1
EXHIBIT 4.1
SEQUOIA MORTGAGE TRUST 199_-_,
Issuer
and
_________________________________,
Trustee
INDENTURE
Dated as of _____________ __, 199__
Relating to
SEQUOIA MORTGAGE TRUST 199_-_
COLLATERALIZED MORTGAGE BONDS
2
Cross-reference sheet showing the location in the indenture of
the provisions inserted pursuant to Sections 310 through 318(a) inclusive of
the Trust Indenture Act of 1939.
TIA Indenture Section
--- -----------------
Section 310
(a) (1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a) (2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(a) (3) . . . . . . . . . . . . . . . . . . . . . . . . . 6.14(2)
(a) (4) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a) (5) . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
. . . . . . . . . . . . . . . . . . . . . . . . . 6.10
. . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(c) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 311
(a) . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
Section 312
(a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
. . . . . . . . . . . . . . . . . . . . . . . . . 7.02(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(c)
Section 313
(a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)
. . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(b)
Section 314
(a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.04
. . . . . . . . . . . . . . . . . . . . . . . . . 11.05
. . . . . . . . . . . . . . . . . . . . . . . . . 3.10
(b) (1) . . . . . . . . . . . . . . . . . . . . . . . . . 2.12(c)(viii)
(b) (2) . . . . . . . . . . . . . . . . . . . . . . . . . 3.06
(c) (1) . . . . . . . . . . . . . . . . . . . . . . . . . 2.12(d)
. . . . . . . . . . . . . . . . . . . . . . . . . 4.01
. . . . . . . . . . . . . . . . . . . . . . . . . 11.01
i
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TIA Indenture Section
--- -----------------
(c) (2) . . . . . . . . . . . . . . . . . . . . . . . . . 2.12(c)(ii)
. . . . . . . . . . . . . . . . . . . . . . . . . 4.01
. . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(c) (3) . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
. . . . . . . . . . . . . . . . . . . . . . . . . 2.12(f)
(d) (1) . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
. . . . . . . . . . . . . . . . . . . . . . . . . 8.12
(d) (2) . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
. . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) (3) . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
. . . . . . . . . . . . . . . . . . . . . . . . . 2.12(f)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
Section 315
(a) . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(b)
. . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)(1)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.02
. . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)
(d) (1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(b)
(d) (2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)(2)
(d) (3) . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)(3)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 5.16
Section 316
(a) (1) (A) . . . . . . . . . . . . . . . . . . . . . . . . 5.14
. . . . . . . . . . . . . . . . . . . . . . . . . 8.01
(a) (1) (B) . . . . . . . . . . . . . . . . . . . . . . . . 5.02
. . . . . . . . . . . . . . . . . . . . . . . . . 5.15
(a) (2) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 5.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 317
(a) (1) . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
(a) (2) . . . . . . . . . . . . . . . . . . . . . . . . . 5.06
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 3.03
Section 318
(a) . . . . . . . . . . . . . . . . . . . . . . . . . 11.07
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TABLE OF CONTENTS
Page
PARTIES
PRELIMINARY STATEMENT
GRANTING CLAUSE
ARTICLE I
DEFINITIONS
SECTION 1.01. General Definitions . . . . . . . . . . . . . . I-1
"Accountant" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
"Accrual Date" . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
"Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
"Additional Mortgage Collateral" . . . . . . . . . . . . . . . . . I-1
"Adjusted Net Mortgage Rate" . . . . . . . . . . . . . . . . . . . I-2
"Adjustment Date" . . . . . . . . . . . . . . . . . . . . . . . . I-2
"Advance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
"Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
"Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
"Appraised Value" . . . . . . . . . . . . . . . . . . . . . . . . I-2
"Assignments" . . . . . . . . . . . . . . . . . . . . . . . . . . I-2
"Authenticating Agent" . . . . . . . . . . . . . . . . . . . . . . I-3
"Authorized Officer" . . . . . . . . . . . . . . . . . . . . . . . I-3
"Available Funds" . . . . . . . . . . . . . . . . . . . . . . . . I-3
"Bank" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
"Bankruptcy Code" . . . . . . . . . . . . . . . . . . . . . . . . I-3
"Beneficial Owner" . . . . . . . . . . . . . . . . . . . . . . . . I-3
"Bond Account" . . . . . . . . . . . . . . . . . . . . . . . . . . I-3
"Bond Distribution Amount" . . . . . . . . . . . . . . . . . . . . I-3
"Bond Payment Amount" . . . . . . . . . . . . . . . . . . . . . . I-4
"Bondholder" or "Holder" . . . . . . . . . . . . . . . . . . . . . I-4
"Bond Insurance Policy" . . . . . . . . . . . . . . . . . . . . . I-4
"Bond Insurer" . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
"Bond Interest Rate" . . . . . . . . . . . . . . . . . . . . . . . I-4
"Bond Register" and "Bond Registrar" . . . . . . . . . . . . . . . I-4
"Bonds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
"Book Entry Bonds" . . . . . . . . . . . . . . . . . . . . . . . . I-4
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Page
"Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
"Certificate Interest Rate" . . . . . . . . . . . . . . . . . . . I-4
"Class" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4
"Class B-1 Interest Carryover Shortfall" . . . . . . . . . . . . . I-5
"Class B-1 Interest Payment Amount" . . . . . . . . . . . . . . . I-5
"Class B-1 Percentage" . . . . . . . . . . . . . . . . . . . . . . I-5
"Class B-1 Principal Amount" . . . . . . . . . . . . . . . . . . . I-5
"Class B-1 Principal Carryover Shortfall" . . . . . . . . . . . . I-5
"Class B-1 Principal Payment Amount" . . . . . . . . . . . . . . . I-5
"Class B-2 Interest Carryover Shortfall" . . . . . . . . . . . . . I-6
"Class B-2 Interest Payment Amount" . . . . . . . . . . . . . . . I-6
"Class B-2 Percentage" . . . . . . . . . . . . . . . . . . . . . . I-6
"Class B-2 Principal Amount" . . . . . . . . . . . . . . . . . . . I-6
"Class B-2 Principal Carryover Shortfall" . . . . . . . . . . . . I-6
"Class B-2 Principal Payment Amount" . . . . . . . . . . . . . . . I-6
"Class Interest Shortfall" . . . . . . . . . . . . . . . . . . . . I-7
"Class Principal Amount" . . . . . . . . . . . . . . . . . . . . . I-7
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
"Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
"Combined Prepayment Percentage" . . . . . . . . . . . . . . . . . I-7
"Commission" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7
"Controlling Class" . . . . . . . . . . . . . . . . . . . . . . . . .
"Cooperative Loan" . . . . . . . . . . . . . . . . . . . . . . . . I-7
"Cooperative Shares" . . . . . . . . . . . . . . . . . . . . . . . I-7
"Corporate Trust Office" . . . . . . . . . . . . . . . . . . . . . I-8
"Cut-Off Date" . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
"Debt Service Reduction" . . . . . . . . . . . . . . . . . . . . . I-8
"Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
"Defaulted Pledged Mortgage" . . . . . . . . . . . . . . . . . . . I-8
"Deficient Valuation" . . . . . . . . . . . . . . . . . . . . . . I-8
"Definitive Bonds" . . . . . . . . . . . . . . . . . . . . . . . . I-8
"Deleted Pledged Mortgage" . . . . . . . . . . . . . . . . . . . . I-8
"Denomination" . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
"Depositor" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
"Depository" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8
"Depository Participants" . . . . . . . . . . . . . . . . . . . . I-9
"Deposit Trust Agreement" . . . . . . . . . . . . . . . . . . . . I-9
"Determination Date" . . . . . . . . . . . . . . . . . . . . . . . I-9
"Distribution Account" . . . . . . . . . . . . . . . . . . . . . . I-9
"Distribution Account Deposit Date" . . . . . . . . . . . . . . . I-9
ii
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Page
"Due Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9
"Eligible Account" . . . . . . . . . . . . . . . . . . . . . . . . I-9
"Escrow Account" . . . . . . . . . . . . . . . . . . . . . . . . I-10
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . I-10
"Expense Rate" . . . . . . . . . . . . . . . . . . . . . . . . . I-10
"FDIC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
"FHLMC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
"FIRREA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
"Fitch" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
"FNMA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
"Grant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10
"Highest Lawful Rate" . . . . . . . . . . . . . . . . . . . . . I-11
"Holder" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
"Indenture" or "this Indenture" . . . . . . . . . . . . . . . . I-11
"Independent" . . . . . . . . . . . . . . . . . . . . . . . . . I-11
"Index" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11
"Indirect Participant" . . . . . . . . . . . . . . . . . . . . . I-12
"Individual Bond" . . . . . . . . . . . . . . . . . . . . . . . I-12
"Insurance Policy" . . . . . . . . . . . . . . . . . . . . . . . I-12
"Insurance Proceeds" . . . . . . . . . . . . . . . . . . . . . . I-12
"Insured Expenses" . . . . . . . . . . . . . . . . . . . . . . . I-12
"Interest Accrual Period" . . . . . . . . . . . . . . . . . . . I-12
"Interest Conversion Date" . . . . . . . . . . . . . . . . . . . I-12
"Interest Payment Amount" . . . . . . . . . . . . . . . . . . . I-12
"Invested Amount" . . . . . . . . . . . . . . . . . . . . . . . I-12
"Investor Certificate" . . . . . . . . . . . . . . . . . . . . . I-12
"Investor Percentage" . . . . . . . . . . . . . . . . . . . . . I-13
"Investor Prepayment Percentage" . . . . . . . . . . . . . . . . I-13
"Issuer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
"Issuer Order" and "Issuer Request" . . . . . . . . . . . . . . I-13
"Letter Agreement" . . . . . . . . . . . . . . . . . . . . . . . I-13
"Liquidated Pledged Mortgage" . . . . . . . . . . . . . . . . . I-13
"Liquidation Proceeds" . . . . . . . . . . . . . . . . . . . . . I-13
"Loan-to-Value Ratio" . . . . . . . . . . . . . . . . . . . . . I-13
"Margin" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13
"Master Servicer" . . . . . . . . . . . . . . . . . . . . . . . I-14
"Master Servicing Agreement" . . . . . . . . . . . . . . . . . . I-14
"Master Servicing Fee" . . . . . . . . . . . . . . . . . . . . . I-14
"Master Servicing Fee Rate" . . . . . . . . . . . . . . . . . . I-14
"Maturity" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
iii
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Page
"Maximum Rate" . . . . . . . . . . . . . . . . . . . . . . . . . I-14
"Moody's" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
"Mortgage" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14
"Mortgage Documents" . . . . . . . . . . . . . . . . . . . . . . I-14
"Mortgage Note" . . . . . . . . . . . . . . . . . . . . . . . . I-15
"Mortgage Rate" . . . . . . . . . . . . . . . . . . . . . . . . I-15
"Mortgaged Property" . . . . . . . . . . . . . . . . . . . . . . I-15
"Mortgagor" . . . . . . . . . . . . . . . . . . . . . . . . . . I-15
"Net Mortgage Rate" . . . . . . . . . . . . . . . . . . . . . . I-15
"Net Interest Shortfalls" . . . . . . . . . . . . . . . . . . . I-15
"Nonrecoverable Advance" . . . . . . . . . . . . . . . . . . . . I-15
"Officers' Certificate" . . . . . . . . . . . . . . . . . . . . I-15
"Officer's Certificate of the Master Servicer" . . . . . . . . . I-15
"Operative Agreements" . . . . . . . . . . . . . . . . . . . . . I-15
"Opinion of Counsel" . . . . . . . . . . . . . . . . . . . . . . I-16
"Optional Redemption Date" . . . . . . . . . . . . . . . . . . . I-16
"Optional Redemption Record Date" . . . . . . . . . . . . . . . I-16
"Original Class B-1 Principal Amount" . . . . . . . . . . . . . I-16
"Original Class B-2 Principal Amount" . . . . . . . . . . . . . I-16
"Original Invested Amount" . . . . . . . . . . . . . . . . . . . I-16
"Original Pledged Mortgages" . . . . . . . . . . . . . . . . . . I-16
"Original Senior Class Principal Amount" . . . . . . . . . . . . I-16
"Original Subordination Amount" . . . . . . . . . . . . . . . . I-16
"OTS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-16
"Outstanding" . . . . . . . . . . . . . . . . . . . . . . . . . I-16
"Outstanding Pledged Mortgage" . . . . . . . . . . . . . . . . . I-17
"Owner" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-17
"Owner Trustee" . . . . . . . . . . . . . . . . . . . . . . . . I-17
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . I-17
"Payment Date" . . . . . . . . . . . . . . . . . . . . . . . . . I-17
"Payment Date Statement" . . . . . . . . . . . . . . . . . . . . I-17
"Periodic Rate Cap" . . . . . . . . . . . . . . . . . . . . . . I-18
"Permitted Encumbrance" . . . . . . . . . . . . . . . . . . . . I-18
"Permitted Investments" . . . . . . . . . . . . . . . . . . . . I-18
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-20
"Pledged Accounts" . . . . . . . . . . . . . . . . . . . . . . . I-20
"Pledged Mortgage Schedule" . . . . . . . . . . . . . . . . . . I-20
"Pledged Mortgages" . . . . . . . . . . . . . . . . . . . . . . I-21
"Pool Stated Principal Balance" . . . . . . . . . . . . . . . . I-21
"Predecessor Bonds" . . . . . . . . . . . . . . . . . . . . . . I-21
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Page
"Prepayment Interest Shortfall" . . . . . . . . . . . . . . . . I-21
"Prepayment Period" . . . . . . . . . . . . . . . . . . . . . . I-21
"Primary Mortgage Insurance Policy" . . . . . . . . . . . . . . I-21
"Principal Prepayment" . . . . . . . . . . . . . . . . . . . . . I-21
"Principal Prepayment in Full" . . . . . . . . . . . . . . . . . I-21
"Proceeding" . . . . . . . . . . . . . . . . . . . . . . . . . . I-21
"Proprietary Lease" . . . . . . . . . . . . . . . . . . . . . . I-21
"Prospectus Supplement" . . . . . . . . . . . . . . . . . . . . I-21
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . I-22
"Rating Agency" . . . . . . . . . . . . . . . . . . . . . . . . I-22
"Realized Loss" . . . . . . . . . . . . . . . . . . . . . . . . I-22
"Record Date" . . . . . . . . . . . . . . . . . . . . . . . . . I-22
"Redemption Date" . . . . . . . . . . . . . . . . . . . . . . . I-23
"Redemption Price" . . . . . . . . . . . . . . . . . . . . . . . I-23
"Refinancing Pledged Mortgage" . . . . . . . . . . . . . . . . . I-23
"Relief Act" . . . . . . . . . . . . . . . . . . . . . . . . . . I-23
"Relief Act Reductions" . . . . . . . . . . . . . . . . . . . . I-23
"REO Property" . . . . . . . . . . . . . . . . . . . . . . . . . I-23
"Replacement Pledged Mortgage" . . . . . . . . . . . . . . . . . I-23
"Request for Release" . . . . . . . . . . . . . . . . . . . . . I-24
"Responsible Officer" . . . . . . . . . . . . . . . . . . . . . I-24
"S&P" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
"SAIF" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
"Sale" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24
"Scheduled Payment" . . . . . . . . . . . . . . . . . . . . . . I-24
"Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . I-24
"Seller/Servicer Guide" . . . . . . . . . . . . . . . . . . . . I-24
"Senior Bond Interest Rate" . . . . . . . . . . . . . . . . . . I-24
"Senior Bonds" . . . . . . . . . . . . . . . . . . . . . . . . . I-24
"Senior Class Principal Amount" . . . . . . . . . . . . . . . . I-25
"Senior Interest Payment Amount" . . . . . . . . . . . . . . . . I-25
"Senior Interest Shortfall" . . . . . . . . . . . . . . . . . . I-25
"Senior Percentage" . . . . . . . . . . . . . . . . . . . . . . I-25
"Senior Principal Payment Amount" . . . . . . . . . . . . . . . I-25
"Servicer" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25
"Servicer Advance" . . . . . . . . . . . . . . . . . . . . . . . I-26
"Servicing Advances" . . . . . . . . . . . . . . . . . . . . . . I-26
"Servicing Agreement" . . . . . . . . . . . . . . . . . . . . . I-26
"Servicing Default" . . . . . . . . . . . . . . . . . . . . . . I-26
"Servicing Fee" . . . . . . . . . . . . . . . . . . . . . . . . I-26
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Page
"Servicing Fee Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
"Servicing Officer" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
"Stated Maturity" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-26
"Stated Principal Balance" . . . . . . . . . . . . . . . . . . . . . . . . I-26
"Subordinated Bond Interest Rate" . . . . . . . . . . . . . . . . . . . . I-27
"Subordinated Bonds" . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
"Substitution Adjustment Amount" . . . . . . . . . . . . . . . . . . . . . I-27
"Successor Master Servicer" . . . . . . . . . . . . . . . . . . . . . . . I-27
"Trust Estate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
"Trust Indenture Act" or "TIA" . . . . . . . . . . . . . . . . . . . . . . I-27
"Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
"Trustee Fee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
"Trustee Fee Rate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-27
"Trustee Mortgage File" . . . . . . . . . . . . . . . . . . . . . . . . . I-27
"Withdrawal Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-28
ARTICLE II
THE BONDS
SECTION 2.01. Forms Generally . . . . . . . . . . . . . . . . . . . . II-1
SECTION 2.02. Forms of Bonds and Certificate of Authentication . . . II-1
SECTION 2.03. Bonds Issuable in Classes; Provisions with Respect
to Principal and Interest Payments . . . . . . . . . . II-2
SECTION 2.04. Denominations . . . . . . . . . . . . . . . . . . . . . II-5
SECTION 2.05. Execution, Authentication, Delivery and Dating . . . . II-5
SECTION 2.06. Temporary Bonds . . . . . . . . . . . . . . . . . . . . II-6
SECTION 2.07. Registration, Registration of Transfer and Exchange . . II-6
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Bonds . . . . . . II-7
SECTION 2.09. Payments of Principal and Interest . . . . . . . . . . II-8
SECTION 2.10. Persons Deemed Owners . . . . . . . . . . . . . . . . . II-10
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . II-10
SECTION 2.12. Authentication and Delivery of Bonds . . . . . . . . . II-10
SECTION 2.13. Matters Relating to Book Entry Bonds . . . . . . . . . II-15
SECTION 2.14. Termination of Book Entry System . . . . . . . . . . . II-16
SECTION 2.15. Additional Bonds . . . . . . . . . . . . . . . . . . . II-17
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ARTICLE III
COVENANTS
Page
SECTION 3.01. Payment of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
SECTION 3.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
SECTION 3.03. Money for Bond Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . III-1
SECTION 3.04. Corporate Existence of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . III-4
SECTION 3.05. Protection of Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-4
SECTION 3.06. Opinions as to Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-6
SECTION 3.07. Performance of Obligations; Master Servicing Agreement . . . . . . . . . . . . . . . . III-6
SECTION 3.08. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-7
SECTION 3.09. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-7
SECTION 3.10. Annual Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . III-9
SECTION 3.11. Recording of Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-9
SECTION 3.12. Limitation of Liability of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-9
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . IV-1
SECTION 4.02. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2
ARTICLE V
DEFAULTS AND REMEDIES
SECTION 5.01. Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . V-3
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . V-4
SECTION 5.04. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5
SECTION 5.05. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5
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Page
SECTION 5.06. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-7
SECTION 5.07. Trustee May Enforce Claims without Possession of Bonds . . . . . . . . . . . . . . . . . V-8
SECTION 5.08. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-8
SECTION 5.09. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-8
SECTION 5.10. Unconditional Rights of Bondholders to Receive Principal and Interest . . . . . . . . . . V-9
SECTION 5.11. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . V-10
SECTION 5.12. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10
SECTION 5.13. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10
SECTION 5.14. Control by Bondholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10
SECTION 5.15. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-11
SECTION 5.16. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-11
SECTION 5.17. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . V-12
SECTION 5.18. Sale of Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-12
SECTION 5.19. Action on Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-14
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
SECTION 6.02. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-2
SECTION 6.03. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-3
SECTION 6.04. Not Responsible for Recitals or Issuance of Bonds . . . . . . . . . . . . . . . . . . . VI-5
SECTION 6.05. May Hold Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5
SECTION 6.06. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5
SECTION 6.07. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5
SECTION 6.08. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-6
SECTION 6.09. Trustee's Capital and Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-7
SECTION 6.10. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . VI-7
SECTION 6.11. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . VI-8
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business of Trustee . . . . . . . . VI-9
SECTION 6.13. Preferential Collection of Claim Against Issuer . . . . . . . . . . . . . . . . . . . . VI-9
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Page
SECTION 6.14. Co-trustees and Separate Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-9
SECTION 6.15. Authenticating Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-11
SECTION 6.16. Review of Mortgage Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-12
SECTION 6.17. Payment of Certain Insurance Premiums . . . . . . . . . . . . . . . . . . . . . . . . . VI-13
SECTION 6.18. Substitution of Insurance Policies, Etc.; Notification of Rating Agencies . . . . . . . VI-13
ARTICLE VII
BONDHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer to Furnish Trustee Names and Addresses of Bondholders . . . . . . . . . . . . . VII-1
SECTION 7.02. Preservation of Information; Communications to Bondholders . . . . . . . . . . . . . . VII-1
SECTION 7.03. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1
SECTION 7.04. Reports by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2
SECTION 7.05. Notice to the Rating Agencies [and to Bond Insurer.] . . . . . . . . . . . . . . . . . VII-2
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ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Page
SECTION 8.01. Collection of Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1
SECTION 8.02. Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1
SECTION 8.03. General Provisions Regarding Pledged Accounts . . . . . . . . . . . . . . . . . . . . VIII-2
SECTION 8.04. Purchases of Defective Pledged Mortgages . . . . . . . . . . . . . . . . . . . . . . VIII-3
SECTION 8.05. Grant of Replacement Pledged Mortgage . . . . . . . . . . . . . . . . . . . . . . . . VIII-5
SECTION 8.06. Reports by Trustee to Bondholders . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-5
SECTION 8.07. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-7
SECTION 8.08. Trust Estate; Release and Delivery of Mortgage Documents . . . . . . . . . . . . . . VIII-8
SECTION 8.09. Amendments to the Master Servicing Agreement . . . . . . . . . . . . . . . . . . . . VIII-9
SECTION 8.10. Servicers and Master Servicer as Agents and Bailees of Trustee . . . . . . . . . . . VIII-9
SECTION 8.11. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-10
SECTION 8.12. Release of Pledged Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-10
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Bondholders . . . . . . . . . . . . . . . . IX-1
SECTION 9.02. Supplemental Indentures With Consent of Bondholders . . . . . . . . . . . . . . . . . . IX-2
SECTION 9.03. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . IX-4
SECTION 9.04. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . IX-4
SECTION 9.05. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . IX-4
SECTION 9.06. Reference in Bonds to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . IX-5
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Page
SECTION 9.07. Amendments to Deposit Trust Agreement or Master Servicing Agreement . . . . . . . . . . IX-5
ARTICLE X
REDEMPTION OF BONDS
SECTION 10.01. Special Redemption; Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-1
SECTION 10.02. Form of Redemption Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . X-1
SECTION 10.03. Bonds Payable on Optional Redemption Date . . . . . . . . . . . . . . . . . . . . . . . X-2
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Page
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . XI-1
SECTION 11.02. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . XI-1
SECTION 11.03. Acts of Bondholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-3
SECTION 11.04. Notices, etc. to Trustee and Issuer . . . . . . . . . . . . . . . . . . . . . . . . . XI-3
SECTION 11.05. Notices and Reports to Bondholders; Waiver of Notices . . . . . . . . . . . . . . . . XI-4
SECTION 11.06. Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-5
SECTION 11.07. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . XI-5
SECTION 11.08. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . XI-5
SECTION 11.09. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-5
SECTION 11.10. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-5
SECTION 11.11. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-6
SECTION 11.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-6
SECTION 11.13. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-6
SECTION 11.14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-6
SECTION 11.15. Recording of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-6
SECTION 11.16. Issuer Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-6
SECTION 11.17. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-7
SECTION 11.18. Usury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-7
SECTION 11.19. No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XI-8
ARTICLE XII
THE BOND INSURER
SECTION 12.01. Certain Matters Regarding the Bond Insurer and The Bond Insurance Policy . . . . . . . XII-1
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
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Page
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
SCHEDULE A - Schedule of Pledged Mortgages . . . . . . . . . . . . . . . . A-1
EXHIBIT I - Letter Agreement with the Depository
EXHIBIT II - Form of Senior Bond
EXHIBIT III - Form of Class B-1 Bond
EXHIBIT IV - Form of Class B-2 Bond
EXHIBIT V - Form of Bond Insurance Policy
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PARTIES
INDENTURE, dated as of ___________ ___, 199__ (as amended or
supplemented from time to time as permitted hereby, the "Indenture"), between
Sequoia Mortgage Trust 199_-_ (herein, together with its permitted successors
and assigns, called the "Issuer"), a statutory business trust created under the
Deposit Trust Agreement (as defined herein), and _____________________________,
a _____________ corporation, as trustee (together with its permitted successors
in the trusts hereunder, the "Trustee").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of
this Indenture to provide for its Collateralized Mortgage Bonds, (the "Bonds"),
issuable as provided in this Indenture. All covenants and agreements made by
the Issuer herein are for the benefit and security of the Holders of the Bonds.
The Issuer is entering into this Indenture, and the Trustee is accepting the
trusts created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement
of the Issuer in accordance with its terms have been done.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee, for the exclusive
benefit of the Holders of the Bonds [and the Bond Insurer], all of the Issuer's
right, title and interest in and to (a) the Pledged Mortgages identified in
Schedule A to this Indenture, including the related Mortgage Documents, which
the Issuer has caused to be delivered to the Trustee herewith, and all interest
and principal received or receivable by the Issuer on or with respect to the
Pledged Mortgages after the Cut-Off Date and all interest and principal
payments on the Pledged Mortgages received prior to the Cut-off Date in respect
of installments of interest and principal due thereafter, but not including
payments of interest and principal due and payable on the Pledged Mortgages on
or before the Cut-off Date, and all
1
18
other proceeds received in respect of such Pledged Mortgages, (b) the Issuer's
rights under the Master Servicing Agreement, (c) the Insurance Policies, (d)
all cash, instruments or other property held or required to be deposited in the
Bond Account or the Distribution Account (exclusive of any earnings on
investments made with funds deposited in the Distribution Account or the Bond
Account) and (e) all proceeds of the conversion, voluntary or involuntary, of
any of the foregoing into cash or other liquid assets, including, without
limitation, all Insurance Proceeds, Liquidation Proceeds and condemnation
awards. Such Grants are made, however, in trust, to secure the Bonds equally
and ratably without prejudice, priority or distinction between any Bond and any
other Bond by reason of difference in time of issuance or otherwise, and to
secure (i) the payment of all amounts due on the Bonds in accordance with their
terms, (ii) the payment of all other sums payable under this Indenture with
respect to the Bonds and (iii) compliance with the provisions of this
Indenture, all as provided in this Indenture. All terms used in the foregoing
granting clauses that are defined in Section 1.01 are used with the meanings
given in said Section.
The Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions of this Indenture and agrees to
perform the duties herein required to the best of its ability to the end that
the interests of the Holders of the Bonds [and the Bond Insurer] may be
adequately and effectively protected.
[The Trustee agrees that it will hold any proceeds of any
claim made upon the Bond Insurance Policy, solely for the use and benefit of
the Bondholders in accordance with the terms hereof and of the Bond Insurance
Policy.]
2
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ARTICLE I
DEFINITIONS
SECTION 1.01. GENERAL DEFINITIONS.
Except as otherwise specified or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of this Indenture, and the definitions of such terms are
applicable to the singular as well as to the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms.
Whenever reference is made herein to an Event of Default or a Default known to
the Trustee or of which the Trustee has notice or knowledge, such reference
shall be construed to refer only to an Event of Default or Default of which the
Trustee is deemed to have notice or knowledge pursuant to Section 6.01(d). All
other terms used herein which are defined in the Trust Indenture Act (as
hereinafter defined), either directly or by reference therein, have the
meanings assigned to them therein.
"ACCOUNTANT": A Person engaged in the practice of accounting
who (except when this Indenture provides that an Accountant must be
Independent) may be employed by or affiliated with the Issuer or an Affiliate
of the Issuer.
"ACCRUAL DATE": The date upon which interest begins accruing
on the Bonds, such date being ____________ ___, 199__.
"ACT": With respect to any Bondholder, as defined in Section
11.03.
"ADDITIONAL MORTGAGE COLLATERAL": Pledged Mortgages pledged
to the Trustee following the Closing Date in connection with the issuance of
Additional Bonds pursuant to Section hereof, provided that following such
pledge, aggregate Pledged Mortgages then pledged to secure the Bonds are within
the following parameters: (i) the percentage of the Pledged Mortgages which are
[fixed interest rate] mortgage loans will not exceed __%, (ii) the percentage
of Pledged Mortgages which are [adjustable rate] mortgage loans will not exceed
__%, (iii) the percentage of Pledged Mortgages that contain "due-on-sale"
clauses will not exceed __%, (iv) the percentage of Pledged
I-1
20
Mortgages secured by investor properties will not exceed __%, (v) the weighted
average original Loan-to-Value Ratio of the Pledged Mortgages will not exceed
__%, (vi) the percentage of Pledged Mortgages originated pursuant to a "limited
documentation" program will not exceed __%, (vii) the percentage of Pledged
Mortgages having an original Loan-to-Value Ratio in excess of 80% that will be
covered by a primary mortgage loan insurance policy will equal at least __%,
(viii) the percentage of Pledged Mortgages which are cash-out refinance
mortgages will not exceed __% and (ix) the percentage of Pledged Mortgages that
are delinquent by one or more scheduled payments will not exceed __%.
"ADJUSTED NET MORTGAGE RATE": As to each Pledged Mortgage and
at any time, the per annum rate equal to the Mortgage Rate less the sum of the
Master Servicing Fee Rate and the related Servicing Fee Rate.
"ADJUSTMENT DATE": As to any Pledged Mortgage, the date on
which the related Mortgage Rate adjusts [annually] after a period of ___
year[s] following origination, in accordance with the terms of the related
Mortgage Note.
"ADVANCE": The payment required to be made by the Master
Servicer with respect to any Payment Date pursuant to Section 4 of the Master
Servicing Agreement, the amount of any such payment being equal to the
aggregate of the payments of principal and interest (net of the Master
Servicing Fee and the applicable Servicing Fee and net of any net income in the
case of any REO Property) on the Pledged Mortgages that were due on the related
Due Date and not received as of the close of business on the related
Determination Date, less the aggregate amount of any such delinquent payments
that the Master Servicer has determined would constitute a Nonrecoverable
Advance if advanced.
"AFFILIATE": With respect to any Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
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"AGENT": Any Bond Registrar, Paying Agent or Authenticating
Agent.
"APPRAISED VALUE": With respect to any Pledged Mortgage, the
Appraised Value of the related Mortgaged Property shall be: (i) with respect
to a Pledged Mortgage other than a Refinancing Pledged Mortgage, the lesser of
(a) the value of the Mortgaged Property based upon the appraisal made at the
time of the origination of such Pledged Mortgage and (b) the sales price of the
Mortgaged Property at the time of the origination of such Pledged Mortgage;
(ii) with respect to a Refinancing Pledged Mortgage, the value of the Mortgaged
Property based upon the appraisal made at the time of the origination of such
Refinancing Pledged Mortgage.
"ASSIGNMENTS": Collectively (i) the original instrument of
assignment of a Mortgage, including any interim assignments from the originator
or any other holder of any Pledged Mortgage, and (ii) the original instrument
of assignment of such Mortgage, made by the Issuer to the Trustee (which in
either case may, to the extent permitted by the laws of the state in which the
related Mortgaged Property is located, be a blanket instrument of assignment
covering other Mortgages as well and which may also, to the extent permitted by
the laws of the state in which the related Mortgaged Property is located, be an
instrument of assignment running directly from the mortgagee of record under
the related Mortgage to the Trustee).
"AUTHENTICATING AGENT": The Person, if any, appointed as
Authenticating Agent by the Trustee at the request of the Issuer pursuant to
Section 6.15, until any successor Authenticating Agent for the Bonds is named,
and thereafter "Authenticating Agent" shall mean such successor.
"AUTHORIZED OFFICER": Any officer of the Owner Trustee who is
authorized to act for the Owner Trustee in respect of the Issuer and whose name
appears on a list of such authorized officers furnished by the Owner Trustee to
the Trustee, as such list may be amended or supplemented from time to time, and
any officer of the Issuer who is authorized to act pursuant to the Deposit
Trust Agreement and whose name appears on a list furnished by the Depositor to
the Owner Trustee and the Trustee, as such list may be amended or supplemented
from time to time.
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"AVAILABLE FUNDS": As defined in Section 1 of the Master
Servicing Agreement.
"BANK": ________________________, a Delaware banking
corporation, in its individual capacity and not as Owner Trustee.
"BANKRUPTCY CODE": The United States Bankruptcy Reform Act of
1978, as amended.
"BENEFICIAL OWNER": With respect to a Book Entry Bond, the
Person who is the beneficial owner of such Book Entry Bond.
"BOND ACCOUNT": The separate Eligible Account or Accounts
created and maintained by the Master Servicer pursuant to Section 3(h)(v) of
the Master Servicing Agreement with a depository institution in the name of the
Master Servicer for the benefit of the Trustee on behalf of Bondholders and
designated "Sequoia Mortgage Holdings, Inc. in trust for the registered
holders of Sequoia Mortgage Trust 199_-_ Collateralized Mortgage Bonds, Series
199_-_".
"BOND DISTRIBUTION AMOUNT": As to any Payment Date, an amount
equal to the sum of (i) the Senior Interest Payment Amount, (ii) the Senior
Principal Payment Amount, (iii) the Class B-1 Interest Payment Amount, (iv) the
Class B-1 Principal Payment Amount, (v) the Class B-2 Interest Payment Amount
and (vi) the Class B-2 Principal Payment Amount.
"BOND PAYMENT AMOUNT": As to any Payment Date, an amount
equal to the sum of (i) the Senior Interest Payment Amount, (ii) the Senior
Principal Payment Amount, (iii) the Class B-1 Interest Payment Amount, (iv) the
Class B- 1 Principal Payment Amount, (v) the Class B-2 Interest Payment Amount
and (vi) the Class B-2 Principal Payment Amount, in each case for such Payment
Date.
"BONDHOLDER" OR "HOLDER": The Person in whose name a
Bond is registered in the Bond Register.
"BOND INSURANCE POLICY": Any financial guaranty insurance
policy covering any Bonds or Class of Bonds of any Series.
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"BOND INSURER": The issuer of any Bond Insurance Policy.
"BOND INTEREST RATE": The Senior Bond Interest Rate, the
Class B-1 Bond Interest Rate or the Class B-2 Bond Interest Rate, as
applicable.
"BOND REGISTER" AND "BOND REGISTRAR": As defined in Section
2.07.
"BONDS": Any bonds authorized by, and authenticated and
delivered under, this Indenture.
"BOOK ENTRY BONDS": The Bonds shall be registered in the name
of the Depository or its nominee, ownership of which is reflected on the books
of the Depository or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"BUSINESS DAY": Any day other than (i) a Saturday or a
Sunday, or (ii) a day on which banking institutions in the City of New York,
New York or the State of California or the city in which the Corporate Trust
Office of the Trustee is located are authorized or obligated by law or
executive order to be closed.
"CERTIFICATE INTEREST RATE": As defined in Section 1 of the
Master Servicing Agreement.
"CLASS": Collectively, all of the Bonds bearing the same
class designation. The Bonds are divided into Classes as provided in Section
2.03.
"CLASS B-1 INTEREST CARRYOVER SHORTFALL": The amount by which
sum of (i) the interest at the Class B-1 Bond Interest Rate on the Class B-1
Principal Amount and (ii) the interest at the Class B-1 Bond Interest Rate on
any Class B-1 Principal Carryover Shortfall, on each prior Payment Date,
exceeded the amount actually distributed as interest on such prior Payment
Dates and not subsequently distributed.
"CLASS B-1 BOND INTEREST RATE": With respect to any Interest
Accrual Period, the annual rate at which interest
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accrues on the Class B-1 Bonds as specified in such Bonds and in Section
2.03(c).
"CLASS B-1 INTEREST PAYMENT AMOUNT": As to any Payment Date,
the sum of (i) interest at the Class B-1 Bond Interest Rate on the Class B-1
Principal Amount, (ii) interest at the Class B-1 Bond Interest Rate on any
Class B-1 Principal Carryover Shortfall, (iii) the Class B-1 Interest Carryover
Shortfall and (iv) interest at the Class B-1 Bond Interest Rate on any Class
B-1 Interest Carryover Shortfall.
"CLASS B-1 PERCENTAGE": As to any Payment Date, the
percentage equivalent of a fraction the numerator of which is the Class B-1
Principal Amount immediately prior to such date and the denominator of which is
the sum of (i) the Senior Class Principal Amount, (ii) the Class B-1 Principal
Amount, (iii) the Class B-2 Principal Amount and (iv) the Invested Amount, in
each case immediately prior to such date.
"CLASS B-1 PRINCIPAL AMOUNT": As to any Payment Date is the
lesser of (i) the aggregate of the Stated Principal Balances of the Pledged
Mortgages, less the Senior Class Principal Amount immediately prior to such
date, and (ii) the Original Class B-1 Principal Amount reduced by all amounts
previously distributed to holders of the Class B-1 Bonds as payments of
principal.
"CLASS B-1 PRINCIPAL CARRYOVER SHORTFALL": As to any Payment
Date, the excess of (i) the Original Class B-1 Principal Amount reduced by all
amounts previously distributed to holders of the Class B-1 Bonds as payments of
principal or Class B-1 Principal Carryover Shortfall, over (ii) the Class B-1
Principal Amount immediately prior to such date.
"CLASS B-1 PRINCIPAL PAYMENT AMOUNT": As to any Payment Date,
the sum of (i) the Class B-1 Percentage of the sum of (a) the principal portion
of the Schedules Payment due on each Pledged Mortgage [on the related Due
Date], (b) the principal portion of the purchase price of each Pledged Mortgage
that was purchased by Redwood Trust or another person pursuant to the Mortgage
Loan Purchase Agreement [or by the Master Servicer in connection with any
optional purchase by the Master Servicer of a defaulted Pledged Mortgage] as of
such Payment Date, (c) the
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Substitution Adjustment Amount in connection with any Deleted Pledged Mortgage
received with respect to such Payment Date, (d) any Insurance Proceeds or
Liquidation Proceeds allocable to recoveries of principal of Pledged Mortgages
that are not yet Liquidated Pledged Mortgages received during the [calendar
month] preceding the month of such Payment Date, (e) with respect to each
Pledged Mortgage that became a Liquidated Pledged Mortgage during the [calendar
month] preceding the month of such Payment Date, the Stated Principal Balance
of such Pledged Mortgage and (f) all partial and full principal prepayments by
borrowers received during the related Prepayment Period and (ii) any Class B-1
Principal Carryover Shortfall.
CLASS B-2 BOND INTEREST RATE": With respect to any Interest
Accrual Period, the annual rate at which interest accrues on the Class B-2
Bonds as specified in such Bonds and in Section 2.03(c).
"CLASS B-2 INTEREST CARRYOVER SHORTFALL": The amount by which
sum of (i) the interest at the Class B-2 Bond Interest Rate on the Class B-2
Principal Amount and (ii) the interest at the Class B-2 Bond Interest Rate on
any Class B-2 Principal Carryover Shortfall, on each prior Payment Date,
exceeded the amount actually distributed as interest on such prior Payment
Dates and not subsequently distributed.
"CLASS B-2 INTEREST PAYMENT AMOUNT": As to any Payment Date,
the sum of (i) interest at the Class B-2 Bond Interest Rate on the Class B-2
Principal Amount, (ii) interest at the Class B-2 Bond Interest Rate on any
Class B-2 Principal Carryover Shortfall, (iii) the Class B-2 Interest Carryover
Shortfall and (iv) interest at the Class B-2 Bond Interest Rate on any Class
B-2 Interest Carryover Shortfall.
"CLASS B-2 PERCENTAGE": As to any Payment Date, the
percentage equivalent of a fraction the numerator of which is the Class B-2
Principal Amount immediately prior to such date and the denominator of which is
the sum of (i) the Senior Class Principal Amount, (ii) the Class B-1 Principal
Amount, (iii) the Class B-2 Principal Amount and (iv) the Invested Amount, in
each case immediately prior to such date.
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"CLASS B-2 PRINCIPAL AMOUNT": As to any Payment Date is the
lesser of (i) the aggregate of the Stated Principal Balances of the Pledged
Mortgages, less the sum of the Senior Class Principal Amount and the Class B-1
Principal Amount, in each case immediately prior to such date, and (ii) the
Original Class B-2 Principal Amount reduced by all amounts previously
distributed to holders of the Class B-2 Bonds as payments of principal.
"CLASS B-2 PRINCIPAL CARRYOVER SHORTFALL": As to any Payment
Date, the excess of (i) the Original Class B-2 Principal Amount reduced by all
amounts previously distributed to holders of the Class B-2 Bonds as payments of
principal or Class B-2 Principal Carryover Shortfall, over (ii) the Class B-2
Principal Amount immediately prior to such date.
"CLASS B-2 PRINCIPAL PAYMENT AMOUNT": As to any Payment Date,
the sum of (i) the Class B-2 Percentage of the sum of (a) the principal portion
of the Scheduled Payment due on each Pledged Mortgage [on the related Due
Date], (b) the principal portion of the purchase price of each Pledged Mortgage
that was purchased by Redwood Trust or another person pursuant to the Mortgage
Loan Purchase Agreement [or by the Master Servicer in connection with any
optional purchase by the Master Servicer of a defaulted Pledged Mortgage] as of
such Payment Date, (c) the Substitution Adjustment Amount in connection with
any Deleted Pledged Mortgage received with respect to such Payment Date, (d)
any Insurance Proceeds or Liquidation Proceeds allocable to recoveries of
principal of Pledged Mortgages that are not yet Liquidated Pledged Mortgages
received during the [calendar month] preceding the month of such Payment Date,
(e) with respect to each Pledged Mortgage that became a Liquidated Pledged
Mortgage during the [calendar month] preceding the month of such Payment Date,
the Stated Principal Balance of such Pledged Mortgage and (f) all partial and
full principal prepayments by borrowers received during the related Prepayment
Period and (ii) any Class B-2 Principal Carryover Shortfall.
"CLASS INTEREST SHORTFALL": As to any Payment Date, the
Senior Interest Shortfall, the Class B-1 Interest Carryover Shortfall or the
Class B-2 Interest Carryover Shortfall, as applicable.
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"CLASS PRINCIPAL AMOUNT": The Senior Class Principal Amount,
the Class B-1 Principal Amount or the Class B-2 Principal Amount, as
applicable.
"CLOSING DATE": ____________ ___, 199__.
"CODE": The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
"COMMISSION": Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time under the Trust Indenture Act or similar legislation
replacing the Trust Indenture Act.
"CONTROLLING CLASS": The Class A-1 Bonds or, if the Class A-1
Bonds are no longer Outstanding, the most senior Class of Subordinated Bonds
then Outstanding.
"COOPERATIVE LOAN": As defined in Section 1 of the Master
Servicing Agreement.
"COOPERATIVE SHARES": As defined in Section 1 of the Master
Servicing Agreement.
"CORPORATE TRUST OFFICE": The principal corporate trust
office of the Trustee located at ______________
______________________________________, or at such other address as the Trustee
may designate from time to time by notice to the Bondholders and the Issuer, or
the principal corporate trust office of any successor Trustee.
"CUT-OFF DATE": _____________ ___, 199__.
"DEBT SERVICE REDUCTION": With respect to any Pledged
Mortgage, a reduction by a court of competent jurisdiction in a proceeding
under the Bankruptcy Code in the Scheduled Payment for such Pledged Mortgage
which became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
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"DEFAULT": Any occurrence which is, or with notice or the
lapse of time or both would become, an Event of Default.
"DEFAULTED PLEDGED MORTGAGE": The meaning specified in
Section 8.04(e).
"DEFICIENT VALUATION": With respect to any Pledged Mortgage,
a valuation by a court of competent jurisdiction of the Mortgaged Property in
an amount less than the then outstanding indebtedness under the Pledged
Mortgage, or any reduction in the amount of principal to be paid in connection
with any Scheduled Payment that results in a permanent forgiveness of
principal, which valuation or reduction results from an order of such court
which is final and non-appealable in a proceeding under the Bankruptcy Code.
"DEFINITIVE BONDS": Bonds other than Book Entry Bonds.
"DELETED PLEDGED MORTGAGE": As defined in Section 5 of the
Master Servicing Agreement.
"DENOMINATION": With respect to each Bond, the amount set
forth on the face thereof as the "Initial Principal Amount of this Bond".
"DEPOSITOR": Sequoia Mortgage Funding Corporation, a Delaware
corporation.
"DEPOSITORY": The initial Depository with respect to each
Class of Book Entry Bonds shall be The Depository Trust Company of New York,
the nominee for which is Cede & Co. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(3) of the Uniform Commercial
Code of the State of New York.
"DEPOSITORY PARTICIPANTS": A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"DEPOSIT TRUST AGREEMENT": The Amended and Restated Deposit
Trust Agreement, dated as of ____________ _ _, 199__, between the Bank and the
Depositor, creating the Issuer, as such
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Deposit Trust Agreement may be amended or supplemented from time to time.
"DETERMINATION DATE": As to any Payment Date, the ___th day
of each month or if such ___th day is not a Business Day the next succeeding
Business Day; provided, however, that if such next succeeding Business Day is
less than two Business Days prior to the related Payment Date, then the
Determination Date shall be the next Business Day preceding the ___th day of
such month.
"DISTRIBUTION ACCOUNT": The separate Eligible Account created
and maintained by the Trustee pursuant to Section 8.02 in the name of the
Trustee for the benefit of the Bondholders and designated "____________________
in trust for registered holders of Sequoia Mortgage Trust 199_-_, Collateralized
Mortgage Bonds. Funds in the Distribution Account shall be held in trust for the
Bondholders for the uses and purposes set forth in this Indenture.
"DISTRIBUTION ACCOUNT DEPOSIT DATE": As to any Payment Date,
[12:30 p.m. Pacific time] on the Business Day immediately preceding such
Payment Date.
"DUE DATE": The first day of each month.
["DUFF & PHELPS": Duff & Phelps Credit Rating Company, or any
successor thereto. For purposes of Section 11.04 the address for notices to
Duff & Phelps shall be Duff & Phelps Credit Rating Company, 55 E. Monroe
Street, 35th Floor, Chicago, Illinois 60603, Attention: MBS Monitoring, or
such other address as Duff & Phelps may hereafter furnish to the Issuer and the
Master Servicer.]
"ELIGIBLE ACCOUNT": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in the case of
a depository institution or trust company that is the principal subsidiary of a
holding company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts
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are insured by the FDIC or the SAIF (to the limits established by the FDIC or
the SAIF) and the uninsured deposits in which accounts are otherwise secured
such that, as evidenced by an Opinion of Counsel delivered to the Trustee and
to each Rating Agency, the Bondholders have a claim with respect to the funds
in such account or a perfected first priority security interest against any
collateral (which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution or trust company in which such account is maintained, or
(iii) a trust account or accounts maintained with the trust department of a
federal or state chartered depository institution or trust company, acting in
its fiduciary capacity or (iv) any other account acceptable to each Rating
Agency. Eligible Accounts may bear interest, and may include, if otherwise
qualified under this definition, accounts maintained with the Trustee.
"ESCROW ACCOUNT": As defined in Section 1 of the Master
Servicing Agreement.
"EVENT OF DEFAULT": The meaning specified in Section 5.01.
"EXPENSE RATE": As to each Pledged Mortgage, the sum of the
related Servicing Fee Rate, the Master Servicing Fee Rate and Trustee Fee Rate.
"FDIC": The Federal Deposit Insurance Corporation, or any
successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
"FIRREA": The Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
["FITCH": Fitch Investors Service, L.P., or any successor
thereto. For purposes of Section 11.04 the address for notices to Fitch shall
be Fitch Investors Service, L.P., One State Street Plaza, New York, New York
10004, Attention: Residential Mortgage Surveillance Group, or such other
address as
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Fitch may hereafter furnish to the Issuer and the Master Servicer.]
"FNMA": The Federal National Mortgage Association, a
federally chartered and privately owned corporation organized and existing
under the Federal National Mortgage Association Charter Act, or any successor
thereto.
"GRANT": To grant, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, mortgage, pledge, create and grant a
security interest in, deposit, set-over and confirm. A Grant of a Pledged
Mortgage and related Mortgage Documents, a Permitted Investment, the Master
Servicing Agreement, an Insurance Policy, or any other instrument shall include
all rights, powers and options (but none of the obligations) of the Granting
party thereunder, including, without limitation, the immediate and continuing
right to claim for, collect, receive and give receipts for principal and
interest payments thereunder, Insurance Proceeds, condemnation awards, purchase
prices and all other moneys payable thereunder and all proceeds thereof, to
give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the
name of the Granting party or otherwise, and generally to do and receive
anything which the Granting party is or may be entitled to do or receive
thereunder or with respect thereto.
"HIGHEST LAWFUL RATE": The meaning specified in Section
11.18.
"HOLDER": The holder of Bonds issued pursuant to this
Indenture.
"INDENTURE" or "THIS INDENTURE": This instrument as
originally executed and, if from time to time supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, as so supplemented or amended. All references in this
instrument to designated "Articles", "Sections", "Subsections" and other
subdivisions are to the designated Articles, Sections, Subsections and other
subdivisions of this instrument as originally executed. The words "herein",
"hereof" and "hereunder" and other words of similar import refer to this
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Indenture as a whole and not to any particular Article, Section, Subsection or
other subdivision.
"INDEPENDENT": When used with respect to any specified Person
means such a Person who (i) is in fact independent of the Issuer and any other
obligor upon the Bonds, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer or in any such other obligor
or in an Affiliate of the Issuer or such other obligor and (iii) is not
connected with the Issuer or any such other obligor as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions. Whenever it is herein provided that any Independent Person's opinion
or certificate shall be furnished to the Trustee, such Person shall be
appointed by an Issuer Order and with the approval of the Trustee, which
approval shall not be unreasonably withheld, and such opinion or certificate
shall state that the signer has read this definition and that the signer is
Independent within the meaning hereof.
"INDEX": As to (a) each Pledged Mortgage, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note and (b) either Bond Interest Rate and any Payment
Date, the weekly average yield on United States Treasury Securities adjusted to
a constant maturity of one year as made available by the Federal Reserve Board
and most recently available as of 45 days prior to the first day of the month
preceding the month in which such Payment Date occurs.
"INDIRECT PARTICIPANT": A broker, dealer, bank or other
financial institution or other Person that clears through or maintains a
custodial relationship with a Depository Participant.
"INDIVIDUAL BOND": A Bond of an original principal amount of
$1,000; a Bond of an original principal amount in excess of $1,000 shall be
deemed to be a number of Individual Bonds equal to the quotient obtained by
dividing such original principal amount by $1,000.
"INSURANCE POLICY": With respect to any Pledged Mortgage, any
insurance policy, including all riders and
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endorsements thereto in effect, including any replacement policy or policies
for any Insurance Policies.
"INSURANCE PROCEEDS": Proceeds paid by an insurer pursuant to
any Insurance Policy, in each case other than any amount included in such
Insurance Proceeds in respect of Insured Expenses.
"INSURED EXPENSES": Expenses covered by an Insurance Policy
or any other insurance policy with respect to the Pledged Mortgages.
"INTEREST ACCRUAL PERIOD": With respect to each Class of
Bonds and any Payment Date, the calendar month prior to the month of such
Payment Date.
"INTEREST CONVERSION DATE": As to the Pledged Mortgages, the
date on which the first Adjustment Date occurs.
"INTEREST PAYMENT AMOUNT": The Senior Interest Payment
Amount, the Class B-1 Interest Payment Amount, the Class B-2 Interest Payment
Amount or the Certificate Interest Payment Amount, as applicable.
"INVESTED AMOUNT": As of any Payment Date, the lesser of (i)
the aggregate of the Stated Principal Balances of the Pledged Mortgages, less
the sum of (x) the Senior Class Principal Amount, (y) the Class B-1 Principal
Amount and (z) the Class B-2 Principal Amount, in each case immediately prior
to such date, and (ii) the Original Invested Amount reduced by all amounts
previously distributed to the holder of the Investor Certificate in reduction
of the Invested Amount.
"INVESTOR CERTIFICATE": As defined in Section 1.01 of the
Deposit Trust Agreement.
"INVESTOR PERCENTAGE": As of any Payment Date, the difference
between 100% and the sum of the Senior Percentage, the Class B-1 Percentage and
the Class B-2 Percentage for such date.
"ISSUER": Sequoia Mortgage Trust 199_-_ formed pursuant to
the Deposit Trust Agreement.
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"ISSUER ORDER" and "ISSUER REQUEST": A written order or
request that is dated and signed in the name of the Issuer by an Authorized
Officer and delivered to the Trustee.
"LETTER AGREEMENT": With respect to the Book Entry Bonds, the
letter agreement among the Issuer, the Trustee and the Depository governing
book entry transfers of, and certain other matters with respect to, such Book
Entry Bonds and attached as Exhibit I hereto.
"LIQUIDATED PLEDGED MORTGAGE": With respect to any Payment
Date, a defaulted Pledged Mortgage (including any REO Property) which was
liquidated in the calendar month preceding the month of such Payment Date and
as to which the Master Servicer has certified (in accordance with the Master
Servicing Agreement) that it has received all amounts it expects to receive in
connection with the liquidation of such Pledged Mortgage including the final
disposition of an REO Property.
"LIQUIDATION PROCEEDS": Amounts, including Insurance
Proceeds, received in connection with the partial or complete liquidation of
defaulted Pledged Mortgages, whether through trustee's sale, foreclosure sale
or otherwise or amounts received in connection with any condemnation or partial
release of a Mortgaged Property and any other proceeds received in connection
with an REO Property, less the sum of related unreimbursed Master Servicing
Fees, Servicing Advances and Advances.
"LOAN-TO-VALUE RATIO": With respect to any Pledged Mortgage
and as to any date of determination, the fraction (expressed as a percentage)
the numerator of which is the principal balance of the related Pledged Mortgage
at such date of determination and the denominator of which is the Appraised
Value of the related Mortgaged Property.
"MARGIN": As to each Pledged Mortgage, the percentage amount
set forth on the related Mortgage Note added to the Index in calculating the
Mortgage Rate thereon.
"MASTER SERVICER": _________________________________, a
____________ corporation, as Master Servicer under the Master Servicing
Agreement, and its permitted successors and assigns thereunder.
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"MASTER SERVICING AGREEMENT": The master servicing agreement
dated as of _____________ , 199__, among the Issuer, the Trustee and the
Master Servicer, pursuant to which the Master Servicer will be obligated to
manage and supervise the administration and servicing of the Pledged Mortgages
securing the Bonds and each Servicer of the Pledged Mortgages, or its
successors or assigns, as such agreement may be amended or supplemented from
time to time as permitted thereby.
"MASTER SERVICING FEE": As to each Pledged Mortgage and any
Payment Date, an amount equal to one month's interest at the related Master
Servicing Fee Rate on the Stated Principal Balance of such Pledged Mortgage or,
in the event of any payment of interest which accompanies a Principal
Prepayment in Full made by the Mortgagor, interest at the Master Servicing Fee
Rate on the Stated Principal Balance of such Pledged Mortgage for the period
covered by such payment of interest, subject to reduction as provided in
Section 5(a) of the Master Servicing Agreement.
"MASTER SERVICING FEE RATE": With respect to each Mortgage
Loan, _____% per annum.
"MATURITY": With respect to any Bond, the date on which the
entire unpaid principal amount of such Bond becomes due and payable as therein
or herein provided, whether at the Stated Maturity of the final installment of
such principal or by declaration of acceleration, call for redemption or
otherwise.
"MAXIMUM RATE": As to any Pledged Mortgage, the maximum rate
set forth on the related Mortgage Note at which interest can accrue on such
Pledged Mortgage.
["MOODY'S": Moody's Investors Service, Inc., or any successor
thereto. For purposes of Section 11.04 the address for notices to Moody's shall
be Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007,
Attention: ____________ or such other address as Moody's may hereafter furnish
to the Issuer and the Master Servicer.]
"MORTGAGE": The mortgage, deed of trust or other instrument
creating a first lien on an estate in fee simple or leasehold interest in real
property securing a Mortgage Note.
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"MORTGAGE DOCUMENTS": The mortgage documents listed in
Section 2(a)(i) of the Master Servicing Agreement pertaining to a particular
Pledged Mortgage and any additional documents delivered to the Trustee to be
added to the Mortgage Documents pursuant to the Master Servicing Agreement.
"MORTGAGE NOTE": The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Pledged
Mortgage.
"MORTGAGE RATE": The annual rate of interest borne by a
Mortgage Note from time to time.
"MORTGAGED PROPERTY": The underlying property securing a
Pledged Mortgage, which, with respect to a Cooperative Loan, is the related
Cooperative Shares and Proprietary Lease.
"MORTGAGOR": The obligor(s) on a Mortgage Note.
"NET MORTGAGE RATE": As to any Pledged Mortgage and Payment
Date, the related Mortgage Rate as of the Due Date in the month preceding the
month of such Payment Date reduced by the related Expense Rate.
"NET INTEREST SHORTFALLS": As to any Payment Date, the amount
by which the sum of (i) the amount of interest which would otherwise have been
received with respect to any Pledged Mortgage that was the subject of a Relief
Act Reduction and (ii) any Prepayment Interest Shortfalls, in each case during
the [calendar month] preceding the month of such Payment Date, exceeds the sum
of (i) the Master Servicing Fee for such period and (ii) the Certificate
Interest Payment Amount, the Invested Amount Payment and any other amounts
payable to the holder of the Investor Certificate described in [ ].
"NONRECOVERABLE ADVANCE": Any portion of an Advance or
Servicer Advance previously made or proposed to be made by the Master Servicer
or the related Servicer, as the case may be, that, in the good faith judgment
of the Master Servicer or such Servicer, will not be ultimately recoverable by
the Master Servicer from the related Mortgagor, related Liquidation Proceeds or
otherwise.
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"OFFICERS' CERTIFICATE": A certificate signed by two
Authorized Officers.
"OFFICER'S CERTIFICATE OF THE MASTER SERVICER": A certificate
(i) signed by the Chairman of the Board, the Vice Chairman of the Board, the
President, a Managing Director, a Vice President (however denominated), an
Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant
Treasurers or Assistant Secretaries of the Master Servicer, or (ii) if provided
for herein, signed by a Servicing Officer, as the case may be, and delivered to
the Trustee, as required hereby.
"OPERATIVE AGREEMENTS": The meaning ascribed thereto in the
Deposit Trust Agreement.
"OPINION OF COUNSEL": A written opinion of counsel who may,
except as otherwise expressly provided in this Indenture, be counsel for the
Issuer, and who shall be reasonably satisfactory to the Trustee.
"OPTIONAL REDEMPTION DATE": With respect to the Bonds which
are subject to optional redemption, the date on which Bonds may be redeemed
pursuant to Section 10.01.
"OPTIONAL REDEMPTION RECORD DATE": The meaning specified in
Section 10.02.
"ORIGINAL CLASS B-1 PRINCIPAL AMOUNT": $____________.
"ORIGINAL CLASS B-2 PRINCIPAL AMOUNT": $____________.
"ORIGINAL INVESTED AMOUNT": $____________.
"ORIGINAL PLEDGED MORTGAGES": The Pledged Mortgages listed on
the Pledged Mortgage Schedule and granted to the Trustee on the Closing Date.
"ORIGINAL SENIOR CLASS PRINCIPAL AMOUNT":
$___________________.
"ORIGINAL SUBORDINATION AMOUNT": The sum of the Original
Subordinated Class Principal Amount and the Original Invested Amount.
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"OTS": The Office of Thrift Supervision.
"OUTSTANDING": As of the date of determination, all Bonds
theretofore authenticated and delivered under this Indenture except:
(i) Bonds theretofore cancelled by the Bond Registrar
or delivered to the Bond Registrar for cancellation;
(ii) Bonds or portions thereof for whose payment or
redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the Issuer)
in trust for the Holders of such Bonds; provided, however, that if
such Bonds are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor, satisfactory
to the Trustee, has been made;
(iii) Bonds in exchange for or in lieu of which other
Bonds have been authenticated and delivered pursuant to this Indenture
unless proof satisfactory to the Trustee is presented that any such
Bonds are held by a bona fide purchaser (as defined by the Uniform
Commercial Code of the applicable jurisdiction); and
(iv) Bonds alleged to have been destroyed, lost or
stolen for which replacement Bonds have been issued as provided for in
Section 2.08;
provided, however, that in determining whether the Holders of the requisite
percentage of the aggregate Class Principal Amount of the Outstanding Bonds
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Bonds owned by the Issuer, any other obligor upon the Bonds
or any Affiliate of the Issuer or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Bonds which the Trustee knows to be
so owned shall be so disregarded. Bonds so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act
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with respect to such Bonds and that the pledgee is not the Issuer, any other
obligor upon the Bonds or any Affiliate of the Issuer or such other obligor.
"OUTSTANDING PLEDGED MORTGAGE": As of any Due Date, a Pledged
Mortgage with a Stated Principal Balance greater than zero which was not the
subject of a Principal Prepayment in Full prior to such Due Date and which did
not become a Liquidated Pledged Mortgage prior to such Due Date.
"OWNER": The meaning ascribed thereto in the Deposit Trust
Agreement.
"OWNER TRUSTEE": Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee under
the Deposit Trust Agreement, until a successor Person shall have become the
Owner Trustee pursuant to the applicable provisions of the Deposit Trust
Agreement, and thereafter "Owner Trustee" shall mean such successor Person.
"PAYING AGENT": The Trustee or any other depository
institution or trust company that is authorized by the Issuer pursuant to
Section 3.03 to pay the principal of, or interest on, any Bonds on behalf of
the Issuer.
"PAYMENT DATE": The ___th day of each [calendar month] after
the initial issuance of the Bonds or, if such ___th day is not a Business Day,
the next succeeding Business Day, commencing in ____________ 199__.
"PAYMENT DATE STATEMENT": The meaning specified in Section
8.06.
["PERIODIC RATE CAP": As to any Pledged Mortgage and any
Adjustment Date, the maximum percentage increase or decrease to the related
Mortgage Note on any such Adjustment Date, as specified in the related Mortgage
Note.]
"PERMITTED ENCUMBRANCE": Any lien, charge, security interest,
mortgage or other encumbrance Granted by the Issuer in the Trust Estate,
provided that:
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(i) such lien, charge, security interest, mortgage or
encumbrance extends only to a portion of the Trust Estate which is
limited to cash deliverable or payable to the Issuer pursuant to
Section 8.01 or Section 8.02(d);
(ii) such lien, charge, security interest, mortgage or other
encumbrance secures indebtedness which the Issuer is permitted to
incur under the terms of this Indenture; and
(iii) the beneficiary of such lien, charge, security interest,
mortgage or other encumbrance has agreed that in connection with the
enforcement thereof it will not bring any Proceeding seeking, or which
would result in, the sale of any portion of the Trust Estate and will
not file any petition for the commencement of insolvency proceedings
with respect to the Issuer under the federal bankruptcy laws, as now
or hereafter in effect, or any other present or future federal or
state bankruptcy, insolvency or similar law, or for the appointment of
any receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Issuer or of any of its property, or
seeking an order for the winding up or liquidation of the affairs of
the Issuer.
"PERMITTED INVESTMENTS": At any time, any one or more of the
following obligations and securities:
(i) obligations of the United States or any agency thereof,
provided that such obligations are backed by the full faith and credit
of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Bonds by the Rating Agencies, as
evidenced by a signed writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings
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then assigned to the Bonds by the Rating Agencies, as evidenced by a
signed writing delivered by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or long-term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial
paper or long-term unsecured debt obligations of such holding company,
but only if Moody's Investor's service, Inc. is not the applicable
Rating Agency) are then rated one of the two highest long-term and the
highest short-term ratings of each Rating Agency for such securities,
or such lower ratings as will not result in the downgrading or
withdrawal of the ratings then assigned to the Bonds by the Rating
Agencies, as evidenced by a signed writing delivered by each Rating
Agency;
(v) demand or time deposits or certificates of deposit issued
by any bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to the Rating
Agencies at the time of the issuance of such agreements, as evidenced
by a signed writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of 115% of
the face amount thereof) bearing interest or sold at a discount issued
by any corporation incorporated under the
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laws of the United States or any state thereof which, at the time of
such investment, have one of the two highest ratings of each Rating
Agency (except if the Rating Agency is Moody's, such rating shall be
the highest commercial paper rating of Moody's for any such series),
or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Bonds by the Rating
Agencies, as evidenced by a signed writing delivered by each Rating
Agency;
(ix) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable rating by
each Rating Agency or such lower rating as will not result in a change
in the rating then assigned to the Bonds by each Rating Agency;
(x) short-term investment funds sponsored by any trust
company or national banking association incorporated under the laws of
the United States or any state thereof which on the date of
acquisition has been rated by each applicable Rating Agency in their
respective highest applicable rating category or such lower rating as
will not result in a change in the rating then specified stated
maturity and bearing interest or sold at a discount acceptable to each
Rating Agency as will not result in the downgrading or withdrawal of
the ratings then assigned to the Bonds by the Rating Agencies; and
(xi) such other investments having a specified stated
maturity and bearing interest or sold at a discount acceptable to the
Rating Agencies as will not result in the downgrading or withdrawal of
the ratings then assigned to the Bonds by the Rating Agencies;
provided, that no such instrument shall be a Permitted Investment if (i) such
instrument evidences the right to receive interest only payments with respect
to the obligations underlying such instrument or (ii) such instrument would
require the Issuer to register as an investment company under the Investment
Company Act of 1940, as amended.
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"PERSON": Any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"PLEDGED ACCOUNTS": The Bond Account and the Distribution
Account (exclusive of any earnings on investments made with funds deposited in
the Distribution Account or the Bond Account).
"PLEDGED MORTGAGE SCHEDULE": The list of Pledged Mortgages
(as from time to time amended by the Master Servicer to reflect the addition of
Replacement Pledged Mortgages and the deletion of Deleted Pledged Mortgages
pursuant to the provisions of the Master Servicing Agreement) Granted to the
Trustee pursuant to the provisions hereof as part of the Trust Estate and from
time to time subject to this Agreement, attached hereto as Schedule I.
"PLEDGED MORTGAGES": Such of the mortgage loans Granted to
the Trustee pursuant to the provisions hereof as from time to time are held as
a part of the Trust Estate (including any REO Property), the mortgage loans so
held being identified in the Pledged Mortgage Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property.
"POOL STATED PRINCIPAL BALANCE": As to any Payment Date, the
aggregate of the Stated Principal Balances of the Pledged Mortgages which were
Outstanding Pledged Mortgages on the Due Date in the month preceding the month
of such Payment Date.
"PREDECESSOR BONDS": With respect to any particular Bond of a
Class, every previous Bond of that Class evidencing all or a portion of the
same debt as that evidenced by such particular Bond; and, for the purpose of
this definition, any Bond authenticated and delivered under Section 2.08 in
lieu of a lost, destroyed or stolen Bond shall be deemed to evidence the same
debt as the lost, destroyed or stolen Bond.
"PREPAYMENT INTEREST SHORTFALL": As to any Payment Date,
Pledged Mortgage and Principal Prepayment, the amount, if any, by which one
month's interest at the related Mortgage Rate
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on such Principal Prepayment exceeds the amount of interest paid in connection
with such Principal Prepayment.
"PREPAYMENT PERIOD": As to any Payment Date, the [calendar
month] preceding the month of such Payment Date.
"PRIMARY MORTGAGE INSURANCE POLICY": Each policy of primary
mortgage guaranty insurance or any replacement policy therefor with respect to
any Pledged Mortgage.
"PRINCIPAL PREPAYMENT": Any payment of principal by a
Mortgagor on a Pledged Mortgage that is received in advance of its scheduled
Due Date and is not accompanied by an amount representing scheduled interest
due on any date or dates in any month or months subsequent to the month of
prepayment.
"PRINCIPAL PREPAYMENT IN FULL": Any Principal Prepayment made
by a Mortgagor of the entire principal balance of a Pledged Mortgage.
"PROCEEDING": Any suit in equity, action at law or other
judicial or administrative proceeding.
"PROPRIETARY LEASE": As defined in Section 1 of the Master
Servicing Agreement.
"PROSPECTUS SUPPLEMENT": The Prospectus Supplement dated
_________ ___, 199__relating to the Bonds.
"PURCHASE PRICE": With respect to any Pledged Mortgage
required to be purchased by the Master Servicer pursuant to Section 2(a)(ii) or
2(d)(iii) of the Master Servicing Agreement or purchased at the option of the
Master Servicer pursuant to Section 3(n) of the Master Servicing Agreement, an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Pledged Mortgage on the date of such purchase, and (ii) accrued interest
thereon at the applicable Adjusted Net Mortgage Rate from the date through
which interest was last paid by the Mortgagor to the Due Date in the month in
which the Purchase Price is to be distributed to Bondholders.
"RATING AGENCY": Each of [ ] and [ ]. If either such
organization or a successor is no longer in
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existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Issuer, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers.
"REALIZED LOSS": With respect to each Liquidated Pledged
Mortgage, an amount (not less than zero or more than the Stated Principal
Balance of the Pledged Mortgage) as of the date of such liquidation, equal to
(i) the Stated Principal Balance of the Liquidated Pledged Mortgage as of the
date of such liquidation, plus (ii) interest at the Net Mortgage Rate from the
Due Date as to which interest was last paid or advanced (and not reimbursed) to
Bondholders up to the Due Date in the month in which Liquidation Proceeds are
required to be distributed on the Stated Principal Balance of such Liquidated
Pledged Mortgage from time to time, minus (iii) the Liquidation Proceeds, if
any, received during the month in which such liquidation occurred, to the
extent applied as recoveries of interest at the Adjusted Net Mortgage Rate and
to principal of the Liquidated Pledged Mortgage. With respect to each Pledged
Mortgage which has become the subject of a Deficient Valuation, if the
principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Pledged Mortgage outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Pledged Mortgage as reduced by the Deficient Valuation. With respect to each
Pledged Mortgage which has become the subject of a Debt Service Reduction and
any Payment Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been reduced.
"RECORD DATE": With respect to any Payment Date, the date on
which the Persons entitled to receive any payment of principal of, or interest
on, any Bonds (or notice of a payment in full of principal) due and payable on
such Payment Date are determined; such date shall be the last day of the month
preceding the month of such Payment Date.
"REDEMPTION DATE": Any Optional Redemption Date or any
Payment Date on which Bonds may be redeemed.
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"REDEMPTION PRICE": With respect to any Class of Bonds to be
redeemed, an amount equal to 100% of the related Class Principal Amount of the
Bonds (including, in the case of the Subordinated Bonds, any unpaid
Subordinated Principal Carryover Shortfall) to be so redeemed, together with
interest on such amount at the applicable Bond Interest Rate through the last
day of the month immediately preceding the month in which such Redemption Date
occurs, together with any unpaid Class Interest Shortfalls.
"REFINANCING PLEDGED MORTGAGE": Any Pledged Mortgage
originated in connection with the refinancing of an existing mortgage loan.
"RELIEF ACT": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
"RELIEF ACT REDUCTIONS": With respect to any Payment Date and
any Pledged Mortgage as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended calendar month as a
result of the application of the Relief Act, the amount, if any, by which (i)
interest collectible on such Pledged Mortgage for the most recently ended
calendar month is less than (ii) interest accrued thereon for such month
pursuant to the Mortgage Note.
"REO PROPERTY": A Mortgaged Property acquired by the Trustee
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Pledged Mortgage.
"REPLACEMENT PLEDGED MORTGAGE": A Mortgage Loan substituted
by the Master Servicer for a Deleted Mortgage Loan which must, on the date of
such substitution, as confirmed in a Request for Release, substantially in the
form of Exhibit C to the Master Servicing Agreement, (i) have a Stated
Principal Balance, after deduction of the principal portion of the Scheduled
Payment due in the month of substitution, not in excess of, and not more than
10% less than, the Stated Principal Balance of the Deleted Mortgage Loan; (ii)
be accruing interest at a rate no lower than and not more than 1% per annum
higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value
Ratio no higher than that of the Deleted Mortgage Loan; (iv) have a Mortgage
Rate based upon the same Index and a Margin at least
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equal to and not greater than 50 basis points higher than that of the Deleted
Mortgage Loan; (v) have a Mortgage Rate subject to a Periodic Rate Cap and
Maximum Rate that are no less than those applicable to the Deleted Mortgage
Loan; (vi) have Adjustment Dates that are no more or less frequent than the
Deleted Mortgage Loan; (vii) have a remaining term to maturity no greater than
(and not more than one year less than that of) the Deleted Mortgage Loan;
(viii) not be a Cooperative Loan unless the Deleted Mortgage Loan was a
Cooperative Loan; and (ix) comply with each representation and warranty set
forth in Section 2(d)(ii) of the Master Servicing Agreement.
"REQUEST FOR RELEASE": The Request for Release submitted by
the Master Servicer to the Trustee, substantially in the form of Exhibits C and
D to the Master Servicing Agreement, as appropriate.
"RESPONSIBLE OFFICER": With respect to the Trustee, any
officer in the corporate trust department or similar group of the Trustee and
also, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his or her knowledge of and familiarity
with the particular subject.
"S&P": Standard & Poor's Ratings Group, a division of
McGraw-Hill Inc. For purposes of Section 11.04 the address for notices to S&P
shall be Standard & Poor's Ratings Group, 26 Broadway, 15th Floor, New York,
New York 10004, Attention: Mortgage Surveillance Monitoring, or such other
address as S&P may hereafter furnish to the Issuer and the Master Servicer.
"SAIF": The Savings Association Insurance Fund, or any
successor thereto.
"SALE": The meaning specified in Section 5.18(a).
"SCHEDULED PAYMENT": The scheduled monthly payment on a
Pledged Mortgage due on any Due Date allocable to principal and/or interest on
such Pledged Mortgage which, unless otherwise specified in the Master Servicing
Agreement, shall give effect to any related Debt Service Reduction and any
Deficient Valuation that affects the amount of the monthly payment due on such
Pledged Mortgage.
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"SECURITIES ACT": The Securities Act of 1933, as amended.
"SENIOR BOND INTEREST RATE": With respect to any Interest
Accrual Period, the annual rate at which interest accrues on the Senior Bonds
as specified in such Bonds and in Section 2.03(c).
"SENIOR BONDS": The Class A-1 Bonds.
"SENIOR CLASS PRINCIPAL AMOUNT": As of any Payment Date, the
Original Senior Class Principal Amount reduced by all amounts previously
distributed to Holders of the Senior Bonds as payments of principal.
"SENIOR INTEREST PAYMENT AMOUNT": As to any Payment Date, the
sum of (i) one month's interest accrued during the related Interest Accrual
Period at the Senior Bond Interest Rate on the Senior Class Principal Amount,
subject to reduction pursuant to Section 2.03(d) and (ii) the sum of the
amounts, if any, by which the amount described in clause (i) above on each
prior Payment Date exceeded the amount actually distributed as interest on such
prior Payment Dates and not subsequently distributed.
"SENIOR INTEREST SHORTFALL": As to any Payment Date, the
amount by which the amount described in clause (i) of the definition of Senior
Interest Payment Amount exceeds the amount of interest actually paid on the
Senior Bonds on such Payment Date pursuant to such clause (i).
"SENIOR PERCENTAGE": As to any Payment Date, the percentage
equivalent of a fraction the numerator of which is the Senior Class Principal
Amount immediately prior to such date and the denominator of which is the sum
of (i) the Senior Class Principal Amount, (ii) the Class B-1 Principal Amount,
(iii) the Class B-2 Principal Amount and (iv) the Invested Amount, in each case
immediately prior to such date.
"SENIOR PRINCIPAL PAYMENT AMOUNT": As to each Payment Date,
the Senior Percentage of the sum of (a) the principal portion of the Scheduled
Payment due on each Pledged Mortgage [on the related Due Date], (b) the
principal portion of the purchase
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price of each Pledged Mortgage that was purchased by Redwood Trust or another
person pursuant to the Mortgage Loan Purchase Agreement [or any optional
purchase by the Master Servicer of a defaulted Pledged Mortgage] as of such
Payment Date, (c) the Substitution Adjustment Amount in connection with any
Deleted Pledged Mortgage received with respect to such Payment Date, (d) any
Insurance Proceeds or Liquidation Proceeds allocable to recoveries of principal
of Pledged Mortgages that are not yet Liquidated Pledged Mortgages received
during the [calendar month] preceding the month of such Payment Date, (e) with
respect to each Pledged Mortgage that became a Liquidated Pledged Mortgage
during the [calendar month] preceding the month of such Payment Date, the
Stated Principal Balance of such Pledged Mortgage, and (f) all partial and full
principal prepayments by borrowers received during the related Prepayment
Period.
"SERVICER": Any person with which the Master Servicer has
entered into a Servicing Agreement for the servicing of all or a portion of the
Pledged Mortgages pursuant to Section 3(b) of the Master Servicing Agreement.
"SERVICER ADVANCE": The meaning ascribed to such term in
Section 3(h)(iv) of the Master Servicing Agreement.
"SERVICING ADVANCES": All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by the Master
Servicer of its servicing obligations, including, but not limited to, the cost
of (i) the preservation, restoration and protection of a Mortgaged Property,
(ii) any expenses reimbursable to the Master Servicer pursuant to Section 3(n)
of the Master Servicing Agreement and any enforcement or judicial proceedings,
including foreclosures, (iii) the management and liquidation of any REO
Property and (iv) compliance with the obligations under Section 3(l) of the
Master Servicing Agreement.
"SERVICING AGREEMENT": Any agreement between the Master
Servicer and related Servicer relating to servicing and/or administration of
certain Pledged Mortgages as provided in Section 3(b) of the Master Servicing
Agreement.
"SERVICING DEFAULT": As defined in the Master Servicing
Agreement.
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"SERVICING FEE": As to each Pledged Mortgage and any Payment
Date, an amount equal to one month's interest at the applicable Servicing Fee
Rate on the Stated Principal Balance of such Pledged Mortgage.
"SERVICING FEE RATE": With respect to any Pledged Mortgage,
the per annum rate set forth in the Pledged Mortgage Schedule for such Pledged
Mortgage.
"SERVICING OFFICER": Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing of the
Pledged Mortgages whose name and facsimile signature appear on a list of
servicing officers furnished to the Trustee by the Master Servicer on the
Closing Date pursuant to the Master Servicing Agreement, as such list may from
time to time be amended.
"STATED MATURITY": With respect to any and all Bonds
_________________.
"STATED PRINCIPAL BALANCE": As to any Pledged Mortgage and
Due Date, the unpaid principal balance of such Pledged Mortgage as of such Due
Date as specified in the amortization schedule at the time relating thereto
(before any adjustment to such amortization schedule by reason of any
moratorium or similar waiver or grace period) after giving effect to any
previous partial Principal Prepayments and Liquidation Proceeds allocable to
principal (other than with respect to any Liquidated Pledged Mortgage) and to
the payment of principal due on such Due Date and irrespective of any
delinquency in payment by the related Mortgagor.
"SUBORDINATED BOND INTEREST RATE": With respect to any
Interest Accrual Period, the annual rate at which interest accrues on the
Subordinated Bonds as specified in such Bonds and in Section 2.03(c).
"SUBORDINATED BONDS": The Class B-1 and the Class B-2 Bonds.
"SUBSTITUTION ADJUSTMENT AMOUNT": The meaning ascribed to
such term pursuant to Section 2(d)(iv) of the Master Servicing Agreement.
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"SUCCESSOR MASTER SERVICER": A Person appointed by the
Trustee who succeeds either the Trustee or the Master Servicer, pursuant to the
applicable provisions of the Master Servicing Agreement.
"TRUST ESTATE": All money, instruments and other property
subject or intended to be subject to the lien of this Indenture for the benefit
of the Bondholders as of any particular time (including, without limitation,
all property and interests Granted to the Trustee), including all proceeds
thereof.
"TRUST INDENTURE ACT" OR "TIA": The Trust Indenture Act of
1939, as amended, as in force at the Closing Date, unless otherwise
specifically provided.
"TRUSTEE": ______________________________, a banking
corporation organized and existing under the laws of
_________________________________, and any Person succeeding as Trustee
hereunder pursuant to Section 6.12 or any other applicable provision hereof.
"TRUSTEE FEE": As to any Payment Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated Principal
Balance with respect to such Payment Date.
"TRUSTEE FEE RATE": With respect to each Pledged Mortgage,
the per annum rate agreed upon in writing on or prior to the Closing Date by
the Trustee and the Issuer.
"TRUSTEE MORTGAGE FILE": With respect to each Pledged
Mortgage, the original documents and instruments relating thereto to be
retained in the custody and possession of the Trustee, as set forth and
enumerated in Section 2(a) of the Master Servicing Agreement.
"WITHDRAWAL DATE": The ___th day of each month, or if such
day is not a Business Day, the next preceding Business Day.
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ARTICLE II
THE BONDS
SECTION 2.01. FORMS GENERALLY.
The Bonds and the Trustee's certificate of authentication
shall be in substantially the form required by this Article II, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange on which
the Bonds may be listed, or as may, consistently herewith, be determined by the
officers executing such Bonds, as evidenced by their execution thereof. Any
portion of the text of any Bond may be set forth on the reverse thereof with an
appropriate reference on the face of the Bond.
The Definitive Bonds may be produced in any manner determined
by the officers executing such Bonds, as evidenced by their execution thereof;
provided, however, that in the event the Bonds are listed on any securities
exchange, the Bonds shall be produced in accordance with the rules of any
securities exchange on which the Bonds may be listed.
SECTION 2.02. FORMS OF BONDS AND CERTIFICATE OF AUTHENTICATION.
(a) The form of Bond which is a Senior Bond is attached
hereto as Exhibit II.
(b) The form of Bond which is a Class B-1 Bond is
attached hereto as Exhibit III.
(c) The form of Bond which is a Class B-2 Bond is
attached hereto as Exhibit IV.
(d) The form of the Trustee's certificate of
authentication is as follows:
"This is one of the Bonds referred to in the within mentioned
Indenture.
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-----------------------------------
as Trustee
By:
--------------------------------
Authorized Signatory"
(e) The form of assignment is as follows:
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"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 of Assignee)
______________________________________________________________________________
the within Bond of Sequoia Mortgage Trust 199_-_, and does hereby irrevocably
constitute and appoint __________ Attorney to transfer such Bond on the books
of the within named trust, with full power of substitution in the premises.
Dated: ____________________________________ ______________________________
Notice: The signature to this
assignment must correspond
with the name as written upon
the face of this Bond in
every particular without
alteration or enlargement or
any change whatever. The
signature must be guaranteed
by a member of a signature
guaranty medallion program.
Notarized or witnessed
signatures are not
acceptable."
[(f) The Bonds shall have a Statement of Insurance printed
thereon or attached thereto which essentially sets forth the terms of the Bond
Insurance Policy.]
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SECTION 2.03. BONDS ISSUABLE IN CLASSES; PROVISIONS WITH RESPECT TO
PRINCIPAL AND INTEREST PAYMENTS.
(a) General.
The Bonds shall be designated generally as the Sequoia
Mortgage Trust _________, "Collateralized Mortgage Bonds" of the Issuer. Each
Bond shall bear upon the face thereof the designation so selected for the Class
to which it belongs.
Bonds of each Class shall constitute Book Entry Bonds as
defined in Section 2.13 hereof. The aggregate principal amount of Bonds that
may be authenticated and delivered under the Indenture is unlimited.
All of the Bonds shall be issued in the appropriate forms
attached as Exhibits hereto with such additions and completions as are
appropriate for each such Class.
The Class A-1 Bonds shall constitute the sole Class of Senior
Bonds and the Class B-1 Bonds and the Class B-2 Bonds shall constitute the sole
Classes of Subordinated Bonds.
The final installments of principal of the Classes of Bonds
shall have the Stated Maturity specified above. The principal of each Bond
shall be payable in installments ending no later than the Stated Maturity of
the final installment of the principal thereof unless the unpaid principal of
such Bond becomes due and payable at an earlier date by declaration of
acceleration or call for redemption or otherwise. All payments made with
respect to any Bond shall be applied first to the interest then due and payable
on such Bond and then to the principal thereof.
(b) Payments of Principal of and Interest on the Bonds.
On each Payment Date, the Trustee shall withdraw the Bond
Payment Amount from the Distribution Account and apply such funds to payments
on the Bonds in the following order of priority and, in each case, to the
extent of funds remaining:
(i) to the Senior Bonds, an amount allocable to
interest equal to the Senior Interest Payment Amount for such Payment
Date;
(ii) to the Senior Bonds, an amount allocable to
principal equal to the Senior Principal Payment Amount for such
Payment Date;
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(iii) to the Class B-1 Bonds, an amount allocable to
interest equal to the Class B-1 Interest Payment Amount for such
Payment Date;
(iv) to the Class B-1 Bonds, an amount allocable to
principal equal to the Class B-1 Principal Payment Amount for such
Payment Date;
(v) to the Class B-2 Bonds, an amount allocable to
interest equal to the Class B-2 Interest Payment Amount for such
Payment Date; and
(vi) to the Class B-2 Bonds, an amount allocable to
principal to the Class B-2 Principal Payment Amount for such Payment
Date.
(c) Calculation of the Bond Interest Rate.
(i) The Bond Interest Rate for the Senior Bonds (the
"Senior Bond Interest Rate") and any Interest Accrual Period will
equal ______________;
(ii) The Bond Interest Rate for the Class B-1 Bonds (the
"Class B-1 Bond Interest Rate") and any Interest Accrual Period will
equal ___________________;
(iii) The Bond Interest Rate for the Class B-2 Bonds (the
"Class B-2 Bond Interest Rate") and any Interest Accrual Period will
equal _______________; and
(iv) The Senior Interest Payment Amount, the Class B-1
Interest Payment Amount and the Class B-2 Interest Payment Amount
shall each be calculated on the basis of a 360-day year of twelve
30-day months.
(d) Reduction of Interest Payment Amounts.
With respect to each Payment Date, the amounts referred to in
clause (i) of the definition of Senior Interest Payment Amount and clauses (i)
and (ii) of the definitions of Class B-1 Interest Payment Amount and Class B-2
Interest Payment Amount, as applicable, for such Payment Date shall be reduced
by the applicable Class' pro rata share (based on the Interest Payment Amount
for such Class before reduction pursuant to this Section 2.03(d)) of Net
Interest Shortfalls.
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(e) Pro Rata Payments.
All payments on the Bonds of any Class shall be made pro rata
among all Bonds of such Class.
(f) Payments to the Senior Bondholders provided for in
(b) of this Section 2.03 shall be paid, on each Payment Date after the
Subordinated Class Principal Amount and the Invested Amount have been reduced
to zero and where the Senior Interest Payment Amount and the Senior Principal
Payment Amount exceed the Available Funds, by the Bond Insurer.
SECTION 2.04. DENOMINATIONS.
Each Class of Book Entry Bonds shall be evidenced initially by
a single Bond representing the entire aggregate Class Principal Amount of such
Class of Bonds as of the Closing Date, beneficial ownership of which may be
held in denominations of $25,000 and increments of $1,000 in excess thereof for
all Bonds. All of the Book Entry Bonds shall be initially registered on the
Bond Register in the name of Cede & Co., the nominee of the Depository, and no
Beneficial Owner will receive a Definitive Bond representing such Beneficial
Owner's interest in the Book Entry Bonds, except in the event of Book Entry
Termination.
SECTION 2.05. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Bonds shall be executed by an Authorized Officer of the
Issuer. The signature of such officer on the Bonds may be manual or facsimile.
Bonds bearing the manual or facsimile signature of an
individual who was at any time an Authorized Officer shall bind the Issuer,
notwithstanding that such individual has ceased to hold such office prior to
the authentication and delivery of such Bonds or did not hold such office at
the date of such Bonds.
At any time and from time to time after the execution and
delivery of this Indenture, the Issuer may deliver Bonds executed on behalf of
the Issuer to the Trustee for
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authentication; and the Trustee shall authenticate and deliver such Bonds as in
this Indenture provided and not otherwise.
Each Bond authenticated on the Closing Date shall be dated the
Closing Date. All other Bonds which are authenticated after the Closing Date
for any other purpose hereunder shall be dated the date of their
authentication.
No Bond shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Bond a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or by any Authenticating Agent by the manual signature
of one of its authorized officers or employees, and such certificate upon any
Bond shall be conclusive evidence, and the only evidence, that such Bond has
been duly authenticated and delivered hereunder.
SECTION 2.06. TEMPORARY BONDS.
So long as the Book Entry Bonds are held by the Depository for
the Participants in book-entry form, they may be typewritten or in any other
form acceptable to the Issuer, the Trustee and the Depository. At any time
during which the Book Entry Bonds are not held by the Depository for the
Participants in book-entry form, the Definitive Bonds shall be lithographed or
printed with steel engraved borders.
Pending the preparation of Definitive Bonds, the Issuer may
execute, and upon Issuer Order the Trustee shall authenticate and deliver,
temporary Bonds which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Bonds in lieu of which they may be so issued and with such
variations as the officers executing such Bonds may determine, as evidenced by
their execution of such Bonds.
If temporary Bonds are issued, the Issuer will cause
definitive Bonds to be prepared without unreasonable delay. After the
preparation of definitive Bonds, the temporary Bonds shall be exchangeable for
definitive Bonds upon surrender of the temporary Bonds at the office or agency
of the Issuer to be maintained as provided in Section 3.02, without charge to
the
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Holder. Upon surrender or cancellation of any one or more temporary Bonds, the
Issuer shall execute and the Trustee shall authenticate and deliver and
exchange therefor a like principal amount of definitive Bonds of the same Class
and of authorized denominations. Until so exchanged, the temporary Bonds shall
in all respects be entitled to the same benefits under this Indenture as
Definitive Bonds of the same Class.
SECTION 2.07. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Issuer shall cause to be kept a register (the "Bond
Register") in which, subject to such reasonable regulations as it may
prescribe, the Issuer shall provide for the registration of Bonds and the
registration of transfers of Bonds. The Trustee is hereby initially appointed
"Bond Registrar" for the purpose of registering Bonds and transfers of Bonds as
herein provided. Upon any resignation of any Bond Registrar appointed by the
Issuer, the Issuer shall promptly appoint a successor or, in the absence of
such appointment, shall assume the duties of Bond Registrar.
At any time the Trustee is not also the Bond Registrar, the
Trustee shall be a co-Bond Registrar. The Issuer shall cause each co-Bond
Registrar to furnish the Bond Registrar, promptly after each authentication of
a Bond by it, appropriate information with respect thereto for entry by the
Bond Registrar into the Bond Register. If the Trustee shall at any time not be
authorized to keep and maintain the Bond Register, the Trustee shall have the
right to inspect such Bond Register at all reasonable times and to rely
conclusively upon a certificate of the Person in charge of the Bond Register as
to the names and addresses of the Holders of the Bonds and the principal
amounts and numbers of such Bonds so held.
Upon surrender for registration of transfer of any Bond at the
office or agency of the Issuer to be maintained as provided in Section 3.02,
the Issuer shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Bonds of
any authorized denominations and of a like aggregate principal amount and
Class.
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At the option of the Holder, Bonds may be exchanged for other
Bonds of any authorized denominations, and of a like aggregate initial
principal amount and Class, upon surrender of the Bonds to be exchanged at such
office or agency. Whenever any Bonds are so surrendered for exchange, the
Issuer shall execute, and the Trustee shall authenticate and deliver, the Bonds
which the Bondholder making the exchange is entitled to receive.
All Bonds issued upon any registration of transfer or exchange
of Bonds shall be the valid obligations of the Issuer, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Bonds
surrendered upon such registration of transfer or exchange.
Every Bond presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Bonds, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge as may be imposed in
connection with any registration of transfer or exchange of Bonds, other than
exchanges pursuant to Section 2.08 not involving any transfer.
SECTION 2.08. MUTILATED, DESTROYED, LOST OR STOLEN BONDS.
If (1) any mutilated Bond is surrendered to the Trustee or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Bond and (2) there is delivered to the Trustee such security or
indemnity as may be required by the Trustee to save the Issuer and the Trustee
harmless, then, in the absence of notice to the Issuer or the Trustee that such
Bond has been acquired by a bona fide purchaser, the Issuer shall execute and
upon its request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond or
Bonds of the same tenor, aggregate initial principal amount and Class bearing a
number not contemporaneously outstanding. If, after the delivery of such new
Bond, a bona fide purchaser of the original Bond in lieu of which such new Bond
was issued presents for payment such
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original Bond, the Issuer and the Trustee shall be entitled to recover such new
Bond from the person to whom it was delivered or any person taking therefrom,
except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expenses incurred by the Issuer or the Trustee in connection therewith. If
any such mutilated, destroyed, lost or stolen Bond shall have become or shall
be about to become due and payable, or shall have become subject to redemption
in full, instead of issuing a new Bond, the Issuer may pay such Bond without
surrender thereof, except that any mutilated Bond shall be surrendered.
Upon the issuance of any new Bond under this Section, the
Issuer may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Bond issued pursuant to this Section in lieu of any
destroyed, lost or stolen Bond shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Bond shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Bonds duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Bonds.
SECTION 2.09. PAYMENTS OF PRINCIPAL AND INTEREST.
(a) Each payment of principal of and interest on a Book
Entry Bond shall be paid to the Depository, which shall credit the amount of
such payments to the accounts of its Depository Participants in accordance with
its normal procedures. Each Depository Participant shall be responsible for
disbursing such payments to the Beneficial Owners of the Book Entry Bonds that
it represents and to each indirect participating brokerage firm (a "brokerage
firm" or "indirect participating firm") for which it acts as agent. Each
brokerage firm shall be responsible
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for disbursing funds to the Beneficial Owners of the Book Entry Bonds that it
represents. All such credits and disbursements are to be made by the Depository
and the Depository Participants in accordance with the provisions of the Bonds.
Neither the Trustee, the Bond Registrar nor the Issuer shall have any
responsibility for such credits and disbursements.
Each payment of principal of and interest on a Definitive Bond
shall be paid to the Person in whose name such Bond (or one or more Predecessor
Bonds) is registered at the close of business on the Record Date or Optional
Redemption Record Date, for such Payment Date or Optional Redemption Date, by
check mailed to such Person's address as it appears in the Bond Register on
such Record Date or the Optional Redemption Record Date, except for the final
installment of principal payable with respect to such Bond, which shall be
payable as provided in Section 2.09(b).
All payments of principal of and interest on the Bonds shall
be made only from the Trust Estate and any other assets of the Issuer, and each
Holder of the Bonds, by its acceptance of the Bonds, agrees that it will have
recourse solely against such Trust Estate and such other assets of the Issuer
and that neither the Owner Trustee in its individual capacity, the Owner nor
any of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for any amounts
payable, or performance due, under the Bonds or this Indenture.
(b) All reductions in the principal amount of a Bond (or
one or more Predecessor Bonds) effected by payments of installments of
principal made on any Payment Date or Optional Redemption Date shall be binding
upon all Holders of such Bond and any Bond issued upon transfer thereof or in
exchange therefor or in lieu thereof. The final installment of principal of
each Bond (including the Redemption Price of any Bond called for optional
redemption, if such optional redemption will result in payment of the entire
unpaid principal amount of any such Bond) shall be payable only upon
presentation and surrender thereof on or after the Payment Date or Optional
Redemption Date therefor at the office or agency of the Issuer maintained by it
for such purpose in the Borough of Manhattan, the City of New York, State of
New York, pursuant to Section 3.02. Whenever the Trustee
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expects that the entire remaining unpaid principal amount of any Bond will
become due and payable on the next Payment Date, it shall, no later than five
days prior to such Payment Date, mail or cause to be mailed to the Holder of
each Bond as of the close of the business on such otherwise applicable Record
Date a notice to the effect that:
(i) the Trustee expects that funds sufficient to pay
such final installment will be available in the Distribution Account
on such Payment Date; and
(ii) if such funds are available, such final
installment will be payable on such Payment Date, but only upon
presentation and surrender of such Bond at the office or agency of the
Issuer maintained for such purpose pursuant to Section 3.02 (the
address of which shall be set forth in such notice).
Notices in connection with optional redemptions of Bonds shall
be mailed to Holders in accordance with Section 10.02.
SECTION 2.10. PERSONS DEEMED OWNERS.
Prior to due presentment for registration of transfer of any
Bond, the Issuer, [the Bond Insurer], the Trustee, any Agent and any other
agent of the Issuer, [the Bond Insurer], or the Trustee shall treat the Person
in whose name any Bond is registered as the owner of such Bond (a) on the
applicable Record Date or Optional Redemption Record Date for the purpose of
receiving payments of the principal of, and interest on, such Bond and (b) on
any other date for all other purposes whatsoever, whether or not such Bond is
overdue, and neither the Issuer, [the Bond Insurer], the Trustee, any Agent nor
any other agent of the Issuer or the Trustee shall be affected by notice to the
contrary.
SECTION 2.11. CANCELLATION.
All Bonds surrendered for payment, registration of transfer,
exchange or redemption shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Issuer may at any time
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deliver to the Trustee for cancellation any Bond previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner
whatsoever, and all Bonds so delivered shall be promptly cancelled by the
Trustee. No Bonds shall be authenticated in lieu of or in exchange for any
Bonds cancelled as provided in this Section, except as expressly permitted by
this Indenture. All cancelled Bonds held by the Trustee shall be held by the
Trustee in accordance with its standard retention policy, unless the Issuer
shall direct by an Issuer Order that they be destroyed or returned to it.
SECTION 2.12. AUTHENTICATION AND DELIVERY OF BONDS.
The Bonds may be executed by the Issuer and delivered to the
Trustee for authentication, and thereupon the same shall be authenticated and
delivered by the Trustee, upon Issuer Request and upon receipt by the Trustee
of the following:
(a) an Issuer Order authorizing the execution,
authentication and delivery of the Bonds and specifying the Classes,
the Stated Maturity of the final installment of principal, the
principal amount and the Bond Interest Rate, of each Class of such
Bonds to be authenticated and delivered;
(b) an Issuer Order authorizing the execution and
delivery of this Indenture;
(c) One or more Opinions of Counsel addressed to the
Trustee, complying with the requirements of Section 11.01, reasonably
satisfactory in form and substance to the Trustee, and to the effect
that:
(i) all instruments furnished to the Trustee by
the Issuer pursuant to this Section 2.12 in connection with
the Bonds conform in all material respects to the requirements
of this Indenture and constitute all the documents required to
be delivered under this Section 2.12 for the Trustee to
authenticate and deliver the Bonds (counsel rendering such
opinion or opinions need not express any opinion as to whether
the Pledged Mortgages Granted to the Trustee as security
conform to the requirements of this Indenture);
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(ii) all conditions precedent provided for in this
Indenture relating to the authentication and delivery of the
Bonds have been complied with in all material respects
(counsel rendering such opinion or opinions need not express
any opinion as to the matters set forth in the parenthetical
clause at the end of paragraph (i) above or as to whether the
amount of cash or other collateral, if any, delivered to the
Trustee pursuant to any subsection of this Section 2.12 is the
requisite amount);
(iii) the Bank has corporate power to execute and
deliver the Deposit Trust Agreement, the Deposit Trust
Agreement authorizes the Issuer to execute and deliver the
Bonds and this Indenture, and to issue the Bonds, and the
Owner Trustee has duly taken all necessary action under the
Deposit Trust Agreement for those purposes;
(iv) the Issuer is a statutory business trust
created under the laws of the State of Delaware and duly
authorized by the Deposit Trust Agreement;
(v) assuming due authorization, execution and
delivery thereof by the Trustee, this Indenture will be the
legally valid and binding obligation of the Issuer,
enforceable against the Issuer in accordance with its terms,
except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws and equitable
principles relating to or limiting creditors' rights generally
and such counsel need express no opinion as to the
availability of equitable remedies;
(vi) the Bonds, when issued, delivered,
authenticated and paid for, will be the legally valid and
binding obligations of the Issuer, entitled to the benefits of
this Indenture, and enforceable against the Issuer in
accordance with their terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws and equitable principles relating to or limiting
creditors' rights generally and such counsel need express no
opinion as to the availability of equitable remedies;
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(vii) assuming due execution and delivery thereof
by the Trustee and by the Master Servicer, the Master
Servicing Agreement constitutes the legally valid and binding
obligation of the Master Servicer and of the Issuer,
respectively, enforceable against the Master Servicer and the
Issuer in accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or
similar laws and equitable principles relating to or limiting
creditors' rights generally and such counsel need express no
opinion as to the availability of equitable remedies;
(viii) the Mortgage Notes included in the Original
Pledged Mortgages have been duly and validly assigned,
delivered and pledged to the Trustee to the extent
contemplated by this Indenture, and this Indenture together
with such assignment, delivery and pledge to the Trustee,
creates as security for the Bonds a valid and perfected
security interest of first priority in such Mortgage Notes,
except to the extent limited in the event (A) the Trustee
relinquishes possession of any such Mortgage Note, (B) the
Depositor, the Issuer, the Master Servicer or any Servicer
transfers any such Mortgage Note or the related Mortgage to a
bona fide purchaser for value without notice prior to
notification to the Mortgagor of the assignment to the Trustee
of such Mortgage Note or due recordation of the Assignment to
the Trustee of the related Mortgage or (C) the Depositor, the
Issuer, the Master Servicer or any Servicer discharges any
such Mortgage Note or the related Mortgage prior to such
notification or recordation; the Mortgages delivered to the
Trustee with the Original Mortgage Notes will continue to
secure the Mortgage Notes included in the Original Pledged
Mortgages, as though, and to the same extent as if, such
Mortgage Notes had not been assigned, delivered and pledged;
and it is not necessary to record or file this Indenture or to
take any other action, except as set forth above, in order to
make effective the lien and security interest created by this
Indenture in the Mortgage Notes included in the Original
Pledged Mortgages;
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(ix) this Indenture has been duly qualified under
the TIA; and
(x) the Issuer's registration statement with
respect to the Bonds has become effective under the Securities
Act of 1933, as amended, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of such
registration statement has been issued and is in effect under
such act and no proceedings for that purpose have been
instituted or are pending under such act.
In rendering the opinions set forth above, such counsel may
rely upon officers' certificates of the Depositor, the Owner Trustee,
the Issuer, any Servicer, the Master Servicer and the Trustee, without
independent confirmation or verification, as to the following matters
and as to such other matters as shall be reasonably acceptable to the
Trustee: (A) the accuracy of the descriptions of the Mortgage Notes
included in the Original Pledged Mortgages and the conformity thereof
to the descriptions in this Indenture, (B) the ownership by Sequoia
Mortgage Funding Corporation, the Depositor and the Issuer of such
Mortgage Notes free and clear of any lien, claim, charge or interest
of any kind of any third party, (C) the physical delivery of such
Mortgage Notes to the Trustee, (D) the absence of any evidence
appearing on any such Mortgage Note of any right or interest
inconsistent with the opinions expressed, and (E) the form of
endorsement approved by such counsel having been made on each such
Mortgage Note. In rendering the opinions set forth above, such counsel
need express no opinion as to (A) the perfection of the security
interest in any collateral not governed by Article 9 of the Uniform
Commercial Code of the State of California, (B) the existence of, or
the priority of the security interest created by the Indenture
against, any liens or other interests which arise by operation of law
and which do not require any filing or similar action in order to take
priority over a perfected security interest or (C) the priority of the
security interest created by this Indenture with respect to any claim
or lien in favor of the United States or any agency or instrumentality
thereof (including federal tax liens and liens arising under Title IV
of the Employee Retirement Income Security Act of 1974, as amended).
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(d) an Officers' Certificate complying with the
requirements of Section 11.01 and stating that:
(i) the Issuer is not in Default under this
Indenture and the issuance of the Bonds will not result in any
breach of any of the terms, conditions or provisions of, or
constitute a default under, the Deposit Trust Agreement or any
indenture, mortgage, deed of trust or other agreement or
instrument to which the Issuer is a party or by which it is
bound, or any order of any court or administrative agency
entered in any proceeding to which the Issuer is a party or by
which it may be bound or to which it may be subject, and that
all conditions precedent provided in this Indenture relating
to the authentication and delivery of the Bonds have been
complied with;
(ii) the Issuer is the owner of each Original
Pledged Mortgage, free and clear of any lien, security
interest or charge, has not assigned any interest or
participation in any such Pledged Mortgage (or, if any such
interest or participation has been assigned, it has been
released) and has the right to Grant each such Original
Pledged Mortgage to the Trustee;
(iii) the information set forth in the Pledged
Mortgage Schedule attached as Schedule A to this Indenture is
true and correct in all material respects as of the Closing
Date;
(iv) the Issuer has Granted to the Trustee all of
its right, title and interest in each Pledged Mortgage;
(v) as of the Closing Date, no lien in favor of
the United States described in Section 6321 of the Code, or
lien in favor of the Pension Benefit Guaranty Corporation
described in Section 4068(a) of the Employee Retirement Income
Security Act of 1974, as amended, has been filed as described
in subsections 6323(f) and 6323(g) of the Code upon any
property belonging to the Issuer; and
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(vi) attached thereto is a true and correct copy
of letters signed by the Rating Agencies confirming that the
Senior Bonds have been rated AAA by [ ] and [ ] and that
the Class B-1 Bonds have been rated [ ] by [ ].
(e) An executed counterpart of the Master Servicing
Agreement.
(f) A certificate of one or more Independent Persons, whose
regular business activity includes valuing securities and mortgage
loans similar to the Original Pledged Mortgages, of the fair value of
the Original Pledged Mortgages, which fair value, as so certified,
will be equal to or in excess of the sum of the Original Senior Class
Principal Amount and the Original Subordinated Class Principal Amount,
and which determination of fair value shall be as of a date not
earlier than three Business Days prior to the Closing Date.
SECTION 2.13. MATTERS RELATING TO BOOK ENTRY BONDS.
(a) If the Bonds are listed on any stock exchange at any
time after the Closing Date, the Issuer shall, if required as a condition to
such listing, prepare and deliver to the Trustee Bonds in substantially the
same form as the Bonds issued on the Closing Date, but with such other
additional features and such modifications, if any, as shall be necessary or
appropriate in order to comply with the requirements of such stock exchange for
the listing of the Bonds on such exchange. Bonds in the form issued on the
Closing Date shall thereafter be exchangeable for Bonds in such revised form to
the same extent as temporary Bonds are exchangeable for Definitive Bonds
pursuant to Section 2.06.
(b) Each Class of Book Entry Bonds will be issued in the
form of a single typewritten bond certificate (each, a "DTC Certificate") to be
delivered to the Depository by the Issuer substantially in the respective forms
for each such Class attached as Exhibits hereto. The DTC Certificate for each
such Class of Book Entry Bonds shall be initially registered on the
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Bond Register in the name of the nominee of such Depository and no Beneficial
Owner will receive a certificate representing its interests in any Class of
Book Entry Bonds except in the event that the Trustee issues Definitive Bonds,
as provided in Section 2.14. Pursuant to the Letter Agreement, while each Class
of the Book Entry Bonds remains outstanding and such Depository remains the
Holder, it will agree to make book-entry transfers among the Depository
Participants and receive and transmit payments of principal and interest on the
Book Entry Bonds until and unless the Trustee authenticates and delivers
Definitive Bonds to the Beneficial Owners of the Book Entry Bonds or their
nominees, as described in Section 2.14.
(c) Prior to Book Entry Termination, each Class of Book
Entry Bonds will remain registered in the name of the Depository or its nominee
and at all times: (i) registration of the Book Entry Bonds may not be
transferred by the Trustee or the Bond Registrar except to another Depository;
(ii) the Depository shall maintain book-entry records with respect to the
Beneficial Owners and with respect to ownership and transfers of such Book
Entry Bonds; (iii) ownership and transfers of registration of the Book Entry
Bonds on the books of the Depository shall be governed by applicable rules
established by the Depository; (iv) the Depository may collect its usual and
customary fees, charges and expenses from its Depository Participants; (v) the
Trustee shall deal with the Depository, Depository Participants and interest
participating firms as representatives of the Beneficial Owners of the Book
Entry Bonds for purposes of exercising the rights of holders under the
Indenture, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Beneficial Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants
with respect to indirect participating firms and Persons shown on the books of
such indirect participating firms as direct or indirect Beneficial Owners.
All transfers by Beneficial Owners of Book Entry Bonds shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Beneficial Owner. Each
Depository Participant shall only
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transfer Book Entry Bonds of Beneficial Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures.
SECTION 2.14. TERMINATION OF BOOK ENTRY SYSTEM.
(a) The book entry system through the Depository with
respect to any Class of Book Entry Bonds may be terminated upon the happening
of any of the following:
(i) The Depository or the Issuer advises the
Trustee in writing that the Depository is no longer willing or
able to properly discharge its responsibilities as Depository
and the Issuer is unable to locate a qualified successor
clearing agency satisfactory to the Trustee and the Issuer;
(ii) The Issuer at its option advises the Trustee
in writing that it elects to terminate the book entry system
through the Depository; or
(iii) After the occurrence of an Event of Default
(at which time the Trustee shall use all reasonable efforts to
promptly notify each Beneficial Owner through the Depository
of such Event of Default when such notice shall be given
pursuant to Section 6.02), the Beneficial Owners of a majority
in aggregate Class Principal Amount of the Book Entry Bonds
together advise the Trustee and the Depository through the
Depository Participants in writing that the continuation of a
book entry system through the Depository is no longer in the
best interests of the Beneficial Owners.
(b) Upon the occurrence of any event described in
subsection (a) above, the Trustee shall notify all Beneficial Owners, through
the Depository, of the occurrence of any such event and of the availability of
Definitive Bond certificates to Beneficial Owners requesting the same, in an
aggregate Class Principal Amount representing the interest of each, making such
adjustments and allowances as it may find necessary or appropriate as to
accrued interest, if any, and previous calls for redemption. Definitive Bond
certificates shall be issued
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only upon surrender to the Trustee of the Book Entry Bond by the Depository,
accompanied by registration instructions for the Definitive Bond certificates.
Neither the Issuer nor the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon issuance of the Definitive Bond
certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall cease to be applicable and the provisions
relating to Definitive Bonds shall be applicable.
SECTION 2.15. ADDITIONAL BONDS.
Notwithstanding the requirements of Article II hereof, the
Issuer may without the consent of any Bondholder, pledge additional Mortgage
Collateral to the Trust Estate subsequent to the issuance of the Bonds and may
issue Additional Bonds of any Class then Outstanding or of one or more
additional Classes. The Issuer's right to issue any Additional Bonds is subject
to receipt of written confirmation from each Rating Agency to the effect that
the issuance of such Additional Bonds will not adversely affect the rating of
any Outstanding Bonds of such Series and to satisfaction of the conditions
precedent for authentication and delivery of Bonds by the Trustee in Section
2.12.
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ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT OF BONDS.
The Issuer will pay or cause to be duly and punctually paid
the principal of, and interest on, the Bonds in accordance with the terms of
the Bonds and this Indenture.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer will maintain in the Borough of Manhattan, the City
of New York, the State of New York an office or agency where Bonds may be
presented or surrendered for payment or may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Bonds and this Indenture may be served. The Issuer will give
prompt written notice to the Trustee of the location and any change in the
location, of such office or agency. Until written notice of any change in the
location of such office or agency is delivered to the Trustee or if at any time
the Issuer shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, Bonds may be so presented
and surrendered, and such notices and demands may be made or served, at the
office of ___________________________________________ at
_________________________________________ ___________________________________.
The Issuer may also from time to time designate one or more
other offices or agencies (in or outside the City of New York) where the Bonds
may be presented or surrendered for any or all such purposes and may from time
to time rescind such designations; provided, however, that (i) no such
designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York, the State of New York, for the purposes set forth in the
preceding paragraph, (ii) presentations or surrenders of Bonds for payment may
be made only in the City of New York, the State of New York or at the Corporate
Trust Office of the Trustee and (iii) any designation of an office or agency
for payment of Bonds shall be subject to Section 3.03. The Issuer will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
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SECTION 3.03. MONEY FOR BOND PAYMENTS TO BE HELD IN TRUST.
All payments of amounts due and payable with respect to any
Bonds which are to be made from amounts withdrawn from the Distribution Account
pursuant to Section 8.02(c) or Section 5.08 shall be made on behalf of the
Issuer by the Trustee or by a Paying Agent, and no amounts so withdrawn from
the Distribution Account for payments of Bonds shall be paid over to the Issuer
under any circumstances except as provided in this Section 3.03 or in Section
5.08.
If the Issuer shall have a Paying Agent that is not also the
Bond Registrar, it shall furnish, or cause the Bond Registrar to furnish, no
later than
(a) the fifth calendar day after each Record Date, and
(b) the first Business Day after the Optional Redemption
Record Date applicable to the Optional Redemption Date,
a list, in such form as such Paying Agent may reasonably require, of the names
and addresses of the Holders of Bonds and of the number of Individual Bonds of
each Class held by each such Holder.
Whenever the Issuer shall have a Paying Agent other than the
Trustee, it will, on or before the Business Day next preceding each Payment
Date and Optional Redemption Date, direct the Trustee to deposit with such
Paying Agent an aggregate sum sufficient to pay the amounts then becoming due
(to the extent funds are then available for such purpose in the Distribution
Account), such sum to be held in trust for the benefit of the Persons entitled
thereto. Any moneys deposited with a Paying Agent in excess of an amount
sufficient to pay the amounts then becoming due on the Bonds with respect to
which such deposit was made shall, upon Issuer Order, be paid over by such
Paying Agent to the Trustee for application in accordance with Article VIII.
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Any Paying Agent shall be appointed by Issuer Order. The
Issuer shall not appoint any Paying Agent which is not, at the time of such
appointment, a depository institution or trust company whose obligations would
be Permitted Investments pursuant to clause (iv) of the definition of the term
"Permitted Investments". The Issuer will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee (and if the Trustee acts as Paying
Agent, it hereby so agrees), subject to the provisions of this Section, that
such Paying Agent will:
(1) allocate all sums received for payment to the Holders
of Bonds on each Payment Date and Optional Redemption Date among such
Holders in the proportion specified in the applicable Payment Date
Statement, as the case may be, in each case to the extent permitted by
applicable law;
(2) hold all sums held by it for the payment of amounts
due with respect to the Bonds in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(3) if such Paying Agent is not the Trustee, immediately
resign as a Paying Agent and forthwith pay to the Trustee all sums
held by it in trust for the payment of the Bonds if at any time it
ceases to meet the standards set forth above required to be met by a
Paying Agent at the time of its appointment;
(4) if such Paying Agent is not the Trustee, give the
Trustee notice of any Default by the Issuer (or any other obligor upon
the Bonds) in the making of any payment required to be made with
respect to any Bonds for which it is acting as Paying Agent;
(5) if such Paying Agent is not the Trustee, at any time
during the continuance of any such Default, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust
by such Paying Agent; and
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(6) comply with all requirements of the Code, and all
regulations thereunder, with respect to the withholding from any
payments made by it on any Bonds of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting
requirements in connection therewith; provided, however, that with
respect to withholding and reporting requirements applicable to
original issue discount (if any) on any Class of Bonds, the Issuer has
provided the calculations pertaining thereto to the Trustee.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or any other purpose, by Issuer
Order direct any Paying Agent, if other than the Trustee, to pay to the Trustee
all sums held in trust by such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Subject to applicable escheat laws, any money held by the
Trustee or any Paying Agent in trust for the payment of any amount due with
respect to any Bond and remaining unclaimed for six years after such amount has
become due and payable to the Holder of such Bond shall be discharged from such
trust and, upon its written request, paid to the Issuer; and the Holder of such
Bond shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Trustee or such Paying Agent with respect
to such trust money shall thereupon cease. The Trustee may, but shall not be
required to, adopt and employ, at the expense of the Issuer, any reasonable
means of notification of such repayment (including, but not limited to, mailing
notice of such repayment to Holders whose Bonds have been called but have not
been surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Trustee or any
Agent, at the last address of record for each such Holder).
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SECTION 3.04. CORPORATE EXISTENCE OF OWNER TRUSTEE.
(a) Subject to subsections (b) and (c) below, the Owner
Trustee will keep in full effect its existence, rights and franchises as a bank
and trust company under the laws of the state of its incorporation.
(b) Any corporation into which the Owner Trustee may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Owner Trustee shall be a party, 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, anything herein, or in any agreement relating to such merger or
consolidation, by which any such Owner Trustee may seek to retain certain
powers, rights and privileges therefore obtaining for any period of time
following such merger or consolidation, to the contrary notwithstanding.
(c) Any successor to the Owner Trustee appointed pursuant
to Section 10.01 of the Deposit 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.
(d) Upon any consolidation or merger of or other
succession to the Owner Trustee in accordance with this Section 3.04, the
Person formed by or surviving such consolidation or merger (if other than the
Issuer) or the Person succeeding to the Owner Trustee under the Deposit Trust
Agreement may exercise every right and power of the Owner Trustee, on behalf of
the Issuer, under this Indenture with the same effect as if such Person had
been named as the Owner Trustee herein.
SECTION 3.05. PROTECTION OF TRUST ESTATE.
(a) 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 as may be necessary or advisable
to:
(i) Grant more effectively all or any portion of the
Trust Estate;
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(ii) maintain or preserve the lien of this Indenture or
carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity
of any Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Documents; or
(v) preserve and defend title to the Trust Estate and
the rights of the Trustee, and of the Bondholders, in the Pledged
Mortgages and the other property held as part of the Trust Estate
against the claims of all Persons and parties.
The Issuer hereby designates the Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Section 3.05; provided, however,
that such designation shall not be deemed to create a duty in the Trustee to
monitor the compliance of the Issuer with the foregoing covenants; and provided
further, however, that the duty of the Trustee to execute any instrument
required pursuant to this Section 3.05 shall arise only if the Trustee has
knowledge pursuant to Section 6.01(d) of the occurrence of a failure of the
Issuer to comply with provisions of this Section 3.05.
(b) Except as permitted by Section 8.08, the Trustee
shall not remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction
in which it was held at the date of the most recent Opinion of Counsel
delivered pursuant to Section 3.06 (or from the jurisdiction in which it was
held, or to which it is intended to be removed, as described in the Opinion of
Counsel delivered at the Closing Date pursuant to Section 2.12(c), if no
Opinion of Counsel has yet been delivered pursuant to Section 3.06) or cause or
permit ownership or the pledge of any portion of the Trust Estate that consists
of book-entry securities to be recorded on the books of a Person located in a
different jurisdiction from the jurisdiction in which such ownership or pledge
was recorded at such time unless the Trustee shall have first received an
Opinion of Counsel to the effect that the lien and security interest created by
this Indenture
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with respect to such property will continue to be maintained after giving
effect to such action or actions.
SECTION 3.06. OPINIONS AS TO TRUST ESTATE.
On or before February 15 in each calendar year, beginning with
[the first calendar year commencing more than three months after the Closing
Date, the Issuer shall furnish to the Trustee an Opinion of Counsel reasonably
satisfactory in form and substance to the Trustee either stating that, in the
opinion of such counsel, such action has been taken as is necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion
of Counsel shall also describe all such actions, if any, that will, in the
opinion of such counsel, be required to be taken to maintain the lien and
security interest of this Indenture with respect to the Trust Estate until May
15 in the following calendar year.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; MASTER SERVICING AGREEMENT.
(a) The Issuer shall punctually perform and observe all
of its obligations and agreements contained in the Deposit Trust Agreement. The
Issuer and the Trustee shall punctually perform and observe all of their
respective obligations and agreements contained in the Master Servicing
Agreement.
(b) The Issuer shall not take any action and will use its
reasonable good faith efforts not to permit any action to be taken by others
that would release any Person from any of such Person's covenants or
obligations under any of the Mortgage Documents or under any instrument
included in the Trust Estate, or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the Mortgage Documents, except as
expressly provided or permitted in this Indenture and the Master Servicing
Agreement or such Mortgage Document or other instrument or unless such action
will not adversely affect the interests of the Holders of the Bonds.
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(c) The Issuer shall monitor the performance of the
Master Servicer under the Master Servicing Agreement, and shall use its
reasonable good faith efforts to cause the Master Servicer duly and punctually
to perform all of its duties and obligations thereunder. Upon the occurrence of
a Servicing Default of which an Authorized Officer of the Issuer has actual
knowledge under the Master Servicing Agreement, the Issuer shall promptly
notify the Trustee thereof, and shall specify in such notice the action, if
any, the Issuer is taking in respect of such Servicing Default. So long as any
such Servicing Default shall be continuing, the Trustee may (i) terminate all
of the rights and powers of the Master Servicer pursuant to the applicable
provisions of the Master Servicing Agreement; (ii) exercise any rights it may
have to enforce the Master Servicing Agreement against the Master Servicer;
and/or (iii) waive any such Servicing Default under the Master Servicing
Agreement or take any other action with respect to such Servicing Default as is
permitted thereunder.
(d) Upon any termination by the Trustee of the Master
Servicer's rights and powers pursuant to the Master Servicing Agreement, the
rights and powers of the Master Servicer with respect to the Pledged Mortgages
shall vest in the Trustee and the Trustee shall be the successor in all
respects to the Master Servicer in its capacity as Master Servicer with respect
to such Pledged Mortgages under the Master Servicing Agreement, until the
Trustee shall have appointed, with the consent of the Issuer, such consent not
to be unreasonably withheld, and the Rating Agencies, and in accordance with
the applicable provisions of the Master Servicing Agreement a new FNMA- or
FHLMC-approved Person to serve as successor to the Master Servicer. With such
consent, the Trustee may elect to continue to serve as successor Master
Servicer under the Master Servicing Agreement. Upon appointment of a successor
Master Servicer, the Trustee and such successor Master Servicer shall enter
into a master servicing agreement in a form substantially similar to the Master
Servicing Agreement. In connection with any such appointment, the Trustee may
make such arrangements for the compensation of such successor as it and such
successor shall agree, but in no event shall such compensation of any successor
Master Servicer (including the Trustee) be in excess of that payable to the
Master Servicer under the Master Servicing Agreement.
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(e) Upon any termination of the Master Servicer's rights
and powers pursuant to the Master Servicing Agreement, the Trustee shall
promptly notify the Issuer and the Rating Agencies, specifying in such notice
that the Trustee or any successor Master Servicer, as the case may be, has
succeeded the Master Servicer under the Master Servicing Agreement, which
notice shall also specify the name and address of any such successor Master
Servicer.
SECTION 3.08. INVESTMENT COMPANY ACT.
The Issuer shall at all times conduct its operations so as not
to be subject to the Investment Company Act of 1940, as amended (or any
successor statute), and the rules and regulations thereunder.
SECTION 3.09. NEGATIVE COVENANTS.
The Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate except as expressly permitted by this
Indenture or the Master Servicing Agreement;
(b) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Bonds by reason of the
payment of any taxes levied or assessed upon any portion of the Trust
Estate;
(c) engage in any business or activity other than in
connection with, or relating to, the issuance of the Bonds and the
Investor Certificate pursuant to this Indenture and the Deposit Trust
Agreement, respectively, or amend Section 2.03 or Section 11.01 of the
Deposit Trust Agreement as in effect on the Closing Date without, in
each case, the consent of the Holders of 66 2/3% of the aggregate
Class Principal Amount of the Bonds then Outstanding;
(d) incur any indebtedness or assume or guaranty any
indebtedness of any Person, except for such indebtedness as may be
incurred by the Issuer in connection with the issuance of the Bonds
pursuant to this Indenture;
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(e) dissolve or liquidate in whole or in part; or
(f) (i) permit the validity or effectiveness of this
Indenture or any Grant to be impaired, or permit the lien of this
Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations under this Indenture, except as may be expressly permitted
hereby, (ii) permit any lien, charge, security interest, mortgage or
other encumbrance (other than the lien of this Indenture, the lien
created by Section 8.04 of the Deposit Trust Agreement, as in effect
on the Closing Date, or any Permitted Encumbrance) to be created on or
extended to or otherwise arise upon or burden the Trust Estate or any
part thereof or any interest therein or the proceeds thereof or (iii)
permit the lien of this Indenture not to constitute a valid perfected
first priority security interest in the Trust Estate.
SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE.
On or before 120 days after the end of the first fiscal year
of the Issuer which ends more than three months after the Closing Date, and
each fiscal year thereafter, the Issuer shall deliver to the Trustee a written
statement, signed by an Authorized Officer, stating that:
(1) a review of the fulfillment by the Issuer during such
year of its obligations under this Indenture has been made under such
officer's supervision; and
(2) to the best of such officer's knowledge, based on
such review, the Issuer has fulfilled all of its obligations under
this Indenture throughout such year, or, if there has been a Default
in the fulfillment of any such obligation, specifying each such
Default known to such officer and the nature and status thereof.
SECTION 3.11. RECORDING OF ASSIGNMENTS.
The Issuer shall cause the Assignments of the Pledged
Mortgages securing the Bonds to be duly recorded in the manner specified in
Section 2(a)(i) of the Master Servicing Agreement.
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If the Issuer fails to cause the Assignment to be recorded within the time
limit provided thereunder, the Issuer shall cause the Master Servicer to
purchase such corresponding Pledged Mortgage pursuant to Section 8.04 and the
applicable provisions of the Master Servicing Agreement.
SECTION 3.12. LIMITATION OF LIABILITY OF .
It is expressly understood and agreed by the parties hereto
that (a) this Indenture is executed and delivered by _________________________,
not individually or personally but solely as owner trustee of Sequoia Mortgage
Trust 199_-_ under the Deposit Trust Agreement, in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Issuer is made and
intended not as personal representations, undertakings and agreements by
________________________, but is made and intended for the purpose for binding
only the Issuer, (c) nothing herein contained shall be construed as creating
any liability on ___ _____________________, other than any liability arising
out of its gross negligence, bad faith or wilful misconduct, and (d) under no
circumstances shall ________________________ be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer under this Indenture or the other Operative
Agreements.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE.
Whenever the following conditions shall have been satisfied:
(1) either
(A) all Bonds theretofore authenticated and
delivered (other than (i) Bonds which have been destroyed,
lost or stolen and which have been replaced or paid as
provided in Section 2.08, and (ii) Bonds for whose payment
money has theretofore been deposited in trust and thereafter
repaid to the Issuer, as provided in Section 3.03) have been
delivered to the Trustee for cancellation; or
(B) all Bonds not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the
Stated Maturity of the final installment of the
principal thereof within one year, or
(iii) are to be called for redemption
within one year under irrevocable arrangements
satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the
expense, of the Issuer,
and the Issuer, in the case of clauses (B)(i), (B)(ii) or (B)(iii)
above, has deposited or caused to be deposited with the Trustee, in
trust for such purpose, an amount sufficient to pay and discharge the
entire indebtedness on such Bonds not theretofore delivered to the
Trustee for cancellation, for principal and interest to the Stated
Maturity of their entire unpaid principal amount or to the applicable
Redemption Date, as the case may be, and in the case of
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Bonds which were not paid at the Stated Maturity of their entire
unpaid principal amount, for all overdue principal and all interest
payable on such Bonds to the next succeeding Payment Date therefor;
(2) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer; and
(3) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel reasonably satisfactory in form
and substance to the Trustee each stating that all conditions
precedent herein providing for the satisfaction and discharge of this
Indenture have been complied with;
then, upon Issuer Request, this Indenture and the lien, rights and interests
created hereby shall cease to be of further effect, and the Trustee and each
co-trustee and separate trustee, if any, then acting as such hereunder shall,
at the expense of the Issuer, execute and deliver all such instruments as may
be necessary to acknowledge the satisfaction and discharge of this Indenture
and shall pay, or assign or transfer and deliver, to the Issuer or upon Issuer
Order all Pledged Mortgages, cash, securities and other property held by it as
part of the Trust Estate remaining after satisfaction of the conditions set
forth in clauses (1) and (2) above.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Issuer to the Trustee under Section 6.07, the
obligations of the Trustee to the Issuer and the Holders of Bonds under Section
3.03, the obligations of the Trustee to the Holders of Bonds under Section 4.02
and the provisions of Article II with respect to lost, stolen, destroyed or
mutilated Bonds, registration of transfers of Bonds and rights to receive
payments of principal of, and interest on, the Bonds shall survive.
SECTION 4.02. APPLICATION OF TRUST MONEY.
All money deposited with the Trustee pursuant to Sections 3.03
and 4.01 shall be held in trust and applied by it, in accordance with the
provisions of the Bonds and this Indenture, to the payment, either directly or
through any Paying Agent, as the Trustee may determine, to the Persons entitled
thereto, of the principal and interest for whose payment such money has been
deposited with the Trustee.
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ARTICLE V
DEFAULTS AND REMEDIES
SECTION 5.01. EVENT OF DEFAULT.
"Event of Default", wherever used herein, means, with respect
to Bonds issued hereunder, any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(1) if the Issuer shall
(A) default in the payment when and as due of any
installment of principal of or interest on any Bond, or
(B) default in the payment of the Redemption
Price of any Bond which has been called for optional
redemption pursuant to Article X;
(2) if the Issuer shall breach, or default in the due
observance, of any one or more of the covenants set forth in clauses
(a) through (e) of Section 3.09;
(3) if the Issuer shall breach, or default in the due
observance or performance of, any other of its covenants in this
Indenture, and such Default shall continue for a period of 30 days
after there shall have been given, by registered or certified mail, to
the Issuer by the Trustee, or to the Issuer and the Trustee [by the
Bond Insurer, or, during the existence of a Bond Insurer Default] by
the Holders of Bonds representing more than 50% of the aggregate Class
Principal Amount of the Controlling Class, a written notice specifying
such Default and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder;
(4) if any representation or warranty of the Issuer made
in this Indenture or any certificate or other writing delivered
pursuant hereto or in connection herewith shall prove to be incorrect
in any material respect as of the time
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when the same shall have been made and, within 30 days after there
shall have been given, by registered or certified mail, written notice
thereof to the Issuer by the Trustee, or to the Issuer and the Trustee
by the Holders of Bonds representing more than 50% of the aggregate
Class Principal Amount of the Controlling Class, the circumstance or
condition in respect of which such representation or warranty was
incorrect shall not have been eliminated or otherwise cured;
(5) the entry of a decree or order for relief by a court
having jurisdiction in respect of the Issuer in an involuntary case
under the federal bankruptcy laws, as now or hereafter in effect, or
any other present or future federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or of
any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer and the continuance of any
such decree or order unstayed and in effect for a period of 60
consecutive days; or
(6) the commencement by the Issuer of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or
any other present or future federal or state bankruptcy, insolvency or
similar law, or the consent by the Issuer to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or of
any substantial part of its property or the making by the Issuer of an
assignment for the benefit of creditors or the failure by the Issuer
generally to pay its debts as such debts become due or the taking of
corporate action by the Issuer in furtherance of any of the foregoing.
(a) Notwithstanding the foregoing, prior to the payment
in full of the Senior Bonds, the failure of the Issuer to pay when and as due
any installment of principal of or interest (regardless of the lapse of any
grace period) on any Subordinated Bond shall not constitute an Event of Default
hereunder. In addition, notwithstanding any applicable provision of this
Indenture, upon payment in full of the Senior Bonds, the prior
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occurrence of any such shortfalls attributable to the Subordinated Bonds, which
shortfalls have previously been paid in full, will not constitute an Event of
Default hereunder in respect of the Subordinated Bonds. Subject to the
foregoing, Section 5.01 of the Indenture shall otherwise apply in all respects
to the Subordinated Bonds.
(b) Notwithstanding the foregoing, the failure of the
Issuer to pay when and as due any installment of principal of (regardless of
the lapse of any grace period) any Senior Bond shall not constitute an Event of
Default hereunder unless the Senior Class Principal Amount exceeds the
aggregate Stated Principal Balances of the Pledged Mortgages after application
of all available amounts on deposit in the Distribution Account on a Payment
Date. Subject to the foregoing, Section 5.01 of the Indenture shall otherwise
apply in all respects to the Senior Bonds.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing with respect
to the Bonds, then and in every such case the Trustee or the Holders of Bonds
representing more than 50% of the aggregate Class Principal Amount of the
Controlling Class may declare all the Bonds to be immediately due and payable,
by a notice in writing to the Issuer (and to the Trustee if given by
Bondholders), and upon any such declaration such Bonds shall become immediately
due and payable in an amount equal to:
(i) the aggregate Class Principal Amount of all
Classes of Bonds,
(ii) accrued and unpaid interest at the respective Bond
Interest Rates on the aggregate Class Principal Amount through the
date of acceleration, and
(iii) in the case of the Senior Bonds, interest (but
only to the extent payment thereof shall be legally enforceable) on
any overdue installments of interest on the Senior Bonds from the
Stated Maturity of any such installments to the date of the
acceleration at the Bond Interest Rate at which such interest accrued
or such lower rate at which payment of such interest shall be legally
enforceable.
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At any time after such a declaration of acceleration of
maturity of the Bonds has been made and before a judgment or decree for payment
of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of Bonds representing more than 50% of the
aggregate Class Principal Amount of the Controlling Class, by written notice to
the Issuer and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Issuer has paid or deposited with the Trustee a
sum sufficient to pay:
(A) all payments of principal of, and interest
on, all Bonds and all other amounts which would then be due
hereunder or upon such Bonds if the Event of Default giving
rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the nonpayment of
the principal of Bonds which have become due solely by such
acceleration, have been cured or waived as provided in Section 5.15.
No such rescission shall affect any subsequent Default or
impair any right consequent thereon.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
Subject to Section 5.05, the Issuer covenants that if an Event
of Default shall occur and be continuing in respect to the Bonds and the Bonds
have been declared due and payable and such declaration and its consequences
have not been rescinded and annulled, the Issuer will, upon demand of the
Trustee, pay to the Trustee, for the benefit of the Holders of the Bonds:
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(i) the amounts specified in the first paragraph
of Section 5.02, and
(ii) in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Issuer fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a Proceeding for the collection of the sums so due and unpaid, and
may prosecute such Proceeding to judgment or final decree, and may enforce the
same against the Issuer or any other obligor upon the Bonds and collect, out of
the Trust Estate (as defined in the Deposit Trust Agreement), wherever
situated, of the Issuer, the moneys adjudged or decreed to be payable in the
manner provided by law; provided, however, that neither the Bank nor any of its
agents, officers, directors, employees, successors or assigns shall be
personally liable for any amounts due under the Bonds or this Indenture.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Bondholders by any Proceedings the Trustee deems appropriate to protect
and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or enforce any other proper remedy, including, without
limitation, instituting a Proceeding prior to any declaration of acceleration
of the Maturity of the Bonds for the collection of all amounts then due and
unpaid on such Bonds, prosecuting such Proceeding to final judgment or decree,
enforcing the same against the Issuer and collecting out of the property,
wherever situated, of the Issuer the moneys adjudged or decreed to be payable
in the manner provided by law.
SECTION 5.04. REMEDIES.
If an Event of Default shall have occurred and be continuing
and the Bonds have been declared due and payable and such declaration and its
consequences have not been rescinded and
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annulled, the Trustee (subject to Section 5.18, to the extent applicable) may
do one or more of the following:
(a) institute Proceedings for the collection of all
amounts then payable on the Bonds, or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer moneys adjudged due;
(b) in accordance with Section 5.18, sell the Trust
Estate or any portion thereof or rights or interest therein, at one or
more public or private Sales called and conducted in any manner
permitted by law;
(c) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate; and
(d) exercise any remedies of a secured party under the
Uniform Commercial Code and take any other appropriate action to
protect and enforce the rights and remedies of the Trustee or the
Holders of the Bonds hereunder.
SECTION 5.05. [RESERVED].
SECTION 5.06. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, composition or other
judicial Proceeding relative to the Issuer or any other obligor upon any of the
Bonds or the property of the Issuer or of such other obligor or their
creditors, the Trustee (irrespective of whether the Bonds shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Issuer for the payment of
any overdue principal or interest) shall be entitled and empowered, by
intervention in such Proceeding or otherwise to:
(i) file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Bonds and
file such other papers or documents and take such other actions as it
deems necessary or advisable in order to
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have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Bondholders allowed in such Proceeding;
and
(ii) collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator or sequestrator (or
other similar official) in any such Proceeding is hereby authorized by
each Bondholder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly
to the Bondholders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 6.07.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Bondholder any plan of reorganization, arrangement, adjustment or composition
affecting any of the Bonds or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Bondholder in any such
Proceeding.
SECTION 5.07. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF BONDS.
All rights of action and claims under this Indenture or any of
the Bonds may be prosecuted and enforced by the Trustee without the possession
of any of the Bonds or the production thereof in any Proceeding relating
thereto, and any such Proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall
be for the ratable benefit of the Holders of the Bonds in respect of which such
judgment has been recovered. Any surplus shall be available, in accordance with
Section 5.08, for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
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SECTION 5.08. APPLICATION OF MONEY COLLECTED.
If the Bonds have been declared due and payable following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, any money collected by the Trustee with respect to the
Bonds pursuant to this Article or otherwise and any monies that may then be
held or thereafter received by the Trustee with respect to the Bonds shall be
applied, after payment to the Trustee of such amounts as may be payable to it
under Section 6.07, in the order, at the date or dates fixed by the Trustee
and, in case of the distribution of the entire amount due on account of
principal of, and interest on, such Bonds, upon presentation and surrender
thereof:
First: To the payment of amounts then due and unpaid to any
Servicer or the Master Servicer in respect of Nonrecoverable Advances
made by such Servicer or the Master Servicer pursuant to the related
Servicing Agreement or the Master Servicing Agreement;
Second: To the payment of amounts of interest and principal
then due and unpaid upon the Outstanding Bonds in accordance with the
priorities set forth in Section 2.03(b); and
Third: To the payment of the remainder, if any, to the Issuer
or any other Person legally entitled thereto.
SECTION 5.09. LIMITATION ON SUITS.
No Holder of a Bond shall have any right to institute any
Proceedings, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(2) the Holders of Bonds representing more than 50% of
the aggregate Class Principal Amount of the Controlling Class shall
have made written request to the Trustee to institute Proceedings in
respect of such Event of Default in its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee
indemnity in full against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such Proceeding; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of Bonds representing more than 50% of the aggregate Class Principal
Amount of the Controlling Class;
it being understood and intended that no one or more Holders of Bonds shall
have any right in any manner whatever by virtue of, or by availing themselves
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders of Bonds or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all the Holders of Bonds.
SECTION 5.10. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision in this Indenture, other
than the provisions hereof limiting the right to recover amounts due on a Bond
to recovery from the property of the Issuer, the Holder of any Bond shall have
the right, to the extent permitted by applicable law, which right is absolute
and unconditional, to receive payment of each installment of interest on such
Bond on the respective Stated Maturities of such installments of interest, to
receive payment of each installment of principal of such Bond when due (or, in
the case of any Bond called for redemption, on the date fixed for such
redemption) and to institute suit for the enforcement of any such payment, and
such right shall not be impaired without the consent of such Holder.
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SECTION 5.11. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Bondholder has instituted any Proceeding
to enforce any right or remedy under this Indenture and such Proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Bondholder, then and in every such case the Issuer,
the Trustee and the Bondholders shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the
Bondholders shall continue as though no such Proceeding had been instituted.
SECTION 5.12. RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to the
Trustee or to the Bondholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 5.13. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Bond to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Bondholders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Bondholders, as the case may be.
SECTION 5.14. CONTROL BY BONDHOLDERS.
The Holders of Bonds representing more than 50% of the
aggregate Class Principal Amount of the Controlling Class shall have the right
to direct the time, method and place of conducting any Proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee; provided, however, that:
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(1) such direction shall not be in conflict with any rule
of law or with this Indenture;
(2) any direction to the Trustee to undertake a Sale of
the Trust Estate shall be by the Holders of Bonds representing the
percentage of the aggregate Class Principal Amount of the Controlling
Class specified in Section 5.18(b)(1), unless Section 5.18(b)(2) is
applicable; and
(3) [Reserved];
(4) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction;
provided, however, that, subject to Section 6.01, the Trustee need not
take any action which it determines might involve it in liability or
be unjustly prejudicial to the Bondholders not consenting.
SECTION 5.15. WAIVER OF PAST DEFAULTS.
The Holders of Bonds representing more than 50% of the
aggregate Class Principal Amount of the Controlling Class may on behalf of the
Holders of all the Bonds of such Class waive any past Default hereunder and its
consequences, except a Default:
(1) in the payment of any installment of principal of, or
interest on, any Bond; or
(2) in respect of a covenant or provision hereof which
under Section 9.02 cannot be modified or amended without the consent
of the Holder of each Outstanding Bond affected.
Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 5.16. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any
Bond by his or her acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit
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for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the
costs of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply
to any suit instituted by the Trustee, to any suit instituted by any
Bondholder, or group of Bondholders, holding in the aggregate Bonds
representing more than 10% of the aggregate Class Principal Amount of the
Controlling Class, or to any suit instituted by any Bondholder for the
enforcement of the payment of any installment of interest on any Bond on or
after the Stated Maturity thereof expressed in such Bond or for the enforcement
of the payment of any installment of principal of any Bond when due (or, in the
case of any Bond called for redemption, on or after the applicable redemption
date).
SECTION 5.17. WAIVER OF STAY OR EXTENSION LAWS.
The Issuer covenants (to the extent that it may lawfully do
so) that it 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 of
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants in, or the performance of, this Indenture; and the Issuer (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 5.18. SALE OF TRUST ESTATE.
(a) The power to effect any sale (a "Sale") of any
portion of the Trust Estate pursuant to Section 5.04 shall not be exhausted by
any one or more Sales as to any portion of the Trust Estate remaining unsold,
but shall continue unimpaired until the entire Trust Estate shall have been
sold or all amounts payable on the Bonds and under this Indenture with respect
thereto shall have been paid. The Trustee may from time to time postpone any
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public Sale by public announcement made at the time and place of such Sale. The
Trustee hereby expressly waives its right to any amount fixed by law as
compensation for any Sale.
(b) To the extent permitted by law, the Trustee shall not
in any private Sale sell or otherwise dispose of the Trust Estate, or any
portion thereof, unless:
(1) the Holders of all Controlling Class consent to, or
direct the Trustee to make, such Sale; or
(2) the proceeds of such Sale would be not less than the
entire amount which would be distributable to the Holders of the
Bonds, in full payment thereof in accordance with Section 5.08, on the
Payment Date next succeeding the date of such Sale.
(3) [Reserved]
The purchase by the Trustee of all or any portion of the Trust
Estate at a private Sale shall not be deemed a Sale or disposition thereof for
purposes of this Section 5.18(b).
(c) Unless the Holders of all Controlling Class have
otherwise consented or directed the Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (2) of subsection (b) of this Section 5.18 has
not been established by the Trustee and no Person bids an amount equal to or
greater than such amount, the Trustee shall bid an amount at least $1.00 more
than the highest other bid.
(d) In connection with a Sale of all or any portion of
the Trust Estate:
(1) any Holder or Holders of Bonds may bid for
and purchase the property offered for Sale, and upon compliance with
the terms of sale may hold, retain and possess and dispose of such
property, without further accountability, and may, in paying the
purchase money therefor, deliver any Controlling Class or claims for
interest thereon in lieu of cash up to the amount which shall, upon
distribution of the net proceeds of such Sale,
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be payable thereon, and such Bonds, in case the amount so payable
thereon shall be less than the amount due thereon, shall be returned
to the Holders thereof after being appropriately stamped to show such
partial payment;
(2) the Trustee may bid for and acquire the
property offered for Sale in connection with any public Sale thereof,
and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting the gross Sale price against the sum of
(A) the amount which would be distributable to the Holders of the
Bonds as a result of such Sale in accordance with Section 5.08 on the
Payment Date next succeeding the date of such Sale and (B) the
expenses of the Sale and of any Proceedings in connection therewith
which are reimbursable to it, without being required to produce the
Bonds in order to complete any such Sale or in order for the net Sale
price to be credited against such Bonds, and any property so acquired
by the Trustee shall be held and dealt with by it in accordance with
the provisions of this Indenture;
(3) the Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Estate in connection with a Sale thereof;
(4) the Trustee is hereby irrevocably appointed
the agent and attorney-in-fact of the Issuer to transfer and convey
its interest in any portion of the Trust Estate in connection with a
Sale thereof, and to take all action necessary to effect such Sale;
and
(5) no purchaser or transferee at such a Sale
shall be bound to ascertain the Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any moneys.
(e) Notwithstanding anything in this Indenture to the
contrary, if an Event of Default specified in Section 5.01(1) is the Event of
Default, or one of the Events of Default, on the basis of which the Bonds have
been declared due and payable, then the Trustee may, in its sole discretion,
sell the Trust Estate without compliance with this Section 5.18.
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SECTION 5.19. ACTION ON BONDS.
The Trustee's right to seek and recover judgment under this
Indenture shall not be affected by the seeking, obtaining or application of any
other relief under or with respect to this Indenture. Neither the lien of this
Indenture nor any rights or remedies of the Trustee or the Holders of Bonds
shall be impaired by the recovery of any judgment by the Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Trust Estate.
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ARTICLE VI
THE TRUSTEE
SECTION 6.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) Except during the continuance of an Event of
Default:
(1) The Trustee need perform only those duties
that are specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture;
and
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. The Trustee shall, however, examine
such certificates and opinions to determine whether they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of
subsection (b) of this Section;
(2) The Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
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(3) The Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.14 or Section
5.18.
(d) Except with respect to duties of the Trustee
prescribed by the TIA, as to which this Section 6.01(d) shall not apply, for
all purposes under this Indenture, the Trustee shall not be deemed to have
notice or knowledge of any Event of Default described in Section 5.01(2),
5.01(5) or 5.01(6) or any Default described in Section 5.01(3) or 5.01(4) or
any Servicing Default or default under the Master Servicing Agreement unless a
Responsible Officer assigned to and working in the Trustee's corporate trust
department has actual knowledge thereof or unless written notice of any event
which is in fact such an Event of Default, Servicing Default or default is
received by the Trustee at the Corporate Trust Office, and such notice
references the Bonds generally, the Issuer, the Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. In determining that such
repayment or indemnity is not reasonably assured to it, the Trustee must
consider not only the likelihood of repayment or indemnity by or on behalf of
the Issuer but also the likelihood of repayment or indemnity from amounts
payable to it from the Trust Estate pursuant to Sections 6.07 and 8.02(d);
provided, however, that, except as provided in the first sentence of this
Section 6.01(e), the Trustee shall not refuse or fail to perform any of its
duties hereunder solely as a result of nonpayment of its reasonable fees and
expenses; and provided further, however, that nothing in this Section 6.01(e)
shall be construed to limit the exercise by the Trustee of any right or remedy
permitted under this Indenture or otherwise in the event of the Issuer's
failure to pay the amounts due the Trustee pursuant to Section 6.07.
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(f) Every provision of this Indenture that in any way
relates to the Trustee is subject to the provisions of this Section.
(g) Notwithstanding any extinguishment of all right,
title and interest of the Issuer in and to the Trust Estate following an Event
of Default and a consequent declaration of acceleration of the Maturity of the
Bonds, whether such extinguishment occurs through a Sale of the Trust Estate to
another Person, the acquisition of the Trust Estate by the Trustee or
otherwise, the rights, powers and duties of the Trustee with respect to the
Trust Estate (or the proceeds thereof) and the Bondholders and the rights of
Bondholders shall continue to be governed by the terms of this Indenture.
SECTION 6.02. NOTICE OF DEFAULT.
Within 90 days after the occurrence of any Default known to
the Trustee, the Trustee shall transmit by mail to all Holders of Bonds notice
of each such Default, unless such Default shall have been cured or waived;
provided, however, that except in the case of a Default of the type described
in Section 5.01(1), the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the
Holders of the Bonds; and provided, further, that in the case of any Default of
the character specified in Section 5.01(3) or 5.01(4) no such notice to Holders
of the Bonds shall be given until at least 30 days after the occurrence
thereof. Concurrently with the mailing of any such notice to the Holders of the
Bonds, the Trustee shall transmit by mail a copy of such notice to the Rating
Agencies.
SECTION 6.03. RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 6.01 hereof:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other paper or
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document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Issuer mentioned
herein shall be sufficiently evidenced by an Issuer Request or Issuer Order,
and any resolution of the board of directors may be sufficiently evidenced by a
written resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate or the Officer's Certificate of
the Master Servicer;
(d) the Trustee may consult with counsel, and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Bondholders pursuant to this Indenture, unless such
Bondholders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, note or other paper or document, but the Trustee, in its
discretion may make such further inquiry or investigation into such facts or
matters as it may see fit, and if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, on reasonable prior
notice to the Issuer, to examine the books, records and premises of the Issuer,
personally or by agent or attorney, during the Issuer's normal business hours;
provided that the Trustee shall and shall cause its agents to hold in
confidence all such information except to the extent disclosure
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may be required by law and except to the extent that the Trustee, in its sole
judgment, may determine that such disclosure is consistent with its obligations
hereunder;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed and supervised
with due care by it hereunder;
(h) the Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers;
(i) prior to the time that one of its Responsible
Officers obtains actual knowledge of a Servicing Default as defined in the
Master Servicing Agreement or a failure by the Master Servicer thereunder which
with notice and the passage of time will become a Servicing Default, the
Trustee shall not be responsible for taking action with respect thereto;
(j) the Trustee shall not be responsible for supervising,
monitoring or reviewing the Master Servicer's performance of its duties under
the Master Servicing Agreement except to the extent of determining (i) that the
periodic reports, certificates and opinions required to be delivered by the
Master Servicer to it thereunder are delivered in timely fashion and conform to
the requirements of the Master Servicing Agreement, (ii) that the amounts
received by it from the Master Servicer for deposit in the Distribution Account
during any month are as shown in the Master Servicer's report for such month,
(iii) and that any Trustee Mortgage File or document therein that has been
released by the Trustee to the Master Servicer is returned as provided in the
Master Servicing Agreement; and
(k) the provisions of this Section, other than clauses
(e), (i) and (j), and of Sections 6.01(b) and (c) shall apply to the Trustee as
it may be Successor Master Servicer under the Master Servicing Agreement.
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SECTION 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS.
The recitals contained herein and in the Bonds, except the
certificates of authentication on the Bonds, shall be taken as the statements
of the Issuer, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations with respect to the Trust Estate or as to
the validity or sufficiency of this Indenture or of the Bonds. The Trustee
shall not be accountable for the use or application by the Issuer of the Bonds
or the proceeds thereof or any money paid to the Issuer or upon Issuer Order
pursuant to the provisions hereof.
SECTION 6.05. MAY HOLD BONDS.
The Trustee, any Agent, or any other agent of the Issuer, in
its individual or any other capacity, may become the owner or pledgee of Bonds
and, subject to Sections 6.08 and 6.13, may otherwise deal with the Issuer or
any Affiliate of the Issuer with the same rights it would have if it were not
the Trustee, Agent or such other agent.
SECTION 6.06. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by this Indenture or
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Issuer and except
to the extent of income or other gain on investments which are obligations of
the Trustee, in its commercial capacity, and income or other gain actually
received by the Trustee on investments, which are obligations of others.
SECTION 6.07. COMPENSATION AND REIMBURSEMENT.
The Issuer agrees:
(1) subject to any separate written agreement with the
Trustee, to pay the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
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(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
connection with the performance of its duties hereunder (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to
hold them harmless against, any loss, liability or expense incurred
without negligence or bad faith on their part, arising out of, or in
connection with, the acceptance or administration of this trust,
including the costs and expenses of defending themselves against any
claim in connection with the exercise or performance of any of their
powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee
shall have given the Issuer written notice thereof promptly
after the Trustee shall have knowledge thereof;
(ii) while maintaining absolute control over its
own defense, the Trustee shall cooperate and consult fully
with the Issuer in preparing such defense; and
(iii) notwithstanding anything to the contrary in
this Section 6.07(3), the Issuer shall not be liable for
settlement of any such claim by the Trustee entered into
without the prior consent of the Issuer.
As security for the performance of the obligations of the
Issuer under this Section, the Trustee shall have a lien ranking junior to the
lien of the Bonds with respect to which any claim of the Trustee under this
Section arose (but senior to all other liens, if any) upon all property and
funds held or collected as part of the Trust Estate by the Trustee in its
capacity as such. The Trustee shall not institute any Proceeding seeking the
enforcement of such lien against the Trust Estate unless such Proceeding is in
connection with a Proceeding in accordance with Article V for enforcement of
the lien of this Indenture after the occurrence of an Event of Default (other
than
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an Event of Default arising solely from the Issuer's failure to pay amounts due
the Trustee under this Section 6.07) and a resulting declaration of
acceleration of Maturity of the Bonds which has not been rescinded and
annulled.
SECTION 6.08. ELIGIBILITY; DISQUALIFICATION.
Irrespective of whether this Indenture is qualified under the
TIA, this Indenture shall always have a Trustee who satisfies the requirements
of TIA Sections 310(a)(1) and 310(a)(5). The Trustee shall always have a
combined capital and surplus as stated in Section 6.09. The Trustee shall be
subject to TIA Section 310(b).
SECTION 6.09. TRUSTEE'S CAPITAL AND SURPLUS.
The Trustee shall at all times have a combined capital and
surplus of at least $50,000,000 or shall be a member of a bank holding company
system, the aggregate combined capital and surplus of which is at least
$50,000,000; provided, however, that the Trustee's separate capital and surplus
shall at all times be at least the amount required by TIA Section 310(a)(2) if
this Indenture is qualified under the TIA. If the Trustee publishes annual
reports of condition of the type described in TIA Section 310(a)(2), its
combined capital and surplus for purposes of this Section 6.09 shall be as set
forth in the latest such report.
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 6.11.
(b) The Trustee may resign at any time by giving written
notice thereof to the Issuer. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
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(c) The Trustee may be removed at any time by Act of the
Holders representing more than 50% of the aggregate Class Principal Amount of
the Controlling Class, delivered to the Trustee and to the Issuer.
(d) If at any time:
(1) the Trustee shall have a conflicting interest
prohibited by Section 6.08 and shall fail to resign or eliminate such
conflicting interest in accordance with Section 6.08 after written
request therefor by the Issuer or by any Bondholder; provided,
however, that this Section 6.10(d)(1) shall not be operative as part
of this Indenture unless and until this Indenture is qualified under
the TIA, and until such qualification this Indenture shall be
construed as if this Section 6.10(d)(1) were not contained herein; or
(2) the Trustee shall cease to be eligible under
Section 6.09 or shall become incapable of acting or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, (i) the Issuer by an Issuer Order may remove the
Trustee or (ii) subject to Section 5.16, any Bondholder who has been a bona
fide Holder of a Bond for at least six months may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee, unless this
Indenture is qualified under the TIA and the Trustee's duty to resign is stayed
as provided in Section 310(b) of the TIA.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Trustee
for any cause, the Issuer, by an Issuer Order shall promptly appoint a
successor Trustee. If within one year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Trustee shall be
appointed by Act of the Holders of Bonds representing more than 50% of the
aggregate
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Class Principal Amount of the Controlling Class delivered to the Issuer and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and supersede the
successor Trustee appointed by the Issuer. If no successor Trustee shall have
been so appointed by the Issuer or Bondholders and shall have accepted
appointment in the manner hereinafter provided, any Bondholder who has been a
bona fide Holder of a Bond for at least six months may, on behalf of itself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(f) The Issuer shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to the
Holders of Bonds. Each notice shall include the name of the successor Trustee
and the address of its Corporate Trust Office.
SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee. Notwithstanding the
foregoing, on request of the Issuer or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder subject
nevertheless to its lien, if any, provided for in Section 6.07. Upon request of
any such successor Trustee, the Issuer shall execute and deliver any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
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SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF
TRUSTEE.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Bonds have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Bonds so authenticated with the same effect
as if such successor Trustee had authenticated such Bonds.
SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIM AGAINST ISSUER.
If this Indenture is qualified under the TIA, the Trustee
shall be subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b), and a Trustee who has resigned or been removed
shall be subject to TIA Section 311(a) to the extent indicated.
SECTION 6.14. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the legal
requirements of the TIA or of any jurisdiction in which any of the Trust Estate
may at the time be located, the Issuer and the Trustee shall have power to
appoint, and, upon the written request of the Trustee or of the Holders of
Bonds representing more than 50% of the aggregate Class Principal Amount of the
Controlling Class with respect to which a co-trustee or separate trustee is
being appointed, the Issuer shall for such purpose join with the Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Trustee either to act
as co-trustee, jointly with the Trustee, of all or any part of the Trust
Estate, or to act as separate trustee of any such property, in either case with
such powers as may be provided in the
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instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Issuer does
not join in such appointment within 15 days after the receipt by it of a
request to do so, or in case an Event of Default has occurred and is
continuing, the Trustee alone shall have power to make such appointment.
Should any written instrument from the Issuer be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right or power, any
and all such instruments shall, on request, be executed, acknowledged and
delivered by the Issuer. Each notice shall include the name and address of any
such co-trustee or successor trustee.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms:
(1) The Bonds shall be authenticated and
delivered and all rights, powers, duties and obligations hereunder in
respect of the custody of securities, cash and other personal property
held by, or required to be deposited or pledged with, the Trustee
hereunder, shall be exercised solely by the Trustee.
(2) The rights, powers, duties and obligations
hereby conferred or imposed upon the Trustee in respect of any
property covered by such appointment shall be conferred or imposed
upon and exercised or performed by the Trustee or by the Trustee and
such co-trustee or separate trustee jointly, as shall be provided in
the instrument appointing such co-trustee or separate trustee, except
to the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
co-trustee or separate trustee.
(3) The Trustee at any time, by an instrument in
writing executed by it, with the concurrence of the Issuer
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evidenced by an Issuer Order, may accept the resignation of or remove
any co-trustee or separate trustee appointed under this Section, and,
in case of an Event of Default has occurred and is continuing, the
Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the
Issuer. Upon the written request of the Trustee, the Issuer shall join
with the Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee which has resigned or has been removed may be appointed in the
manner provided in this Section.
(4) No co-trustee or separate trustee shall be
required to satisfy the eligibility requirements under Sections 6.08
and 6.09. No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee, or
any other such trustee hereunder.
(5) Any Act of Bondholders delivered to the Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 6.15. AUTHENTICATING AGENTS.
Upon the request of the Issuer, the Trustee shall appoint an
Authenticating Agent with power to act on its behalf and subject to its
direction in the authentication and delivery of the Bonds designated for such
authentication by the Issuer and containing provisions therein for such
authentication (or with respect to which the Issuer has made other
arrangements, satisfactory to the Trustee and such Authenticating Agent, for
notation on the Bonds of the authority of an Authenticating Agent appointed
after the initial authentication and delivery of such Bonds) in connection with
transfers and exchanges under Sections 2.06 and 2.07, if any, as fully to all
intents and purposes as though the Authenticating Agent had been expressly
authorized by those Sections to authenticate and deliver Bonds. For all
purposes of this Indenture (other than in connection with the authentication
and delivery of Bonds pursuant to Sections 2.05 and 2.12 in connection with
their initial issuance and for
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purposes of Section 2.08), the authentication and delivery of Bonds by the
Authenticating Agent pursuant to this Section shall be deemed to be the
authentication and delivery of Bonds "by the Trustee". Such Authenticating
Agent shall at all times be a Person that both meets the requirements of
Section 6.09 for the Trustee hereunder and has its principal office in the
Borough of Manhattan, City and State of New York.
Any Authenticating Agent shall also serve as Bond Registrar or
co-Bond Registrar, as provided in Section 2.07. Any Authenticating Agent
appointed by the Trustee pursuant to the terms of this Section 6.15 or pursuant
to the terms of any supplemental indenture shall deliver to the Trustee as a
condition precedent to the effectiveness of such appointment an instrument
accepting the trusts, duties and responsibilities of Authenticating Agent and
of Bond Registrar or co-Bond Registrar and indemnifying the Trustee for and
holding the Trustee harmless against, any loss, liability or expense (including
reasonable attorneys' fees) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance, administration of
the trust or exercise of authority by such Authenticating Agent, Bond Registrar
or co-Bond Registrar.
Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authenticating Agent, shall be the successor of
the Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section, without the execution or filing of any further act
on the part of the parties hereto or the Authenticating Agent or such successor
corporation.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and the Issuer. The Trustee may at
any time terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and the Issuer. Upon
receiving such a notice of resignation or upon such a termination, or in case
at any time any Authenticating Agent shall cease to be eligible under this
Section, the Trustee shall promptly appoint a successor Authenticating Agent,
shall give written notice of such
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appointment to the Issuer and shall mail notice of such appointment to all
Holders of Bonds.
The Trustee agrees, subject to Section 6.01(e), to pay to any
Authenticating Agent from time to time reasonable compensation for its services
and the Trustee shall be entitled to be reimbursed for such payments, subject
to Section 6.07. The provisions of Sections 2.10, 6.04 and 6.05 shall be
applicable to any Authenticating Agent.
SECTION 6.16. REVIEW OF MORTGAGE DOCUMENTS.
The Trustee agrees, for the benefit of the Holders of the
Bonds, to review, within 90 days after the Closing Date, the Mortgage Documents
delivered to it in connection with the Grant of the Original Pledged Mortgages
as security for the Bonds. The Trustee's review shall be limited to a
determination that all documents referred to in the definition of the term
Mortgage Documents have been delivered with respect to each such Pledged
Mortgage (other than the documents related to any Pledged Mortgage so listed
which has been subject to a Principal Prepayment in Full and the proceeds of
which have been delivered to the Trustee in lieu of the applicable Mortgage
Documents), that all such documents have been executed, and that all such
documents relate to the Original Pledged Mortgages, provided that the Trustee
shall not be responsible for determining whether any assignment is in
recordable form or for verifying the information with respect to said loans
contained on the Pledged Mortgage Schedule. In performing such review the
Trustee may rely upon the purported genuineness and due execution of any such
document and on the purported genuineness of any signature thereon. If the
Trustee discovers any defect or omission in the Mortgage Documents or that any
document required to be delivered to it has not been delivered or that any
document so delivered does not relate to any of the Original Pledged Mortgages,
it shall promptly notify the Issuer and the Master Servicer of such Pledged
Mortgage in accordance with the provisions of the Master Servicing Agreement.
SECTION 6.17. PAYMENT OF CERTAIN INSURANCE PREMIUMS.
Notwithstanding anything to the contrary contained in this
Indenture, the Trustee agrees, for the benefit of the
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Holders of the Bonds, that, should it fail to receive notice from the Master
Servicer or the applicable Insurer, within the time period required pursuant to
the Master Servicing Agreement, to the effect that any premiums due with
respect to any Insurance Policies the premiums for which are required to be
paid by the Servicer or the Master Servicer from amounts on deposit in the
related Escrow Account, or required to be advanced by the Master Servicer or
the related Servicer, have been paid in full at the times set forth in the
Master Servicing Agreement, the Trustee shall proceed with diligence to make
inquiries of the Master Servicer, the Issuer and the applicable Insurers as to
whether such premiums have been paid at the times set forth in the Master
Servicing Agreement. In the event such premiums have not been paid and the
coverage provided under the related Insurance Policy may be interrupted or
adversely affected, the Trustee agrees promptly to pay such premiums from
amounts on deposit in the Distribution Account, pursuant to Section 8.02(d) and
in accordance with its obligations under the applicable provisions of the
Master Servicing Agreement.
SECTION 6.18. SUBSTITUTION OF INSURANCE POLICIES, ETC.; NOTIFICATION OF
RATING AGENCIES.
(a) Provided that the conditions set forth in paragraph
(b) hereof have been satisfied, the Issuer may substitute a replacement policy
or instrument for any Bond Insurance Policy.
(b) The Issuer shall notify each Rating Agency rating the
Bonds in the event that any replacement policy or instrument is obtained for
any Bond Insurance Policy and Insurer or other Person other than the Person who
issued such policy or instrument; provided, however, that the Trustee shall not
be required to accept any such replacement policy or instrument unless the
Trustee has received from each Rating Agency rating the Bonds a written
instrument to the effect that such acceptance by the Trustee will not result in
the lowering of the then applicable rating of any Bonds issued pursuant to this
Indenture by such Rating Agency.
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ARTICLE VII
BONDHOLDERS' LISTS AND REPORTS
SECTION 7.01. ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS.
(a) The Issuer shall furnish or cause to be furnished to
the Trustee (i) semi-annually, not less than 45 days nor more than 60 days
after the Interest Payment Date occurring closest to six months after the
Closing Date and each Interest Payment Date occurring at six-month intervals
thereafter, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Bonds and (ii) at such other times, as
the Trustee may request in writing, within 30 days after receipt by the Issuer
of any such request, a list of similar form and content as of a date not more
than 10 days prior to the time such list is furnished; provided, however, that
so long as the Trustee is the Bond Registrar, no such list shall be required to
be furnished.
(b) In addition to furnishing to the Trustee the
Bondholder lists, if any, required under subsection (a), the Issuer shall also
furnish all Bondholder lists, if any, required under Section 3.03 at the times
required by Section 3.03.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS.
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Bonds
contained in the most recent list, if any, furnished to the Trustee as provided
in Section 7.01 and the names and addresses of the Holders of Bonds received by
the Trustee in its capacity as Bond Registrar. The Trustee may destroy any list
furnished to it as provided in Section 7.01 upon receipt of a new list so
furnished.
(b) If this Indenture is qualified under the TIA,
Bondholders may communicate pursuant to TIA Section 312(b) with other
Bondholders with respect to their rights under this Indenture or under the
Bonds.
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(c) If this Indenture is qualified under the TIA, the
Issuer, the Trustee and the Bond Registrar shall have the protection of TIA
Section 312(c).
SECTION 7.03. REPORTS BY TRUSTEE.
(a) If this Indenture is qualified under the TIA, then
within 30 days after May 15 of each year (the "reporting date"), commencing
with the year after the issuance of the Bonds, (i) in the circumstance required
by TIA Section 313(a), the Trustee shall mail to all Holders a brief report
dated as of such reporting date that complies with TIA Section 313(a), (ii) the
Trustee shall also mail to Holders of Bonds with respect to which it has made
advances any reports with respect to such advances that are required by TIA
Section 313(b)(2) and (iii) the Trustee shall also mail to Holders of Bonds any
reports required by TIA Section 313(b)(1). For purposes of the information
required to be included in any such reports pursuant to TIA Sections 313(a)(3),
313(b)(1) (if applicable) or 313(b)(2), the principal amount of indenture
securities outstanding on the date as of which such information is provided
shall be the aggregate Class Principal Amount of the then Controlling Class
covered by the report. The Trustee shall comply with TIA Section 313(c) with
respect to any reports required by this Section 7.03(a).
(b) If this Indenture is qualified under the TIA, a copy
of each report required under this Section 7.03 shall, at the time of such
transmission to Holders of Bonds be filed by the Trustee with the Commission
and with each securities exchange upon which the Bonds are listed. The Issuer
will notify the Trustee when the Bonds are listed on any securities exchange.
SECTION 7.04. REPORTS BY ISSUER.
If this Indenture is qualified under the TIA, the Issuer (a)
shall file with the Trustee, within 15 days after it files them with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) which the Issuer is required
to file with the Commission pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 and (b) shall also comply with the other provisions of TIA
Section 314(a).
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SECTION 7.05. NOTICE TO THE RATING AGENCIES [AND TO BOND INSURER.]
The Issuer shall use its best efforts promptly to provide
notice to the Rating Agencies [and the Bond Insurer] of any of the following
events of which it has actual knowledge:
(a) any material change to or amendment of this
Indenture;
(b) the occurrence of any Default or Event of Default
that has not been cured;
(c) the resignation or termination of the Trustee;
(d) the substitution of Pledged Mortgages;
(e) the proposed issuance of Additional Bonds;
(f) the final payment of Bondholders; and
[(g) any payment or claim made under the Bond Insurance
Policy.]
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ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
SECTION 8.01. COLLECTION OF MONEYS.
Except as otherwise expressly provided herein, the Trustee may
demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Trustee pursuant
to this Indenture. The Trustee shall hold all such money and property received
by it as part of the Trust Estate and shall apply it as provided in this
Indenture. Except as otherwise expressly provided herein, if any default
occurred in the making of any payment or performance under any agreement or
instrument that is part of the Trust Estate, the Trustee may take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall
be without prejudice to any right to claim a Default or Event of Default
hereunder and any right to proceed thereafter as provided in Article V.
SECTION 8.02. DISTRIBUTION ACCOUNT.
(a) On or prior to the Closing Date, the Issuer shall
cause the Master Servicer to establish and maintain, in the name of the
Trustee, for the benefit of the Bondholders and the Holder of the Investor
Certificate, the Pledged Accounts as provided in Section 3(h) of the Master
Servicing Agreement.
(b) Except as otherwise provided in the Master Servicing
Agreement, within one Business Day of receipt thereof by the Master Servicer,
the Master Servicer will deposit in the Bond Account all amounts required to be
deposited therein pursuant to Section 3(h) of the Master Servicing Agreement.
(c) The Trustee shall establish and maintain, on behalf of
the Bondholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
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(i) the aggregate amount remitted by the Master
Servicer to the Trustee pursuant to Section 3(h)(vii) of the
Master Servicing Agreement; and
(ii) any other amounts deposited hereunder which are
required to be deposited in the Distribution Account.
In the event that the Master Servicer shall remit any amount
not required to be remitted, it may at any time direct the Trustee to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer's
Certificate to the Trustee which describes the amounts deposited in error in
the Distribution Account. All funds deposited in the Distribution Account shall
be held by the Trustee in trust for the Bondholders until disbursed in
accordance with this Indenture or withdrawn in accordance with Section 2.03(b).
In no event shall the Trustee incur liability for withdrawals from the
Distribution Account at the direction of the Master Servicer.
(d) Subject to Sections 5.02 and 5.08, on each Payment
Date and Redemption Date, the Trustee shall distribute all amounts on deposit
in the Distribution Account to Bondholders in respect of the Bonds to the
extent of amounts due and unpaid on the Bonds for principal and interest in the
amounts and in the order of priority set forth in Section 2.03(b).
SECTION 8.03. GENERAL PROVISIONS REGARDING PLEDGED ACCOUNTS.
(a) Each Pledged Account shall relate solely to the
Bonds, the Investor Certificate and to the Pledged Mortgages, Permitted
Investments and other property securing the Bonds. Funds and other property in
each Pledged Account shall not be commingled with any other moneys or property
of the Issuer or any Affiliate thereof. Notwithstanding the foregoing, the
Trustee may hold any funds or other property received or held by it as part of
a Pledged Account, other than the Distribution Account, in collective accounts
maintained by it in the normal course of its business and containing funds or
property held by it for other Persons (which may include the Issuer or an
Affiliate), provided that such accounts are under the sole control of the
Trustee and the Trustee maintains adequate records indicating the ownership of
all such funds or property and the portions thereof held for credit to each
Pledged Account.
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(b) So long as no Default or Event of Default shall have
occurred and be continuing, all or a portion of the funds in the Pledged
Accounts shall be invested in Permitted Investments and reinvested by the
Trustee upon written direction of the Master Servicer, subject to the
provisions of Section 3(h) of the Master Servicing Agreement. Any such
Permitted Investment shall mature not later than the applicable date specified
in Section 3(h)(ix) of the Master Servicing Agreement. All income and gain (net
of any losses) realized from any such investment of funds on deposit in the
Pledged Accounts shall be for the benefit of the Master Servicer as servicing
compensation and shall be remitted to it monthly as provided in the Master
Servicing Agreement. The amount of any realized losses in the Pledged Accounts
incurred in respect of any such investments shall promptly be deposited by the
Master Servicer in the applicable Pledged Account or Pledged Accounts. The
Master Servicer will not direct the Trustee to make any investment of any funds
or to sell any investment held in any of the Pledged Accounts unless the
security interest Granted and perfected in such account will continue to be
perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person, and, in connection with any direction
to the Trustee to make any such investment or sale, if requested by the
Trustee, the Master Servicer shall deliver to the Trustee an Opinion of
Counsel, acceptable to the Trustee, to such effect.
(c) Subject to Section 6.01(c), the Trustee shall not in
any way be held liable by reason of any insufficiency in any of the Pledged
Accounts resulting from any loss on any Permitted Investment included therein
except for losses attributable to the Trustee's failure to make payments on
such Permitted Investments issued by the Trustee, in its commercial capacity as
principal obligor and not as trustee, in accordance with their terms.
(d) If (i) the Master Servicer shall have failed to give
investment directions for any funds on deposit in the Pledged Accounts to the
Trustee by 11:00 a.m. Eastern Time (or such other time as may be agreed by the
Master Servicer and Trustee) on any Business Day or (ii) a Default or Event of
Default shall have occurred and be continuing with respect to the
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Bonds but the Bonds shall not have been declared due and payable pursuant to
Section 5.02 or (iii) if such Bonds shall have been declared due and payable
following an Event of Default, amounts collected or receivable from the Trust
Estate are being applied in accordance with Section 5.05 as if there had not
been such a declaration, then the Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Pledged Accounts in one or more
Permitted Investments.
(e) The Trustee shall, at all times while any Bonds are
outstanding, maintain in its possession, or in the possession of an agent whose
actions with respect to such items are under the sole control of the Trustee,
all certificates or other instruments, if any, evidencing any investment of
funds in a Pledged Account. The Trustee shall relinquish possession of such
items, or direct its agent to do so, only for purposes of collecting the final
payment receivable on such investment or certificate or, in connection with the
sale of any investment held in a Pledged Account, against delivery of the
amount receivable in connection with any sale.
SECTION 8.04. PURCHASES OF DEFECTIVE PLEDGED MORTGAGES.
(a) If at any time the Issuer or the Trustee discovers or
is notified by the Master Servicer (i) that there has been a breach of any of
the Master Servicer's representations and warranties with respect to Pledged
Mortgages contained in the Master Servicing Agreement that materially and
adversely affects the interests of the Bondholders in any Pledged Mortgage,
(ii) that any of the Mortgage Documents for a Pledged Mortgage has not been
properly executed by the Mortgagor or contains a material defect or (iii) that
any Mortgage Documents for a Pledged Mortgage shall not have been received by
the Trustee within the applicable time periods and in the forms set forth in
Section 3.11 or Section 6.16, as the case may be, and the Master Servicing
Agreement, then the party discovering such defect or omission or receiving
notice thereof shall promptly notify the other party and the Master Servicer
(other than in cases where the Master Servicer has given notice thereof).
(b) If any defect, misrepresentation or omission
described in subsection (a) of this Section 8.04 materially and adversely
affects the interests of the Bondholders, then the
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Issuer shall, pursuant to the applicable provisions of the Master Servicing
Agreement, cause the Master Servicer to either (i) cure any such defect,
misrepresentation or omission, (ii) remove such Pledged Mortgage and substitute
in its place a Replacement Pledged Mortgage or (iii) purchase the affected
Pledged Mortgage, in each case at the times and in the manner set forth in the
Master Servicing Agreement.
(c) Upon any such purchase or substitution, the Issuer
shall be entitled to request a release of the defective Pledged Mortgage from
the lien of this Indenture pursuant to Section 8.08(c) and Section 8.12.
(d) If the Master Servicer shall either (i) purchase any
Pledged Mortgage it is required to purchase pursuant to the Master Servicing
Agreement and deposit the Purchase Price therefor in the Bond Account or (ii)
(a) remove such Pledged Mortgage from the Trust Estate and substitute in its
place a Replacement Pledged Mortgage and (b) deposit in the Bond Account any
related Substitution Adjustment Amount, in each case in the manner set forth in
the Master Servicing Agreement, then the Master Servicer shall be deemed to
have complied with all requirements imposed upon it by this Section 8.04 with
respect to such Pledged Mortgage.
(e) The Master Servicer shall, in its sole discretion,
have the right to purchase for its own account from the Trust Estate any
Pledged Mortgage which is 91 days or more delinquent at a price and in the
manner specified in Section 3(n) of the Master Servicing Agreement. Upon
purchase of such Pledged Mortgage by the Master Servicer, the Master Servicer
shall have the right to treat such Pledged Mortgage (a "Defaulted Pledged
Mortgage") as having been the subject of a Principal Prepayment in Full and
request the release thereof from the lien of this Indenture pursuant to Section
8.12.
SECTION 8.05. GRANT OF REPLACEMENT PLEDGED MORTGAGE.
The Master Servicer shall be permitted to substitute any
Pledged Mortgage for any Original Pledged Mortgage initially Granted to the
Trustee on the Closing Date pursuant to this Indenture as set forth in Sections
2(a)(ii) and 2(d)(iv) of the Master Servicing Agreement.
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SECTION 8.06. REPORTS BY TRUSTEE TO BONDHOLDERS.
On each Payment Date or Optional Redemption Date the Trustee
shall deliver a written report to each Holder of Bonds, setting forth the
following:
(a) On or before [noon California time] on the
Determination Date, the Master Servicer shall provide by modem to the Trustee
with respect to the Pledged Mortgages, an electronic data file (accompanied by
a hardcopy report) in a format which is mutually agreed upon by the Master
Servicer and the Trustee. The Trustee shall be under no duty to recalculate,
verify or recompute the information provided to it by the Master Servicer under
this Section 8.06(a). Not later than each Payment Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each Bondholder, the
Master Servicer and the Issuer a statement (each, a "Payment Date Statement")
setting forth with respect to the related distribution:
(i) the amount thereof allocable to principal,
separately identifying the aggregate amount of any Principal
Prepayments and Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, and
(x) any of (a) the amount by which the aggregate Senior Interest
Shortfalls on prior Payment Dates exceeds the amount paid on the
Senior Bonds on prior Payment Dates pursuant to clause (ii) of the
definition of Senior Interest Payment Date, (b) the amount by which
the aggregate Class B-1 Interest Shortfalls on prior Payment Dates
exceeds the amount paid on the Class B-1 Bonds on prior Payment Dates
pursuant to clause (iii) of the definition of Class B-1 Interest
Payment Amount and (c) the amount by which the aggregate Class B-2
Interest Shortfalls on prior Payment Dates exceeds the amount paid on
the Class B-2 Bonds on prior Payment Dates pursuant to clause (iii) of
the definition of Class B-2 Interest Payment Amount included in such
distribution and (y) any of the amounts in clauses (a), (b) or (c)
above remaining after giving effect to such distribution.
(iii) if the distribution to the Holders of such Class
of Bonds is less than the full amount that would be
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distributable to such Holders pursuant to Section 2.03(b) on such
Payment Date if there were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof as between
principal and interest and specifying, in the case of the Subordinated
Bonds, the Class B-2 Principal Carryover Shortfall and/or Class B-1
Principal Carryover Shortfall;
(iv) the Class Principal Amount of each Class of
Bonds and the Invested Amount after giving effect to the distribution
of principal on such Payment Date;
(v) the Pool Stated Principal Balance for the
following Payment Date;
(vi) the Senior Percentage, the Class B-1 Percentage,
the Class B-2 Percentage and the Investor Percentage for the following
Payment Date;
(vii) the amount of the Master Servicing Fees and
Servicing Fees paid to or retained by the Master Servicer and the
Servicers (with respect to the Servicers, in the aggregate) with
respect to such Payment Date;
(viii) the Bond Interest Rate for each such Class of
Bonds and the Certificate Interest Rate with respect to such Payment
Date;
(ix) the amount of Advances included in the
distribution on such Payment Date and the aggregate amount of Advances
outstanding as of the close of business on such Payment Date;
(x) the number and aggregate principal amounts of
Pledged Mortgages (A) delinquent (exclusive of Pledged Mortgages in
foreclosure) (1) 1 to 29 days (2) 30 to 59 days (3) 60 to 89 days and
(4) 90 or more days and (B) in foreclosure and delinquent (1) 1 to 29
days (2) 30 to 59 days (3) 60 to 89 days and (4) 90 or more days, as
of the close of business on the last day of the calendar month
preceding such Payment Date;
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(xi) for each of the preceding 12 calendar months, or
all calendar months since the Cut-off Date, whichever is less, the
aggregate dollar amount of the Scheduled Payments (A) due on all
Outstanding Pledged Mortgages on each of the Due Dates in each such
month and (B) delinquent 60 days or more on each of the Due Dates in
each such month;
(xii) with respect to any Pledged Mortgage that became
an REO Property during the preceding calendar month, the loan number
and Stated Principal Balance of such Pledged Mortgage as of the close
of business on the Determination Date preceding such Payment Date and
the date of acquisition thereof;
(xiii) the total number and principal balance of any
REO Properties (and market value, if available) as of the close of
business on the Determination Date preceding such Payment Date;
(xiv) the Senior Percentage, the Class B-1 Percentage,
the Class B-2 Percentage and the Investor Prepayment Percentage for
the following Payment Date;
(xv) the aggregate amount of Realized Losses incurred
during the preceding calendar month and aggregate Realized Losses
through such Payment Date;
(xvi) the amount payable to the holder of the Investor
Certificate pursuant to Section 5.01 of the Deposit Trust Agreement;
and
[(xvii) any amount payable under the Bond Insurance Policy.]
(b) The Trustee's responsibility for disbursing the above
information to the Bondholders is limited to the availability, timeliness and
accuracy of the information derived from the Master Servicer. The Trustee will
send a copy of each statement provided pursuant to this Section 8.06 to each
Rating Agency.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to
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each Person who at any time during the calendar year was a Bondholder, a
statement containing the information set forth in clauses (a)(i), (a)(ii) and
(a)(vii) of this Section 8.06 aggregated for such calendar year or applicable
portion thereof during which such Person was a Bondholder. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time in effect.
SECTION 8.07. REPORTS BY TRUSTEE.
In addition to any statements required to be delivered or
prepared by the Trustee pursuant to Section 2.09, 8.02, 8.06 or 10.01, the
Trustee shall deliver to the Issuer, within two Business Days after the request
of the Issuer, a written report setting forth the amount of each Pledged
Account established hereunder and the identity of the investments included
therein. Without limiting the generality of the foregoing, the Trustee shall,
upon the request of the Issuer, promptly transmit to the Issuer copies of all
accountings of, and information with respect to, collections furnished to it by
the Master Servicer and shall promptly notify the Issuer if on the second
Business Day after any Distribution Account Deposit Date, the related Bond
Distribution Amount or any portion thereof has not been received by the
Trustee.
SECTION 8.08. TRUST ESTATE; RELEASE AND DELIVERY OF MORTGAGE DOCUMENTS.
(a) The Trustee may, and when required by the provisions
of this Indenture shall, execute instruments in form supplied to it to release
property from the lien of this Indenture, or convey the Trustee's interest in
the same, in a manner and under circumstances which are not inconsistent with
the provisions of this Indenture and the TIA. No party relying upon an
instrument executed by the Trustee as provided in this Article VIII shall be
bound to ascertain the Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.
(b) In order to facilitate the servicing of the Pledged
Mortgages by the Servicers, the Master Servicer is
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authorized under the Master Servicing Agreement for the benefit of the Trustee,
the Bondholders and the Issuer, to supervise, administer, monitor and oversee
the servicing of the Pledged Mortgages by the Servicers and the observance and
performance by the Servicers of all services, duties, responsibilities and
obligations which are to be observed or performed by each Servicer pursuant to
the Seller/Servicer Guide.
(c) Upon request by the Master Servicer accompanied by a
Request for Release in the form of Exhibit D to the Master Servicing Agreement
to the effect that a Pledged Mortgage has been the subject of a Prepayment in
Full or has otherwise been paid in full, together with any other items required
under Section 8.12, the Trustee shall promptly release the related Mortgage
Documents and execute such other documents as the Master Servicer may request
to evidence satisfaction and discharge of such Pledged Mortgage.
(d) In addition, if from time to time and as appropriate
for the servicing or foreclosure of any Pledged Mortgage, or the other purposes
set forth in the Master Servicing Agreement, the Master Servicer requests the
Trustee to release any related Mortgage Documents or other documents contained
in the Trustee Mortgage File relating to such Pledged Mortgage and delivers to
the Trustee a Request for Release in the form of Exhibit C to the Master
Servicing Agreement to the Trustee and signed by a Servicing Officer, the
Trustee shall release the related Mortgage Documents to the Master Servicer if
the applicable requirements of the Master Servicing Agreement have been
satisfied. If such Pledged Mortgage shall be liquidated and the Trustee
receives an Issuer Request accompanied by a Request for Release as provided in
subsection (c) above, together with any other items required under Section
8.12, then the Trustee shall release any documents with respect to such Pledged
Mortgage still in its possession to or upon the order of the Issuer and shall
execute such other documents as the Master Servicer may request to evidence
satisfaction and discharge of such Pledged Mortgage, as set forth in subsection
(c) above.
(e) The Trustee shall, at such time as there are no Bonds
Outstanding, release all of the Trust Estate to the Issuer (other than any cash
held for the payment of the Bonds pursuant
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to Section 3.03 or Section 4.02), subject, however, to Section 4.01 and the
rights of the Trustee under Section 6.07.
SECTION 8.09. AMENDMENTS TO THE MASTER SERVICING AGREEMENT.
The Trustee may enter into or consent to any amendment or
supplement to the Master Servicing Agreement or waive any Servicing Default
only in accordance with the applicable provisions of the Master Servicing
Agreement. The Trustee may, in its discretion, decline to enter into or consent
to any such supplement or amendment or make any such waiver (i) unless the
Trustee receives an Opinion of Counsel that the interests of the Holders would
not be materially adversely affected or (ii) if its own rights, duties or
immunities would be adversely affected.
SECTION 8.10. SERVICERS AND MASTER SERVICER AS AGENTS AND BAILEES OF
TRUSTEE.
In order to facilitate the servicing of the Pledged Mortgages
by the each Servicer or by the Master Servicer, each Servicer shall deposit in
the Servicing Account proceeds of the Pledged Mortgages in accordance with the
provisions of the Servicing Agreements, the Master Servicing Agreement and this
Indenture, prior to the time they are deposited into the Bond Account. In
addition, on each Withdrawal Date, the Master Servicer shall cause each
Servicer to remit to the Master Servicer for deposit in the Bond Account all
funds held in the Servicing Account that are required to be remitted to the
Master Servicer in accordance with the terms of the Servicing Agreement and the
Master Servicing Agreement. Solely for purposes of perfection under Section
9-305 of the Uniform Commercial Code or similar provision of law in the state
in which such property is held by the Servicers or the Master Servicer, the
Trustee hereby designates the Master Servicer and each Servicer as its agents
and bailees to hold such funds with respect to the Pledged Mortgages until they
are deposited into the Distribution Account as well as its agents and bailees
in holding any Mortgage Documents or other documents contained in a Trustee
Mortgage File released to it by the Trustee pursuant to Section 8.08(d), and
any other items constituting a part of the Trust Estate which from time to time
come into possession of any Servicer or the Master Servicer. It is intended
that, by the Servicers' and Master Servicer's acceptance of such agency
pursuant to the
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Servicing Agreements and the Master Servicing Agreement, the Trustee, as
secured party, will be deemed to have possession of such Mortgage Documents,
such moneys and such other items for purposes of Section 9-305 of the Uniform
Commercial Code or similar provision of law of the states in which such
property is held by such Servicer or the Master Servicer.
SECTION 8.11. OPINION OF COUNSEL.
The Trustee shall be entitled to receive at least five
Business Days' notice of any action to be taken pursuant to Section 8.08(a)
(other than in connection with releases of Pledged Mortgages which were the
subject of a Principal Prepayment in Full) accompanied by copies of any
instruments involved, and the Trustee shall be entitled to request an Opinion
of Counsel, in form and substance reasonably satisfactory to the 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. Counsel rendering any such opinion may
rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Trustee in connection with any
such action.
SECTION 8.12. RELEASE OF PLEDGED MORTGAGES.
(a) The Issuer shall be entitled to request a release
from the lien of this Indenture of any Pledged Mortgage at any time after such
Pledged Mortgage has been the subject of a Principal Prepayment in Full or in
accordance with the requirements of Section 8.04 if:
(i) the Master Servicer has complied with all
requirements imposed on it by Section 8.04 in connection with such
Pledged Mortgage (or is deemed to have complied with such requirements
by reason of the provisions of Section 8.04(e));
(ii) at the time such release is requested, no
Default or Event of Default has occurred and is continuing; provided,
however, that if a Pledged Mortgage has been the subject of a
Principal Prepayment in Full, then the Trustee shall release such
Pledged Mortgage from the lien of this
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Indenture upon compliance with all other conditions of this subsection
(a), notwithstanding the existence of a Default or Event of Default;
(iii) the Master Servicer delivers to the Trustee an
Officers' Certificate (A) identifying the Pledged Mortgage to be
released, (B) requesting the release thereof, (C) setting forth the
amount deposited in the Bond Account with respect thereto, if any, and
(D) certifying that the conditions set forth in clauses (i) and (ii)
above have been satisfied; and
(iv) the Issuer delivers to the Trustee a certificate
of fair value if required by Section 314(d)(1) or Section 314(d)(3) of
the TIA.
(b) Upon satisfaction of the conditions specified in
subsection (a) of this Section 8.12, the Trustee shall release from the lien of
this Indenture and deliver to or upon the order of the Master Servicer the
Pledged Mortgage to be released (including all related Mortgage Documents)
described in the Master Servicer's Request for Release.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.
Without the consent of the Holders of any Bonds, the Issuer
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to
assure, convey and confirm unto the Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(2) to add to the conditions, limitations and
restrictions on the authorized amount, terms and purposes of the
issuance, authentication and delivery of any Bonds, as herein set
forth, additional conditions, limitations and restrictions thereafter
to be observed;
(3) to evidence the succession of another Person to the
Issuer, and the assumption by any such successor of the covenants of
the Issuer herein and in the Bonds contained;
(4) to add to the covenants of the Issuer, for the
benefit of the Holders of all Bonds or to surrender any right or power
herein conferred upon the Issuer;
(5) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, which shall not be
inconsistent with the provisions of this Indenture, provided that such
action shall not adversely affect the interests of the Holders of the
Bonds (any such action shall be deemed not to adversely affect the
interests of the Bondholders if the Issuer delivers to the Trustee
letters from each Rating Agency to the effect that such action will
not result in a downgrading of the Bonds);
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(6) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted, and to add to this Indenture such
other provisions as may be expressly required by the TIA; or
(7) to set forth the terms of Additional Bonds and to
pledge Additional Mortgage Collateral for such Additional Bonds.
The Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise except to the extent required by law.
The Trustee may in its discretion determine whether or not the
rights of the Holder of Bonds would be adversely affected by any supplemental
indenture, and any such determination shall be conclusive upon the Holders of
all Bonds, whether theretofore or thereafter authenticated and delivered
hereunder. In making such determination, a supplemental indenture shall be
conclusively deemed by the Trustee not to adversely affect the Bonds if (i) the
Trustee receives a letter or other writing from each Rating Agency rating the
Bonds to the effect that execution of the supplemental indenture will not
result in any change in the current rating assigned by that Rating Agency to
the Bonds and (ii) the supplemental indenture effects no change in principal
priority schedules, interest rates, Redemption Prices, substitution of Mortgage
Collateral, Payment Dates, Record Dates, Accounting Dates, terms or optional
Redemption, the application of surplus to the payment of the Bonds or other
payment terms. The Trustee shall not be liable for any such determination made
in good faith.
[The Trustee shall provide the Bond Insurer, if any, with a
copy of any supplemental indenture executed pursuant to
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this Section, by first class mail mailed to the Bond Insurer within five
Business Days after the execution of such supplemental indenture.
Notwithstanding the foregoing, no supplemental indenture that changes in any
way any of the payment terms of the Bonds may be entered into without the prior
written consent of such Bonder Insurer.]
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.
With the consent of the Holders of Bonds representing not less
than two-thirds of the aggregate Class Principal Amount of the Controlling
Class by Act of said Holders delivered to the Issuer and the Trustee [and the
Bond Insurer], the Issuer and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Bonds under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Bond affected thereby:
(1) change the Stated Maturity of the final installment
of the principal of, or any installment of interest on, any Bond or
reduce the principal amount thereof, the Bond Interest Rate thereon or
the Redemption Price with respect thereto, change the earliest date on
which any Bond may be redeemed at the option of the Issuer, change any
place of payment where, or the coin or currency in which, any Bond or
any interest thereon is payable, or impair the right to institute suit
for the enforcement of the payment of any installment of interest due
on any Bond on or after the Stated Maturity thereof or for the
enforcement of the payment of the entire remaining unpaid principal
amount of any Bond on or after the Stated Maturity of the final
installment of the principal thereof (or, in the case of redemption,
on or after the applicable Optional Redemption Date);
(2) reduce the percentage of the aggregate Class
Principal Amount of the Controlling Class, the consent of the Holders
of which is
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required for any such supplemental indenture, or the consent of the
Holders of which is required for any waiver of compliance with
provisions of this Indenture or Defaults hereunder and their
consequences provided for in this Indenture;
(3) modify any of the provisions of this Section, Section
5.14 or Section 5.18(b) except to increase any percentage specified
therein or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Bond affected thereby;
(4) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(5) permit the creation of any lien ranking prior to or
on a parity with the lien of this Indenture with respect to any part
of the Trust Estate (except for Permitted Encumbrances) or terminate
the lien of this Indenture on any property at any time subject hereto
or deprive the Holder of any Bond of the security afforded by the lien
of this Indenture; or
(6) modify any of the provisions of this Indenture in
such manner as to materially and adversely affect rights of the
Holders of the Controlling Class to the benefits of any provisions for
the mandatory redemption of Bonds contained herein.
The Trustee may in its discretion determine whether or not the
rights of the Holder of any Controlling Class would be materially and adversely
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of all Bonds authenticated and delivered hereunder.
The Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Bondholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Trustee of
any supplemental indenture pursuant to this Section,
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the Trustee shall mail to the Holders of the Bonds to which such supplemental
indenture relates [and to the Bond Insurer] a notice setting forth in general
terms the substance of such supplemental indenture. Any failure of the Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 6.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Bonds to which such supplemental indenture relates which
have theretofore been or thereafter are authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
SECTION 9.06. REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.
Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and if required by the
Trustee shall, bear a notation in form
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approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Issuer shall so determine, new Bonds so modified as to
conform, in the opinion of the Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Trustee in exchange for Controlling Class.
SECTION 9.07. AMENDMENTS TO DEPOSIT TRUST AGREEMENT OR MASTER SERVICING
AGREEMENT.
The Trustee shall, upon Issuer Request, consent to any
proposed amendment to the Deposit Trust Agreement or Master Servicing
Agreement, or an amendment to or waiver of any provision of any other document
relating to the Deposit Trust Agreement or Master Servicing Agreement, such
consent to be given without the necessity of obtaining the consent of the
Holders of any Bonds upon receipt by the Trustee of:
(i) an Opinion of Counsel to the effect that such amendment
or waiver will not materially and adversely affect the interests of
the Holders of the Bonds and that all conditions precedent to such
consent specified in this Section 9.07 have been satisfied; provided,
however, that no such Opinion of Counsel shall be required if the
Person requesting the amendment obtains a letter from each Rating
Agency stating that the amendment would not result in the downgrading
or withdrawal of the respective ratings then assigned to the Bonds; it
being understood and agreed that any such letter in and of itself will
not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit
issues affecting any such rating;
(ii) an Officers' Certificate, to which such proposed
amendment or waiver shall be attached, stating that such attached copy
is the true copy of the proposed amendment or waiver and that all
conditions precedent to such consent specified in this Section 9.07
have been satisfied;
(iii) written confirmation from the Rating Agencies that the
implementation of the proposed amendment or waiver will not adversely
affect their rating of the Bonds; and
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(iv) any other document required pursuant to Section 11.01.
Notwithstanding the foregoing, the Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own
rights, duties or immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require
that any Person obtain the consent of the Trustee to any amendment or waiver
or any provision of any document where the making of such amendment or the
giving of such waiver without obtaining the consent of the Trustee is not
prohibited by this Indenture or by the terms of the document that is the
subject of the proposed amendment or waiver.
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ARTICLE X
REDEMPTION OF BONDS
SECTION 10.01. SPECIAL REDEMPTION; REDEMPTION.
(a) The Bonds shall not be subject to special redemption.
(b) The Bonds shall be subject to redemption by the
Issuer, in whole but not in part, at the option of the Issuer, on any Payment
Date on or after the Payment Date on which the sum of (i) the Invested Amount,
(ii) the Senior Class Principal Amount, (iii) the Class B-1 Principal Amount
and (iv) the Class B-2 Principal Amount, after giving effect to payments
expected to be made on such Payment Date, is __% or less than the aggregate of
the Stated Principal Balances of the Pledged Mortgages as of the Cut-Off Date
[(including the Additional Bonds)], on the terms and conditions specified in
this subsection (b) at the Redemption Price. If the Issuer elects to so redeem
the Bonds, it shall, no later than 30 days prior to the Optional Redemption
Date selected for such redemption, deliver notice of such election to the
Trustee, together with the Redemption Price therefor to be deposited in the
Distribution Account, an Issuer Order directing the Trustee to effect such
redemption, any certification and opinion required pursuant to Section 11.01
and a form of redemption notice. All Bonds so redeemed shall be due and payable
on such Optional Redemption Date upon the giving of the notice thereof required
by Section 10.02.
SECTION 10.02. FORM OF REDEMPTION NOTICE.
Notice of redemption shall be given by the Trustee in the name
of and at the expense of the Issuer by first class mail, postage prepaid,
mailed not less than five days prior to the applicable Optional Redemption Date
(but in no event prior to the date on which the Redemption Price with respect
to the Bonds to be redeemed pursuant to subsection (b) of Section 10.01 has
been deposited in the Distribution Account) to each Holder of Bonds to be
redeemed, such Holders being determined as of the last day of the month
preceding the month in which such Optional Redemption Date occurs (the
"Optional Redemption Record Date").
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All notices of redemption shall state:
(1) the Optional Redemption Date; and
(2) the fact of such payment in full, the place where
such Bonds are to be surrendered for payment of the Redemption Price
(which shall be the office or agency of the Issuer to be maintained as
provided in Section 3.02) and that no interest shall accrue on such
Bond for any period after the last day of the month preceding the
month in which the date fixed for redemption occurs. Failure to give
notice of redemption, or any defect therein, to any Holder of any Bond
selected for redemption shall not impair or affect the validity of the
redemption of any other Bond.
SECTION 10.03. BONDS PAYABLE ON OPTIONAL REDEMPTION DATE.
Notice of redemption having been given as provided in Section
10.02, the Bonds or portions thereof so to be redeemed shall, on the applicable
Optional Redemption Date, become due and payable at the Redemption Price and
(unless the Issuer shall default in the payment of the Redemption Price) no
interest shall accrue on such Redemption Price for any period after the last
day of the month preceding the month in which such Optional Redemption Date
occurs.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Issuer to the Trustee
to take any action under any provision of this Indenture, the Issuer shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate, opinion or letter with respect to
compliance with a condition or covenant provided for in this Indenture
(including one furnished pursuant to specific requirements of this Indenture
relating to a particular application or request) shall include:
(1) a statement that each individual signing such
certificate, opinion or letter has read such covenant or condition and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate, opinion or letter are based;
(3) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation as is
necessary to enable such individual to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
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SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents
Any certificate or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate ar opinion or
representations with respect to the matters upon which his other certificate or
opinion is based are erroneous. Any such Issuer certificate or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an Authorized Officer or
Officers of the Owner Trustee or a certificate of the officers of the Depositor
or the manager of the Issuer, stating that the information with respect to such
factual matters is in the possession of the Owner Trustee, or the Depositor or
the manager of the Issuer, unless such officer or counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous. Any Opinion of
Counsel may be based on the written opinion of other counsel, in which event
such Opinion of Counsel shall be accompanied by a copy of such other counsel's
opinion and shall include a statement to the effect that such counsel believes
that such counsel and the Trustee may reasonably rely upon the opinion of such
other counsel.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Wherever in this Indenture, in connection with any application
or certificate or report to the Trustee, it is
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provided that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of the Issuer's compliance with
any term hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate or
report (as the case may be), of the facts and opinions stated in such document
shall in such case be conditions precedent to the right of the Issuer to have
such application granted or to the sufficiency of such certificate or report.
The foregoing shall not, however, be construed to affect the Trustee's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Section 6.01(b)(2).
Whenever in this Indenture it is provided that the absence of
the occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Trustee at the request or
direction of the Issuer, then, notwithstanding that the satisfaction of such
condition is a condition precedent to the Issuer's right to make such request
or direction, the Trustee shall be protected in acting in accordance with such
request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default as provided in Section
6.01(d).
SECTION 11.03. ACTS OF BONDHOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Bondholders may be embodied in any evidence by one or more
instruments of substantially similar tenor signed by such Bondholders in person
or by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Bondholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section.
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(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a witness of
such execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgements of deeds, certifying that the
individual signing such instrument or writing acknowledged to him or her the
execution thereof. Whenever such execution is by an officer of a corporation or
a member of a partnership on behalf of such corporation or partnership, such
certificate or affidavit shall also constitute sufficient proof of his or her
authority.
(c) The ownership of Bonds shall be proved by the Bond
Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Bonds shall bind
the Holder of every Bond issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Trustee or the Issuer in reliance thereon, whether
or not any notation of such action is made upon such Bonds.
SECTION 11.04. NOTICES, ETC. TO TRUSTEE AND ISSUER.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Bondholders or other documents provided or permitted
by this Indenture to be made upon, given or furnished to, or filed with:
(1) the Trustee by any Bondholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with and received by the Trustee at its
Corporate Trust Office;
(2) the Issuer by the Trustee or by any Bondholder shall
be sufficient for every purpose hereunder (except as provided in
Sections 5.01(3) and (4)) if in writing and mailed, first-class,
postage prepaid, to the Issuer addressed to it c/o
_______________________________________________________________________
______________ ____________________________, Attention: Corporate
Trust Administration, or at any other address previously furnished in
writing to the Trustee by the Issuer;
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(3) any Rating Agency by the Trustee, the Issuer or the
Master Servicer shall be sufficient for every purpose hereunder if
made, given, furnished or filed in writing to or with and received by
such Rating Agency at the address specified therefor in the definition
corresponding to the name of such Rating Agency; or
[(4) the Bond Insurer by the Trustee, the Issuer or any
Bondholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage prepaid to the Bond Insurer
at ________________ _____________________.]
SECTION 11.05. NOTICES AND REPORTS TO BONDHOLDERS; WAIVER OF NOTICES.
Where this Indenture provides for notice to Bondholders of any
event or the mailing of any report to Bondholders, such notice or report shall
be sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class, postage prepaid, to each Bondholder affected by such event or to
whom such report is required to be mailed, at the address of such Bondholder as
it appears on the Bond Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice or the
mailing of such report. In any case where a notice or report to Bondholders is
mailed in the manner provided above, neither the failure to mail such notice or
report, nor any defect in any notice or report so mailed, to any particular
Bondholder shall affect the sufficiency of such notice or report with respect
to other Bondholders, and any notice or report which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given or
provided.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waiver of notice by any Bondholder shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to
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Bondholders when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
Where this Indenture provides for notice to Bondholders of any
event, such notice shall also be sent to ______________________________________
_____________________________, so long as [ ] is a Rating Agency.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for any meeting of
Bondholders. Any Agent may make reasonable rules and set reasonable
requirements for its functions.
SECTION 11.07. CONFLICT WITH TRUST INDENTURE ACT.
If this Indenture is qualified under the TIA and any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this Indenture by any of the provisions of the TIA,
such required provision shall control.
SECTION 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 by the Issuer
shall bind its successors and assigns, whether so expressed or not.
SECTION 11.10. SEPARABILITY.
In case any provision in this Indenture or in the Bonds shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
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SECTION 11.11. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Bonds, expressed or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any separate trustee or co-trustee appointed under
Section 6.14 and the Bondholders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 11.12. LEGAL HOLIDAYS.
In any case where the date of any Payment Date, Redemption
Date or any other date on which principal of, or interest on, any Bond is
proposed to be paid shall not be a Business Day, then (notwithstanding any
other provision of the Bonds or this Indenture) payment need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the nominal date of any such Payment Date,
Optional Redemption Date or other date for the payment of principal of, or
interest on, any Bond, as the case may be, and no interest shall accrue for the
period from and after any such nominal date, provided such payment is made in
full on such next succeeding Business Day.
SECTION 11.13. GOVERNING LAW.
This Indenture and each Bond shall be construed in accordance
with and governed by the substantive laws of the State of New York applicable
to agreements made and to be performed in the State of New York and the
obligations, rights and remedies of the parties hereto and the Bondholders
shall be determined in accordance with such laws.
SECTION 11.14. COUNTERPARTS.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
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SECTION 11.15. RECORDING OF INDENTURE.
This Indenture is subject to recording in any appropriate
public recording office, such recording to be effected by the Issuer and at its
expense in compliance with any Opinion of Counsel delivered pursuant to Section
2.12(c) or Section 3.06.
SECTION 11.16. ISSUER OBLIGATION.
No recourse may be taken, directly or indirectly, against (i)
the Bank, (ii) any incorporator, subscriber to the capital stock, stockholder,
officer or director of the Bank or of any predecessor or successor of the Bank,
(iii) any holder of a beneficial interest in the Issuer (solely in its capacity
as such), (iv) any incorporator, subscriber to the capital stock, stockholder,
partner, beneficiary, agent, officer, director, employee, or successor or
assign of a holder of a beneficial interest in the Issuer, (v) the Depositor or
any Affiliate thereof (other than the Issuer) or (vi) any incorporator,
subscriber to the capital stock, stockholder, officer, director or employee of
the Trustee or any predecessor or successor of the Trustee with respect to the
Issuer's obligation with respect to the Bonds or the obligation of the Issuer
or the Trustee under this Indenture or any certificate or other writing
delivered in connection herewith or therewith.
SECTION 11.17. INSPECTION.
The Issuer agrees that, on reasonable prior notice, it will
permit any representative of the Trustee, during the Issuer's normal business
hours, to examine all books of account, records, reports and other papers of
the Issuer, to make copies and extracts therefrom, to cause such books to be
audited by Independent Accountants selected by the Trustee, and to discuss its
affairs, finances and accounts with its officers, employees and Independent
Accountants (and by this provision the Issuer hereby authorizes its Accountants
to discuss with such representatives such affairs, finances and accounts), all
at such reasonable times and as often as may be reasonably requested. Any
expense incident to the exercise by the Trustee of any rights under this
Section 11.17 shall be borne by the Issuer.
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SECTION 11.18. USURY.
The amount of interest payable or paid on any Bond under the
terms of this Indenture shall be limited to an amount which shall not exceed
the maximum nonusurious rate of interest allowed by the applicable laws of the
United States or the State of New York (whichever shall permit the higher
rate), which could lawfully be contracted for, charged or received (the
"Highest Lawful Rate"). In the event any payment of interest on any Bond
exceeds the Highest Lawful Rate, the Issuer stipulates that such excess amount
will be deemed to have been paid as a result of an error on the part of both
the Trustee, acting on behalf of the Holder of such Bond, and the Issuer, and
the Holder receiving such excess payment shall promptly, upon discovery of such
error or upon notice thereof from the Issuer or the Trustee, refund the amount
of such excess or, at the option of the Trustee, apply the excess to the
payment of principal of such Bond, if any, remaining unpaid.
SECTION 11.19. NO PETITION.
The Trustee, by entering into this Indenture, and each
Bondholder, by accepting a Bond, hereby covenant and agree that they 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 United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Bonds, this Indenture or any
of the Operative Agreements.
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ARTICLE XII
THE BOND INSURER
SECTION 12.01. CERTAIN MATTERS REGARDING THE BOND INSURER AND THE BOND
INSURANCE POLICY.
[as set forth in the applicable policy]
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IN WITNESS WHEREOF, each party has caused this Indenture to be
executed by its duly authorized officer or officers as of the day and year
first above written.
SEQUOIA MORTGAGE TRUST 199_-_,
as Issuer
By: ,
----------------------------------
not in its individual capacity but
solely as Owner Trustee
By:
----------------------------------
Name:
Title:
-------------------------------
as Trustee
By:
----------------------------------
Authorized Officer
By:
----------------------------------
Name:
Title:
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STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On the ____ day of _____________ in the year one thousand nine
hundred and ninety-_____ before me personally came __________________________,
to me known, who being by me duly sworn did depose and say that she/he resides
in _______________, that she/he is the ______________________ of
__________________________, the corporation described in and which executed
the above instrument and that she/he signed her/his name thereto by authority
of the Board of Directors of said corporation.
[NOTARIAL SEAL]
---------------------------------
Notary Public
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STATE OF _________________ )
) ss.:
COUNTY OF ________________ )
On the ____ day of __________, 199__, before me, a notary
public in and for said State, personally appeared ___________________________,
known to me (or proved to me on the basis of satisfactory evidence) to be a
______ ______________ of ____________________________________, the
___________________ corporation that executed the within instrument, and also
known to me (or proved to me on the basis of satisfactory evidence) to be the
persons who executed it on behalf of said _____________________ corporation,
and acknowledged to me that such ___________________ corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my official seal the day and year in this certificate first above written.
[NOTARIAL SEAL]
---------------------------------
Notary Public
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EXHIBIT I
LETTER AGREEMENT WITH THE DEPOSITORY
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EXHIBIT II
FORM OF SENIOR BOND
The form of Senior Bond is as follows:
PRINCIPAL OF THIS BOND IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE CLASS PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE CLASS PRINCIPAL AMOUNT OF
THIS BOND MAY BE ASCERTAINED ONLY BY OBTAINING A CONFIRMATION THEREOF FROM THE
TRUSTEE UNDER THE INDENTURE REFERRED TO BELOW.
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND
SO 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 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.
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SEQUOIA MORTGAGE TRUST 199_-_,
a Delaware Statutory Business Trust
Collateralized Mortgage Bonds
CLASS A-1
DUE: __________ ___, _____
ACCRUAL DATE: __________ ___, _____
ISSUE DATE: __________ ___, _____
[ ] INTEREST RATE
Initial Class Principal
Amount of this Bond:
$____________________________ CUSIP NO.___
CERTIFICATE NUMBER 1
Sequoia Mortgage Trust 199 _-_ (the "Issuer"), a statutory
business trust formed under the Deposit Trust Agreement dated as of
_____________ ___, 199__ and having _________________________, a Delaware bank
and trust company, as Owner Trustee, for value received, hereby promises to pay
to CEDE & CO. or registered assigns, the principal sum of [AMOUNT IN WORDS]
($_______) in monthly installments on the ____________ day of each month,
commencing on ________ _ ___, _____ (each, a "Payment Date"), and ending on or
before __________ ___, _____, (the "Stated Maturity" of such final installment
of principal), and to pay interest (computed on the basis of a 360-day year of
twelve 30-day months) on the Class Principal Amount (as defined in the
Indenture hereinafter referred to) of this Bond from time to time from _
________ ___, _____ (the "Accrual Date"), or such later date to which interest
has been paid, through the last day of the month preceding the month in which
the principal amount of this Bond is paid in full, at a [variable/fixed] rate
determined as described below, such interest being payable monthly on each
Payment Date. If any Payment Date shall not be a "Business Day" (as defined in
the Indenture), payment of the amount due will be made on the next succeeding
Business Day.
Installments of principal of this Bond are due and payable as
described in the Indenture.
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Interest payable on this Bond on a Payment Date will be equal
to the amount of interest that has accrued on the Class Principal Amount of
this Bond during the one-month period ending on the last day of the month
preceding the month in which each such Payment Date occurs (each, an "Interest
Accrual Period").
The principal of, and interest on, this Bond 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 Bond shall be applied as set forth in the
Indenture. Any installment of principal or interest which is not paid when and
as due shall bear interest as described in the Indenture.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Sequoia Mortgage Trust 199_-_ has caused
this instrument to be duly executed by its duly authorized officer.
Dated:_______________ SEQUOIA MORTGAGE TRUST 199_-_
By:
---------------------------------
not in its individual capacity
but solely as Owner Trustee
By:
---------------------------------
Title:
------------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds referred to in the within-mentioned Indenture.
,
- ---------------------------
as Trustee
By: ,
--------------------------
Authorized Signatory
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This Bond is one of a duly authorized issue of Bonds of the
Issuer, designated as its Collateralized Mortgage Bonds, Series 199_-_ (herein
called the "Bonds"). The Bonds are issuable in one or more classes; the Bonds
of particular Classes being herein called the Class A-1, Class B-1 and Class
B-2 Bonds, all issued and to be issued under the Issuer's Indenture dated as of
____________ ___, 199__ between the Issuer and _______________________________
(the "Trustee", which term includes any successor Trustee under the Indenture),
which authorized the Bonds, and reference is hereby made thereto for a statement
of the respective rights thereunder of the Issuer, the Trustee and the Holders
of the Bonds of each particular Class thereof and the terms upon which the Bonds
of each Class are, and are to be, authenticated and delivered.
The Class A-1 Bonds constitute "Senior Bonds" and the Class
B-1 Bonds and the Class B-2 Bonds constitute "Subordinated Bonds".
All terms used in this Bond which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Bond Interest Rate for the Senior Bonds (the "Senior Bond
Interest Rate") and any Interest Accrual Period will equal _______________.
As provided in the Indenture, the Bonds are issuable in
Classes which may vary as is provided or permitted in the Indenture. Bonds of
each Class are equally and ratably secured by the collateral pledged as
security therefor to the extent provided by the Indenture.
For each Principal Payment Date, the aggregate amount of each
installment of principal due and payable on the Senior Bonds will be equal to
the Senior Principal Payment Amount for such Payment Date. The Senior Principal
Payment Amount for any Payment Date is equal to the Senior Percentage of the
sum of (a) the principal portion of the Scheduled Payment due on each Pledged
Mortgage [on the related Due Date], (b) the principal portion of the purchase
price of each Pledged Mortgage that was purchased by Redwood Trust or another
person pursuant to the Mortgage Loan Purchase Agreement [or any optional
purchase by the Master Servicer of a defaulted Pledged Mortgage] as of such
Payment Date, (c) the
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Substitution Adjustment Amount in connection with any Deleted Pledged Mortgage
received with respect to such Payment Date, (d) any Insurance Proceeds or
Liquidation Proceeds allocable to recoveries of principal of Pledged Mortgages
that are not yet Liquidated Pledged Mortgages received during the [calendar
month] preceding the month of such Payment Date, (e) with respect to each
Pledged Mortgage that became a Liquidated Pledged Mortgage during the [calendar
month] preceding the month of such Payment Date, the Stated Principal Balance
of such Pledged Mortgage, and (f) all partial and full principal prepayments by
borrowers received during the related Prepayment Period.
Payments of principal or interest, if any, on the Bonds will
be made on each Payment Date, commencing on ____________ ___, 199__, in the
manner and in accordance with the priorities for the Bonds provided in the
Indenture.
The entire unpaid principal amount of each Class of Bonds
shall be due and payable, if not then previously paid, on the Stated Maturity
of the final installment of principal of such Class.
All payments of principal of, and interest on, the Bonds shall
be made only from the Trust Estate Granted as security for the Bonds and any
other assets of the Issuer that have not been Granted as security for any other
bonds or obligations of the Issuer, and each Holder hereof, by its acceptance
of this Bond, agrees that it will have recourse solely against such Trust
Estate and such other assets of the Issuer and that neither
_____________________ ___ in its individual capacity, any holder of a
beneficial interest in the Issuer nor any of their respective shareholders,
partners, beneficiaries, agents, officers, directors, employees, successors or
assigns shall be personally liable for any amounts payable, or performance due,
under this Bond or the Indenture.
Payment of the then remaining unpaid principal amount of this
Bond on the Stated Maturity of its final installment of principal or on such
earlier date as the Issuer shall be required to pay the then remaining unpaid
principal amount of this Bond or payment of the Redemption Price payable on any
date as of which this Bond has been called for redemption in full, shall be
made upon presentation of this Bond to the office or agency of the Issuer
maintained for such purpose. Payments of interest on this
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Bond due and payable on each Payment Date or on any Optional Redemption Date,
to the extent this Bond is not being paid in full, together with any
installment of principal of this Bond due and payable on each Payment Date or
the Optional Redemption Date, to the extent not in full payment of this Bond,
shall be made by check mailed to the Person whose name appears as the
registered Holder of this Bond (or one or more Predecessor Bonds) on the Bond
Register as of the last day of the month preceding the month in which such
Payment Date occurs (each a "Record Date").
Checks for amounts which include installments of principal due
on this Bond shall be mailed to the Person entitled thereto at the address of
such Person as it appears on the Bond Register as of the applicable Record Date
without requiring that this Bond be submitted for notation of payment and
checks returned undelivered will be held for payment to the Person entitled
thereto, subject to the terms of the Indenture, at the office or agency in the
United States of America designated by the Issuer for such purpose pursuant to
the Indenture. Any reduction in the principal amount of this Bond (or any one
or more Predecessor Bonds) effected by any payments made on any Payment Date
shall be binding upon all Holders of this Bond and of any Bond issued upon the
registration of transfer hereof or in exchange herefor 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 Bond on a Payment Date or Optional Redemption Date which is prior to the
Stated Maturity of the final installment of principal hereof, then the Trustee,
on behalf of the Issuer, will notify the Person who was the registered Holder
hereof on the last day of the month prior to the month in which such Payment
Date or Optional Redemption Date occurs, and the amount then due and payable
shall, if sufficient funds therefor are available, be payable only upon
presentation of this Bond to the office or agency of the Issuer maintained for
such purpose.
The failure of the Issuer to pay when and as due any
installment of principal of (regardless of the lapse of any grace period) any
Senior Bond shall not constitute an Event of Default under the Indenture unless
the Senior Class Principal Amount exceeds the aggregate Stated Principal
Balances of the Pledged
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Mortgages after application of all available amounts on deposit in the
Distribution Account on a Payment Date.
If an Event of Default as defined in the Indenture shall occur
and be continuing with respect to the Bonds, the Bonds may become or be
declared due and payable in the manner and with the effect provided in the
Indenture. If any such acceleration of maturity occurs prior to the Stated
Maturity of the final installment of principal of this Bond, the amount payable
to the Holder of this Bond will be equal to the Class Principal Amount of this
Bond on the date this Bond becomes so due and payable, together with accrued
interest. Following the acceleration of the maturity of the Bonds, all amounts
collected as proceeds of the collateral securing the Bonds or otherwise shall
be applied as described in the Indenture. Following such acceleration, interest
on any overdue installments of interest on all Bonds shall be payable at the
rate set forth in the Indenture.
The Bonds are not prepayable or redeemable at the option or
direction of the Issuer except that the Bonds are subject to redemption in
whole, but not in part, at the option of the Issuer on any Payment Date on or
after the Payment Date on which the sum of (i) the Invested Amount, (ii) the
Senior Class Principal Amount, (iii) the Class B- 1 Principal Amount and (iv)
the Class B-2 Principal Amount, after giving effect to payments expected to be
made on such Payment Date, is __% or less of the aggregate of the Stated
Principal Balances of the Pledged Mortgages as of the Cut- Off Date. Any such
redemption at the option of the Issuer shall be at a price equal to 100% of the
unpaid principal amount of the Bonds (including, in the case of the
Subordinated Bonds, any unpaid Class B-1 Principal Carryover Shortfall and/or
Class B-2 Principal Carryover Shortfall) so redeemed plus accrued interest
through the last day of the month preceding the month in which such optional
redemption occurs.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Bond may be registered on
the Bond Register of the Issuer, upon surrender of this Bond 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 Trustee duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more
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new Bonds of the same Class, of authorized denominations and in the same
aggregate initial principal amount, will be issued to the designated transferee
or transferees.
Prior to the due presentment for registration of transfer of
this Bond, the Issuer, the Trustee, and any agent of the Issuer shall treat the
Person in whose name this Bond is registered (i) on any Record Date, for
purposes of making payments, and (ii) on any other date for any other purposes,
as the owner hereof, whether or not this Bond be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Bonds under the
Indenture at any time by the Issuer with the consent of the Holders of Bonds
representing two-thirds of the aggregate Class Principal Amount of the
Controlling Class. The Indenture also contains provisions permitting the
Holders of Bonds representing specified percentages of the aggregate Class
Principal Amount of the Controlling Class on behalf of the Holders of all the
Bonds of such Class, 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, at the time of the
giving thereof, of this Bond (or any one or more Predecessor Bonds) shall be
conclusive and binding upon such Holder and upon all future holders of this
Bond and of any Bond issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Bond. The Indenture also permits the Trustee to amend
or waive certain terms and conditions set forth in the Indenture without the
consent of the Holders of the Bonds of any Series issued thereunder.
The Senior Bonds are "Book Entry Bonds" which will be
available to investors only through the book entry facilities of The Depository
Trust Company, and bond certificates for all Classes of Bonds will be available
only under certain limited circumstances as described in the Indenture.
AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE
SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF
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THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
THEREIN.
No reference herein to the Indenture and no provision of this
Bond or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional to the extent permitted by applicable law,
to pay the principal of, and interest on, this Bond at the times, place and
rate, and in the coin or currency herein prescribed.
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EXHIBIT III
FORM OF A CLASS B-1 BOND
The form of a Class B-1 Bond is as follows:
PRINCIPAL OF THIS BOND IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE CLASS PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE CLASS PRINCIPAL AMOUNT OF
THIS BOND MAY BE ASCERTAINED ONLY BY OBTAINING A CONFIRMATION THEREOF FROM THE
TRUSTEE UNDER THE INDENTURE REFERRED TO BELOW.
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND
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.
THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
BONDS AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS BOND. THE ISSUE DATE OF THIS BOND IS __________ ___, 199__. THE PER ANNUM
RATE OF INTEREST ON THIS BOND IS ___% ASSUMING THAT PRINCIPAL PAYMENTS ARE MADE
ON THE MORTGAGE COLLATERAL UNDERLYING THE BONDS AT _______% OF THE STANDARD
PREPAYMENT ASSUMPTION (AS DEFINED IN THE PROSPECTUS SUPPLEMENT) THIS BOND HAS
BEEN ISSUED WITH $ OF OID PER $1,000 OF INITIAL PRINCIPAL AMOUNT, THE YIELD TO
MATURITY IS ___% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL SHORT
ACCRUAL PERIOD IS $_______ OF OID PER $1,000 OF INITIAL PRINCIPAL AMOUNT,
CALCULATED ASSUMING THE YIELD IS ACCRUED DAILY DURING INITIAL SHORT PERIOD. NO
REPRESENTATION IS MADE AS TO THE RATE AT WHICH PRINCIPAL PAYMENTS WILL BE MADE
ON THE MORTGAGE COLLATERAL.
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SEQUOIA MORTGAGE TRUST 199_-_,
a Delaware Statutory Business Trust
Collateralized Mortgage Bonds
CLASS B-1
DUE: _____________ ___, _____
ACCRUAL DATE: _____________ ___, _____
ISSUE DATE: _____________ ___, _____
___________ INTEREST RATE
Initial Class Principal CUSIP NO. ______
Amount of this Bond:
$____________________ CERTIFICATE NUMBER 1
Sequoia Mortgage Trust 199_-_ (the "Issuer"), a statutory
business trust formed under the Deposit Trust Agreement dated as of __________
___, _____, and having ________________________, a Delaware bank and trust
company, as Owner Trustee for value received, hereby promises to pay to CEDE &
CO. or registered assigns, the principal sum of [AMOUNT IN WORDS]
($___________) in monthly installments on the ______________ day of each month,
commencing on _________ ___, _____ (each, a "Payment Date"), and ending on or
before __________ ___, _____ (the "Stated Maturity" of such final installment of
principal), and to pay interest (computed on the basis of a 360-day year of
twelve 30-day months) on the Class Principal Amount (as defined in the
Indenture) of this Bond from time to time from __________ ___, _____ (the
"Accrual Date"), or such later date to which interest has been paid, through the
last day of the month preceding the month in which the principal amount of this
Bond is paid in full, at a [variable/fixed] rate determined as described below,
such interest being payable monthly on each Payment Date. If any Payment Date
shall not be a "Business Day" (as defined in the Indenture), payment of the
amount due will be made on the next succeeding Business Day.
Installments of principal of this Bond are due and payable as
described in the Indenture.
Interest payable on this Bond on a Payment Date will be equal
to the amount of interest that has accrued on the Class
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Principal Balance of this Bond during the one-month period ending on the last
day of the month preceding the month in which each such Payment Date occurs
(each, an "Interest Accrual Period").
The principal of, and interest on, this Bond 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 Bond shall be applied as set forth in the
Indenture. Any installment of principal or interest which is not paid when and
as due shall bear interest as described in the Indenture.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Sequoia Mortgage Trust 199_-_ has caused
this instrument to be duly executed by its duly authorized officer.
Dated:_______________ SEQUOIA MORTGAGE TRUST 199_-_
By:
--------------------------------
not in its individual capacity
but solely as Owner Trustee
By:
--------------------------------
Title:
-----------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds referred to in the within-mentioned Indenture.
,
- ----------------------------
as Trustee
By:
-----------------------------------
Authorized Signatory
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This Bond is one of a duly authorized issue of Bonds of the
Issuer, designated as its Collateralized Mortgage Bonds, Series 199_-_ (herein
called the "Bonds"). The Bonds are issuable in one or more classes; the Bonds
of particular Classes being herein called the Class A-1, Class B-1 and Class
B-2 Bonds, all issued and to be issued under the Issuer's Indenture dated as of
____________ ___, 199__ between the Issuer and ________________________________
(the "Trustee", which term includes any successor Trustee under the Indenture),
which authorized the Bonds, and reference is hereby made thereto for a
statement of the respective rights thereunder of the Issuer, the Trustee and
the Holders of the Bonds of each particular Class thereof and the terms upon
which the Bonds of each Class are, and are to be, authenticated and delivered.
The Class A-1 Bonds constitute "Senior Bonds" and the Class
B-1 Bonds and Class B-2 Bonds constitute "Subordinated Bonds".
All terms used in this Bond which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Bond Interest Rate for the Class B-1 Bonds (the "Class B-1
Bond Interest Rate") and any Interest Accrual Period will equal
________________.
As provided in the Indenture, the Bonds are issuable in
Classes which may vary as provided or permitted in the Indenture. Bonds of each
Class are equally and ratably secured by the collateral pledged as security
therefor to the extent provided by the Indenture.
For each Payment Date, the aggregate amount of each
installment of principal due and payable on the Class B-1 Bonds will be equal
to the Class B-1 Principal Payment Amount for such Payment Date. The Class B-1
Principal Payment Amount for any Payment Date is equal to the sum of (i) the
Class B-1 Percentage of the sum of (a) the principal portion of the Scheduled
Payment due on each Pledged Mortgage [on the related Due Date], (b) the
principal portion of the purchase price of each Pledged Mortgage that was
purchased by Redwood Trust or another person pursuant to the Mortgage Loan
Purchase Agreement [or by the Master Servicer in connection with any optional
purchase by the Master Servicer of a
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defaulted Pledged Mortgage] as of such Payment Date, (c) the Substitution
Adjustment Amount in connection with any Deleted Pledged Mortgage received with
respect to such Payment Date, (d) any Insurance Proceeds or Liquidation
Proceeds allocable to recoveries of principal of Pledged Mortgages that are not
yet Liquidated Pledged Mortgages received during the [calendar month] preceding
the month of such Payment Date, (e) with respect to each Pledged Mortgage that
became a Liquidated Pledged Mortgage during the [calendar month] preceding the
month of such Payment Date, the Stated Principal Balance of such Pledged
Mortgage and (f) all partial and full principal prepayments by borrowers
received during the related Prepayment Period and (ii) any Class B-1 Principal
Carryover Shortfall.
Payments of principal or interest, if any, on the Bonds will
be made on each Payment Date, commencing on __________ ___, 199__, in the
manner and in accordance with the priorities for the Bonds provided in the
Indenture.
The entire unpaid principal amount of each Class of Bonds
shall be due and payable, if not then previously paid, on the Stated Maturity
of the final installment of principal of such Class.
All payments of principal of, and interest on, the Bonds shall
be made only from the Trust Estate Granted as security for the Bonds and any
other assets of the Issuer that have not been Granted as security for any other
bonds or obligations of the Issuer, and each Holder hereof, by its acceptance
of this Bond, agrees that it will have recourse solely against such Trust
Estate and such other assets of the Issuer and that neither Wilmington Trust
Company in its individual capacity, any holder of a beneficial interest in the
Issuer nor any of their respective shareholders, partners, beneficiaries,
agents, officers, directors, employees, successors or assigns shall be
personally liable for any amounts payable, or performance due, under this Bond
or the Indenture.
Payment of the then remaining unpaid principal amount of this
Bond on the Stated Maturity of its final installment of principal or on such
earlier date as the Issuer shall be required to pay the then remaining unpaid
principal amount of this Bond or payment of the Redemption Price payable on any
date as of which
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this Bond has been called for redemption in full, shall be made upon
presentation of this Bond to the office or agency of the Issuer maintained for
such purpose. Payments of interest on this Bond due and payable on each Payment
Date or on any Optional Redemption Date, to the extent this Bond is not being
paid in full, together with any installment of principal of this Bond due and
payable on each Payment Date or the Optional Redemption Date, to the extent not
in full payment of this Bond, shall be made by check mailed to the Person whose
name appears as the registered Holder of this Bond (or one or more Predecessor
Bonds) on the Bond Register as of the last day of the month preceding the month
in which such Payment Date occurs (each a "Record Date").
Checks for amounts which include installments of principal due
on this Bond shall be mailed to the Person entitled thereto at the address of
such Person as it appears on the Bond Register as of the applicable Record Date
without requiring that this Bond be submitted for notation of payment and
checks returned undelivered will be held for payment to the Person entitled
thereto, subject to the terms of the Indenture, at the office or agency in the
United States of America designated by the Issuer for such purpose pursuant to
the Indenture. Any reduction in the principal amount of this Bond (or any one
or more Predecessor Bonds) effected by any payments made on any Payment Date
shall be binding upon all Holders of this Bond and of any Bond issued upon the
registration of transfer hereof or in exchange herefor 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 Bond on a Payment Date or Optional Redemption Date which is prior to the
Stated Maturity of the final installment of principal hereof, then the Trustee,
on behalf of the Issuer, will notify the Person who was the registered Holder
hereof on the last day of the month prior to the month in which such Payment
Date or optional Redemption Date occurs, and the amount then due and payable
shall, if sufficient funds therefor are available, be payable only upon
presentation of this Bond to the office or agency of the Issuer maintained for
such purpose.
Prior to the payment in full of the Senior Bonds, the failure
of the Issuer to pay when and as due any installment of principal of or
interest (regardless of the lapse of any grace
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period) on any Subordinated Bond shall not constitute an Event of Default under
the Indenture. In addition, notwithstanding any applicable provision of the
Indenture, upon payment in full of the Senior Bonds, the prior occurrence of
any such shortfalls attributable to the Subordinated Bonds, which shortfalls
have previously been paid in full, will not constitute an Event of Default
under the Indenture in respect of the Subordinated Bonds.
If an Event of Default as defined in the Indenture shall occur
and be continuing with respect to the Bonds, the Bonds may become or be
declared due and payable in the manner and with the effect provided in the
Indenture. If any such acceleration of maturity occurs prior to the Stated
Maturity of the final installment of principal of this Bond, the amount payable
to the Holder of this Bond will be equal to the Class Principal Amount of this
Bond on the date this Bond becomes so due and payable, together with accrued
interest. Following the acceleration of the maturity of the Bonds, all amounts
collected as proceeds of the collateral securing the Bonds or otherwise shall
be applied as described in the Indenture. Following such acceleration, interest
on any overdue installments of interest on all Bonds shall be payable at the
rate set forth in the Indenture.
The Bonds are not prepayable or redeemable at the option or
direction of the Issuer except that the Bonds are subject to redemption in
whole, but not in part, at the option of the Issuer on any Payment Date on or
after the Payment Date on which the sum of (i) the Invested Amount, (ii) the
Senior Class Principal Amount, (iii) the Class B- 1 Principal Amount and (iv)
the Class B-2 Principal Amount, after giving effect to payments expected to be
made on such Payment Date, is __% or less of the aggregate of the Stated
Principal Balances of the Pledged Mortgages as of the Cut- Off Date. Any such
redemption at the option of the Issuer shall be at a price equal to 100% of the
unpaid principal amount of the Bonds (including, in the case of the
Subordinated Bonds, any unpaid Class B-1 Principal Carryover Shortfall and/or
Class B-2 Principal Carryover Shortfall) so redeemed plus accrued interest
through the last day of the month preceding the month in which such optional
redemption occurs.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Bond may be registered on
the Bond Register of the Issuer, upon surrender of
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this Bond 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 Trustee duly
executed by the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Bonds of the same Class, of authorized denominations
and in the same aggregate initial principal amount, will be issued to the
designated transferee or transferees.
Prior to the due presentment for registration of transfer of
this Bond, the Issuer, the Trustee, and any agent of the Issuer shall treat the
Person in whose name this Bond is registered (i) on any Record Date, for
purposes of making payments, and (ii) on any other date for any other purposes,
as the owner hereof, whether or not this Bond be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Bonds under the
Indenture at any time by the Issuer with the consent of the Holders of Bonds
representing two-thirds of the aggregate Class Principal Amount of the
Controlling Class. The Indenture also contains provisions permitting the
Holders of Bonds representing specified percentages of the aggregate Class
Principal Amount of the Controlling Class on behalf of the Holders of all the
Bonds of such Class, 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, at the time of the
giving thereof, of this Bond (or any one or more Predecessor Bonds) shall be
conclusive and binding upon such Holder and upon all future holders of this
Bond and of any Bond issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Bond. The Indenture also permits the Trustee to amend
or waive certain terms and conditions set forth in the Indenture without the
consent of the Holders of the Bonds of any Series issued thereunder.
The Class B-1 Bonds are "Book Entry Bonds" which will be
available to investors only through the book entry facilities of The Depository
Trust Company, and bond certificates for all Classes
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of Bonds will be available only under certain limited circumstances as
described in the Indenture.
AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE
SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
No reference herein to the Indenture and no provision of this
Bond or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional to the extent permitted by applicable law,
to pay the principal of, and interest on, this Bond at the times, place and
rate, and in the coin or currency herein prescribed.
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EXHIBIT IV
FORM OF A CLASS B-2 BOND
The form of a Class B-2 Bond is as follows:
PRINCIPAL OF THIS BOND IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE CLASS PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE CLASS PRINCIPAL AMOUNT OF
THIS BOND MAY BE ASCERTAINED ONLY BY OBTAINING A CONFIRMATION THEREOF FROM THE
TRUSTEE UNDER THE INDENTURE REFERRED TO BELOW.
[UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND
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.]
THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS B-1
BONDS AND THE SENIOR BONDS AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS BOND. THE ISSUE DATE OF THIS BOND IS _____________, 199__. THE PER ANNUM
RATE OF INTEREST ON THIS BOND IS ___% ASSUMING THAT PRINCIPAL PAYMENTS ARE MADE
ON THE MORTGAGE COLLATERAL UNDERLYING THE BONDS AT _______% OF THE STANDARD
PREPAYMENT ASSUMPTION (AS DEFINED IN THE PROSPECTUS SUPPLEMENT) THIS BOND HAS
BEEN ISSUED WITH $ OF OID PER $1,000 OF INITIAL PRINCIPAL AMOUNT, THE YIELD TO
MATURITY IS ___% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL SHORT
ACCRUAL PERIOD IS $_______ OF OID PER $1,000 OF INITIAL PRINCIPAL AMOUNT,
CALCULATED ASSUMING THE YIELD IS ACCRUED DAILY DURING INITIAL SHORT PERIOD. NO
REPRESENTATION IS MADE AS TO THE RATE AT WHICH PRINCIPAL PAYMENTS WILL BE MADE
ON THE MORTGAGE COLLATERAL.
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SEQUOIA MORTGAGE TRUST 199_-_,
a Delaware Statutory Business Trust
Collateralized Mortgage Bonds
CLASS B-2
DUE: __________ ___, _____
ACCRUAL DATE: __________ ___, _____
ISSUE DATE: __________ ___, _____
INTEREST RATE
Initial Class Principal CUSIP NO. ______
Amount of this Bond:
$____________________ CERTIFICATE NUMBER 1
Sequoia Mortgage Trust 199_-_ (the "Issuer"), a statutory
business trust formed under the Deposit Trust Agreement dated as of __________
___, 199__, and having ________________________, a Delaware bank and trust
company, as Owner Trustee for value received, hereby promises to pay to CEDE &
CO. or registered assigns, the principal sum of [AMOUNT IN WORDS]
($___________) in monthly installments on the ____________ day of each month,
commencing on __________ ___, _____ (each, a "Payment Date"), and ending on or
before __________ ___, _____ (the "Stated Maturity" of such final installment
of principal), and to pay interest (computed on the basis of a 360-day year of
twelve 30-day months) on the Class Principal Amount (as defined in the
Indenture) of this Bond from time to time from __________ ___, _____ (the
"Accrual Date"), or such later date to which interest has been paid, through
the last day of the month preceding the month in which the principal amount of
this Bond is paid in full, at a variable rate determined as described below,
such interest being payable monthly on each Payment Date. If any Payment Date
shall not be a "Business Day" (as defined in the Indenture), payment of the
amount due will be made on the next succeeding Business Day.
Installments of principal of this Bond are due and payable as
described in the Indenture.
Interest payable on this Bond on a Payment Date will be equal
to the amount of interest that has accrued on the Class
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Principal Balance of this Bond during the one-month period ending on the last
day of the month preceding the month in which each such Payment Date occurs
(each, an "Interest Accrual Period").
The principal of, and interest on, this Bond 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 Bond shall be applied as set forth in the
Indenture. Any installment of principal or interest which is not paid when and
as due shall bear interest as described in the Indenture.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Sequoia Mortgage Trust 199_-_ has caused
this instrument to be duly executed by its duly authorized officer.
Dated:_______________ SEQUOIA MORTGAGE TRUST 199_-_
By:
--------------------------------
not in its individual capacity
but solely as Owner Trustee
By:
--------------------------------
Title:
-----------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds referred to in the within-mentioned Indenture.
,
- ----------------------------
as Trustee
By:
-----------------------------------
Authorized Signatory
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This Bond is one of a duly authorized issue of Bonds of the
Issuer, designated as its Collateralized Mortgage Bonds, Series 199__-__
(herein called the "Bonds"). The Bonds are issuable in one or more classes; the
Bonds of particular Classes being herein called the Class A-1, Class B-1 and
Class B-2 Bonds, all issued and to be issued under the Issuer's Indenture dated
as of ____________ ___, _____, between the Issuer and ____________
_____________________ (the "Trustee", which term includes any successor Trustee
under the Indenture), which authorized the Bonds, and reference is hereby made
thereto for a statement of the respective rights thereunder of the Issuer, the
Trustee and the Holders of the Bonds of each particular Class thereof and the
terms upon which the Bonds of each Class are, and are to be, authenticated and
delivered.
The Class A-1 Bonds constitute "Senior Bonds" and the Class
B-1 and Class B-2 Bonds constitute "Subordinated Bonds".
All terms used in this Bond which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Bond Interest Rate for the Class B-2 Bonds (the "Class B-2
Bond Interest Rate") and any Interest Accrual Period will equal
_______________.
As provided in the Indenture, the Bonds are issuable in
Classes which may vary as provided or permitted in the Indenture. Bonds of each
Class are equally and ratably secured by the collateral pledged as security
therefor to the extent provided by the Indenture.
For each Payment Date, the aggregate amount of each
installment of principal due and payable on the Class B-2 Bonds will be equal
to the Class B-2 Principal Payment Amount for such Payment Date. The Class B-2
Principal Payment Amount for any Payment Date is equal to the sum of (i) the
Class B-2 Percentage of the sum of (a) the principal portion of the Scheduled
Payment due on each Pledged Mortgage [on the related Due Date], (b) the
principal portion of the purchase price of each Pledged Mortgage that was
purchased by Redwood Trust or another person pursuant to the Mortgage Loan
Purchase Agreement [or by the Master Servicer in connection with any optional
purchase by the Master Servicer of a
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defaulted Pledged Mortgage] as of such Payment Date, (c) the Substitution
Adjustment Amount in connection with any Deleted Pledged Mortgage received with
respect to such Payment Date, (d) any Insurance Proceeds or Liquidation
Proceeds allocable to recoveries of principal of Pledged Mortgages that are not
yet Liquidated Pledged Mortgages received during the [calendar month] preceding
the month of such Payment Date, (e) with respect to each Pledged Mortgage that
became a Liquidated Pledged Mortgage during the [calendar month] preceding the
month of such Payment Date, the Stated Principal Balance of such Pledged
Mortgage and (f) all partial and full principal prepayments by borrowers
received during the related Prepayment Period and (ii) any Class B-2 Principal
Carryover Shortfall.
Payments of principal or interest, if any, on the Bonds will
be made on each Payment Date, commencing on _____________ __, 199_, in the
manner and in accordance with the priorities for the Bonds provided in the
Indenture.
The entire unpaid principal amount of each Class of Bonds
shall be due and payable, if not then previously paid, on the Stated Maturity
of the final installment of principal of such Class.
All payments of principal of, and interest on, the Bonds shall
be made only from the Trust Estate Granted as security for the Bonds and any
other assets of the Issuer that have not been Granted as security for any other
bonds or obligations of the Issuer, and each Holder hereof, by its acceptance
of this Bond, agrees that it will have recourse solely against such Trust
Estate and such other assets of the Issuer and that neither Wilmington Trust
Company in its individual capacity, any holder of a beneficial interest in the
Issuer nor any of their respective shareholders, partners, beneficiaries,
agents, officers, directors, employees, successors or assigns shall be
personally liable for any amounts payable, or performance due, under this Bond
or the Indenture.
Payment of the then remaining unpaid principal amount of this
Bond on the Stated Maturity of its final installment of principal or on such
earlier date as the Issuer shall be required to pay the then remaining unpaid
principal amount of this Bond or payment of the Redemption Price payable on any
date as of which
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this Bond has been called for redemption in full, shall be made upon
presentation of this Bond to the office or agency of the Issuer maintained for
such purpose. Payments of interest on this Bond due and payable on each Payment
Date or on any Optional Redemption Date, to the extent this Bond is not being
paid in full, together with any installment of principal of this Bond due and
payable on each Payment Date or the Optional Redemption Date, to the extent not
in full payment of this Bond, shall be made by check mailed to the Person whose
name appears as the registered Holder of this Bond (or one or more Predecessor
Bonds) on the Bond Register as of the last day of the month preceding the month
in which such Payment Date occurs (each a "Record Date").
Checks for amounts which include installments of principal due
on this Bond shall be mailed to the Person entitled thereto at the address of
such Person as it appears on the Bond Register as of the applicable Record Date
without requiring that this Bond be submitted for notation of payment and
checks returned undelivered will be held for payment to the Person entitled
thereto, subject to the terms of the Indenture, at the office or agency in the
United States of America designated by the Issuer for such purpose pursuant to
the Indenture. Any reduction in the principal amount of this Bond (or any one
or more Predecessor Bonds) effected by any payments made on any Payment Date
shall be binding upon all Holders of this Bond and of any Bond issued upon the
registration of transfer hereof or in exchange herefor 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 Bond on a Payment Date or Optional Redemption Date which is prior to the
Stated Maturity of the final installment of principal hereof, then the Trustee,
on behalf of the Issuer, will notify the Person who was the registered Holder
hereof on the last day of the month prior to the month in which such Payment
Date or optional Redemption Date occurs, and the amount then due and payable
shall, if sufficient funds therefor are available, be payable only upon
presentation of this Bond to the office or agency of the Issuer maintained for
such purpose.
Prior to the payment in full of the Senior Bonds, the failure
of the Issuer to pay when and as due any installment of principal of or
interest (regardless of the lapse of any grace
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period) on any Subordinated Bond shall not constitute an Event of Default under
the Indenture. In addition, notwithstanding any applicable provision of the
Indenture, upon payment in full of the Senior Bonds, the prior occurrence of
any such shortfalls attributable to the Subordinated Bonds, which shortfalls
have previously been paid in full, will not constitute an Event of Default
under the Indenture in respect of the Subordinated Bonds.
If an Event of Default as defined in the Indenture shall occur
and be continuing with respect to the Bonds, the Bonds may become or be
declared due and payable in the manner and with the effect provided in the
Indenture. If any such acceleration of maturity occurs prior to the Stated
Maturity of the final installment of principal of this Bond, the amount payable
to the Holder of this Bond will be equal to the Class Principal Amount of this
Bond on the date this Bond becomes so due and payable, together with accrued
interest. Following the acceleration of the maturity of the Bonds, all amounts
collected as proceeds of the collateral securing the Bonds or otherwise shall
be applied as described in the Indenture. Following such acceleration, interest
on any overdue installments of interest on all Bonds shall be payable at the
rate set forth in the Indenture.
The Bonds are not prepayable or redeemable at the option or
direction of the Issuer except that the Bonds are subject to redemption in
whole, but not in part, at the option of the Issuer on any Payment Date on or
after the Payment Date on which the sum of (i) the Invested Amount, (ii) the
Senior Class Principal Amount and (iii) the Subordinated Class Principal
Amount, after giving effect to payments expected to be made on such Payment
Date, is __% or less of the aggregate of the Stated Principal Balances of the
Pledged Mortgages as of the Cut-Off Date. Any such redemption at the option of
the Issuer shall be at a price equal to 100% of the unpaid principal amount of
the Bonds (including, in the case of the Subordinated Bonds, any unpaid Class
B-1 Principal Carryover Shortfall and/or Class B-2 Principal Carryover
Shortfall) so redeemed plus accrued interest through the last day of the month
preceding the month in which such optional redemption occurs.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Bond may be registered on
the Bond Register of the Issuer, upon surrender of this Bond for registration
of transfer at the office or agency
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designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Bonds of the same Class, of authorized
denominations and in the same aggregate initial principal amount, will be
issued to the designated transferee or transferees.
Prior to the due presentment for registration of transfer of
this Bond, the Issuer, the Trustee, and any agent of the Issuer shall treat the
Person in whose name this Bond is registered (i) on any Record Date, for
purposes of making payments, and (ii) on any other date for any other purposes,
as the owner hereof, whether or not this Bond be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Bonds under the
Indenture at any time by the Issuer with the consent of the Holders of Bonds
representing two-thirds of the aggregate Class Principal Amount of the
Controlling Class. The Indenture also contains provisions permitting the
Holders of Bonds representing specified percentages of the aggregate Class
Principal Amount of the Controlling Class on behalf of the Holders of all the
Bonds such Class, 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, at the time of the
giving thereof, of this Bond (or any one or more Predecessor Bonds) shall be
conclusive and binding upon such Holder and upon all future holders of this
Bond and of any Bond issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Bond. The Indenture also permits the Trustee to amend
or waive certain terms and conditions set forth in the Indenture without the
consent of the Holders of the Bonds of any Series issued thereunder.
[The Subordinated Bonds are "Book Entry Bonds" which will be
available to investors only through the book entry facilities of The Depository
Trust Company, and bond certificates for all Classes of Bonds will be available
only under certain limited circumstances as described in the Indenture.]
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AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE
SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
No reference herein to the Indenture and no provision of this
Bond or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional to the extent permitted by applicable law,
to pay the principal of, and interest on, this Bond at the times, place and
rate, and in the coin or currency herein prescribed.
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EXHIBIT V
FORM OF BOND INSURANCE POLICY
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