (based on the information contained in the Servicing Report
and the Monthly Statement for such Payment Date) and shall make the following
deposits as indicated, in each case as specified below and in the following
order of priority: (1) to the Note Payment Account for payment pursuant to
Section 8.02 of the Indenture (i) to the holders of the Notes, all accrued and
unpaid interest on each Class of Notes and an amount equal to the aggregate of
the then outstanding Class Principal Balances of each Class of Notes and (ii)
to the various parties, the amounts set forth in Section 8.02(i) and (ii) in
the Indenture; (2) to the Certificate Distribution Account for distribution
pursuant to the Trust Agreement to the Certificateholders, all accrued and
unpaid interest on the Certificates and an amount equal to the aggregate of the
then outstanding Class Principal Balance of the Certificates; (3) to the Note
Payment Account for payment of the Deferred Amounts owed to any Note, if any,
until each such Deferred Amount has been paid in full; and (4) to the
Certificate Distribution Account, any remaining amount for distribution
pursuant to the Trust Agreement.
Section 5.02. [RESERVED].
Section 5.03. [RESERVED].
Section 5.04. [RESERVED].
Section 5.05. Certificate Distribution Account. The Indenture Trustee
shall withdraw from the Collection Account all amounts required pursuant to
Section 5.01(c) to be deposited in the Certificate Distribution Account with
respect to the preceding Due Period and remit such amount to the Owner Trustee
or the Co-Owner Trustee for deposit into the Certificate Distribution Account.
On each Payment Date, the Owner Trustee or the Co-Owner Trustee shall
distribute all amounts on deposit in the Certificate Distribution Account
pursuant to Section 5.02 of the Trust Agreement.
Section 5.06. Trust Accounts; Trust Account Property. (a) Control of
Trust Accounts. Each of the Trust Accounts established hereunder has been
pledged by the Issuer to the Indenture Trustee under the Indenture and shall be
subject to the lien of the Indenture. In addition to the provisions hereunder,
each of the Trust Accounts shall also be established and maintained pursuant to
the Indenture. Amounts paid or distributed from each Trust Account in
accordance with the Indenture and this Agreement shall be released from the
lien of the Indenture upon such payment or distribution thereunder or
hereunder. The Indenture Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Trust Accounts and in all
proceeds thereof (including all income thereon) and all such funds,
investments, proceeds and income shall be part of the Trust Estate. If, at any
time, any Trust Account ceases to be an Eligible Account, the Indenture Trustee
(or the Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) (i) establish a new Trust Account as an Eligible Account, (ii)
terminate the ineligible Trust Account, and (iii) transfer any cash and
investments from such ineligible Trust Account to such new Trust Account. With
respect to the Trust Accounts, the Indenture Trustee agrees, by its acceptance
hereof, that each such Trust Account shall be subject to the sole and exclusive
custody and control of the Indenture Trustee for the benefit of the
Securityholders and the Issuer, as the case may be, and the Indenture Trustee
shall have sole signature and withdrawal authority with respect thereto.
In addition to this Agreement, the Certificate Distribution Account
established hereunder also shall be subject to and maintained in accordance
with this Agreement and the Trust Agreement. The Owner Trustee or Co-Owner
Trustee shall possess all right, title and interest for the benefit of the
Certificateholders in all funds on deposit from time to time in the Certificate
Distribution Account and in all proceeds thereof (including all income thereon)
and all such funds, investments, proceeds and income shall be part of the Trust
Account Property. If, at any time, the Certificate Distribution Account ceases
to be an Eligible Account, the Issuer (or the Servicer on its behalf) shall
within 10 Business Days (or such longer period, not to exceed 30 calendar days,
as to which each Rating Agency may consent) (i) establish a new Certificate
Distribution Account as an Eligible Account, (ii) terminate the ineligible
Certificate Distribution Account, and (iii) transfer any cash and investments
from such ineligible Certificate Distribution Account to such new Certificate
Distribution Account. The Owner Trustee and Co-Owner Trustee agree, by their
acceptance hereof, that such Certificate Distribution Account shall be subject
to the sole and exclusive custody and control of the Owner Trustee and Co-Owner
Trustee for the benefit of the Issuer and the parties entitled to distributions
therefrom, including without limitation, the Certificateholders, and the Owner
Trustee and the Co-Owner Trustee shall have sole signature and withdrawal
authority with respect to the Certificate Distribution Account.
(b) (1) Investment of Funds. So long as no Servicer Event of Default
shall have occurred and be continuing, the funds held in any Trust Account or
in the Certificate Distribution Account may be invested (to the extent
practicable and consistent with any requirements of the Code) in Permitted
Investments, as directed by the Servicer in the case of the Collection Account
and as directed by the Issuer in the case of the Note Payment Account and the
Certificate Distribution Account, in each case in writing or by telephone or
facsimile transmission confirmed in writing. In any case, funds in any Trust
Account or in the Certificate Distribution Account must be available for
withdrawal without penalty, and any Permitted Investments must mature or
otherwise be available for withdrawal, not later than two (2) Business Days
(except with respect to the Note Payment Account and Certificate Distribution
Account, which shall be invested on a one (1) Business Day basis) immediately
preceding the Payment Date next following the date of such investment and shall
not be sold or disposed of prior to its maturity subject to Section 5.06(b)(2)
below. All interest and any other investment earnings on amounts or investments
held in any Trust Account or in the Certificate Distribution Account shall be
deposited into such account immediately upon receipt. All Permitted Investments
in which funds in the Note Payment Account are invested must be held by or
registered in the name of "U.S. Bank National Association, as Indenture
Trustee, in trust for the United National Home Loan Owner Trust 1999-1 Asset
Backed Securities, Series 1999-1". While the Co-Owner Trustee holds the
Certificate Distribution Account, all Permitted Investments in which funds in
the Certificate Distribution Account are invested shall be held by or
registered in the name of "U.S. Bank National Association, as Co-Owner Trustee,
in trust for the United National Home Loan Owner Trust 1999-1 Asset Backed
Securities, Series 1999-1".
(b)(2) Insufficiency and Losses in Trust Accounts. If any amounts are
needed for disbursement from the Note Payment Account or the Certificate
Distribution Account and sufficient uninvested funds are not available to make
such disbursement, the Indenture Trustee, or the Owner Trustee or Co-Owner
Trustee in the case of the Certificate Distribution Account, shall cause to be
sold or otherwise converted to cash a sufficient amount of the investments in
such account to make up such insufficiency. The Indenture Trustee, or Owner
Trustee or Co-Owner Trustee in the case of the Certificate Distribution
Account, shall not be liable for any investment loss or other charge resulting
therefrom, unless such loss or charge is caused by the failure of the Indenture
Trustee or Owner Trustee or Co-Owner Trustee, respectively, to perform in
accordance with this Section 5.06.
If any losses are realized in connection with any investment in any
Trust Account or in the Certificate Distribution Account pursuant to this
Agreement and the Indenture, then the Servicer, with respect to the Collection
Account and the Issuer, with respect to the Note Payment Account and the
Certificate Distribution Account, shall deposit the amount of such losses (to
the extent not offset by income from other investments in such account) in such
account immediately upon the realization of such loss. All interest and any
other investment earnings on amounts held in any Trust Account or in the
Certificate Distribution Account shall be taxed to the Issuer and for federal
and state income tax purposes the Issuer shall be deemed to be the owner of
each Trust Account and of the Certificate Distribution Account.
(c) On each Payment Date the Indenture Trustee shall withdraw from
the Note Payment Account any interest earned on or investment income earned
with respect to funds in the Note Payment Account (net of any losses on such
investments pursuant to Section 5.06(b)(2)) and pay such amounts to the
Co-Owner Trustee for deposit in the Certificate Distribution Account.
(d) Subject to Section 6.01 of the Indenture, the Indenture Trustee
shall not in any way be held liable by reason of any insufficiency in the Note
Payment Account held by the Indenture Trustee resulting from any investment
loss on any Permitted Investment included therein (except to the extent that
the Indenture Trustee, with respect to such Permitted Investment, is the
obligor and has defaulted thereon).
(e) The Issuer and the Indenture Trustee hereby appoint U.S. Bank
National Association as Securities Intermediary with respect to the Trust
Accounts and the Certificate Distribution Account. The Issuer has, pursuant to
the Indenture, granted to the Indenture Trustee, as collateral agent for the
benefit of the Securityholders, a security interest to secure all amounts due
Noteholders hereunder in and to the Trust Accounts and the Security
Entitlements to all Financial Assets credited to the Trust Accounts, and the
Depositor hereby grants to the Issuer, as collateral agent for the benefit of
Certificateholders, a security interest to secure all amounts due
Certificateholders hereunder in and to the Certificate Distribution Account and
the Security Entitlements and all Financial Assets credited to the Certificate
Distribution Account, including in each case without limitation all amounts,
securities, investments, Financial Assets, investment property and other
property from time to time deposited in or credited to such accounts and all
proceeds thereof. Amounts held from time to time in the Trust Accounts will
continue to be held by the Securities Intermediary for the benefit of the
Indenture Trustee, as collateral agent, for the benefit of the Securityholders,
and amounts held from time to time in the Certificate Distribution Account will
continue to be held by the Securities Intermediary for the benefit of the
Issuer, as collateral agent, for the benefit of the Certificateholders. Upon
the termination of the Trust or the discharge of the Indenture, the Indenture
Trustee shall inform the Securities Intermediary of such termination. By
acceptance of their Securities or interests therein, the Securityholders shall
be deemed to have appointed U.S. Bank National Association as Securities
Intermediary. U.S. Bank National Association hereby accepts such appointment as
Securities Intermediary.
(1) With respect to the Trust Account Property credited to the
Trust Accounts and the Certificate Distribution Account, the
Securities Intermediary agrees that:
(i) with respect to any Trust Account Property that is held
in deposit accounts, each such deposit account shall be subject
to the exclusive custody and control of the Securities
Intermediary, and the Securities Intermediary shall have sole
signature authority with respect thereto;
(ii) the sole assets permitted in the Trust Accounts and
the Certificate Distribution Account shall be those as the
Securities Intermediary agrees to treat as Financial Assets; and
(iii) any such Trust Account Property that is, or is
treated as, a Financial Asset shall be physically delivered
(accompanied by any required endorsements) to, or credited to an
account in the name of, the Securities Intermediary or other
eligible institution maintaining any Trust Account or the
Certificate Distribution Account in accordance with the
Securities Intermediary's customary procedures such that the
Securities Intermediary or such other institution establishes a
Security Entitlement in favor of the Indenture Trustee (or the
Issuer, in the case of the Certificate Distribution Account)
with respect thereto over which the Securities Intermediary or
such other institution has Control;
(2) The Securities Intermediary hereby confirms that (A) each
Trust Account and the Certificate Distribution Account is an account
to which Financial Assets are or may be credited, and the Securities
Intermediary shall, subject to the terms of this Agreement, treat the
Indenture Trustee, as collateral agent, as entitled to exercise the
rights that comprise any Financial Asset credited to any Trust
Account, and the Issuer, as collateral agent, as entitled to exercise
the rights that comprise any Financial Asset credited to the
Certificate Distribution Account, (B) all Trust Account Property in
respect of any Trust Account or the Certificate Distribution Account
will be promptly credited by the Securities Intermediary to such
account, and (C) all securities or other property underlying any
Financial Assets credited to any Trust Account or the Certificate
Distribution Account shall be registered in the name of the Securities
Intermediary, endorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the
Securities Intermediary and in no case (x) will any Financial Asset
credited to any Trust Account be registered in the name of the
Depositor or the Issuer, payable to the order of the Depositor or the
Issuer or specially endorsed to the Depositor or the Issuer, or (y)
will any Financial Asset credited to the Certificate Distribution
Account be registered in the name of the Depositor, payable to the
order of the Depositor or specially endorsed to the Depositor, except
to the extent the foregoing have been specially endorsed to the
Securities Intermediary or in blank;
(3) The Securities Intermediary hereby agrees that each item
of property (whether investment property, Financial Asset, security,
instrument or cash) credited to any Trust Account or the Certificate
Distribution Account shall be treated as a Financial Asset;
(4) If at any time the Securities Intermediary shall receive
any order from the Indenture Trustee directing transfer or redemption
of any Financial Asset relating to any Trust Account, the Securities
Intermediary shall comply with such entitlement order without further
consent by the Depositor, the Issuer or any other Person. If at any
time the Indenture Trustee notifies the Securities Intermediary in
writing that the Trust has been terminated or the Indenture discharged
in accordance herewith and with the Trust Agreement or the Indenture,
as applicable, and the security interest granted pursuant to the
Indenture has been released, then thereafter if the Securities
Intermediary shall receive any order from the Depositor or the Issuer
directing transfer or redemption of any Financial Asset relating to
any Trust Account, the Securities Intermediary shall comply with such
entitlement order without further consent by the Indenture Trustee or
any other Person;
If at any time the Securities Intermediary shall receive any
order from the Issuer directing transfer or redemption of any
Financial Asset relating to the Certificate Distribution Account, the
Securities Intermediary shall comply with such entitlement order
without further consent by the Depositor or any other Person. If at
any time the Issuer notifies the Securities Intermediary in writing
that the Trust has been terminated in accordance herewith and with the
Trust Agreement and the security interest granted above has been
released, then thereafter if the Securities Intermediary shall receive
any order from the Depositor directing transfer or redemption of any
Financial Asset relating to the Certificate Distribution Account, the
Securities Intermediary shall comply with such entitlement order
without further consent by the Issuer or any other Person;
(5) In the event that the Securities Intermediary has or
subsequently obtains by agreement, operation of law or otherwise a
security interest in any Trust Account or the Certificate Distribution
Account or any Financial Asset credited thereto, the Securities
Intermediary hereby agrees that such security interest shall be
subordinate to the security interest of the Indenture Trustee, in the
case of the Trust Accounts, or of the Issuer, in the case of the
Certificate Distribution Account. The Financial Assets credited to the
Trust Accounts or the Certificate Distribution Account will not be
subject to deduction, set-off, banker's lien, or any other right in
favor of any Person other than the Indenture Trustee, in the case of
the Trust Accounts, or the Issuer, in the case of the Certificate
Distribution Account (except that the Securities Intermediary may set
off (i) all amounts due to it in respect of its customary fees and
expenses for the routine maintenance and operation of the Trust
Accounts and the Certificate Distribution Account, and (ii) the face
amount of any checks which have been credited to any Trust Account or
the Certificate Distribution Account but are subsequently returned
unpaid because of uncollected or insufficient funds);
(6) There are no other agreements entered into between the
Securities Intermediary in such capacity and the Depositor or the
Issuer with respect to any Trust Account, or the Depositor with
respect to the Certificate Distribution Account. In the event of any
conflict between this Agreement (or any provision of this Agreement)
and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail;
(7) The rights and powers granted under the Indenture and
herein to (x) the Indenture Trustee have been granted in order to
perfect its security interest in the Trust Accounts and the Security
Entitlements to the Financial Assets credited thereto, and (y) the
Issuer have been granted in order to perfect its security interest in
the Certificate Distribution Account and the Security Entitlements to
the Financial Assets credited thereto, and are powers coupled with an
interest and will neither be affected by the bankruptcy of the
Depositor (or the Issuer, in the case of the Trust Accounts) nor by
the lapse of time. The obligations of the Securities Intermediary
hereunder shall continue in effect until the security interest of the
Indenture Trustee in the Trust Accounts or of the Issuer in the
Certificate Distribution Account, and in such Security Entitlements,
has been terminated pursuant to the terms of this Agreement and the
Indenture Trustee or the Issuer, as applicable, has notified the
Securities Intermediary of such termination in writing; and
(8) Notwithstanding anything else contained herein, the
Depositor and the Issuer agree that the Trust Accounts and the
Certificate Distribution Account will be established only with the
Securities Intermediary or another institution meeting the
requirements of this Section, which by acceptance of its appointment
as Securities Intermediary agrees substantially as follows: (1) it
will comply with Entitlement Orders related to the Trust Accounts
issued by the Indenture Trustee, as collateral agent, without further
consent by the Depositor or the Issuer, and with Entitlement Orders
related to the Certificate Distribution Account issued by the Issuer,
as collateral agent, without further consent by the Depositor; (2)
until termination of the Trust or discharge of the Indenture, it will
not enter into any other agreement related to such accounts pursuant
to which it agrees to comply with Entitlement Orders of any Person
other than the Indenture Trustee, as collateral agent with respect to
the Trust Accounts, or the Issuer, as collateral agent with respect to
the Certificate Distribution Account; and (3) all assets delivered or
credited to it in connection with such accounts and all investments
thereof will be promptly credited to the applicable account.
Section 5.07. Allocation of Losses. (a) In the event that Net
Liquidation Proceeds, Insurance Proceeds or Released Mortgaged Property
Proceeds on a Liquidated Home Loan are less than the related Principal Balance
plus accrued interest thereon, or any Obligor makes a partial payment of any
Monthly Payment due on a Home Loan, such Net Liquidation Proceeds, Insurance
Proceeds, Released Mortgaged Property Proceeds or partial payment shall be
applied to payment of the related Debt Instrument in respect of principal and
interest shall be applied in the manner set forth in such Debt Instrument.
(b) On any Payment Date, any Allocable Loss Amount shall be applied,
after giving effect to all payments and distributions made on such Payment
Date, to the reduction of the Class Principal Balances of the Subordinate
Securities in accordance with the Allocable Loss Amount Priority. Any Allocable
Loss Amount allocated to a Class of Securities pursuant to this Section 5.07(b)
shall be allocated among the Securities of such Class in proportion to their
respective outstanding principal balances.
ARTICLE VI
STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS
Section 6.01 Statements. (a) No later than each Servicing Report
Date, the Servicer shall deliver to the Indenture Trustee, the Depositor and
the Seller the Servicing Report.
(b) (1) Based on the information provided by the Servicer in the
Servicing Report, no later than two (2) Business Days before each Payment Date,
the Indenture Trustee shall prepare and distribute a monthly statement (the
"Monthly Statement"), with respect to such Payment Date to the Seller, the
Depositor, the Securityholders and each Rating Agency, stating the date of
original issuance of the Securities (day, month and year), the name of the
Issuer (i.e., "United National Home Loan Owner Trust 1999-1"), the series
designation of the Securities (i.e., "Series 1999-1"), the date of this
Agreement and the following information:
(i) the Available Collection Amount and the Regular Payment
Amount for the related Payment Date;
(ii) the Class Principal Balance or Notional Balance of each
Class of Securities and the Pool Principal Balance as of the first
day of the related Due Period and after giving effect to payments and
distributions made to the holders of such Securities on such Payment
Date;
(iii) the Class Pool Factor with respect to each Class of
Securities then outstanding, carried to seven decimal places;
(iv) the amount of principal and interest received on the Home
Loans during the related Due Period;
(v) the Servicing Fee for such Payment Date;
(vi) the amount, if any, paid on such Payment Date to each Class
of Securities in respect of Deferred Amounts;
(vii) with respect to each Class of Securities the amount of any
applicable Deferred Amounts remaining unreimbursed after giving
effect to payments made on such Payment Date;
(viii) the weighted average remaining term to maturity of the
Home Loans and the weighted average Home Loan Interest Rate of the
Home Loans each as of such Payment Date;
(ix) certain performance information, including delinquency and
foreclosure information with respect to the Home Loans, as set forth
in the Monthly Statement;
(x) the amount of Nonrecoverable Advances reimbursed to the
Servicer;
(xi) the number of and aggregate Principal Balance of all Home
Loans in foreclosure proceedings (other than any Home Loans described
in clause (xvi)) and the percent of the aggregate Principal Balances
of such Home Loans to the aggregate Principal Balances of all Home
Loans, all as of the close of business on the last day of the related
Due Period;
(xii) the number of and the aggregate Principal Balance of the
Home Loans in bankruptcy proceedings (other than any Home Loans
described in clause (xvii)) and the percent of the aggregate
Principal Balances of such Home Loans to the aggregate Principal
Balances of all Home Loans, all as of the close of business on the
last day of the related Due Period;
(xiii) the number of Foreclosure Properties, the aggregate
Principal Balance of the related Home Loans, the book value of such
Foreclosure Properties and the percent of the aggregate Principal
Balances of such Home Loans to the aggregate Principal Balances of
all Home Loans, all as of the close of business on the last day of
the related Due Period;
(xiv) during the related Due Period, the aggregate Principal
Balance of Home Loans for each of the following: (A) that became
Liquidated Home Loans and (B) that became Deleted Home Loans pursuant
to Section 3.05 as a result of such Deleted Home Loans being
Liquidated Home Loans or a Home Loan in foreclosure, default or
imminent default, including the foregoing amounts by loan type;
(xv) from the Cut-Off Date through the most current Due Period,
the cumulative aggregate Principal Balance of Home Loans for each of
the following: (A) that became Liquidated Home Loans, and (B) that
became Deleted Home Loans pursuant to Section 3.05 as a result of
such Deleted Home Loans being in foreclosure, default or imminent
default;
(xvi) the scheduled principal payments and the principal
prepayments received with respect to the Home Loans during the
related Due Period;
(xvii) the number of Home Loans remaining in the Home Loan Pool;
(xviii) the Cumulative Losses; and
(xix) such other information as may be reasonably requested by
the Indenture Trustee, the Issuer or the Residual Interest
Certificateholder.
(2) No later than two (2) Business Days before each Payment
Date, the Indenture Trustee shall prepare and distribute to the
Seller, the Depositor and each Rating Agency a monthly statement that
includes the cumulative aggregate Principal Balance of Home Loans
that became Deleted Home Loans pursuant to Section 3.05(c) as a
result of such Deleted Home Loans being Defective Home Loans, from
the Closing Date through the most current Due Period.
(3) No later than seven days following a repurchase or
substitution pursuant to Sections 2.06, 3.05 or 4.02, the Indenture
Trustee shall notify each Rating Agency of the aggregate principal
balances of the Home Loans repurchased or substituted and (if
applicable) the relevant Substitution Adjustment.
All reports prepared by the Indenture Trustee of the withdrawals from
and deposits in the Collection Account will be based in whole or in part upon
the information provided to the Indenture Trustee by the Servicer, and the
Indenture Trustee may fully rely upon and shall have no liability with respect
to such information provided by the Servicer.
(c) Within a reasonable period of time after the end of each calendar
year, the Indenture Trustee shall prepare and distribute to each Person who at
any time during the calendar year was a Securityholder, such information as is
reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (b)(iii) and (iv) above, aggregated for
such calendar year or applicable portion thereof during which such Person was a
Securityholder.
(d) On each Payment Date, the Indenture Trustee shall forward to DTC
and to the Holder of each Security a copy of the Monthly Statement in respect
of such Payment Date and a statement setting forth the amounts actually
distributed to the holder of such Security on such Payment Date, together with
such other information as the Indenture Trustee deems necessary or appropriate.
(e) Within a reasonable period of time after the end of each calendar
year, the Indenture Trustee shall prepare and distribute to each Person who at
any time during the calendar year was the Holder of a Security, such
information as is reasonably necessary to provide to such Person a statement
containing the information provided pursuant to the previous paragraph
aggregated for such calendar year or applicable portion thereof during which
such Person was the holder of such Security.
(f) Upon reasonable advance notice in writing, the Servicer will
provide to each Securityholder which is a savings and loan association, bank or
insurance company access to information and documentation regarding the Home
Loans sufficient to permit such Securityholder to comply with applicable
regulations of the FDIC or other regulatory authorities with respect to
investment in such Securities.
(g) The Indenture Trustee shall furnish to each Securityholder,
during the term of this Agreement, such periodic, special, or other reports,
including information tax returns or reports required with respect to the
Securities, including Internal Revenue Service Forms 1099 and (if instructed in
writing by the Issuer on the basis of the advice of legal counsel) and other
similar reports that are required to be filed by the Indenture Trustee or its
agent and the Holder of the Certificates, whether or not provided for herein,
as shall be necessary, reasonable, or appropriate with respect to the
Securityholders, or otherwise with respect to the purposes of this Agreement,
all such reports or information to be provided by and in accordance with such
applicable instructions and directions as the Securityholders may reasonably
require.
(h) Reports and computer tapes furnished by the Servicer and the
Indenture Trustee pursuant to this Agreement shall be deemed confidential and
of proprietary nature, and shall not be copied or distributed except in
connection with the purposes and requirements of this Agreement. No Person
entitled to receive copies of such reports or tapes shall use the information
therein for the purpose of soliciting the customers of the Seller or the
Servicer or for any other purpose except as set forth in this Agreement.
Section 6.02 Reports of Foreclosure and Abandonment of Mortgaged
Property. Each year beginning in 1999 the Servicer, at its expense, shall make
the reports of foreclosures and abandonment of any Mortgaged Property required
by Section 6050J of the Code. The reports from the Servicer shall be in form
and substance sufficient to meet the reporting requirements imposed by such
Section 6050J of the Code.
Section 6.03. Specification of Certain Tax Matters. Each
Securityholder shall provide the Indenture Trustee with a completed and
executed Form W-9 prior to purchasing a Security. The Indenture Trustee shall
comply with all requirements of the Code, and applicable state and local law,
with respect to the withholding from any payments or distributions made to any
Securityholder of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith.
ARTICLE VII
GENERAL SERVICING PROCEDURES
Section 7.01 Assumption Agreements. When a Mortgaged Property has
been or is about to be conveyed by the Obligor, the Servicer shall, to the
extent it has knowledge of such conveyance or prospective conveyance, exercise
its rights to accelerate the maturity of the related Home Loan under any
"due-on-sale" clause contained in the related Mortgage or Debt Instrument;
provided, however, that the Servicer shall not exercise any such right if the
"due-on-sale" clause, in the reasonable belief of the Servicer, is not
enforceable under applicable law. In such event or in the event the related
Mortgage and Debt Instrument do not contain a "due-on-sale" clause, the
Servicer shall enter into an assumption and modification agreement with the
person to whom such property has been or is about to be conveyed, pursuant to
which such person becomes liable under the Debt Instrument and, unless
prohibited by applicable law or the Home Loan documents, the Obligor remains
liable thereon. The Servicer is also authorized to enter into a substitution of
liability agreement with such person, pursuant to which the original Obligor is
released from liability and such person is substituted as Obligor and becomes
liable under the Debt Instrument. The Servicer shall notify the Custodian that
any such substitution or assumption agreement has been completed by promptly
forwarding to the Custodian the original of such substitution or assumption
agreement, which original shall be added by the Custodian to the related Home
Loan File and shall, for all purposes, be considered a part of such Home Loan
File to the same extent as all other documents and instruments constituting a
part thereof. In connection with any assumption or substitution agreement
entered into pursuant to this Section 7.01, the Servicer shall not change the
Home Loan Interest Rate or the Monthly Payment, defer or forgive the payment of
principal or interest, reduce the outstanding principal amount or extend the
final maturity date on such Home Loan. Any fee collected by the Servicer for
consenting to any such conveyance or entering into an assumption or
substitution agreement shall be retained by or paid to the Servicer as
additional Servicing Compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Home Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 7.02 Satisfaction of Mortgages and Release of Home Loan
Files. Subject to the provisions of Sections 4.01 and 4.02, the Servicer shall
not grant a satisfaction or release of a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage or otherwise
prejudice any right the Securityholders may have under the mortgage
instruments. The Servicer shall maintain the fidelity bond and errors and
omissions insurance as provided for in Section 4.05 insuring the Servicer
against any loss it may sustain with respect to any Home Loan not satisfied in
accordance with the procedures set forth herein.
Upon the payment in full of any Home Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Custodian
by a Request for Release attached hereto as Exhibit C (which Request for
Release shall include a statement to the effect that all amounts received or to
be received in connection with such payment which are required to be deposited
in the Collection Account pursuant to Section 5.01(b) have been or will be so
deposited) of a Servicing Officer and shall request delivery to it of the Home
Loan File. Upon receipt of such certification and request and in accordance
with Section 2.09 of the Indenture, the Custodian shall promptly release the
related Home Loan File to the Servicer. Expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be payable only
from and to the extent of Servicing Compensation and shall not be chargeable to
the Collection Account, the Note Payment Account, or the Certificate
Distribution Account. Upon receipt by the Custodian of the certification of a
Servicing Officer with respect to the release of the Home Loan File for any
Home Loan or any documents included therein, the Custodian shall release to the
Servicer such Home Loan File and shall deliver such instruments of transfer
presented to it by the Servicer as shall be necessary or appropriate for the
release of such Home Loan File in accordance with such certification of the
Servicing Officer. The release to the Servicer of an Home Loan File pursuant to
such certification shall not require or be subject to the prior approval of the
Indenture Trustee in the case of a release in connection with the following:
(1) the satisfaction or release of a Mortgage upon the payment in full of the
Home Loan or upon such Home Loan becoming a Liquidated Home Loan; (2) a Home
Loan in default for which the Servicer is or will be pursuing foreclosure or
another method of liquidation pursuant to Section 4.02; or (3) the correction
of documentation in the Home Loan File for errors and ambiguities, provided
that such corrections shall be performed and returned to the Custodian in a
prompt manner. In the case of a release of the related Home Loan File to the
Servicer in connection with a substitution or repurchase of any Home Loan
pursuant to Section 3.05 or the release of a Home Loan from the lien of the
Indenture pursuant to Section 11.02 or a release for other servicing reasons,
such release of the Home Loan File by the Custodian shall be subject to the
prior approval of the Indenture Trustee.
The Indenture Trustee shall execute and deliver to the Servicer any
court pleadings, requests for trustee's sale or other documents necessary to
the foreclosure or trustee's sale in respect of a Mortgaged Property or to any
legal action brought to obtain judgment against any Obligor on the Debt
Instrument or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Debt Instrument or Mortgage or
otherwise available at law or in equity. Together with such documents or
pleadings, the Servicer shall deliver to the Indenture Trustee a certificate of
a Servicing Officer requesting that such pleadings or documents be executed by
the Indenture Trustee and certifying as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Indenture Trustee will not invalidate or otherwise affect the lien of the
Mortgage, except for the termination of such a lien upon completion of the
foreclosure or trustee's sale. The Indenture Trustee shall, upon receipt of a
written request from a Servicing Officer, execute any document provided to the
Indenture Trustee by the Servicer or take any other action requested in such
request that is, in the opinion of the Servicer as evidenced by such request,
required by any state or other jurisdiction to discharge the lien of a Mortgage
upon the satisfaction thereof and the Indenture Trustee will sign and post, but
will not guarantee receipt of, any such documents to the Servicer, or such
other party as the Servicer may direct, within five Business Days, or more
promptly if needed, of the Indenture Trustee's receipt of such certificate or
documents. Such certificate or documents shall establish to the Indenture
Trustee's satisfaction that the related Home Loan has been paid in full by or
on behalf of the Obligor and that such payment has been deposited in the
Collection Account.
Subject to any other applicable terms and conditions of this
Agreement, the Indenture Trustee and Servicer shall be entitled to approve an
assignment in lieu of satisfaction with respect to any Home Loan in accordance
with Accepted Servicing Practices. Upon approval of an assignment in lieu of
satisfaction with respect to any Home Loan, the Servicer shall receive cash in
an amount equal to the unpaid principal balance of and accrued interest on such
Home Loan and the Servicer shall treat such amount as a Principal Prepayment
with respect to such Home Loan for all purposes hereof.
Section 7.03 Servicing Compensation. As compensation for its services
hereunder, the Servicer shall be entitled to receive from the Collection
Account, the Servicing Fee out of which the Servicer shall pay any servicing
fees owed or payable to any Subservicer. Additional servicing compensation in
the form of assumption and other administrative fees, amounts remitted pursuant
to Section 7.01 and late payment charges and other similar servicing charges or
fees (but excluding prepayment fees or prepayment penalties) shall be part of
the Servicing Compensation payable to the Servicer hereunder. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided for herein.
Section 7.04. Annual Statements as to Compliance. Not later than the
last day of the fourth month following the end of the Servicer's fiscal year,
beginning in April 2000, the Servicer will deliver to the Residual Interest
Certificateholder, the Depositor, each Rating Agency, the Indenture Trustee and
the Issuer, an Officer's Certificate stating that (i) the Servicer has fully
complied with the provisions of Articles V and VII, (ii) a review of the
activities of the Servicer during the preceding year or portion thereof and of
performance under this Agreement has been made under such officer's
supervision, and (iii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof and the action being taken by the Servicer to cure
such default.
Section 7.05. Annual Independent Public Accountants' Servicing
Report. On or before 120 days after the end of each of the Servicer's fiscal
years elapsing during the term of its appointment under this Agreement,
beginning with the first fiscal year ending after the Closing Date, the
Servicer, at its expense, shall furnish to the Residual Interest
Certificateholder, the Depositor, the Indenture Trustee, the Issuer and each
Rating Agency (i) an opinion by a firm of independent certified public
accountants on the financial position of the Servicer at the end of the
relevant fiscal year and the results of operations and changes in financial
position of the Servicer for such year then ended on the basis of an
examination conducted in accordance with generally accepted auditing standards,
and (ii) if the Servicer is then servicing any Home Loans, a statement from
such independent certified public accountants to the effect that based on an
examination of certain specified documents and records relating to the
servicing of the Servicer's loan portfolio conducted substantially in
compliance with the audit program for mortgages serviced for the United States
Department of Housing and Urban Development Mortgage Audit Standards, or the
Uniform Single Attestation Program for Mortgage Bankers or SAS 70 (the
"Applicable Accounting Standards"), such firm is of the opinion that such
servicing has been conducted in compliance with the Applicable Accounting
Standards except for (a) such exceptions as such firm shall believe to be
immaterial and (b) such other exceptions as shall be set forth in such
statement.
Section 7.06. Right to Examine Servicer Records. The Indenture
Trustee, the Residual Interest Certificateholder, the Issuer and each of their
respective agents shall have the right upon reasonable prior notice, during
normal business hours and as often as reasonably required, to examine, audit
and copy, at the expense of the Person making such examination, any and all of
the books, records or other information of the Servicer (including without
limitation any Subservicer to the extent provided in the related Subservicing
Agreement) whether held by the Servicer or by another on behalf of the
Servicer, which may be relevant to the performance or observance by the
Servicer of the terms, covenants or conditions of this Agreement. The Indenture
Trustee and the Issuer agree that any information obtained pursuant to the
terms of this Agreement shall be held confidential.
Section 7.07. Reports to the Indenture Trustee; Collection Account
Statements. If the Collection Account is not maintained with the Indenture
Trustee, then not later than 30 days after each Record Date, the Servicer shall
forward to the Indenture Trustee a statement, certified by a Servicing Officer,
setting forth the status of the Collection Account as of the close of business
on the preceding Record Date and showing, for the period covered by such
statement, the aggregate of deposits into the Collection Account for each
category of deposit specified in Section 5.01(b), the aggregate of withdrawals
from the Collection Account for each category of withdrawal specified in
Section 5.01(b) and (d) and the aggregate amount of permitted withdrawals not
made in the related Due Period in each case, for the related Due Period.
ARTICLE VIII
REPORTS TO BE PROVIDED
Section 8[RESERVED]
Section 8.02. Reports to the Commission.
(a) The Indenture Trustee shall, on behalf of the Trust, cause to be
filed with the Securities and Exchange Commission (the "Commission") any
periodic reports required to be filed under the provisions of the Exchange Act
and the rules and regulations of the Commission thereunder. Upon the request of
the Indenture Trustee, each of the Seller, the Servicer and the Depositor 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 is in the possession of such Person and that the Indenture
Trustee may reasonably request in connection with the performance of its duties
and obligations under this Section.
(b) The Indenture Trustee shall file with the Commission a Form 15
with respect to the Trust as soon as practicable following the first date on
which the conditions to filing thereof have been satisfied. Following the
filing of such Form 15, the Indenture Trustee will submit a certificate
addressed to an officer of the Depositor certifying that all filings pursuant
to this Section 8.02 have been made and shall attach a copy of acceptance slips
for such filings.
ARTICLE IX
THE SERVICER
Section 9.01 Indemnification; Third Party Claims. (a) The Servicer
agrees to indemnify and hold the Indenture Trustee, the Co-Owner Trustee, the
Owner Trustee, the Issuer, the Depositor and each Securityholder harmless from
and against any and all claims, losses, penalties, fines, forfeitures, legal
fees and related costs, judgments, and any other costs, fees and expenses that
the Indenture Trustee, the Co-Owner Trustee, the Owner Trustee, the Issuer, the
Depositor or any Securityholder may sustain directly resulting from the
negligence, willful misfeasance, or bad faith of the Servicer in the
performance of its duties hereunder. The Servicer shall not be liable or
responsible for any of the representations, covenants, warranties,
responsibilities, duties or liabilities of any prior Servicer. To the extent
the Servicer has actual knowledge, the Servicer shall promptly notify the
Indenture Trustee, the Issuer, and the Depositor if a claim is made by a third
party with respect to this Agreement. The Servicer shall assume the defense of
any such claim and advance all expenses in connection therewith, including
reasonable counsel fees, and promptly advance funds to pay, discharge and
satisfy any judgment or decree which may be entered against the Servicer, the
Indenture Trustee, the Issuer, the Depositor and/or any Securityholder in
respect of such claim related to the Servicer's negligence, willful misfeasance
or bad faith in the performance of its duties hereunder.
Notwithstanding anything in this Agreement, to the contrary, the
Servicer shall not be liable for the settlement of any claim by the Indenture
Trustee, the Issuer, the Depositor, any Securityholder or the Owner Trustee, as
the case may be entered into without the prior consent of the Servicer.
The Trust shall indemnify and hold harmless the Servicer against any
loss, liability or expense incurred in connection with any legal action
relating to this Agreement, other than any loss, liability or expense related
to any specific Home Loan or Home Loans and any loss, liability or expense
incurred by reason of the Servicer's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement; provided,
however, amounts payable pursuant to this Section 9.01(a) shall be payable
solely from amounts available to be distributed pursuant to Section
5.02(a)(xiv) of the Trust Agreement.
(b) Except as otherwise set forth in Section 3.05 (d), the Seller
agrees to indemnify and hold the Indenture Trustee, the Owner Trustee, the
Issuer, the Servicer and each Securityholder harmless from and against any and
all claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the Indenture
Trustee, the Issuer, the Servicer or any Securityholder may sustain directly
resulting from the negligence, willful misfeasance, or bad faith of the Seller
in the performance of its duties hereunder or in compliance with the terms of
this Agreement. The Seller shall immediately notify the Indenture Trustee, the
Issuer, the Servicer and each Securityholder if a claim is made by a third
party with respect to this Agreement, and the Seller shall assume (with the
consent of the Indenture Trustee and the Issuer) the defense of any such claim
and advance all expenses in connection therewith, including reasonable counsel
fees, and promptly advance funds to pay, discharge and satisfy any judgment or
decree which may be entered against the Seller, the Servicer, the Indenture
Trustee, the Issuer and/or any Securityholder in respect of such claim.
(c) The obligations of the Servicer and the Seller under this Section
9.01 shall survive the termination of this Agreement.
Section 9.02. Merger or Consolidation of the Servicer. The Servicer
shall keep in full effect its existence, rights and franchises as a corporation,
and will obtain and preserve its qualification to do business as a foreign
corporation and maintain such other licenses and permits, in each jurisdiction
necessary to protect the validity and enforceability of this Agreement or any of
the Home Loans and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be required to be an Eligible Servicer and shall be the
successor of the Servicer, as applicable 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. The Servicer shall
send notice of any such merger, conversion, consolidation or succession to the
Indenture Trustee and the Issuer.
Section 9.03 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 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, officer, employee or agent of the Servicer may rely on any document
of any kind which it in good faith reasonably believes to be genuine and to
have been adopted or signed by the proper authorities respecting any matters
arising hereunder. Subject to the terms of Section 9.01 herein, the Servicer
shall have no obligation to appear with respect to, prosecute or defend any
legal action which is not incidental to the Servicer's duty to service the Home
Loans in accordance with this Agreement.
Section 9.04. Servicer Not to Resign; Assignment. (a) The Servicer
shall not resign from the obligations and duties hereby imposed on it except by
mutual consent of the Servicer, the Depositor, the Indenture Trustee and the
Issuer, or upon the determination that the Servicer's duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by
the Servicer. Any such determination permitting the resignation of the Servicer
shall be evidenced by a written opinion of counsel (who may be an employee of
the Servicer) to such effect delivered to the Indenture Trustee, the Issuer and
the Depositor, which opinion of counsel shall be in form and substance
acceptable to the Indenture Trustee and the Issuer. No such resignation shall
become effective until the Indenture Trustee or a successor Servicer has
assumed the Servicer's responsibilities and obligations hereunder in accordance
with Section 10.02.
(b) The Servicer shall not assign this Agreement or any of its
obligations, rights and duties hereunder without the prior written consent of
the Depositor, the Indenture Trustee and the Issuer; provided, however, the
Servicer may assign this Agreement without the prior written consent of the
Depositor, the Indenture Trustee and the Issuer, to any Person that (A)
services not less than $25,000,000 in aggregate outstanding principal amount of
loans similar in type to the Home Loans, (B) has a net worth of not less than
$2,500,000, (C) has a blanket fidelity bond and errors and omissions insurance
coverage satisfying the requirements set forth in Section 4.05 and (D) will not
cause any rating of any Class of the Securities in effect immediately prior to
such assignment to be qualified, downgraded or withdrawn, as evidenced by a
letter from each Rating Agency to such effect. Any such assignment to a
successor Servicer (other than the Indenture Trustee) shall be effective only
upon delivery to the Indenture Trustee and the Issuer of an agreement, duly
executed by the Servicer and such successor Servicer in a form reasonably
satisfactory to the Indenture Trustee and the Issuer, in which such successor
Servicer shall assume the due and punctual performance of each covenant and
condition to be performed or observed by the Servicer hereunder.
Section 9.05 Relationship of Servicer to the Issuer and the Indenture
Trustee. The relationship of the Servicer (and of any successor to the Servicer
as servicer under this Agreement) to the Issuer and the Indenture Trustee under
this Agreement is intended by the parties hereto to be that of an independent
contractor and not of a joint venturer, agent or partner of the Issuer or the
Indenture Trustee.
ARTICLE X
DEFAULT
Section 10.01 Servicer Events of Default. (a) In case one or more of
the following Events of Default by the Servicer shall occur and be continuing:
(i) any failure by the Servicer to deposit in the Collection
Account in accordance with Section 5.01(b) any payments in respect of
the Home Loans received by the Servicer no later than the second
Business Day following the day on which such payments were received.
(ii) any failure by the Servicer duly to observe or perform, in
any material respect, any other covenants, obligations or agreements
of the Servicer as set forth in this Agreement (other than a
covenant, obligation or agreement, or default in the observance of
which, that is elsewhere in this Section 10.01 specifically dealt
with), which failure continues unremedied for a period of 30 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 (a) to the Servicer by the
Indenture Trustee or the Issuer, or (b) to the Servicer, the
Indenture Trustee or the Issuer by any Securityholder; or
(iii) (A) the entry by a court or supervisory authority having
jurisdiction of a decree or order for relief in respect of the
Servicer in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization, or other
similar law or (B) the appointment a custodian, receiver, liquidator,
assignee, trustee, sequestrator, or other similar official of such
member or of any substantial part of its property, or ordering the
winding up or liquidation of the Servicer's affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(iv) the commencement by the Servicer of a voluntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or of any other case
or proceeding to be adjudicated bankrupt or insolvent or the consent
by the Servicer to the entry of a decree or order for relief in
respect of itself in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization,
or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Servicer, or the filing by
the Servicer of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law,
or the consent by the Servicer to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator, or similar official of
the Servicer or of any substantial part of its property, or the
making by the Servicer of an assignment for the benefit of creditors,
or the Servicer's failure to pay its debts generally as they become
due, or the taking of corporate action by the Servicer in furtherance
of any such action; or
(v) the Servicer shall admit in writing its inability to pay its
debts 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; or
(vi) if Advanta Mortgage Corp. USA is the Servicer, the
Cumulative Losses exceed: (i) with respect to the Due Period ending
March 30, 2000, 2.34% of the Pool Balance as of the Cut-Off Date;
(ii) with respect to the Due Period ending March 30, 2001, 6.66% of
the Pool Balance as of the Cut-Off Date; (iii) with respect to the
Due Period ending March 30, 2002, 9.90% of the Pool Balances of the
Cut-Off Date; (iv) with respect to the Due Period ending March 30,
2003, 12.37% of the Pool Balance as of the Cut-Off Date; (v) with
respect to the Due Period ending March 30, 2004, 14.26% of the Pool
Balance as of the Cut-Off Date or (vi) with respect to the Due Period
ending March 30, 2005, 15.70% of the Pool Balance as of the Cut-Off
Date; or
(vii) the consolidated net worth of the Servicer on a
consolidated basis is less than $10,000,000.
(b) then, and in each such case, so long as a Servicer Event of
Default shall not have been remedied, the Indenture Trustee may and, at the
direction of (i) the Majority Noteholders or (ii) the Issuer with the consent
of the Majority Noteholders, shall, by notice in writing to the Servicer and
each Rating Agency, in addition to whatever rights the Indenture Trustee may
have at law or equity to damages, including injunctive relief and specific
performance, terminate all of the rights and obligations of the Servicer under
this Agreement and in and to the Home Loans and the proceeds thereof, as
Servicer under this Agreement whether with respect to the Home Loans or
otherwise, and such rights and obligations shall, subject to Section 10.02,
pass to and be vested in a successor Servicer acceptable to the Rating
Agencies, or the Indenture Trustee if a successor Servicer cannot be retained
in a timely manner, and the successor Servicer, or Indenture Trustee, as
applicable, 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 do or cause to be done all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
including, but not limited to, the transfer and endorsement or assignment of
the Home Loans and related documents. The Servicer agrees to cooperate with the
successor Servicer in effecting the termination of the Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the successor Servicer for administration by it of all amounts
which shall at the time be credited by the Servicer to the Collection Account
or thereafter received with respect to the Home Loans.
Section 10.02 Indenture Trustee to Act; Appointment of Successor. On
and after the date the Servicer receives a notice of termination pursuant to
Section 10.01, or the Indenture Trustee receives the resignation of the
Servicer evidenced by an opinion of counsel or accompanied by the consents
required by Section 9.04, or the Servicer is removed as Servicer pursuant to
this Article X, then the Indenture Trustee shall appoint a successor Servicer,
which is an Eligible Servicer, and acceptable to the Rating Agencies to 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; provided, however,
that the successor Servicer shall not be liable for any actions of any Servicer
prior to it; provided further, however, that if a successor Servicer cannot be
retained in a timely manner, the Indenture Trustee shall act as successor
Servicer and shall assume the responsibilities of the Servicer hereunder. In
the event that the Indenture Trustee assumed the responsibilities of Servicer
pursuant to this Section 10.02, the Indenture Trustee will become licensed,
qualified and in good standing in each Mortgaged Property State the laws of
which require licensing or qualification, in order to perform its obligations
as Servicer hereunder or, alternatively, shall retain an agent who is so
licensed, qualified and in good standing in any such Mortgaged Property State.
The successor Servicer shall be obligated to make Servicing Advances hereunder.
As compensation therefor, the successor Servicer appointed pursuant to this
Section 10.02, shall be entitled to all Servicing Compensation as provided in
this Agreement. The Servicer shall not be entitled to any termination fee if it
is terminated pursuant to Section 10.01, but shall be entitled to any accrued
and unpaid Servicing Fee to the date of termination. Any collections received
by the prior Servicer after its removal or resignation shall be endorsed by it
to the Indenture Trustee and remitted directly to the Indenture Trustee or, at
the direction of the Indenture Trustee, to the successor Servicer.
Notwithstanding anything to the contrary herein, the Servicer shall
remain liable for all liabilities incurred by its as Servicer hereunder prior
to the time that any resignation pursuant to Section 9.04 or termination under
Section 10.01 becomes effective, including its indemnification obligations
pursuant to Section 9.01 hereof.
The compensation of any successor Servicer (including, without
limitation, the Indenture Trustee) so appointed shall be no greater than the
Servicing Fee, together with other Servicing Compensation provided for herein.
In the event the Indenture Trustee is required to solicit bids to appoint a
successor Servicer, the Indenture Trustee shall solicit, by public
announcement, bids from housing and home finance institutions, banks and
mortgage servicing institutions meeting the qualifications set forth in Section
9.04(b) above. Such public announcement shall specify that the successor
Servicer shall be entitled up to the full amount of the Servicing Fee and
Servicing Compensation provided for herein. Within thirty days after any such
public announcement, the Indenture Trustee shall negotiate and effect the sale,
transfer and assignment of the servicing rights and responsibilities hereunder
to the qualified party submitting the highest qualifying bid. The Indenture
Trustee shall deduct from any sum received by the Indenture Trustee from the
successor Servicer in respect of such sale, transfer and assignment all costs
and expenses of any public announcement and of any sale, transfer and
assignment of the servicing rights and responsibilities hereunder and the
amount of any unreimbursed Servicing Advances made by the Indenture Trustee.
After such deductions, the remainder of such sum shall be paid by the Indenture
Trustee to the Servicer at the time of such sale, transfer and assignment to
the successor Servicer.
The Indenture Trustee, the Issuer, any Custodian, the Servicer and
any such successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession of a
successor Servicer. The Servicer agrees to cooperate with the Indenture Trustee
and any successor Servicer in effecting the termination of the Servicer's
servicing responsibilities and rights hereunder and shall promptly provide the
Indenture Trustee or such successor Servicer, as applicable, all documents and
records reasonably requested by the applicable party to enable it to assume the
Servicer's functions hereunder and shall promptly also transfer to the
Indenture Trustee or such successor Servicer, as applicable, all amounts which
then have been or should have been deposited in the Collection Account by the
Servicer or which are thereafter received with respect to the Home Loans.
Neither the Indenture Trustee nor any other successor Servicer shall be held
liable by reason of any failure to make, or any delay in making, any payment
hereunder or any portion thereof caused by (i) the failure of the prior
Servicer to deliver, or any delay in delivering, cash, documents or records to
it, or (ii) restrictions relating to the prior Servicer imposed by any
regulatory authority having jurisdiction over the prior Servicer. Upon an
appointment of a successor Servicer hereunder, written notice of such
appointment shall be provided by the Indenture Trustee to each Securityholder,
the Issuer and the Depositor.
Pending appointment of a successor Servicer hereunder, the Indenture
Trustee shall act as Servicer hereunder as hereinabove provided. In connection
with such appointment and assumption, the Indenture Trustee may make such
arrangements for the compensation of such successor Servicer as it and such
successor Servicer shall agree; provided, however, that no such compensation
shall be in excess of the Servicing Compensation in the form of assumption
fees, late payment charges or otherwise as provided in this Agreement.
Section 10.03 Waiver of Defaults. The Majority Securityholders may,
on behalf of all Securityholders, waive any events permitting removal of the
Servicer as servicer pursuant to this Article X, provided, however, that the
Majority Securityholders may not waive a default in making a required payment
or distribution on a Security without the consent of the related
Securityholder. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereto except
to the extent expressly so waived.
Section 10.04. Accounting Upon Termination of Servicer. Upon
termination of the Servicer under this Article X, the Servicer shall, at its
own expense:
(a) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee, the funds in any Collection Account;
(b) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee, all of the Servicer's files, documents and
statements relating to the Home Loans held by it hereunder and a Home Loan
portfolio computer tape;
(c) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee and the Issuer a full accounting of all
funds, including a statement showing the Monthly Payments collected by it and a
statement of monies held in trust by it for payments or charges with respect to
the Home Loans; and
(d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Home Loans to its successor and to more fully and definitively
vest in such successor all rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer under this Agreement.
ARTICLE XI
TERMINATION
Section 11.01 Termination. (a) This Agreement shall terminate upon
any of the following events: (i) the later of (a) the satisfaction and
discharge of the Indenture pursuant to Section 4.01 of the Indenture and Notice
to the Indenture Trustee of such discharge and (b) the disposition of all funds
with respect to the last Home Loan and the remittance of all funds due
hereunder; (ii) payment of all amounts due and payable to the Securityholders,
the Servicer, the Indenture Trustee, the Owner Trustee, the Co-Owner Trustee
and the Issuer pursuant to this Agreement and the Indenture and written notice
to the Indenture Trustee from the Issuer of the Issuer's intent to terminate
this Agreement; or (iii) mutual written consent of the Servicer, the Issuer,
the Depositor and all Securityholders in writing.
(b) Notice of termination of this Agreement pursuant to Section
11.01(a)(i) shall be sent by the Indenture Trustee to the Securityholders in
accordance with Section 2.6(b) of the Indenture. Notice of termination of this
Agreement pursuant to Section 11.01(a)(ii) or (iii) shall be mailed or
transmitted by facsimile by the Indenture Trustee to the Securityholders on the
Business Day immediately following the day on which the Indenture Trustee
receives notice of such termination, and such notice to the Securityholders
shall state that the Securityholders are to surrender their respective
Securities for cancellation and shall specify the place where such Securities
are to be surrendered.
Section 11.02 Optional Termination by the Residual Interest
Certificateholder or the Servicer.
(a) [RESERVED].
(b) The Residual Interest Certificateholder or the Servicer, if the
Residual Interest Certificateholder does not exercise its option within 30
days, may, at its option, effect an early redemption of the Notes and purchase
of the Certificates on any Payment Date on or after which the Pool Principal
Balance declines to 5% or less of the Original Pool Principal Balance by
releasing from the Indenture the Home Loans for the Termination Price. The
Residual Interest Certificateholder or the Servicer shall effect such early
redemption or purchase by providing notice thereof to the Indenture Trustee and
Owner Trustee and by paying into the Collection Account in the manner described
below an amount equal to the Termination Price.
(c) Any early redemption and purchase by the Residual Interest
Certificateholder or the Servicer pursuant to Section 11.02(b) shall be
accomplished by remitting the Termination Price to the Indenture Trustee on the
Determination Date immediately preceding the Payment Date on which the early
redemption or purchase is to occur. The amount so remitted and any other
amounts then on deposit in the Collection Account (other than any amounts not
required to have been deposited therein pursuant to Section 5.01(b)(1) and any
amounts withdrawable therefrom by the Indenture Trustee pursuant to Section
5.01(d)) shall be available to the Indenture Trustee pursuant to Section
5.01(b)(2) for payment or distribution to Securityholders on the final Payment
Date; provided, that the Certificateholders may accept a distribution of the
Home Loans in lieu of cash. Any amounts received with respect to the Home Loans
and Foreclosure Properties subsequent to the Due Period immediately preceding
such final Payment Date shall belong to the Residual Interest Certificateholder
or the Servicer free of the lien of the Indenture. For purposes of calculating
the payments and distributions to be made on the final Payment Date, amounts
transferred to the Note Payment Account and the Certificate Distribution
Account immediately preceding such final Payment Date shall in all cases be
deemed to have been received during the related Due Period, and amounts so
transferred shall be applied pursuant to Section 5.01(d). Section 1Notice of
Termination. Notice of termination of this Agreement or of early redemption and
purchase of the Securities shall be sent (i) by the Indenture Trustee to the
Noteholders in accordance with Section 10.02 of the Indenture and (ii) by the
Owner Trustee to the Certificateholder in accordance with Section 9.01(d) of
the Trust Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Acts of Securityholders. Except as otherwise
specifically provided herein, whenever Securityholder action, consent or
approval is required under this Agreement, such action, consent or approval
shall be deemed to have been taken or given on behalf of, and shall be binding
upon, all Securityholders if the Majority Securityholders agree to take such
action or give such consent or approval.
Section 12.02. Amendment. (a) This Agreement may be amended from time
to time by the Issuer, the Seller, the Depositor, the Servicer, and the
Indenture Trustee by written agreement with notice thereof to the
Securityholders, without the consent of any of the Securityholders, to cure any
error or ambiguity, to correct or supplement any provisions hereof which may be
defective or inconsistent with any other provisions hereof, to add any other
provisions with respect to matters or questions arising under this Agreement;
provided, however, that such action will not adversely affect in any material
respect the interests of the Securityholders. An amendment described above
shall be deemed not to adversely affect in any material respect the interests
of the Securityholders if either (i) an opinion of counsel is obtained to such
effect, or (ii) the party requesting the amendment obtains a letter from each
of the Rating Agencies confirming that the amendment, if made, would not result
in the downgrading or withdrawal of the rating then assigned by the respective
Rating Agency to any Class of Securities then outstanding.
(b) This Agreement may also be amended from time to time by the
Issuer, the Seller, the Depositor, the Servicer, and the Indenture Trustee by
written agreement, with the prior written consent of the Majority
Securityholders, 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 Securityholders; provided, however, that no
such amendment shall (i) reduce or increase in any manner the amount of, or
delay or accelerate the timing of, collections of payments on Home Loans or
payments or distributions which are required to be made on any Security,
without the consent of the holders of 100% of each Class of Securities affected
thereby, (ii) adversely affect in any material respect the interests of the
holders of any Class of Securities in any manner other than as described in (i)
, without the consent of the holders of 100% of such Class of Securities, or
(iii) reduce the percentage of any Class of Securities, the holders of which
are required to consent to any such amendment, without the consent of the
holders of 100% of such Class of Securities.
(c) It shall not be necessary for the consent of Securityholders
under this Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance thereof.
(d) Prior to the execution of any amendment to this Agreement, the
Issuer 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. The Issuer and the Indenture Trustee may, but shall not be obligated
to, enter into any such amendment which affects such Person's own rights, duties
or immunities under this Agreement.
Section 12.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement, or a memorandum thereof if permitted under
applicable law, is subject to recordation in all appropriate public offices for
real property records in all of the counties or other comparable jurisdictions
in which any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the Securityholders' expense on direction of the
Majority Securityholders, but only when accompanied by an opinion of counsel to
the effect that such recordation materially and beneficially affects the
interests of the Securityholders or is necessary for the administration or
servicing of the Home Loans.
Section 12.04. Duration of Agreement. This Agreement shall continue
in existence and effect until terminated as herein provided.
Section 12.05. 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, AND, TO THE EXTENT PERMITTED BY LAW, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 12.06. 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 overnight mail, certified mail or
registered mail, postage prepaid, to: (i) in the case of the Seller, 514 Market
Street, Parkersburg, West Virginia 26101, Attention: Chief Financial Officer,
or such other addresses as may hereafter be furnished to the Securityholders
and the other parties hereto in writing by the Seller, (ii) in the case of the
Issuer, United National Home Loan Owner Trust 1999-1, c/o Wilmington Trust
Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890, Attention: Corporate Trust Administration, or such other address as may
hereafter be furnished to the Securityholders and the other parties hereto,
(iii) in the case of the Depositor, Bear Stearns Asset Backed Securities, Inc.,
245 Park Avenue, New York, New York 10167, Attention: Asset Backed Securities
Group, or such other address as may hereafter be furnished to the
Securityholders and the other parties hereto in writing by the Depositor, (iv)
in case of the Servicer, 10790 Rancho Bernardo Road, San Diego, CA 92127,
Attention: Senior Vice President, Loan Servicing, or such other address as may
hereafter be furnished to the Securityholders and the other parties hereto in
writing by the Servicer, (v) in the case of the Indenture Trustee or Co-Owner
Trustee, U.S. Bank National Association, 180 East Fifth Street, St. Paul,
Minnesota 55101, Attention: Structured Finance, United National Bank Series
1999-1, and (vi) in the case of the Securityholders, as set forth in the
applicable Note Register and Certificate Register. Any such notices shall be
deemed to be effective with respect to any party hereto upon the receipt of
such notice by such party, provided, however, that a facsimile or other form of
electronic transmission shall be deemed to be received by the parties referred
to in (i) to (vi) above when transmitted so long as the transmitting machine
has provided an electronic confirmation of such transmission and such facsimile
or other form of electronic transmission is confirmed with a printed paper copy
thereof by mail or overnight courier service; and provided, further, that any
delivery of computer readable format hereunder shall be accompanied or
confirmed by the delivery of a printed paper copy thereof. Notices to the
Securityholders shall be effective upon mailing or personal delivery. Each
party may, by notice, designate any further or different address to which
subsequent notices, certificates or other communications to such party shall be
sent.
Section 12.07. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other covenants, agreements, provisions or terms of
this Agreement.
Section 12.08. No Partnership. Nothing herein contained shall be
deemed or construed to create any partnership or joint venture between the
parties hereto and the services of the Servicer shall be rendered as an
independent contractor.
Section 12.09. Counterparts. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same Agreement.
Section 12.10. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the Servicer, the Depositor, the Seller, the
Issuer and the Securityholders and their respective successors and permitted
assigns.
Section 12.11. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
Section 12.12. Actions of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Securityholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Securityholders in person or by agent 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, the Seller, the Servicer or the Issuer, as applicable. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and conclusive in favor
of the Indenture Trustee, the Seller, the Servicer and the Issuer if made in
the manner provided in this Section.
(b) The fact and date of the execution by any Securityholder of any
such instrument or writing may be proved in any reasonable manner which the
Seller, the Servicer or the Issuer deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Securityholder shall bind every holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be
done, by the Indenture Trustee, the Seller, the Servicer or the Issuer in
reliance thereon, whether or not notation of such action is made upon such
Security.
(d) The Seller, the Servicer or the Issuer may require additional
proof of any matter referred to in this Section 12.12 as it shall deem
necessary.
Section 12.13. Reports to Rating Agencies. (a) The Indenture Trustee
shall provide to each Rating Agency copies of statements, reports and notices,
to the extent received by it from the Servicer, the Seller or the Issuer
hereunder, as follows:
(i) copies of amendments to this Agreement;
(ii) notice of any substitution or repurchase of any Home Loans;
(iii) notice of any termination, replacement, succession, merger
or consolidation of either the Servicer, any Custodian or the Issuer;
(iv) notice of final payment on the Notes and the final
distribution with respect to the Certificates;
(v) notice of the occurrence of any Servicer Event of Default;
(vi) copies of the annual independent auditor's report delivered
pursuant to Section 7.05, and copies of any compliance reports
delivered by the Servicer hereunder including Section 7.04; and
(vii) copies of any Monthly Statement pursuant to Section 6.01,
and
(b) With respect to the requirement of the Indenture Trustee to
provide statements, reports and notices to the Rating Agencies such statements,
reports and notices shall be delivered to the Rating Agencies at the following
addresses: (i) if to Moody's, 99 Church Street, 4th Floor, New York, New York
10007, (ii) if to Fitch, One State Street Plaza, New York, New York 10004,
(iii) if to S&P, 26 Broadway, 15TH Floor, New York, New York 10004-1064,
Attention: Asset-Backed Monitoring Department.
Section 12.14. Inconsistencies Among Basic Documents.
In the event certain provisions of a Basic Document conflict with the
provisions of this Sale and Servicing Agreement, the parties hereto agree that
the provisions of this Sale and Servicing Agreement shall be controlling.
Section 12.15 No Petition. Each of the Indenture Trustee, the Seller
and the Servicer by entering into this Agreement, hereby covenants and agrees
that it will not at any time institute against the Issuer, or join in any
institution against 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 Securities or any of the Basic Documents.
Section 12.16 Beneficiaries. The Owner Trustee is an intended third
party beneficiary of this Agreement.
Section 12.17. Limitation of Liability. It is expressly understood
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally but
solely as Owner Trustee of the Trust, 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 Trust is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Trust, (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 hereto and by any Person claiming
by, through or under the parties hereto and (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement or any other related documents.
Section 12.18. Seller Obligations. The Seller shall indemnify and pay
the fees and expenses of the Owner Trustee pursuant to Sections 8.01 and 8.02
of the Trust Agreement in the event the Seller is no longer the Residual
Interest Certificateholder.
IN WITNESS WHEREOF, the Servicer, the Depositor, the Issuer and the
Seller have caused their names to be signed by their respective officers
thereunto duly authorized, as of the day and year first above written, to this
Sale and Servicing Agreement.
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1,
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee
By: /s/ Norma P. Closs
-----------------------------------------------------
Name: Norma P. Closs
Title: Vice President
UNITED NATIONAL BANK, as Seller
By: /s/ Joe L. Wilson
-----------------------------------------------------
Name: Joe L. Wilson
Title: Executive Vice President
BEAR STEARNS ASSET BACKED SECURITIES, INC.,
as Depositor
By: /s/ Matthew Perkins
----------------------------------------------------
Name: Matthew Perkins
Title: Managing Director
ADVANTA MORTGAGE CORP. USA, as Servicer
By: /s/ William P. Garland
----------------------------------------------------
Name: William P. Garland
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee,
Co-Owner Trustee and Custodian
By: /s/ Donna L. Nordstrom
----------------------------------------------------
Name: Donna L. Nordstrom
Title: Assistant vice President
THE STATE OF CALIFORNIA)
)
COUNTY OF SAN DIEGO )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared William Garland, known to me to be the person and officer
whose name subscribed to the foregoing instrument and acknowledged to me that
the same was the act of the said United National Bank, a national banking
association, and that he executed the same as the act of such corporation for
the purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 24th day of March,
1999.
/s/ Julie Simek
------------------------------------
Notary Public, State of California
My commission expires: September 27, 2001
THE STATE OF WEST VIRGINIA )
)
COUNTY OF OHIO )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared Joe L. Wilson, known to me to be the person and officer
whose name subscribed to the foregoing instrument and acknowledged to me that
the same was the act of the said Advanta Mortgage Corp., USA, a Delaware
corporation and that he executed the same as the act of such corporation for
the purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 24th day of March,
1999.
/s/ Kelly J. Lauri
-------------------------------------
Notary Public, State of West Virginia
My commission expires: February 2, 2001
THE STATE OF DELAWARE )
)
COUNTY OF NEW CASTLE )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared Norma P. Closs, known to me to be the person and officer
whose name subscribed to the foregoing instrument and acknowledged to me that
the same was the act of the said United National Home Loan Owner Trust 1999-1,
as Issuer, and that he executed the same as the act of such association for
the purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 24th day of March,
1999.
/s/ Janel R. Havrilla
-------------------------------------
Notary Public, State of Delaware
My commission expires: February 2, 2001
Janel R. Havrilla
------------------------------------
(printed name)
THE STATE OF MINNESOTA )
)
COUNTY OF RAMSEY )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared Joe L. Wilson, known to me to be the person and officer
whose name subscribed to the foregoing instrument and acknowledged to me that
the same was the act of the said U.S. Bank National Association, as Indenture
Trustee, and that she executed the same as the act of such association for the
purposes and consideration therein expressed, and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 24th day of March,
1999.
___________________________________
Notary Public, State of Minnesota
My commission expires:
________________________. (printed name)
EXHIBIT A
Home Loan Schedule
EXHIBIT B
Form of Monthly Statement
EXHIBIT C
FORM OF REQUEST FOR RELEASE
[DATE]
U.S. Bank National Association
As Custodian
180 East Fifth Street
St. Paul, Minnesota 55101
Re: United National Home Loan Owner Trust 1999-1
Asset-Backed Notes, Series 1999-1
Ladies and Gentlemen:
In connection with the administration of the Home Loans held by you
as Custodian under the Sale and Servicing Agreement dated as of March 1, 1999,
among the Issuer, as issuer, United National Bank, as seller, Bear Stearns
Asset Backed Securities, Inc., as depositor, Advanta Mortgage Corp. USA, as
servicer and U.S. Bank National Association, as indenture trustee, co-owner
trustee and custodian (the "Agreement"), we hereby request a release of the
Home Loan File held by you as Custodian with respect to the following described
Home Loan for the reason indicated below.
Loan No.: __________________
Reason for requesting file:
___________ a. Home Loan paid in full. (The [Servicer]
[Subservicer] hereby certifies that all amounts
received in connection with the payment in full of
the Home Loan which are required to be deposited in
the Collection Account pursuant to Section 5.01 of
the Agreement have been so deposited).
___________ b. Repurchase of Home Loan. (The [Servicer] [
Subservicer] hereby certifies that the required
amount has been deposited in the Collection Account
pursuant to the Agreement.)
___________ c. The Home Loan is being foreclosed.
___________ d. The Home Loan is being re-financed by another
depository institution. ([Master Servicer]
[Subservicer] hereby certifies that all amounts
received in connection with the payment in full of
the Home Loan which are required to be deposited in
the Collection Account pursuant to Section 5.01 of
the Agreement have been so deposited).
___________ e. Other (Describe).
The undersigned acknowledges that the above Home Loan File will be
held by the undersigned in accordance with the provisions of the Agreement and
will promptly be returned to the Custodian when the need therefor by the
[Servicer] [Subservicer] no longer exists unless the Home Loan has been
liquidated.
Capitalized terms used herein shall have the meanings ascribed to
them in the Agreement.
[ADVANTA MORTGAGE CORP.]
By:___________________________________
Name:
Title: Servicing Officer
EXHIBIT D
[RESERVED]
EXHIBIT E
Form of Lost Note Affidavit
EXECUTION COPY
ADMINISTRATION AGREEMENT
among
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1,
as Issuer
and
U.S. BANK NATIONAL ASSOCIATION,
as Administrator
and
UNITED NATIONAL BANK
as Co-Administrator
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
and
Dated as of March 1, 1999
UNITED NATIONAL HOME LOAN OWNER TRUST 1999-1
This Administration Agreement (the "Agreement") is entered into as of
March 1, 1999, among United National Home Loan Owner Trust 1999-1, a Delaware
business trust (the "Issuer"), U.S. Bank National Association, a national
banking association, not in its individual capacity but solely as
Administrator (the "Administrator"), United National Bank, a national banking
association, not in its individual capacity but solely as Co-Administrator
(the "Co-Administrator") and Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee (the "Owner Trustee").
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Indenture or, if not defined therein, the Sale
and Servicing Agreement.
W I T N E S S E T H:
WHEREAS, the Issuer is a business trust under the Delaware Business
Trust Act (12 Del.C. ss. 3801 et seq.) created by a Trust Agreement relating
to the Trust, dated as of March 1, 1999, among Bear Stearns Asset Backed
Securities, Inc., as depositor (in such capacity, the "Depositor"), Wilmington
Trust Company, as Owner Trustee, and U.S. Bank National Association, as
Co-Owner Trustee (the "Trust Agreement");
WHEREAS, the Issuer will issue Asset Backed Notes (the "Notes") and
Asset Backed Certificates (the "Certificates"), Series 1999-1 (collectively,
the "Securities");
WHEREAS, the Notes will be secured by certain collateral, as more
particularly set forth in the Indenture, dated as of March 1, 1999, between
the Issuer and U.S. Bank National Association, as indenture trustee (in such
capacity, the "Indenture Trustee") (the "Indenture");
WHEREAS, the Certificates will be created pursuant to the Trust
Agreement and will represent the undivided beneficial ownership interest in
the Trust;
WHEREAS, the Issuer has entered into certain agreements in connection
with the issuance of the Securities, including (i) a Sale and Servicing
Agreement, dated as of March 1, 1999 among the Issuer as issuer, Advanta
Mortgage Corp. USA, as servicer, United National Bank, a national banking
association, as seller (the "Seller") and U.S. Bank National Association as
indenture trustee and co-owner trustee (the "Indenture Trustee") (as amended
and supplemented from time to time, the "Sale and Servicing Agreement"), (ii)
the Letter of Representation, dated March 26, 1999, among the Issuer, the
Indenture Trustee and The Depository Trust Company relating to the Notes (as
amended and supplemented from time to time, the "Depository Agreement"), (iii)
the Indenture and (iv) the Trust Agreement (the Sale and Servicing Agreement,
the Depository Agreement, the Indenture and the Trust Agreement being
hereinafter referred to collectively as the "Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer is required
to perform certain duties in connection with (a) the Notes and the collateral
therefor pledged pursuant to the Indenture (the "Collateral") and (b) the
beneficial ownership interests in the Issuer represented by the Certificates
(the registered holders of such interests being referred to herein as the
"Owners");
WHEREAS, the Issuer desires to have the Administrator or the
Co-Administrator perform certain of the duties of the Issuer referred to in
the preceding clause, and to provide such additional services consistent with
the terms of this Agreement and the Related Agreements as the Issuer may from
time to time request;
WHEREAS, the Administrator and the Co-Administrator have the capacity
to provide the respective services required hereby and are willing to perform
such services for the Issuer on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
Section 1. Duties of the Administrator and the Co-Administrator.
(a) Duties with respect to the Depository Agreement, the Sale and
Servicing Agreement, the Indenture and the Trust Agreement.
(i) The Administrator and the Co-Administrator agree to perform all
of the duties of the Issuer under the Depository Agreement. In addition,
the Administrator and the Co-Administrator shall consult with the Owner
Trustee regarding the duties of the Issuer under the Sale and Servicing
Agreement and the Indenture. The Administrator and the Co-Administrator
shall monitor the performance of the Issuer and shall notify the Owner
Trustee when action is necessary to comply with the Issuer's duties under
the Sale and Servicing Agreement and the Indenture. In addition to the
foregoing, (x) the Administrator shall take all appropriate action that
is the duty of the Issuer to take with respect to the following matters
under the Basic Documents and identified as (A), (B), (C), (D), (G), (H),
(I), (J), (O), (P), (R), (T), (Y) and (ii) set forth below and (y) the
Co-Administrator shall take all appropriate action that is the duty of
the Issuer to take with respect to the following matters under the Basic
Documents and identified as (E), (F), (K), (L), (M), (N), (Q), (S), (U),
(V), (W), (X), (iii) and (iv) (references are to sections of the
Indenture):
(A) the preparation of the Notes for execution by the Owner Trustee
upon their issuance and upon the registration of any transfer or
exchange of the Notes (Sections 2.02, 2.03 and 2.04);
(B) the duty to cause the Note Register to be kept if the Issuer
assumes the duties of Note Registrar, and to give the Indenture
Trustee notice of any appointment of a new Note Registrar and the
location, or change in location, of the Note Register (Section
2.03);
(C) the notification of Noteholders of the final principal payment
on their Notes or of the redemption of the Notes or duty to cause
the Indenture Trustee to provide such notification (Sections 2.06(b)
and 10.02);
(D) the preparation of an Issuer Order for authentication of the
Notes and delivery of the same to the Indenture Trustee (Section
2.07);
(E) the preparation of an Issuer Request required for the release of
collateral and delivery of the same to the Indenture Trustee
(Section 2.09);
(F) the preparation, obtaining or filing of instruments, opinions
and certificates and other documents required for the release of
collateral (Section 2.09);
(G) the preparation of Definitive Notes in accordance with the
instructions of the Clearing Agency, the duty to attempt to locate a
qualified successor to the Clearing Agency, if necessary, and the
preparation of written notice to the Indenture Trustee of
termination of the book entry system through the Clearing Agency
(Section 2.12);
(H) the maintenance of an office in the Borough of Manhattan, City
of New York, for registration of transfer or exchange of Notes
(Section 3.02);
(I) the preparation of an Issuer Order required to appoint a Paying
Agent, the preparation of written notice to the Indenture Trustee
and the duty to cause newly appointed Paying Agents, if any, to
execute and deliver to the Indenture Trustee the instrument
specified in the Indenture regarding funds held in trust (Section
3.03);
(J) preparation of an Issuer Order required to direct the Paying
Agent to pay to the Indenture Trustee all sums held in trust by the
Paying Agent (Section 3.03);
(K) the provision to the Indenture Trustee of calculations
pertaining to original issue discount, if any, on the Notes and, if
applicable, the accrual of market discount or the amortization of
premium on the Notes to the extent that the Co-Administrator has
received from Bear, Stearns & Co. Inc. sufficient information to
calculate such amounts (Section 3.03);
(L) the obligation to maintain the existence of the Issuer under
Delaware law and preserve its qualification to do business in all
necessary jurisdictions (Section 3.04(a));
(M) the preparation and execution of all supplements, amendments,
financing statements, continuation statements, instruments of
further assurance and other instruments, in accordance with Section
3.05 of the Indenture, necessary to protect the Collateral (Section
3.05);
(N) the delivery of the annual delivery of Opinions of Counsel, in
accordance with Section 3.06 of the Indenture, as to the Trust
Estate, and the annual delivery of the Officers' Certificate and
certain other statements, in accordance with Section 3.09 of the
Indenture, as to compliance with the Indenture (Sections 3.06 and
3.09);
(O) the delivery of notice to the Indenture Trustee and the Rating
Agencies of each Event of Default under the Indenture and each
default by the Seller under the Home Loan Purchase Agreement
(Section 3.13);
(P) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture (Section 4.01);
(Q) the preparation of an Officer's Certificate and the obtaining of
the Opinion of Counsel and the Independent Certificate relating
thereto with respect to any request by the Issuer to the Indenture
Trustee to take any action under the Indenture (Sections 4.01 and
11.01);
(R) the preparation of an Officer's Certificate and the obtaining of
the Opinion of Counsel with respect to any request by the Issuer to
the Indenture Trustee to take any action under the Indenture
(Sections 4.01 and 11.01);
(S) payment of any expenses of the Issuer incurred pursuant to
Section 5.17;
(T) the furnishing of the Indenture Trustee with the names and
addresses of Holders of Notes during any period when the Indenture
Trustee is not the Note Registrar (Section 7.01);
(U) the preparation and filing of all documents and reports by the
Issuer as required under the Exchange Act, the rules and regulations
of the Commission and the TIA (Section 7.03);
(V) the preparation of an Issuer Request and Officers' Certificate
and the obtaining of an Opinion of Counsel and Independent
Certificates, if necessary, for the release of the Collateral, as
defined in the Indenture (Sections 8.05 and 8.06);
(W) the preparation of Issuer Orders and the obtaining of Opinions
of Counsel with respect to the execution of supplemental indentures
and, if necessary, the mailing to the Noteholders of notices with
respect to their consent to such supplemental indentures (Sections
9.01, 9.02 and 9.03);
(X) the preparation of Issuer Orders and the obtaining of Opinions
of Counsel with respect to any proposed amendment of the Trust
Agreement or amendment to or waiver of any provision of any other
document relating to the Trust Agreement (Section 9.07); and
(Y) the notification of the Rating Agencies of a redemption of the
Notes (Section 10.01).
(ii) The Administrator shall perform the duties of the Administrator
specified in Sections 3.03, 3.04, 3.05, 3.08, 10.02, 10.03 and 10.05 of
the Trust Agreement required to be performed in connection with the
resignation or removal of the Owner Trustee.
(iii) The Co-Administrator shall perform the duties of (a) the
Co-Administrator specified in Sections 6.02(b) and 7.08 of the Trust
Agreement and (b) the Issuer specified in Sections 5.06(b)(1) and
5.06(b)(2) of the Sale and Servicing Agreement.
(iv) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Co-Administrator 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 Administrator's opinion, no less favorable to the Issuer than would
be available from unaffiliated parties.
(b) In addition to the duties of the Co-Administrator set forth above,
the Co-Administrator 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 Related Agreements, 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 the Related Agreements. Subject to
Section 5 of this Agreement, and in accordance with the directions of the
Owner Trustee, the Co-Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Collateral
(including the Related Agreements) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator.
(c) Notwithstanding anything in this Agreement or the Related Agreements
to the contrary, the Co-Administrator shall be responsible for promptly
notifying the Owner Trustee in the event that any withholding tax is imposed
on the Trust's payments (or allocations of income) to an Owner as contemplated
in Section 5.02(c) of the Trust Agreement. Any such notice shall specify the
amount of any withholding tax required to be withheld by the Owner Trustee
pursuant to such provision.
(d) The Co-Administrator shall satisfy its obligations with respect to
clause (c) above by retaining, at the expense of the Issuer payable by the
Issuer, a firm of independent public accountants (the "Accountants")
acceptable to the Owner Trustee which shall perform the obligations of the
Co-Administrator thereunder. In connection with paragraph (c) above, the
Accountants will provide a letter in form and substance satisfactory to the
Owner Trustee and the Co-Administrator as to whether any tax withholding is
then required and, if required, the procedures to be followed with respect
thereto to comply with the requirements of the Code. The Accountants shall be
required to update the letter in each instance that any additional tax
withholding is subsequently required or any previously required tax
withholding shall no longer be required.
Section 2. Records. The Administrator and the Co-Administrator shall
maintain appropriate books of account and records relating to services
performed hereunder, which books of account and records shall be accessible
for inspection by the Issuer and the Company at any time during normal
business hours.
Section 3. Compensation. The Administrator will perform the duties and
provide the services called for under Section 1 above without any separate
compensation therefor for so long as the Indenture and the Sale and Servicing
Agreement remain in effect, and thereafter for such compensation as shall be
agreed upon between the Administrator and the Owner Trustee. The fees of the
attorneys delivering the Opinion of Counsel, the fees of Accountant's retained
pursuant to Section 1(d) above, and any other amounts of out-of-pocket
expenses reasonably incurred by the Co-Administrator pursuant to the Indenture
shall be paid by the Residual Interest Certificateholder and the Residual
Interest Certificateholder, by its execution hereof, agrees to pay such
reasonable fees and expenses to the Administrator. The Administrator shall
perform any other services as may be agreed between the Administrator and the
Owner Trustee for such compensation as may be agreed between the Administrator
and the Owner Trustee. The Co-Administrator shall be paid its fees and
expenses pursuant to Section 8.02 of the Indenture.
Section 4. Additional Information to be Furnished to the Issuer. The
Administrator and the Co-Administrator shall furnish to the Issuer upon
request such additional information regarding the Collateral as the Issuer
shall reasonably request.
Section 5. Independence of the Administrator and the Co-Administrator.
For all purposes of this Agreement, the each of the Administrator and the
Co-Administrator shall be an independent contractor and shall not be subject
to the supervision of the Issuer or the Owner Trustee with respect to the
manner in which it accomplishes the performance of its obligations hereunder.
Unless expressly authorized by the Issuer, the Administrator and the
Co-Administrator shall have no authority to act for or represent the Issuer or
the Owner Trustee in any way and shall not otherwise be deemed an agent of the
Issuer or the Owner Trustee.
Section 6. No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the Administrator or the Co-Administrator and either of the
Issuer or the Owner Trustee, as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (ii)
shall be construed to impose any liability as such on any of them or (iii)
shall be deemed to confer on any of them any express, implied or apparent
authority to incur any obligation or liability on behalf of the others.
Section 7. Other Activities of Administrator and the Co-Administrator.
Nothing herein shall prevent the Administrator and the Co-Administrator or
their respective Affiliates from engaging in other businesses or, in its sole
discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in
business activities similar to those of the Issuer or the Owner Trustee.
Section 8. Term of Agreement; Resignation and Removal of Administrator
and the Co-Administrator.
(a) This Agreement shall continue in force until the termination of the
Trust Agreement in accordance with its terms, upon which event this Agreement
shall automatically terminate.
(b) Subject to Section 8(e) hereof, the Administrator and the
Co-Administrator may resign their respective duties hereunder by providing the
Issuer with at least 60 days' prior written notice.
(c) Subject to Section 8(e) hereof, the Issuer may remove the
Administrator or the Co-Administrator without cause by providing the
Administrator or the Co-Administrator with at least 60 days' prior written
notice.
(d) Subject to Section 8(e) hereof, the Issuer may remove the
Administrator or the Co-Administrator immediately upon written notice of
termination from the Issuer to the Administrator or the Co-Administrator if
any of the following events shall occur:
(i) the Administrator or the Co-Administrator shall default in the
performance of any of its duties under this Agreement and, after notice
of such default, shall not cure such default within ten days (or, if such
default cannot be cured in such time, shall not give within ten days such
assurance of cure as shall be reasonably satisfactory to the Issuer); or
(ii) a court having jurisdiction in the premises shall (x) enter a
decree or order for relief, which decree or order shall not have been
vacated within 60 days, in respect of the Administrator or the
Co-Administrator in any involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or (y)
appoint a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Administrator or the
Co-Administrator or any substantial part of its property, or (z) order
the winding-up or liquidation of the Administrator or the
Co-Administrator's affairs; or
(iii) the Administrator or the Co-Administrator shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such law, or shall
consent to the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator or similar official for the Administrator or the
Co-Administrator or any substantial part of its property, shall consent
to the taking of possession by any such official of any substantial part
of its property, shall make any general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become due.
Each of the Administrator and the Co-Administrator agrees that if any of
the events specified in clauses (ii) or (iii) of this Section shall occur, it
shall give written notice thereof to the Issuer and the Indenture Trustee
within seven days after the occurrence of such event.
(e) No resignation or removal of the Administrator or the
Co-Administrator, pursuant to this Section shall be effective until (i) a
successor Administrator or the Co-Administrator shall have been appointed by
the Issuer and (ii) such successor Administrator or the Co-Administrator has
agreed in writing to be bound by the terms of this Agreement in the same
manner as the Administrator or the Co-Administrator is bound hereunder.
(f) The appointment of any successor Administrator or the
Co-Administrator shall be effective only after satisfaction of the Rating
Agency Condition with respect to the proposed appointment.
(g) Subject to Section 8(e) and 8(f), the Administrator acknowledge that
upon the appointment of a successor Indenture Trustee pursuant to Section 6.08
of Indenture, the Administrator shall immediately resign and such successor
Indenture Trustee shall automatically become the Administrator under this
Agreement. Any such successor Indenture Trustee shall be required to agree to
assume the duties of the Administrator under the terms and conditions of this
Agreement in its acceptance of appointment as successor Indenture Trustee.
Section 9. Action upon Termination, Resignation or Removal of the
Administrator and the Co-Administrator. Promptly upon the effective date of
termination of this Agreement pursuant to Section 8(a) hereof or the
resignation or removal of the Administrator or the Co-Administrator pursuant
to Section 8(b) or (c) hereof, respectively, the Administrator or the
Co-Administrator shall be entitled to be paid all reimbursable expenses
accruing to it to the date of such termination, resignation or removal. The
Administrator or the Co-Administrator shall forthwith upon such termination
pursuant to Section 8(a) deliver to the Issuer all property and documents of
or relating to the Collateral then in the custody of the Administrator or the
Co-Administrator. In the event of the resignation or removal of the
Administrator or the Co-Administrator pursuant to Section 8(b), (c) or (d),
the Administrator or the Co-Administrator shall cooperate with the Issuer and
take all reasonable steps requested to assist the Issuer in making an orderly
transfer of the duties of the Administrator or the Co-Administrator.
Section 10. Notices. Any notice, report or other communication given
hereunder shall be in writing and addressed as follows:
(a) if to the Issuer, to:
United National Home Loan Owner Trust 1999-1
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(b) if to the Administrator, to:
U.S. Bank National Association
180 E. Fifth Street
St. Paul, Minnesota 55101
Attention: Structured Finance Dept.
(c) if to the Co-Administrator, to:
United National Bank
514 Market Street
Parkersburg, West Virginia 26101
Attention: Structured Finance Dept.
(d) if to the Owner Trustee, to:
Wilmington Trust Company Rodney Square
North 1100 North Market Street
Wilmington, DE 19890-0001
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed
given if such notice is mailed by certified mail, postage prepaid, or hand
delivered to the address of such party as provided above.
Section 11. Amendments. This Agreement may be amended from time to time
by a written amendment duly executed and delivered by the Issuer, the
Administrator and the Co-Administrator, with the prior written consent of the
Owner Trustee without the consent of the Noteholders and the
Certificateholders, 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 Certificateholders;
provided that such amendment will not materially and adversely affect the
interest of any Noteholder or Certificateholder. An amendment described above
shall be deemed not to adversely affect in any material respects the interests
of any Noteholder or Certificateholder if either (i) an Opinion of Counsel is
obtained to such effect, or (ii) the party requesting the amendment satisfies
the Rating Agency Condition with respect to such amendment. This Agreement may
also be amended by the Issuer, the Administrator and the Co-Administrator with
the prior written consent of the Owner Trustee and the holders of Notes
evidencing at least a majority of the Outstanding Amount of the Notes and the
holders of Certificates evidencing at least a majority of the Certificate
Principal Balance 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 Noteholders or the Certificateholders;
provided, however, that no such amendment may (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments in respect of the Home Loans or distributions that are required to be
made for the benefit of the Noteholders or Certificateholders, respectively
(ii) reduce the aforesaid percentage of the holders of Notes and Certificates
which are required to consent to any such amendment, in either case of clause
(i) or (ii) without the consent of the holders of all the outstanding Notes
and Certificates and the Securities Insurer (if any).
Section 12. Successors and Assigns.
(a) This Agreement may not be assigned by the Administrator or the
Co-Administrator unless such assignment is previously consented to in writing
by the Owner Trustee and the Rating Agency Condition in respect thereof has
been satisfied. An assignment with such consent and satisfaction, if accepted
by the assignee, shall bind the assignee hereunder in the same manner as the
Administrator or the Co-Administrator is bound hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by the Administrator or the
Co-Administrator without the consent of the Owner Trustee to a corporation or
other organization that is a successor (by merger, consolidation or purchase
of assets) to the Administrator or the Co-Administrator, provided that such
successor organization executes and delivers to the Issuer and the Owner
Trustee an agreement in which such corporation or other organization agrees to
be bound hereunder by the terms of said assignment in the same manner as the
Administrator or the Co-Administrator is bound hereunder. Subject to the
foregoing, this Agreement shall bind any successors or assigns of the parties
hereto.
Section 13. GOVERNING LAW. THIS AGREEMENT 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 14. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
Section 15. Counterparts. This Agreement may be executed in counterparts,
each of which when so executed shall together constitute one and the same
agreement.
Section 16. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall 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 17. Not Applicable to U.S. Bank National Association in Other
Capacities. Nothing in this Agreement shall affect any obligation U.S. Bank
National Association may have in any other capacity.
Section 18. Limitation of Liability of Owner Trustee. Notwithstanding
anything contained herein to the contrary, this Agreement has been
countersigned by Wilmington Trust Company not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer and in no event shall
Wilmington Trust Company in its individual capacity or any beneficial owner of
the Issuer have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder, as to all of which
recourse shall be had solely to the assets of the Issuer. For all purposes of
this Agreement, 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 19. Benefit of Agreement. It is expressly agreed that in
performing its duties under this Agreement, the Administrator and the
Co-Administrator will act for the benefit of holders of the Securities as well
as for the benefit of the Trust, and that such obligations on the part of the
Administrator and the Co-Administrator shall be enforceable at the instance of
the Indenture Trustee and the Trust.
Section 20. Bankruptcy Matters. No party to this Agreement shall take any
action to cause the Trust to dissolve in whole or in part or file a voluntary
petition or otherwise initiate proceedings to have the Trust adjudicated
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 of the Trust as debtor under any
applicable federal or state law relating to bankruptcy, insolvency, or other
relief for debtors with respect to the Trust; or seek or consent to the
appointment of any trustee, receiver, conservator, assignee, sequestrator,
custodian, liquidator (or other similar official) of the Trust or of all or
any substantial part of the properties and assets of the Trust, or cause the
Trust to make any general assignment for the benefit of creditors of the
Trust, or take any action in furtherance of any of the above actions.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
UNITED NATIONAL BANK HOME LOAN OWNER TRUST 1999-1
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Norma P. Closs
-----------------------------------------------
Name: Norma P. Closs
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Administrator
By: /s/ Donna L. Nordstrom
-----------------------------------------------
Name: Donna L. Nordstrom
Title: Assistant Vice President
UNITED NATIONAL BANK,
as Co-Administrator
By: /s/ Joe L. Wilson
-------------------------------------------------
Name: Joe L. Wilson
Title: Executive Vice President
WILMINGTON TRUST COMPANY,
as Owner Trustee
By: /s/ Norma P. Closs
-----------------------------------------------
Name: Norma P. Closs
Title: Vice President
EXECUTION COPY
BEAR STEARNS ASSET BACKED SECURITIES, INC.,
as Purchaser
and
UNITED NATIONAL BANK
as Seller
HOME LOAN PURCHASE AGREEMENT
Dated as of March 1, 1999
Home Loans
United National Home Loan Owner Trust 1999-1
Table of Contents
Page
ARTICLE I.
DEFINITIONS
Section 1.01. Definitions........................................4
ARTICLE II.
SALE OF HOME LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of Home Loans.................................4
Section 2.02. [RESERVED].........................................5
Section 2.03. Obligations of Seller Upon Sale....................5
Section 2.04. Payment of Purchase Price for the Home Loans.......7
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Seller Representations and Warranties
Relating to the Home Loans.......................8
Section 3.02. Seller Representations and Warranties...............8
Section 3.03. Representations and Warranties of the Purchaser....10
Section 3.04. Remedies for Breach................................10
ARTICLE IV.
SELLER'S COVENANTS
Section 4.01. Covenants of the Seller............................11
ARTICLE V.
[RESERVED]
ARTICLE VI.
TERMINATION
Section 6.01. Termination........................................11
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment..........................................11
Section 7.02. Governing Law......................................12
Section 7.03. Notices............................................12
Section 7.04. Severability of Provisions.........................12
Section 7.05. Counterparts.......................................12
Section 7.06. Further Agreements.................................12
Section 7.07. Intention of the Parties...........................13
Section 7.08. Successors and Assigns: Assignment of
Purchase Agreement..............................13
Section 7.09. Survival...........................................13
Schedule I Home Loans.......................................................I-1
HOME LOAN PURCHASE AGREEMENT, dated as of March 1, 1999 (the "Agreement"),
between United National Bank (the "Seller") and Bear Stearns Asset Backed
Securities, Inc. (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Seller is the owner of (i) the notes or other evidence of
indebtedness (the "Debt Instruments") so indicated on Schedule I hereto referred
to below, and Related Documents (as defined below) (collectively, the "Home
Loans");
WHEREAS, the Seller in the case of the Home Loans, as of the date hereof
owns the mortgages (the "Mortgages") on the properties (the "Mortgaged
Properties") securing such Home Loans, including rights to (a) any property
acquired by foreclosure or deed in lieu of foreclosure or otherwise and (b) the
proceeds of any insurance policies covering the Home Loans or the Mortgaged
Properties or the Obligors on the Home Loans;
WHEREAS, the parties hereto desire that the Seller sell the Home Loans to
the Purchaser pursuant to the terms of this Agreement;
WHEREAS, pursuant to the terms of a Sale and Servicing Agreement dated as
of March 1, 1999 (the "Sale and Servicing Agreement") among the Trust, as
issuer, the Purchaser, as depositor, the Seller, as seller, Advanta Mortgage
Corp., USA, as servicer, and U.S. Bank National Association, as indenture
trustee, co-owner trustee and custodian (the "Indenture Trustee"), the Purchaser
will convey the Home Loans to United National Home Loan Trust 1999-1 (the
"Trust"); and
WHEREAS, the Purchaser will assign to the Issuer and the Issuer will pledge
to the Indenture Trustee all of the Purchaser's rights against the Seller
pursuant to this Agreement as described herein.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used but not defined
herein shall have the meanings assigned thereto in the Sale and Servicing
Agreement.
ARTICLE II.
SALE OF HOME LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of Home Loans. The Seller, concurrently with the
execution and delivery of this Agreement and on each date of substitution
pursuant to Section 3.05 of the Sale and Servicing Agreement, does hereby sell,
assign, set over and otherwise convey to the Purchaser, without recourse, (i)
all of its right, title and interest in and to each Home Loan, including the
Cut-Off Date Principal Balance, all interest accruing thereon after the Cut-Off
Date and all collections in respect of interest and principal received after the
Cut-Off Date (excluding the rights to (a) receive prepayment fees and prepayment
penalties and (b) interest accrued on the Home Loans up to and including the
Cut-Off Date, which rights are retained by the Seller); (ii) the related
Mortgages; (iii) property which has been acquired by foreclosure or deed in lieu
of foreclosure; (iv) its interest in any insurance policies in respect of the
Home Loans and any Insurance Proceeds; (v) the Related Documents; and (vi) all
proceeds of any of the foregoing.
Section 2.02. [RESERVED].
Section 2.03. Obligations of Seller Upon Sale. In connection with any
transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its own
expense, on or prior to the Closing Date, or date of substition, as the case may
be, (a) to indicate in its books and records that the Home Loans have been sold
to the Purchaser or to the Issuer as assignee of the Purchaser and pledged by
the Issuer to the Indenture Trustee, as applicable, pursuant to this Agreement
and (b) to deliver to the Purchaser and the Indenture Trustee a computer file
containing a true and complete list of all such Home Loans specifying for each
such Home Loan, as of the Cut-Off Date, (i) its account number and (ii) the
Cut-Off Date Principal Balance. Such file, which forms a part of Exhibit A to
the Sale and Servicing Agreement, shall also be marked as Schedule I to this
Agreement and is hereby incorporated into and made a part of this Agreement.
Except as specified in Section 2.05(a) of the Sale and Servicing Agreement,
in connection with any conveyance hereunder by the Seller, the Seller shall on
behalf of the Purchaser deliver to, and deposit with the Indenture Trustee, on
or before the Closing Date the following documents or instruments with respect
to each Home Loan (the "Related Documents"):
(i) the original Debt Instrument, endorsed in blank, with all
intervening endorsements showing a complete chain of title from the
originator of such Home Loan to the Seller;
(ii) the original Mortgage, with evidence of recording thereon,
provided that if the original Mortgage has been delivered for recording to
the appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located but has not yet been returned to the Seller
by such recording office, the Seller shall deliver to the Custodian a
certified true copy of such original Mortgage so certified by the Seller,
together with a certificate of the Seller certifying that such original
Mortgage has been so delivered to such recording office; in all such
instances, the Seller shall deliver or cause to be delivered the original
recorded Mortgage to the Custodian promptly upon receipt of the original
recorded Mortgage;
(iii) the original Assignment of Mortgage, to "U.S. Bank National
Association as Indenture Trustee for United National Home Loan Owner Trust
1999-1", which assignment shall be in form and substance acceptable for
recording;
(iv) if required, the original attorney's opinion of title or the
original policy of title insurance, provided that if any such original
policy of title insurance has not yet been received by the Seller, the
Seller shall have delivered to the Custodian a copy of such policy or a
title insurance binder or commitment for the issuance of such policy;
(v) originals of all intervening assignments of Mortgage, with
evidence of recording thereon, showing a complete chain of title from the
originator to the Seller, provided that if any such original intervening
assignment of Mortgage has been delivered for recording to the appropriate
public recording office of the jurisdiction in which the Mortgaged Property
is located but has not yet been returned to the Seller by such recording
office, the Seller may have delivered to the Custodian a certified true
copy of such original assignment of Mortgage so certified by the Seller,
together with a certificate of the Seller certifying that such original
assignment of Mortgage has been so delivered to such recording office; in
all such instances, the Seller shall deliver or cause to be delivered any
such original assignments to the Custodian promptly upon receipt thereof;
and
(vi) originals of all assumption, modification, consolidation or
substitution agreements, if any.
The Seller hereby confirms to the Indenture Trustee that it has made the
appropriate entries in its general accounting records, to indicate that such
Home Loans have been transferred to the Purchaser by the Seller and to the
Issuer by the Purchaser and pledged to the Indenture Trustee by the Issuer and
constitute part of the Trust Estate in accordance with the terms of the Sale and
Servicing Agreement.
The Seller further hereby confirms to the Purchaser that, as of the Closing
Date it has caused the portions of its ledgers relating to the Home Loans
maintained by the Seller to be clearly and unambiguously marked to indicate that
the Home Loans have been sold to the Purchaser or the Issuer as assignee of the
Purchaser and pledged to the Indenture Trust by the Issuer, as applicable. The
ledger shall indicate that the Home Loans are held by the Indenture Trustee in
its capacity as custodian of the United National Home Loan Trust 1999-1.
In all instances where the original recorded Mortgage is not delivered as
provided in clause (ii) above and instances where intervening assignments with
evidence of recording thereon called for by clause (iii) above (other than with
respect to an Assignment of Mortgage to be prepared by the Indenture Trustee)
and clause (v) above (other than with respect to the intervening assignment from
Keystone or KMC, as the case may be, to the Seller to be prepared by the
Indenture Trustee pursuant to Section 2.05(a) of the Sale and Servicing
Agreement), are unavailable, the Seller will deliver or cause to be delivered
the original recorded Mortgage and intervening assignments with evidence of
recording thereon, as applicable, to the Indenture Trustee, as assignee of the
Issuer, promptly upon receipt thereof but in no event later than one year after
the Closing Date.
The Purchaser hereby acknowledges its acceptance of all right, title and
interest to the Home Loans and other property, now existing and hereafter
created or conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a sale
by the Seller to the Purchaser of all the Seller's right, title and interest in
and to the Home Loans and other property described above. In the event the
transaction set forth herein is deemed not to be a sale, the Seller hereby
grants to the Purchaser a security interest in all of the Seller's right, title
and interest in, to and under the Home Loans and other property described above,
whether now existing or hereafter created, to secure all of the Seller's
obligations hereunder; and this Agreement shall constitute a security agreement
under applicable law. The Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the Home
Loans, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such
throughout the term of the Sale and Servicing Agreement.
Section 2.04. Payment of Purchase Price for the Home Loans. (a) In
consideration of the sale of the Home Loans from the Seller to the Purchaser on
the Closing Date, the Purchaser agrees (i) to pay to the Seller on the Closing
Date by transfer of immediately available funds, an amount equal to the sum of
$138,229,024.78 (which sum is net of certain fees and expenses agreed to by the
Seller) in respect of the Home Loans, and (ii) to deliver to the Seller or cause
to be delivered to the Seller the Certificates including the Residual Interest
Certificate, registered in the name of the Seller or its designee. The Seller
shall pay, and be billed directly for, all expenses incurred by the Purchaser or
the Issuer in connection with the issuance of the Securities, including, without
limitation, printing fees incurred in connection with the prospectus supplement
and the prospectus relating to the Securities, blue sky registration fees and
expenses, fees and expenses of Purchaser's counsel, fees of the rating agencies
requested to rate the Securities, accountant's fees and expenses and the fees
and expenses of the Owner Trustee, the Co-Owner Trustee and the Indenture
Trustee and other out-of-pocket costs, if any.
(b) Other than as specified in Section 2.05(a) of the Sale and Servicing
Agreement, within 30 days of the Closing Date, the Seller, at its own expense,
shall submit for recording each Assignment of Mortgage in favor of the Indenture
Trustee as transferee of the Issuer pursuant to the Sale and Servicing Agreement
in the appropriate real property or other records. With respect to any
Assignment of Mortgage as to which the related recording information is
unavailable within the applicable time period set forth above, such Assignment
of Mortgage shall be submitted for recording within 30 days after receipt of
such information but in no event later than one year from the date such
Assignment of Mortgage is otherwise required to be recorded pursuant to this
Section 2.04(b) unless such Assignment of Mortgage is prepared and submitted for
recordation by the Indenture Trustee. The Indenture Trustee shall be required,
pursuant to the Sale and Servicing Agreement, to retain a copy of each
Assignment of Mortgage submitted for recording. In the event that any such
Assignment of Mortgage is lost or returned unrecorded because of a defect
therein, the Seller shall, or shall cause the Indenture Trustee to, promptly
prepare a substitute Assignment of Mortgage or cure such defect, as the case may
be, and shall be required to submit each such Assignment of Mortgage for
recording. With respect to any "Non-Recordation" State, the Seller may provide
to the Indenture Trustee (and to each Rating Agency, in the case of any state in
which 5% or more by Principal Balance as of the Cut-Off Date of the Mortgaged
Properties are located), an opinion of counsel in a form reasonably acceptable
to the Indenture Trustee (and, where applicable, to each Rating Agency), to the
effect that, as to any Home Loan with respect to which the related Mortgaged
Property is located in such state, recordation of an assignment of the Mortgage
in such state is not necessary to transfer title to the related Mortgage Note to
the Issuer or to pledge to the Indenture Trustee the Issuer's rights under such
Mortgage Note in respect of which the Mortgaged Property is located in such
state. Any failure of the Seller to comply with this Section shall result in the
obligation of the Seller to repurchase or substitute an Eligible Substitute Home
Loan for the related Home Loan pursuant to the provisions of the Sale and
Servicing Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Seller Representations and Warranties Relating to the Home
Loans. The Seller represents and warrants to the Purchaser that with respect to
the Home Loans as of the Closing Date or date of substitution with respect to
each Qualified Substitute Home Loan, each of the representations and warranties
contained in Section 3.03 of the Sale and Servicing Agreement, with the same
force and effect as if fully set forth herein, is true and correct as of the
Closing Date or date of substitution, as the case may be.
With respect to the representations and warranties set forth in this
Section 3.01 that are made to the best of the Seller's knowledge or as to which
the Seller has no knowledge, if it is discovered by the Depositor, the Seller,
the Servicer or the Indenture Trustee as set forth in the Sale and Servicing
Agreement that the substance of such representation and warranty is inaccurate
and such inaccuracy materially and adversely affects the value of the related
Home Loan then, notwithstanding the Seller'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.
With respect to any breach of a representation or warranty set forth in
this Section 3.01, the Seller shall cure, repurchase or substitute in accordance
with the Sale and Servicing Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 3.01 shall survive the sale and assignment of the Home
Loans to the Purchaser.
Section 3.02. Seller Representations and Warranties. The Seller hereby
represents and warrants to the Purchaser that as of the Closing Date or as of
such date specifically provided herein:
(i) The Seller is a national banking association duly organized, validly
existing and in good standing under the laws of the jurisdiction of its creation
and has the power and authority to own its assets and to transact the business
in which it is currently engaged. The Seller is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on (a) its business, properties, assets or condition (financial
or other), (b) its performance of its obligations under this Agreement, (c) the
value or marketability of the Home Loans or (d) the ability to foreclose on the
related Mortgaged Properties;
(ii) The Seller has the power and authority to make, execute, deliver and
perform this Agreement and to consummate all of the transactions contemplated
under this Agreement, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute its legal, valid and binding
obligation enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies;
(iii) The Seller holds all necessary licenses, certificates and permits
from all government authorities necessary for conducting its business as it is
presently conducted. It 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 consents, licenses, approvals or authorizations, or
registrations or declarations, 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 it will
not conflict with or result in a breach of, or constitute a default under, any
provision of any existing law or regulation or any order or decree of any court
applicable to the Seller or any of its properties or any provision of its
Articles of Association or Bylaws, or constitute a material breach of, or result
in the creation or imposition of any lien, charge or encumbrance upon any of its
properties pursuant to, any mortgage, indenture, contract or other agreement to
which it is a party or by which it may be bound;
(v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to its knowledge
threatened, against the Seller or any of its properties or with respect to this
Agreement or the Securities which in its opinion has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by this
Agreement;
(vi) No certificate of an officer, statement furnished in writing or report
delivered pursuant to the terms hereof by the Seller contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the certificate, statement or report not misleading;
(vii) The transactions contemplated by this Agreement are in the ordinary
course of the Seller's business;
(viii) The Seller is not insolvent, nor will the Seller be made insolvent
by the transfer of the Home Loans, nor is the Seller aware of any pending
insolvency;
(ix) The Seller is not in violation of, and the execution and delivery of
this Agreement by it and its performance and compliance with the terms of this
Agreement will not constitute a violation with respect to, any order or decree
of any court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction, which violation would materially and
adversely affect the Seller's condition (financial or otherwise) or operations
or any of the Seller's properties or materially and adversely affect the
performance of any of its duties hereunder;
(x) There are no actions or proceedings against, or investigations of, it
pending or, to its knowledge, threatened, before any court, administrative
agency or other tribunal (A) that, if determined adversely, would prohibit the
Seller from entering into this Agreement and the Sale and Servicing Agreement,
(B) seeking to prevent the consummation of any of the transactions contemplated
by this Agreement or (C) that, if determined adversely, would prohibit or
materially and adversely affect the Seller's performance of any of its
respective obligations under, or the validity or enforceability of, this
Agreement and the Sale and Servicing Agreement;
(xi) The Seller represents and warrants that it did not sell the Home Loans
to the Depositor as Purchaser under this Agreement with any intent to hinder,
delay or defraud any of its creditors; and the Seller will not be rendered
insolvent as a result of the sale of the Home Loans to the Depositor as
Purchaser under this Agreement;
(xii) The Seller represents and warrants that it acquired title to the Home
Loans in good faith, without notice of any adverse claim; and
(xiii) The Seller represents and warrants that the transfer, assignment and
conveyance of the Debt Instruments and the Mortgages by the Seller pursuant to
this Agreement are not subject to the bulk transfer laws or any similar
statutory provisions in effect in any applicable jurisdiction.
Section 3.03. Representations and Warranties of the Purchaser. The
Purchaser represents and warrants to the Seller as of the Closing Date or as of
such date specifically provided herein:
(i) this Agreement constitutes a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity); and
(ii) the Purchaser has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with full
corporate power and authority to own its assets and conduct its business as
presently being conducted.
Section 3.04. Remedies for Breach. With respect to a breach of any
representation or warranty set forth in Section 3.01 or Section 3.02, the Seller
hereby agrees to comply with the remedy provisions set forth in Section 3.05 of
the Sale and Servicing Agreement with respect thereto.
ARTICLE IV.
SELLER'S COVENANTS
Section 4.01. Covenants of the Seller. The Seller hereby covenants that
except for the transfer hereunder, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Home Loan, or any interest therein; the Seller will notify the
Indenture Trustee, as assignee of the Purchaser's assignee, of the existence of
any lien on any Home Loan immediately upon discovery thereof; and the Seller
will defend the right, title and interest of the Trust, as assignee of the
Purchaser, in, to and under the Home Loans, against all claims of third parties
claiming through or under the Seller; provided, however, that nothing in this
Section 4.01 shall prevent or be deemed to prohibit the Seller from suffering to
exist upon any of the Home 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 Seller 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.
ARTICLE V.
[RESERVED]
ARTICLE VI.
TERMINATION
Section 6.01. Termination. The respective obligations and responsibilities
of the Seller and the Purchaser created hereby shall terminate, except for the
Purchaser's and the Seller's indemnity obligations as provided herein, upon the
termination of the Trust as provided in Article XI of the Sale and Servicing
Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment. This Agreement may be amended from time to time by
the Seller and the Purchaser by written agreement signed by the Seller and the
Purchaser.
Section 7.02. Governing Law. This Agreement shall be governed by and
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 7.03. 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 registered mail, postage prepaid, addressed as
follows:
if to the Seller:
United National Bank
514 Market Street
Parkersburg, WV 26101
Attention: President
or such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.
if to the Purchaser:
Bear Stearns Asset Backed Securities, Inc.
245 Park Avenue
New York, NY 10167
Attention: Asset Backed Securities
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.
Section 7.04. Severability of Provisions. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.
Section 7.05. Counterparts. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06. Further Agreements. The Purchaser and the Seller each agree
to execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or reasonable and appropriate to effectuate the
purposes of this Agreement or in connection with the issuance of the Securities.
Without limiting the generality of the foregoing, as a further inducement
for the Purchaser to purchase the Home Loans from the Seller, the Seller will
cooperate with the Purchaser in connection with the sale of any of the
securities representing interests in or collaterized by the Home Loans. In that
connection, the Seller will provide to the Purchaser any and all information and
appropriate verification of information, whether through letters of its auditors
and counsel or otherwise, as the Purchaser shall reasonably request and will
provide to the Purchaser such additional representations and warranties,
covenants, opinions of counsel, letters from auditors, and certificates of
public officials or officers of the Seller as are reasonably required in
connection with such transactions and the offering of the Notes.
Section 7.07. Intention of the Parties. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, the Home Loans
rather than pledging the Home Loans to secure a loan by the Purchaser to the
Seller. Accordingly, the parties hereto each intend to treat the transaction for
all purposes (other than Federal income tax purposes) as a sale by the Seller,
and a purchase by the Purchaser, of the Home Loans. The Purchaser and its
assignees will have the right to review the Home Loans and the related Home Loan
Files to determine the characteristics of the Home Loans which will affect the
consequences of owning the Home Loans and the Seller will cooperate with all
reasonable requests made by the Purchaser and its assignees in the course of
such review.
Section 7.08. Successors and Assigns: Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser and the Indenture Trustee. The obligations of the Seller
under this Agreement cannot be assigned or delegated to a third party without
the consent of the Purchaser, which consent shall be at the Purchaser's sole
discretion except that the Purchaser acknowledges and agrees that the Seller may
assign its obligations hereunder to any Person into which the Seller is merged
or any corporation resulting from any merger, conversion or consolidation to
which the Seller is a party or any Person succeeding to the business of the
Seller. The parties hereto acknowledge that the Purchaser is acquiring the Home
Loans for the purpose of assigning them to the Issuer and that the Issuer will
pledge the Home Loans and other property described herein to the Indenture
Trustee as collateral for the Notes. As an inducement to the Purchaser to
purchase the Home Loans, the Seller acknowledges and consents to the assignment
by the Purchaser to the Issuer and the pledge by the Issuer to the Indenture
Trustee of all of the Purchaser's rights against the Seller pursuant to this
Agreement insofar as such rights relate to Home Loans pledged to such Indenture
Trustee and to the enforcement or exercise of any right or remedy against the
Seller pursuant to this Agreement by the Indenture Trustee under the Sale and
Servicing Agreement. Such enforcement of a right or remedy by the Indenture
Trustee shall have the same force and effect as if the right or remedy had been
enforced or exercised by the Purchaser directly.
Section 7.09. Survival. The representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the purchase of the Home Loans hereunder
and the issuance of the Securities.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed to this Home Loan Purchase Agreement by their respective officers
thereunto duly authorized as of the day and year first above written.
BEAR STEARNS ASSET BACKED
SECURITIES, INC.,
as Purchaser
By: /s/ Matthew Perkins
--------------------------------
Name: Matthew Perkins
Title: Managing Director
UNITED NATIONAL BANK,
as Seller
By: /s/ Joe L. Wilson
--------------------------------
Name: Joe L. Wilson
Title: Executive Vice President
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 24th day of March 1, 1999 before me, a Notary Public in and
for said State, personally appeared Matthew Perkins, known to me to be a
Managing Director of BEAR STEARNS ASSET BACKED SECURITIES, INC., the
corporation that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Clarice Zanani
- ------------------
Notary Public
STATE OF WEST VIRGINIA )
)ss.:
COUNTY OF OHIO )
On the 24th day of March 1999 before me, a Notary Public in and for
said State, personally appeared Joe L. Wilson, known to me to be an Executive
Vice President of UNITED NATIONAL BANK, the company that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Kelly J. Lauri
- ------------------
Notary Public
SCHEDULE I
HOME LOANS
