Document:

EXHIBIT 4.1

 

 

IMPAC CMB TRUST SERIES 2005-6

Issuer

 

and

WELLS FARGO BANK, N.A.

Indenture Trustee

	
             
 	
            
 
 
 	
             
 

 

INDENTURE

Dated as of September 9, 2005

	
             
 	
            
 
 
 	
             
 

 

COLLATERALIZED ASSET-BACKED BONDS

	
             
 	
            
 
 
 	
             
 

 

 

 

 

TABLE OF CONTENTS

Section

ARTICLE I

Definitions

	
            Section 1.01
 	
            Definitions
 
	
            Section 1.02
 	
            Incorporation by Reference of Trust Indenture Act
 
	
            Section 1.03
 	
            Rules of Construction
 

ARTICLE II

Original Issuance of Bonds

	
            Section 2.01
 	
            Form
 
	
            Section 2.02
 	
            Execution, Authentication and Delivery
 
	
            Section 2.03
 	
            Acceptance of Mortgage Loans by Indenture Trustee
 
	
            Section 2.04
 	
            Acceptance of Derivative Contracts and Special Certificate Cap Contract by Indenture Trustee
 
	
            Section 2.05
 	
            [Reserved]. 
 
	
            Section 2.06
 	
            [Reserved]. 
 

ARTICLE III

Covenants

	
            Section 3.01
 	
            Collection of Payments with respect to the Mortgage Loans
 
	
            Section 3.02
 	
            Maintenance of Office or Agency
 
	
            Section 3.03
 	
            Money for Payments To Be Held in Trust; Paying Agent
 
	
            Section 3.04
 	
            Existence
 
	
            Section 3.05
 	
            Payment of Principal and Interest
 
	
            Section 3.06
 	
            Protection of Trust Estate
 
	
            Section 3.07
 	
            Opinions as to Trust Estate
 
	
            Section 3.08
 	
            Performance of Obligations
 
	
            Section 3.09
 	
            Negative Covenants
 
	
            Section 3.10
 	
            Annual Statement as to Compliance
 
	
            Section 3.11
 	
            [Reserved]. 
 
	
            Section 3.12
 	
            Representations and Warranties Concerning the Mortgage Loans
 
	
            Section 3.13
 	
            Amendments to Servicing Agreement
 
	
            Section 3.14
 	
            Master Servicer as Agent and Bailee of the Indenture Trustee
 
	
            Section 3.15
 	
            Investment Company Act
 
	
            Section 3.16
 	
            Issuer May Consolidate, etc
 
	
            Section 3.17
 	
            Successor or Transferee
 
	
            Section 3.18
 	
            No Other Business
 
	
            Section 3.19
 	
            No Borrowing
 
	
            Section 3.20
 	
            Guarantees, Loans, Advances and Other Liabilities
 
	
            Section 3.21
 	
            Capital Expenditures
 
	
            Section 3.22
 	
            Determination of Bond Interest Rate
 
	
            Section 3.23
 	
            Restricted Payments
 

 

 

 

 

	
            Section 3.24
 	
            Notice of Events of Default
 
	
            Section 3.25
 	
            Further Instruments and Acts
 
	
            Section 3.26
 	
            Statements to Bondholders
 
	
            Section 3.27
 	
            [Reserved]. 
 
	
            Section 3.28
 	
            [Reserved]. 
 
	
            Section 3.29
 	
            Certain Representations Regarding the Trust Estate. 
 
	
            Section 3.30
 	
            [Reserved]. 
 
	
            Section 3.31
 	
            [Reserved]. 
 
	
            Section 3.32
 	
            Replacement Derivative Contracts
 
	
            Section 3.33
 	
            [Reserved]. 
 
	
            Section 3.34
 	
            Allocation of Realized Losses
 
	
            Section 3.35
 	
            [Reserved]. 
 
	
            Section 3.36
 	
            [Reserved]. 
 

ARTICLE IV

The Bonds; Satisfaction and Discharge of Indenture

	
            Section 4.01
 	
            The Bonds
 
	
            Section 4.02
 	
            Registration of and Limitations on Transfer and Exchange of Bonds; Appointment of Bond Registrar and Certificate Registrar
 
	
            Section 4.03
 	
            Mutilated, Destroyed, Lost or Stolen Bonds
 
	
            Section 4.04
 	
            Persons Deemed Owners
 
	
            Section 4.05
 	
            Cancellation
 
	
            Section 4.06
 	
            Book-Entry Bonds
 
	
            Section 4.07
 	
            Notices to Depository
 
	
            Section 4.08
 	
            Definitive Bonds
 
	
            Section 4.09
 	
            Tax Treatment
 
	
            Section 4.10
 	
            Satisfaction and Discharge of Indenture
 
	
            Section 4.11
 	
            Application of Trust Money
 
	
            Section 4.12
 	
            Repayment of Monies Held by Paying Agent
 
	
            Section 4.13
 	
            Temporary Bonds
 
	
            Section 4.14
 	
            [Reserved] 
 
	
            Section 4.15
 	
            Representation Regarding ERISA
 

ARTICLE V

Default and Remedies

	
            Section 5.01
 	
            Events of Default
 
	
            Section 5.02
 	
            Acceleration of Maturity; Rescission and Annulment
 
	
            Section 5.03
 	
            Collection of Indebtedness and Suits for Enforcement by Indenture Trustee. 
 
	
            Section 5.04
 	
            Remedies; Priorities
 
	
            Section 5.05
 	
            Optional Preservation of the Trust Estate
 
	
            Section 5.06
 	
            Limitation of Suits
 
	
            Section 5.07
 	
            Unconditional Rights of Bondholders To Receive Principal and Interest
 
	
            Section 5.08
 	
            Restoration of Rights and Remedies
 
	
            Section 5.09
 	
            Rights and Remedies Cumulative
 

 

 

 

 

	
            Section 5.10
 	
            Delay or Omission Not a Waiver
 
	
            Section 5.11
 	
            Control By the Bond Insurer
 
	
            Section 5.12
 	
            Waiver of Past Defaults
 
	
            Section 5.13
 	
            Undertaking for Costs
 
	
            Section 5.14
 	
            Waiver of Stay or Extension Laws
 
	
            Section 5.15
 	
            Sale of Trust Estate
 
	
            Section 5.16
 	
            Action on Bonds
 
	
            Section 5.17
 	
            Performance and Enforcement of Certain Obligations
 

ARTICLE VI

The Indenture Trustee

	
            Section 6.01
 	
            Duties of Indenture Trustee
 
	
            Section 6.02
 	
            Rights of Indenture Trustee
 
	
            Section 6.03
 	
            Individual Rights of Indenture Trustee
 
	
            Section 6.04
 	
            Indenture Trustee’s Disclaimer
 
	
            Section 6.05
 	
            Notice of Event of Default
 
	
            Section 6.06
 	
            Reports by Indenture Trustee to Bondholders and Tax Administration
 
	
            Section 6.07
 	
            Compensation and Indemnity
 
	
            Section 6.08
 	
            Replacement of Indenture Trustee
 
	
            Section 6.09
 	
            Successor Indenture Trustee by Merger
 
	
            Section 6.10
 	
            Appointment of Co-Indenture Trustee or Separate Indenture Trustee
 
	
            Section 6.11
 	
            Eligibility; Disqualification
 
	
            Section 6.12
 	
            Preferential Collection of Claims Against Issuer
 
	
            Section 6.13
 	
            Representations and Warranties
 
	
            Section 6.14
 	
            Directions to Indenture Trustee
 
	
            Section 6.15
 	
            The Agents
 
	
            Section 6.16
 	
            Execution of Derivative Contracts
 

ARTICLE VII

Bondholders’ Lists and Reports

	
            Section 7.01
 	
            Issuer To Furnish Indenture Trustee Names and Addresses of Bondholders
 
	
            Section 7.02
 	
            Preservation of Information; Communications to Bondholders
 
	
            Section 7.03
 	
            Reports of Issuer
 
	
            Section 7.04
 	
            Reports by Indenture Trustee
 
	
            Section 7.05
 	
            Statements to Bondholders
 

 

ARTICLE VIII

Accounts, Disbursements and Releases

	
            Section 8.01
 	
            Collection of Money
 
	
            Section 8.02
 	
            Trust Accounts
 
	
            Section 8.03
 	
            Officer’s Certificate
 
	
            Section 8.04
 	
            Termination Upon Distribution to Bondholders
 
	
            Section 8.05
 	
            Release of Trust Estate
 
	
            Section 8.06
 	
            Surrender of Bonds Upon Final Payment
 

 

 

 

 

	
            Section 8.07
 	
            Optional Redemption of the Bonds
 

ARTICLE IX

Supplemental Indentures

	
            Section 9.01
 	
            Supplemental Indentures Without Consent of Bondholders
 
	
            Section 9.02
 	
            Supplemental Indentures With Consent of Bondholders
 
	
            Section 9.03
 	
            Execution of Supplemental Indentures
 
	
            Section 9.04
 	
            Effect of Supplemental Indenture
 
	
            Section 9.05
 	
            Conformity with Trust Indenture Act
 
	
            Section 9.06
 	
            Reference in Bonds to Supplemental Indentures
 

ARTICLE X

Miscellaneous

	
            Section 10.01
 	
            Compliance Certificates and Opinions, etc
 
	
            Section 10.02
 	
            Form of Documents Delivered to Indenture Trustee
 
	
            Section 10.03
 	
            Acts of Bondholders
 
	
            Section 10.04
 	
            Notices etc., to Indenture Trustee, Issuer, Seller and Rating Agencies
 
	
            Section 10.05
 	
            Notices to Bondholders; Waiver
 
	
            Section 10.06
 	
            Conflict with Trust Indenture Act
 
	
            Section 10.07
 	
            Effect of Headings
 
	
            Section 10.08
 	
            Successors and Assigns
 
	
            Section 10.09
 	
            Separability
 
	
            Section 10.10
 	
            Legal Holidays
 
	
            Section 10.11
 	
            Benefits of Indenture
 
	
            Section 10.12
 	
            GOVERNING LAW
 
	
            Section 10.13
 	
            Counterparts
 
	
            Section 10.14
 	
            Recording of Indenture
 
	
            Section 10.15
 	
            Issuer Obligation
 
	
            Section 10.16
 	
            No Petition
 
	
            Section 10.17
 	
            Inspection
 

ARTICLE XI

Certain Matters Regarding the Bond Insurer

	
            Section 11.01
 	
            Rights of the Bond Insurer to Exercise the Rights of the Class 1-A-1 Bondholders and Class 1-A-2 Bondholders
 
	
            Section 11.02
 	
            Claims Upon the Bond Insurance Policy; Insurance Account
 
	
            Section 11.03
 	
            Effect of Payments by the Bond Insurer; Subrogation
 
	
            Section 11.04
 	
            Notices and Information to the Bond Insurer
 
	
            Section 11.05
 	
            Trustee to Hold Bond Insurance Policy
 

 

EXHIBITS

	
            Exhibit A-1
 	
            — 
 	
            Form of Class [_]-A-[_] Bonds
 
	
            Exhibit A-2
 	
            — 
 	
            Form of Class [_]-M-[_] Bonds
 
	
            Exhibit A-3
 	
            — 
 	
            Form of Class [_]-B-[_] Bonds
 
	
            Exhibit B
 	
            — 
 	
            Mortgage Loan Schedule
 

 

 

 

 

	
            Exhibit C 
 	
            — 
 	
            [Reserved]
 
	
            Exhibit D 
 	
            — 
 	
            [Reserved]
 
	
            Exhibit E 
 	
            — 
 	
            Derivative Contracts
 
	
            Exhibit F 
 	
            — 
 	
            Special Certificate Cap Contract
 
	
            Exhibit G 
 	
            — 
 	
            [Reserved]
 
	
            Exhibit H
 	
            — 
 	
            [Reserved]
 
	
            Exhibit I-1
 	
            — 
 	
            [Reserved]
 
	
            Exhibit I-2
 	
            — 
 	
            [Reserved]
 
	
            Exhibit J
 	
            — 
 	
            [Reserved]
 
	
            Appendix A
 	
            — 
 	
            Definitions
 

 

 

This Indenture, dated as of September 9, 2005, is entered into between Impac CMB Trust Series 2005-6, a Delaware statutory trust, as Issuer (the “Issuer”), and Wells Fargo Bank, N.A., a national banking association, as Indenture Trustee (the “Indenture Trustee”).

WITNESSETH THAT:

Each party hereto agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Issuer’s Collateralized Asset-Backed Bonds, Series 2005-6 (the “Bonds”).

GRANTING CLAUSE

The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as trustee for the benefit of the Holders of the Bonds and the Bond Insurer, all of the Issuer’s right, title and interest in and to whether now existing or hereafter created by (a) the Mortgage Loans, Eligible Substitute Mortgage Loans and the proceeds thereof and all rights under the Related Documents; (b) all funds on deposit from time to time in the Collection Account allocable to the Mortgage Loans excluding any investment income from such funds; (c) all funds on deposit from time to time in the Payment Account and in all proceeds thereof; (d) all rights under (i) the Mortgage Loan Purchase Agreement as assigned to the Issuer, with respect to the Mortgage Loans, (ii) the Servicing Agreement and any Subservicing Agreements, (iii) any title, hazard and primary insurance policies with respect to the Mortgaged
Properties, (iv) the Custodial Agreement and (v) the rights with respect to the Derivative Contracts and the Special Certificate Cap Contract as assigned to the Issuer; (e) with respect to the Holders of the Class 1-A Bonds, the Bond Insurance Policy and (f) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing and all payments on or under, and all proceeds of every kind and nature whatsoever in respect of, any or all of the foregoing and all payments on or under, and all proceeds of every kind and nature whatsoever in the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks, deposit accounts, rights to payment of any and every kind, and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing
(collectively, the “Trust Estate” or the “Collateral”).

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Bonds, equally and ratably without prejudice, priority or distinction, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

The Indenture Trustee, as trustee on behalf of the Holders of the Bonds and the Bond Insurer, acknowledges such Grant, accepts the trust under this Indenture in accordance with the provisions hereof and agrees to perform its duties as Indenture Trustee as required herein.  The Indenture Trustee agrees that it will hold the Bond Insurance Policy in trust and that it will hold any proceeds of any claim made upon the Bond Insurance Policy solely for the use and benefit of the Holders of the Class 1-A-1 Bonds and Class 1-A-2 Bonds in accordance with the terms hereof and the terms of the Bond Insurance Policy.

ARTICLE I

 

 

 

Definitions

Section 1.01     Definitions.  For all purposes of this Indenture, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Definitions attached hereto as Appendix A which is incorporated by reference herein. All other capitalized terms used herein shall have the meanings specified herein.

Section 1.02     Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the Trust Indenture Act (the “TIA”), the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:

“Commission” means the Securities and Exchange Commission.

“indenture securities” means the Bonds.

“indenture security holder” means a Bondholder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Indenture Trustee.

“obligor” on the indenture securities means the Issuer and any other obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rules and have the meanings assigned to them by such definitions.

	
            Section 1.03
 	
            Rules of Construction.  Unless the context otherwise requires:
 
	
             
	
            (i)
 	
            a term has the meaning assigned to it;
 	
             

				

(ii)          an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time;

	
            (iii)
 	
            “or” is not exclusive;
 	
             

	
            (iv)
 	
            “including” means including without limitation;
 

(v)           words in the singular include the plural and words in the plural include the singular; and

(vi)          any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

 

ARTICLE II

 

Original Issuance of Bonds

Section 2.01     Form.  The Class A, Class M and Class B Bonds, together with the Indenture Trustee’s certificate of authentication, shall be in substantially the form set forth in Exhibits A-1, A-2 and A-3 to this Indenture, respectively, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture.

The Bonds shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders).

The terms of the Bonds set forth in Exhibits A-1, A-2 and A-3 to this Indenture are part of the terms of this Indenture.

Section 2.02     Execution, Authentication and Delivery.  The Bonds shall be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Bonds may be manual or facsimile.

Bonds bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Bonds or did not hold such offices at the date of such Bonds.

The Indenture Trustee shall upon Issuer Request authenticate and deliver the Class 1-A-1, Class 1-A-2, Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1, Class 1-B-2, Class 2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds for original issue in an aggregate initial principal amount of $1,717,619,000. The Class 1-A-1 Bonds shall be issued in an aggregate initial principal amount of $957,433,000, the Class 1-A-2 Bonds shall be issued in an aggregate initial principal amount of $200,000,000, the Class 1-M-1 Bonds shall be issued in an aggregate initial principal amount of $141,297,000, the Class 1-M-2 Bonds shall be issued in an aggregate initial principal amount of $20,293,000, the Class 1-M-3 Bonds shall be issued in an aggregate initial principal amount of $59,375,000, the Class 1-M-4 Bonds shall be issued in an aggregate initial
principal amount of $54,865,000, the Class 1-M-5 Bonds shall be issued in an aggregate initial principal amount of $25,554,000, the Class 1-B-1 Bonds shall be issued in an aggregate initial principal amount of $29,312,000, the Class 1-B-2 Bonds shall be issued in an aggregate initial principal amount of $15,031,000, the Class 2-A-1 Bonds shall be issued in an aggregate initial principal amount of $100,812,000, the Class 2-A-2 Bonds shall be issued in an aggregate initial principal amount of $36,858,000, the Class 2-M-1 Bonds shall be issued in an aggregate initial principal amount of $24,133,000, the Class 2-M-2 Bonds shall be issued in an aggregate initial principal amount of $21,940,000, the Class 2-B-1 Bonds shall be issued in an aggregate initial principal amount of $17,552,000 and the Class 2-B-2 Bonds shall be issued in an aggregate initial principal amount of $13,164,000.

Each of the Bonds shall be dated the date of its authentication. The Bonds shall be issuable as registered Bonds and the Bonds shall be issuable in the minimum initial Bond Principal Balances of $100,000 and in integral multiples of $1 in excess thereof.

 

 

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 Indenture Trustee by the manual signature of one of its authorized signatories, 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 2.03       Acceptance of Mortgage Loans by Indenture Trustee.  (a) The Custodian as agent for the Indenture Trustee acknowledges receipt of, subject to the exceptions it notes pursuant to the procedures described below, the documents (or certified copies thereof) referred to in Section 2.1(b) of the Mortgage Loan Purchase Agreement, with respect to the Mortgage Loans, and declares that it holds and will continue to hold those documents and any amendments, replacements or supplements thereto and all other assets of the Trust Estate on behalf of the Indenture Trustee in trust for the use and benefit of all present and future Holders of the Bonds and the Bond Insurer. No later than 45 days after the Closing Date with respect to the Mortgage Loans, (or, with respect to any Eligible Substitute Mortgage
Loan, within 5 days after the receipt by the Custodian as agent for the Indenture Trustee thereof and, with respect to any documents received beyond 45 days after the Closing Date, promptly thereafter), the Custodian as agent for the Indenture Trustee agrees, for the benefit of the Bondholders and the Bond Insurer, to review each Mortgage File delivered to it and to execute and deliver, or cause to be executed and delivered, to the Indenture Trustee, the Seller, the Bond Insurer and the Master Servicer an Initial Certification in the form annexed to the Custodial Agreement as Exhibit One.  In conducting such review, the Custodian will ascertain whether all required documents described in Section 2.1(b) of the Mortgage Loan Purchase Agreement, with respect to the Mortgage Loans, have been executed and received and whether those documents relate, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans it has received, as
identified in Exhibit B to this Indenture, as supplemented (provided, however, that with respect to those documents described in subclause (b)(vii) of such section, the Custodian’s obligations shall extend only to documents actually delivered pursuant to such subclause). In performing any such review, the Custodian may conclusively rely on the purported due execution and genuineness of any such document and on the purported genuineness of any signature thereon. If the Custodian as agent for the Indenture Trustee finds any document constituting part of the Mortgage File not to have been executed or received, or to be unrelated to the Mortgage Loans identified in Exhibit B to this Indenture or to appear to be defective on its face, the Custodian as agent for the Indenture Trustee shall promptly notify the Seller and the Bond Insurer of such finding and of the Seller’s obligation to cure such defect or repurchase or substitute for
the related Mortgage Loan. To the extent that the Custodian as agent for the Indenture Trustee has not received a Mortgage File with respect to any of the Mortgage Loans by the Closing Date, the Custodian as agent for the Indenture Trustee shall not require the deposit of cash into the Payment Account or any other account to cover the amount of that Mortgage Loan and shall solely treat such Mortgage Loan as if it were in breach of a representation or warranty; provided that the aggregate Stated Principal Balance of such Mortgage Loans does not exceed 1% of the Cut-off Date Balance. 

(b)        No later than 180 days after the Closing Date, (with respect to the Mortgage Loans), the Custodian as agent for the Indenture Trustee will review, for the benefit of the Bondholders and the Bond Insurer, the Mortgage Files and will execute and deliver or cause to be executed and delivered to the Seller, the Bond Insurer and the Indenture Trustee, a Final 

 

Certification in the form annexed to the Custodial Agreement as Exhibit Two. In conducting such review, the Custodian as agent for the Indenture Trustee will ascertain whether an original of each document described in subclauses (b)(ii)-(iv) of Section 2.1 of the Mortgage Loan Purchase Agreement with respect to the Mortgage Loans, required to be recorded has been returned from the recording office with evidence of recording thereon or a certified copy has been obtained from the recording office. If the Custodian as agent for the Indenture Trustee finds any document constituting part of the Mortgage File has not been received, or to be unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans identified in Exhibit B to this Indenture or to appear defective on its face, the Custodian as agent for the Indenture Trustee shall promptly notify the
Seller and the Bond Insurer.

(c)        Upon deposit of the Repurchase Price in the Payment Account, the Custodian as agent for the Indenture Trustee shall release to the Seller the related Mortgage File and the Indenture Trustee shall execute and deliver all instruments of transfer or assignment, without recourse, furnished to it by the Seller as are necessary to vest in the Seller title to and rights under the related Mortgage Loan. Such purchase shall be deemed to have occurred on the date on which certification of the deposit of the Repurchase Price in the Payment Account was received by the Indenture Trustee. The Custodian as agent for the Indenture Trustee shall amend the applicable Mortgage Loan Schedule to reflect such repurchase and shall promptly notify the Master Servicer, the Bond Insurer and the Rating Agencies of such amendment.

Section 2.04     Acceptance of Derivative Contracts and Special Certificate Cap Contract by Indenture Trustee.  The Indenture Trustee acknowledges receipt of the Derivative Contracts and the Special Certificate Cap Contract and declares that it holds and will continue to hold these documents and any amendments, replacements or supplements thereto and all other assets of the Trust Estate as Indenture Trustee in trust for the use and benefit of all present and future Holders of the Bonds. The Indenture Trustee shall enforce the Derivative Contracts and the Special Certificate Cap Contract in accordance with their terms.  The Issuer hereby directs the Indenture Trustee to execute, not in its individual capacity, but solely as Indenture Trustee on behalf of the Trust, and deliver the Derivative Contracts and the Special
Certificate Cap Contract.

	
            Section 2.05
 	
            [Reserved].
 	
             

	
            Section 2.06
 	
            [Reserved].
 
				

		 

ARTICLE III

 

Covenants

Section 3.01     Collection of Payments with respect to the Mortgage Loans.  The Indenture Trustee shall establish and maintain an Eligible Account (the “Payment Account”) in which the Indenture Trustee shall, subject to the terms of this paragraph, deposit, on the same day as it is received from the Master Servicer, each remittance received by the Indenture Trustee with respect to the Mortgage Loans. The Indenture Trustee shall make all payments of principal of and interest on the Bonds, subject to Section 3.03 as provided in Section 3.05 herein from monies on deposit in the Payment Account.

Section 3.02     Maintenance of Office or Agency.  The Issuer will maintain an office or agency where, subject to satisfaction of conditions set forth herein, Bonds 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 hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders may be made at the office of the Indenture Trustee located at Sixth and Marquette, Minneapolis, Minnesota 55479-0113, Attention: Corporate Trust Services IMH Assets Corp. 2005-6, and notices and demands may be made or
served at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.

Section 3.03     Money for Payments To Be Held in Trust; Paying Agent.  (a)  As provided in Section 3.01, all payments of amounts due and payable with respect to any Bonds that are to be made from amounts withdrawn from the Payment Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment Account for payments of Bonds shall be paid over to the Issuer except as provided in this Section 3.03. The Issuer hereby appoints the Indenture Trustee as its Paying Agent.

The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent it hereby so agrees), subject to the provisions of this Section 3.03, that such Paying Agent will:

(i)         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;

(ii)         give the Indenture Trustee and the Bond Insurer notice of any default by the Issuer of which it has actual knowledge in the making of any payment required to be made with respect to the Bonds;

 

 

(iii)        at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

(iv)        immediately resign as Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Bonds if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment;

(v)        comply with all requirements of the Code 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; and

(vi)        not commence a bankruptcy proceeding against the Issuer in connection with this Indenture.

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Request direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Bond (other than amounts paid under the Bond Insurance Policy) and remaining unclaimed for one year after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request; and the Holder of such 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 Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the
expense and direction of the Issuer cause to be published once, in an Authorized Newspaper published in the English language, notice that such money remains unclaimed and that, after a date specified therein which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. The Indenture Trustee, with the written consent of the Bond Insurer, so long as no Bond Insurer Default exists, may also adopt and employ, at the expense and direction of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Bonds have been called but have not been surrendered for redemption or whose right to or interest in monies due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Bondholder).

Section 3.04     Existence.  The Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other state or of the 

 

United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Bonds, the Mortgage Loans and each other instrument or agreement included in the Trust Estate.

Section 3.05     Payment of Principal and Interest.  (a) On each Payment Date from amounts on deposit in the Payment Account in accordance with Section 8.02 hereof, the Indenture Trustee shall pay to the Persons specified below, to the extent provided therein, the Available Funds, any Insured Amount and the Class 1-A-2 Derivative Payment for such Payment Date; provided, however, that any amounts representing payments from the Bond Insurer shall only be used to pay interest and principal to the Class 1-A-1 Bondholders and Class 1-A-2 Bondholders pursuant to subsections (b) and (c) below.

(b)        On each Payment Date, the Group 1 Available Funds, the Class 1-A-2 Derivative Payment and the Insured Amount, if any, for such Payment Date shall be distributed in the following order of priority, (with any Class 1-A-2 Derivative Payment used solely to make payments of Accrued Bond Interest on the Class 1-A-2 Bonds for such Payment Date) in each case to the extent of the Group 1 Available Funds, the Class 1-A-2 Derivative Payment and the Insured Amount remaining for such Payment Date:

first, concurrently, to the Holders of the Class 1-A-1 Bonds and Class 1-A-2 Bonds, the related Accrued Bond Interest for such Classes for such Payment Date; and

second, sequentially, in each case to the extent of the Group 1 Available Funds remaining for such Payment Date, to the Holders of the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds, in that order, any Accrued Bond Interest for such Classes for such Payment Date.

(c)        On each Payment Date, the Holders of the Group 1 Bonds shall be entitled to receive payments in respect of principal equal to the related Principal Distribution Amount for that Payment Date, allocated on a pro rata basis, based on the Bond Principal Balances thereof, in reduction of the Bond Principal Balances thereof, until the Bond Principal Balances thereof have been reduced to zero.

(d)        On each Payment Date, any Net Monthly Excess Cashflow in respect of the Group 1 Loans shall be paid as follows:

(i)         to the Bond Insurer, the aggregate of all payments, if any, made by the Bond Insurer under the Bond Insurance Policy with respect to the Class 1-A-1 Bonds and Class 1-A-2 Bonds, including interest thereon, to the extent not previously paid or reimbursed;

(ii)         to the Holders of the Group 1 Bonds, pro rata, in an amount equal to any related Overcollateralization Increase Amount, payable to such Bondholders as part of the Principal Distribution Amount as described under Section 3.05(c) above;

 

 

(iii)        first, concurrently, to the Holders of the Class 1-A-1 Bonds and Class 1-A-2 Bonds and second, sequentially, to the Holders of the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds in an amount equal to the Allocated Realized Loss Amount for such Bonds;

(iv)        sequentially, to the Class 2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds, any Cross-Collateralized Loss Payments as provided in Section 3.05(i);

(v)        first, concurrently, to the Holders of the Class 1-A-1 Bonds and Class 1-A-2 Bonds and second, sequentially, to the Holders of the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds, in that order, any Unpaid Interest Shortfall for such Bonds on such Payment Date, to the extent not previously reimbursed;

(vi)        first, concurrently, to the Holders of the Class 1-A-1 Bonds and Class 1-A-2 Bonds and second, sequentially, to the Holders of the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds, in that order, any related Basis Risk Shortfall Carry Forward Amount for such Bonds on such Payment Date, to the extent not covered by the Group 1 Derivative Contracts; provided, however, that any Basis Risk Shortfall Carry-Forward Amount on the Class 1-A-2 Bonds shall be directed to the related Derivative Contract Counterparty unless a Class 1-A-2 Derivative Contract Counterparty Termination Event is in effect; provided, however, that in such event the Holder of the Class 1-A-2 Bonds will be entitled to receive any Basis Risk Shortfall Carry-Forward Amounts that arise on and after the
Payment Date when the Class 1-A-2 Derivative Contract Counterparty Termination Event occurs;

(vii)       sequentially to the Holders of the Class 2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds, in each case, in respect of the Allocated Realized Loss Amounts;

(viii)      to the Indenture Trustee for amounts owed the Indenture Trustee hereunder remaining unpaid; and

(ix)        any remaining amounts to the Certificate Paying Agent, as designee of the Issuer, for the benefit of the Holders of the Trust Certificates.

(e)        On each Payment Date, the Group 2 Available Funds for such Payment Date shall be distributed in each case to the extent of the Group 2 Available Funds remaining for such Payment Date:

first, concurrently, to the Holders of the Class 2-A-1 Bonds and Class 2-A-2 Bonds; and

second, sequentially, to the Holders of the Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds, in that order, the related Accrued Bond Interest for such Classes for such Payment Date.

 

 

(f)         On each Payment Date any amounts received in respect of the Special Certificate Cap Contract shall be distributed to the Certificate Paying Agent, as designee of the Issuer, for the benefit of the Holders of the Trust Certificates.

(g)        On each Payment Date, the Holders of the Group 2 Bonds shall be entitled to receive payments in respect of principal equal the related Principal Distribution Amount for that Payment Date, allocated on a pro rata basis, based on the Bond Principal Balances thereof, in reduction of the Bond Principal Balances thereof, until the Bond Principal Balances thereof have been reduced to zero.

(h)        On each Payment Date, any Net Monthly Excess Cashflow in respect of the Group 2 Loans shall be paid as follows:

(i)         to the Holders of the Group 2 Bonds, pro rata, in an amount equal to any related Overcollateralization Increase Amount, payable to such Holders as part of the Principal Distribution Amount as described under Section 3.05(g) above;

(ii)         sequentially, to the Holders of the Class 2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds in an amount equal to the Allocated Realized Loss Amount for such Bonds;

(iii)        first, concurrently, to the Holders of the Class 1-A-1 Bonds and Class 1-A-2 Bonds and second, sequentially, to the Holders of the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds, any Cross-Collateralized Loss Payments as provided in Section 3.05(i);

(iv)        first, concurrently, to the Holders of the Class 2-A-1 Bonds and Class 2-A-2 Bonds and second, sequentially, to the Holders of the Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds, in that order, any Unpaid Interest Shortfall for such Bonds on such Payment Date, to the extent not previously reimbursed;

(v)        first, concurrently, to the Holders of the Class 2-A-1 Bonds and Class 2-A-2 Bonds and second, sequentially, to the Holders of the Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds, in that order, any related Basis Risk Shortfall Carry-Forward Amount for such Bonds on such Payment Date, to the extent not covered by the Group 2 Derivative Contracts;

(vi)        first, concurrently, to the Holders of the Class 1-A-1 Bonds and Class 1-A-2 Bonds and second, sequentially, to the Holders of the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds, in each case, in respect of the Allocated Realized Loss Amounts;

(vii)       to the Indenture Trustee for amounts owed the Indenture Trustee hereunder remaining unpaid; and

(viii)      any remaining amounts will be distributed to the Certificate Paying Agent, as designee of the Issuer, for the benefit of the Holders of the Trust Certificates.

 

 

(i)         On each Payment Date, Crossable Excess from each Loan Group may be available to cover Crossable Losses on Mortgage Loans in the non-related Loan Group if on such Payment Date one Loan Group has Crossable Excess and one Loan Group has Crossable Losses. In such instance, payments shall be made from the Loan Group with Crossable Excess to the Loan Group with Crossable Losses, up to the amount of such Crossable Losses.

(j)         With respect to the Group 1 Derivative Contracts and on each Payment Date, the Group 1 Net Derivative Contract Payment Amount with respect to such Payment Date shall be allocated to the Group 1 Bonds in the following order of priority, in each case to the extent of amounts available:

(i)         to the Holders of the Class 1-A-1 Bonds and Class 1-A-2 Bonds, pro rata, based on their respective entitlement, any related Basis Risk Shortfall Carry-Forward Amount for such Payment Date; provided, however, that any Basis Risk Shortfall Carry-Forward Amount on the Class 1-A-2 Bonds shall be directed to the related Derivative Contract Counterparty unless a Class 1-A-2 Derivative Contract Counterparty Termination Event is in effect, provided, however, that in such event the holder of the Class 1-A-2 Bonds will be entitled to receive any Basis Risk Shortfall Carry-Forward Amounts that arise on and after the Payment Date when the Class 1-A-2 Derivative Contract Counterparty Termination Event occurs; 

(ii)         sequentially, to the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds any related Basis Risk Shortfall Carry-Forward Amount for such Payment Date; and

(iii)        any remaining amounts shall be included in the Net Monthly Excess Cashflow for the Group 1 Loans, and shall be used as described under Section 3.05(d) above.

(k)        With respect to the Class 1-A-2 Derivative Contract, on each Payment Date, the Class 1-A-2 Derivative Contract Payment Amount with respect to such Payment Date will be allocated to the Class 1-A-2 Bonds.

(l)         With respect to the Group 2 Derivative Contracts and on each Payment Date, the Group 2 Net Derivative Contract Payment Amount with respect to such Payment Date shall be distributed in the following order of priority, in each case to the extent of amounts available: 

(i)         to the Holders of the Class 2-A-1 Bonds and Class 2-A-2 Bonds, pro rata, based on their respective entitlement, any related Basis Risk Shortfall Carry-Forward Amount for such Payment Date; and

(ii)         sequentially, to the Holders of the Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds any related Basis Risk Shortfall Carry-Forward Amount for such Payment Date.

(iii)        any remaining amounts shall be included in the Net Monthly Excess Cashflow for the Group 2 Loans, and shall be used as described under Section 3.05(h) above.

 

 

(m)       Notwithstanding anything herein to the contrary, amounts payable by the Class 1-A-2 Derivative Contract Counterparty shall be limited to the amounts specified in the Class 1-A-2 Derivative Contract, and shall not, for the avoidance of doubt, be increased to cover Prepayment Interest Shortfalls Relief Act Shortfalls allocated to the Class 1-A-2 Bonds.

(n)        With respect to the Group 1 Loans, up to 65% of prepayment penalties on the Group 1 Loans, to the extent there is a shortfall after distribution of all other sources of Net Monthly Excess Cashflow, will be used to cover losses on the Group 1 Bonds as described above in Section 3.05(d). The remaining 35% of the Group 1 prepayment penalties and all of the Group 2 prepayment penalties will be distributed to the Certificate Paying Agent, as designee of the Issuer, for the benefit of the Holders of the Trust Certificates.

(o)        Each distribution with respect to a Book-Entry Bond shall be paid to the Depository, as Holder thereof, and the Depository shall be responsible for crediting the amount of such distribution to the accounts of its Depository Participants in accordance with its normal procedures. Each Depository Participant shall be responsible for disbursing such distribution to the Bond Owners that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as agent. Each brokerage firm shall be responsible for disbursing funds to the Bond Owners that it represents. None of the Indenture Trustee, the Bond Registrar, the Paying Agent, the Depositor or the Master Servicer shall have any responsibility therefor except as otherwise provided by this Indenture or applicable law.

(p)        On each Payment Date, the Certificate Paying Agent shall deposit in the Certificate Distribution Account all amounts it received pursuant to this Section 3.05 for the purpose of distributing such funds to the Certificateholders.

(q)        Any installment of interest or principal, if any, payable on any Bond that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall, if such Holder shall have so requested at least five Business Days prior to the related Record Date, be paid to each Bondholder of record on the preceding Record Date, by wire transfer to an account specified in writing by such Bondholder reasonably satisfactory to the Indenture Trustee as of the preceding Record Date or in all other cases or if no such instructions have been delivered to the Indenture Trustee, by check to such Bondholder mailed to such Bondholder’s address as it appears in the Bond Register in the amount required to be distributed to such Bondholder on such Payment Date pursuant to such Bondholder’s Bonds; provided, however, that the Indenture Trustee shall not pay to such Bondholders any amount required to be withheld from a payment to such Bondholder by the Code.

(r)         The principal of each Bond shall be due and payable in full on the Final Scheduled Payment Date for such Bond as provided in the forms of Bond set forth in Exhibits A-1, A-2 and A-3 to this Indenture. All principal payments on the Bonds shall be made to the Bondholders entitled thereto in accordance with the Percentage Interests represented by such Bonds. Upon notice to the Indenture Trustee by the Issuer, the Indenture Trustee shall notify the Person in whose name a Bond is registered at the close of business on the Record Date preceding the Final Scheduled Payment Date or other final Payment Date (including any final Payment Date resulting from any redemption pursuant to Section 8.07 hereof). Such notice shall to the 

 

extent practicable be mailed no later than five Business Days prior to such Final Scheduled Payment Date or other final Payment Date and shall specify that payment of the principal amount and any interest due with respect to such Bond at the Final Scheduled Payment Date or other final Payment Date will be payable only upon presentation and surrender of such Bond and shall specify the place where such Bond may be presented and surrendered for such final payment. No interest shall accrue on the Bonds on or after the Final Scheduled Payment Date or any such other final Payment Date.

The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to sign any financing statement, continuation statement or other instrument required to be signed pursuant to this Section 3.05 upon the Issuer’s preparation thereof and delivery to the Indenture Trustee.

Section 3.06     Protection of Trust Estate.  (a) The Issuer will from time to time prepare, execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

(i)         maintain or preserve the lien and security interest (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof;

(ii)         perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;

(iii)        cause the Issuer or Master Servicer to enforce any of the rights to the Mortgage Loans; or

(iv)        preserve and defend title to the Trust Estate and the rights of the Indenture Trustee, the Bond Insurer and the Bondholders in such Trust Estate against the claims of all Persons and parties.

(b)        Except as otherwise provided in this Indenture, the Indenture 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 3.07 hereof (or from the jurisdiction in which it was held as described in the Opinion of Counsel delivered on the Closing Date pursuant to Section 3.07(a) hereof, or if no Opinion of Counsel has yet been delivered pursuant to Section 3.07(b) hereof, unless the Indenture Trustee shall have first received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture with respect to such property will continue to be maintained after giving effect to such action or actions).

The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to sign any financing statement, continuation statement or other instrument required to be signed pursuant to this Section 3.06 upon the Issuer’s preparation thereof and delivery to the Indenture Trustee.

Section 3.07     Opinions as to Trust Estate.  (a) On the Closing Date, the Issuer shall furnish to the Indenture Trustee, the Bond Insurer and the Owner Trustee an Opinion of Counsel 

 

either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto, and any other requisite documents, and with respect to the execution and filing of any financing statements and continuation statements, as are necessary to perfect and make effective the lien and first priority security interest in the Collateral and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and first priority security interest effective.

(b)        On or before April 15 in each calendar year, beginning in 2006, the Issuer shall furnish to the Indenture Trustee and the Bond Insurer an Opinion of Counsel at the expense of the Issuer either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the lien and first priority security interest in the Collateral and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest in the Collateral until December 31 in the following calendar year.

Section 3.08     Performance of Obligations.  (a) The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Estate.

(b)        The Issuer, with the consent of the Bond Insurer so long as no Bond Insurer Default exists, may contract with other Persons to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be deemed to be action taken by the Issuer.

(c)        The Issuer will not take any action or permit any action to be taken by others which would release any Person from any of such Person’s covenants or obligations under any of the documents relating to the Mortgage Loans or under any instrument included in the Trust Estate, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any of the documents relating to the Mortgage Loans or any such instrument, except such actions as the Master Servicer is expressly permitted to take in the Servicing Agreement. The Indenture Trustee, as pledgee of the Mortgage Loans, shall with the consent of, or direction of, the Bond Insurer, so long as no Bond Insurer Default exists, be able to exercise the rights of the Issuer to direct the actions of the Master
Servicer pursuant to the Servicing Agreement.

(d)        The Issuer may retain an administrator and may enter into contracts acceptable to the Bond Insurer with other Persons for the performance of the Issuer’s obligations hereunder, and performance of such obligations by such Persons shall be deemed to be performance of such obligations by the Issuer.

 

 

Section 3.09     Negative Covenants.  So long as any Bonds are Outstanding, the Issuer shall not:

(i)         except as expressly permitted by this Indenture, sell, transfer, exchange or otherwise dispose of the Trust Estate, unless directed to do so by the Bond Insurer or the Indenture Trustee with the consent of the Bond Insurer, so long as no Bond Insurer Default exists;

(ii)         claim any credit on, or make any deduction from the principal or interest payable in respect of, the Bonds (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Bondholder by reason of the payment of the taxes levied or assessed upon any part of the Trust Estate;

(iii)        (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Bonds under this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof or (C) permit the lien of this Indenture not to constitute a valid first priority security interest in the Trust Estate; or

(iv)        waive or impair, or fail to assert rights under, the Mortgage Loans, or impair or cause to be impaired the Issuer’s interest in the Mortgage Loans, the Mortgage Loan Purchase Agreement or in any Basic Document, if any such action would materially and adversely affect the interests of the Bondholders or the Bond Insurer.

Section 3.10     Annual Statement as to Compliance.  The Issuer will deliver to the Indenture Trustee and the Bond Insurer, by March 1 of each year commencing with the calendar year 2006, an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:

(i)         a review of the activities of the Issuer during the previous calendar year and of its performance under this Indenture has been made under such Authorized Officer’s supervision; and

(ii)         to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year, or, if there has been a default in its compliance with any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

	
            Section 3.11
 	
            [Reserved].
 

Section 3.12     Representations and Warranties Concerning the Mortgage Loans.  The Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit of the representations and 

 

warranties made by the Seller in the Mortgage Loan Purchase Agreement concerning the Seller and the Mortgage Loans to the same extent as though such representations and warranties were made directly to the Indenture Trustee. If a Responsible Officer of the Indenture Trustee has actual knowledge of any breach of any representation or warranty made by the Seller in the Mortgage Loan Purchase Agreement, the Indenture Trustee shall promptly notify the Seller and the Bond Insurer of such finding and the Seller’s obligation to cure such defect or repurchase or substitute for the related Mortgage Loan.

Section 3.13     Amendments to Servicing Agreement.  The Issuer covenants with the Indenture Trustee and the Bond Insurer that it will not enter into any amendment or supplement to the Servicing Agreement without the prior written consent of the Indenture Trustee and, so long as no Bond Insurer Default exists, the Bond Insurer.

Section 3.14     Master Servicer as Agent and Bailee of the Indenture Trustee.  Solely for purposes of perfection under Section 9-305 of the Uniform Commercial Code or other similar applicable law, rule or regulation of the state in which such property is held by the Master Servicer, the Issuer and the Indenture Trustee hereby acknowledge that the Master Servicer is acting as bailee of the Indenture Trustee in holding amounts on deposit in the Collection Account, as well as its bailee in holding any Related Documents released to the Master Servicer, and any other items constituting a part of the Trust Estate which from time to time come into the possession of the Master Servicer. It is intended that, by the Master Servicer’s acceptance of such bailee arrangement, the Indenture Trustee, as a secured party of the
Mortgage Loans, will be deemed to have possession of such Related Documents, such monies and such other items for purposes of Section 9-305 of the Uniform Commercial Code of the state in which such property is held by the Master Servicer. The Indenture Trustee shall not be liable with respect to such documents, monies or items while in possession of the Master Servicer.

Section 3.15     Investment Company Act.  The Issuer shall not become an “investment company” or be under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended (or any successor or amendatory statute), and the rules and regulations thereunder (taking into account not only the general definition of the term “investment company” but also any available exceptions to such general definition); provided, however, that the Issuer shall be in compliance with this Section 3.15 if it shall have obtained an order exempting it from regulation as an “investment company” so long as it is in compliance with the conditions imposed in such order.

Section 3.16     Issuer May Consolidate, etc.  (a) The Issuer shall not consolidate or merge with or into any other Person, unless:

(i)         the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any state or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form reasonably satisfactory to the Indenture Trustee and the Bond Insurer, the due and punctual payment of the principal of and interest on all Bonds, and the payment of the Bond Insurance Premium and all other amounts payable to the Bond Insurer, the Indenture Trustee and the Derivative Contract Counterparties, the payment to 

 

the Certificate Paying Agent of all amounts due to the Certificateholders, and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein;

(ii)         immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing;

(iii)        the Rating Agencies shall have notified the Issuer that such transaction shall not cause the rating of the Bonds to be reduced, suspended or withdrawn or to be considered by either Rating Agency to be below investment grade;

(iv)        the Issuer and the Bond Insurer shall have received an Opinion of Counsel (and shall have delivered a copy thereof to the Indenture Trustee) to the effect that such transaction will not (A) result in a “substantial modification” of the Bonds under Treasury Regulation section 1.1001-3, or adversely affect the status of the Bonds as indebtedness for federal income tax purposes, or (B) if 100% of the Certificates are not owned by IMH Assets Corp., cause the Trust to be subject to an entity level tax for federal income tax purposes;

(v)        any action that is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and

(vi)        the Issuer shall have delivered to the Indenture Trustee and the Bond Insurer an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for or relating to such transaction have been complied with (including any filing required by the Exchange Act), and that such supplemental indenture is enforceable; and

(vii)       the Bond Insurer, so long as no Bond Insurer Default exists, shall have given its prior written consent.

(b)        The Issuer shall not convey or transfer any of its properties or assets, including those included in the Trust Estate, to any Person, unless:

(i)         the Person that acquires by conveyance or transfer the properties and assets of the Issuer, the conveyance or transfer of which is hereby restricted, shall (A) be a United States citizen or a Person organized and existing under the laws of the United States of America or any state thereof, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Bonds and the payment of the Bond Insurance Premium and all other amounts payable to the Bond Insurer and the Derivative Contract Counterparties and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein,
(C) expressly agree by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of the holders of the Bonds and the Bond Insurer, 

 

(D) unless otherwise provided in such supplemental indenture, expressly agree to indemnify, defend and hold harmless the Issuer and the Indenture Trustee and the Bond Insurer against and from any loss, liability or expense arising under or related to this Indenture and the Bonds and (E) expressly agree by means of such supplemental indenture that such Person (or if a group of Persons, then one specified Person) shall make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Bonds;

(ii)         immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

(iii)        the Rating Agencies shall have notified the Issuer that such transaction shall not cause the rating of the Bonds to be reduced, suspended or withdrawn;

(iv)        the Issuer and the Bond Insurer shall have received an Opinion of Counsel (and shall have delivered a copy thereof to the Indenture Trustee) to the effect that such transaction will not (A) result in a “substantial modification” of the Bonds under Treasury Regulation section 1.1001-3, or adversely affect the status of the Bonds as indebtedness for federal income tax purposes, or (B) if 100% of the Certificates are not owned by IMH Assets Corp., cause the Trust to be subject to an entity level tax for federal income tax purposes;

(v)        any action that is necessary to maintain the lien and security interest created by this Indenture shall have been taken; 

(vi)        the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act); and

(vii)       the Bond Insurer, so long as no Bond Insurer Default exists, shall have given its prior written consent.

Section 3.17     Successor or Transferee.  (a) Upon any consolidation or merger of the Issuer in accordance with Section 3.16(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

(b)        Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.16(b), the Issuer will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Bonds immediately upon the delivery of written notice to the Indenture Trustee and the Bond Insurer of such conveyance or transfer and approval of such transaction given by the Bond Insurer to the Indenture Trustee.

 

 

Section 3.18     No Other Business.  The Issuer shall not engage in any business other than financing, purchasing, owning and selling and managing the Mortgage Loans and the issuance of the Bonds and Certificates in the manner contemplated by this Indenture and the Basic Documents and all activities incidental thereto.

Section 3.19     No Borrowing.  The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Bonds and amounts due to the Bond Insurer under this Indenture and the Insurance Agreement.

Section 3.20     Guarantees, Loans, Advances and Other Liabilities.  Except as contemplated by this Indenture or the Basic Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

Section 3.21     Capital Expenditures.  The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).

Section 3.22     Determination of Bond Interest Rate.  On each Interest Determination Date the Indenture Trustee shall determine One-Month LIBOR and the related Bond Interest Rate for each Class of Bonds for the following Accrual Period and shall inform the Issuer, the Master Servicer, the Bond Insurer and the Depositor at their respective facsimile numbers given to the Indenture Trustee in writing thereof. The establishment of One-Month LIBOR on each Interest Determination Date by the Indenture Trustee and the Indenture Trustee’s calculation of the rate of interest applicable to each Class of Bonds for the related Accrual Period shall (in the absence of manifest error) be final and binding.

Section 3.23     Restricted Payments.  The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, (x) distributions and payments to the Owner Trustee, the Indenture Trustee, Bondholders and the Certificateholders as
contemplated by, and to the extent funds are available for such purpose under this Indenture and the Trust Agreement and (y) payments to the Master Servicer and the Subservicers pursuant to the terms of the Servicing Agreement. The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with this Indenture and the Basic Documents.

Section 3.24     Notice of Events of Default.  The Issuer shall give the Indenture Trustee, the Bond Insurer and the Rating Agencies prompt written notice of each Event of Default hereunder and under the Trust Agreement.

 

 

Section 3.25     Further Instruments and Acts.  Upon request of the Indenture Trustee or the Bond Insurer, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

Section 3.26     Statements to Bondholders.  On each Payment Date, the Indenture Trustee and the Certificate Registrar shall make available on the Indenture Trustee’s website, www.ctslink.com, to the Bond Insurer and to each Bondholder and Certificateholder the most recent statement prepared by the Master Servicer pursuant to Section 4.01 of the Servicing Agreement.

	
            Section 3.27
 	
            [Reserved].
 	
             

	
            Section 3.28
 	
            [Reserved].
 	
             

	
            Section 3.29
 	
            Certain Representations Regarding the Trust Estate.
 

(a)        With respect to that portion of the Collateral described in clauses (a) through (f) of the definition of Trust Estate, the Issuer represents to the Indenture Trustee that:

(i)         This Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Collateral in favor of the Indenture Trustee, as trustee for the Bondholders, which security interest is prior to all other liens, and is enforceable as such as against creditors of and purchasers from the Issuer.

(ii)         The Collateral constitutes “deposit accounts” or “instruments,” as applicable, within the meaning of the applicable UCC.

(iii)        The Issuer owns and has good and marketable title to the Collateral, free and clear of any lien, claim or encumbrance of any Person.

(iv)        The Issuer has taken all steps necessary to cause the Indenture Trustee to become the account holder of the Collateral.

(v)        Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral.

(vi)        The Collateral is not in the name of any Person other than the Issuer or the Indenture Trustee.  The Issuer has not consented to the bank maintaining the Collateral to comply with instructions of any Person other than the Indenture Trustee.

(b)        With respect to that portion of the Collateral described in clauses (e) and (f), the Issuer represents to the Indenture Trustee that:

(i)         This Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Collateral in favor of the Indenture Trustee, as trustee for 

 

the Bondholders, which security interest is prior to all other liens, and is enforceable as such as against creditors of and purchasers from the Issuer.

(ii)         The Collateral constitutes “general intangibles” within the meaning of the applicable UCC.

(iii)        The Issuer owns and has good and marketable title to the Collateral, free and clear of any lien, claim or encumbrance of any Person.

(iv)        Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral.

(c)        With respect to any Collateral in which a security interest may be perfected by filing, the Issuer has not authorized the filing of, and is not aware of any financing statements against, the Issuer, that include a description of collateral covering such Collateral, other than any financing statement relating to the security interest granted to the Indenture Trustee hereunder or that has been terminated.  The Issuer is not aware of any judgment or tax lien filings against the Issuer.

(d)        The Issuer has caused or will have caused, within ten days, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in all Collateral granted to the Indenture Trustee hereunder in which a security interest may be perfected by filing.  Any financing statement that is filed in connection with this Section 3.29 shall contain a statement that a purchase or security interest in any collateral described therein will violate the rights of the secured party named in such financing statement.

(e)        The foregoing representations may not be waived and shall survive the issuance of the Bonds.

	
            Section 3.30
 	
            [Reserved].
 	
             

	
            Section 3.31
 	
            [Reserved].
 
				

Section 3.32     Replacement Derivative Contracts.  In the event of a default by a related Derivative Contract Counterparty with respect to the related Derivative Contracts (a “Derivative Contract Default”), the Issuer, at its expense, may, but shall not be required to, substitute a new derivative contract for the existing Derivative Contracts or any other form of similar coverage for basis risk shortfalls; provided, however, that the timing and mechanism for receiving payments under such new derivative contracts shall be reasonably acceptable to the Indenture Trustee. It shall be a condition to substitution of any new derivative contracts that there be delivered to the Indenture Trustee an Opinion of Counsel to
the effect that such substitution would not (a) result in a “substantial modification” of the Bonds under Treasury Regulation section 1.1001-3, or adversely affect the status of the Bonds as indebtedness for federal income tax purposes, or (b) if 100% of the Certificates are not owned by IMH Assets Corp., cause the Trust to be subject to an entity level tax for federal income tax purposes.

 

 

	
            Section 3.33
 	
            [Reserved].
 

Section 3.34     Allocation of Realized Losses.  (a)  Prior to each Payment Date, the Master Servicer shall determine the total amount of Realized Losses that occurred during the related Prepayment Period. The amount of each Realized Loss shall be evidenced by an Officer’s Certificate delivered to the Indenture Trustee with the related Remittance Report.

(b)        On each Payment Date following the application of all amounts distributable on such date, to the extent the aggregate Stated Principal Balance of the Group 1 Loans is less than the aggregate Bond Principal Balances of the Group 1 Bonds due to Realized Losses on the Group 1 Loans, the Bond Principal Balances of the Class 1-B-2, Class 1-B-1, Class 1-M-5, Class 1-M-4, Class 1-M-3, Class 1-M-2 and Class 1-M-1, in that order, and then to the Class 1-A-1 Bonds and Class 1-A-2 Bonds, pro rata, based on the Bond Principal Balances thereof, shall be reduced to zero; provided that any Realized Losses allocable to the Class 1-A Bonds will be covered by the Bond Insurance Policy.  On each Payment Date following the application of all amounts distributable on such date, to the extent the aggregate Stated Principal Balance of the Group 2 Loans is less
than the aggregate Bond Principal Balances of the Group 2 Bonds due to Realized Losses on the Group 2 Loans, the Bond Principal Balances of the of the Class 2-B-2, Class 2-B-1, Class 2-M-2, Class 2-M-1, Class 2-A-2 and Class 2-A-1 Bonds, in that order, shall be reduced, until the Bond Principal Balance thereof has been reduced to zero. All Realized Losses allocated to a Class of Bonds will be allocated in proportion to the Percentage Interests evidenced thereby.

(c)        On each payment date, the Prepayment Penalty Loss Coverage Amount will be used to cover current period and prior period unreimbursed Realized Losses, to the extent not covered by Net Monthly Excess Cashflow, by an additional payment of principal on the related Bonds.  Any unused Prepayment Penalty Loss Coverage Amount will be paid to the Certificates and will not be available on future payment dates.

	
            Section 3.35
 	
            [Reserved].
 
	
            Section 3.36
 	
            [Reserved].
 	
             

				

			 

 

ARTICLE IV

 

The Bonds; Satisfaction and Discharge of Indenture

Section 4.01     The Bonds.  Each Class of Bonds shall be registered in the name of a nominee designated by the Depository. Beneficial Owners will hold interests in the Bonds through the book-entry facilities of the Depository in minimum initial Bond Principal Balances of $100,000 and integral multiples of $1 in excess thereof.

The Indenture Trustee may for all purposes (including the making of payments due on the Bonds) deal with the Depository as the authorized representative of the Beneficial Owners with respect to the Bonds for the purposes of exercising the rights of Holders of the Bonds hereunder. Except as provided in the next succeeding paragraph of this Section 4.01, the rights of Beneficial Owners with respect to the Bonds shall be limited to those established by law and agreements between such Beneficial Owners and the Depository and Depository Participants. Except as provided in Section 4.08 hereof, Beneficial Owners shall not be entitled to definitive certificates for the Bonds as to which they are the Beneficial Owners. Requests and directions from, and votes of, the Depository as Holder of the Bonds shall not be deemed inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with solicitations of consents from or voting by Bondholders and give notice to the Depository of such record date. Without the consent of the Issuer and the Indenture Trustee, no Bond may be transferred by the Depository except to a successor Depository that agrees to hold such Bond for the account of the Beneficial Owners.

In the event the Depository Trust Company resigns or is removed as Depository, the Indenture Trustee with the approval of the Issuer may appoint a successor Depository. If no successor Depository has been appointed within 30 days of the effective date of the Depository’s resignation or removal, each Beneficial Owner shall be entitled to certificates representing the Bonds it beneficially owns in the manner prescribed in Section 4.08.

The Bonds shall, on original issue, be executed on behalf of the Issuer by the Owner Trustee, not in its individual capacity but solely as Owner Trustee, authenticated by the Indenture Trustee and delivered by the Indenture Trustee to or upon the order of the Issuer.

Section 4.02     Registration of and Limitations on Transfer and Exchange of Bonds; Appointment of Bond Registrar and Certificate Registrar.  The Issuer shall cause to be kept at the Corporate Trust Office a Bond Register in which, subject to such reasonable regulations as it may prescribe, the Bond Registrar shall provide for the registration of Bonds and of transfers and exchanges of Bonds as herein provided.

Subject to the restrictions and limitations set forth below, upon surrender for registration of transfer of any Bond at the Corporate Trust Office, the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds in authorized initial Bond Principal Balances evidencing the same Class and aggregate Percentage Interests.

 

 

Subject to the foregoing, at the option of the Bondholders, Bonds may be exchanged for other Bonds of like tenor and in authorized initial Bond Principal Balances evidencing the same Class and aggregate Percentage Interests upon surrender of the Bonds to be exchanged at the Corporate Trust Office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver the Bonds which the Bondholder making the exchange is entitled to receive. Each Bond presented or surrendered for registration of transfer or exchange shall (if so required by the Bond Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer in form reasonably satisfactory to the Bond Registrar duly executed by the Holder thereof or his attorney duly authorized in writing with such signature guaranteed by a
commercial bank or trust company located or having a correspondent located in the city of New York. Bonds delivered upon any such transfer or exchange will evidence the same obligations, and will be entitled to the same rights and privileges, as the Bonds surrendered.

No service charge shall be made for any registration of transfer or exchange of Bonds, but the Bond Registrar shall require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any registration of transfer or exchange of Bonds.

The Issuer hereby appoints the Indenture Trustee as (i) Certificate Registrar to keep at its Corporate Trust Office a Certificate Register pursuant to Section 3.09 of the Trust Agreement in which, subject to such reasonable regulations as it may prescribe, the Certificate Registrar shall provide for the registration of Certificates and of transfers and exchanges thereof pursuant to Section 3.05 of the Trust Agreement and (ii) Bond Registrar under this Indenture. The Indenture Trustee hereby accepts such appointments.

Section 4.03     Mutilated, Destroyed, Lost or Stolen Bonds.  If (i) any mutilated Bond is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Bond, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer, the Bond Insurer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Bond Registrar or the Indenture Trustee that such Bond has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuer shall execute, and upon its request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Bond, a
replacement Bond; provided, however, that if any such destroyed, lost or stolen Bond, but not a mutilated Bond, shall have become or within seven days shall be due and payable, instead of issuing a replacement Bond, the Issuer may pay such destroyed, lost or stolen Bond when so due or payable without surrender thereof. If, after the delivery of such replacement Bond or payment of a destroyed, lost or stolen Bond pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the Issuer, the Bond Insurer and the Indenture Trustee shall be entitled to recover such replacement Bond (or such payment) from the Person to whom it was delivered or any Person taking such replacement Bond from such Person to whom such replacement Bond was delivered or any assignee of such Person,
except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of 

 

any loss, damage, cost or expense incurred by the Issuer, the Bond Insurer or the Indenture Trustee in connection therewith.

Upon the issuance of any replacement Bond under this Section 4.03, the Issuer may require the payment by the Holder of such Bond of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee) connected therewith.

Every replacement Bond issued pursuant to this Section 4.03 in replacement of any mutilated, destroyed, lost or stolen Bond shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, 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 4.03 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 4.04     Persons Deemed Owners.  Prior to due presentment for registration of transfer of any Bond, the Issuer, the Bond Insurer, the Indenture Trustee, the Paying Agent and any agent of the Issuer, the Bond Insurer or the Indenture Trustee may treat the Person in whose name any Bond is registered (as of the day of determination) as the owner of such Bond for the purpose of receiving payments of principal of and interest, if any, on such Bond and for all other purposes whatsoever, whether or not such Bond be overdue, and neither the Issuer, the Bond Insurer, the Indenture Trustee, the Paying Agent nor any agent of the Issuer, the Bond Insurer or the Indenture Trustee shall be affected by notice to the contrary.

Section 4.05     Cancellation.  All Bonds surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Bonds 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 Indenture Trustee. No Bonds shall be authenticated in lieu of or in exchange for any Bonds cancelled as provided in this Section 4.05, except as expressly permitted by this Indenture. All cancelled Bonds may be held or disposed of by the Indenture Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Request that they be destroyed or returned to it; provided, however, that such Issuer Request is timely and the Bonds have not been previously disposed of by the Indenture Trustee.

Section 4.06     Book-Entry Bonds.  The Bonds, upon original issuance, will be issued in the form of typewritten Bonds representing the Book-Entry Bonds, to be delivered to The Depository Trust Company, the initial Depository, by, or on behalf of, the Issuer. The Bonds shall initially be registered on the Bond Register in the name of Cede & Co., the nominee of the initial Depository, and no Beneficial Owner will receive a Definitive Bond representing such Beneficial Owner’s interest in such Bond, except as provided in Section 4.08. With respect to 

 

such Bonds, unless and until definitive, fully registered Bonds (the “Definitive Bonds”) have been issued to Beneficial Owners pursuant to Section 4.08:

	
            (i)
 	
            the provisions of this Section 4.06 shall be in full force and effect;
 

(ii)         the Bond Registrar, the Paying Agent and the Indenture Trustee shall be entitled to deal with the Depository for all purposes of this Indenture (including the payment of principal of and interest on the Bonds and the giving of instructions or directions hereunder) as the sole Holder of the Bonds, and shall have no obligation to the Beneficial Owners of the Bonds;

(iii)        to the extent that the provisions of this Section 4.06 conflict with any other provisions of this Indenture, the provisions of this Section 4.06 shall control;

(iv)        the rights of Beneficial Owners shall be exercised only through the Depository and shall be limited to those established by law and agreements between such Owners of Bonds and the Depository and/or the Depository Participants. Unless and until Definitive Bonds are issued pursuant to Section 4.08, the initial Depository will make book-entry transfers among the Depository Participants and receive and transmit payments of principal of and interest on the Bonds to such Depository Participants; and

(v)        whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Bonds evidencing a specified percentage of the Bond Principal Balances of the Bonds, the Depository shall be deemed to represent such percentage with respect to the Bonds only to the extent that it has received instructions to such effect from Beneficial Owners and/or Depository Participants owning or representing, respectively, such required percentage of the beneficial interest in the Bonds and has delivered such instructions to the Indenture Trustee.

Section 4.07     Notices to Depository.  Whenever a notice or other communication to the Bondholders is required under this Indenture, unless and until Definitive Bonds shall have been issued to Beneficial Owners pursuant to Section 4.08, the Indenture Trustee shall give all such notices and communications specified herein to be given to Holders of the Bonds to the Depository, and shall have no obligation to the Beneficial Owners.

Section 4.08    Definitive Bonds.  If (i) the Indenture Trustee determines that the Depository is no longer willing or able to properly discharge its responsibilities with respect to the Bonds and the Indenture Trustee is unable to locate a qualified successor, (ii) the Indenture Trustee elects to terminate the book-entry system through the Depository or (iii) after the occurrence of an Event of Default, Beneficial Owners of Bonds representing beneficial interests aggregating at least a majority of the Bond Principal Balances of the Bonds advise the Depository in writing that the continuation of a book-entry system through the Depository is no longer in the best interests of the Beneficial Owners, then the Depository shall notify all Beneficial Owners and the Indenture Trustee of the occurrence of any such event and of
the availability of Definitive Bonds to Beneficial Owners requesting the same. Upon surrender to the Indenture Trustee of the typewritten Bonds representing the Book-Entry Bonds by the Depository, accompanied by registration instructions, the Issuer shall execute and the Indenture 

 

Trustee shall authenticate the Definitive Bonds in accordance with the instructions of the Depository. None of the Issuer, the Bond Registrar or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Bonds, the Indenture Trustee shall recognize the Holders of the Definitive Bonds as Bondholders.

Section 4.09     Tax Treatment.  The Issuer has entered into this Indenture, and the Bonds will be issued with the intention that, for federal, state and local income, single business and franchise tax purposes, the Bonds will qualify as indebtedness. The Issuer and the Indenture Trustee (in accordance with Section 6.06 hereof), by entering into this Indenture, and each Bondholder, by its acceptance of its Bond (and each Beneficial Owner by its acceptance of an interest in the applicable Book-Entry Bond), agree to treat the Bonds for federal, state and local income, single business and franchise tax purposes as indebtedness.

Section 4.10     Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further effect with respect to the Bonds except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Bonds, (iii) rights of Bondholders (and the Bond Insurer, as subrogee of the Class 1-A-1 Bondholders and Class 1-A-2 Bondholders) to receive payments of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09, 3.17, 3.19 and 3.20, (v) the rights and immunities of the Indenture Trustee hereunder including under Section 6.07 and the obligations of the Indenture Trustee under Section 4.11, (vi) the right of the related Derivative Contract Counterparty to receive the related Net Derivative Fee and (vii) the rights of Bondholders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Bonds and shall release and deliver the Collateral to or upon the order of the Issuer, when

	
            (A)
 	
            either
 

(1)        all Bonds theretofore authenticated and delivered (other than (i) Bonds that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 4.03 hereof and (ii) Bonds for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.03) have been delivered to the Indenture Trustee for cancellation; or

(2)        all Bonds not theretofore delivered to the Indenture Trustee for cancellation

	
            a.
 	
            have become due and payable,
 

	
            b.
 	
            will become due and payable at the Final Scheduled Payment Date within one year, or
 
	
            c.
 	
  have been called for early redemption and the Trust has been terminated pursuant to Section 8.07 hereof,
 

 

 

 

and the Issuer, in the case of a. or b. above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States of America (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Bonds then outstanding not theretofore delivered to the Indenture Trustee for cancellation when due on the Final Scheduled Payment Date or other final Payment Date and has delivered to the Indenture Trustee a verification report from a nationally recognized accounting firm certifying that the amounts deposited with the Indenture Trustee are sufficient to pay and discharge the entire indebtedness of such Bonds, or, in the case of c. above, the Issuer shall have complied with all requirements of Section 8.07 hereof, 

(B)        the Issuer has paid or caused to be paid all other sums payable hereunder; and

(C)       the Issuer has delivered to the Indenture Trustee and the Bond Insurer an Officer’s Certificate and an Opinion of Counsel, each meeting the applicable requirements of Section 10.01 hereof, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with and, if the Opinion of Counsel relates to a deposit made in connection with Section 4.10(A)(2)b. above, such opinion shall further be to the effect that such deposit will constitute an “in-substance defeasance” within the meaning of Revenue Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuer will be the owner of the assets deposited in trust for federal income tax purposes.

Section 4.11     Application of Trust Money.  All monies deposited with the Indenture Trustee pursuant to Section 4.10 hereof 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 or the Issuer, Certificate Paying Agent as designee of the Issuer or the Bond Insurer, as the Indenture Trustee may determine, to the Holders of Securities, of all sums due and to become due thereon for principal and interest or otherwise; but such monies need not be segregated from other funds except to the extent required herein or required by law.

Section 4.12     Repayment of Monies Held by Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Bonds, all monies then held by any Person other than the Indenture Trustee under the provisions of this Indenture with respect to such Bonds shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.05 and thereupon such Person shall be released from all further liability with respect to such monies.

Section 4.13     Temporary Bonds.  Pending the preparation of any Definitive Bonds, the Issuer may execute and upon its written direction, the Indenture Trustee may authenticate and make available for delivery, temporary Bonds that are printed, lithographed, typewritten, photocopied or otherwise produced, in any denomination, substantially of the tenor of the Definitive Bonds in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other 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 the Definitive Bonds, the temporary Bonds shall be exchangeable for Definitive Bonds upon surrender of the temporary Bonds at the office of the Indenture Trustee located at Sixth and Marquette Avenue, Minneapolis, Minnesota 55479, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Bonds, the Issuer shall execute and the Indenture Trustee shall authenticate and make available for delivery, in exchange therefor, Definitive Bonds of authorized denominations and of like tenor, class and aggregate principal amount. Until so exchanged, such temporary Bonds shall in all respects be entitled to the same benefits under this Indenture as Definitive Bonds.

	
            Section 4.14
 	
            [Reserved]
 

Section 4.15     Representation Regarding ERISA.  By acquiring a Bond or interest therein, each Holder of such Bond or Beneficial Owner of any such interest will be deemed to represent that either (1) it is not acquiring the Bond with Plan Assets or (2) (A) the acquisition, holding and transfer of such Bond will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer, any Subservicer, any other servicer, any administrator, any provider of credit support, including the Derivative Contract Counterparties, any owner of the Certificates, or any of their Affiliates being a “Party in Interest” (within the meaning of ERISA) or
Disqualified Person (within the meaning of the Code) with respect to such holder or Beneficial Owner that is a Plan and (B) the Bonds are rated investment grade or better and such Person believes that the Bonds are properly treated as indebtedness without substantial equity features for purposes of the Department of Labor regulation 29 C.F.R. § 2510.3-101, and agrees to so treat the Bonds. Alternatively, regardless of the rating of the Bonds, such Person may provide the Indenture Trustee and the Owner Trustee with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuer, the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer which opines that the acquisition, holding and transfer of such Bond or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Issuer,
the Seller, the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee,  the Master Servicer or any successor servicer to any obligation in addition to those undertaken in the Indenture.

 

ARTICLE V

 

Default and Remedies

Section 5.01     Events of Default.  The Issuer shall deliver to the Indenture Trustee and the Bond Insurer, within five days after learning of the occurrence of an Event of Default, written notice in the form of an Officer’s Certificate of any event which with the giving of notice and the lapse of time would become an Event of Default under clause (iii) or (iv) of the definition of “Event of Default”, its status and what action the Issuer is taking or proposes to take with respect thereto. The Indenture Trustee shall not be deemed to have knowledge of any Event of Default unless a Responsible Officer has actual knowledge thereof or unless written notice of such Event of Default is received by a Responsible Officer and such notice references the Bonds, the Trust Estate or this Indenture.

Section 5.02     Acceleration of Maturity; Rescission and Annulment.  If an Event of Default should occur and be continuing, then and in every such case the Indenture Trustee at the written direction of the Holders of Bonds representing not less than a majority of the aggregate Bond Principal Balance of the Bonds may declare the Bonds to be immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee if such notice is given by the Bondholders), and upon any such declaration the unpaid Bond Principal Balance of the Bonds, together with accrued and unpaid interest thereon through the date of acceleration shall become immediately due and payable; provided, however, that for purposes of this sentence and for purposes of this Article V, unless a Bond Insurer Default exists, the Bond
Insurer may exercise the rights of all of the Holders of the Class 1-A Bonds.

At any time after such declaration of acceleration of maturity with respect to an Event of Default has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Holders of the Bonds representing not less than a majority of the aggregate Bond Principal Balance of the Bonds, by written notice to the Issuer and the Indenture Trustee, may waive the related Event of Default and rescind and annul such declaration and its consequences if

(i)         the Issuer or the Bond Insurer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

	
            (A)
 	
            all payments of principal of and interest on the Bonds and all other amounts that would then be due hereunder or upon the Bonds if the Event of Default giving rise to such acceleration had not occurred;
 
	
            (B)
 	
            all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel; and
 

	
            (C)
 	
            all amounts owed to the Derivative Contract Counterparties;
 

 

 

 

(ii)         all Events of Default, other than the nonpayment of the principal of the Bonds that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.

No such rescission shall affect any subsequent default or impair any right consequent thereto.

Section 5.03     Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

(a)        The Issuer covenants that if (i) default is made in the payment of any interest on any Bond when the same becomes due and payable, and such default continues for a period of five days, or (ii) default is made in the payment of the principal of or any installment of the principal of any Bond when the same becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee, at the direction of the Bond Insurer, so long as no Bond Insurer Default exists, or if a Bond Insurer Default does exist, at the direction of the Holders of a majority of the aggregate Bond Principal Balances of the Bonds, pay to the Indenture Trustee, for the benefit of the Holders of Bonds, the whole amount then due and payable on the Bonds for principal and interest, with interest at the applicable Bond Interest Rate upon the overdue principal, and in
addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.

(b)        In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee, in its own name and as trustee of an express trust, and at the direction of the Bond Insurer, so long as no Bond Insurer Default exists, subject to the provisions of Section 10.16 hereof 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 other obligor upon the Bonds and collect in the manner provided by law out of the property of the Issuer or other obligor the Bonds, wherever situated, the monies adjudged or decreed to be payable.

(c)        If an Event of Default occurs and is continuing, the Indenture Trustee, at the direction of the Bond Insurer, so long as no Bond Insurer Default exists subject to the provisions of Section 10.16 hereof may, as more particularly provided in Section 5.04 hereof, in its discretion, proceed to protect and enforce its rights and the rights of the Bondholders and the Bond Insurer, by such appropriate Proceedings, as the Indenture Trustee shall be directed by the Bond Insurer, so long as no Bond Insurer Default exists, to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

(d)        In case there shall be pending, relative to the Issuer or any other obligor upon the Bonds or any Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other 

 

comparable judicial Proceedings relative to the Issuer or other obligor upon the Bonds, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, at the direction of the Bond Insurer, so long as no Bond Insurer Default exists, irrespective of whether the principal of any Bonds shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such Proceedings or otherwise:

(i)         to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Bonds and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith), the Bond Insurer and of the Bondholders allowed in such Proceedings;

(ii)         unless prohibited by applicable law and regulations, to vote on behalf of the Holders of Bonds in any election of a trustee, a standby trustee or Person performing similar functions in any such Proceedings;

(iii)        to collect and receive any monies or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Bondholders, the Bond Insurer and of the Indenture Trustee on their behalf, and

(iv)        to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee, the Bond Insurer or the Holders of Bonds allowed in any judicial proceedings relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Bondholders to make payments to the Indenture Trustee with the consent of the Bond Insurer so long as no Bond Insurer Default exists and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Bondholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee and all amounts due to the Bond Insurer.

(e)        Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Bondholder any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Bondholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

 

 

(f)         All rights of action and of asserting claims under this Indenture, or under any of the Bonds, may be enforced by the Indenture Trustee without the possession of any of the Bonds or the production thereof in any trial or other Proceedings relative thereto, and any such action or proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Bonds, subject to Section 5.05 hereof.

(g)        In any Proceedings brought by the Indenture Trustee with the consent of the Bond Insurer so long as no Bond Insurer Default exists (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Holders of the Bonds, and it shall not be necessary to make any Bondholder a party to any such Proceedings.

Section 5.04     Remedies; Priorities.  (a) If an Event of Default shall have occurred and be continuing and if an acceleration has been declared and not rescinded pursuant to Section 5.02 hereof, the Indenture Trustee subject to the provisions of Section 10.16 hereof may with the consent of the Bond Insurer so long as no Bond Insurer Default exists, and shall, at the written direction of the Bond Insurer so long as no Bond Insurer Default exists, do one or more of the following (subject to Section 5.05 hereof):

(i)         institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Bonds or under this Indenture with respect thereto, whether by declaration or otherwise, and all amounts payable under the Insurance Agreement, enforce any judgment obtained, and collect from the Issuer and any other obligor upon such Bonds monies adjudged due;

(ii)         institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;

(iii)        exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Bonds and the Bond Insurer; and

(iv)        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;

provided, however, that so long as a Bond Insurer Default exists the Indenture Trustee may not sell or otherwise liquidate the Trust Estate following an Event of Default, unless (A) the Indenture Trustee obtains the consent of the Holders of 100% of the aggregate Bond Principal Balance of the Bonds, (B) the proceeds of such sale or liquidation distributable to the Holders of the Bonds are sufficient to discharge in full all amounts then due and unpaid upon such Bonds for principal and interest and to reimburse the Bond Insurer for any amounts drawn under the Bond Insurance Policy and any other amounts due to the Bond Insurer under the Insurance Agreement or (C) the Indenture Trustee determines that the Mortgage Loans will not continue to provide sufficient funds for the payment of principal of and interest on the applicable Bonds as 

 

they would have become due if the Bonds had not been declared due and payable, and the Indenture Trustee obtains the consent of the Holders of a majority of the aggregate Bond Principal Balance of the Bonds. In determining such sufficiency or insufficiency with respect to clause (B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an opinion (obtained at the expense of the Trust) of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose. Notwithstanding the foregoing, so long as an Event of Servicer Termination has not occurred, any Sale of the Trust Estate shall be made subject to the continued servicing of the Mortgage Loans by the Master Servicer as provided in the Servicing Agreement.

(b)        If the Indenture Trustee collects any money or property with respect to the Group 1 Loans pursuant to this Article V, it shall pay out the money or property in the following order; provided, however, that any amounts representing payments from the Bond Insurer shall only be used to pay interest and principal to the Class 1-A-1 Bondholders and Class 1-A-2 Bondholders pursuant to clauses FOURTH and FIFTH below:

FIRST: to the Indenture Trustee for amounts due under Section 6.07 hereof;

SECOND: to the related Derivative Contract Counterparty, any amounts owed under the Derivative Contracts, other than any Additional Derivative Contract Counterparty Payment;

THIRD: to the Bond Insurer, provided no Bond Insurer Default exists, with respect to any Bond Insurance Premium then due to the extent unpaid pursuant to the Servicing Agreement;

FOURTH: to the Group 1 Bondholders for amounts due and unpaid on the Bonds (including Unpaid Interest Shortfalls but not including any Basis Risk Shortfall Carry-Forward Amounts) with respect to interest, first, concurrently, to the Class 1-A-1 Bonds and Class 1-A-2 Bonds and second, sequentially, to the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds according to the amounts due and payable on the Bonds for interest;

FIFTH: to Group 1 Bondholders for amounts due and unpaid on the Bonds with respect to principal, and to each Group 1 Bondholder, pro rata, without preference or priority of any kind, according to the amounts due and payable on such Bonds for principal, until the Bond Principal Balance of each such Class is reduced to zero;

SIXTH: to the Bond Insurer for the payment of all amounts due and owing to the Bond Insurer under the Insurance Agreement (including any Premium Amount not paid pursuant to clause THIRD above);

SEVENTH: to the Group 1 Bondholders, first, concurrently, to the Class 1-A-1 Bonds and Class 1-A-2 Bonds and second, sequentially, to the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds the amount of any related Allocated Realized Loss Amount not previously paid;

 

 

EIGHTH: to the Group 1 Bondholders for amounts due and unpaid on the Bonds with respect to any related Unpaid Interest Shortfalls, first, concurrently, to the Class 1-A-1 Bonds and Class 1-A-2 Bonds and second, sequentially, to the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds, according to the amounts due and payable on the Bonds with respect thereto, from amounts available in the Trust Estate for the Bondholders;

NINTH: to the Group 1 Bondholders for amounts due and unpaid on the Bonds with respect to any related Basis Risk Shortfall Carry-Forward Amounts, first, concurrently, to the Class 1-A-1 Bonds and Class 1-A-2 Bonds and second, sequentially, to the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 and Class 1-B-2 Bonds, in that order, according to the amounts due and payable on the Bonds with respect thereto, from amounts available in the Trust Estate for the Bondholders to the extent not covered by the Group 1 Derivative Contracts; provided, however, that any Basis Risk Shortfall Carry-Forward Amount on the Class 1-A-2 Bonds shall be directed to the related Derivative Contract Counterparty unless a Class 1-A-2 Derivative Contract Counterparty Termination Event is in effect; provided, however, that in such event the Holder of the Class 1-A-2
Bonds will be entitled to receive any Basis Risk Shortfall Carry-Forward Amounts that arise on and after the Payment Date when the Class 1-A-2 Derivative Contract Counterparty Termination Event occurs;

TENTH: to the related Derivative Contract Counterparty, any Additional Derivative Contract Counterparty Payment; and

ELEVENTH: to the payment of the remainder, if any to the Certificate Paying Agent on behalf of the Issuer or to any other person legally entitled thereto.

(c)        If the Indenture Trustee collects any money or property with respect to the Group 2 Loans pursuant to this Article V, it shall pay out the money or property in the following order:

FIRST: to the Indenture Trustee for amounts due under Section 6.07 hereof;

SECOND: to the related Derivative Contract Counterparty, any amounts owed under the Derivative Contracts, other than any Additional Derivative Contract Counterparty Payment;

THIRD: to the Group 2 Bondholders for amounts due and unpaid on the Bonds (including Unpaid Interest Shortfalls but not including any Basis Risk Shortfall Carry-Forward Amounts) with respect to interest, first, concurrently, to the Class 2-A-1 Bonds and Class 2-A-2 Bonds and second, sequentially, to the Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds according to the amounts due and payable on the Bonds for interest;

FOURTH: to the Group 2 Bondholders for amounts due and unpaid on the Bonds with respect to principal, and to each Group 2 Bondholder, pro rata, without preference or priority of any kind, according to the amounts due and payable on such Bonds for principal, until the Bond Principal Balance of each such Class is reduced to zero;

 

 

FIFTH: to the Group 2 Bondholders, sequentially, to the Class 2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds the amount of any related Allocated Realized Loss Amount not previously paid;

SIXTH: to the Group 2 Bondholders for amounts due and unpaid on the Bonds with respect to any related Unpaid Interest Shortfalls, first, concurrently, to the Class 2-A-1 Bonds and Class 2-A-2 Bonds and second, sequentially, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds, according to the amounts due and payable on the Bonds with respect thereto, from amounts available in the Trust Estate for the Bondholders;

SEVENTH: to the Group 2 Bondholders for amounts due and unpaid on the Bonds with respect to any related Basis Risk Shortfall Carry-Forward Amounts, first, concurrently, to the Class 2-A-1 Bonds and Class 2-A-2 Bonds and second, sequentially, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds, according to the amounts due and payable on the Bonds with respect thereto, from amounts available in the Trust Estate for the Bondholders to the extent not covered by the Group 2 Derivative Contracts;

EIGHTH: to the related Derivative Contract Counterparty, any Additional Derivative Contract Counterparty Payment; and

NINTH: to the payment of the remainder, if any to the Certificate Paying Agent on behalf of the Issuer or to any other person legally entitled thereto.

The Indenture Trustee may fix a record date and Payment Date for any payment to Bondholders pursuant to this Section 5.04. At least 15 days before such record date, the Indenture Trustee shall mail to each Bondholder a notice that states the record date, the Payment Date and the amount to be paid.

Section 5.05     Optional Preservation of the Trust Estate.  If the Bonds have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may with the consent of the Bond Insurer (which consent shall not be required if a Bond Insurer Default exists) and, shall, at the direction of the Bond Insurer so long as no Bond Insurer Default exists, elect to take and maintain possession of the Trust Estate. It is the desire of the parties hereto and the Bondholders that there be at all times sufficient funds for the payment of principal of and interest on the Bonds and other obligations of the Issuer, including payment to the Bond Insurer, and the Indenture Trustee, unless directed otherwise by the
Bond Insurer, shall take such desire into account when determining whether or not to take and maintain possession of the Trust Estate. In determining whether to take and maintain possession of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

Section 5.06     Limitation of Suits.  No Bondholder of any Bond shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the 

 

appointment of a receiver or trustee, or for any other remedy hereunder, unless and subject to the provisions of Section 10.16 hereof,

(i)         such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

(ii)         the Holders of not less than 25% of the aggregate Bond Principal Balances of the Bonds have made a written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

(iii)        such Holder or Holders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in complying with such request;

(iv)        the Indenture Trustee for 60 days after its receipt of such notice of request and offer of indemnity has failed to institute such Proceedings; and

(v)        no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Holders of a majority of the Bond Principal Balances of the Bonds; and

(vi)        such Holder or Holders have the written consent of the Bond Insurer, unless a Bond Insurer Default exists.

It is 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 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.

Subject to the last paragraph of Section 5.11 herein, in the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Bonds, each representing less than a majority of the Bond Principal Balances of the Bonds, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

Section 5.07     Unconditional Rights of Bondholders To Receive Principal and Interest.  Notwithstanding any other provisions in this Indenture, the Holder of any Bond shall have the right, which is absolute and unconditional, to receive payment of the interest and principal, if any, on such Bond on or after the respective due dates thereof expressed in such Bond or in this Indenture and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Bondholder.

Section 5.08     Restoration of Rights and Remedies.  If the Indenture 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 Indenture Trustee, the Bond Insurer or to such Bondholder, then and in every 

 

such case the Issuer, the Indenture Trustee, the Bond Insurer 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 Indenture Trustee, the Bond Insurer and the Bondholders shall continue as though no such Proceeding had been instituted.

Section 5.09     Rights and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to the Indenture Trustee, to the Bond Insurer 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 5.10     Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee, the Bond Insurer or 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 V or by law to the Indenture Trustee, the Bond Insurer or to the Bondholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee, by the Bond Insurer or by the Bondholders, as the case may be.

Section 5.11     Control By the Bond Insurer.  The Bond Insurer, unless a Bond Insurer Default exists, or the Holders of a majority of the aggregate Bond Principal Balances of the Bonds, if a Bond Insurer Default exists, shall have the right (subject to the provisions of Section 5.06) to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Bonds or exercising any trust or power conferred on the Indenture Trustee; provided that:

(i)         such direction shall not be in conflict with any rule of law or with this Indenture;

(ii)         if a Bond Insurer Default exists, any direction to the Indenture Trustee to sell or liquidate the Trust Estate shall be by Holders of Bonds representing not less than 100% of the Bond Principal Balances of the Bonds; 

(iii)        if the conditions set forth in Section 5.05 hereof have been satisfied and the Indenture Trustee, with the consent of the Bond Insurer (which consent shall not be required if a Bond Insurer Default exists), elects to retain the Trust Estate pursuant to such Section, then any direction to the Indenture Trustee by Holders of Bonds representing less than 100% of the Bond Principal Balances of the Bonds to sell or liquidate the Trust Estate shall be of no force and effect; and

(iv)        the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction of the Holders of Bonds representing a majority of the Bond Principal Balances of the Bonds.

 

 

Notwithstanding the rights of Bondholders set forth in this Section 5.11 the Indenture Trustee need not take any action that it determines might involve it in liability.

Section 5.12     Waiver of Past Defaults.  Prior to the declaration of the acceleration of the maturity of the Bonds as provided in Section 5.02 hereof, the Holders of Bonds representing not less than a majority of the aggregate Bond Principal Balance of the Bonds may waive any past Event of Default and its consequences except an Event of Default (a) with respect to payment of principal of or interest on any of the Bonds, (b) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Bond or (c) the waiver of which would materially and adversely affect the interests of the Bond Insurer or modify its obligations under the Bond Insurance Policy.  In the case of any such waiver, the Issuer, the Indenture Trustee and the Holders of the Bonds shall be
restored to their former positions and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereto.

Upon any such waiver, any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereto.

Section 5.13     Undertaking for Costs.  All parties to this Indenture agree, and each Holder of any Bond and each Beneficial Owner of any interest therein by such Holder’s or Beneficial Owner’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 5.13 shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Bondholder, or group of Bondholders, in each case holding in the aggregate more than 10% of the Bond Principal Balances of the Bonds or (c) any suit instituted by any Bondholder for the enforcement of the payment of principal of or interest on any Bond on or after the respective due dates expressed in such Bond and in this Indenture.

Section 5.14     Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

Section 5.15     Sale of Trust Estate.  (a) The power to effect any sale or other disposition (a “Sale”) of any portion of the Trust Estate pursuant to Section 5.04 hereof is expressly subject to the provisions of Section 5.05 hereof and this Section 5.15. The power to effect any such Sale 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 and under the Insurance Agreement shall have been paid. The Indenture Trustee with the consent of the Bond Insurer (which consent shall not be required if a Bond Insurer Default exists), may from time to time postpone any public Sale by public announcement made at the time and place of such Sale. The Indenture Trustee hereby expressly waives its right to any amount fixed by law as compensation for any Sale.

(b)        The Indenture Trustee shall not in any private Sale sell the Trust Estate, or any portion thereof, unless

(1)        the Bond Insurer, unless a Bond Insurer Default exists, or the Holders of all Bonds if a Bond Insurer Default exists, consent to or direct the Indenture Trustee to make, such Sale, or

(2)        the proceeds of such Sale would be not less than the entire amount which would be payable to the Bondholders under the Bonds and the Bond Insurer in respect of amounts drawn under the Bond Insurance Policy and any other amounts due to the Bond Insurer under the Insurance Agreement, in full payment thereof in accordance with Section 5.02 hereof, on the Payment Date next succeeding the date of such Sale, or

(3)        the Indenture Trustee determines that the conditions for retention of the Trust Estate set forth in Section 5.05 hereof cannot be satisfied (in making any such determination, the Indenture Trustee may rely upon an opinion of an Independent investment banking firm obtained and delivered as provided in Section 5.05 hereof) and the Bond Insurer consents to such Sale, or if a Bond Insurer Default exists, the Holders of Bonds representing at least 100% of the Bond Principal Balances of the Bonds consent to such Sale.

The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall not be deemed a Sale or other disposition thereof for purposes of this Section 5.15(b).

(c)        Unless the Bond Insurer, or if a Bond Insurer Default exists, the Holders representing at least 66-2/3% of the Bond Principal Balances of the Bonds have otherwise consented or directed the Indenture 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 5.15 has not been established by the Indenture Trustee and no Person bids an amount equal to or greater than such amount, the Indenture Trustee, as trustee for the benefit of the Holders of the Bonds, shall bid an amount at least $1.00 more than the highest other bid.

	
            (d)
 	
            In connection with a Sale of all or any portion of the Trust Estate,
 

(1)        any Holder or Holders of Bonds may bid for and purchase the property offered for sale, and upon compliance with the terms of sale may hold, retain and possess and dispose of such property, without further accountability, and may, in paying the purchase money therefor, deliver any Bonds or claims for interest thereon in lieu of cash up to the amount which shall, upon distribution of the net proceeds of such Sale, be 

 

payable thereon, and such Bonds, in case the amounts 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 Indenture Trustee, with the consent of the Bond Insurer so long as no Bond Insurer Default exists, may bid for and acquire the property offered for Sale in connection with any Sale thereof, and, subject to any requirements of, and to the extent permitted by, applicable law in connection therewith, may purchase all or any portion of the Trust Estate in a private sale, 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 and Holders of Certificates and amounts distributable to the Bond Insurer as a result of such Sale in accordance with Section 5.04(b) hereof 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 Indenture Trustee shall be held and dealt with by it in accordance with the provisions of this Indenture;

(3)        the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance, prepared by the Issuer and satisfactory to the Indenture Trustee, transferring its interest in any portion of the Trust Estate in connection with a Sale thereof;

(4)        the Indenture 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 Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.

Section 5.16     Action on Bonds.  The Indenture Trustee’s right to seek and recover judgment on the Bonds or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Bondholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.04(b) hereof.

Section 5.17     Performance and Enforcement of Certain Obligations.  (a) Promptly following a request from the Indenture Trustee to do so, the Issuer in its capacity as Holder of the Mortgage Loans, shall take all such lawful action as the Indenture Trustee or the Bond Insurer may request to cause the Issuer to compel or secure the performance and observance by the Seller and the Master Servicer, as applicable, of each of their obligations to the Issuer under or in 

 

connection with the Mortgage Loan Purchase Agreement and the Servicing Agreement, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Mortgage Loan Purchase Agreement and the Servicing Agreement to the extent and in the manner directed by the Indenture Trustee, with the consent of the Bond Insurer so long as no Bond Insurer Default exists, as pledgee of the Mortgage Loans, including the transmission of notices of default on the part of the Seller or the Master Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Seller or the Master Servicer of each of their obligations under the Mortgage Loan Purchase Agreement and the Servicing Agreement. So long as no Bond Insurer Default exists, the Bond Insurer shall have the right to approve or reject any
proposed successor to the Master Servicer (other than the Indenture Trustee) under the Servicing Agreement. 

(b)        The Indenture Trustee, subject to the rights of the Bond Insurer under this Agreement and the Servicing Agreement, as pledgee of the Mortgage Loans may, and at the direction (which direction shall be in writing or by telephone (confirmed in writing promptly thereafter) of the Bond Insurer, or if a Bond Insurer Default exists, of the Holders of 66-2/3% of the Bond Principal Balances of the Bonds, shall exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller or the Master Servicer under or in connection with the Mortgage Loan Purchase Agreement and the Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Seller or the Master Servicer, as the case may be, of each of their obligations to the Issuer thereunder and to give any consent,
request, notice, direction, approval, extension or waiver under the Mortgage Loan Purchase Agreement and the Servicing Agreement, as the case may be, and any right of the Issuer to take such action shall not be suspended.

 

ARTICLE VI

 

The Indenture Trustee

Section 6.01     Duties of Indenture Trustee.  (a)  If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

	
            (b)
 	
            Except during the continuance of an Event of Default:
 

(i)         the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and

(ii)         in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; however, the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

(c)        The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i)         this paragraph does not limit the effect of paragraph (b) of this Section 6.01;

(ii)         the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and

(iii)        the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it (A) from Bondholders or from the Issuer, which they are entitled to give under the Basic Documents or (B) from the Bond Insurer, which it is entitled to give under the Basic Documents.

(d)        The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.

(e)        Money held in trust by the Indenture Trustee need not be segregated from other trust funds except to the extent required by law or the terms of this Indenture or the Trust Agreement.

(f)         No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to 

 

believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(g)        Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section and to the provisions of the TIA.

(h)        The Indenture Trustee shall act in accordance with Sections 6.03 and 6.04 of the Servicing Agreement and shall act as successor to the Master Servicer or appoint a successor Master Servicer in accordance with Section 6.02 of the Servicing Agreement.

Section 6.02     Rights of Indenture Trustee.  (a) The Indenture Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Indenture Trustee need not investigate any fact or matter stated in the document.

(b)        Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel. The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate or Opinion of Counsel.

(c)        The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee.

(d)        The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

(e)        The Indenture Trustee may consult with counsel, and the advice or Opinion of Counsel with respect to legal matters relating to this Indenture and the Bonds shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f)         For the limited purpose of effecting any action to be undertaken by the Indenture Trustee, but not specifically as a duty of the Indenture Trustee in the Indenture, the Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder, either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.

(g)        The Indenture Trustee or its Affiliates are permitted to receive additional compensation that could be deemed to be in the Indenture Trustee’s economic self-interest for (i) serving as investment adviser, administrator, shareholder servicing agent, custodian or sub-custodian with respect to certain of the Eligible Investments, (ii) using Affiliates to effect transactions in certain Eligible Investments and (iii) effecting transactions in certain Eligible Investments. Such compensation shall not be considered an amount that is reimbursable or 

 

payable to the Indenture Trustee pursuant to Sections 3.05(d), 3.05(h), 5.04(b), 6.07 or 8.02(c) hereunder or out of Available Funds.

(h)        In order to comply with its duties under the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“U.S.A. Patriot Act”), the Indenture Trustee shall obtain and verify certain information and documentation from the other party to this Indenture, including, but not limited to, such party’s name, address, and other identifying information.

Section 6.03     Individual Rights of Indenture Trustee.  The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Bonds and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee, subject to the requirements of the Trust Indenture Act. Any Bond Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12 hereof.

Section 6.04     Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Bonds, it shall not be accountable for the Issuer’s use of the proceeds from the Bonds, and it shall not be responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Bonds or in the Bonds other than the Indenture Trustee’s certificate of authentication.

Section 6.05     Notice of Event of Default.  Subject to Section 5.01, the Indenture Trustee shall promptly mail to each Bondholder and the Bond Insurer notice of the Event of Default after it is known to a Responsible Officer of the Indenture Trustee, unless such Event of Default shall have been waived or cured. Except in the case of an Event of Default in payment of principal of or interest on any Bond, the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Bondholders.

Section 6.06     Reports by Indenture Trustee to Bondholders and Tax Administration.  The Indenture Trustee shall deliver to each Bondholder such information as may be required to enable such Holder to prepare its federal and state income tax returns.

The Indenture Trustee shall prepare and file (or cause to be prepared and filed), on behalf of the Owner Trustee, all tax returns (if any) and information reports, tax elections and such annual or other reports of the Issuer as are necessary for preparation of tax returns and information reports as provided in Section 5.03 of the Trust Agreement, including without limitation Form 1099. All tax returns and information reports shall be signed by the Owner Trustee as provided in Section 5.03 of the Trust Agreement.

Section 6.07     Compensation and Indemnity.  The Issuer shall pay to the Indenture Trustee on each Payment Date reasonable compensation for its services. On each Payment Date, the Indenture Trustee shall pay itself from amounts available therefore on deposit in the Payment Account for such Payment Date all amounts owing to the Indenture Trustee hereunder (including amounts owing from the Issuer for indemnification and otherwise) as provided in Section 

 

3.05(d)(vii), 3.05(h)(vii), Section 5.04(b) and Section 8.02(c) hereof and Appendix A hereto. The Indenture Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to compensation for its services. Such expenses shall include reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts. The Issuer shall indemnify the Indenture Trustee against any and all loss, liability or expense (including attorneys’ fees) incurred by it in connection with the administration of this Trust and the performance of its duties hereunder. The Indenture Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend any such claim, and the Indenture Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer is not obligated to reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith.

The Issuer’s payment obligations to the Indenture Trustee pursuant to this Section 6.07 shall survive the discharge of this Indenture and the termination or resignation of the Indenture Trustee. When the Indenture Trustee incurs expenses after the occurrence of an Event of Default with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or similar law.

Section 6.08     Replacement of Indenture Trustee.  No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may resign at any time by so notifying the Issuer and the Bond Insurer. The Bond Insurer or, if a Bond Insurer Default exists, the Holders of a majority of Bond Principal Balances of the Bonds may remove the Indenture Trustee by so notifying the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer shall, with the consent of the Bond Insurer so long as no Bond Insurer Default exists, remove the Indenture Trustee if:

	
            (i)
 	
            the Indenture Trustee fails to comply with Section 6.11 hereof;
 
	
            (ii)
 	
            the Indenture Trustee is adjudged a bankrupt or insolvent;
 	
             

(iii)        a receiver or other public officer takes charge of the Indenture Trustee or its property; or

	
            (iv)
 	
            the Indenture Trustee otherwise becomes incapable of acting.
 

If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall, with the consent of the Bond Insurer so long as no Bond Insurer Default exists, promptly appoint a successor Indenture Trustee.

 

 

A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee, to the Bond Insurer and to the Issuer. Thereupon, the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a notice of its succession to Bondholders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer, the Bond Insurer or the Holders of a majority of Bond Principal Balances of the Bonds may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.

Section 6.09     Successor Indenture Trustee by Merger.  If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation, without any further act, shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall provide the Rating Agencies and the Bond Insurer with prior written notice of any such transaction.

If at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture and any of the Bonds shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Bonds so authenticated; and if at that time any of the Bonds shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Bonds either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is in the Bonds or in this Indenture provided that the certificate of the Indenture Trustee shall have.

Section 6.10     Appointment of Co-Indenture Trustee or Separate Indenture Trustee.  (a)  Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person or Persons, in such capacity and for the benefit of the Bondholders and the Bond Insurer, such title to the Trust Estate, or any part hereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture
Trustee or the Bond Insurer may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 hereof and notice to the Bond Insurer but not to the Bondholders (unless a Bond Insurer Default exists, in which case notice 

 

will be sent to the Bondholders) of the appointment of any co-trustee or separate trustee shall be required under Section 6.08 hereof.

(b)        Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

(i)         all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Indenture Trustee;

(ii)         no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

(iii)        the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

(c)        Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be filed with the
Indenture Trustee.

(d)        Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

Section 6.11     Eligibility; Disqualification.  The Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a). The Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and it or its parent shall have a long-term debt rating of Baa3 or better by Moody’s and BBB or better by Standard & Poor’s. The Indenture Trustee shall comply with TIA § 310(b), including the optional provision permitted by the second sentence of TIA § 310(b)(9); provided, 

 

however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

Section 6.12     Preferential Collection of Claims Against Issuer.  The Indenture Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). An Indenture Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

Section 6.13     Representations and Warranties.  The Indenture Trustee hereby represents that:

(i)         The Indenture Trustee is duly organized and validly existing as an association in good standing under the laws of the United States with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted;

(ii)         The Indenture Trustee has the power and authority to execute and deliver this Indenture and to carry out its terms; and the execution, delivery and performance of this Indenture have been duly authorized by the Indenture Trustee by all necessary corporate action;

(iii)        The consummation of the transactions contemplated by this Indenture and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Indenture Trustee or any agreement or other instrument to which the Indenture Trustee is a party or by which it is bound; and

(iv)        To the Indenture Trustee’s knowledge, there are no proceedings or investigations pending or threatened before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Indenture Trustee or its properties: (A) asserting the invalidity of this Indenture (B) seeking to prevent the consummation of any of the transactions contemplated by this Indenture or (C) seeking any determination or ruling that might materially and adversely affect the performance by the Indenture Trustee of its obligations under, or the validity or enforceability of, this Indenture.

	
            Section 6.14
 	
            Directions to Indenture Trustee.  The Indenture Trustee is hereby directed:
 

(a)        to accept the pledge of the Mortgage Loans and hold the assets of the Trust Estate in trust for the Bondholders and the Bond Insurer;

(b)        to authenticate and deliver the Bonds substantially in the form prescribed by Exhibits A-1, A-2 and A-3 to this Indenture in accordance with the terms of this Indenture; and

(c)        to take all other actions as shall be required to be taken by the terms of this Indenture.

 

 

Section 6.15     The Agents.  The provisions of this Indenture relating to the limitations of the Indenture Trustee’s liability and to its indemnity, rights and protections shall inure also to the Paying Agent and Bond Registrar.

Section 6.16     Execution of Derivative Contracts.  The Issuer hereby directs the Indenture Trustee to enter into and execute the Derivative Contracts and the Special Certificate Cap Contract and make all representations and warranties contained therein on behalf of the Trust. The Indenture Trustee hereby acknowledges receipt by it of the Derivative Contracts and the Special Certificate Cap Contract.  Upon receipt thereof from the counterparty under the Derivative Contracts and the Special Certificate Cap Contract, the Indenture Trustee shall deposit into the Payment Account an amount equal to all amounts actually received under the Derivative Contracts and the Special Certificate Cap Contract and not previously deposited into the Payment Account.

 

 

ARTICLE VII

 

Bondholders’ Lists and Reports

Section 7.01     Issuer To Furnish Indenture Trustee Names and Addresses of Bondholders.  The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five days after each Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Holders of Bonds as of such Record Date, (b) at such other times as the Indenture Trustee and the Bond Insurer may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Bond Registrar, no such list shall be
required to be furnished to the Indenture Trustee.

Section 7.02    Preservation of Information; Communications to Bondholders.  (a) The Indenture 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 furnished to the Indenture Trustee as provided in Section 7.01 hereof and the names and addresses of Holders of Bonds received by the Indenture Trustee in its capacity as Bond Registrar. The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.

(b)        Bondholders may communicate pursuant to TIA § 312(b) with other Bondholders with respect to their rights under this Indenture or under the Bonds.

(c)        The Issuer, the Indenture Trustee and the Bond Registrar shall have the protection of TIA § 312(c).

Section 7.03     Reports of Issuer.  (a)  Subject to Section 4.06 of the Servicing Agreement (i) The Indenture Trustee shall file with the Commission on behalf of the Issuer, with a copy to the Issuer and the Bond Insurer within 15 days before the Issuer is required to file the same with the Commission, the annual reports and the information, documents and other reports (or such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Issuer may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

(ii)         The Indenture Trustee shall file with the Commission, on behalf of the Issuer, in accordance with rules and regulations prescribed from time to time by the Commission such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

(iii)        The Indenture Trustee shall supply (and the Indenture Trustee shall transmit by mail to all Bondholders described in TIA § 313(c)) such summaries of any information, documents and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations prescribed from time to time by the Commission.

 

 

(b)        Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year.

Section 7.04     Reports by Indenture Trustee.  If required by TIA § 313(a), within 60 days after each January 30 beginning with March 31, 2006, the Indenture Trustee shall mail to each Bondholder as required by TIA § 313(c) and the Bond Insurer a brief report dated as of such date that complies with TIA § 313(a). The Indenture Trustee also shall comply with TIA § 313(b).

A copy of each report at the time of its mailing to Bondholders shall be filed by the Indenture Trustee with the Commission via EDGAR and each stock exchange, if any, on which the Bonds are listed. The Issuer shall notify the Indenture Trustee if and when the Bonds are listed on any stock exchange.

Section 7.05     Statements to Bondholders.  (a) With respect to each Payment Date, the Indenture Trustee shall make available via the Indenture Trustee’s website www.ctslink.com or deliver at the recipient’s option to each Bondholder and each Certificateholder, the Derivative Contract Counterparties, the Depositor, the Owner Trustee, the Certificate Paying Agent, the Bond Insurer and each Rating Agency, a statement setting forth the following information as to the Bonds, to the extent applicable:

	
            (i)
 	
            the aggregate amount of collections with respect to the Mortgage Loans;
 

(ii)         the Group 1 Available Funds, Group 2 Available Funds and Net Monthly Excess Cash Flow, with respect to the Group 1 Loans and Group 2 Loans, payable to each Class of Bondholders for such Payment Date, the Basis Risk Shortfall Carry-Forward Amount on each Class of Bonds for such Payment Date and the aggregate Unpaid Interest Shortfall on each Class of Bonds for such Payment Date;

(iii)        (a) the amount of such distribution to each Class 1-A-1, Class 1-A-2, Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1, Class 1-B-2, Class 2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds applied to reduce the Bond Principal Balance thereof, and (b) the aggregate amount included therein representing Principal Prepayments;

(iv)        the Insured Amount, if any, paid by the Bond Insurer under the Bond Insurance Policy for such Payment Date and the aggregate Insured Amounts for all prior Payment Dates paid by the Bond Insurer under the Bond Insurance Policy and not yet reimbursed;

(v)        the amount of such distribution to Holders of each Class of Bonds allocable to interest;

	
            (vi)
 	
            the amount of such distribution to the Certificates;
 

(vii)       if the distribution to the Holders of any Class of Bonds is less than the full amount that would be distributable to such Holders if there were sufficient funds available therefor, the amount of the shortfall;

 

 

(viii)      the number and the aggregate Stated Principal Balance of the Mortgage Loans as of the end of the related Due Period, determined in the aggregate and separately for Loan Group 1 and Loan Group 2;

(ix)        the aggregate Bond Principal Balance of each Class of Bonds, after giving effect to the amounts distributed on such Payment Date, separately identifying any reduction thereof due to Realized Losses other than pursuant to an actual distribution of principal and the aggregate Bond Principal Balance of all of the Class 1-A-1, Class 1-A-2, Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1, Class 1-B-2, Class 2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Bonds after giving effect to the distribution of principal on such Payment Date;

	
            (x)
 	
            [reserved]
 

(xi)        the number and aggregate Stated Principal Balances of Mortgage Loans (a) as to which the Monthly Payment is delinquent for 31-60 days, 61-90 days, 91 or more days, respectively, (b) in foreclosure and (c) that have become REO Property, in each case as of the end of the preceding calendar month, determined in the aggregate and separately for Loan Group 1 and Loan Group 2;

(xii)       the Group 1 Net Derivative Contract Payment Amount and Group 2 Net Derivative Contract Payment Amount;

(xiii)      the Overcollateralization Increase Amount with respect to each Loan Group, Overcollateralization Release Amount, Overcollateralization Target Amount and Overcollateralized Amount, if any, in each case as the end of the related Payment Date, and as determined separately for each Loan Group;

	
            (xiv)
 	
            the amount of any Advances and Compensating Interest payments;
 

(xv)       the aggregate Realized Losses with respect to the related Payment Date and the cumulative Realized Losses since the Closing Date;

(xvi)      the number and aggregate Stated Principal Balance of Mortgage Loans repurchased pursuant to the Mortgage Loan Purchase Agreement for the related Payment Date and cumulatively since the Closing Date determined in the aggregate and separately for Loan Group 1 and Loan Group 2;

	
            (xvii)
 	
            [reserved]
 	
             

	
            (xviii)
 	
            the book value of any REO Property;
 

(xix)      the amount of any Prepayment Interest Shortfalls or Relief Act Shortfalls for such Payment Date; and

(xx)       the aggregate Stated Principal Balance of Mortgage Loans purchased pursuant to Section 3.18 of the Servicing Agreement for the related Payment Date and cumulatively since the Closing Date.

 

 

Items (iii) and (iv) above shall be presented on the basis of a Bond having a $1,000 denomination. In addition, by January 31 of each calendar year following any year during which the Bonds are outstanding, the Indenture Trustee shall furnish a report to each Bondholder of record if so requested in writing at any time during each calendar year as to the aggregate of amounts reported pursuant to (iii) and (iv) with respect to the Bonds for such calendar year.

The Indenture Trustee may conclusively rely upon the Remittance Report provided by the Master Servicer pursuant to Section 4.01 of the Servicing Agreement and on the amount of the Group 1 Net Derivative Contract Payment Amount and Group 2 Net Derivative Contract Payment Amount furnished to the Indenture Trustee pursuant to the Derivative Contracts in its preparation of its Statement to Bondholders.

The Indenture Trustee will make the monthly statements provided for in this section (and, at its option, any additional files containing the same information in an alternative format) available each month to Bondholders, other parties to this Agreement and any other interested parties via the Indenture Trustee’s website. The Indenture Trustee’s website shall initially be located at www.ctslink.com. Assistance in using the website can be obtained by calling the Indenture Trustee’s customer service desk at (301) 815-6600. Parties that are unable to use the website are entitled to have a paper copy mailed to them via first class mail by calling the customer service desk and indicating such. With the consent of the Depositor, the Indenture Trustee may have the right to change the way the monthly statements are distributed in order to make such distribution more convenient
and/or more accessible to the above parties and the Indenture Trustee shall provide timely and adequate notification to all above parties regarding any such changes. The Indenture Trustee shall be entitled to rely on, but shall not be responsible for, the content or accuracy of any information provided by third parties for purposes of preparing the monthly statement, and may affix thereto any disclaimer it deems appropriate in its reasonable discretion (without suggesting liability on the part of any other party hereto).

 

 

ARTICLE VIII

 

Accounts, Disbursements and Releases

Section 8.01     Collection of Money.  Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply all such money received by it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.

Section 8.02     Trust Accounts.  (a) On or prior to the Closing Date, the Issuer shall cause the Indenture Trustee to establish and maintain, in the name of the Indenture Trustee, for the benefit of the Bondholders, the Bond Insurer and the Derivative Contract Counterparties, the Payment Account as provided in Section 3.01 hereof. 

(b)        All monies deposited from time to time in the Payment Account and all deposits therein pursuant to this Indenture (other than deposits of any gain or income on investments thereof) are for the benefit of the Bondholders and the Bond Insurer. Any loss on any investment made by the Indenture Trustee with funds in the Payment Account shall be reimbursed immediately to the Trust Estate by the Master Servicer. All investments made with monies in the Payment Account and the Certificate Distribution Account including all income or other gain from such investments shall be for the benefit of and the risk of the Master Servicer.

(c)        On each Payment Date, the Indenture Trustee shall (i) pay itself one day’s float from amounts on deposit in the Payment Account for such Payment Date and any other amounts payable to it hereunder, and then shall (ii) pay the Bond Insurance Premium to the Bond Insurer, (iii) pay the related Derivative Contract Counterparty the Group 1 Net Derivative Fee, Group 2 Net Derivative Fee and Class 1-A-2 Derivative Fee, in each case excluding any Additional Derivative Contract Counterparty Payment, and then shall pay the Owner Trustee the Owner Trustee’s Fee, and then the Indenture Trustee shall distribute all remaining amounts on deposit in the Payment Account to the Bondholders in respect of the Bonds and to such other persons in the order of priority set forth in Section 3.05 hereof (except as otherwise provided in Section 5.04(b) hereof).

(d)        The Indenture Trustee shall invest any funds in the Payment Account, but only in Eligible Investments, as directed by the Master Servicer, maturing no later than the Business Day preceding each Payment Date and such Eligible Investments shall not be sold or disposed of prior to their maturity.  From the Business Day prior to the Payment Date until distributed, such funds shall be held uninvested and any income, gain or other benefit with respect thereto shall be for the benefit of the Indenture Trustee.

 

 

Section 8.03     Officer’s Certificate.  The Indenture Trustee shall receive at least seven Business Days’ notice when requested by the Issuer to take any action pursuant to Section 8.05(a) hereof, accompanied by copies of any instruments to be executed, and the Indenture Trustee shall also require, as a condition to such action, an Officer’s Certificate, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with.

Section 8.04     Termination Upon Distribution to Bondholders.  This Indenture and the respective obligations and responsibilities of the Issuer and the Indenture Trustee created hereby shall terminate upon the distribution to Bondholders, the Bond Insurer, the Certificate Paying Agent on behalf of the Certificateholders and the Indenture Trustee of all amounts required to be distributed pursuant to Article III; provided, however, that in no event shall the trust created hereby continue beyond the expiration of 21 years from the death of the survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to the Court of St. James, living on the date hereof.

Section 8.05     Release of Trust Estate.  (a) Subject to the payment of its fees and expenses, the Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture, including for the purposes of any repurchase by the Master Servicer of a Mortgage Loan pursuant to Section 3.18 of the Servicing Agreement. No party relying upon an instrument executed by the Indenture Trustee as provided in Article VIII hereunder shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent, or see to the application of any monies.

(b)        The Indenture Trustee shall, at such time as (i) there are no Bonds outstanding, (ii) all sums due to the Indenture Trustee pursuant to this Indenture have been paid and (iii) all sums due to the Bond Insurer have been paid, release any remaining portion of the Trust Estate that secured the Bonds from the lien of this Indenture.

(c)        The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section 8.05 only upon receipt of a request from the Issuer accompanied by an Officers’ Certificate and an Opinion of Counsel stating that all applicable requirements have been satisfied, and a letter from the Bond Insurer stating that the Bond Insurer has no objection to such request from the Issuer, except as otherwise provided in clause (a).

Section 8.06     Surrender of Bonds Upon Final Payment.  By acceptance of any Bond, the Holder thereof agrees to surrender such Bond to the Indenture Trustee promptly, prior to such Bondholder’s receipt of the final payment thereon.

Section 8.07     Optional Redemption of the Bonds.  (a) The Majority Certificateholder shall have the option to redeem the Group 1 Bonds in whole, but not in part, on any Payment Date on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Group 1 Loans as of the end of the related Due Period is less than or equal to 20% of the aggregate Group 1 Cut-off Date Balance and (ii) the Payment Date occurring in August 

 

2015. The Majority Certificateholder shall have the option to redeem the Group 2 Bonds in whole, but not in part, on any Payment Date on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Group 2 Loans as of the end of the related Due Period is less than or equal to 20% of the aggregate Group 2 Cut-off Date Balance and (ii) the Payment Date occurring in August 2015. The aggregate redemption price for each Group of Bonds will be equal to the unpaid Bond Principal Balance of such Bonds as of the Payment Date on which the proposed redemption will take place in accordance with the foregoing, together with accrued and unpaid interest thereon at the applicable Bond Interest Rate through such Payment Date (including any related Unpaid Interest Shortfall and Basis Risk Shortfall Carry-Forward Amount), plus an amount sufficient to pay in full all amounts owing to the
Bond Insurer and the Indenture Trustee under this Indenture and the Insurance Agreement (which amounts shall be specified in writing upon request of the Issuer by the Indenture Trustee and the Bond Insurer) and plus an amount equal to any amounts owing to the Derivative Contract Counterparties under the Derivative Contracts.

(b)        In order to exercise the foregoing option, the Issuer shall provide written notice of its exercise of such option to the Indenture Trustee, the Bond Insurer, the Owner Trustee and the Master Servicer at least 15 days prior to its exercise. Following receipt of the notice, the Indenture Trustee shall provide notice to the Bondholders of the final payment on the Bonds. In addition, the Issuer shall, not less than one Business Day prior to the proposed Payment Date on which such redemption is to be made, deposit the aggregate redemption price specified in (a) above with the Indenture Trustee, who shall deposit the aggregate redemption price into the Payment Account and shall, on the Payment Date after receipt of the funds, apply such funds to make final payments of principal and interest on the Bonds in accordance with Sections 3.05(b), (c)
and (d) hereof and to make payment in full to the Bond Insurer for all amounts owing under the Insurance Agreement and to make payment in full to the Indenture Trustee for all amounts payable to it under this Indenture and this Indenture shall be discharged subject to the provisions of Section 4.10 hereof. If for any reason the amount deposited by the Issuer is not sufficient to make such redemption or such redemption cannot be completed for any reason, the amount so deposited by the Issuer with the Indenture Trustee shall be immediately returned to the Issuer in full and shall not be used for any other purpose or be deemed to be part of the Trust Estate.

 

ARTICLE IX

 

Supplemental Indentures

Section 9.01     Supplemental Indentures Without Consent of Bondholders.  (a) Without the consent of the Holders of any Bonds but with the prior written consent of the Bond Insurer and prior notice to the Rating Agencies and the Bond Insurer, the Issuer and the Indenture Trustee, when authorized by an Issuer Request, at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:

(i)         to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

(ii)         to evidence the succession, in compliance with the applicable provisions hereof, of another Person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Bonds contained;

(iii)        to add to the covenants of the Issuer, for the benefit of the Holders of the Bonds, or to surrender any right or power herein conferred upon the Issuer;

(iv)        to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee;

(v)        to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture;

(vi)        to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that such action shall not materially and adversely affect the interests of the Holders of the Bonds;

(vii)       to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Bonds and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI hereof; or

(viii)      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;

provided, however, that no such indenture supplements shall be entered into unless the Indenture Trustee shall have received an Opinion of Counsel as to the enforceability of any such indenture 

 

supplement and to the effect that (i) such indenture supplement is permitted hereunder and (ii) entering into such indenture supplement will not result in a “substantial modification” of the Bonds under Treasury Regulation Section 1.1001-3 or adversely affect the status of the Bonds as indebtedness for federal income tax purposes.

The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

(b)        The Issuer and the Indenture Trustee, when authorized by an Issuer Request, may, also without the consent of any of the Holders of the Bonds but with the prior written consent of the Bond Insurer and prior notice to the Rating Agencies, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Bonds under this Indenture; provided, however, that such action as evidenced by an Opinion of Counsel, (i) is permitted by this Indenture, and shall not (ii) adversely affect in any material respect the interests of any Bondholder or (iii) if 100% of the Certificates are not owned by IMH Assets Corp., cause the
Issuer to be subject to an entity level tax for federal income tax purposes.

Section 9.02     Supplemental Indentures With Consent of Bondholders.  The Issuer and the Indenture Trustee, when authorized by an Issuer Request, also may, with prior notice to the Rating Agencies and, with the prior written consent of the Bond Insurer and with the consent of the Holders of not less than a majority of the Bond Principal Balance of each Class of Bonds affected thereby, by Act (as defined in Section 10.03 hereof) of such Holders delivered to the Issuer and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Bonds under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the Holder of each Bond affected thereby:

(i)         change the date of payment of any installment of principal of or interest on any Bond, or reduce the principal amount thereof or the interest rate thereon, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or interest on the Bonds, or change any place of payment where, or the coin or currency in which, any Bond or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Bonds on or after the respective due dates thereof;

(ii)         reduce the percentage of the Bond Principal Balances of the Bonds, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

 

 

(iii)        modify or alter the provisions of the proviso to the definition of the term “Outstanding” or modify or alter the exception in the definition of the term “Bondholder”

(iv)        reduce the percentage of the Bond Principal Balances of the Bonds required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04 hereof;

(v)        modify any provision of this Section 9.02 except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Bond affected thereby;

(vi)        modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Bond on any Payment Date (including the calculation of any of the individual components of such calculation); or

(vii)       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 or, except as otherwise permitted or contemplated herein, terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Bond of the security provided by the lien of this Indenture;

and provided, further, that such action shall not, as evidenced by an Opinion of Counsel, cause the Issuer (if 100% of the Certificates are not owned by IMH Assets Corp.) to be subject to an entity level tax.

Any such action shall not adversely affect in any material respect the interest of any Bondholder (other than a Bondholder who shall consent to such supplemental indenture) as evidenced by an Opinion of Counsel (provided by the Person requesting such supplemental indenture) delivered to the Indenture Trustee.

No supplemental indenture adverse to the interests of the Derivative Contract Counterparties shall be entered into without the related Derivative Contract Counterparty’s written consent.

It shall not be necessary for any Act of Bondholders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee shall mail to the Holders of the Bonds to which such amendment or supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

 

Section 9.03     Execution of Supplemental Indentures.  In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02 hereof, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.  

Section 9.04     Effect of Supplemental Indenture.  Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be modified and amended in accordance therewith with respect to the Bonds affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the Holders of the Bonds shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.05     Conformity with Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be qualified under the Trust Indenture Act.

Section 9.06     Reference in Bonds to Supplemental Indentures.  Bonds authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Bonds so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Bonds.

 

ARTICLE X

 

Miscellaneous

Section 10.01   Compliance Certificates and Opinions, etc.  (a) Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee and the Bond Insurer (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and (ii) 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, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(1)        a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

(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 or opinion are based;

(3)        a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with;

(4)        a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with; and

(5)        if the signatory of such certificate or opinion is required to be Independent, the statement required by the definition of the term “Independent Certificate”.

(6)        (i)         Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 10.01 (a) or elsewhere in this Indenture, furnish to the Indenture Trustee and the Bond Insurer an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days prior to such deposit) to the Issuer of the Collateral or other property or securities to be so deposited and a report from a nationally recognized accounting firm verifying such value.

(ii)         Whenever the Issuer is required to furnish to the Indenture Trustee and the Bond Insurer an Officer’s Certificate certifying or stating the opinion of any signer 

 

thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate from a nationally recognized accounting firm as to the same matters, if the fair value of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or more of the Bond Principal Balances of the Bonds, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the Bond Principal Balances of the Bonds.

(iii)        Whenever any property or securities are to be released from the lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee and the Bond Insurer an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days prior to such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

(iv)        Whenever the Issuer is required to furnish to the Indenture Trustee and the Bond Insurer an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property or securities released from the lien of this Indenture since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10% or more of the Bond Principal Balances of the Bonds, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related
Officer’s Certificate is less than $25,000 or less than one percent of the then Bond Principal Balances of the Bonds.

Section 10.02   Form of Documents Delivered to Indenture Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Seller or the Issuer, stating that the information with respect to such factual matters is in the possession of the Seller or the Issuer, unless such 

 

counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.

Section 10.03   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 and evidenced by one or more instruments of substantially similar tenor signed by such Bondholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the 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 hereof) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section 10.03 hereof.

(b)        The fact and date of the execution by any person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.

	
            (c)
 	
            The ownership of Bonds shall be proved by the Bond Registrar.
 

(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 thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Bond.

Section 10.04   Notices etc., to Indenture Trustee, Issuer, Seller and Rating Agencies.  Any request, demand, authorization, direction, notice, consent, waiver or Act of Bondholders or other documents provided or permitted by this Indenture shall be in writing and if such request, demand, authorization, direction, notice, consent, waiver or act of Bondholders is to be made upon, given or furnished to or filed with:

 

 

(i)         the Indenture 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 the Indenture Trustee at the Corporate Trust Office. The Indenture Trustee shall promptly transmit any notice received by it from the Bondholders to the Issuer; or

(ii)         the Issuer by the Indenture Trustee or by any Bondholder shall be sufficient for every purpose hereunder if in writing and mailed first-class, postage prepaid to the Issuer addressed to: Impac CMB Trust Series 2005-6, in care of Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19990-0001, Attention: Corporate Trust Administration, or at any other address previously furnished in writing to the Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice received by it from the Bondholders to the Indenture Trustee; or

(iii)        the Seller by the Indenture Trustee shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage pre-paid, or personally delivered or telecopied to: Impac Mortgage Holdings, Inc., 1401 Dove Street, Newport Beach, California 92660, Attention: General Counsel; or

(iv)        the Bond Insurer by the Issuer, the Indenture Trustee or by any Bondholders shall be sufficient for every purpose hereunder if in writing and mailed, first-class postage pre-paid, or personally delivered or telecopied to: Ambac Assurance Corporation, One State Street Plaza, New York, New York 10004, Attention: Consumer Asset-Backed Securities Group, Telephone: (212) 208-3394, Telecopier: (212) 363-1459. The Bond Insurer shall promptly transmit any notice received by it from the Issuer, the Indenture Trustee or the Bondholders to the Issuer or Indenture Trustee, as the case may be.

Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee or the Owner Trustee shall be in writing, mailed first-class postage pre-paid, to (i) in the case of Moody’s, at the following address: Moody’s Investors Service, Inc., Residential Mortgage Monitoring Department, 99 Church Street, New York, New York 10007 and (ii) in the case of Standard & Poor’s, at the following address: Standard & Poor’s, 55 Water Street, 41st Floor, New York, New York 10041, Attention of Asset Backed Surveillance Department; or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

Section 10.05   Notices to Bondholders; Waiver.  Where this Indenture provides for notice to Bondholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Bondholder affected by such event, at such Person’s address 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. In any case where notice to Bondholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Bondholder shall affect the sufficiency of such notice with respect to other Bondholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly
given regardless of whether such notice is in fact actually received.

 

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Bondholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to 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 Indenture Trustee shall be deemed to be a sufficient giving of such notice.

Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute an Event of Default.

Section 10.06   Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

Section 10.07   Effect of Headings.  The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

Section 10.08   Successors and Assigns.  All covenants and agreements in this Indenture and the Bonds by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents.

Section 10.09   Separability.  In case any provision in this Indenture or in the Bonds shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 10.10   Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the 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 date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.

Section 10.11   Benefits of Indenture.  The Bond Insurer and its successors and assigns shall be a third-party beneficiary to the provisions of this Indenture. To the extent that this Indenture confers upon or gives or grants to the Bond Insurer any right, remedy or claim under or by reason of this Indenture, the Bond Insurer may enforce any such right, remedy or claim conferred, given or granted hereunder. Nothing in this Indenture or in the Bonds, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, 

 

and the Bondholders and the Bond Insurer, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 10.12   GOVERNING LAW.  THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 10.13   Counterparts.  This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 10.14   Recording of Indenture.  If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel at its expense (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Bondholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

Section 10.15   Issuer Obligation.  No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Bonds or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

Section 10.16   No Petition.  The Indenture Trustee, by entering into this Indenture, and each Bondholder, by accepting a Bond, hereby covenant and agree that they will not at any time prior to one year from the date of termination hereof, 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 Basic Documents.

 

 

Section 10.17   Inspection.  The Issuer agrees that, at its expense, on reasonable prior notice, it shall permit any representative of the Indenture Trustee and the Bond Insurer, during the Issuer’s normal business hours, to examine all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees, and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested. The Indenture Trustee shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder.

 

 

ARTICLE XI

 

Certain Matters Regarding the Bond Insurer

Section 11.01   Rights of the Bond Insurer to Exercise the Rights of the Class 1-A-1 Bondholders and Class 1-A-2 Bondholders.  By accepting its Bond, each Class 1-A-1 Bondholder and Class 1-A-2 Bondholder agrees that unless an Bond Insurer Default exists, the Bond Insurer shall have the right to exercise all consent, voting, direction and other control rights of the Class 1-A-1 Bondholders and Class 1-A-2 Bondholders under this Indenture without any further consent of the Class 1-A-1 Bondholders and Class 1-A-2 Bondholders.

Section 11.02   Claims Upon the Bond Insurance Policy; Insurance Account.  (a) If, on the Business Day next succeeding the Determination Date, the Master Servicer determines that (i) the funds that will be on deposit in the Payment Account on the third Business Day prior to the related Payment Date, to the extent payable to the Class 1-A-1 Bondholders and Class 1-A-2 Bondholders pursuant to Section 3.05, are insufficient to pay the Accrued Bond Interest on the Class 1-A-1 Bonds and Class 1-A-2 Bonds for such Payment Date, net of any Prepayment Interest Shortfalls, Relief Act Shortfalls or Basis Risk Shortfalls allocated to the Class 1-A-1 Bonds and Class 1-A-2 Bonds or (ii) the funds available in connection with an optional redemption of the Bonds pursuant to Section 8.07 or on the Final Scheduled Payment Date will be
insufficient to reduce the Bond Principal Balance of the Class 1-A-1 Bonds and Class 1-A-2 Bonds to zero, the Master Servicer shall deliver to the Indenture Trustee not later than 1:00 p.m. New York City time on the Business Day next succeeding the Determination Date a certificate signed by a Servicing Officer directing the Indenture Trustee to draw on the Bond Insurance Policy and stating the amount to be drawn and stating the Insured Amount for the Class 1-A-1 Bonds and Class 1-A-2 Bonds, and the Indenture Trustee shall give notice by telephone or telecopy of the aggregate amount of such deficiency, confirmed in writing in the form set forth as Exhibit A to the endorsement of the Bond Insurance Policy, to the Bond Insurer at or before 12:00 noon, New York City time, on the Business Day prior to such Payment Date.  If, subsequent to such notice, and prior to payment by the Bond Insurer pursuant to such notice, additional amounts are deposited in the Payment Account,  the Indenture
Trustee shall reasonably  promptly notify the Bond Insurer and withdraw the notice or reduce the amount claimed, as appropriate.

(b)        The Indenture Trustee shall establish a separate special purpose non-interest bearing trust account for the benefit of Holders of the Class 1-A-1 Bonds and Class 1-A-2 Bonds and the Bond Insurer referred to herein as the “Insurance Account” over which the Indenture Trustee shall have exclusive control and sole right of withdrawal.  The Indenture Trustee shall deposit any amount paid to it under the Bond Insurance Policy in the Insurance Account and distribute such amount only for purposes of payment to Holders of Class 1-A-1 Bonds and Class 1-A-2 Bonds of the Insured Amount for which a claim was made.  Such amount may not be applied to satisfy any costs, expenses or liabilities of the Master Servicer, the Indenture Trustee or the Trust Estate.  Amounts paid under the Bond Insurance Policy shall be transferred to the Payment
Account in accordance with the next succeeding paragraph and disbursed by the Indenture Trustee to Holders of Class 1-A-1 Bonds and Class 1-A-2 Bonds in accordance with 

 

Section 3.05 or Section 8.04, as applicable.  It shall not be necessary for such payments to be made by checks or wire transfers separate from the checks or wire transfers used to pay the Insured Amount with other funds available to make such payment.  However, the amount of any payment of principal of or interest on the Class 1-A-1 Bonds and Class 1-A-2 Bonds to be paid from funds transferred from the Insurance Account shall be noted as provided in paragraph (c) below and in the statement to be furnished to Holders of the Bonds and Certificates pursuant to Section 3.25.  Funds held in the Insurance Account shall not be invested by the Master Servicer or the Indenture Trustee.

On any Payment Date with respect to which a claim has been made under the Bond Insurance Policy, the amount of any funds received by the Indenture Trustee as a result of any claim under the Bond Insurance Policy, to the extent required to pay the Insured Amount on such Payment Date, shall be withdrawn by the Indenture Trustee from the Insurance Account and deposited in the Payment Account and applied by the Indenture Trustee, together with the other funds to be distributed to the Class 1-A-1 Bondholders and Class 1-A-2 Bondholders pursuant to Section 3.05, directly to the payment in full of the Insured Amount due on the Class 1-A-1 Bonds and Class 1-A-2 Bonds.  Any funds remaining in the Insurance Account on the first Business Day following a Payment Date shall be remitted by the Indenture Trustee to the Bond Insurer, pursuant to the written instructions of the Bond Insurer, by the end
of such Business Day.

(c)        The Indenture Trustee shall keep a complete and accurate record of the amount of interest and principal paid into the Insurance Account in respect of any Class 1-A-1 Bonds and Class 1-A-2 Bonds from moneys received by the Indenture Trustee under the Bond Insurance Policy.  The Bond Insurer shall have the right to inspect such records at reasonable times during normal business hours upon two Business Days prior written notice to the Indenture Trustee.

Section 11.03   Effect of Payments by the Bond Insurer; Subrogation.  Anything herein to the contrary notwithstanding, for purposes of this Section 11.03, any payment with respect to principal of or interest on the Class 1-A-1 Bonds and Class 1-A-2 Bonds which is made with monies received pursuant to the terms of the Bond Insurance Policy shall not be considered payment of the Class 1-A-1 Bonds and Class 1-A-2 Bonds from the Trust Estate.  The Master Servicer and the Indenture Trustee acknowledge, and each Holder by its acceptance of a Class 1-A-1 Bond and Class 1-A-2 Bond agrees, that without the need for any further action on the part of the Bond Insurer, the Master Servicer, the Indenture Trustee or the Certificate Registrar, to the extent the Bond Insurer makes payments, directly or indirectly, on account of principal
of or interest on the Class 1-A-1 Bonds and Class 1-A-2 Bonds to the Holders of such Bonds, the Bond Insurer will be fully subrogated to, and each Class 1-A-1 Bondholder and Class 1-A-2 Bondholder and the Indenture Trustee hereby delegate and assign to the Bond Insurer, to the fullest extent permitted by law, the rights of such Holders to receive such principal and interest from the Trust Estate; provided that the Bond Insurer shall be paid such amounts only from the sources and in the manner explicitly provided for herein.

The Indenture Trustee and the Master Servicer shall cooperate in all respects with any reasonable request by the Bond Insurer for action to preserve or enforce the Bond Insurer’s rights or interests under this Indenture without limiting the rights or affecting the interests of the Holders as otherwise set forth herein.

 

 

Section 11.04   Notices and Information to the Bond Insurer.  All notices, statements, reports, certificates or opinions required by this Indenture  to be sent or made available to any other party hereto, or to the Bondholders or Certificateholders shall also be sent or made available to the Bond Insurer.

Section 11.05   Trustee to Hold Bond Insurance Policy.  The Indenture Trustee will hold the Bond Insurance Policy in trust as agent for the Class 1-A-1 Bondholders and Class 1-A-2 Bondholders for the purpose of making claims thereon and distributing the proceeds thereof. Neither the Bond Insurance Policy, nor the amounts paid on the Bond Insurance Policy will constitute part of the Trust Estate.  Each Class 1-A-1 Bondholder and Class 1-A-2 Bondholder, by accepting its Bond, appoints the Indenture Trustee as attorney-in-fact for the purpose of making claims on the Bond Insurance Policy.  The Indenture Trustee shall surrender the Bond Insurance Policy to the Bond Insurer for cancellation upon the expiration of the term of the Bond Insurance Policy as provided in the Bond Insurance Policy following the retirement of the Class
1-A-1 Bonds and Class 1-A-2 Bonds.

 

 

 

IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their names to be signed hereto by their respective officers thereunto duly authorized, all as of the day and year first above written.

	
            IMPAC CMB TRUST SERIES 2005-6, as Issuer
 
	
             
 
	
            Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee
 
	
             
 
	
             
 
	
            By:  /s/ Michele C. Harra
 
	
            Name: Michele C. Harra 
 
	
            Title: Financial Services Officer 
 
	
             
 
	
             
 
	
             
 
	
            WELLS FARGO BANK, N.A., as Indenture Trustee
 
	
             
 
	
             
 
	
            By:  /s/ Sandra Whalen 
 
	
            Name: Sandra Whalen
 
	
            Title:  Vice President 
 

 

 

Acknowledged and agreed with respect to Section 2.07 hereof:

 

IMPAC MORTGAGE HOLDINGS, INC.,

as Seller

 

	
            By:
 	
            /s/ Richard J. Johnson
 

Name:  Richard J. Johnson

	
            Title:  
 	
            EVP, CFO
 

 

 

 

	
            STATE OF CALIFORNIA
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF ORANGE
 	
            )
 	
             
 

 

On this 7th day of September, 2005, before me personally appeared Richard J. Johnson to me known, who being by me duly sworn, did depose and say, that he is the Executive Vice President, Chief Financial Officer of the Indenture Trustee, one of the corporations described in and which executed the above instrument; and that he signed his name thereto by like order.

Notary Public

	
             
 	
            
/s/ Julia Williams
 
 
	
             
 	
            NOTARY PUBLIC

 
 

 

 

 [NOTARIAL SEAL]

 

 

 

 

	
            STATE OF DELAWARE
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF NEW CASTLE
 	
            )
 	
             
 

 

On this 6th day of September, 2005, before me personally appeared Michele Harra to me known, who being by me duly sworn, did depose and say, that she is a Financial Services Officer of the Owner Trustee, one of the entities described in and which executed the above instrument; and that she signed her name thereto by like order.

Notary Public

 

	
             
 	
            
/s/ J. Christopher Murphy 

            
 
	
             
 	
            NOTARY PUBLIC

 
 

 [NOTARIAL SEAL]

 

 

 

	
            STATE OF NEW YORK
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF NEW YORK 
 	
            )
 	
             
 

On this 6th day of September, 2005, before me personally appeared Sandra Whalen to me known, who being by me duly sworn, did depose and say, that he is a Vice President of the Seller, one of the entities described in and which executed the above instrument; and that she signed her name thereto by like order.

Notary Public

	
             
 	
            
/s/ Deborah Daniels
 
 
	
             
 	
            NOTARY PUBLIC

 
 

 [NOTARIAL SEAL]

 

 

EXHIBIT A-1

FORM OF CLASS [_]-A-[_] BONDS

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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.

THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE INDENTURE.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AND THE BOND INSURANCE POLICY AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

 

IMPAC CMB TRUST SERIES 2005-6

COLLATERALIZED ASSET-BACKED BONDS

CLASS [_]-A-[_]

	
            AGGREGATE [BOND PRINCIPAL

BALANCE]:

$[             ]
 	
            BOND INTEREST

RATE: [Adjustable Rate] [___%]
 
	
            INITIAL [BOND PRINCIPAL

BALANCE] OF THIS BOND: $[             ]
 	
            BOND NO. 1
 
	
            PERCENTAGE INTEREST: 100%
 	
            CUSIP NO. [             ]
 

 

Impac CMB Trust Series 2005-6 (the “Issuer”), a Delaware statutory trust, for value received, hereby promises to pay to Cede & Co. or registered assigns, [the principal sum of ($_________________) in monthly installments on the twenty-fifth day of each month or, if such day is not a Business Day, the next succeeding Business Day (each a “Payment Date”), commencing in September 2005 and ending on or before the Payment Date occurring in October 2035 (the “Final Scheduled Payment Date”) and to pay] interest on the Bond Principal Balance of this Bond (this “Bond”) outstanding from time to time as provided below.

This Bond is one of a duly authorized issue of the Issuer’s Collateralized Asset-Backed Bonds, Series 2005-6 (the “Bonds”), issued under an Indenture dated as of September 9, 2005 (the “Indenture”), between the Issuer and Wells Fargo Bank, N.A., as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Issuer, the Indenture Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to be authenticated and delivered. All terms used in this Bond which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

[Ambac Assurance Corporation (the “Bond Insurer”), in consideration of the payment of the premium and subject to the terms of the certificate guaranty insurance policy (the “Bond Insurance Policy”) issued thereby, has unconditionally and irrevocably guaranteed the payment of the Insured Amount with respect to the Class 1-A-1 Bonds and Class 1-A-2 Bonds with respect to each Payment Date. Such Bond Insurance Policy will not cover any Prepayment Interest Shortfalls, Relief Act Shortfalls or Basis Risk Shortfall Carry- Forward Amount.]

Payments of principal and interest on this Bond will be made on each Payment Date to the Bondholder of record as of the related Record Date. The “Bond Principal Balance” of a Bond as of any date of determination is equal to the initial Bond Principal Balance thereof, reduced by the aggregate of all amounts previously paid with respect to such Bond on account of principal and the aggregate amount of cumulative Realized Losses allocated to such Bond on all prior Payment Dates.

The principal of, and interest on, this Bond are due and payable as described in the Indenture, 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 equal to this Bond’s pro rata share of the aggregate payments on all Class [_]-A-[_] Bonds as described above, and shall be applied as between interest and principal as provided in the Indenture.

All principal and interest accrued on the Bonds, if not previously paid, will become finally due and payable at the Final Scheduled Payment Date.

The Group 1 Bonds are subject to redemption in whole, but not in part, by the Majority Certificateholder, on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Group 1 Loans as of the end of the related Due Period is less than or equal to 20% of the sum of the aggregate Stated Principal Balance of the Group 1 Loans as of the Cut-off Date, and (ii) the Payment Date occurring in August 2015. The Group 2 Bonds are subject to redemption in whole, but not in part, by the Majority Certificateholder, on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Group 2 Loans as of the end of the related Due Period is less than or equal to 20% of the aggregate Stated Principal Balance of the Group 2 Loans as of the Cut-off Date and (ii) the Payment Date occurring in August 2015.

The Issuer shall not be liable upon the indebtedness evidenced by the Bonds except to the extent of amounts available from the Trust Estate which constitutes security for the payment of the Bonds. The assets included in the Trust Estate will be the sole source of payments on the Class [_]-A-[_] Bonds, and each Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond will be limited in right of payment to amounts available from the Trust Estate as provided in the Indenture and (ii) such Holder shall have no recourse to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac Mortgage Holdings, Inc., the Master Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities, except the assets of the Issuer pledged to secure the Class [_]-A-[_] Bonds pursuant to the Indenture and the rights conveyed to the Issuer under the Indenture.

Any payment of principal or interest payable on this Bond which is punctually paid on the applicable Payment Date shall be paid to the Person in whose name such Bond is registered at the close of business on the Record Date for such Payment Date by check mailed to such Person’s address as it appears in the Bond Register on such Record Date, except for the final installment of principal and interest payable with respect to such Bond, which shall be payable as provided below. Notwithstanding the foregoing, upon written request with appropriate instructions by the Holder of this Bond delivered to the Indenture Trustee at least five Business Days prior to the Record Date, any payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States designated by such Holder. All scheduled reductions in
the principal amount of a Bond (or one or more predecessor Bonds) effected by payments of principal made on any Payment Date shall be binding upon all Holders of this Bond and of any bond issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Bond. The final payment of this Bond shall be payable upon presentation and surrender thereof on or after the Payment Date thereof at the Corporate Trust Office or the office or agency of the Issuer maintained by it for such purpose pursuant to Section 3.02 of the Indenture.

 

 

Subject to the foregoing provisions, each Bond delivered under the Indenture, upon registration of transfer of or in exchange for or in lieu of any other Bond shall carry the right to unpaid principal and interest that were carried by such other Bond.

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 payment of the entire unpaid Bond Principal Balance of the Bonds, the amount payable to the Holder of this Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds, together with accrued and unpaid interest thereon as described in the Indenture. The Indenture provides that, notwithstanding the acceleration of the maturity of the Bonds, under certain circumstances specified therein, all amounts collected as proceeds of the Trust Estate securing the Bonds or otherwise shall continue to be applied to payments of principal of and interest on the Bonds as if they had not been declared due and payable.

The failure to pay any Unpaid Interest Shortfall at any time when funds are not available to make such payment as provided in the Indenture shall not constitute an Event of Default under the Indenture.

The Holder of this Bond or Beneficial Owner of any interest herein is deemed to represent that either (1) it is not acquiring the Bond with Plan Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer, any Subservicer, any other servicer, any administrator, any provider of credit support, any owner of the Certificates, or any of their Affiliates being a “Party in Interest” (within the meaning of ERISA) or Disqualified Person (within the meaning of the Code) with respect to such Holder or Beneficial Owner that is a Plan and (B) the Bonds are rated investment grade or better and such person believes that the Bonds are properly
treated as indebtedness without substantial equity features for purposes of the DOL Regulations, and agrees to so treat the Bonds. Alternatively, regardless of the rating of the Bonds, such person may provide the Indenture Trustee and the Owner Trustee with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuer, the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer which opines that the acquisition, holding and transfer of such Bond or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller, the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer to any obligation in addition to those undertaken in the Indenture.

[Pursuant to the Indenture, unless a Bond Insurer Default (as defined in the Indenture) exists (i) the Bond Insurer shall be deemed to be the holder of the Class 1-A-1 Bonds and Class 1-A-2 Bonds for certain purposes specified in the Indenture (other than with respect to payment on the Class 1-A-1 Bonds and Class 1-A-2 Bonds), and will be entitled to exercise all rights of the Bondholders thereunder, including the rights of Bondholders relating to the occurrence of, and the remedies with respect to, an Event of Default, without the consent of such Bondholders, and (ii) the Trustee may take actions which would otherwise be at its option or within its 

 

discretion, including actions relating to the occurrence of, and the remedies with respect to, an Event of Default, only at the direction, or with the consent, of the Bond Insurer.]

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 for registration of transfer of, or presentation of a written instrument of transfer for, this Bond at the office or agency designated by the Issuer pursuant to the Indenture, accompanied by proper instruments of assignment in form satisfactory to the Indenture Trustee, one or more new Bonds of any authorized denominations and of a like aggregate initial Bond Principal Balance, will be issued to the designated transferee or transferees.

Prior to the due presentment for registration of transfer of this Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Bond is registered as the owner of such Bond (i) on the applicable Record Date for the purpose of making payments and interest of such Bond, and (ii) on any other date for all other purposes whatsoever, as the owner hereof, whether or not this Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee 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 Bond Insurer and the Holders of a majority of all Bonds at the time outstanding. The Indenture also contains provisions permitting (i) the Bond Insurer or (ii) if the Bond Insurer defaults, the Holders of Bonds representing specified percentages of the aggregate Bond Principal Balance of the Bonds on behalf of the Holders of all the Bonds, to waive any past Default under the Indenture and its consequences. Any such waiver by the Holder, at the time of the giving thereof, of this Bond (or any one or more predecessor Bonds) shall bind the Holder of every Bond issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon such Bond. The Indenture also permits the Issuer and the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Holders of the Bonds issued thereunder.

Initially, the Bonds will be registered in the name of Cede & Co. as nominee of DTC, acting in its capacity as the Depository for the Bonds. The Bonds will be delivered by the clearing agency in denominations as provided in the Indenture and subject to certain limitations therein set forth. The Bonds are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of different authorized denominations, as requested by the Holder surrendering same.

Unless the Certificate of Authentication hereon has been executed by the Indenture Trustee by manual signature, this Bond shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS BOND 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.

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed by Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee.

	
            Dated: September 9, 2005
 	
             
 
	
             
 	
            IMPAC CMB TRUST SERIES 2005-6
 
	
             
 	
            BY: WILMINGTON TRUST COMPANY, not in its individual capacity but solely in its capacity as Owner Trustee
 
	
             
 	
            By:_______________________________________
 Authorized Signatory
 
	
             
 	
             
 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

WELLS FARGO BANK, N.A., as Indenture Trustee

 

By:______________________________________

	
            Authorized Signatory
 

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of the Bond, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
            TEN COM
 	
            --
 	
            as tenants in common
 
	
            TEN ENT
 	
            --
 	
            as tenants by the entireties
 
	
            JT TEN
 	
            --
 	
            as joint tenants with right of survivorship and not as tenants in common
 
	
            UNIF GIFT MIN ACT
 	
            --
 	
            __________ Custodian ______________________________

(Cust)                                          
   (Minor)

under Uniform Gifts to Minor Act _____________________

(State)
 

 

Additional abbreviations may also be used though not in the above list.

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF

ASSIGNEE:

 

	
             
 
	
             
 
	
             
 

(Please print or typewrite name and address, including zip code, of assignee)

 

	
             
 

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints __________________ attorney to transfer said Bond on the books kept for registration thereof, with full power of substitution in the premises.

	
            Dated: _______________
 	
            ____________________________________
 

Signature Guaranteed by _________________________________

NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. Signature(s) must be guaranteed by a commercial bank or by a member firm of the New York Stock Exchange or another national securities exchange. Notarized or witnessed signatures are not acceptable.

 

 

EXHIBIT A-2

FORM OF CLASS [_]-M-[_] BONDS

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [_]-A-[_] BONDS [AND CLASS [_]-M-[_] BONDS] AS DESCRIBED IN THE INDENTURE.

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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.

THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE INDENTURE.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

 

IMPAC CMB TRUST SERIES 2005-6

COLLATERALIZED ASSET-BACKED BONDS

CLASS [_]-M-[_]

 

	
            AGGREGATE BOND PRINCIPAL

BALANCE:

$[             ]
 	
            BOND INTEREST

RATE: Adjustable Rate
 
	
            INITIAL BOND PRINCIPAL

BALANCE OF THIS BOND: $[             ]
 	
            BOND NO. 1
 
	
            PERCENTAGE INTEREST: 100%
 	
            CUSIP NO. [             ]
 

 

Impac CMB Trust Series 2005-6 (the “Issuer”), a Delaware statutory trust, for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of ______________________________ ($___________) in monthly installments on the twenty-fifth day of each month or, if such day is not a Business Day, the next succeeding Business Day (each a “Payment Date”), commencing in September 2005 and ending on or before the Payment Date occurring in October 2035 (the “Final Scheduled Payment Date”) and to pay interest on the Bond Principal Balance of this Bond (this “Bond”) outstanding from time to time as provided below.

This Bond is one of a duly authorized issue of the Issuer’s Collateralized Asset-Backed Bonds, Series 2005-6 (the “Bonds”), issued under an Indenture dated as of September 9, 2005 (the “Indenture”), between the Issuer and Wells Fargo Bank, N.A., as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Issuer, the Indenture Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to be authenticated and delivered. All terms used in this Bond which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

Payments of principal and interest on this Bond will be made on each Payment Date to the Bondholder of record as of the related Record Date. The “Bond Principal Balance” of a Bond as of any date of determination is equal to the initial Bond Principal Balance thereof, reduced by the aggregate of all amounts previously paid with respect to such Bond on account of principal and the aggregate amount of cumulative Realized Losses allocated to such Bond on all prior Payment Dates.

The principal of, and interest on, this Bond are due and payable as described in the Indenture, 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 equal to this Bond’s pro rata share of the aggregate payments on all Class [_]-M-[_] Bonds as described above, and shall be applied as between interest and principal as provided in the Indenture.

 

 

All principal and interest accrued on the Bonds, if not previously paid, will become finally due and payable at the Final Scheduled Payment Date.

The Group 1 Bonds are subject to redemption in whole, but not in part, by the Majority Certificateholder, on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Group 1 Loans as of the end of the related Due Period is less than or equal to 20% of the sum of the aggregate Stated Principal Balance of the Group 1 Loans as of the Cut-off Date, and (ii) the Payment Date occurring in August 2015. The Group 2 Bonds are subject to redemption in whole, but not in part, by the Majority Certificateholder, on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Group 2 Loans as of the end of the related Due Period is less than or equal to 20% of the aggregate Stated Principal Balance of the Group 2 Loans as of the Cut-off Date and (ii) the Payment Date occurring in August 2015.

The Issuer shall not be liable upon the indebtedness evidenced by the Bonds except to the extent of amounts available from the Trust Estate which constitutes security for the payment of the Bonds. The assets included in the Trust Estate will be the sole source of payments on the Class [_]-M-[_] Bonds, and each Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond will be limited in right of payment to amounts available from the Trust Estate as provided in the Indenture and (ii) such Holder shall have no recourse to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac Mortgage Holdings, Inc., the Master Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities, except the assets of the Issuer pledged to secure the Class [_]-M-[_] Bonds pursuant to the Indenture and the rights conveyed to the Issuer under the Indenture.

Any payment of principal or interest payable on this Bond which is punctually paid on the applicable Payment Date shall be paid to the Person in whose name such Bond is registered at the close of business on the Record Date for such Payment Date by check mailed to such Person’s address as it appears in the Bond Register on such Record Date, except for the final installment of principal and interest payable with respect to such Bond, which shall be payable as provided below. Notwithstanding the foregoing, upon written request with appropriate instructions by the Holder of this Bond delivered to the Indenture Trustee at least five Business Days prior to the Record Date, any payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States designated by such Holder. All reductions in the
principal amount of a Bond (or one or more predecessor Bonds) effected by payments of principal made on any Payment Date shall be binding upon all Holders of this Bond and of any bond issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Bond. The final payment of this Bond shall be payable upon presentation and surrender thereof on or after the Payment Date thereof at the Corporate Trust Office or the office or agency of the Issuer maintained by it for such purpose pursuant to Section 3.02 of the Indenture.

Subject to the foregoing provisions, each Bond delivered under the Indenture, upon registration of transfer of or in exchange for or in lieu of any other Bond shall carry the right to unpaid principal and interest that were carried by such other Bond.

 

 

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 payment of the entire unpaid Bond Principal Balance of the Bonds, the amount payable to the Holder of this Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds, together with accrued and unpaid interest thereon as described in the Indenture. The Indenture provides that, notwithstanding the acceleration of the maturity of the Bonds, under certain circumstances specified therein, all amounts collected as proceeds of the Trust Estate securing the Bonds or otherwise shall continue to be applied to payments of principal of and interest on the Bonds as if they had not been declared due and payable.

The failure to pay any Unpaid Interest Shortfall at any time when funds are not available to make such payment as provided in the Indenture shall not constitute an Event of Default under the Indenture.

The Holder of this Bond or Beneficial Owner of any interest herein is deemed to represent that either (1) it is not acquiring the Bond with Plan Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer, any Subservicer, any other servicer, any administrator, any provider of credit support, any owner of the Certificates, or any of their Affiliates being a “Party in Interest” (within the meaning of ERISA) or Disqualified Person (within the meaning of the Code) with respect to such Holder or Beneficial Owner that is a Plan and (B) the Bonds are rated investment grade or better and such person believes that the Bonds are properly
treated as indebtedness without substantial equity features for purposes of the DOL Regulations, and agrees to so treat the Bonds. Alternatively, regardless of the rating of the Bonds, such person may provide the Indenture Trustee and the Owner Trustee with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuer, the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer which opines that the acquisition, holding and transfer of such Bond or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller, the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer to any obligation in addition to those undertaken in the Indenture.

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 for registration of transfer of, or presentation of a written instrument of transfer for, this Bond at the office or agency designated by the Issuer pursuant to the Indenture, accompanied by proper instruments of assignment in form satisfactory to the Indenture Trustee, one or more new Bonds of any authorized denominations and of a like aggregate initial Bond Principal Balance, will be issued to the designated transferee or transferees.

Prior to the due presentment for registration of transfer of this Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Bond is registered as the owner of such Bond (i) on the applicable Record Date 

 

for the purpose of making payments and interest of such Bond, and (ii) on any other date for all other purposes whatsoever, as the owner hereof, whether or not this Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee 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 a majority of all Bonds at the time outstanding. The Indenture also contains provisions permitting the Holders of Bonds representing specified percentages of the aggregate Bond Principal Balance of the Bonds on behalf of the Holders of all the Bonds, to waive any past Default under the Indenture and its consequences. Any such waiver by the Holder, at the time of the giving thereof, of this Bond (or any one or more predecessor Bonds) shall bind the Holder of every Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made
upon such Bond. The Indenture also permits the Issuer and the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Holders of the Bonds issued thereunder.

Initially, the Bonds will be registered in the name of Cede & Co. as nominee of DTC, acting in its capacity as the Depository for the Bonds. The Bonds will be delivered by the clearing agency in denominations as provided in the Indenture and subject to certain limitations therein set forth. The Bonds are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of different authorized denominations, as requested by the Holder surrendering same.

Unless the Certificate of Authentication hereon has been executed by the Indenture Trustee by manual signature, this Bond shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS BOND 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.

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed by Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee.

	
            Dated: September 9, 2005
 	
             
 
	
             
 	
            IMPAC CMB TRUST SERIES 2005-6
 
	
             
 	
            BY: WILMINGTON TRUST COMPANY, not in its individual capacity but solely in its capacity as Owner Trustee
 
	
             
 	
            By:_______________________________________
 Authorized Signatory
 
	
             
 	
             
 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

WELLS FARGO BANK, N.A., as Indenture Trustee

	
            By:
 	
            _____________________________
 

Authorized Signatory

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of the Bond, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
            TEN COM
 	
            --
 	
            as tenants in common
 
	
            TEN ENT
 	
            --
 	
            as tenants by the entireties
 
	
            JT TEN
 	
            --
 	
            as joint tenants with right of survivorship and not as tenants in common
 
	
            UNIF GIFT MIN ACT
 	
            --
 	
            __________ Custodian ______________________________

(Cust)                                          
   (Minor)

under Uniform Gifts to Minor Act _____________________

(State)
 

 

Additional abbreviations may also be used though not in the above list.

 

 

ASSIGNMENT

FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

	
             
 
	
             
 
	
             
 

 

(Please print or typewrite name and address, including zip code, of assignee)

 

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ________________________ attorney to transfer said Bond on the books kept for registration thereof, with full power of substitution in the premises.

	
            Dated:
 	
            _________________________
 	
            _____________________________
 

Signature Guaranteed by ________________________________

NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. Signature(s) must be guaranteed by a commercial bank or by a member firm of the New York Stock Exchange or another national securities exchange. Notarized or witnessed signatures are not acceptable.

 

 

EXHIBIT A-3

FORM OF CLASS [__]-B-[__] BONDS

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A BONDS [,] [AND] CLASS M BONDS [AND CLASS [_]-B-[_] BONDS] AS DESCRIBED IN THE INDENTURE.

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE INDENTURE TRUSTEE 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.

THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF THE INDENTURE.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

 

IMPAC CMB TRUST SERIES 2005-6

COLLATERALIZED ASSET-BACKED BONDS

CLASS [_]-B-[_]

 

	
            AGGREGATE BOND PRINCIPAL

BALANCE:

$[             ]
 	
            BOND INTEREST

RATE: [Adjustable Rate]
 
	
            INITIAL BOND PRINCIPAL

BALANCE OF THIS BOND: $[             ]
 	
            BOND NO. 1
 
	
            PERCENTAGE INTEREST: 100%
 	
            CUSIP NO. [             ]
 

 

Impac CMB Trust Series 2005-6 (the “Issuer”), a Delaware statutory trust, for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of ______________________________ ($___________) in monthly installments on the twenty-fifth day of each month or, if such day is not a Business Day, the next succeeding Business Day (each a “Payment Date”), commencing in September 2005 and ending on or before the Payment Date occurring in October 2035 (the “Final Scheduled Payment Date”) and to pay interest on the Bond Principal Balance of this Bond (this “Bond”) outstanding from time to time as provided below.

This Bond is one of a duly authorized issue of the Issuer’s Collateralized Asset-Backed Bonds, Series 2005-6 (the “Bonds”), issued under an Indenture dated as of September 9, 2005 (the “Indenture”), between the Issuer and Wells Fargo Bank, N.A., as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Issuer, the Indenture Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to be authenticated and delivered. All terms used in this Bond which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

Payments of principal and interest on this Bond will be made on each Payment Date to the Bondholder of record as of the related Record Date. The “Bond Principal Balance” of a Bond as of any date of determination is equal to the initial Bond Principal Balance thereof, reduced by the aggregate of all amounts previously paid with respect to such Bond on account of principal and the aggregate amount of cumulative Realized Losses allocated to such Bond on all prior Payment Dates.

The principal of, and interest on, this Bond are due and payable as described in the Indenture, 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 equal to this Bond’s pro rata share of the aggregate payments on all Class [_]-B-[_] Bonds as described above, and shall be applied as between interest and principal as provided in the Indenture.

 

 

All principal and interest accrued on the Bonds, if not previously paid, will become finally due and payable at the Final Scheduled Payment Date.

The Group 1 Bonds are subject to redemption in whole, but not in part, by the Majority Certificateholder, on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Group 1 Loans as of the end of the related Due Period is less than or equal to 20% of the sum of the aggregate Stated Principal Balance of the Group 1 Loans as of the Cut-off Date, and (ii) the Payment Date occurring in August 2015. The Group 2 Bonds are subject to redemption in whole, but not in part, by the Majority Certificateholder, on or after the earlier of (i) the Payment Date on which the aggregate Stated Principal Balance of the Group 2 Loans as of the end of the related Due Period is less than or equal to 20% of the aggregate Stated Principal Balance of the Group 2 Loans as of the Cut-off Date and (ii) the Payment Date occurring in August 2015.

The Issuer shall not be liable upon the indebtedness evidenced by the Bonds except to the extent of amounts available from the Trust Estate which constitutes security for the payment of the Bonds. The assets included in the Trust Estate will be the sole source of payments on the Class [_]-B-[_] Bonds, and each Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond will be limited in right of payment to amounts available from the Trust Estate as provided in the Indenture and (ii) such Holder shall have no recourse to the Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac Mortgage Holdings, Inc., the Master Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities, except the assets of the Issuer pledged to secure the Class [_]-B-[_] Bonds pursuant to the Indenture and the rights conveyed to the Issuer under the Indenture.

Any payment of principal or interest payable on this Bond which is punctually paid on the applicable Payment Date shall be paid to the Person in whose name such Bond is registered at the close of business on the Record Date for such Payment Date by check mailed to such Person’s address as it appears in the Bond Register on such Record Date, except for the final installment of principal and interest payable with respect to such Bond, which shall be payable as provided below. Notwithstanding the foregoing, upon written request with appropriate instructions by the Holder of this Bond delivered to the Indenture Trustee at least five Business Days prior to the Record Date, any payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States designated by such Holder. All reductions in the
principal amount of a Bond (or one or more predecessor Bonds) effected by payments of principal made on any Payment Date shall be binding upon all Holders of this Bond and of any bond issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Bond. The final payment of this Bond shall be payable upon presentation and surrender thereof on or after the Payment Date thereof at the Corporate Trust Office or the office or agency of the Issuer maintained by it for such purpose pursuant to Section 3.02 of the Indenture.

Subject to the foregoing provisions, each Bond delivered under the Indenture, upon registration of transfer of or in exchange for or in lieu of any other Bond shall carry the right to unpaid principal and interest that were carried by such other Bond.

 

 

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 payment of the entire unpaid Bond Principal Balance of the Bonds, the amount payable to the Holder of this Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds, together with accrued and unpaid interest thereon as described in the Indenture. The Indenture provides that, notwithstanding the acceleration of the maturity of the Bonds, under certain circumstances specified therein, all amounts collected as proceeds of the Trust Estate securing the Bonds or otherwise shall continue to be applied to payments of principal of and interest on the Bonds as if they had not been declared due and payable.

The failure to pay any Unpaid Interest Shortfall at any time when funds are not available to make such payment as provided in the Indenture shall not constitute an Event of Default under the Indenture.

The Holder of this Bond or Beneficial Owner of any interest herein is deemed to represent that either (1) it is not acquiring the Bond with Plan Assets or (2) (A) the acquisition, holding and transfer of a Bond will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the Master Servicer, any Subservicer, any other servicer, any administrator, any provider of credit support, any owner of the Certificates, or any of their Affiliates being a “Party in Interest” (within the meaning of ERISA) or Disqualified Person (within the meaning of the Code) with respect to such Holder or Beneficial Owner that is a Plan and (B) the Bonds are rated investment grade or better and such person believes that the Bonds are properly
treated as indebtedness without substantial equity features for purposes of the DOL Regulations, and agrees to so treat the Bonds. Alternatively, regardless of the rating of the Bonds, such person may provide the Indenture Trustee and the Owner Trustee with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuer, the Seller, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer or any successor servicer which opines that the acquisition, holding and transfer of such Bond or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller, the Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee,  the Master Servicer or any successor servicer to any obligation in addition to those undertaken in the Indenture.

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 for registration of transfer of, or presentation of a written instrument of transfer for, this Bond at the office or agency designated by the Issuer pursuant to the Indenture, accompanied by proper instruments of assignment in form satisfactory to the Indenture Trustee, one or more new Bonds of any authorized denominations and of a like aggregate initial Bond Principal Balance, will be issued to the designated transferee or transferees.

Prior to the due presentment for registration of transfer of this Bond, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Bond is registered as the owner of such Bond (i) on the applicable Record Date 

 

for the purpose of making payments and interest of such Bond, and (ii) on any other date for all other purposes whatsoever, as the owner hereof, whether or not this Bond be overdue, and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer or the Indenture Trustee 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 a majority of all Bonds at the time outstanding. The Indenture also contains provisions permitting the Holders of Bonds representing specified percentages of the aggregate Bond Principal Balance of the Bonds on behalf of the Holders of all the Bonds, to waive any past Default under the Indenture and its consequences. Any such waiver by the Holder, at the time of the giving thereof, of this Bond (or any one or more predecessor Bonds) shall bind the Holder of every Bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made
upon such Bond. The Indenture also permits the Issuer and the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of the Holders of the Bonds issued thereunder.

Initially, the Bonds will be registered in the name of Cede & Co. as nominee of DTC, acting in its capacity as the Depository for the Bonds. The Bonds will be delivered by the clearing agency in denominations as provided in the Indenture and subject to certain limitations therein set forth. The Bonds are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of different authorized denominations, as requested by the Holder surrendering same.

Unless the Certificate of Authentication hereon has been executed by the Indenture Trustee by manual signature, this Bond shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS BOND 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.

 

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed by Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee.

	
            Dated: September 9, 2005
 	
             
 
	
             
 	
            IMPAC CMB TRUST SERIES 2005-6
 
	
             
 	
            BY: WILMINGTON TRUST COMPANY, not in its individual capacity but solely in its capacity as Owner Trustee
 
	
             
 	
            By:_______________________________________
 Authorized Signatory
 
	
             
 	
             
 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds referred to in the within-mentioned Indenture.

WELLS FARGO BANK, N.A., as Indenture Trustee

 

	
            By:
 	
            ____________________________________
 

Authorized Signatory

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of the Bond, shall be construed as though they were written out in full according to applicable laws or regulations:

 

	
            TEN COM
 	
            --
 	
            as tenants in common
 
	
            TEN ENT
 	
            --
 	
            as tenants by the entireties
 
	
            JT TEN
 	
            --
 	
            as joint tenants with right of survivorship and not as tenants in common
 
	
            UNIF GIFT MIN ACT
 	
            --
 	
            __________ Custodian ______________________________

(Cust)                                          
   (Minor)

under Uniform Gifts to Minor Act _____________________

(State)
 

 

Additional abbreviations may also be used though not in the above list.

 

 

ASSIGNMENT

FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

	
             
 
	
             
 
	
             
 

 

(Please print or typewrite name and address, including zip code, of assignee)

 

the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ________________________ attorney to transfer said Bond on the books kept for registration thereof, with full power of substitution in the premises.

	
            Dated:
 	
            ________________________
 	
            ________________________________
 

Signature Guaranteed by ______________________________________

NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. Signature(s) must be guaranteed by a commercial bank or by a member firm of the New York Stock Exchange or another national securities exchange. Notarized or witnessed signatures are not acceptable.

 

 

EXHIBIT B

MORTGAGE LOAN SCHEDULE

(Filed Manually)

 

 

EXHIBIT C

[RESERVED]

 

 

EXHIBIT D

[RESERVED]

 

 

EXHIBIT E

DERIVATIVE CONTRACTS

(Provided Upon Request)

 

 

EXHIBIT F

SPECIAL CERTIFICATE CAP CONTRACT

(Provided Upon Request)

 

 

EXHIBIT G

[RESERVED]

 

 

EXHIBIT H

[RESERVED]

 

 

EXHIBIT I-1

[RESERVED]

 

 

EXHIBIT I-2

[RESERVED]

 

 

EXHIBIT J

 

[RESERVED]

 

 

 

 

APPENDIX A

DEFINITIONS

Accrual Period: With respect to any Payment Date and each Class of Bonds, the period from the preceding Payment Date (or in the case of the first Payment Date, from the Closing Date) through the day preceding such Payment Date.

Accrued Bond Interest: With respect to any Payment Date and each Class of Bonds, interest accrued during the related Accrual Period at the then-applicable Bond Interest Rate on the related Bond Principal Balance thereof immediately prior to such Payment Date, less such Bonds’ Unpaid Interest Shortfall for such Payment Date, plus any Accrued Bond Interest remaining unpaid from any prior Payment Date with interest thereon at the related Bond Interest Rate. Accrued Bond Interest for each Class of Bonds shall be calculated on the basis of the actual number of days in the Accrual Period and a 360-day year.

Additional Derivative Contract Counterparty Payment: With respect to any Payment Date, any termination payments payable to the related Derivative Contract Counterparty as a result of a default of the related Derivative Contract Counterparty under the related Derivative Contracts.

Adjustment Date: As to each Mortgage Loan, each date set forth in the related Mortgage Note on which an adjustment to the interest rate on such Mortgage Loan becomes effective.

Advance: As to any Mortgage Loan, any advance made by the Master Servicer pursuant to Section 4.04 of the Servicing Agreement or by a Subservicer in respect of delinquent Monthly Payments of principal and interest pursuant to the related Subservicing Agreement.

Affiliate: With respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, “control” means the power to direct the management and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative to the foregoing.

Allocated Realized Loss Amount: With respect to any Class of Bonds and any Payment Date, an amount equal to the sum of any related Realized Loss allocated to reduce the Bond Principal Balance of that Class of Bonds on that Payment Date (other than, with respect to the Class 1-A Bonds, a Realized Loss which was covered by the Bond Insurance Policy) and any Allocated Realized Loss Amount for that Class remaining unpaid from the previous Payment Date, less the amount of any Subsequent Recoveries added to the Bond Principal Balance of such Bond.

Appraised Value: The appraised value of a Mortgaged Property based upon the lesser of (i) the appraisal made at the time of the origination of the related Mortgage Loan, or (ii) the sale price of such Mortgaged Property at such time of origination. With respect to a Mortgage Loan, the proceeds of which were used to refinance an existing mortgage loan, the appraised value of the Mortgaged Property based upon the appraisal obtained at the time of refinancing.

 

 

Assignment of Mortgage: An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form, which is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale of the Mortgage, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering Mortgages secured by Mortgaged Properties located in the same county, if permitted by law.

Authorized Newspaper: A newspaper of general circulation in the Borough of Manhattan, The City of New York, printed in the English language and customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays.

Authorized Officer: With respect to the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (such list may be modified or supplemented from time to time thereafter).

Available Funds: The Group 1 Available Funds or Group 2 Available Funds, as applicable.

Available Funds Rate: On any Payment Date and with respect to the Group 1 Bonds, the per annum rate equal to the product of:

	
             
 	
            (i)
 	
            (A) the product of:
 

(1) the Group 1 Net WAC Rate; and

(2) an amount equal to the greater of (a) 1.0000 or (b) a fraction equal to

(x) the aggregate Stated Principal Balance of the Group 1 Loans as of the beginning of the related Due Period divided by

(y) the aggregate Bond Principal Balance of the Group 1 Bonds immediately prior to such Payment Date, minus

(B) on each payment date on which a Class 1-A-2 Derivative Contract Counterparty Termination Event is not in effect, the product of:

(1)  prior to the Step-Up Date, 0.110% per annum, and on or after the Step-Up Date, 0.220% per annum; and

(2)  a fraction equal to

(x)  the Bond Principal Balance of the Class 1-A-2 Bonds immediately prior to such Payment Date divided by

(y)  the aggregate Bond Principal Balance of the Group 1 Bonds immediately prior to such payment date; minus

 

 

(C) the Policy Premium Rate times a fraction equal to 

(1)  the aggregate Bond Principal Balance of the Class 1-A Bonds immediately prior to such payment date divided by

(2)  the aggregate Bond Principal Balance of the Bonds immediately prior to such payment date, and

(ii) a fraction equal to (x) 30 divided by (y) the number of days in the related Accrual Period.

On any Payment Date and for the Group 2 Bonds, the per annum rate equal to the product of:

	
             
 	
            (i)
 	
            the product of:
 

(1) the Group 2 Net WAC Rate; and

(2) an amount equal to the greater of (a) 1.0000 or (b) a fraction equal to

 (x) the aggregate Stated Principal Balance of the Group 2 Loans as of the beginning of the related Due Period divided by

(y) the aggregate Bond Principal Balance of the Group 2 Bonds immediately prior to such Payment Date, and

(i)           (ii) a fraction equal to (x) 30 divided by (y) the number of days in the related Accrual Period.

Bankruptcy Code: The Bankruptcy Code of 1978, as amended.

Basic Documents: The Trust Agreement, the Certificate of Trust, the Indenture, the Servicing Agreement, the Mortgage Loan Purchase Agreement, the Insurance Agreement, the Derivative Contracts, the Special Certificate Cap Contract and the other documents and certificates delivered in connection with any of the above.

Basic Principal Distribution Amount: With respect to any Payment Date and each Loan Group, the lesser of (a) the excess of (i) the related Available Funds and the Class 1-A Insured Amount, if any, for such Payment Date over (ii) the aggregate amount of Accrued Bond Interest for the related Bonds for such Payment Date and (b) the excess of (i) the related Principal Remittance Amount for such Payment Date over (ii) the related Overcollateralization Release Amount, if any, for such Payment Date.

Basis Risk Shortfall: With respect to any Class of Bonds (other than the Class 1-A-2 Bonds), on each Payment Date where clause (iii) of the definition of “Bond Interest Rate” is less than the lesser of clauses (i) and (ii) of the definition of “Bond Interest Rate,” the excess of (x) the related Accrued Bond Interest thereon for such Payment Date calculated pursuant to the lesser of clause (i) and (ii) of the definition of “Bond Interest Rate” over (y) the related Accrued Bond Interest thereon for such Payment Date calculated at the related Available Funds Rate. With respect to the Class 1-A-2 Bonds, (A) on each Payment Date on which a Class 1-A-2 Derivative Contract Counterparty Termination Event is in effect, where clause (b)(iii) of the definition of “Bond Interest Rate” is less than the lesser of clauses (b)(i) and
(b)(ii) of the definition of “Bond Interest Rate,” the excess of (x) the related Accrued Bond Interest thereon for such Payment Date calculated pursuant to the lesser of clause (b)(i) and (b)(ii) of the definition of “Bond Interest Rate” over (y) the related Accrued Bond Interest thereon for such Payment Date calculated at the related Available Funds Rate, or (B) on each Payment Date on which a Class 1-A-2 Derivative Contract Counterparty Termination Event is not in effect, where clause (b)(iii) of the definition of “Bond Interest Rate” is less than the lesser of clause (a) and clause (b)(ii) of the definition of “Bond Interest Rate,” the excess, if any, of (x) the related Accrued Bond Interest thereon for such Payment Date calculated pursuant to the lesser of clause (a) and (b)(ii) of the definition of “Bond Interest Rate” over (y) the related Accrued Bond Interest thereon for such Payment Date calculated at the related Available
Funds Rate.  

 

Basis Risk Shortfall Carry-Forward Amount: With respect to each Class of Bonds and any Payment Date, as determined separately for each Class of Bonds, an amount equal to the aggregate amount of Basis Risk Shortfall for such Bonds on such Payment Date, plus any unpaid Basis Risk Shortfall for such Class of Bonds from prior Payment Dates, plus interest thereon at the Bond Interest Rate for such Payment Date, to the extent previously unreimbursed by the related Net Monthly Excess Cashflow or the related Group 1 Derivative Contracts or Group 2 Derivative Contracts.

Beneficial Owner: With respect to any Bond, the Person who is the beneficial owner of such Bond as reflected on the books of the Depository or on the books of a Person maintaining an account with such Depository (directly as a Depository Participant or indirectly through a Depository Participant, in accordance with the rules of such Depository).

Bond: A Class A, Class M or Class B Bond.

Bondholder or Holder: The Person in whose name a Bond is registered in the Bond Register, except that, any Bond registered in the name of the Depositor, the Issuer, the Indenture Trustee, the Seller or the Master Servicer or any Affiliate of any of them shall be deemed not to be a holder or holders, nor shall any so owned be considered outstanding, for purposes of giving any request, demand, authorization, direction, notice, consent or waiver under the Indenture or the Trust Agreement; provided that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds that a Responsible Officer of the Indenture Trustee or the Owner Trustee actually knows to be so owned shall be so disregarded. Owners of Bonds that have been pledged in good faith may be regarded
as Holders if the pledgee establishes to the satisfaction of the Indenture Trustee or the Owner Trustee the pledgee’s right so to act with respect to such Bonds and that the pledgee is not the Issuer, any other obligor upon the Bonds or any Affiliate of any of the foregoing Persons.

Bond Insurance Policy: The bond guaranty insurance policy issued by the Bond Insurer for the benefit of the Class 1-A Bondholders.

 

 

Bond Insurance Premium: The premium payable to the Bond Insurer with respect to the Bond Insurance Policy, as specified in the Insurance Agreement. 

Bond Insurer: Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance corporation, any successor thereto.

Bond Insurer Default: The existence and continuance of any of the following: (a) a failure by the Bond Insurer to make a payment required under the Bond Insurance Policy in accordance with its terms; or (b)(i) the Bond Insurer (A) files any petition or commences any case or proceeding under any provision or chapter of the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (B) makes a general assignment for the benefit of its creditors, or (C) has an order for relief entered against it under the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization which is final and nonappealable; or (ii) a court of competent jurisdiction, the New York or Wisconsin Department of Insurance or other
competent regulatory authority enters a final and nonappealable order, judgment or decree (A) appointing a custodian, trustee, agent or receiver for the Bond Insurer or for all or any material portion of its property or (B) authorizing the taking of possession by a custodian, trustee, agent or receiver of the Bond Insurer (or the taking of possession of all or any material portion of the property of the Bond Insurer).

Bond Interest Rate: With respect to each Payment Date and each Class of Bonds (other than the Class 1-A-2 Bonds), a floating rate equal to the least of (i) One-Month LIBOR plus the related Bond Margin, (ii) the related Maximum Bond Interest Rate and (iii) the related Available Funds Rate with respect to such Payment Date.  With respect to the Class 1-A-2 Bonds, (a) with respect to each Payment Date on which a Class 1-A-2 Derivative Contract Counterparty Termination Event is not in effect, a floating rate equal to One-Month LIBOR plus 0.140% per annum, initially, and, on or after the Step-Up Date, One-Month LIBOR plus 0.280% per annum and (b) with respect to each Payment Date on which a Class 1-A-2 Derivative Contract Counterparty Termination Event is in effect, a floating rate equal to the least of (i) One-Month LIBOR plus 0.250% per annum, initially, and, on
or after the Step-Up Date, One-Month LIBOR plus 0.500% per annum, (ii) the related Maximum Bond Interest Rate and (iii) the related Available Funds Rate with respect to such Payment Date. 

Bond Margin: With respect to the Class 1-A-1 Bonds, on any Payment Date prior to the Step Up Date, 0.250% per annum, and on any Payment Date on and after the Step Up Date, 0.500% per annum. With respect to the Class 1-A-2 Bonds, on any Payment Date prior to the Step Up Date, 0.140% per annum, and on any Payment Date on or after the Step Up Date, 0.280% per annum; provided, however, that on any Payment Date on which a Class 1-A-2 Derivative Contract Counterparty Termination Event is in effect, 0.250% per annum, and, on any Payment Date on or after the Step-Up Date, 0.500% per annum. With respect to the Class 1-M-1 Bonds, on any Payment Date prior to the Step Up Date, 0.480% per annum, and on any Payment Date on and after the Step Up Date, 0.720% per annum. With respect to the Class 1-M-2 Bonds, on any Payment Date prior to the Step Up Date, 0.510% per annum,
and on any Payment Date on and after the Step Up Date, 0.765% per annum. With respect to the Class 1-M-3 Bonds, on any Payment Date prior to the Step Up Date, 0.610% per annum, and on any Payment Date on and after the Step Up Date, 0.915% per annum. With respect to the Class 1-M-4 Bonds, on any 

 

Payment Date prior to the Step Up Date, 0.670% per annum, and on any Payment Date on and after the Step Up Date, 1.005% per annum. With respect to the Class 1-M-5 Bonds, on any Payment Date prior to the Step Up Date, 0.710% per annum, and on any Payment Date on and after the Step Up Date, 1.065% per annum. With respect to the Class 1-B-1 Bonds, on any Payment Date prior to the Step Up Date, 1.350% per annum, and on any Payment Date on and after the Step Up Date, 2.025% per annum. With respect to the Class 1-B-2 Bonds, on any Payment Date prior to the Step Up Date, 1.550% per annum, and on any Payment Date on and after the Step Up Date, 2.325% per annum. With respect to the Class 2-A-1 Bonds, on any Payment Date prior to the Step Up Date, 0.340% per annum, and on any Payment Date on and after the Step Up Date, 0.680% per annum. With respect to the Class 2-A-2 Bonds, on any Payment Date prior to the Step Up
Date, 0.400% per annum, and on any Payment Date on and after the Step Up Date, 0.800% per annum. With respect to the Class 2-M-1 Bonds, on any Payment Date prior to the Step Up Date, 0.520% per annum, and on any Payment Date on and after the Step Up Date, 0.780% per annum. With respect to the Class 2-M-2 Bonds, on any Payment Date prior to the Step Up Date, 0.750% per annum, and on any Payment Date on and after the Step Up Date, 1.125% per annum. With respect to the Class 2-B-1 Bonds, on any Payment Date prior to the Step Up Date, 1.700% per annum, and on any Payment Date on and after the Step Up Date, 2.550% per annum. With respect to the Class 2-B-2 Bonds, on any Payment Date prior to the Step Up Date, 2.250% per annum, and on any Payment Date on and after the Step Up Date, 3.375% per annum. 

Bond Owner: The Beneficial Owner of a Bond.

Bond Principal Balance: With respect to any Bond as of any date of determination, the initial Bond Principal Balance as stated on the face thereof, minus all amounts distributed in respect of principal with respect to such Bond on or prior to such date and, in the case of any Bond, the aggregate amount of any reductions in the Bond Principal Balance thereof deemed to have occurred in connection with allocations of Realized Losses on all prior Payment Dates; provided that, the Bond Principal Balance of any Class of Bonds with the highest payment priority to which Realized Losses have been allocated shall be increased by the amount of any Subsequent Recoveries on the related Mortgage Loans not previously allocated, but not by more than the amount of Realized Losses previously allocated to reduce the Bond Principal Balance of that Class.

Bond Register: The register maintained by the Bond Registrar in which the Bond Registrar shall provide for the registration of Bonds and of transfers and exchanges of Bonds.

Bond Registrar: The Indenture Trustee, in its capacity as Bond Registrar, or any successor to the Indenture Trustee in such capacity.

Bondholder or Holder: The Person in whose name a Bond is registered in the Bond Register, except that, any Bond registered in the name of the Depositor, the Issuer, the Indenture Trustee, the Seller or the Master Servicer or any Affiliate of any of them shall be deemed not to be a holder or holders, nor shall any so owned be considered outstanding, for purposes of giving any request, demand, authorization, direction, notice, consent or waiver under the Indenture or the Trust Agreement; provided that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or 

 

waiver, only Bonds that a Responsible Officer of the Indenture Trustee or the Owner Trustee actually knows to be so owned shall be so disregarded. Owners of Bonds that have been pledged in good faith may be regarded as Holders if the pledgee establishes to the satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Issuer, any other obligor upon the Bonds or any Affiliate of any of the foregoing Persons. Any Bonds on which payments are made under the Bond Insurance Policy shall be deemed Outstanding until the Bond Insurer has been reimbursed with respect thereto and the Bond Insurer shall be deemed the Bondholder thereof to the extent of such unreimbursed payment.

Book-Entry Bonds: Beneficial interests in the Bonds, ownership and transfers of which shall be made through book entries by the Depository as described in Section 4.06 of the Indenture.

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, Delaware, California, Minnesota and Maryland or in the city in which the corporate trust office of the Indenture Trustee is located, is required or authorized by law to be closed.

Cash Liquidation: As to any defaulted Mortgage Loan other than a Mortgage Loan as to which an REO Acquisition occurred, a determination by the Master Servicer evidenced in a certificate of a Servicing Officer that it has received all Insurance Proceeds, Liquidation Proceeds and other payments or cash recoveries which the Master Servicer reasonably and in good faith expects to be finally recoverable with respect to such Mortgage Loan.

Certificate Distribution Account: The account or accounts created and maintained pursuant to Section 3.10(c) of the Trust Agreement. The Certificate Distribution Account shall be an Eligible Account.

Certificate Paying Agent: The meaning specified in Section 3.10 of the Trust Agreement.

Certificate Percentage Interest: With respect to each Certificate, the Certificate Percentage Interest stated on the face thereof.

Certificate Register: The register maintained by the Certificate Registrar in which the Certificate Registrar shall provide for the registration of Certificates and of transfers and exchanges of Certificates.

Certificate Registrar: Initially, the Indenture Trustee, in its capacity as Certificate Registrar, or any successor to the Indenture Trustee in such capacity.

Certificate of Trust: The Certificate of Trust filed for the Trust pursuant to Section 3810(a) of the Statutory Trust Statute.

Certificates or Trust Certificates: The Impac CMB Trust Series 2005-6 Trust Certificates, Series 2005-6, evidencing the beneficial ownership interest in the Issuer and executed by the Owner Trustee in substantially the form set forth in Exhibit A to the Trust Agreement.

 

 

Certificateholder or Holder:  The Person in whose name a Certificate is registered in the Certificate Register.  Owners of Certificates that have been pledged in good faith may be regarded as Holders if the pledgee establishes to the satisfaction of the Indenture Trustee or the Owner Trustee, as the case may be, the pledgee’s right so to act with respect to such Certificates and that the pledgee is not the Issuer, any other obligor upon the Certificates or any Affiliate of any of the foregoing Persons.

Class: Any of the Class A Bonds, Class M Bonds or Class B Bonds.

Class 1-A Bonds: The Class 1-A-1 Bonds and Class 1-A-2 Bonds.

Class 1-A Insured Amount: Draws on the Bond Insurance Policy to cover related Deficiency Amounts and Preference Amounts on the Class 1-A Bonds.

Class 1-A-2 Derivative Contract: The derivative contract between the Seller and the Derivative Contract Counterparty for the benefit of the Class 1-A-2 Bonds.

Class 1-A-2 Derivative Contract Counterparty: Bear Stearns Capital Markets Inc.

Class 1-A-2 Derivative Contract Counterparty Termination Event: As provided in the Class 1-A-2 Derivative Contract, any default with respect to the Derivative Contract Counterparty in connection with the Class 1-A-2 Derivative Contract where the related Derivative Contract Counterparty is terminated and a new derivative contract counterparty is not found or the related Derivative Contract Counterparty is unable to make payments.

Class 1-A-2 Derivative Fee: With respect to any Payment Date, the aggregate amount payable on that Payment Date to the Class 1-A-2 Derivative Contract Counterparty under the Class 1-A-2 Derivative Contract calculated at a rate equal to (a) prior to the Step-Up Date, 0.110% per annum, and (b) on or after the Step-Up Date, 0.220% per annum, in each case based on a notional balance equal to the Bond Principal Balance of the Class 1-A-2 Bonds immediately prior to that Payment Date.

Class 1-A-2 Derivative Payment: With respect to any Payment Date, any amounts received with respect to the Class 1-A-2 Derivative Contract.

Class A Bonds: The Class 1-A-1, Class 1-A-2, Class 2-A-1 and Class 2-A-2 Bonds in the form attached as Exhibit A-1 to the Indenture.

Class B Bonds: The Class 1-B-1, Class 1-B-2, Class 2-B-1 and Class 2-B-2 Bonds in the form attached as Exhibit A-3 to the Indenture.

Class M Bonds: The Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 2-M-1 and Class 2-M-2 Bonds in the form attached as Exhibit A-2 to the Indenture.

CMSA IRP: Commercial Mortgage Securities Association Investor Reporting Package.

Closing Date: September 9, 2005.

 

 

Code: The Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

Collateral: The meaning specified in the Granting Clause of the Indenture.

Collection Account: The account or accounts created and maintained pursuant to Section 3.06(d) of the Servicing Agreement. The Collection Account shall be an Eligible Account.

Commission: The Securities and Exchange Commission.

Compensating Interest: With respect to any Payment Date as determined separately for each Loan Group, the amount of any Prepayment Interest Shortfalls resulting from prepayments in full during the preceding calendar month on the related Mortgage Loans, but only to the extent such Prepayment Interest Shortfalls do not exceed an amount equal to the lesser of (a) one-twelfth of 0.125% of the aggregate Stated Principal Balance of the related Mortgage Loans immediately preceding such Payment Date and (b) the sum of the Master Servicing Fee and Subservicing Fee for such Payment Date for the related Mortgage Loans.

Corporate Trust Office: With respect to the Indenture Trustee, Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal corporate trust office of the Indenture Trustee and Bond Registrar at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this instrument is located at, (A) for bond transfer and surrender purposes, Wells Fargo Bank, N.A. Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services IMH 2005-6, and for all other purposes, (B) 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention:  Client Manager, IMH Asset Corp., 2005-6. With respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee at which at any particular time its corporate trust business shall be administered, which
office at the date of the execution of this Trust Agreement is located at Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19801, Attention: Impac CMB Trust Series 2005-6 (IM0506).

Corrected Mortgage Loan: Any Multifamily Loan which is no longer a Specially Serviced Mortgage Loan as a result of the curing of any event of default under such Specially Serviced Mortgage Loan through a modification, restructuring or workout negotiated by the Master Servicer, or a Special Servicer on the Master Servicer's behalf, and evidenced by a signed writing.

Countrywide: Countrywide Home Loans Servicing LP or its successor in interest.

Cross-Collateralized Loss Payments: For any Payment Date and each Loan Group, the amount, if any, of Crossable Excess from such Loan Group available to cover Crossable Losses in the other Loan Groups as provided in Section 3.05 of the Indenture.

Crossable Excess: With respect to Loan Group 1 and Loan Group 2 and any Payment Date, an amount equal to the related Net Monthly Excess Cashflow remaining after payments have been made pursuant to Section 3.05(d)(iii) and Section 3.05(h)(ii) of the Indenture, respectively.

 

 

Crossable Losses: With respect to either Loan Group and any Payment Date, an amount equal to any Realized Losses suffered by any Mortgage Loan in such Loan Group, to the extent that such Realized Losses have not been covered by related Net Monthly Excess Cashflow on such Payment Date, and any previously unreimbursed Realized Losses suffered by any Mortgage Loans in such Loan Group to the extent such Realized Losses have not been covered by related and non-related Net Monthly Excess Cashflow on prior Payment Dates.

Custodial Agreement: The custodial agreement dated as of September 9, 2005, among the Indenture Trustee, the Depositor, the Master Servicer and the Custodian.

Custodian: Deutsche Bank National Trust Company. 

Cut-off Date: August 1, 2005.

Cut-off Date Balance: The aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

Cut-off Date Principal Balance: With respect to any Mortgage Loan, the unpaid principal balance thereof as of the Cut-off Date after applying the principal portion of Monthly Payments due on or before such date, whether or not received, and without regard to any payments due after such date.

Debt Service Coverage Ratio: With respect to any Group 2 Loan at any given time, the ratio of (i) the Net Cash Flow of the related Mortgaged Property for a twelve-month period to (ii) the annualized scheduled payments on the Group 2 Loan.

Debt Service Reduction: With respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction constituting a Deficient Valuation or any reduction that results in a permanent forgiveness of principal.

Default: Any occurrence which is or with notice or the lapse of time or both would become an Event of Default.

Deficiency Amount: With respect to each Payment Date prior to the Final Scheduled Payment Date and the Class 1-A Bonds, an amount equal to the sum of (i) the excess, if any, of (a) the amount of Accrued Bond Interest on the Class 1-A Bonds for that Payment Date over (b) the Group 1 Available Funds for that Payment Date and (ii) the amount of any Realized Losses allocated to the Class 1-A Bonds for that Payment Date. With respect to the Final Scheduled Payment Date and the Class 1-A Bonds, an amount equal to the sum of (i) the excess, if any, of (a) the amount of Accrued Bond Interest on the Class 1-A Bonds for that Payment Date over (b) the Group 1 Available Funds for that Payment Date and (ii) the Bond Principal Balance of all outstanding Class 1-A Bonds due on such Final Scheduled Payment Date to the extent not paid from Group 1 Available Funds on that
Payment Date. For the Class 1-A Bonds and any date on which the acceleration of the Bonds has been directed or consented to by the Bond Insurer pursuant to the Indenture, the amount required to pay the Bond Principal Balances of the Class 1-A Bonds in full, together with accrued and unpaid interest thereon through the date of payment of the Class 1-A Bonds.

 

 

Deficient Valuation: With respect to any Mortgage Loan, a valuation by a court of competent jurisdiction of the Mortgaged Property in an amount less than the then outstanding indebtedness under the Mortgage Loan, or any reduction in the amount of principal to be paid in connection with any scheduled Monthly Payment that constitutes a permanent forgiveness of principal, which valuation or reduction results from a proceeding under the Bankruptcy Code.

Definitive Bonds: The meaning specified in Section 4.06 of the Indenture.

Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with an Eligible Substitute Mortgage Loan.

Depositor: IMH Assets Corp., a California corporation, or its successor in interest.

Depository or Depository Agency: The Depository Trust Company or a successor appointed by the Indenture Trustee. Any successor to the Depository shall be an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act and the regulations of the Securities and Exchange Commission thereunder.

Depository Participant: A Person for whom, from time to time, the Depository effects book-entry transfers and pledges of securities deposited with the Depository.

Derivative Contracts: Any of the Group 1 Derivative Contracts, the Class 1-A-2 Derivative Contract or the Group 2 Derivative Contracts, as applicable.

Derivative Contract Counterparty: With respect to the Group 1 Derivative Contracts and Group 2 Derivative Contracts, Bank of America, N.A. and with respect to the Class 1-A-2 Derivative Contract, the Class 1-A-2 Derivative Contract Counterparty.

Determination Date: With respect to any Payment Date, the 15th day of the related month, or if the 15th day of such month is not a Business Day, the immediately preceding Business Day.

Due Date: With respect to each Mortgage Loan, the day of the month on which each scheduled Monthly Payment is due.

Due Period: With respect to any Payment Date and the Mortgage Loans, the period commencing on the second day of the month immediately preceding the month of such Payment Date (or, with respect to the first Due Period, the day following the Cut-off Date) and ending on the first day of the month of such Payment Date.

Eligible Account: An account that is any of the following: (i) a segregated account maintained with a federal or state chartered depository institution (A) the short-term obligations of which are rated A-1+ or better by Standard & Poor's and P-1 by Moody's at the time of any deposit therein or (B) fully insured to the limits established by the FDIC, provided that any deposits not so insured shall, to the extent acceptable to the Bond Insurer and each Rating Agency, as evidenced in writing, be maintained such that (as evidenced by an Opinion of Counsel delivered to the Indenture Trustee, the Bond Insurer and each Rating Agency) the Indenture Trustee has a claim with respect to the funds in such account or a perfected first 

 

security interest against any collateral (which shall be limited to Eligible Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution with which such account is maintained, (ii) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company subject to regulations regarding fiduciary funds on deposit  similar to Title 12 of the Code of Federal Regulations Section 9.10(b), which, in either case, has corporate trust powers, acting in its fiduciary capacity, or (iii) in the case of the Collection Account or Servicing Account, either (A) a trust account or accounts maintained at the corporate trust department of the Indenture Trustee or (B) an account or accounts maintained at the corporate trust department of the Indenture Trustee or the Subservicer (or an affiliate thereof), as
long as their short term debt obligations are rated P-1 by Moody's and A-1+ by Standard & Poor's or better and their long term debt obligations are rated A2 by Moody's and AA- by Standard & Poor's or better, (iv) in the case of the Collection Account and the Payment Account, a trust account or accounts maintained in the corporate trust division of the Indenture Trustee, or (v) an account or accounts of a depository institution acceptable to each Rating Agency as evidenced in writing by each Rating Agency that use of any such account as the Collection Account or the Payment Account will not reduce the rating assigned to any of the Securities by such Rating Agency below investment grade without taking into account the Bond Insurance Policy and acceptable to the Bond Insurer as evidenced in writing.

Eligible Investments: One or more of the following:

(i)           obligations of or instruments guaranteed as to principal and interest by the United States or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States;

(ii)          repurchase agreements on obligations specified in clause (i) maturing not more than one month from the date of acquisition thereof, provided that the unsecured obligations of the party agreeing to repurchase such obligations are at the time rated by each Rating Agency in its highest short-term rating available;

(iii)        federal funds, certificates of deposit, demand deposits, time deposits and bankers’ acceptances (which shall each have an original maturity of not more than 90 days and, in the case of bankers’ acceptances, shall in no event have an original maturity of more than 365 days or a remaining maturity of more than 30 days) of any U.S. depository institution or trust company incorporated under the laws of the United States or any state thereof or of any domestic branch of a foreign depository institution or trust company, denominated in United States dollars; provided that the debt obligations of such depository institution or trust company (or, if the only Rating Agency is Standard & Poor’s, in the case of the principal depository institution in a depository institution holding
company, debt obligations of the depository institution holding company) at the date of acquisition thereof have been rated by each Rating Agency in its highest short-term rating available; and provided further that, if the only Rating Agency is Standard & Poor’s and if the depository or trust company is a principal subsidiary of a bank holding company and the debt obligations of such subsidiary are not separately rated, the applicable rating shall be that of the bank holding company; and, provided further that, if the original maturity of such short-term obligations of a domestic branch of a foreign 

 

depository institution or trust company shall exceed 30 days, the short-term rating of such institution shall be A-1+ in the case of Standard & Poor’s if Standard & Poor’s is the Rating Agency;

(iv)         commercial paper (having original maturities of not more than 365 days) of any corporation incorporated under the laws of the United States or any state thereof which on the date of acquisition has been rated by Moody’s and Standard & Poor’s in their highest short-term ratings available; provided that such commercial paper shall have a remaining maturity of not more than 30 days;

(v)          a money market fund or a qualified investment fund rated by Moody’s in its highest long-term ratings available and rated AAAm or AAAm-G by Standard & Poor’s, including any such funds for which Wells Fargo Bank., N.A. or any affiliate thereof serves as an investment advisor, manager, administrator, shareholder, servicing agent, and/or custodian or sub-custodian;        

(vi)         other obligations or securities that are acceptable to each Rating Agency as a Permitted Investment hereunder and will not reduce the rating assigned to any Class of Bonds (without taking the Bond Insurance Policy into account) by such Rating Agency below the lower of the then-current rating or the rating assigned to such Bonds as of the Closing Date by such Rating Agency, as evidenced in writing; and

(vii)       any investment approved in writing by each of the Rating Agencies and the Bond Insurer.

The Indenture Trustee may purchase from or sell to itself or an affiliate, as principal or agent, the Eligible Investments listed above.

provided, however, that each such instrument shall be acquired in an arm's length transaction and no such instrument shall be an Eligible Investment if it represents, either (1) the right to receive only interest payments with respect to the underlying debt instrument or (2) the right to receive both principal and interest payments derived from obligations underlying such instrument and the principal and interest payments with respect to such instrument provide a yield to maturity greater than 120% of the yield to maturity at par of such underlying obligations; provided further, however, that each such instrument acquired shall not be acquired at a price in excess of par.

Eligible Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller for a Deleted Mortgage Loan which must, on the date of such substitution, as confirmed in an Officer's Certificate delivered to the Indenture Trustee, (i) have an outstanding principal balance, after deduction of the principal portion of the monthly payment due in the month of substitution (or in the case of a substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after such deduction), not in excess of the outstanding principal balance of the Deleted Mortgage Loan (the amount of any shortfall to be deposited by the Seller in the Collection Account in the month of substitution); (ii) comply with each non-statistical representation and warranty set forth in Section 3.1(b) of the Mortgage Loan Purchase Agreement as of the
date of substitution; (iii) have a Mortgage Rate no lower than and 

 

not more than 1% per annum higher than the Mortgage Rate of the Deleted Mortgage Loan as of the date of substitution; (iv) have a Loan-to-Value Ratio at the time of substitution no higher than that of the Deleted Mortgage Loan at the time of substitution; (v) have a remaining term to stated maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan; (vi) not be 30 days or more delinquent; and (vii) be an adjustable-rate first lien mortgage loan, if being substituted for a Mortgage Loan secured by a first lien on the related Mortgaged Property.

ERISA: The Employee Retirement Income Security Act of 1974, as amended.

Event of Default: With respect to the Indenture, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(i)           a failure by the Issuer to pay (a) Accrued Bond Interest on any Class of Bonds or the Principal Distribution Amount with respect to a Payment Date on such Payment Date or (b) the Unpaid Interest Shortfall with respect to any Class of Bonds, but only, with respect to clause (b), to the extent funds are available to make such payment as provided in the Indenture; or

(ii)          the failure by the Issuer on the Final Scheduled Payment Date to reduce the Bond Principal Balance of any of the Class A Bonds, Class M Bonds or the Class B Bonds to zero; or

(iii)        the occurrence of a default in the observance or performance of any covenant or agreement of the Issuer made in the Indenture, or any representation or warranty of the Issuer made in the Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Bond Insurer, or if a Bond Insurer Default exists,
the Holders of at least 25% of the aggregate Bond Principal Balance of the Outstanding Bonds, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of default hereunder; or

(iv)         there occurs the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or ordering the winding-up or liquidation of the Issuer's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

(v)          there occurs the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any 

 

such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the assets of the Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of any action by the Issuer in furtherance of any of the foregoing.

Event of Servicer Termination: With respect to the Servicing Agreement, a Servicing Default as defined in Section 6.01 of the Servicing Agreement.

Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Expense Fee Rate: With respect to each Mortgage Loan, the sum of the Master Servicing Fee Rate, the applicable Subservicing Fee Rate, the Owner Trustee's Fee Rate, the Lender-Paid PMI Insurer Fee Rate, if such Mortgage Loan is covered by a lender-paid primary mortgage insurance policy, and the related Net Derivative Fee Rate.

Expenses: The meaning specified in Section 7.02 of the Trust Agreement.

Fannie Mae: Fannie Mae (formerly, the Federal National Mortgage Association), or any successor thereto.

FDIC: The Federal Deposit Insurance Corporation or any successor thereto.

Final Certification: The final certification delivered by the Custodian pursuant to Section 2.03(b) of the Indenture in the form attached to the Custodial Agreement.

Final Scheduled Payment Date: With respect to each Class of Group 1 Bonds and Group 2 Bonds, the Payment Date in October 2035.

Fitch Ratings: Fitch, Inc., or its successor in interest.

Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds exceeds (ii) the related Stated Principal Balance (plus accrued and unpaid interest thereon at the applicable Mortgage Rate from the date interest was last paid through the date of receipt of the final Liquidation Proceeds) of such Liquidated Mortgage Loan immediately prior to the final recovery of its Liquidation Proceeds.

Freddie Mac: Freddie Mac (formerly, the Federal Home Loan Mortgage Corporation), or any successor thereto.

Grant: Pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of such collateral or other 

 

agreement or instrument and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

Gross Margin: With respect to any Mortgage Loan, the percentage set forth as the “Gross Margin” for such Mortgage Loan on the Mortgage Loan Schedule, as adjusted from time to time in accordance with the terms of the Servicing Agreement.

Group 1 Available Funds: For any Payment Date, an amount equal to the amount received by the Indenture Trustee and available in the Payment Account on that Payment Date in respect of the Group 1 Loans. The Group 1 Available Funds will generally be equal to (a) the sum of (1) the aggregate amount of scheduled payments on the Group 1 Loans received or advanced that were due during the related Due Period, (2) any unscheduled payments and receipts on the Group 1 Loans, including mortgagor prepayments on such Mortgage Loans, the proceeds of any repurchase of the Group 1 Loans by the Master Servicer or Seller, Insurance Proceeds (including amounts paid under the PMI Insurer Policy), Subsequent Recoveries and Liquidation Proceeds received during the related Prepayment Period, in each case net of amounts reimbursable therefrom to the Indenture Trustee, the Master
Servicer and any subservicer, (3) any Compensating Interest paid by the Master Servicer in respect of the Group 1 Loans and (4) any prepayment charges related to the Group 1 Loans, and reduced by (b) the sum of the related (1) Master Servicing Fees, the Subservicing Fees, the Owner Trustee’s Fee, the Policy Premium Fee, the Lender-Paid PMI Insurer Fee and the Net Derivative Fee, if any, (2) the Class 1-A-2 Derivative Fee and (3) certain amounts owed to the Master Servicer, the Depositor, the Indenture Trustee and the Owner Trustee in respect of the Group 1 Loans, as provided in the Agreements.

Group 1 Bond: A Class 1-A-1, Class 1-A-2, Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-B-1 or Class 1-B-2 Bond.

Group 1 Cut-off Date Balance: The sum of the aggregate Stated Principal Balance of the Group 1 Loans as of the Cut-off Date.

Group 1 Derivative Contracts: The confirmation together with the associated ISDA Master Agreement with respect to the six derivative contracts between the Seller and the related Derivative Contract Counterparty primarily for the benefit of the Group 1 Bonds and the Certificates, set forth in Exhibit E of the Indenture.

Group 1 Loan: A Mortgage Loan in Loan Group 1.

Group 1 Net Derivative Contract Payment Amount: With respect to any Payment Date, the amount equal to the excess, if any, of (a) the aggregate amount payable on that Payment Date to the Issuer from the related Derivative Contract Counterparty pursuant to the Group 1 Derivative Contracts, over (b) the aggregate amount payable on that Payment Date to the related Derivative Contract Counterparty under the Group 1 Derivative Contracts, other than any Additional Derivative Contract Counterparty Payment.

 

 

Group 1 Net Derivative Fee: With respect to any Payment Date, the Net Derivative Fee pursuant to the Group 1 Derivative Contracts.

Group 1 Net WAC Rate: The weighted average of the Net Mortgage Rates on the Group 1 Loans included in the Trust as of the beginning of the related Due Period, weighted on the basis of the Stated Principal Balances of the Group 1 Loans as of the beginning of the related Due Period.

Group 1 Overcollateralization Target Amount: With respect to any Payment Date, 0.50% of the Group 1 Cut-off Date Balance.

Group 2 Available Funds: For any Payment Date, an amount equal to the amount received by the Indenture Trustee and available in the Payment Account on that Payment Date in respect of the Group 2 Loans. The Group 2 Available Funds will generally be equal to (a) the sum of (1) the aggregate amount of scheduled payments on the Group 2 Loans received or advanced that were due during the related Due Period, (2) any unscheduled payments and receipts on the Group 2 Loans, including mortgagor prepayments on such Mortgage Loans, the proceeds of any repurchase of the Group 2 Loans by the Master Servicer or Seller, Subsequent Recoveries, Insurance Proceeds and Liquidation Proceeds, received during the related Prepayment Period, in each case net of amounts reimbursable therefrom to the Indenture Trustee, the Master Servicer and any subservicer and (3) any Compensating
Interest paid by the Master Servicer in respect of the Group 2 Loans, and reduced by (b) the sum of the related (1) Master Servicing Fees, the Subservicing Fees, the Owner Trustee’s Fee, the Net Derivative Fee, if any, and (2) certain amounts owed to the Master Servicer, the Depositor, the Indenture Trustee and the Owner Trustee in respect of the Group 2 Loans, as provided in the Agreements.

Group 2 Bond: A Class 2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2, Class 2-B-1 or Class 2-B-2 Bond.

Group 2 Cut-off Date Balance: The sum of the aggregate Stated Principal Balance of the Group 2 Loans as of the Cut-off Date.

Group 2 Derivative Contracts: The confirmation together with the associated ISDA Master Agreement with respect to the two derivative contracts between the Seller and the related Derivative Contract Counterparty primarily for the benefit of the Group 2 Bonds and the Certificates, set forth in Exhibit E of the Indenture.

Group 2 Loan: A Mortgage Loan in Loan Group 2.

Group 2 Net Derivative Contract Payment Amount: With respect to any Payment Date, the amount equal to the excess, if any, of (a) the aggregate amount payable on that Payment Date to the Issuer from the related Derivative Contract Counterparty pursuant to the Group 2 Derivative Contracts, over (b) the aggregate amount payable on that Payment Date to the related Derivative Contract Counterparty under the Group 2 Derivative Contracts, other than any Additional Derivative Contract Counterparty Payment.

Group 2 Net Derivative Fee: With respect to any Payment Date, the Net Derivative Fee pursuant to the Group 2 Derivative Contracts.

 

 

Group 2 Net WAC Rate: The weighted average of the Net Mortgage Rates on the Group 2 Loans included in the Trust as of the beginning of the related Due Period, weighted on the basis of the Stated Principal Balances of the Group 2 Loans as of the beginning of the related Due Period.

Group 2 Overcollateralization Target Amount: With respect to any Payment Date prior to the Group 2 Stepdown Date, 3.75% of the Group 2 Cut-off Date Balance.  With respect to any Payment Date on or after the Group 2 Stepdown Date, the greater of (i) 7.50% of the aggregate Stated Principal Balance of the Group 2 Loans as of the end of the related Due Period, and (ii) 0.50% of the Group 2 Cut-off Date Balance; provided however, that on or after the Group 2 Stepdown Date, if a Group 2 Trigger Event is in effect, the Group 2 Overcollateralization Target Amount will be equal to such amount on the previous Payment Date.

Group 2 Stepdown Date: The later to occur of (x) the Payment Date occurring in September 2012 and (y) the first Payment Date for which the aggregate Stated Principal Balance of the Group 2 Loans (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) is less than or equal to 50.00% of the sum of the Group 2 Cut-off Date Balance.

Group 2 Trigger Event: A Trigger Event is in effect with respect to any Payment Date with respect to the Group 2 Loans if:

(1) in the case of any Payment Date after the 84th Payment Date, the three month average of the aggregate principal balance of Group 2 Loans that are 60 or more days delinquent (including for this purpose any such Mortgage Loans in bankruptcy or foreclosure and Mortgage Loans with respect to which the related mortgaged property has been acquired by the Trust) as of the close of business on the last day of the preceding calendar month exceeds 16.00% of the aggregate Stated Principal Balance of the Group 2 Loans; or

(2) (a) in the case of any Payment Date after the 84th Payment Date and on or before the 96th Payment Date, the cumulative amount of Realized Losses incurred on the Group 2 Loans from the Cut-off Date, through the end of the calendar month immediately preceding such Payment Date exceeds 5.50% of the Group 2 Cut-off Date Balance, plus an additional 1/12th of 1.25% of the Group 2 Cut-off Date Balance for each Payment Date after the 84th Payment Date to and including the 96th Payment Date, (b) in the case of any Payment Date after the 96th Payment Date and on or before the 108th Payment Date, the cumulative amount of Realized Losses from the Cut-off Date, through the end of the calendar month immediately preceding such Payment Date exceeds 6.75% of the Group 2 Cut-off Date Balance, plus an additional 1/12th of 0.75% of the Group 2 Cut-off Date Balance for each Payment Date after the 96th
Payment Date to and including the 108th Payment Date, (c) in the case of any Payment Date after the 108th Payment Date and on or before the 120th Payment Date, the cumulative amount of Realized Losses from the Cut-off Date, through the end of the calendar month immediately preceding such Payment Date exceeds 7.50% of the Group 2 Cut-off Date Balance, plus an additional 1/12th of 0.75% of the Group 2 Cut-off Date Balance for each Payment Date after the 108th Payment Date to and including the 120th Payment Date, and (d) in the case of any 

 

Payment Date after the 120th Payment Date, the cumulative amount of Realized Losses from the Cut-off Date, through the end of the calendar month immediately preceding such Payment Date exceeds 8.25% of the Group 2 Cut-off Date Balance.

For purposes of the foregoing calculations, a mortgage loan is considered “60 days” and “90 days” delinquent if a payment due on the first day of a month has not been received by the second day of the second following month and third following month, respectively.

Hazardous Materials: Any dangerous, toxic or hazardous pollutants, chemicals, wastes, or substances, including, without limitation, those so identified pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., or any other environmental laws now existing, and specifically including, without limitation, asbestos and asbestos-containing materials, polychlorinated biphenyls, radon gas, petroleum and petroleum products, urea formaldehyde and any substances classified as being “in inventory”, “usable work in progress” or similar classification which would, if classified unusable, be included in the foregoing definition.

Impac Holdings: Impac Mortgage Holdings, Inc., a Maryland corporation, and its successors and assigns.

Indemnified Party: The meaning specified in Section 7.02 of the Trust Agreement.

Indenture: The indenture dated as of September 9, 2005, between the Issuer and the Indenture Trustee, relating to the Impac CMB Trust Series 2005-6 Bonds.

Indenture Trustee: Wells Fargo Bank, N.A., and its successors and assigns or any successor indenture trustee appointed pursuant to the terms of the Indenture.

Independent: When used with respect to any specified Person, the Person (i) is in fact independent of the Issuer, any other obligor on the Bonds, the Seller, the Master Servicer, the Depositor and any Affiliate of any of the foregoing Persons, (ii) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any of the foregoing Persons and (iii) is not connected with the Issuer, any such other obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

Independent Certificate: A certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, made by an independent appraiser or other expert appointed by an Issuer Request and approved by the Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of “Independent” in this Indenture and that the signer is Independent within the meaning thereof.

Index: With respect to any Mortgage Loan, the index for the adjustment of the Mortgage Rate set forth as such on the related Mortgage Note.

 

 

Initial Certification: The initial certification delivered by the Custodian pursuant to Section 2.03(a) of the Indenture in the form attached to the Custodial Agreement.

Initial Subservicers: Initially, with respect to substantially all of the Mortgage Loans in Loan Group 1, Countrywide Home Loans Servicing LP. On or about December 1, 2005, the subservicing with respect to substantially all of the Mortgage Loans in Loan Group 1, will be transferred to GMAC Mortgage Corporation.  With respect to all of the Mortgage Loans in Loan Group 2, Midland Loan Services, Inc.

Insurance Account: The account created and maintained pursuant to Section 11.02(b) of the Indenture.  The Insurance Account shall be an Eligible Account.

Insurance Agreement:  The Insurance and Indemnity Agreement, dated as of September 9, 2005, among the Bond Insurer, the Master Servicer, the Seller, the Depositor, the Issuer and the Indenture Trustee, including any amendments and supplements thereto.

Insurance Proceeds: Proceeds paid by any insurer pursuant to any insurance policy covering a Mortgage Loan which are required to be remitted to the Master Servicer, net of any component thereof (i) covering any expenses incurred by or on behalf of the Master Servicer in connection with obtaining such proceeds, (ii) that is applied to the restoration or repair of the related Mortgaged Property or (iii) released to the Mortgagor in accordance with the Master Servicer's normal servicing procedures.

Insured Amount: Shall have the meaning assigned to the term “Insured Amount” in the Bond Insurance Policy.

Interest Determination Date: With respect to each Accrual Period (other than the first Accrual Period), the second LIBOR Business Day preceding the related Payment Date on which such Accrual Period commences.

Investment Company Act: The Investment Company Act of 1940, as amended, and any amendments thereto.

IRS: The Internal Revenue Service.

Issuer: Impac CMB Trust Series 2005-6, a Delaware statutory trust, or its successor in interest.

Issuer Request: A written order or request signed in the name of the Issuer by any one of its Authorized Officers and approved in writing by the Bond Insurer, so long as no Bond Insurer Default exists, and delivered to the Indenture Trustee.

Lender-Paid PMI Insurer Fee: With respect to each Mortgage Loan covered by a lender-paid primary mortgage insurance policy and any Payment Date, the fee payable to the related insurer at a rate equal to 1/12th of the Lender-Paid PMI Insurer Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the beginning of the related Due Period.

 

 

Lender-Paid PMI Insurer Fee Rate: With respect to each Mortgage Loan covered by a lender-paid primary mortgage insurance policy, the per annum rate payable to the related insurer under the related policy.

LIBOR Business Day: A day on which banks are open for dealing in foreign currency and exchange in London and New York City.

Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation, assignment, participation, deposit arrangement, encumbrance, lien (statutory or other), preference, priority right or interest or other security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement under the UCC (other than any such financing statement filed for informational purposes only) or comparable law of any jurisdiction to evidence any of the foregoing; provided, however, that any assignment pursuant to Section 6.02 of the Servicing Agreement shall not be
deemed to constitute a Lien.

Lifetime Rate Cap: With respect to each Mortgage Loan with respect to which the related Mortgage Note provides for a lifetime rate cap, the maximum Mortgage Rate permitted over the life of such Mortgage Loan under the terms of such Mortgage Note, as set forth on the Mortgage Loan Schedule and initially as set forth on Exhibit A to the Servicing Agreement.

Liquidated Mortgage Loan: With respect to any Payment Date, any Mortgage Loan in respect of which the Master Servicer has determined, in accordance with the servicing procedures specified in the Servicing Agreement, as of the end of the related Due Period that substantially all Liquidation Proceeds which it reasonably expects to recover with respect to the disposition of the related Mortgaged Property or REO Property have been recovered.

Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead) which are incurred by or on behalf of the Master Servicer, or any Special Servicer on the Master Servicer's behalf, in connection with the liquidation of any Mortgage Loan and not recovered under any insurance policy, such expenses including, without limitation, legal fees and expenses, any unreimbursed amount expended (including, without limitation, amounts advanced to correct defaults on any Mortgage Loan which is senior to such Mortgage Loan, amounts advanced to keep current or pay off a Mortgage Loan that is senior to such Mortgage Loan and disposition fees) respecting the related Mortgage Loan and any related and unreimbursed expenditures for real estate property taxes or for property restoration, preservation or insurance against casualty loss or damage.

Liquidation Proceeds: Proceeds (including Insurance Proceeds) received in connection with the liquidation of any Mortgage Loan or related REO Property, whether through trustee's sale, foreclosure sale or otherwise.

Loan Group: Either of Loan Group 1 or Loan Group 2.

Loan Group 1: The Group 1 Loans.

Loan Group 2: The Group 2 Loans.

 

 

Loan-to-Value Ratio: With respect to any Mortgage Loan, as of any date of determination, a fraction expressed as a percentage, the numerator of which is the then current principal amount of the Mortgage Loan, and the denominator of which is the Appraised Value of the related Mortgaged Property.

Loan Year: With respect to any Mortgage Loan, the one-year period commencing on the day succeeding the origination of such Mortgage Loan and ending on the anniversary date of such Mortgage Loan, and each annual period thereafter.

Lost Note Affidavit: With respect to any Mortgage Loan as to which the original Mortgage Note has been lost or destroyed and has not been replaced, an affidavit from the Seller certifying that the original Mortgage Note has been lost, misplaced or destroyed (together with a copy of the related Mortgage Note).

Majority Certificateholder: A Holder of a 50.01% or greater Certificate Percentage Interest of the Certificates.

Master Servicer: Impac Funding Corporation, a California corporation, and its successors and assigns.

Master Servicing Fee: With respect to each Mortgage Loan and any Payment Date, the fee payable monthly to the Master Servicer in respect of master servicing compensation that accrues at an annual rate equal to the Master Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the beginning of the related Due Period.

Master Servicing Fee Rate: With respect to any Mortgage Loan, 0.03% per annum.

Maximum Bond Interest Rate: With respect to each class of (1) Group 1 Bonds, 11.00% per annum and (2) Group 2 Bonds, 10.25% per annum.

MERS:  Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.

MERS® System:  The system of recording transfers of Mortgages electronically maintained by MERS.

MIN:  The Mortgage Identification Number for Mortgage Loans registered with MERS on the MERS® System.

Minimum Mortgage Rate: With respect to each Mortgage Loan, the minimum Mortgage Rate.

MOM Loan:  With respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof.

Monthly Payment: With respect to any Mortgage Loan (including any REO Property) and any Due Date, the payment of principal and interest due thereon in accordance with the 

 

amortization schedule at the time applicable thereto (after adjustment, if any, for partial Principal Prepayments and for Deficient Valuations occurring prior to such Due Date but before any adjustment to such amortization schedule by reason of any bankruptcy, other than a Deficient Valuation, or similar proceeding or any moratorium or similar waiver or grace period).

Moody's: Moody's Investors Service, Inc. or its successor in interest.

Mortgage: The mortgage, deed of trust or other instrument creating a first lien on an estate in fee simple interest in real property securing a Mortgage Loan.

Mortgage File: The file containing the Related Documents pertaining to a particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to the Mortgage Loan Purchase Agreement or the Servicing Agreement.

Mortgage Loans: The Mortgage Loans that will be transferred and assigned to the Trust pursuant to Section 2.03(a) of the Indenture, each Mortgage Loan so held being identified in the Mortgage Loan Schedule.  The Mortgage Loans have been divided into two groups, Loan Group 1 and Loan Group 2.

Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement, dated as of the Closing Date, between the Seller, as seller, and the Purchaser, as purchaser, relating to the sale, transfer and assignment of the Mortgage Loans.

Mortgage Loan Schedule: With respect to any date, the schedule of Mortgage Loans held by the Issuer on such date. The schedule of Mortgage Loans as of the Cut-off Date is the schedule set forth in Exhibit B of the Indenture, which schedule sets forth as to each Mortgage Loan:

	
             
  	
            (i)
 	
            the loan number and name of the Mortgagor;
 	
             

	
             
  	
            (ii)
 	
            the street address, city, state and zip code of the Mortgaged Property;
 
	
             
  	
            (iii)
 	
            the original Mortgage Rate and current Mortgage Rate;
 	
             

	

             
  	
            (iv)
 	
            the maturity date;
 	
             

	
             
  	
            (v)
 	
            the original principal balance;
 	
             

	
             
  	
            (vi)
 	
            the first Payment Date;
 	
             

	
             
  	
            (vii)
 	
            the type of Mortgaged Property;
 	
             

	
             
  	
            (viii)
 	
            the Monthly Payment in effect as of the Cut-off Date;
 	
             

	
             
  	
            (ix)
 	
            the Cut-off Date Principal Balance;
 	
             

											

(x)          the Index, the Maximum Rate, Minimum Rate, Lifetime Cap and the Gross Margin, if applicable;

 

 

	
             
  	
            (xi)
 	
            the Adjustment Date frequency and Payment Date frequency, if applicable;
 
	
             
  	
            (xii)
 	
            the occupancy status;
 	
             

	
             
  	
            (xiii)
 	
            the purpose of the Mortgage Loan;
 	
             

	
             
  	
            (xiv)
 	
            the Appraised Value of the Mortgaged Property;
 	
             

						

(xv)        (A) the original term to maturity and (B) if such Mortgage Loan is a balloon loan, the amortization term thereof;

	
             
  	
            (xvi)
 	
            the paid-through date of the Mortgage Loan;
 	
             

	
             
  	
            (xvii)
 	
            the Loan-to-Value Ratio;
 	
             

	
             
  	
            (xviii)
 	
            the Mortgagor credit score;
 	
             

	
             
  	
            (xix)
 	
            the lien status
 	
             

	
             
  	
            (xx)
 	
            the documentation program
 	
             

	
             
  	
            (xxi)
 	
            the subordinate lien amount
 	
             

	
             
  	
            (xxii)
 	
            the prepay penalty period
 	
             

	
             
  	
            (xxiii)
 	
            the amortization term
 	
             

	
             
  	
            (xxiv)
 	
            the Interest Only term
 	
             

	
             
  	
            (xxv)
 	
            whether such Mortgage Loan is a Group 1 Loan or a Group 2 Loan;
 
												

(xxvi)    whether such Mortgage Loan is covered by a lender-paid primary insurance policy, and if so, the related Lender-Paid PMI Insurer Fee Rate; and

(xxvii)   whether or not the Mortgage Loan was underwritten pursuant to a limited documentation program.

The Mortgage Loan Schedule shall also set forth the total of the amounts described under (ix) above for all of the Mortgage Loans.

Mortgage Note: The note or other evidence of the indebtedness of a Mortgagor under a Mortgage Loan.

Mortgage Rate: With respect to any Mortgage Loan and any date of determination, the annual rate at which interest accrues on such Mortgage Loan.

Mortgaged Property: The underlying property, including real property and improvements thereon, securing a Mortgage Loan.

 

 

Mortgagor: The obligor or obligors under a Mortgage Note.

Multifamily Loan: Each of the Group 2 Loans transferred and assigned to the Indenture Trustee pursuant to Section 2.03 of the Indenture, secured by a fee simple estate in a parcel of land improved by a multifamily property, together with any personal property, fixtures, leases and other property or rights pertaining thereto, as indicated in the related Mortgage Loan Schedule.

Net Cash Flow: For any given period, the total operating revenues derived from a multifamily property during such period, minus total operating expenses incurred in respect of such property and estimated replacement reserves during such period other than (i) non-cash items such as depreciation and amortization, (ii) capital expenditures and (iii) debt service on loans (including the related Mortgage Loan) secured by liens on such property.

Net Collections: With respect to any Corrected Mortgage Loan, an amount equal to all payments on account of interest and principal on such Mortgage Loan.

Net Derivative Fee: With respect to any Payment Date, the amount equal to the excess, if any, of (a) the aggregate amount payable on that Payment Date to the related Derivative Contract Counterparty (other than the Class 1-A-2 Derivative Contract Counterparty) in respect of the Derivative Contracts, other than any Additional Derivative Contract Counterparty Payment, over (b) the aggregate amount payable on that Payment Date to the Issuer from the related Derivative Contract Counterparty (other than the Class 1-A-2 Derivative Contract Counterparty) pursuant to the Derivative Contracts.

Net Derivative Fee Rate: With respect to any Payment Date and the Group 1 Bonds, the fraction, expressed as a rate per annum, equal to (x) the Group 1 Net Derivative Fee on such Payment Date over (y) the aggregate Stated Principal Balance of the Group 1 Mortgage Loans as of the beginning of the related Due Period. With respect to any Payment Date and the Group 2 Bonds, the fraction, expressed as a rate per annum, equal to (x) the Group 2 Net Derivative Fee on such payment date over (y) the aggregate Stated Principal Balance of the Group 2 Mortgage Loans as of the beginning of the related Due Period.

Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.

Net Monthly Excess Cash Flow: For any Payment Date and each Loan Group, the sum of (a) any related Overcollateralization Release Amount, (b) the excess of (x) the related Available Funds and the Insured Amount, if any, for such Payment Date over (y) the sum for such Payment Date of (A) the aggregate amount of Accrued Bond Interest for the related Bonds and (B) the related Principal Remittance Amount and (c) any amounts payable from the related Derivative Contracts as described in Section 3.05 of the Indenture.

Net Mortgage Rate: With respect to the Group 1 Loans and any Payment Date, the then applicable Mortgage Rate thereon for the scheduled monthly payment thereon during the related Due Period, minus the sum of the related (1) Master Servicing Fee Rate, (2) Subservicing Fee Rate, (3) Owner Trustee's Fee Rate, (4) Net Derivative Fee Rate (if any), and (5) Lender-Paid 

 

PMI Insurer Fee Rate, if such Mortgage Loan is covered by a lender-paid primary mortgage insurance policy. With respect to the Group 2 Loans and any Payment Date, the then applicable Mortgage Rate thereon for the scheduled monthly payment thereon during the related Due Period, minus the sum of the related (1) Master Servicing Fee Rate, (2) Subservicing Fee Rate, (3) Owner Trustee's Fee Rate, (4) Net Derivative Fee Rate (if any), and (5) related Lender-Paid PMI Insurer Fee Rate, if such Mortgage Loan is covered by a lender-paid primary mortgage insurance policy.

New Lease: Any lease of REO Property entered into on behalf of the Trust Fund, including any lease renewed or extended on behalf of the Trust Fund if the Trust Fund has the right to renegotiate the terms of such lease.

Nonrecoverable Advance: Any advance (i) which was previously made or is proposed to be made by the Master Servicer; and (ii) which, in the good faith judgment of the Master Servicer, will not or, in the case of a proposed advance, would not, be ultimately recoverable by the Master Servicer from Liquidation Proceeds, Insurance Proceeds or future payments on any Mortgage Loan. The Indenture Trustee may conclusively rely on any determination of nonrecoverability made by the Master Servicer.

Officer’s Certificate: With respect to the Master Servicer, a certificate signed by the President, Managing Director, a Director, a Vice President or an Assistant Vice President, of the Master Servicer and delivered to the Indenture Trustee. With respect to the Issuer, a certificate signed by any Authorized Officer of the Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, and delivered to the Indenture Trustee. Unless otherwise specified, any reference in the Indenture to an Officer's Certificate shall be to an Officer's Certificate of any Authorized Officer of the Issuer.

One-Month LIBOR: With respect to any Accrual Period (other than the first Accrual Period), the rate determined by the Indenture Trustee on the related Interest Determination Date on the basis of the London interbank offered rate for one-month United States dollar deposits, as such rates appear on the Telerate Screen Page 3750, as of 11:00 a.m. (London time) on such Interest Determination Date.

In the event that on any Interest Determination Date, Telerate Screen 3750 fails to indicate the London interbank offered rate for one-month United States dollar deposits, then One-Month LIBOR for the related Interest Accrual Period will be established by the Indenture Trustee as follows:

 

 

(i)           If on such Interest Determination Date two or more Reference Banks provide such offered quotations, One-Month LIBOR for the related Accrual Period shall be the arithmetic mean of such offered quotations (rounded upwards if necessary to the nearest whole multiple of 1/16%).

(ii)          If on such Interest Determination Date fewer than two Reference Banks provide such offered quotations, One-Month LIBOR for the related Accrual Period shall be the higher of (i) One-Month LIBOR as determined on the previous Interest Determination Date and (ii) the Reserve Interest Rate.

The establishment of One-Month LIBOR on each Interest Determination Date by the Indenture Trustee and the Indenture Trustee's calculation of the rate of interest applicable for the related Accrual Period shall (in the absence of manifest error) be final and binding.

Opinion of Counsel: A written opinion of counsel acceptable to the Indenture Trustee and/or the Bond Insurer, as applicable, in its reasonable discretion which counsel may be in-house counsel for the Master Servicer if acceptable to the Indenture Trustee, the Bond Insurer and the Rating Agencies or counsel for the Depositor, as the case may be.

Original Value: Except in the case of a refinanced Mortgage Loan, the lesser of the Appraised Value or sales price of Mortgaged Property at the time a Mortgage Loan is closed, and for a refinanced Mortgage Loan, the Original Value is the value of such property at the time application is made for such refinancings as set forth in an appraisal acceptable to the Master Servicer.

Outstanding: With respect to the Bonds, as of the date of determination, all Bonds theretofore executed, authenticated and delivered under this Indenture except:

(i)           Bonds theretofore canceled by the Bond Registrar or delivered to the Indenture Trustee for cancellation; and

(ii)          Bonds in exchange for or in lieu of which other Bonds have been executed, authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Bonds are held by a holder in due course.

all Bonds that have been paid with funds provided under the Bond Insurance Policy shall be deemed to be Outstanding until the Bond Insurer has been reimbursed with respect thereto.

Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan (including an REO Property) which was not the subject of a Principal Prepayment in Full, Cash Liquidation or REO Disposition and which was not purchased, deleted or substituted for prior to such Due Date pursuant to the Servicing Agreement.

Overcollateralization Increase Amount: With respect to any Payment Date, and each Loan Group, the lesser of (i) the related Net Monthly Excess Cashflow for such Payment Date and (ii) the excess, if any, of (a) the related Overcollateralization Target Amount over (b) the related Overcollateralized Amount on such Payment Date (after taking into account payments to the related Bonds of the related Principal Remittance Amount on such Payment Date).

 

 

Overcollateralization Release Amount: With respect to any Payment Date and each Loan Group, the lesser of (x) the related Principal Remittance Amount for such Payment Date and (y) the excess, if any, of (i) the related Overcollateralized Amount for such Payment Date (assuming that 100% of the related Principal Remittance Amount is applied as a principal payment on such Payment Date) over (ii) the related Overcollateralization Target Amount for such Payment Date.

Overcollateralization Target Amount: The Group 1 Overcollateralization Target Amount or Group 2 Overcollateralization Target Amount, as applicable.

Overcollateralized Amount: For any Payment Date and each Loan Group, the amount, if any, by which (i) the aggregate Stated Principal Balance of the related Mortgage Loans (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or Advanced, unscheduled collections of principal received during the related Prepayment Period and Realized Losses on the related Mortgage Loans incurred during the related Prepayment Period) exceeds (ii) the aggregate Bond Principal Balance of the related Bonds as of such Payment Date (assuming that 100% of the related Principal Remittance Amount is applied as a principal payment on the Bonds on such Payment Date).

Owner Trust Estate: The corpus of the Issuer created by the Trust Agreement which consists of items referred to in Section 3.01 of the Trust Agreement.

Owner Trustee: Wilmington Trust Company and its successors and assigns or any successor owner trustee appointed pursuant to the terms of the Trust Agreement.

Owner Trustee's Fee: With respect to any Payment Date the product of (i) the Owner Trustee's Fee Rate divided by 12 and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the related Due Period.

Owner Trustee's Fee Rate: On each Mortgage Loan, a rate equal to 0.0017% per annum.

Paying Agent: Any paying agent or co-paying agent appointed pursuant to Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.

Payment Account: The account established by the Indenture Trustee pursuant to Section 3.01 of the Indenture. The Payment Account shall be an Eligible Account.

Payment Date: The 25th day of each month, or if such day is not a Business Day, then the next Business Day, beginning in September 2005.

Percentage Interest: With respect to any Bond, the percentage obtained by dividing the Bond Principal Balance of such Bond by the aggregate Bond Principal Balances of all Bonds of that Class. With respect to any Certificate, the percentage as stated on the face thereof.

Periodic Rate Cap: With respect to any Mortgage Loan, the maximum rate, if any, by which the Mortgage Rate on such Mortgage Loan can adjust on any Adjustment Date, as stated in the related Mortgage Note or Mortgage.

 

 

Person: Any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Phase I Environmental Assessment: A “Phase I environmental assessment” as described in and meeting the criteria of the American Society of Testing Materials Standard E 1527- 94 or any successor thereto published by the American Society of Testing Materials.`

Plan: Any employee benefit plan or certain other retirement plans and arrangements, including individual retirement accounts and annuities, Keogh plans and bank collective investment funds and insurance company general or separate accounts in which such plans, accounts or arrangements are invested, that are subject to ERISA or Section 4975 of the Code.

Plan Assets: Assets of a Plan within the meaning of Department of Labor regulation 29 C.F.R. § 2510.3-101.

PMI Insurer:  Radian Guaranty, Inc., or its successors or assigns.

PMI Insurer Policy: A lender-paid primary mortgage insurance policy issued by Radian in accordance with a March 29, 2002 letter between the Seller and Radian.

PMI Mortgage Loan: Any Mortgage Loan covered by the PMI Insurer Policy, as indicated on the Mortgage Loan Schedule.

Policy Premium Fee:  With respect to any Payment Date, the premium payable to the Bond Insurer at a rate equal to 1/12th of the Policy Premium Rate multiplied by the aggregate Bond Principal Balance of the Class 1-A Bonds on such Payment Date (after giving effect to any distributions of principal to be made on such Payment Date).

Policy Premium Rate: With respect to any Payment Date, the rate per annum specified in the Insurance Agreement.

Pool Balance: With respect to any date of determination, the aggregate of the Stated Principal Balances of all Mortgage Loans as of such date.

Preference Amount: With respect to the Class 1-A Bonds, any amount previously distributed to a Class 1-A Bondholder  that is recoverable and sought to be recovered as a voidable preference by a trustee in bankruptcy pursuant to the United States Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with a final nonappealable order of a court having competent jurisdiction.

Prepayment Interest Shortfall: As to any Payment Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was the subject of (a) a Principal Prepayment in Full during the related Prepayment Period, an amount equal to the excess of interest accrued during the related Prepayment Period at the Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the sum of the amount of interest (less interest at the related Expense Fee Rate) paid by the Mortgagor for such Prepayment Period to the date of such Principal Prepayment in Full and any Advances made by the Master Servicer pursuant to 

 

Section 4.04 of the Servicing Agreement or (b) a partial Principal Prepayment during the related Prepayment Period, an amount equal to the interest at the Net Mortgage Rate during the related Prepayment Period on the amount of such partial Principal Prepayment.

Prepayment Penalty Loss Coverage Amount: With respect to any Payment Date, an amount equal to up to 65% of the prepayment penalties on the Group 1 Loans.

Prepayment Period: With respect to any Payment Date, the calendar month immediately preceding the month in which such payment date occurs.

Primary Insurance Policy: Each primary policy of mortgage guaranty insurance issued by a Qualified Insurer or any replacement policy therefor, whether or not borrower-paid or lender-paid, including the PMI Insurer Policy.

Principal Distribution Amount: For any Payment Date and each Loan Group, the sum of (a) the related Basic Principal Distribution Amount and (b) the related Overcollateralization Increase Amount (to the extent available from Net Monthly Excess Cashflow in the case of Loan Group 1 and Loan Group 2 pursuant to clause (ii) of Section 3.05(d) and clause (i) of Section 3.05(h), respectively).

Principal Prepayment: Any payment of principal or other recovery on a Mortgage Loan, including a recovery that takes the form of Liquidation Proceeds or Insurance Proceeds, which is received in advance of its scheduled Due Date and is not accompanied by an interest amount representing scheduled interest on such payment 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 Mortgage Loan.

Principal Remittance Amount: For any Payment Date and each Loan Group, the sum of

(1)          the principal portion of all scheduled monthly payments on the related mortgage loans due on the related Due Date, to the extent received or advanced;

(2)          the principal portion of all proceeds of the repurchase of a related mortgage loan (or, in the case of a substitution, certain amounts representing a principal adjustment) as required by the Servicing Agreement during the preceding calendar month; 

(3)          the principal portion of all other unscheduled collections received during the preceding calendar month in respect of the related mortgage loans, including full and partial prepayments, the proceeds of any repurchase of such mortgage loans by the Master Servicer or Seller, Liquidation Proceeds, Subsequent Recoveries and Insurance Proceeds (including amounts, if any, paid under the PMI Insurer Policy), in each case to the extent applied as recoveries of principal; and

 

 

(4)          with respect to the Group 1 Loans, any portion of any Insured Amount for such Payment Date representing the amount of any Realized Losses allocated to the Class 1-A-Bonds for that Payment Date.

Proceeding: Any suit in equity, action at law or other judicial or administrative proceeding.

Prospectus: The Prospectus Supplement, dated September 8, 2005, together with the attached Prospectus, dated September 8, 2005.

Purchase Price: With respect to the Mortgage Loans, the meaning specified in Section 2.2(a) of the Mortgage Loan Purchase Agreement.

Purchaser: IMH Assets Corp., a California corporation, and its successors and assigns.

Qualified Environmental Consultant: An Independent Person, with at least five years of relevant experience, who regularly conducts environmental audits for purchasers of commercial properties located in the same general area as the Mortgaged Property.

Qualified Insurer: A mortgage guaranty insurance company duly qualified as such under the laws of the state of its principal place of business and each state having jurisdiction over such insurer in connection with the insurance policy issued by such insurer, duly authorized and licensed in such states to transact a mortgage guaranty insurance business in such states and to write the insurance provided by the insurance policy issued by it, approved as an insurer by the Master Servicer and as a Fannie Mae-approved mortgage insurer.

Rating Agency: Any nationally recognized statistical rating organization, or its successor, that rated the Bonds at the request of the Depositor at the time of the initial issuance of the Bonds. Initially, Standard & Poor's or Moody's. If such organization or a successor is no longer in existence, “Rating Agency” with respect to the Class A Bonds shall be such nationally recognized statistical rating organization, or other comparable Person, designated by the Bond Insurer so long as no Bond Insurer Default exists, notice of which designation shall be given to the Indenture Trustee and Master Servicer. References herein to the highest short term unsecured rating category of a Rating Agency shall mean A-1 or better in the case of Standard & Poor's and P-1 or better in the case of Moody's and in the case of any other Rating Agency shall mean
such equivalent ratings. References herein to the highest long-term rating category of a Rating Agency shall mean “AAA” in the case of Standard & Poor's and “Aaa” in the case of Moody's and in the case of any other Rating Agency, such equivalent rating.

Realized Loss: With respect to each Mortgage Loan (or REO Property) as to which a Cash Liquidation or REO Disposition has occurred, an amount (not less than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan (or REO Property) as of the date of Cash Liquidation or REO Disposition, plus (ii) interest (and REO Imputed Interest, if any) at the Net Mortgage Rate from the Due Date as to which interest was last paid or advanced to Bondholders up to the last day of the month in which the Cash Liquidation (or REO Disposition) occurred on the Stated Principal Balance of such Mortgage Loan (or REO Property) outstanding during each Due Period that such interest was not paid or advanced, minus (iii) the proceeds, if any, received 

 

during the month in which such Cash Liquidation (or REO Disposition) occurred, to the extent applied as recoveries of interest at the Net Mortgage Rate and to principal of the Mortgage Loan, net of the portion thereof reimbursable to the Master Servicer or any Subservicer with respect to related Advances or expenses as to which the Master Servicer or any Subservicer is entitled to reimbursement thereunder but which have not been previously reimbursed.  With respect to each Mortgage Loan which has become the subject of a Deficient Valuation, the difference between the principal balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the principal balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect to each Mortgage Loan which has become the object of a Debt Service Reduction, the amount of such Debt Service Reduction.

Record Date: With respect to any Book-Entry Bonds and any Payment Date, the close of business on the Business Day immediately preceding such Payment Date.  With respect to any Bonds that are not Book-Entry Bonds, the close of business on the last Business Day of the calendar month preceding such Payment Date.  

Reference Banks: Any leading banks engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London, (ii) whose quotations appear on the Telerate Screen Page 3750 on the Interest Determination Date in question, (iii) which have been designated as such by the Indenture Trustee after consultation with the Master Servicer and the Bond Insurer, and (iv) which are not Affiliates of the Depositor or the Seller.

Registered Holder: The Person in whose name a Bond is registered in the Bond Register on the applicable Record Date.

Related Documents: With respect to each Mortgage Loan, the documents specified in Section 2.1(b) of the Mortgage Loan Purchase Agreement and any documents required to be added to such documents pursuant to the Mortgage Loan Purchase Agreement, the Trust Agreement, Indenture or the Servicing Agreement.

Relief Act: The Servicemembers Civil Relief Act.

Relief Act Shortfall: As to any Payment Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO Property), any shortfalls relating to the Relief Act or similar legislation or regulations.

Remittance Report: The report prepared by the Master Servicer pursuant to Section 4.01 of the Servicing Agreement.

REO Acquisition: The acquisition by the Master Servicer on behalf of the Indenture Trustee for the benefit of the Bondholders of any REO Property pursuant to Section 3.13 of the Servicing Agreement.

REO Disposition: As to any REO Property, a determination by the Master Servicer that it has received substantially all Insurance Proceeds, Liquidation Proceeds, REO Proceeds and other payments and recoveries (including proceeds of a final sale) which the Master Servicer expects to be finally recoverable from the sale or other disposition of the REO Property.

 

 

REO Imputed Interest: As to any REO Property, for any period, an amount equivalent to interest (at the Net Mortgage Rate that would have been applicable to the related Mortgage Loan had it been Outstanding) on the unpaid principal balance of the Mortgage Loan as of the date of acquisition thereof for such period as such balance is reduced pursuant to Section 3.13 of the Servicing Agreement by any income from the REO Property treated as a recovery of principal.

REO Proceeds: Proceeds, net of expenses, received in respect of any REO Property (including, without limitation, proceeds from the rental of the related Mortgaged Property) which proceeds are required to be deposited into the Collection Account only upon the related REO Disposition.

REO Property: A Mortgaged Property that is acquired by the Issuer by foreclosure or by deed in lieu of foreclosure.

Repurchase Event: With respect to any Mortgage Loan, either (i) a discovery that, as of the Closing Date the related Mortgage was not a valid first lien or second lien (as applicable) on the related Mortgaged Property, subject to no other liens except (A) the lien of real property taxes and assessments not yet due and payable, (B) covenants, conditions, and restrictions, rights of way, easements and other matters of public record as of the date of recording of such Mortgage and such other permissible title exceptions as are permitted and (C) other matters to which like properties are commonly subject which do not materially adversely affect the value, use, enjoyment or marketability of the related Mortgaged Property or (ii) with respect to any Mortgage Loan as to which the Seller delivers an affidavit certifying that the original Mortgage Note has been lost or
destroyed, a subsequent default on such Mortgage Loan if the enforcement thereof or of the related Mortgage is materially and adversely affected by the absence of such original Mortgage Note.

Repurchase Price: With respect to any Mortgage Loan required to be repurchased on any date pursuant to the Mortgage Loan Purchase Agreement or purchased by the Master Servicer pursuant to the Servicing Agreement, an amount equal to the sum, without duplication, of (i) 100% of the Stated Principal Balance thereof (without reduction for any amounts charged off) and (ii) unpaid accrued interest at the Mortgage Rate on the outstanding principal balance thereof from the Due Date to which interest was last paid by the Mortgagor to the first day of the month following the month of purchase plus (iii) the amount of unreimbursed Advances or unreimbursed Servicing Advances made with respect to such Mortgage Loan plus (iv) any other amounts owed to the Master Servicer or any Subservicer pursuant to Section 3.07 of the Servicing Agreement and not included in clause (iii)
of this definition plus (v) any costs and damages incurred by the Trust in connection with any violation by such Mortgage Loan of any predatory-lending law.

Reserve Interest Rate: With respect to any Interest Determination Date, the rate per annum that the Indenture Trustee determines to be either (i) the arithmetic mean (rounded upwards if necessary to the nearest whole multiple of 0.0625%) of the one-month United States dollar lending rates which New York City banks selected by the Indenture Trustee are quoting on the relevant Interest Determination Date to the principal London offices of leading banks in the London interbank market or (ii) in the event that the Indenture Trustee can determine no such arithmetic mean, the lowest one-month United States dollar lending rate which New York City 

 

banks selected by the Indenture Trustee are quoting on such Interest Determination Date to leading European banks.

Responsible Officer: With respect to the Indenture Trustee, any officer of the Indenture Trustee with direct responsibility for the administration of the Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject.

Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Security: Any of the Certificates or Bonds.

Securityholder or Holder: Any Bondholder or a Certificateholder.

Security Instrument: A written instrument creating a valid first lien or second lien on a Mortgaged Property securing a Mortgage Note, which may be any applicable form of mortgage, deed of trust, deed to secure debt or security deed, including any riders or addenda thereto.

Seller: Impac Mortgage Holdings, Inc., a Maryland corporation, and its successors and assigns.

Servicing Account: The separate trust account created and maintained by the Master Servicer or each Subservicer with respect to the Mortgage Loans or REO Property, which shall be an Eligible Account, for collection of taxes, assessments, insurance premiums and comparable items as described in Section 3.08 of the Servicing Agreement.

Servicing Advances: All customary, reasonable and necessary “out of pocket” costs and expenses incurred in connection with a default, delinquency or other unanticipated event in the performance by the Master Servicer or any Subservicer of its servicing obligations, including, without duplication, but not limited to, the cost of (i) the preservation, restoration and protection of a Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures and any expenses incurred in relation to any such proceedings that result from the Mortgage Loan being registered on the MERS System, (iii) the management and liquidation of any REO Property and (iv) compliance with the obligations under Sections 3.10, 3.11, 3.13 of the Servicing Agreement.

Servicing Agreement: The Servicing Agreement dated as of September 9, 2005, among the Master Servicer, the Issuer and the Indenture Trustee.

Servicing Certificate: A certificate completed and executed by a Servicing Officer on behalf of the Master Servicer in accordance with Section 4.01 of the Servicing Agreement.

Servicing Default: The meaning assigned in Section 6.01 of the Servicing Agreement.

Servicing Fee: The sum of the Master Servicing Fee and the Subservicing Fee.

 

 

Servicing Fee Rate: The sum of the Master Servicing Fee Rate and the related Subservicing Fee Rate.

Servicing Officer: Any officer of the Master Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name and specimen signature appear on a list of servicing officers furnished to the Indenture Trustee by the Master Servicer, as such list may be amended from time to time.

Special Certificate Cap Contract: The confirmation together with the associated ISDA Master Agreement, delivered to the Indenture Trustee on the Closing Date and attached to the Indenture as Exhibit F, for which amounts payable shall be distributed in accordance with Section 3.05(f) of the Indenture.

Special Servicer: Any special servicer that may be appointed by the Master Servicer which consent shall not be unreasonably withheld, for the purposes of servicing the Specially Serviced Mortgage Loans.

Specially Serviced Mortgage Loan: Subject to Section 3.20 of the Servicing Agreement, any Group 2 Loan with respect to which:

(a)          the related Mortgagor is 60 or more days delinquent (without giving effect to any grace period permitted by the related Mortgage Note) in the payment of a Monthly Payment or other obligation (regardless of whether, in respect thereof, Advances have been reimbursed);

(b)          such Mortgagor has expressed to the Master Servicer an inability to pay or a hardship in paying such Group 2 Loan in accordance with its terms;

(c)          the Master Servicer has received notice that such Mortgagor has become the subject of any bankruptcy, insolvency or similar proceeding, admitted in writing the inability to pay its debts as they come due or made an assignment for the benefit of creditors;

(d)          the Master Servicer has received notice of a foreclosure or threatened foreclosure of any lien on the related Mortgaged Property;

(e)          a default, of which the Master Servicer has notice (other than a failure by such Mortgagor to pay principal or interest) and which in the sole judgment of the Master Servicer, materially and adversely affects the interests of the Bondholders, has occurred and remained unremedied for the applicable grace period specified in such Group 2 Loan (or, if no grace period is specified, 60 days); provided, however, that a default requiring a Servicing Advance shall be deemed to materially and adversely affect the interests of the Bondholders for purposes of this definition; or

(f)           the Master Servicer proposes to commence foreclosure or other workout arrangements.

A Group 2 Loan will cease to be a Specially Serviced Mortgage Loan:

 

 

(a)          with respect to the circumstances described in clause (a) above, when the related Mortgagor has brought such Group 2 Loan current and thereafter has made three consecutive full and timely Monthly Payments;

(b)          with respect to the circumstances described in clauses (b) and (d) above, when such circumstances cease to exist in the good faith and reasonable judgment of the Master Servicer, or any Special Servicer on its behalf, and with respect to the circumstances described in clauses (c) and (f),when such circumstances cease to exist; or

(c)          with respect to the circumstances described in clause (e) above, when such default is cured;

provided, however, that in each case, at the time no circumstance identified in clauses (a) through (f) above exists that would cause the Group 2 Loan to continue to be characterized as a Specially Serviced Mortgage Loan.

Standard & Poor's: Standard & Poor's, a division of The McGraw-Hill Companies, Inc., or its successor in interest.

Stated Principal Balance: With respect to any Mortgage Loan or related REO Property as of any date of determination, (i) the principal balance of the Mortgage Loan outstanding as of the Cut-off Date, after application of all scheduled Monthly Payments due on or before such date, whether or not received, minus (ii) the sum of (a) the principal portion of the Monthly Payments due with respect to such Mortgage Loan or REO Property during each Due Period prior to such date of determination which were received or with respect to which an Advance was made, (b) all Principal Prepayments with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation Proceeds and REO Proceeds to the extent applied by the Master Servicer as recoveries of principal in accordance with Section 3.13 of the Servicing Agreement with respect to such Mortgage Loan
or REO Property, which were distributed pursuant to Section 3.05 of the Indenture prior to such date of determination, and (c) the principal portion of any Realized Loss with respect thereto allocated pursuant to Section 3.33 of the Indenture prior to such date of determination.

Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code §§3801 et seq., as the same may be amended from time to time.

Step-Up Date: With respect to the (1) Group 1 Bonds, the first Payment Date following the earlier of (i) the first Payment Date for which the aggregate Stated Principal Balance of the Group 1 Loans as of the end of the related Due Period has been reduced to 20% or less of the sum of the Group 1 Cut-off Date Balance and (ii) the Payment Date occurring in August 2015 and (2) Group 2 Bonds, the first Payment Date following the earlier of (i) the first Payment Date for which the aggregate Stated Principal Balance of the Group 2 Loans as of the end of the related Due Period has been reduced to 20% or less of the Group 2 Cut-off Date Balance and (ii) the Payment Date occurring in August 2015.

Subsequent Recoveries: Additional recoveries, net of reimbursable expenses, with respect to Mortgage Loans that have been previously liquidated and that resulted in a Realized Loss.

 

 

Subservicer: Any Person with whom the Master Servicer has entered into a Subservicing Agreement as a Subservicer and acceptable to the Bond Insurer, including the Initial Subservicers.

Subservicing Account: An Eligible Account established or maintained by a Subservicer as provided for in Section 3.06(e) of the Servicing Agreement.

Subservicing Agreement: The written contract between the Master Servicer and any Subservicer relating to servicing and administration of certain Mortgage Loans as provided in Section 3.02 of the Servicing Agreement.

Subservicing Fee: With respect to each Mortgage Loan and any Payment Date, the fee payable monthly to the related subservicer in respect of servicing compensation that accrues at an annual rate equal to the Subservicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the beginning of the related Due Period.

Subservicing Fee Rate: On each adjustable rate Group 1 Loan, a rate equal to 0.375% per annum.  On each fixed rate first lien Group 1 Loan, a rate equal to 0.250% per annum.  On each fixed rate second lien Group 1 Loan, a rate equal to 0.750% per annum.  On each Group 2 Loan, a rate equal to 0.1096% per annum, with such rate increasing to 0.750% per annum for any multifamily loan that becomes a Specially Serviced Multifamily Loan.

Substitution Adjustment Amount: With respect to any Eligible Substitute Mortgage Loan, the amount as defined in Section 2.03 of the Servicing Agreement.

Telerate Screen Page 3750: The display designated as page 3750 on the Telerate Service (or such other page as may replace page 3750 on that service for the purpose of displaying London interbank offered rates of major banks).

Treasury Regulations: Regulations, including proposed or temporary Regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

Trust: The Impac CMB Trust Series 2005-6 to be created pursuant to the Trust Agreement.

Trust Agreement: The Amended and Restated Trust Agreement dated as of September 9, 2005, among the Owner Trustee, the Depositor and Wells Fargo Bank, N.A., as Certificate Registrar and Certificate Paying Agent, relating to the Trust.

Trust Estate: The meaning specified in the Granting Clause of the Indenture.

Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as amended from time to time, as in effect on any relevant date.

UCC: The Uniform Commercial Code, as amended from time to time, as in effect in any specified jurisdiction.

 

 

Underwriters: Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc. and UBS Securities LLC.

Uninsured Cause: Any cause of damage to property subject to a Mortgage that the complete restoration of such property is not fully reimbursable by the hazard insurance policies.

Unpaid Interest Shortfall: For each class of Bonds and any Payment Date, such Bonds’ pro rata share, based on the amount of Accrued Bond Interest otherwise payable on such Bond on such Payment Date, of (a) any Prepayment Interest Shortfalls on the related Mortgage Loans, to the extent not covered by related Compensating Interest, and (b) any Relief Act Shortfalls on the related Mortgage Loans, plus interest on the amount of previously allocated Unpaid Interest Shortfall on such class of Bonds which remains unreimbursed, at the Bond Interest Rate for such Class for the related Accrual Period.

Workout Fee: An amount equal to the product of 1.50% and the amount of Net Collections received by the Master Servicer or any Special Servicer with respect to each Corrected Mortgage Loan.EXHIBIT 4.1

 

 

 

SACO I TRUST 2005-GP1

 

Issuer,

 

LASALLE BANK NATIONAL ASSOCIATION

 

Securities Administrator

 

and 

 

CITIBANK, N.A.

 

Indenture Trustee

	
             
 	
            
 
 
 	
             
 

 

 

INDENTURE

 

Dated as of September 9, 2005

 

	
             
 	
            
 
 
 	
             
 

 

 

MORTGAGE-BACKED NOTES

 

	
             
 	
            
 
 
 	
             
 

 

 

 

 

TABLE OF CONTENTS [TO BE REVISED]

 

ARTICLE I

DEFINITIONS

	
            Section 1.01
 	
            Definitions
 	
             

	
            Section 1.02
 	
            Incorporation by Reference of Trust Indenture Act
 
	
            Section 1.03
 	
            Rules of Construction
 	
             

				

ARTICLE II

ORIGINAL ISSUANCE OF NOTES

	
            Section 2.01
 	
            Form
 	
             

	
            Section 2.02
 	
            Execution, Authentication and Delivery
 

ARTICLE III

COVENANTS

	
            Section 3.02
 	
            Existence
 	
             

	
            Section 3.03
 	
            Payment of Principal and Interest.
 	
             

	
            Section 3.04
 	
            Protection of Trust Estate
 	
             

	
            Section 3.05
 	
            Opinions as to Trust Estate
 	
             

	
            Section 3.06
 	
            Performance of Obligations
 	
             

	
            Section 3.07
 	
            Negative Covenants
 	
             

	
            Section 3.08
 	
            Annual Statement as to Compliance
 	
             

	
            Section 3.09
 	
            [Reserved].
 	
             

	
            Section 3.10
 	
            Representations and Warranties Concerning the HELOCs
 
	
            Section 3.11
 	
            Investment Company Act
 	
             

	
            Section 3.12
 	
            [Reserved].
 	
             

	
            Section 3.13
 	
            [Reserved].
 	
             

	
            Section 3.14
 	
            No Other Business
 	
             

	
            Section 3.15
 	
            No Borrowing
 	
             

	
            Section 3.16
 	
            Guarantees, Loans, Advances and Other Liabilities
 	
             

	
            Section 3.17
 	
            Capital Expenditures
 	
             

	
            Section 3.18
 	
            Determination of Note Interest Rate.
 	
             

	
            Section 3.19
 	
            Restricted Payments
 	
             

	
            Section 3.20
 	
            Notice of Events of Default
 	
             

	
            Section 3.21
 	
            Further Instruments and Acts
 	
             

	
            Section 3.22
 	
            Reserved.
 	
             

	
            Section 3.23
 	
            Certain Representations Regarding the Trust Estate.
 	
             

	
            Section 3.24
 	
            Allocation of Charge-Off Amounts second, in reduction of the Overcollateralization Amount until reduced to zero.

																				

	
            Section 3.25
 	
            [Reserved].
 	
             

	
            Section 3.26
 	
            Payments under the Policy
 

	
            (b)
 	
            If the Securities Administrator determines that a Deficiency Amount will exist for the following Payment Date, then the Securities Administrator, on behalf of the Indenture Trustee, shall submit a Notice (as defined in the Policy) for payment in the amount of the Deficiency Amount to the Note Insurer no later than 12:00 Noon, New York City time, on the second Business Day prior to the applicable Payment Date
 

 

 

 

ARTICLE IV

THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

	
            Section 4.01
 	
            The Notes
 

	
            Section 4.02
 	
            Registration of and Limitations on Transfer and Exchange of Notes; Appointment of Note Registrar and Certificate Registrar
 

	
            Section 4.03
 	
            Mutilated, Destroyed, Lost or Stolen Notes
 	
             

	
            Section 4.04
 	
            Persons Deemed Owners
 	
             

	
            Section 4.05
 	
            Cancellation
 	
             

	
            Section 4.06
 	
            Book-Entry Notes
 	
             

	
            Section 4.07
 	
            Notices to Depository
 	
             

	
            Section 4.08
 	
            Definitive Notes
 	
             

	
            Section 4.09
 	
            [Reserved].
 	
             

	
            Section 4.10
 	
            Application of Trust Money
 	
             

	
            Section 4.11
 	
            Subrogation and Cooperation
 	
             

	
            Section 4.12
 	
            Repayment of Monies Held by Paying Agent
 
	
            Section 4.13
 	
            Temporary Notes
 	
             

	
            Section 4.14
 	
            Representation Regarding ERISA
 	
             

													

ARTICLE V

DEFAULT AND REMEDIES

	
            Section 5.01
 	
            Events of Default
 	
             

	
            Section 5.02
 	
            Acceleration of Maturity; Rescission and Annulment
 	
             

	
            Section 5.03
 	
            Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
 
	
            Section 5.04
 	
            Remedies; Priorities
 	
             

	
            Section 5.05
 	
            Optional Preservation of the Trust Estate
 	
             

	
            Section 5.06
 	
            Limitation of Suits
 	
             

	
            Section 5.07
 	
            Unconditional Rights of Noteholders To Receive Principal and Interest
 	
             

	
            Section 5.08
 	
            Restoration of Rights and Remedies
 	
             

	
            Section 5.09
 	
            Rights and Remedies Cumulative
 	
             

	
            Section 5.10
 	
            Delay or Omission Not a Waiver
 	
             

	
            Section 5.11
 	
            Control By Note Insurer and Noteholders
 	
             

	
            Section 5.12
 	
            Waiver of Past Defaults
 	
             

	
            Section 5.13
 	
            Undertaking for Costs
 	
             

	
            Section 5.14
 	
            Waiver of Stay or Extension Laws
 	
             

	
            Section 5.15
 	
            Sale of Trust Estate
 	
             

	
            Section 5.16
 	
            Action on Notes
 	
             

																	

ARTICLE VI

THE INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR

	
            Section 6.01
 	
            Duties of Indenture Trustee and Securities Administrator
 	
             

	
            Section 6.02
 	
            Rights of Indenture Trustee and Securities Administrator
 	
             

	
            Section 6.03
 	
            Individual Rights of Indenture Trustee
 	
             

	
            Section 6.04
 	
            [Reserved].
 	
             

	
            Section 6.05
 	
            Indenture Trustee’s and Securities Administrator’s Disclaimer
 	
             

	
            Section 6.06
 	
            Notice of Event of Default
 	
             

	
            Section 6.07
 	
            Reports to Residual Certificateholders
 	
             

	
            Section 6.08
 	
            Compensation
 	
             

	
            Section 6.09
 	
            Replacement of Indenture Trustee and the Securities Administrator
 	
             

	
            Section 6.10
 	
            Successor Indenture Trustee and Securities Administrator by Merger
 
										

 

 

 

	
            Section 6.11
 	
            Appointment of Co-Indenture Trustee or Separate Indenture Trustee
 
	
            Section 6.12
 	
            Eligibility; Disqualification
 	
             

	
            Section 6.13
 	
            [Reserved].
 	
             

	
            Section 6.14
 	
            Representations and Warranties
 	
             

	
            Section 6.15
 	
            Directions to Indenture Trustee and the Securities Administrator.
 	
             

	
            Section 6.16
 	
            The Agents
 	
             

						

ARTICLE VII

NOTEHOLDERS’ LISTS AND REPORTS

	
            Section 7.01
 	
            Issuer To Furnish Securities Administrator and Indenture Trustee Names and Addresses of Noteholders
 

	
            Section 7.02
 	
            Preservation of Information; Communications to Noteholders
 
	
            Section 7.03
 	
            Financial Information
 	
             

	
            Section 7.04
 	
            Statements to Noteholders and Certificateholders
 	
             

				

ARTICLE VIII

ACCOUNTS, DISBURSEMENTS AND RELEASES

	
            Section 8.01
 	
            Collection of Money
 	
             

	
            Section 8.02
 	
            Officer’s Certificate
 	
             

	
            Section 8.03
 	
            Termination Upon Distribution to Noteholders
 
	
            Section 8.04
 	
            Release of Trust Estate
 	
             

	
            Section 8.05
 	
            Surrender of Notes Upon Final Payment
 	
             

	
            Section 8.06
 	
            Optional Redemption of the HELOCs
 	
             

							

ARTICLE IX

SUPPLEMENTAL INDENTURES

	
            Section 9.01
 	
            Supplemental Indentures Without Consent of Noteholders
 
	
            Section 9.02
 	
            Supplemental Indentures With Consent of Noteholders
 	
             

	
            Section 9.03
 	
            Execution of Supplemental Indentures
 	
             

	
            Section 9.04
 	
            Effect of Supplemental Indenture
 	
             

	
            Section 9.05
 	
            Conformity with Trust Indenture Act
 	
             

	
            Section 9.06
 	
            Reference in Notes to Supplemental Indentures
 	
             

							

ARTICLE X

	
            Section 10.01
 	
            Description of REMICs and Designation of REMIC Interests.
 
	
            Section 10.02
 	
            REMIC Elections and REMIC Distributions.
 	
             

	
            Section 10.03
 	
            Allocation of Charge-Off Amounts.
 	
             

	
            Section 10.04
 	
            Tax Administration.
 	
             

	
            Section 10.05
 	
            [Reserved].
 	
             

						

ARTICLE XI

MISCELLANEOUS

	
            Section 11.01
 	
            Compliance Certificates and Opinions, etc
 	
             

	
            Section 11.02
 	
            Form of Documents Delivered to Indenture Trustee
 
	
            Section 11.03
 	
            Acts of Noteholders
 	
             

				

	
            Section 11.04
 	
            Notices etc., to Indenture Trustee Issuer, Securities Administrator, Note Insurer and Rating Agencies
 

	
            Section 11.05
 	
            Notices to Noteholders; Waiver
 	
             

	
            Section 11.06
 	
            Conflict with Trust Indenture Act
 

 

 

 

	
            Section 11.07
 	
            Effect of Headings
 	
             

	
            Section 11.08
 	
            Successors and Assigns
 	
             

	
            Section 11.09
 	
            Separability
 	
             

	
            Section 11.10
 	
            Legal Holidays
 	
             

	
            Section 11.11
 	
            GOVERNING LAW
 	
             

	
            Section 11.12
 	
            Counterparts
 	
             

	
            Section 11.13
 	
            Recording of Indenture
 	
             

	
            Section 11.14
 	
            Issuer Obligation
 	
             

	
            Section 11.15
 	
            No Petition
 	
             

	
            Section 11.16
 	
            Inspection
 	
             

	
            Section 11.17
 	
            Benefits of Indenture
 	
             

	
            Section 11.18
 	
            Securities Administrator to Hold Policy
 
												

 

 

EXHIBITS

 

	
             
 	
            Exhibit A-1
 	
            —
 	
            Form of Class A Notes
 
	
             
 	
            Exhibit A-2
 	
            —
 	
            Form of Class B Notes
 
	
             
 	
            Exhibit A-3
 	
            —
 	
            Form of Class M Notes
 
	
             
 	
            Exhibit B
 	
            —
 	
            Mortgage Loan Schedule
 
	
             
 	
            Exhibit C
 	
            —
 	
            Form of Transferee Certificate
 
	
             
 	
            Exhibit D
 	
            —
 	
            Form of Transferor Certificate
 
	
             
 	
            Exhibit E
 	
            —
 	
            Form of Mortgage Loan Purchase Agreement
 

 

 

 

 

This Indenture, dated as of September 9, 2005, is entered into among SACO I Trust 2005-GP1, a Delaware statutory trust, as Issuer (the “Issuer”), LaSalle Bank National Association, as Securities Administrator (the “Securities Administrator”) and Citibank, N.A., as Indenture Trustee (the “Indenture Trustee”). 

 

WITNESSETH THAT:

Each party hereto agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Issuer’s Mortgage-Backed Notes, Series 2005-GP1 (the “Notes”) and the Note Insurer.

GRANTING CLAUSE

The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as trustee for the benefit of the Holders of the Notes and the Note Insurer, all of the Issuer's right, title and interest in and to, whether now existing or hereafter created, (a) the HELOCs; (b) all funds on deposit from time to time in the Master Servicer Collection Account, excluding any investment income from such funds; (c) all funds on deposit from time to time in the Payment Account and in all proceeds thereof; (d) any REO Property; (e) with respect to the Holders of the Class A-1 Notes and Class M-1 Notes, the Policy; (f) all rights under (I) the Mortgage Loan Purchase Agreement as assigned to the Issuer, with respect to the HELOCs, (II) the Required Insurance Policies and any amounts paid or payable by the insurer under any Insurance Policy (to the extent the mortgagee has a claim thereto) and (III) the
rights with respect to the Servicing Agreement, as assigned to the Issuer by the Assignment Agreement; and (g) all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing and all payments on or under, and all proceeds of every kind and nature whatsoever in respect of, any or all of the foregoing and all payments on or under, and all proceeds of every kind and nature whatsoever in the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks, deposit accounts, rights to payment of any and every kind, and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing (collectively, the "Trust Estate" or the "Collateral").  

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, subject to the priority set forth herein, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

The Indenture Trustee, as trustee on behalf of the Holders of the Notes and the Note Insurer, acknowledges such Grant, accepts the trust under this Indenture in accordance with the provisions hereof and each of the Indenture Trustee and the Securities Administrator agree to perform their respective duties as Indenture Trustee and Securities Administrator as required herein.  The Securities Administrator, on behalf of the Indenture Trustee, agrees that it will hold the Policy in trust and that it will hold any proceeds of any claim made upon the Policy solely for the use and benefit of the Holders of the Class A-1 Notes and Class M-1 Notes in accordance with the terms hereof and the terms of the Policy.

 

 

ARTICLE I

 

DEFINITIONS

Section 1.01     Definitions.  For all purposes of this Indenture, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Definitions attached hereto as Appendix A which is incorporated by reference herein. All other capitalized terms used herein shall have the meanings specified herein.

Section 1.02     Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the Trust Indenture Act (the “TIA”), the provision is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

“Commission” means the Securities and Exchange Commission.

“indenture securities” means the Notes.

“indenture security holder” means a Noteholder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Indenture Trustee.

“obligor” on the indenture securities means the Issuer and any other obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rules have the meanings assigned to them by such definitions.

	
            Section 1.03
 	
            Rules of Construction. Unless the context otherwise requires:
 
	
             
	
            (i)
 	
            a term has the meaning assigned to it;
 	
             

				

(ii)         an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time;

	
            (iii)
 	
            “or” is not exclusive;
 	
             

	
            (iv)
 	
            “including” means including without limitation;
 	
             

	
            (v)
 	
            words in the singular include the plural and words in the plural include the singular; and
 
				

(vi)        any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

 

 

ARTICLE II

 

ORIGINAL ISSUANCE OF NOTES

Section 2.01     Form.  The Class A-1, Class A-2, Class M-1, Class M-2, Class B-1, Class B-2, Class B-3 and Class B-4 Notes, together with the Securities Administrator’s certificate of authentication, shall be in substantially the form set forth in Exhibits A-1, A-2 and A-3 to this Indenture, as applicable, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture.

The Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders).

The terms of the Notes set forth in Exhibits A-1, A-2 and A-3 to this Indenture are part of the terms of this Indenture.

Section 2.02     Execution, Authentication and Delivery.  The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Notes may be manual or facsimile.

Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes.

The Securities Administrator shall upon Issuer Request authenticate and deliver each Class of Notes for original issue in an aggregate initial principal amount equal to the Initial Note Principal Balance for such Class of Notes.

Each of the Notes shall be dated the date of its authentication. The Class A-1, Class A-2, Class M-1, Class M-2 and Class B-1 Notes shall be issuable as registered Notes in book-entry form and the Notes shall be issuable in the minimum initial Note Principal Balances of $100,000 and in integral multiples of $1 in excess thereof.  The Class B-2, Class B-3 and Class B-4 Notes shall be issuable as registered Notes in physical form and the Notes shall be issuable in the minimum initial Note Principal Balances of $100,000 and in integral multiples of $1 in excess thereof.

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Securities Administrator by the manual signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

 

ARTICLE III

 

COVENANTS

	
            (a)
 	
            [Reserved.]
 

Section 3.02     Existence.  The Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other state or of the United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes and each other instrument or agreement included in the Trust Estate.

	
            Section 3.03
 	
            Payment of Principal and Interest.  
 

(a)      On each Payment Date on which the Note Principal Balance of each of the Class M Notes and Class B Notes has not been reduced to zero, the Floating Allocation Percentage of the Interest Collection Amount for such Payment Date, reduced by the servicing fees will be distributed in the following order of priority: 

	
            1.
 	
            to the Note Insurer, the current and any past due premium due for the Policy;
 

 

	
            2.
 	
            to the Class A-1 Notes and Class A-2 Notes, pro rata, the Current Interest and any Unpaid Interest Shortfall Amount for such Payment Date and such Class; 
 

 

	
            3.
 	
            to the Note Insurer, as reimbursement for prior draws (including applicable interest) made under the Policy;
 

 

	
            4.
 	
            to the Class M-1, Class M-2, Class B-1 and Class B-2 Notes, in that order, the related Current Interest for such Class and Payment Date;
 

 

	
            5.
 	
            from amounts otherwise distributable to the Class E Certificates, to the Classes of Notes, as a payment of principal, the amount necessary to build the Overcollateralization Amount to the Overcollateralization Target Amount, including covering the Floating Allocation Percentage of the Charge-Off Amounts during the related Collection Period;
 

 

	
            6.
 	
            to cover any Charge-Off Amounts allocated to the Class A-1 Notes (to the extent not covered by the Policy) and the Class A-2 Notes, pro rata;
 

 

	
            7.
 	
            to the Class M-1 (to the extent not covered by the Policy), Class M-2, Class B-1 and Class B-2 Notes, in that order, any Unpaid Interest Shortfall Amount for such Payment Date and such Class;
 

 

	
            8.
 	
            from amounts otherwise distributable to the Class E Certificates, to the Net WAC Cap Rate Carryover Reserve Account, (i) first to pay the Class A Notes (pro rata), Class M-1, Class M-2, Class B-1 and Class B-2 Notes, in that order, any Net WAC Cap Rate Carryover Amount for such Payment Date and 
 

 

such Class, and (ii) second, to maintain a balance equal to the Net WAC Cap Rate Carryover Reserve Account Deposit; 

 

	
            9.
 	
            to the Note Insurer, any other amounts owed to the Note Insurer pursuant to the Insurance Agreement; and
 

 

	
            10.
 	
            to the Certificate Paying Agent for distribution to the Certificates, as specified in the Trust Agreement.
 

 

(b)      On each Payment Date after the Note Principal Balance of each of the Class M Notes and Class B Notes has been reduced to zero, the Class A-1 Notes’ pro rata share of the Floating Allocation Percentage of the Interest Collection Amount for such Payment Date, reduced by the applicable share of servicing fees, will be distributed in the following order of priority:

	
            1.
 	
            to the Note Insurer, the applicable share of current and any past due premium due for the Policy;
 

 

	
            2.
 	
            to the Class A-1 Notes, the Current Interest and any Unpaid Interest Shortfall Amount for such Payment Date and such Class; 
 

 

	
            3.
 	
            to the Note Insurer, as reimbursement for prior draws (including applicable interest) made under the Policy;
 

 

	
            4.
 	
            from amounts otherwise distributable to the Class E Certificates, to the Class A-1 Notes, as a payment of principal, the amount necessary to build the Overcollateralization Amount to the Overcollateralization Target Amount, including covering the Floating Allocation Percentage of the Charge-Off Amounts during the related Collection Period;
 

 

	
            5.
 	
            to cover any Charge-Off Amounts allocated to the Class A-1 Notes (to the extent not covered by the Policy);
 

 

	
            6.
 	
            from amounts otherwise distributable to the Class E Certificates, to the Net WAC Cap Rate Carryover Reserve Account, (i) first, to pay the Class A-1 Notes, any Net WAC Cap Rate Carryover Amount for such Payment Date and such Class, and (ii) second, to maintain a balance equal to the Net WAC Cap Rate Carryover Reserve Account Deposit; 
 

 

	
            7.
 	
            to the Note Insurer, the applicable share of any other amounts owed to the Note Insurer pursuant to the Insurance Agreement; and
 

 

	
            8.
 	
            to the Certificate Paying Agent for distribution to the Certificates, as specified in the Trust Agreement.
 

 

(c)      On each Payment Date after the Note Principal Balance of each of the Class M Notes and Class B Notes has been reduced to zero, the Class A-2 Notes’ pro rata share of the Floating Allocation Percentage of the Interest Collection Amount for such Payment Date, reduced by the applicable share of servicing fees, will be distributed in the following order of priority:

	
            1.
 	
            to the Note Insurer, the applicable share of current and any past due premium due for the Policy;
 

 

 

 

	
            2.
 	
            to the Class A-2 Notes, the Current Interest and any Unpaid Interest Shortfall Amount for such Payment Date and such Class; 
 

 

	
            3.
 	
            to the Note Insurer, as reimbursement for prior draws (including applicable interest) made under the Policy with respect to the Class M-1 Notes;
 

 

	
            4.
 	
            from amounts otherwise distributable to the Class E Certificates, to the Class A-2 Notes, as a payment of principal, the amount necessary to build the Overcollateralization Amount to the Overcollateralization Target Amount, including covering the Floating Allocation Percentage of the Charge-Off Amounts during the related Collection Period;
 

 

	
            5.
 	
            to cover any Charge-Off Amounts allocated to the Class A-2 Notes;
 

 

	
            6.
 	
            to the Net WAC Cap Rate Carryover Reserve Account, (i) first, to pay the Class A-2 Notes, any Net WAC Cap Rate Carryover Amount for such Payment Date and such Class, and (ii) second, to maintain a balance equal to the Net WAC Cap Rate Carryover Reserve Account Deposit; 
 

 

	
            7.
 	
            to the Note Insurer, the applicable share of any other amounts owed to the Note Insurer pursuant to the Insurance Agreement; and
 

 

	
            8.
 	
            to the Certificate Paying Agent for distribution to the Certificates, as specified in the Trust Agreement.
 

 

(d)      On each Payment Date, the Class S Principal Payment Amount shall be distributed to the holders of the Class S Certificates, until their Certificate Principal Balance has been reduced to zero.  

(e)      On each Payment Date, the Available Principal Payment Amount will be distributed as principal funds in the following order of priority: 

(1)        For each Payment Date prior to the Stepdown Date or on which a Trigger Event is in effect:

(i) to the Class A Notes, pro rata, the Available Principal Payment Amount for such Payment Date, until the Note Principal Balance thereof is reduced to zero; and

(ii) sequentially, to the Class M-1, the Note Insurer for any unreimbursed draws (including applicable interest) made under the Policy, Class M-2, Class B-1, Class B-2, Class B-3 and Class B-4 Notes, in that order, the remaining Available Principal Payment Amount, in each case until the Note Principal Balance of each such Class has been reduced to zero.

 

(2)        For each Payment Date on or after the Stepdown Date, so long as a Trigger Event is not in effect:

(i) to the Class A-1 Notes and Class A-2 Notes, pro rata, the Class A Principal Payment Amount, for such Payment Date, until the Note Principal Balance thereof is reduced to zero;

 

 

(ii) to the Class M-1 Notes, the Class M-1 Principal Payment Amount for such Payment Date, until the Note Principal Balance thereof is reduced to zero;

(iii) to the Note Insurer, as reimbursement for prior draws (including applicable interest) made under the Policy;

(iv) to the Class M-2 Notes, the Class M-2 Principal Payment Amount for such Payment Date, until the Note Principal Balance thereof is reduced to zero;

(v) to the Class B-1 Notes, the Class B-1 Principal Payment Amount for such Payment Date, until the Note Principal Balance thereof is reduced to zero;

(vi) to the Class B-2 Notes, the Class B-2 Principal Payment Amount for such Payment Date, until the Note Principal Balance thereof is reduced to zero;

(vii) to the Class B-3 Notes, the Class B-3 Principal Payment Amount for such Payment Date, until the Note Principal Balance thereof is reduced to zero; 

(viii) to the Class B-4 Notes, the Class B-4 Principal Payment Amount for such Payment Date, until the Note Principal Balance thereof is reduced to zero; and

(ix) to the Certificate Paying Agent for distribution to the Certificates, as specified in the Trust Agreement.

 

	
            (f)
 	
            [Reserved].
 
	
            (g)
 	
            [Reserved].  
 

(h)  No Current Interest will be payable with respect to any Class of Notes after the Payment Date on which the Note Principal Balance of such Note has been reduced to zero.

	
            (i)
 	
            [Reserved].
 	
            .
 

(j)   Each distribution with respect to a Book-Entry Note shall be paid to the Depository, as Holder thereof, and the Depository shall be responsible for crediting the amount of such distribution to the accounts of its Depository Participants in accordance with its normal procedures. Each Depository Participant shall be responsible for disbursing such distribution to the Note Owners that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as agent. Each brokerage firm shall be responsible for disbursing funds to the Note Owners that it represents. None of the Securities Administrator, the Note Registrar, the Paying Agent, the Depositor or the Master Servicer shall have any responsibility therefor.

(k)  On each Payment Date, the Certificate Paying Agent shall deposit in the Payment Account all amounts it received pursuant to this Section 3.03 for the purpose of distributing such funds to the Certificateholders. The Certificate Paying Agent shall make distributions to the Certificateholders under the Trust Agreement as directed by the Securities Administrator hereunder.

 

 

(l)   Any installment of interest or principal, if any, payable on any Note that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall, if such Holder shall have so requested at least five Business Days prior to the related Record Date, be paid to each Holder of record on the preceding Record Date, by wire transfer to an account specified in writing by such Holder as of the preceding Record Date or in all other cases or if no such instructions have been delivered to the Securities Administrator, by check to such Noteholder mailed to such Holder’s address as it appears in the Note Register in the amount required to be distributed to such Holder on such Payment Date pursuant to such Holder’s Notes; provided, however, that the Securities Administrator shall not pay to such Holders any amount required to be
withheld from a payment to such Holder by the Code.

(m) The Note Principal Balance of each Note shall be due and payable in full on the Final Scheduled Payment Date. All principal payments on the Notes shall be made to the Noteholders entitled thereto in accordance with the Percentage Interests represented by such Notes. Upon notice to the Securities Administrator by the Issuer, the Securities Administrator shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Final Scheduled Payment Date or other final Payment Date (including any final Payment Date resulting from any redemption pursuant to Section 8.06 hereof). Such notice shall to the extent practicable be mailed no later than five Business Days prior to such Final Scheduled Payment Date or other final Payment Date and shall specify that payment of the principal amount and any interest due with
respect to such Note at the Final Scheduled Payment Date or other final Payment Date will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for such final payment. No interest shall accrue on the Notes on or after the Final Scheduled Payment Date or any such other final Payment Date.

Section 3.04     Protection of Trust Estate.  (a)  The Issuer will from time to time prepare, execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

(i)         maintain or preserve the lien and security interest (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof;

(ii)         perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;

(iii)        cause the Issuer or the Securities Administrator to enforce any of the rights to the HELOCs; or

(iv)        preserve and defend title to the Trust Estate and the rights of the Indenture Trustee, the Note Insurer and the Noteholders in such Trust Estate against the claims of all persons and parties.

(b)  Except as otherwise provided in this Indenture, the Indenture Trustee shall not remove or permit the Custodian to 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 3.05 hereof (or from the jurisdiction in which it was held as described in the Opinion of Counsel delivered on the Closing Date pursuant to Section 3.05(a) hereof, if no Opinion of Counsel has yet been delivered pursuant to Section 3.05(b) hereof), unless the 

 

Indenture Trustee shall have first received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture with respect to such property will continue to be maintained after giving effect to such action or actions.

The Issuer hereby designates the Securities Administrator its agent and attorney-in-fact to sign any financing statement, continuation statement or other instrument required to be signed pursuant to this Section 3.04 upon the Issuer’s preparation thereof and delivery to the Indenture Trustee.

Section 3.05     Opinions as to Trust Estate.  (a)  On the Closing Date, the Issuer shall furnish to the Indenture Trustee, the Note Insurer and the Owner Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto, and any other requisite documents, and with respect to the execution and filing of any financing statements and continuation statements, as are necessary to perfect and make effective the lien and first priority security interest in the Collateral and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and first priority security interest effective.

(b)  On or before December 31st in each calendar year, beginning in 2006, the Issuer shall furnish to the Indenture Trustee and the Note Insurer an Opinion of Counsel at the expense of the Issuer either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, rerecording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the lien and security interest in the Collateral and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest in the Collateral until December 31 in the following calendar year. 

Section 3.06     Performance of Obligations.  (a)  The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Estate.

(b)  The Issuer, with the consent of the Note Insurer so long as no Note Insurer Default exists, may contract with other Persons to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be deemed to be action taken by the Issuer.

(c)  The Issuer will not take any action or permit any action to be taken by others which would release any Person from any of such Person’s covenants or obligations under any of the documents relating to the HELOCs or under any instrument included in the Trust Estate, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any of the documents relating to the HELOCs or any such instrument, except such actions as the Master Servicer is expressly permitted to take in the Servicing Agreement.

 

 

(d)  The Issuer may retain an administrator and may enter into contracts acceptable to the Note Insurer with other Persons for the performance of the Issuer’s obligations hereunder, and performance of such obligations by such Persons shall be deemed to be performance of such obligations by the Issuer.

(e)  The Issuer will perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Estate and take such other actions, all as may be required to have the Trust Estate qualify as one or more REMICs formed pursuant to the Indenture.

Section 3.07     Negative Covenants.  So long as any Notes are Outstanding or the majority Holder of the Class E Certificates owns 100% of the remaining Securities, the Issuer shall not:

(i)         except as expressly permitted by this Indenture, sell, transfer, exchange or otherwise dispose of the Trust Estate without the consent of the Note Insurer (if applicable);

(ii)         (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof or (C) permit the lien of this Indenture not to constitute a valid first priority security interest in the Trust Estate; 

(iii)        waive or impair, or fail to assert rights under, the HELOCs, or impair or cause to be impaired the Issuer’s interest in the HELOCs, the Mortgage Loan Purchase Agreement or in any Basic Document, if any such action would materially and adversely affect the interests of the Noteholders, the Certificateholders or the Note Insurer; or

(iv)        take any action or fail to take any action that would cause any REMIC created hereunder to cease to qualify as a REMIC or result in an imposition of tax on the Issuer (including, but not limited to, the tax on prohibited transactions under Section 860F of the Code).

Section 3.08     Annual Statement as to Compliance.  The Issuer will deliver to the Indenture Trustee, the Securities Administrator and the Note Insurer, by March 1 of each year commencing with the calendar year 2006, an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:

(i)         a review of the activities of the Issuer during the previous calendar year and of its performance under this Indenture and the Trust Agreement has been made under such Authorized Officer’s supervision; and

(ii)         to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture and the provisions of the Trust Agreement throughout such year, or, if there has been a default in its compliance with any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

	
            Section 3.09
 	
            [Reserved].
 

 

 

 

Section 3.10     Representations and Warranties Concerning the HELOCs.  The Indenture Trustee, as pledgee of the HELOCs, has the benefit of the representations and warranties made by the Seller in the Mortgage Loan Purchase Agreement concerning the Seller and the HELOCs. If a Responsible Officer of the Indenture Trustee has actual knowledge of any breach of any representation or warranty made by the Seller in the Mortgage Loan Purchase Agreement, or any Subsequent Mortgage Loan Purchase Agreement, the Indenture Trustee shall promptly notify the Seller and the Note Insurer of such finding and of the Seller’s obligation to cure such defect or repurchase or substitute for the related HELOC. 

Section 3.11     Investment Company Act.  The Issuer shall not become an “investment company” or be under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended (or any successor or amendatory statute), and the rules and regulations thereunder (taking into account not only the general definition of the term “investment company” but also any available exceptions to such general definition); provided, however, that the Issuer shall be in compliance with this Section 3.11 if it shall have obtained an order exempting it from regulation as an “investment company” so long as it is in compliance with the conditions imposed in such order.

	
            Section 3.12
 	
            [Reserved].
 
	
            Section 3.13
 	
            [Reserved].
 

Section 3.14     No Other Business.  The Issuer shall not engage in any business other than as set forth with respect thereto in the Trust Agreement and other than financing, purchasing, owning and selling and managing the HELOCs and the issuance of the Notes and Certificates in the manner contemplated by this Indenture and the Basic Documents and all activities incidental thereto.

Section 3.15     No Borrowing.  The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Notes under this Indenture and amounts due to the Note Insurer.

Section 3.16     Guarantees, Loans, Advances and Other Liabilities.  Except as contemplated by this Indenture or the Basic Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

Section 3.17     Capital Expenditures.  The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).

	
            Section 3.18
 	
            Determination of Note Interest Rate.  
 

On each Interest Determination Date, the Securities Administrator shall determine One-Month LIBOR and the related Note Interest Rate for each Class of Notes (other than the Class B-3 Notes and Class B-4 Notes) for the following Accrual Period and shall make such rate available to the Issuer, the Indenture Trustee, the Master Servicer, the Note Insurer and the Depositor. The establishment of One-Month LIBOR on each Interest Determination Date by the Securities Administrator and the Securities Administrator’s calculation of the rate of 

 

interest applicable to each Class of Notes (other than the Class B-3 Notes and Class B-4 Notes) for the related Accrual Period shall (in the absence of manifest error) be final and binding.

Section 3.19     Restricted Payments.  The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, (x) distributions and payments to the Owner Trustee, the Indenture Trustee, the Securities Administrator, the Master Servicer, the Servicer, the Certificate Registrar, the
Certificate Paying Agent, the Noteholders, the Note Insurer and the Certificateholders as contemplated by, and to the extent funds are available for such purpose under this Indenture and the Basic Documents and (y) payments to the Master Servicer and the Servicer pursuant to the terms of the Servicing Agreements. The Issuer will not, directly or indirectly, make payments to or distributions from the Master Servicer Collection Account or the Payment Account except in accordance with this Indenture and the Basic Documents.

Section 3.20     Notice of Events of Default.  The Issuer shall give the Indenture Trustee, the Securities Administrator, the Note Insurer and each Rating Agency prompt written notice of each Event of Default hereunder.

Section 3.21     Further Instruments and Acts.  Upon request of the Indenture Trustee or the Note Insurer, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

	
            Section 3.22
 	
            Reserved.
 	
             

	
            Section 3.23
 	
            Certain Representations Regarding the Trust Estate.  
 

(a)  With respect to that portion of the Collateral described in clauses (a) through (c) of the definition of Trust Estate, the Issuer represents to the Indenture Trustee that:

(i)         This Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Collateral in favor of the Indenture Trustee, which security interest is prior to all other liens, and is enforceable as such as against creditors of and purchasers from the Issuer.

(ii)         The Collateral constitutes “deposit accounts,” “instruments” or “certificated securities,” as applicable within the meaning of the applicable UCC.

(iii)        The Issuer owns and has good and marketable title to the Collateral, free and clear of any lien, claim or encumbrance of any Person.

(iv)        The Issuer has caused or will have caused, within ten days of the Closing Date, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Collateral granted to the Indenture Trustee hereunder.

 

 

(v)        Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral.  The Issuer has not authorized the filing of and is not aware of any financing statements against the Issuer that include a description of collateral covering the Collateral other than any financing statement relating to the security interest granted to the Indenture Trustee hereunder or that has been terminated.

(vi)        The Collateral is not in the name of any Person other than the Issuer or the Indenture Trustee.  The Issuer has in its possession all original copies of the security certificates that constitute or evidence the Collateral.  The security certificates that constitute or evidence the Collateral do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee.  The Issuer has not consented to the bank maintaining the Collateral to comply with instructions of any Person other than the Indenture Trustee.

Section 3.24    Allocation of Charge-Off Amounts.  (a)  On or prior to each Payment Date, the Master Servicer shall determine, based solely on information provided to it by the Servicer the amount of any Charge-Off Amount in respect of each HELOC that occurred during the immediately preceding calendar month.

(b)  The Floating Allocation Percentage of Charge-Off Amounts on the HELOCs will be applied on any Payment Date as follows:

first, to any available Interest Collection Amount through an increase in the Overcollateralization Amount as provided in Sections 3.03(a)(5), 3.03(b)(4) and 3.03(c)(4); and

second, in reduction of the Overcollateralization Amount until reduced to zero.

(c)  If on any Payment Date, as a result of the Charge-Off Amounts, the sum of the aggregate Note Principal Balances of the Notes exceeds the Invested Amount as of the last day of the related Collection Period, such excess shall be allocated to the Notes in the following order:

first, to the Class B-4 Notes, until the Note Principal Balance thereof has been reduced to zero;

second, to the Class B-3 Notes, until the Note Principal Balance thereof has been reduced to zero;

third, to the Class B-2 Notes, until the Note Principal Balance thereof has been reduced to zero;

fourth, to the Class B-1 Notes, until the Note Principal Balance thereof has been reduced to zero; 

fifth, to the Class M-2 Notes, until the Note Principal Balance thereof has been reduced to zero;

sixth, to the Class M-1 Notes, until the Note Principal Balance thereof has been reduced to zero; and

seventh, to the Class A-1 Notes and Class A-2 Notes, pro rata, in each case until the Note Principal Balance thereof has been reduced to zero;

provided, however, that any Charge-Off Amounts allocated to the Class A-1 Notes and Class M-1 Notes shall be covered by the Policy.

 

 

(d)  Once Charge-Off Amounts have been allocated to a Class of Notes, such amounts with respect to such Notes will no longer accrue interest nor will such amounts in respect of interest be reinstated thereafter.

(e)  Charge-Off Amounts shall be allocated on the Payment Date in the month following the month in which such loss was incurred and, in the case of the principal portion thereof, after giving effect to distributions made on such Payment Date.

(f)   In addition, in the event that the Servicer receives any Subsequent Recoveries, such Subsequent Recoveries shall be remitted to the Master Servicer and then distributed by the Securities Administrator pursuant to Section 3.01 of this Indenture.

	
            Section 3.25
 	
            [Reserved].
 

Section 3.26     Payments under the Policy.  (a) On the second Business Day prior to any Payment Date, the Securities Administrator on behalf of the Holders of the Class A-1 Notes and Class M-1 Notes shall make a draw on the Policy in an amount, if any, equal to the Deficiency Amount.

(b)        If the Securities Administrator determines that a Deficiency Amount will exist for the following Payment Date, then the Securities Administrator, on behalf of the Indenture Trustee, shall submit a Notice (as defined in the Policy) for payment in the amount of the Deficiency Amount to the Note Insurer no later than 12:00 Noon, New York City time, on the second Business Day prior to the applicable Payment Date. Upon receipt of such Deficiency Amount in accordance with the terms of the Policy, the Securities Administrator shall deposit such Deficiency Amount in the Payment Account for distribution to the Class A-1 Notes and Class M-1 Notes, as applicable, pursuant to Section 3.05 hereof or with respect to an acceleration pursuant to Section 5.02 hereof.

 

 

 

ARTICLE IV

 

THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE

Section 4.01     The Notes.  Each Class of Class A-1, Class A-2, Class M-1, Class M-2, and Class B-1 Notes shall be registered in the name of a nominee designated by the Depository. Beneficial Owners will hold interests in the Class A-1, Class A-2, Class M-1, Class M-2 and Class B-1 Notes through the book-entry facilities of the Depository in minimum initial Note Principal Balances of $100,000 and integral multiples of $1 in excess thereof.  Registered Holders will hold interests in the Class B-2, Class B-3 and Class B-4 Notes in physical form in minimum initial Note Principal Balances of $100,000 and integral multiples of $1 in excess thereof.

The Indenture Trustee and Securities Administrator may for all purposes (including the making of payments due on the Notes) deal with the Depository as the authorized representative of the Beneficial Owners with respect to the Notes for the purposes of exercising the rights of Holders of the Notes hereunder. Except as provided in the next succeeding paragraph of this Section 4.01, the rights of Beneficial Owners with respect to the Notes shall be limited to those established by law and agreements between such Beneficial Owners and the Depository and Depository Participants. Except as provided in Section 4.08 hereof, Beneficial Owners shall not be entitled to definitive certificates for the Notes as to which they are the Beneficial Owners. Requests and directions from, and votes of, the Depository as Holder of the Notes shall not be deemed inconsistent if they are made with respect to
different Beneficial Owners. The Securities Administrator may establish a reasonable record date in connection with solicitations of consents from or voting by Noteholders and give notice to the Depository of such record date. Without the consent of the Issuer and the Securities Administrator, no Note may be transferred by the Depository except to a successor Depository that agrees to hold such Note for the account of the Beneficial Owners.

In the event the Depository Trust Company resigns or is removed as Depository, the Depositor may appoint a successor Depository.  If no successor Depository has been appointed within 30 days of the effective date of the Depository’s resignation or removal, each Beneficial Owner shall be entitled to certificates representing the Notes it beneficially owns in the manner prescribed in Section 4.08.

The Notes shall, on original issue, be executed on behalf of the Issuer by the Owner Trustee, not in its individual capacity but solely as Owner Trustee, authenticated by the Securities Administrator and delivered by the Securities Administrator to or upon the order of the Issuer.

Section 4.02     Registration of and Limitations on Transfer and Exchange of Notes; Appointment of Note Registrar and Certificate Registrar.  The Issuer shall cause to be kept at the Corporate Trust Office of the Securities Administrator a Note Register in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall provide for the registration of Notes and of transfers and exchanges of Notes as herein provided.

Subject to the restrictions and limitations set forth below, upon surrender for registration of transfer of any Note at the Corporate Trust Office of the Securities Administrator, the Issuer shall execute and the Note Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes in authorized initial Note Principal Balances evidencing the same Class and aggregate Percentage Interests.

 

 

No transfer, sale, pledge or other disposition of any Class B-2, Class B-3 or Class B-4 Note or interest therein shall be made unless that transfer, sale, pledge or other disposition is exempt from the registration and/or qualification requirements of the Securities Act and any applicable state securities laws, or is otherwise made in accordance with the Securities Act and such state securities laws.  If a transfer of any Privately Offered Note is to be made without registration under the Securities Act (other than in connection with the initial issuance thereof or a transfer thereof to the Depositor or one of its Affiliates), then the Note Registrar shall refuse to register such transfer unless (i) it receives (and upon receipt, may conclusively rely upon) a certificate substantially in the form attached as Exhibit C hereto (provided, however, that in the case of the Book-Entry Notes,
the Noteholder and the Noteholder’s prospective transferee will be deemed to have made the representations set forth in such certification) or (ii) (a) it receives a written Opinion of Counsel acceptable to and in form and substance satisfactory to the Note Registrar and the Securities Administrator that such transfer may be made pursuant to an exemption, describing the applicable exemption and the basis therefor, from the Securities Act and any applicable state securities laws or is being made pursuant to the Securities Act and any applicable state securities laws, which Opinion of Counsel shall not be an expense of the  Issuer, the Seller, the Owner Trustee, the Indenture Trustee, the Securities Administrator, the Master Servicer or any Servicer and (b) the transferee executes a representation letter, substantially in the form of Exhibit D attached hereto, and transferor executes a representation letter, substantially in the form of Exhibit E hereto, each acceptable to and in
form and substance satisfactory to the Note Registrar and the Securities Administrator certifying the facts surrounding such transfer, which representation letters shall not be an expense of the Issuer, the Seller, the Owner Trustee, the Indenture Trustee, the Securities Administrator, the Master Servicer or any Servicer.  None of the Issuer, the Depositor, the Indenture Trustee, the Securities Administrator or the Note Registrar is obligated to register or qualify any Notes under the Securities Act or any other securities law or to take any action not otherwise required under this Indenture to permit the transfer of any Note or interest therein without registration or qualification.  Any Noteholder desiring to effect a transfer of Notes or interests therein shall, and does hereby agree to, indemnify the Issuer, the Depositor, the Owner Trustee, the Indenture Trustee, the Securities Administrator and the Note Registrar against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws or in accordance with any restrictions on transfer set forth in this Indenture.  Notwithstanding the foregoing, the provisions of this paragraph shall not apply to the initial transfer of the Notes to the Depositor or any Affiliate thereof.

Subject to the foregoing, and Section 4.08, Notes may be exchanged for other Notes of like tenor and in authorized initial Note Principal Balances evidencing the same Class and aggregate Percentage Interests upon surrender of the Notes to be exchanged at the Corporate Trust Office of the Note Registrar. Whenever any Notes are so surrendered for exchange, the Issuer shall execute and the Securities Administrator shall authenticate and deliver the Notes which the Noteholder making the exchange is entitled to receive. Each Note presented or surrendered for registration of transfer or exchange shall (if so required by the Note Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer in form reasonably satisfactory to the Note Registrar duly executed by the Holder thereof or his attorney duly authorized in writing with such signature guaranteed by a commercial
bank or trust company located or having a correspondent located in the city of New York. Notes delivered upon any such transfer or exchange will evidence the same obligations, and will be entitled to the same rights and privileges, as the Notes surrendered.

No service charge shall be made for any registration of transfer or exchange of Notes, but the Note Registrar shall require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes.

 

 

The Issuer hereby appoints the Securities Administrator as (i) Certificate Registrar to keep at its Corporate Trust Office a Certificate Register pursuant to Section 3.08 of the Trust Agreement in which, subject to such reasonable regulations as it may prescribe, the Certificate Registrar shall provide for the registration of Certificates and of transfers and exchanges thereof pursuant to Section 3.04 of the Trust Agreement and (ii) Note Registrar under this Indenture. The Securities Administrator hereby accepts such appointments.

Section 4.03     Mutilated, Destroyed, Lost or Stolen Notes.  If (i) any mutilated Note is surrendered to the Securities Administrator, or the Securities Administrator receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Securities Administrator such security or indemnity as may be required by it to hold the Issuer, the Note Insurer and the Securities Administrator harmless, then, in the absence of notice to the Issuer, the Note Registrar or the Securities Administrator that such Note has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuer shall execute, and upon its request the Securities Administrator shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven days shall be due and payable, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable without surrender thereof.  If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer, the Note Insurer and the Securities Administrator shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer, the Indenture Trustee, the Note Insurer or the Securities Administrator in connection therewith.

Upon the issuance of any replacement Note under this Section 4.03, the Issuer or the Securities Administrator may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Securities Administrator) connected therewith.

Every replacement Note issued pursuant to this Section 4.03 in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section 4.03 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

Section 4.04     Persons Deemed Owners.  Prior to due presentment for registration of transfer of any Note, the Issuer, the Note Insurer, the Indenture Trustee, the Securities Administrator, the Paying Agent and any agent of the Issuer or the Securities Administrator or the Paying Agent may treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee, the Securities Administrator, the Note Insurer, the Paying Agent or any agent of the Issuer, the Securities Administrator, the Indenture Trustee, the Note Insurer or the Paying Agent shall be affected by notice
to the contrary.

 

 

Section 4.05     Cancellation.  All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Securities Administrator, be delivered to the Securities Administrator and shall be promptly cancelled by the Securities Administrator. The Issuer may at any time deliver to the Securities Administrator for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Securities Administrator. No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section 4.05, except as expressly permitted by this Indenture. All cancelled Notes may be held or disposed of by the Securities
Administrator in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Request that they be destroyed or returned to it; provided, however, that such Issuer Request is timely and the Notes have not been previously disposed of by the Securities Administrator.

Section 4.06     Book-Entry Notes.  The Class A-1, Class A-2, Class M-1, Class M-2 and Class B-1 Notes, upon original issuance, will be issued in the form of typewritten Notes representing the Book-Entry Notes, to be delivered to The Depository Trust Company, the initial Depository or to the Securities Administrator, as custodian for the Depository Trust Company, by, or on behalf of, the Issuer. The Notes shall initially be registered on the Note Register in the name of Cede & Co., the nominee of the initial Depository, and no Beneficial Owner will receive a Definitive Note representing such Beneficial Owner’s interest in such Note, except as provided in Section 4.08. With respect to such Notes, unless and until definitive, fully registered Notes (the “Definitive Notes”) have been issued to Beneficial Owners pursuant to Section 4.08:<
/p>

	
            (i)
 	
            the provisions of this Section 4.06 shall be in full force and effect;
 

(ii)         the Note Registrar, the Paying Agent, the Indenture Trustee and the Securities Administrator shall be entitled to deal with the Depository for all purposes of this Indenture (including the payment of principal of and interest on the Notes and the giving of instructions or directions hereunder) as the sole holder of the Notes, and shall have no obligation to the Beneficial Owners of the Notes;

(iii)        to the extent that the provisions of this Section 4.06 conflict with any other provisions of this Indenture, the provisions of this Section 4.06 shall control;

(iv)        the rights of Beneficial Owners shall be exercised only through the Depository and shall be limited to those established by law and agreements between such Owners of Notes and the Depository and/or the Depository Participants. Unless and until Definitive Notes are issued pursuant to Section 4.08, the initial Depository will make book-entry transfers among the Depository Participants and receive and transmit payments of principal of and interest on the Notes to such Depository Participants; and

(v)        whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Notes evidencing a specified percentage of the Note Principal Balances of the Notes, the Depository shall be deemed to represent such percentage with respect to the Notes only to the extent that it has received instructions to such effect from Beneficial Owners and/or Depository Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes and has delivered such instructions to the Securities Administrator and the Indenture Trustee. 

None of the Depositor, the Issuer, the Master Servicer, the Seller, the Securities Administrator, the Indenture Trustee, the Note Registrar and the Owner Trustee shall have any liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Book-Entry Notes or 

 

for maintaining, supervising or reviewing any records relating to beneficial ownership interests or transfers thereof.

The Class B-2, Class B-3 and Class B-4 Notes will be registered in full definitive form.

Section 4.07     Notices to Depository.  Whenever a notice or other communication to the Note Holders is required under this Indenture, unless and until Definitive Notes shall have been issued to Beneficial Owners pursuant to Section 4.08, the Indenture Trustee or Securities Administrator, as applicable, shall give all such notices and communications specified herein to be given to Holders of the Notes to the Depository, and shall have no obligation to the Beneficial Owners.

Section 4.08     Definitive Notes.  If (i) the Depositor advises the Securities Administrator in writing that the Depository is no longer willing or able to properly discharge its responsibilities with respect to the Book-Entry Notes and the Depositor is unable to locate a qualified successor within 30 days or (ii) the Depositor, at its option (with the consent of the Securities Administrator, such consent not to be unreasonably withheld) elects to terminate the book-entry system through the Depository, then the Securities Administrator shall request that the Depository notify all Beneficial Owners of the occurrence of any such event and of the availability of Definitive Notes to Beneficial Owners requesting the same.  Upon surrender to the Securities Administrator of the typewritten Notes representing the Book-Entry
Notes by the Depository, accompanied by registration instructions, the Issuer shall execute and the Securities Administrator shall authenticate the Definitive Notes in accordance with the instructions of the Depository.  None of the Issuer, the Note Registrar or the Securities Administrator shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of Definitive Notes, the Securities Administrator shall recognize the Holders of the Definitive Notes as Noteholders.

In addition, if an Event of Default has occurred and is continuing, each Note Owner materially adversely affected thereby may at its option request a Definitive Note evidencing such Noteholder's interest in the related Class of Notes.  In order to make such request, such Noteholder shall, subject to the rules and procedures of the Depository, provide the Depository or the related Depository Participant with directions for the Securities Administrator to exchange or cause the exchange of the Noteholder's interest in such Class of Notes for an equivalent interest in fully registered definitive form.  Upon receipt by the Securities Administrator of instructions from the Depository directing the Securities Administrator to effect such exchange (such instructions to contain information regarding the Class of Notes and the Note Principal Balance being exchanged, the Depository Participant
account to be debited with the decrease, the registered holder of and delivery instructions for the Definitive Note, and any other information reasonably required by the Securities Administrator), (i) the Securities Administrator shall instruct the Depository to reduce the related Depository Participant's account by the aggregate Note Principal Balance of the Definitive Note, (ii) the Securities Administrator shall execute, authenticate and deliver, in accordance with the registration and delivery instructions provided by the Depository, a Definitive Note evidencing such Noteholder's interest in such Class of Notes and (iii) the Issuer shall execute and the Securities Administrator shall authenticate a new Book-Entry Note reflecting the reduction in the Note Principal Balance of such Class of Notes by the amount of the Definitive Notes.

	
            Section 4.09
 	
            [Reserved].  
 

Section 4.10     Application of Trust Money.  All monies deposited with the Securities Administrator pursuant to Section 4.10 hereof shall be held in trust and applied by it, in accordance with the provisions of the 

 

Notes and this Indenture, to the payment, either directly or through any Paying Agent or the Certificate Paying Agent as designee of the Issuer, as the Securities Administrator may determine, to the Holders of Securities, of all sums due and to become due thereon for principal and interest or otherwise; but such monies need not be segregated from other funds except to the extent required herein or required by law.

Section 4.11     Subrogation and Cooperation. (a) The Issuer and the Indenture Trustee acknowledge that (i) to the extent the Note Insurer makes payments under the Policy on account of principal of or interest on the Class A-1 Notes and Class M-1 Notes, the Note Insurer will be fully subrogated to the rights of such Holders to receive such principal and interest from the Issuer, and (ii) the Note Insurer shall be paid such principal and interest but only from the sources and in the manner provided herein and in the Insurance Agreement for the payment of such principal and interest.

 (b)  The Indenture Trustee shall, so long as it is indemnified to its satisfaction, cooperate in all respects with any reasonable written request by the Note Insurer for action to preserve or enforce the Note Insurer’s rights or interest under this Indenture or the Insurance Agreement, consistent with this Indenture and without limiting the rights of the Noteholders as otherwise set forth in the Indenture, including, without limitation, upon the occurrence and continuance of a default under the Insurance Agreement, a request to take any one or more of the following actions:

(i)  institute Proceedings for the collection of all amounts then payable on the Class A-1 Notes or Class M-1 Notes, or under this Indenture in respect of the Class A-1 Notes or Class M-1 Notes and all amounts payable under the Insurance Agreement, enforce any judgment obtained and collect from the Issuer monies adjudged due;

 

(ii)  sell or cause to be sold the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private Sales (as defined in Section 5.15 hereof) called and conducted in any manner permitted by law;

 

(iii)  institute Proceedings from time to time for the complete or partial foreclosure of this Indenture; and

 

(iv)  exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Note Insurer hereunder;

provided, however, action shall be taken pursuant to this Section 4.12 by the Indenture Trustee to preserve the Note Insurer’s rights or interest under this Indenture or the Insurance Agreement only to the extent such action is available to the Class A-1 or Class M-1 Noteholders or the Note Insurer under other provisions of this Indenture.

 

Notwithstanding any provision of this Indenture to the contrary, so long as no Note Insurer Default exists, the Note Insurer shall at all times be treated as if it were the exclusive owner of all Class A-1 Notes and Class M-1 Notes Outstanding for the purposes of all approvals, consents, waivers and the institution of any action and the written direction of all remedies, and the Indenture Trustee shall act in accordance with the written directions of the Note Insurer so long as it is indemnified therefor to its reasonable satisfaction.

 

Section 4.12     Repayment of Monies Held by Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all monies then held by any Person other than the Securities Administrator under the provisions of this Indenture with respect to such Notes shall, upon demand 

 

of the Issuer, be paid to the Securities Administrator to be held and applied according to Section 3.03 and thereupon such Person shall be released from all further liability with respect to such monies.

Section 4.13     Temporary Notes.  Pending the preparation of any Definitive Notes, the Issuer may execute and upon its written direction, the Securities Administrator may authenticate and make available for delivery, temporary Notes that are printed, lithographed, typewritten, photocopied or otherwise produced, in any denomination, substantially of the tenor of the Definitive Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Notes may determine, as evidenced by their execution of such Notes.

If temporary Notes are issued, the Issuer will cause Definitive Notes to be prepared without unreasonable delay. After the preparation of the Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the Corporate Trust Office of the Securities Administrator, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute and the Securities Administrator shall authenticate and make available for delivery, in exchange therefor, Definitive Notes of authorized denominations and of like tenor, class and aggregate principal amount. Until so exchanged, such temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes.

Section 4.14     Representation Regarding ERISA.  By acquiring a Class A-1, Class A-2, Class M-1, Class M-2 or Class B-1 Notes or interest therein, each Holder of such Note or Beneficial Owner of any such interest will be deemed to represent that either (1) it is not acquiring such Note with Plan Assets or (2) (A) the acquisition, holding and transfer of such Note will not give rise to a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code and (B) the Notes are rated investment grade or better and such person believes that the Notes are properly treated as indebtedness without substantial equity features for purposes of the Department of Labor regulation 29 C.F.R. § 2510.3-101, and agrees to so treat the Notes. Alternatively, regardless of the rating of the Notes, such person
may provide the Securities Administrator and the Note Registrar with an opinion of counsel, which opinion of counsel will not be at the expense of the Issuer, the Seller, the Owner Trustee, the Indenture Trustee, the Securities Administrator, the Note Registrar, the Master Servicer or any servicer which opines that the acquisition, holding and transfer of such Note or interest therein is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller, the Depositor, the Owner Trustee, the Indenture Trustee, the Securities Administrator, the Note Registrar, the Master Servicer or any Servicer to any obligation in addition to those undertaken in the Indenture and the other Basic Documents.

No transfer of any Class B-2, Class B-3 or Class B-4 Notes or any interest therein shall be made to any Person unless the Indenture Trustee and the Note Registrar are provided with an Opinion of Counsel which establishes to the satisfaction of the Indenture Trustee and the Note Registrar that the purchase of the Notes is permissible under applicable law, will not constitute or result in any prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Issuer, the Seller, the Owner Trustee, the Indenture Trustee, the Master Servicer or the Note Registrar to any obligation or liability (including obligations or liabilities under ERISA or Section 4975 of the Code) in addition to those undertaken in this Indenture, which Opinion of Counsel shall not be an expense of the Depositor, the Owner Trustee, the Indenture Trustee, the Securities Administrator, the Notes
Registrar or the Master Servicer. In lieu of such Opinion of Counsel, a Person acquiring the Notes may provide a certification in the form each attached hereto as paragraph 3 of Exhibit C or clause (d) of Exhibit D, which the Issuer, the Seller, the Owner Trustee, the Indenture Trustee, the Master Servicer and the Note Registrar may rely upon without further inquiry or investigation. Neither an Opinion of 

 

Counsel nor a certification will be required in connection with the initial transfer of any such Notes by the Depositor to an affiliate of the Depositor (in which case, the Depositor or any affiliate thereof shall be deemed to have represented that such affiliate is not a Plan or a Person investing Plan Assets of any Plan) and the Owner Trustee, the Indenture Trustee, the Master Servicer and the Note Register shall be entitled to conclusively rely upon a representation (which, upon the request of the Owner Trustee, the Indenture Trustee, the Master Servicer and the Note Register, shall be a written representation) from the Depositor of the status of such transferee as an affiliate of the Depositor.

 

 

ARTICLE V

 

DEFAULT AND REMEDIES

Section 5.01     Events of Default.  The Issuer shall deliver to the Indenture Trustee, the Securities Administrator and the Note Insurer, within five days after learning of the occurrence of a Default, written notice in the form of an Officer’s Certificate of any event which with the giving of notice and the lapse of time would become an Event of Default under clause (ii), (iii) or (iv) of the definition of “Event of Default”, its status and what action the Issuer is taking or proposes to take with respect thereto. The Indenture Trustee shall not be deemed to have knowledge of any Default or Event of Default unless a Responsible Officer has actual knowledge thereof or unless written notice of such Default or Event of Default is received by a Responsible Officer and such notice references the Notes,
the Trust Estate or this Indenture.

Section 5.02     Acceleration of Maturity; Rescission and Annulment.  If an Event of Default should occur and be continuing, then and in every such case the Indenture Trustee at the written direction of the Note Insurer or the Holders of Notes representing not less than a majority of the aggregate Note Principal Balance of the Notes may, with the consent of the Note Insurer, declare the Notes to be immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee if such notice is given by Noteholders), and upon any such declaration the unpaid Note Principal Balance of the Notes, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable; provided, however, that for purposes of this sentence and for purposes of this
Article V, unless a Note Insurer Default exists, the Note Insurer may exercise the rights of all of the Holders of the Class A-1 Notes and Class M-1 Notes.

At any time after such declaration of acceleration of maturity with respect to an Event of Default has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Note Insurer or Holders of the Notes representing not less than a majority of the aggregate Note Principal Balance of each Class of Notes, by written notice to the Issuer and the Indenture Trustee, may, subject to Section 5.12, waive the related Event of Default and rescind and annul such declaration and its consequences if:

(i)         the Issuer has paid or deposited with the Indenture Trustee or Securities Administrator a sum sufficient to pay:

(A)       all payments of principal of and interest on the Notes and all other amounts that would then be due hereunder or under the Notes if the Event of Default giving rise to such acceleration had not occurred;

(B)        all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and the Securities Administrator and their respective agents and counsel; 

	
            (C)
 	
            all amounts owed to the Note Insurer; and
 

(ii)         all Events of Default, other than the nonpayment of the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12; provided, however, the Note Insurer, so long as no Note Insurer Default exists, may waive an Event of Default regardless of Section 5.02(i) above.

 

 

No such rescission shall affect any subsequent default or impair any right consequent thereto.

	
            Section 5.03
 	
            Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
 

(a)  The Issuer covenants that if (i) default is made in the payment of any interest on any Note when the same becomes due and payable, and such default continues for a period of five days, or (ii) default is made in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee, at the direction of the Note Insurer, so long as no Note Insurer default exists, or if a Note Insurer Default does exist, at the direction of the Holders of a majority of the aggregate Note Principal Balances of the Notes, pay to the Securities Administrator, for the benefit of the Holders of Notes and the Note Insurer, the whole amount then due and payable on the Notes for principal and interest, with interest at the applicable Note Interest Rate upon the overdue
principal, and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and the Securities Administrator and their respective agents and counsel.

(b)  In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee, in its own name and as trustee of an express trust, and at the direction of  the Note Insurer, so long as no Note Insurer Default exists, subject to the provisions of Section 10.15 hereof, 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 other obligor upon the Notes and collect in the manner provided by law out of the property of the Issuer or other obligor upon the Notes, wherever situated, the monies adjudged or decreed to be payable.

(c)  If an Event of Default occurs and is continuing, the Indenture Trustee, at the direction of  the Note Insurer, so long as no Note Insurer Default exists subject to the provisions of Section 10.15 hereof, may, as more particularly provided in Section 5.04 hereof, in its discretion, proceed to protect and enforce its rights and the rights of the Noteholders and the Note Insurer by such appropriate Proceedings as directed in writing by the Note Insurer, so long as no Note Insurer Default exists, to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

(d)  In case there shall be pending, relative to the Issuer or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial Proceedings relative to the Issuer or other obligor upon the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, at the direction of  the Note Insurer, so long as no Note Insurer Default exists, irrespective of whether the principal
of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such Proceedings or otherwise:

(i)         to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable 

 

in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence, willful misconduct or bad faith), the Note Insurer and of the Noteholders allowed in such Proceedings;

(ii)         unless prohibited by applicable law and regulations, to vote on behalf of the Holders of Notes in any election of a trustee, a standby trustee or Person performing similar functions in any such Proceedings;

(iii)        to collect and receive any monies or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders, the Note Insurer and of the Indenture Trustee on their behalf, and

(iv)        to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee, the Note Insurer or the Holders of Notes allowed in any judicial proceedings relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Noteholders to make payments to the Securities Administrator, with the consent of the Note Insurer so long as no Note Insurer Default exists, and, in the event that the Indenture Trustee and the Securities Administrator shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee and all amounts due to the Note Insurer.

(e)  Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

(f)   All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any trial or other Proceedings relative thereto, and any such action or proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Notes, subject to Section 5.05 hereof.

In any Proceedings brought by the Indenture Trustee with the consent of the Note Insurer so long as no Note Insurer Default exists (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Noteholder a party to any such Proceedings.

Section 5.04     Remedies; Priorities.  (a)  If an Event of Default shall have occurred and be continuing and if an acceleration has been declared and not rescinded pursuant to Section 5.02 hereof, the Indenture 

 

Trustee, subject to the provisions of Section 10.15 hereof, may, with the consent of the Note Insurer so long as no Note Insurer Default exists, and shall, so long as the Note Insurer is not in default under the Policy, at the written direction of the Holders of a majority of the aggregate Note Principal Balances of the Notes then outstanding with the consent of the Note Insurer, do one or more of the following (subject to Section 5.05 hereof):

(i)         institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, and all amounts payable under the Insurance Agreement, enforce any judgment obtained, and collect from the Issuer and any other obligor upon such Notes monies adjudged due;

(ii)         institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;

(iii)        exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Notes and the Note Insurer; and

(iv)        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;

provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Trust Estate following an Event of Default, unless (A) the Indenture Trustee obtains the consent of the Holders of 100% of the aggregate Note Principal Balance of the Notes then outstanding, (B) the proceeds of such sale or liquidation distributable to the Holders of the Notes are sufficient to discharge in full all amounts then due and unpaid upon such Notes for principal and interest and to reimburse the Note Insurer for any amounts drawn under the Policy and any other amounts due to the Note Insurer under the Insurance Agreement or (C) the Indenture Trustee determines that the HELOCs will not continue to provide sufficient funds for the payment of principal of and interest on the applicable Notes as they would have become due if the Notes had not been declared due and payable, and the Indenture Trustee obtains the
consent of the Holders of 66 2/3% of the aggregate Note Principal Balance of each Class of Notes then outstanding, voting separately.  In determining such sufficiency or insufficiency with respect to clause (B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an opinion (obtained at the expense of the Trust) of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose. Notwithstanding the foregoing, any Sale of the Trust Estate shall be made subject to the continued servicing of the HELOCs by the Servicer (other than any Servicer as to which an Event of Servicer Termination has occurred and is continuing) as provided in the Sale and Servicing Agreement.  Notwithstanding any contrary provision of this Indenture, no Sale of the Trust Estate shall be made unless an Opinion of Counsel is rendered, addressed to the Indenture Trustee, the Note Insurer, the
Securities Administrator and the Owner Trustee, to the effect that such Sale would not (i) result in the imposition of the tax on “prohibited transactions” as defined in sections 860F(a)(2) of any REMIC created hereunder or (ii) cause any REMIC created hereunder to fail to qualify as a REMIC at any time that any Notes or Certificates are outstanding.

(b)  If the Indenture Trustee or the Securities Administrator collects any money or property pursuant to this Article V, the Securities Administrator shall pay out the money or property in the following order; provided, however, that any amounts representing payments from the Note Insurer shall only be used to pay interest and principal to the Class A-1 Noteholders and Class M-1 Noteholders:

 

 

FIRST: to the Indenture Trustee, the Securities Administrator, Master Servicer, the Owner Trustee, the Custodian and the Servicer for amounts due and not previously paid pursuant to the Indenture and the other Basic Documents;

SECOND:  to the Note Insurer, provided no Note Insurer Default exists, with respect to any Premium Amount then due to the extent unpaid pursuant to the Insurance Agreement;

THIRD: to the Class A-1 Notes and Class A-2 Notes, pro rata, for amounts due and unpaid on such Notes with respect to interest (not including any Net WAC Cap Rate Carryover Amounts), according to the amounts due and payable on each such Notes for interest;

FOURTH: to the Class A-1 Notes and Class A-2 Notes, pro rata, for amounts due and unpaid on such Notes with respect to principal, and to each such Note ratably, without preference or priority of any kind, according to the amounts due and payable on such Notes for principal, until the Note Principal Balance of each such Class is reduced to zero;

FIFTH: to the payment of all amounts due and owing to the Note Insurer under the Insurance Agreement (including any Premium Amount not paid pursuant to clause SECOND above;

SIXTH: to the Class A-1 Notes and Class A-2 Notes, pro rata, in each case based on the amount of any Net WAC Cap Rate Carryover Amount not previously paid; 

SEVENTH: first, to the Class M-1 Notes, second, to the Class M-2 Notes, third to the Class B-1 Notes and fourth, to the Class B-2 Notes, for amounts due and unpaid on such Notes with respect to interest (not including any Net WAC Cap Rate Carryover Amounts), according to the amounts due and payable on each such Notes for interest;

EIGHTH: first, to the Class M-1 Notes, second, to the Class M-2 Notes, third to the Class B-1 Notes and fourth, to the Class B-2 Notes, for amounts due and unpaid on such Notes with respect to principal, and to each such Noteholder ratably, without preference or priority of any kind, according to the amounts due and payable on such Notes for principal, until the Note Principal Balance of each such Class is reduced to zero;

NINTH: first, to the Class M-1 Notes, second, to the Class M-2 Notes, third to the Class B-1 Notes and fourth, to the Class B-2 Notes, according to the amounts due and payable on such Classes of Notes for interest and principal; and

TENTH:  to the Certificate Paying Agent for distribution to the Holders of the Certificates on behalf of the Issuer.

The Securities Administrator may fix a record date and Payment Date for any payment to Noteholders pursuant to this Section 5.04. With respect to any acceleration at the direction of the Note Insurer, the first Payment Date after the acceleration shall be the first Payment Date after the acceleration.  At least 15 days before such record date, the Securities Administrator shall mail to each Noteholder a notice that states the record date, the Payment Date and the amount to be paid.

Section 5.05     Optional Preservation of the Trust Estate.  If the Notes have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not 

 

been rescinded and annulled, the Indenture Trustee may, with the consent of the Note Insurer (which consent shall not be required if a Note Insurer Default exists), and shall, at the direction of the Note Insurer so long as no Note Insurer Default exists, elect to take and maintain possession of the Trust Estate. It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes and other obligations of the Issuer, and the Indenture Trustee shall take such desire into account when determining whether or not to take and maintain possession of the Trust Estate. In determining whether to take and maintain possession of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.

Section 5.06     Limitation of Suits.  So long as the majority Holder of the Class E Certificates owns 100% of the Securities, no Holder of any Note (other than the Note Insurer acting pursuant to Section 4.12 hereof) shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder.  No Holder of any Note (other than the Note Insurer acting pursuant to section 4.12 hereof) shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless and subject to the foregoing and the provisions of Section 10.15 hereof:

(i)         such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

(ii)         the Holders of not less than 25% of the aggregate Note Principal Balance of the Notes have made a written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

(iii)        such Holder or Holders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in complying with such request;

(iv)        the Indenture Trustee, for 60 days after its receipt of such notice of request and offer of indemnity, has failed to institute such Proceedings; 

	
            (v)
 	
            such Holders have obtained consent of the Note Insurer; and
 

(vi)        no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Holders of a majority of the Note Principal Balances of the Notes.

It is understood and intended that no one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.

Subject to the last paragraph of Section 5.11 herein, in the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes, each representing less than a majority of the Note Principal Balances of the Notes, the Indenture Trustee shall take such action as requested by the Holders representing the highest amount (in the aggregate) of the Note Principal Balances, notwithstanding any other provisions of this Indenture.

 

 

Section 5.07     Unconditional Rights of Noteholders To Receive Principal and Interest.  Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

Section 5.08     Restoration of Rights and Remedies.  If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee, the Note Insurer or to such Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee, the Note Insurer and the Noteholders shall continue as though no such Proceeding had been instituted.

Section 5.09     Rights and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to the Indenture Trustee, to the Note Insurer or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 5.10     Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee, the Note Insurer or any Holder of any Note 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 V or by law to the Indenture Trustee, the Note Insurer or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

Section 5.11     Control By Note Insurer and Noteholders.  The Note Insurer, unless a Note Insurer Default exists, or the Holders of a majority of the aggregate Note Principal Balances of Notes, if a Note Insurer Default exists, shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided that:

	
            (i)
 	
            such direction shall not be in conflict with any rule of law or with this Indenture;
 

(ii)         if a Note Insurer Default exists, any direction to the Indenture Trustee to sell or liquidate the Trust Estate shall be by Holders of Notes representing not less than 100% of the aggregate Note Principal Balance of the Notes or the Holders of 66 2/3% of the aggregate Note Principal Balance of each Class of Notes then outstanding, voting separately as set forth in Section 5.04(a) hereof; and

(iii)        the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction of the Holders of Notes representing a majority of the Note Principal Balances of the Notes.

Notwithstanding the rights of Noteholders set forth in this Section 5.11 the Indenture Trustee need not take any action that it determines might involve it in liability.

 

 

Section 5.12     Waiver of Past Defaults.  Prior to the declaration of the acceleration of the maturity of the Notes as provided in Section 5.02 hereof, the Note Insurer or the Holders of Notes representing not less than a majority of the aggregate Note Principal Balance of each Class of Notes may waive any past Event of Default and its consequences except an Event of Default (a) with respect to payment of principal of or interest on any of the Notes, (b) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Note, or (c) the waiver of which would materially and adversely affect the interests of the Note Insurer or modify its obligation under the Policy.  In the case of any such waiver, the Issuer, the Indenture Trustee, the Note Insurer and the
Holders of the Notes shall be restored to their former positions and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereto.

Upon any such waiver, any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereto.

Section 5.13     Undertaking for Costs.  All parties to this Indenture agree, and each Holder of any Note and each Beneficial Owner of any interest therein by such Holder’s or Beneficial Owner’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 5.13 shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders, in each case holding in the aggregate more than 10% of the Note Principal Balances of the Notes or (c) any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture.

Section 5.14     Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

Section 5.15     Sale of Trust Estate.  (a)  The power to effect any sale or other disposition (a “Sale”) of any portion of the Trust Estate pursuant to Section 5.04 hereof is expressly subject to the provisions of Sections 5.05 and 5.11(ii) hereof and this Section 5.15. The power to effect any such Sale 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 Notes and under this Indenture and under the Insurance Agreement shall have been paid. The Indenture Trustee with the consent of the Note Insurer (which consent shall not be required if a Note Insurer Default exists) may from time to time postpone any public Sale by public announcement made at
the time and place of such Sale. The Indenture Trustee hereby expressly waives its right to any amount fixed by law as compensation for any Sale.

 

 

(b)  The Indenture Trustee shall not in any private Sale sell the Trust Estate, or any portion thereof, unless

(1)        The Note Insurer, unless a Note Insurer Default exists, or the Holders of all Notes if a Note Insurer Default exists consent to or direct the Indenture Trustee to make, such Sale, or

(2)        the proceeds of such Sale would be not less than the entire amount which would be payable to the Noteholders under the Notes and the Note Insurer in respect of amounts drawn under the Policy and any other amounts due to the Note Insurer under the Insurance Agreement, in full payment thereof in accordance with Section 5.02 hereof, on the Payment Date next succeeding the date of such Sale, or

(3)        the Indenture Trustee determines that the conditions for retention of the Trust Estate set forth in Section 5.05 hereof cannot be satisfied (in making any such determination, the Indenture Trustee may rely upon an opinion of an Independent investment banking firm obtained and delivered as provided in Section 5.05 hereof), and the Note Insurer consents to such Sale, or if a Note Insurer Default exists, and the Holders of Notes representing at least 100% of the Note Principal Balances of the Notes consent to such Sale.

The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall not be deemed a Sale or other disposition thereof for purposes of this Section 5.15(b).

(c)  Unless the Note Insurer, or if a Note Insurer Default exists, the Holders representing at least 100% of the aggregate Note Principal Balance of the Notes or the Holders of 66 2/3% of the aggregate Note Principal Balance of each Class of Notes then outstanding, voting separately as set forth in Section 5.04(a) hereof, have otherwise consented or directed the Indenture 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 5.15 has not been established by the Indenture Trustee and no Person bids an amount equal to or greater than such amount, the Indenture Trustee, as trustee for the benefit of the Holders of the Notes, shall bid an amount (which shall include the Indenture Trustee’s right, in its capacity as
Indenture Trustee, to credit bid) at least $1.00 more than the highest other bid in order to preserve the Trust Estate on behalf of the Noteholders.

	
            (d)
 	
            In connection with a Sale of all or any portion of the Trust Estate,
 

(1)        any Holder or Holders of Notes 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 Notes or claims for interest thereon in lieu of cash up to the amount which shall, upon distribution of the net proceeds of such sale, be payable thereon, and such Notes, in case the amounts 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 Indenture Trustee, with the consent of the Note Insurer so long as no Note Insurer Default exists may bid for and acquire the property offered for Sale in connection with any Sale thereof, and, subject to any requirements of, and to the extent permitted by, applicable law in connection therewith, may purchase all or any portion of the Trust Estate in a private sale, 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 Notes and Holders of Certificates and amounts distributable to the Note Insurer 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 Notes in order to complete any such Sale or in order for the net Sale price to be credited against such Notes, and any property so acquired by the Indenture Trustee shall be held and dealt with by it in accordance with the provisions of this Indenture;

(3)        the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance, prepared by the Issuer and satisfactory to the Indenture Trustee, transferring its interest in any portion of the Trust Estate in connection with a Sale thereof; and

(4)        the Indenture 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.

(e)  So long as a single Holder of the Class E Certificates owns 100% of the remaining Securities, the majority Holder of the Class E Certificates shall not consent to any Sale of the Trust Estate as set forth herein.  Notwithstanding any contrary provision of this Indenture, no Sale of the Trust Estate shall be made unless an Opinion of Counsel is rendered, addressed to the Indenture Trustee, the Note Insurer, the Securities Administrator and the Owner Trustee, to the effect that such Sale would not (i) result in the imposition of the tax on “prohibited transactions” as defined in sections 860F(a)(2) of any REMIC created hereunder or (ii) cause any REMIC created hereunder to fail to qualify as a REMIC at any time that any Notes or Certificates are outstanding.

Section 5.16     Action on Notes.  The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee or the Securities Administrator shall be applied by the Securities Administrator in accordance with Section 5.04(b) hereof.

 

 

ARTICLE VI

 

THE INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR

Section 6.01     Duties of Indenture Trustee and Securities Administrator.  (a)  If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b)  Except during the continuance of an Event of Default of which the Indenture Trustee has actual knowledge or has received written notice, in the case of the Indenture Trustee and, at any time, in the case of the Securities Administrator:

(i)         the Indenture Trustee and the Securities Administrator undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and the other Basic Documents to which it is a party and no implied covenants or obligations shall be read into this Indenture and the other Basic Documents against the Indenture Trustee or the Securities Administrator; and

(ii)         in the absence of bad faith on its part, the Indenture Trustee and the Securities Administrator may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, reports, documents, Issuer Requests or other instruments or opinions furnished to the Indenture Trustee and/or the Securities Administrator and conforming to the requirements of this Indenture or the other Basic Documents; however, the Indenture Trustee and the Securities Administrator shall examine the certificates, reports, documents, Issuer Requests or other instruments and opinions to determine whether or not they conform on their face to the requirements of this Indenture.

(c)  The Indenture Trustee and the Securities Administrator may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

	
            (i)
 	
            this paragraph does not limit the effect of paragraph (b) of this Section 6.01;
 

(ii)         neither the Indenture Trustee nor the Securities Administrator shall be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee or the Securities Administrator, as applicable, was negligent in ascertaining the pertinent facts; and

(iii)        neither the Indenture Trustee nor the Securities Administrator shall  be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it from Noteholders, the Certificateholders or from the Issuer, which they are entitled to give under the Basic Documents.

(d)  Neither the Indenture Trustee nor the Securities Administrator shall be liable for interest on any money received by it except as set forth in the Basic Documents and as the Indenture Trustee or Securities Administrator, as applicable, may agree in writing with the Issuer.

(e)  Money held in trust by the Indenture Trustee or Securities Administrator need not be segregated from other trust funds except to the extent required by law or the terms of this Indenture, the Sale and Servicing Agreement or the Trust Agreement.

 

 

(f)   No provision of this Indenture shall require the Indenture Trustee or the Securities Administrator to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or indemnity satisfactory to it against such risk or liability is not reasonably assured to it.

(g)  Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee or Securities Administrator shall be subject to the provisions of this Section.

(h)  The Indenture Trustee shall not be deemed to have notice or knowledge of any Default or Event of Default unless a Responsible Officer of the Indenture Trustee has actual knowledge thereof or unless written notice of any such event that is in fact an Event of Default or Default is received by the Indenture Trustee at its Corporate Trust Office and such notice references the Notes or Certificates generally, the Issuer, the Trust Estate or this Indenture.

Section 6.02     Rights of Indenture Trustee and Securities Administrator.  (a)  The Indenture Trustee and the Securities Administrator may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Indenture Trustee and the Securities Administrator need not investigate any fact or matter stated in the document.

(b)  Before the Indenture Trustee or the Securities Administrator acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel. Neither the Indenture Trustee nor the Securities Administrator shall be liable for any action it takes or omits to take in good faith in reliance on and in accordance with an Officer’s Certificate or Opinion of Counsel.

(c)  Neither the Indenture Trustee nor the Securities Administrator shall 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.

(d)  The Indenture Trustee or the Securities Administrator may consult with counsel, and the written advice or Opinion of Counsel (which shall not be at the expense of the Indenture Trustee or the Securities Administrator) with respect to legal matters relating to this Indenture, the other Basic Documents and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the written advice or opinion of such counsel.

(e)  For the limited purpose of effecting any action to be undertaken by each of the Indenture Trustee and the Securities Administrator, but not specifically as a duty of the Indenture Trustee or the Securities Administrator in the Indenture, each of the Indenture Trustee and the Securities Administrator may execute any of the trusts or powers hereunder or perform any duties hereunder, either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.

(f)   The Securities Administrator or its Affiliates are permitted to receive additional compensation that could be deemed to be in the Securities Administrator’s economic self-interest for (i) serving as investment adviser, administrator, shareholder servicing agent, custodian or sub-custodian with respect to certain of the Permitted Investments, (ii) using Affiliates to effect transactions in certain Permitted Investments and (iii) effecting transactions in certain Permitted Investments. Such compensation shall not be 

 

considered an amount that is reimbursable or payable to the Securities Administrator (i) as part of the compensation hereunder or (ii) out of Available Funds.

(g)  Anything in this Indenture to the contrary notwithstanding, in no event shall the Indenture Trustee or the Securities Administrator be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Indenture Trustee or the Securities Administrator has been advised of the likelihood of such loss or damage and regardless of the form of action.

(h)  None of the Securities Administrator, the Issuer or the Indenture Trustee shall be responsible for the acts or omissions of the other, it being understood that this Indenture shall not be construed to render them partners, joint venturers or agents of one another.

(i)   Neither the Indenture Trustee nor the Securities Administrator shall be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or indemnity reasonably satisfactory to it against such risk or liability is not reasonably assured to it, and none of the provisions contained in this Indenture shall in any event require the Indenture Trustee or the Securities Administrator to perform, or be responsible for the manner of performance of, any of the obligations of the Master Servicer under the Servicing Agreement, except during such time, if any, as the Indenture Trustee shall be the successor to, and be vested with the rights, duties, powers and
privileges of, the Master Servicer in accordance with the terms of the Servicing Agreement.

(j)   Except for those actions that the Indenture Trustee or the Securities Administrator are required to take hereunder, neither the Indenture Trustee nor the Securities Administrator shall have any obligation or liability to take any action or to refrain from taking any action hereunder in the absence of written direction as provided hereunder.

(k)  Neither the Indenture Trustee nor the Securities Administrator shall be under any obligation to exercise any of the trusts or powers vested in it by this Indenture, other than its obligation to give notices pursuant to this Indenture, or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Noteholders pursuant to the provisions of this Indenture, unless such Noteholders shall have offered to the Indenture Trustee or the Securities Administrator, as applicable, reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby.  Nothing contained herein shall, however, relieve the Indenture Trustee of the obligation, upon the occurrence of an Event of Default of which a Responsible Officer of the Indenture Trustee has actual
knowledge (which has not been cured or waived), to exercise such of the rights and powers vested in it by this Indenture and to use the same degree of care and skill in their exercise as a prudent person would exercise under the circumstances in the conduct of his own affairs.

(l)   Neither the Indenture Trustee nor the Securities Administrator shall be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by Holders of Notes representing not less than 25% of the Note Principal Balance of the Notes and provided that the payment within a reasonable time to the Indenture Trustee or the Securities Administrator, as applicable, of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Indenture Trustee or the Securities Administrator, as applicable, 

 

reasonably assured to the Indenture Trustee by the security afforded to it by the terms of this Indenture. The Indenture Trustee or the Securities Administrator may require reasonable indemnity against such expense or liability as a condition to taking any such action. The reasonable expense of every such examination shall be paid by the Noteholders requesting the investigation.

(m) Should the Indenture Trustee or the Securities Administrator deem the nature of any action required on its part to be unclear, the Indenture Trustee or the Securities Administrator, respectively, may require prior to such action that it be provided by the Depositor with reasonable further instructions.

(n)  The right of the Indenture Trustee or the Securities Administrator to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and neither the Indenture Trustee nor the Securities Administrator shall be accountable for other than its negligence or willful misconduct in the performance of any such act.

(o)  Neither the Indenture Trustee nor the Securities Administrator shall be required to give any bond or surety with respect to the execution of the trust created hereby or the powers granted hereunder.

(p)  Neither the Indenture Trustee nor the Securities Administrator shall have any duty to conduct any affirmative investigation as to the occurrence of any condition requiring the repurchase of any HELOC by the Seller pursuant to this Indenture, the Sale and Servicing Agreement or the Mortgage Loan Purchase Agreement, as applicable, or the eligibility of any HELOC for purposes of this Indenture.

(q)  The Indenture Trustee shall not be deemed to have notice or actual knowledge of any Default or Event of Default unless actually known to a Responsible Officer of the Indenture Trustee or written notice thereof (making reference to this Indenture or the Notes) is received by the Indenture Trustee at the Corporate Trust Office.

Section 6.03     Individual Rights of Indenture Trustee.  The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee, subject to the requirements of the Trust Indenture Act. Any Note Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Section 6.12 hereof.

	
            Section 6.04
 	
            [Reserved].
 

Section 6.05     Indenture Trustee’s and Securities Administrator’s Disclaimer.  Neither the Indenture Trustee nor the Securities Administrator shall be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Notes or any other Basic Document, it shall not be accountable for the Issuer’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Securities Administrator’s certificate of authentication.

Section 6.06     Notice of Event of Default.  Subject to Section 5.01, the Indenture Trustee shall promptly mail to each Noteholder and the Note Insurer notice of the Event of Default after it is known to a Responsible Officer of the Indenture Trustee, unless such Event of Default shall have been waived or cured. Except in the case of an Event of Default in payment of principal of or interest on any Note, the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the best interests of Noteholders.

 

 

Section 6.07     Reports to Residual Certificateholders.  The Securities Administrator shall furnish quarterly to the Holders of the Residual Certificates each applicable Form 1066Q and shall respond promptly to written requests made not more frequently than quarterly by any Holder of a Residual Certificate with respect to the following matters:

(i)         The original projected principal and interest cash flows on the Closing Date on each class of Regular Interests and Residual Interests created hereunder and on the HELOCs, based on the Prepayment Assumption;

(ii)         The projected remaining principal and interest cash flows as of the end of any calendar quarter with respect to each class of Regular Interests and Residual Interests created hereunder and the HELOCs, based on the Prepayment Assumption;

(iii)        The applicable Prepayment Assumption and any interest rate assumptions used in determining the projected principal and interest cash flows described above;

(iv)        The original issue discount (or, in the case of the HELOCs, market discount) or premium accrued or amortized through the end of such calendar quarter with respect to each class of Regular Interests or Residual Interests created hereunder and to the HELOCs, together with each constant yield to maturity used in computing the same;

(v)        The treatment of Charge-Off Amounts with respect to the HELOCs or the Regular Interests or Residual Interests created hereunder, including the timing and amount of any cancellation of indebtedness income of a REMIC with respect to such Regular Interests or Residual Interests or bad debt deductions claimed with respect to the HELOCs;

	
            (vi)
 	
            The amount and timing of any non-interest expenses of a REMIC; and
 

(vii)       Any taxes (including penalties and interest) imposed on the REMIC, including, without limitation, taxes on “prohibited transactions,” “contributions” or “net income from foreclosure property” or state or local income or franchise taxes.

Section 6.08     Compensation.  An annual fee shall be paid to the Indenture Trustee by the Master Servicer pursuant to a separate agreement between the Indenture Trustee and the Master Servicer.  In addition, the Indenture Trustee and the Securities Administrator will each be entitled to recover from the Payment Account pursuant to Section 4.05 of the Sale and Servicing Agreement all reasonable out-of-pocket expenses, disbursements and advances and the expenses of the Indenture Trustee and the Securities Administrator, respectively, in connection with any breach of this Indenture or any claim or legal action (including any pending or threatened claim or legal action) or otherwise incurred or made by the Indenture Trustee or the Securities Administrator, respectively, in the administration of the trusts hereunder (including the
reasonable compensation, expenses and disbursements of its counsel) except any such expense, disbursement or advance as may arise from its own negligence or intentional misconduct or which is the responsibility of the Noteholders as provided herein.  Such compensation and reimbursement obligation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust.  Additionally, each of the Indenture Trustee and the Securities Administrator and any director, officer, employee or agent of the Indenture Trustee or the Securities Administrator shall be indemnified by the Trust and held harmless against any loss, liability or expense (including reasonable attorney's fees and expenses) incurred in the administration of this Indenture (other than its ordinary out of pocket expenses incurred hereunder) or in connection with any claim or legal action relating 

 

to (a) the Basic Documents or (b) the Notes, other than any loss, liability or expense incurred by reason of its own negligence or intentional misconduct, or which is the responsibility of the Noteholders as provided herein.

The Issuer's payment obligations to the Indenture Trustee and Securities Administrator pursuant to this Section 6.08 shall survive the discharge of this Indenture and the termination or resignation of the Indenture Trustee or Securities Administrator.  When the Indenture Trustee or the Securities Administrator incurs expenses after the occurrence of an Event of Default with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or similar law.

Section 6.09     Replacement of Indenture Trustee and the Securities Administrator.  No resignation or removal of the Indenture Trustee or the Securities Administrator and no appointment of a successor Indenture Trustee or a successor Securities Administrator shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.09. The Indenture Trustee or the Securities Administrator may resign at any time by so notifying the Issuer and the Note Insurer. In the event that the Indenture Trustee determines that a conflict of interest exists between the Holders of the Class A Notes and the Holders of any Class of Subordinate Notes, then the Indenture Trustee shall be entitled to resign as the indenture trustee for all Classes of Notes other than the Class A Notes.  In
such event the Holders of a majority of Note Principal Balances of all of the Subordinate Notes shall designate a separate indenture trustee to represent their interests hereunder.  The Note Insurer or, if a Note Insurer Default exists, the Holders of a majority of Note Principal Balances of each Class of Notes may remove the Indenture Trustee by so notifying the Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer shall, with the consent of the Note Insurer so long as no Note Insurer Default exists remove the Indenture Trustee or the Securities Administrator, as applicable, if:

(i)         the Indenture Trustee or the Securities Administrator fails to comply with or qualify pursuant to the provisions of Section 6.12 hereof;

	
            (ii)
 	
            the Indenture Trustee or the Securities Administrator is adjudged a bankrupt or insolvent;
 

(iii)        a receiver or other public officer takes charge of the Indenture Trustee or the Securities Administrator or its property;

(iv)        the Indenture Trustee or the Securities Administrator otherwise becomes incapable of acting; or

	
            (v)
 	
            the Master Servicer is terminated pursuant to the Sale and Servicing Agreement.
 

If the Indenture Trustee or the Securities Administrator resigns or is removed or if a vacancy exists in the office of the Indenture Trustee or the Securities Administrator for any reason (the Indenture Trustee or the Securities Administrator in such event being referred to herein as the retiring Indenture Trustee or the retiring Securities Administrator ), the Issuer shall, with the consent of the Note Insurer so long as no Note Insurer Default exists promptly appoint a successor Indenture Trustee or successor Securities Administrator.

Each of a successor Indenture Trustee or successor Securities Administrator shall deliver a written acceptance of its appointment to the retiring Indenture Trustee, to the Note Insurer or the retiring Securities Administrator, as applicable, and to the Issuer.  Thereupon, the resignation or removal of the retiring Indenture Trustee or the retiring Securities Administrator shall become effective, and the successor Indenture Trustee or 

 

successor Securities Administrator shall have all the rights, powers and duties of the Indenture Trustee or the Securities Administrator, as applicable, under this Indenture.  The successor Indenture Trustee or successor Securities Administrator shall each mail a notice of its succession to Noteholders.  The retiring Indenture Trustee or the retiring Securities Administrator shall promptly transfer all property held by it as Indenture Trustee or Securities Administrator, as applicable, to the successor Indenture Trustee or successor Securities Administrator.

If a successor Indenture Trustee or successor Securities Administrator does not take office within 60 days after the retiring Indenture Trustee or the retiring Securities Administrator, as applicable, resigns or is removed, the retiring Indenture Trustee, the Note Insurer or the retiring Securities Administrator, the Issuer or the Holders of a majority of Note Principal Balances of the Notes may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee or successor Securities Administrator.

Notwithstanding the replacement of the Indenture Trustee or the Securities Administrator pursuant to this Section, the Issuer's obligations under Section 6.08 shall continue for the benefit of the retiring Indenture Trustee or the retiring Securities Administrator.

Section 6.10     Successor Indenture Trustee and Securities Administrator by Merger.  If the Indenture Trustee or the Securities Administrator consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation, without any further act, shall be the successor Indenture Trustee or successor Securities Administrator, as applicable; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.12 hereof. The Indenture Trustee and the Securities Administrator shall provide the Rating Agencies, the Note Insurer and the Issuer with prior written notice, and the Noteholders with prompt written notice, of any such transaction.

If at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture and any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Notes so authenticated; and if at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which is in the Notes or in this Indenture provided that the certificate of the Indenture Trustee shall have.

Section 6.11     Appointment of Co-Indenture Trustee or Separate Indenture Trustee.  (a)  Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Indenture Trustee shall have the power and may, with the consent of Note Insurer, execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders and the Note Insurer, such title to the Trust Estate, or any part hereof, and, subject to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Indenture Trustee or the Note Insurer may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.12 hereof.

 

 

(b)  Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

(i)         all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the
direction of the Indenture Trustee;

(ii)         no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

(iii)        the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

(c)  Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture Trustee.

(d)  Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

Section 6.12     Eligibility; Disqualification.  The Indenture Trustee shall at all times be an entity that meets the requirements of Section 3(c)(3) under the Investment Company Act of 1940 applicable to a trustee, and shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and it or its parent shall have a long-term debt rating of Baa3 or better by Moody’s.

Each of the Indenture Trustee and the Securities Administrator hereunder shall at all times be a corporation or an association organized and doing business under the laws of any state or the United States of America, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authority. In case at any time the Indenture Trustee or the Securities Administrator shall cease to be eligible in accordance with the 

 

provisions of this Section, the Trustee or the Securities Administrator, as the case may be, shall resign immediately in the manner and with the effect specified in Section 6.09 hereof.

The Securities Administrator and any successor Securities Administrator (i) may not be an Originator, the Master Servicer, a subservicer, the Depositor or an affiliate of the Depositor unless the Securities Administrator is an institutional trust department, (ii) must be authorized to exercise corporate trust powers under the laws of its jurisdiction of organization, and (iii) must at all times be rated at least "A/F1" by Fitch if Fitch is a rating agency.

The Indenture Trustee shall notify the Rating Agencies of any change of Securities Administrator. Any resignation or removal of the Indenture Trustee or the Securities Administrator and appointment of a successor trustee or trust administrator, as the case may be, pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor indenture trustee or securities administrator as provided in Section 6.09 hereof. Notwithstanding the foregoing, in the event the Securities Administrator advises the Indenture Trustee that it is unable to continue to perform its obligations pursuant to the terms of this Indenture prior to the appointment of a successor, the Indenture Trustee shall be obligated to perform such obligations until a new trust administrator is appointed. Such performance shall be without prejudice to any claim by a party hereto
or beneficiary hereof resulting from the Securities Administrator's breach of its obligations hereunder. As compensation therefore, the Indenture Trustee shall be entitled to all fees the Securities Administrator would have been entitled to if it had continued to act hereunder.

	
            Section 6.13
 	
            [Reserved].
 	
             

	
            Section 6.14
 	
            Representations and Warranties.  The Indenture Trustee hereby represents that:
 

(i)         The Indenture Trustee is duly organized and validly existing as a national banking association in good standing under the laws of the United States with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted;

(ii)         The Indenture Trustee has the power and authority to execute and deliver this Indenture and to carry out its terms; and the execution, delivery and performance of this Indenture have been duly authorized by the Indenture Trustee by all necessary corporate action;

(iii)        The consummation of the transactions contemplated by this Indenture and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Indenture Trustee or any agreement or other instrument to which the Indenture Trustee is a party or by which it is bound; and

(iv)        To the Indenture Trustee’s knowledge, there are no proceedings or investigations pending or threatened before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Indenture Trustee or its properties: (A) asserting the invalidity of this Indenture, (B) seeking to prevent the consummation of any of the transactions contemplated by this Indenture or (C) seeking any determination or ruling that might materially and adversely affect the performance by the Indenture Trustee of its obligations under, or the validity or enforceability of, this Indenture.

	
            Section 6.15
 	
            Directions to Indenture Trustee and the Securities Administrator.
 

 

 

 

(a)  The Indenture Trustee is hereby directed to accept the pledge of the HELOCs and hold the assets of the Trust in trust for the Noteholders and the Note Insurer and to exercise and deliver the Insurance Agreement and the Custodial Agreement and to acknowledge and agree to the Assignment Agreement.

(b)  the Securities Administrator is hereby directed to (i) authenticate and deliver the Notes substantially in the form prescribed by Exhibits A-1, A-2 and A-3 to this Indenture in accordance with the terms of this Indenture and to take all other actions as shall be required to be taken by the Securities Administrator pursuant to the terms of this Indenture and the other Basic Documents.

Section 6.16     The Agents.  The provisions of this Indenture relating to the limitations of the Indenture Trustee’s liability and to its rights and protections shall inure also to the Paying Agent, Note Registrar and Certificate Registrar.

 

 

ARTICLE VII

 

NOTEHOLDERS’ LISTS AND REPORTS

Section 7.01     Issuer To Furnish Securities Administrator and Indenture Trustee Names and Addresses of Noteholders.  The Issuer will furnish or cause to be furnished to the Securities Administrator and the Indenture Trustee (a) not more than five days after each Record Date, a list, in such form as the Securities Administrator may reasonably require, of the names and addresses of the Holders of Notes as of such Record Date, and (b) at such other times as the Securities Administrator and the Note Insurer 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 Securities Administrator is the Note Registrar, no such list shall be required
to be furnished to the Securities Administrator.

Section 7.02     Preservation of Information; Communications to Noteholders.  (a)  The Securities Administrator shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list furnished to the Securities Administrator as provided in Section 7.01 hereof and the names and addresses of Holders of Notes received by the Securities Administrator in its capacity as Note Registrar. The Securities Administrator may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.

(b)  Noteholders may communicate with other Noteholders with respect to their rights under this Indenture or under the Notes.

Section 7.03     Financial Information.  For so long as any of the Notes bearing a restrictive legend remains outstanding and is a “restricted security” within the meaning of Rule 144(a)(3) under the Securities Act, the Issuer shall, during any period in which it is not subject to Section 13 or 15(d) of the Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) under such Act, cause the Securities Administrator to make available to any Holder of any such Note in connection with any sale thereof and to any prospective purchaser of any such Note from such Holder, in each case upon request, the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act that is in the Securities Administrator’s possession or reasonably obtainable by it, if requested, from
the Master Servicer (and to the extent such information is in the Master Servicer’s possession or is reasonably obtainable by it from the Servicers).

Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year.

Section 7.04     Statements to Noteholders and Certificateholders.  (a)  With respect to each Payment Date, the Securities Administrator shall make available via the Securities Administrator’s website, initially located at www.etrustee.net, to each Noteholder and each Certificateholder, the Indenture Trustee, the Depositor, the Issuer, the Seller, the Owner Trustee, the Certificate Paying Agent, the Note Insurer and the Rating Agencies, a statement setting forth the following information as to the Notes, to the extent applicable:

(i)         the Available Funds, the Basis Risk Shortfall Carryover Amount on each Class of Notes for such Payment Date and the aggregate Net Interest Shortfall on each Class of Notes for such Payment Date;

(ii)         (a) the amount of such distribution to each Class of Notes applied to reduce the Note Principal Balance thereof, and (b) the aggregate amount included therein representing Principal Prepayments;

 

 

	
            (iii)
 	
            the amount of such distribution to Holders of each Class of Notes allocable to interest;
 
	
            (iv)
 	
            the amount of any distribution to the Certificates;
 	
             

(v)        the Insured Amount, if any, paid by the Note Insurer under the Policy for such Payment Date and the aggregate Insured Amounts for all prior Payment Dates paid by the Note Insurer under the Policy and not yet reimbursed;

(vi)        if the distribution to the Holders of any Class of Notes is less than the full amount that would be distributable to such Holders if there were sufficient funds available therefor, the amount of the shortfall;

(vii)       the number and the aggregate Scheduled Principal Balance of the HELOCs as of the end of the related Due Period;

(viii)      the aggregate Note Principal Balance of each Class of Notes, after giving effect to the amounts distributed on such Payment Date, separately identifying any reduction thereof due to Charge-Off Amounts and the aggregate Note Principal Balance of the Notes after giving effect to the distribution of principal on such Payment Date;

(ix)        the number and aggregate Scheduled Principal Balance of HELOCs (a) as to which the Monthly Payment is delinquent for 31-60 days, 61-90 days, 91 or more days, respectively, (b) in foreclosure and (c) that have become REO Property, in each case as of the end of the preceding calendar month;

(x)        the aggregate Charge-Off Amounts with respect to the related Payment Date and cumulative Charge-Off Amounts since the Closing Date;

(xi)        the number and aggregate Scheduled Principal Balance of HELOCs repurchased pursuant to the Mortgage Loan Purchase Agreement for the related Payment Date and cumulatively since the Closing Date;

	
            (xii)
 	
            the book value (if available) of any REO Property;
 	
             

	
            (xiii)
 	
            the amount of any Relief Act Shortfalls for such Payment Date; and
 

(xiv)      the aggregate Scheduled Principal Balance of HELOCs purchased pursuant to Section 2.04 of the Sale and Servicing Agreement for the related Payment Date and cumulatively since the Closing Date.

Items (iii) and (iv) above shall be presented on the basis of a Note having a $1,000 denomination. In addition, by January 31 of each calendar year following any year during which the Notes are outstanding, the Securities Administrator shall furnish a report to each Noteholder of record if so requested in writing at any time during each calendar year as to the aggregate of amounts reported pursuant to (iii) and (iv) with respect to the Notes for such calendar year.

The Securities Administrator may conclusively rely upon the information provided by the Master Servicer to the Securities Administrator in its preparation of monthly statements to Noteholders.

 

 

The Securities Administrator will make the monthly statements provided for in this section (and, at its option, any additional files containing the same information in an alternative format) available each month to Noteholders, each Noteholder and each Certificateholder, the Depositor, the Issuer, the Seller, the Owner Trustee, the Certificate Paying Agent and the Rating Agency via the Securities Administrator's website.  The Securities Administrator’s website shall initially be located at “www.etrustee.net.” Assistance in using the website can be obtained by calling the Securities Administrator’s customer service desk at (312) 904-6299.  Parties that are unable to use the website are entitled to have a paper copy mailed to them via first class mail by calling the Securities Administrator’s customer service desk and indicating such.  The Securities Administrator
may have the right to change the way the monthly statements are distributed in order to make such distribution more convenient and/or more accessible to the above parties and the Securities Administrator shall provide timely and adequate notification to all above parties regarding any such changes.

The Securities Administrator shall be entitled to rely on but shall not be responsible for the content or accuracy of any information provided by third parties for purposes of preparing the monthly statement, and may affix thereto any disclaimer it deems appropriate in its reasonable discretion (without suggesting liability on the part of any other party hereto).

 

 

ARTICLE VIII

 

ACCOUNTS, DISBURSEMENTS AND RELEASES

Section 8.01     Collection of Money.  Except as otherwise expressly provided herein, the Securities Administrator 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 Securities Administrator pursuant to this Indenture. The Securities Administrator shall apply all such money received by it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution
of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.

Section 8.02     Officer’s Certificate.  The Indenture Trustee shall receive at least seven Business Days’ notice when requested by the Issuer to take any action pursuant to Section 8.06(a) hereof, accompanied by copies of any instruments to be executed, and the Indenture Trustee shall also require, as a condition to such action, an Officer’s Certificate, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with.

Section 8.03     Termination Upon Distribution to Noteholders.  This Indenture and the respective obligations and responsibilities of the Issuer, the Securities Administrator and the Indenture Trustee created hereby shall terminate upon the distribution to Noteholders, the Note Insurer, the Certificate Paying Agent on behalf of the Certificateholders, the Securities Administrator and the Indenture Trustee of all amounts required to be distributed pursuant to Article III; provided, however, that in no event shall the trust created hereby continue beyond the earlier of (i) the expiration of 21 years from the death of the survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to the Court of St. James, living on the date hereof or (ii) the Latest Possible Maturity Date.

Section 8.04     Release of Trust Estate.  (a)  Subject to the payment of its fees and expenses, the Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture, including for the purposes of any purchase of a HELOC by the majority Holder of the Class E Certificates pursuant to Section 8.06 of this Indenture.  No party relying upon an instrument executed by the Indenture Trustee as provided in Article VIII hereunder shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent, or see to the
application of any monies.

(b)  The Indenture Trustee shall, at such time as (i) it is notified by the Securities Administrator that there are no Notes Outstanding, (ii) all sums then due and unpaid to the Indenture Trustee pursuant to this Indenture have been paid and (iii) all sums due to the Note Insurer have been paid, release any remaining portion of the Trust Estate that secured the Notes from the lien of this Indenture.

 

 

(c)  The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section 8.05 only upon receipt of a request from the Issuer and a letter from the Note Insurer stating that the Note Insurer has no objection to such request from the Issuer.

Section 8.05     Surrender of Notes Upon Final Payment.  By acceptance of any Note, the Holder thereof agrees to surrender such Note to the Securities Administrator promptly, prior to such Noteholder’s receipt of the final payment thereon.

Section 8.06     Optional Redemption of the HELOCs.  (a)  The Holder of the Class E Certificates, or if there is no single holder, the majority Holder of the Class E Certificates, shall have the option to purchase the assets of the Trust and thereby cause the redemption of the Notes, in whole, but not in part, on or after the Payment Date on which the sum of the Note Principal Balances of the Notes is reduced to an amount less than or equal to 10% of the sum of the original Note Principal Balances of the Notes.  Such optional purchaser shall be subject to the Note Insurer’s consent if the termination would result in a draw on the Policy.  The aggregate redemption price (the “Redemption Price”) for the Notes will be equal to the lesser of (i) the fair market value of the HELOCs and (ii) the sum of the
outstanding principal balance of the HELOCs, and accrued and unpaid interest thereon at the weighted average of the mortgage rates through the day preceding the final Payment Date; provided that the option shall only be exercised if the purchase price is sufficient to repay all outstanding principal and accrued and unpaid interest on the Notes and all amounts owing under the Insurance Agreement.

(b)  In order to exercise the foregoing option, the Holder of the Class E Certificates, or if there is no single holder, the majority Holder of the Class E Certificates, shall provide written notice of its exercise of such option to the Securities Administrator, the Note Insurer, the Issuer, the Owner Trustee and the Master Servicer at least 15 days prior to its exercise. Following receipt of the notice, the Securities Administrator shall provide written notice to the Noteholders of the final payment on the Notes. In addition, the Holder of the Class E Certificates, or if there is no single holder, the majority Holder of the Class E Certificates, shall, not less than one Business Day prior to the proposed Payment Date on which such redemption is to be made, deposit the Redemption Price specified in (a) above with the Securities Administrator, who shall
deposit the Redemption Price into the Payment Account and shall, on the Payment Date after receipt of the funds, apply such funds to make final payments of principal and interest on the Notes in accordance with Section 3.03 hereof and payment to the Securities Administrator and the Master Servicer as set forth in (a) above, and this Indenture shall be discharged subject to the provisions of Section 4.10 hereof. If for any reason the amount deposited by the Holder of the Class E Certificates, or if there is no single holder, the majority Holder of the Class E Certificates, is not sufficient to make such redemption or such redemption cannot be completed for any reason, (a) the amount so deposited by the Holder of the Class E Certificates, or if there is no single holder, the majority Holder of the Class E Certificates, with the Securities Administrator shall be immediately returned to the Holder of the Class E Certificates, or if there is no single holder, the majority Holder of the
Class E Certificates, in full and shall not be used for any other purpose or be deemed to be part of the Trust Estate and (b) the Note Principal Balance of the Notes shall continue to bear interest at the related Note Interest Rate.

(c)  Upon exercise by the Class E Certificateholder or the majority Holder of the Class E Certificates, as applicable, of its purchase option as provided in clause (a) above, the Notes shall be redeemed and the Trust Estate shall be terminated in accordance with the following additional requirements, unless the Indenture Trustee, the Securities Administrator and Owner Trustee have been supplied with an Opinion of Counsel addressed to the Indenture Trustee, the Note Insurer, the Securities Administrator and Owner Trustee, at the expense of the Class E Certificateholder or the majority Holder of the Class E Certificates, as applicable, to the effect 

 

that the failure of the Trust Estate to comply with the requirements of this clause (c) will not (i) result in the imposition of taxes on “prohibited transactions” of a REMIC created hereunder, or (ii) cause a REMIC created hereunder to fail to qualify as a REMIC at any time that any Notes or Certificates are outstanding:

(i)         The Class E Certificateholder or the majority Holder of the Class E Certificates, as applicable, shall establish a 90-day liquidation period and notify the Indenture Trustee, the Securities Administrator and Owner Trustee thereof, and the Securities Administrator shall in turn specify the first day of such period in a statement attached to the tax return for each REMIC created hereunder pursuant to Treasury Regulation Section 1.860F-1. The Class E Certificateholder or the majority Holder of the Class E Certificates, as applicable, shall satisfy all the requirements of a qualified liquidation under Section 860F of the Code and any regulations thereunder, as evidenced by an Opinion of Counsel obtained at the expense of the Class E Certificateholder or the majority Holder of the Class E Certificates, as applicable;

(ii)         During such 90-day liquidation period, and at or prior to the time of making the final payment on the Notes and Certificates, the Indenture Trustee shall sell all of the assets of REMIC I for cash; and

(iii)        At the time of the making of the final payment on the Notes and Certificates, the Securities Administrator and Owner Trustee shall distribute or credit, or cause to be distributed or credited, to the Certificate Paying Agent for distribution to the Holders of the Residual Certificates all cash on hand (other than cash retained to meet claims), and REMIC I shall terminate at that time.

(iv)        By their acceptance of the Notes, the Holders thereof hereby authorize the adoption of a 90-day liquidation period and the adoption of a plan of complete liquidation for each REMIC created hereunder, which authorization shall be binding upon all successor Noteholders.

(v)        The Securities Administrator as agent for each REMIC hereby agrees to adopt and sign such a plan of complete liquidation meeting the requirements for a qualified liquidation under Section 860F of the Code and any regulations thereunder upon the written request of the Class E Certificateholder or the majority Holder of the Class E Certificates, as applicable, and the receipt of the Opinion of Counsel referred to in clause (c)(i) above and to take such other action in connection therewith as may be reasonably requested by the Class E Certificateholder or the majority Holder of the Class E Certificates, as applicable.

 

 

ARTICLE IX

 

SUPPLEMENTAL INDENTURES

Section 9.01     Supplemental Indentures Without Consent of Noteholders.  (a)  Without the consent of the Holders of any Notes or Certificates but with prior notice to the Rating Agencies and the Note Insurer, the Issuer, the Indenture Trustee, the Note Insurer and the Securities Administrator, when authorized by an Issuer Request, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Indenture Trustee and the Securities Administrator, for any of the following purposes:

(i)         to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

(ii)         to evidence the succession, in compliance with the applicable provisions hereof, of another person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes contained;

(iii)        to add to the covenants of the Issuer, for the benefit of the Holders of the Notes and Certificates, or to surrender any right or power herein conferred upon the Issuer;

(iv)        to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture;

(v)        to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that such action shall not materially and adversely affect the interests of the Holders of the Notes or the Note Insurer; provided further, that such supplemental indenture will be deemed to not materially and adversely affect the interests of the Holders of the Notes if a Rating Confirmation is received with respect to such supplemental indenture; 

(vi)        to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Notes and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI hereof; or 

(vii)       to modify, eliminate or add to any of the provisions herein to such extent as shall be necessary or appropriate to maintain the qualification of any REMIC created hereunder as a REMIC under the Code or to avoid or minimize the risk of the imposition of any tax on any REMIC created hereunder pursuant to the Code that would be a claim against any such at any time prior to the final redemption of the Notes and Certificates, provided that the Indenture Trustee, the Securities Administrator and Owner Trustee have been provided an Opinion of Counsel addressed to the Indenture Trustee, the Securities Administrator and Owner Trustee, which opinion shall be an expense of the party requesting such opinion but in any case shall not be an expense of the Indenture Trustee, the Securities Administrator, Owner Trustee or the Trust Estate, to the effect that
such action is necessary or appropriate to maintain such qualification or to avoid or minimize the risk of the imposition of such a tax;

 

 

provided, however, that no such indenture supplements shall be entered into unless the Indenture Trustee, Note Insurer, Owner Trustee and the Securities Administrator shall have received an Opinion of Counsel not at the expense of the Indenture Trustee or the Securities Administrator as to the enforceability of any such indenture supplement and to the effect that (i) such indenture supplement is permitted hereunder and will not materially and adversely affect the Holders of the Notes or the Note Insurer and (ii) entering into such indenture supplement will not cause the imposition of any tax on any REMIC created hereunder, any Noteholder or any Certificateholder or cause any of REMIC created hereunder to cease to qualify as a REMIC at any time that any Notes or Certificates are outstanding.  

The Indenture Trustee and the Securities Administrator are hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

(b)  The Issuer, the Securities Administrator and the Indenture Trustee, when authorized by an Issuer Request, in the case of the Securities Administrator and the Indenture Trustee may, also without the consent of any of the Holders of the Notes and prior notice to the Rating Agency or the Note Insurer, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that such action as evidenced by an Opinion of Counsel addressed to the Indenture Trustee, the Note Insurer, Securities Administrator and Owner Trustee, (i) is permitted by this Indenture, (ii) shall not adversely affect in any material respect the interests of any Noteholder and (iii) shall not cause
the imposition of any tax on any REMIC created hereunder, any Noteholder or any Certificateholder or cause any of REMIC created hereunder to cease to qualify as a REMIC at any time that any Notes or Certificates are outstanding.

Section 9.02    Supplemental Indentures With Consent of Noteholders.  The Issuer, the Securities Administrator and the Indenture Trustee, when authorized by an Issuer Request in the case of the Securities Administrator and the Indenture Trustee, also may, with prior notice to the Rating Agencies and, with the consent of the Note Insurer and the Holders of not less than a majority of the Note Principal Balance of each Class of Notes affected thereby, by Act (as defined in Section 10.03 hereof) of such Holders delivered to the Issuer, the Securities Administrator and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Note affected thereby:

(i)         change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof or the interest rate thereon, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Estate and to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Notes on or after the respective due dates thereof;

(ii)         reduce the percentage of the Note Principal Balances of the Notes, or any Class of Notes, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the 

 

Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

(iii)        modify or alter the provisions of the proviso to the definition of the term “Outstanding” or modify or alter the exception in the definition of the term “Holder”

(iv)        reduce the percentage of the Note Principal Balances of the Notes, or any Class of Notes, required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04 hereof;

(v)        modify any provision of this Section 9.02 except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Note affected thereby;

(vi)        modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of such calculation); or

(vii)       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 or, except as otherwise permitted or contemplated herein, terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security provided by the lien of this Indenture; 

and provided, further, that such action shall not, as evidenced by an Opinion of Counsel addressed to the Indenture Trustee, the Note Insurer, the Securities Administrator and Owner Trustee, cause the imposition of any tax on any REMIC created hereunder, any Noteholder or any Certificateholder or cause any of REMIC created hereunder to cease to qualify as a REMIC at any time that any Notes or Certificates are outstanding.

Any such action shall not adversely affect in any material respect the interest of any Holder (other than a Holder who shall consent to such supplemental indenture) as evidenced by an Opinion of Counsel (provided by the Person requesting such supplemental indenture) delivered to the Indenture Trustee and the Securities Administrator.

It shall not be necessary for any Act of Noteholders under this Section 9.02 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, the Securities Administrator and the Indenture Trustee of any supplemental indenture pursuant to this Section 9.02, the Securities Administrator shall mail to the Holders of the Notes to which such amendment or supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Securities Administrator 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 permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modification thereby of the trusts created by this Indenture, the Indenture Trustee and the Securities Administrator shall be entitled to receive, and subject to Sections 6.01 and 6.02 hereof, shall be fully protected in relying upon, an Opinion of Counsel not at 

 

the expense of the Indenture Trustee or the Securities Administrator stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee and the Securities Administrator each may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s or the Securities Administrator’s own rights, duties, liabilities or immunities under this Indenture or otherwise.

Section 9.04     Effect of Supplemental Indenture.  Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Securities Administrator, the Issuer and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.05     Conformity with Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be qualified under the Trust Indenture Act.

Section 9.06     Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Securities Administrator shall, bear a notation in form approved by the Securities Administrator as to any matter provided for in such supplemental indenture. If the Issuer or the Securities Administrator shall so determine, new Notes so modified as to conform, in the opinion of the Securities Administrator and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Securities Administrator in exchange for Outstanding Notes.

 

 

ARTICLE X

 

TAX MATTERS

 

	
            Section 10.01
 	
            Description of REMICs and Designation of REMIC Interests.
 

 

REMIC I

As provided herein, the Securities Administrator will elect to treat the segregated pool of assets consisting of the HELOCs and certain other related assets subject to this Indenture and the Basic Documents (other than the Net WAC Cap Rate Carryover Reserve Account) as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC I”. The Class S Certificates will be the sole class of Residual Interests in REMIC I for purposes of the REMIC Provisions. The following table irrevocably sets forth the designation, the Uncertificated REMIC I Pass-Through Rate, the initial Uncertificated Principal Balance and, for purposes of satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC I Regular Interests. None of the REMIC I Regular Interests will be certificated.

 

	
            
Designation
 
 	
            
Uncertificated REMIC I

Pass-Through Rate
 
 	
            
Initial Uncertificated Principal Balance
 
 	
            
Latest Possible Maturity Date (1)
 
 
	
            AA
 	
            Variable(2)
 	
            $   339,058,583.96 
 	
            July 25, 2030
 
	
            A-1
 	
            Variable(2)
 	
            $       2,683,230.00 
 	
            July 25, 2030
 
	
            A-2
 	
            Variable(2)
 	
            $            50,000.00 
 	
            July 25, 2030
 
	
            M-1
 	
            Variable(2)
 	
            $          577,780.00 
 	
            July 25, 2030
 
	
            M-2
 	
            Variable(2)
 	
            $            36,320.00 
 	
            July 25, 2030
 
	
            B-1
 	
            Variable(2)
 	
            $            25,950.00 
 	
            July 25, 2030
 
	
            B-2
 	
            Variable(2)
 	
            $            34,600.00 
 	
            July 25, 2030
 
	
            B-3
 	
            Variable(2)
 	
            $            17,300.00 
 	
            July 25, 2030
 
	
            B-4
 	
            Variable(2)
 	
            $            17,300.00 
 	
            July 25, 2030
 
	
            ZZ
 	
            Variable(2)
 	
            $       3,477,082.94 
 	
            July 25, 2030
 

___________________________

	
            (1)
 	
            For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Payment Date immediately following the maturity date for the HELOC with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC I Regular Interest.
 

	
            (2)
 	
            Calculated in accordance with the definition of “Uncertificated REMIC I Pass-Through Rate” herein.
 

 

REMIC II

As provided herein, the Securities Administrator will elect to treat the segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC II”. The Class R Certificates will represent the sole class of Residual Interests in REMIC II for purposes of the REMIC Provisions.

The following table irrevocably sets forth the Class designation, interest rate, initial principal balance and, for purposes of satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity 

 

date” for each Class of Notes and Certificates that represents ownership of one or more of the Regular Interests in REMIC II created hereunder.  

 

	
            
Class Designation
 
 	
            
Interest Rate
 
 	
            
Initial Principal Balance
 
 	
            
Latest Possible Maturity Date(1)
 
 
	
            A-1
 	
            Variable(2)
 	
            $   268,323,000.00
 	
            July 25, 2030
 
	
            A-2
 	
            Variable(2)
 	
            $       5,000,000.00
 	
            July 25, 2030
 
	
            M-1
 	
            Variable(2)
 	
            $     57,778,000.00
 	
            July 25, 2030
 
	
            M-2
 	
            Variable(2)
 	
            $       3,632,000.00
 	
            July 25, 2030
 
	
            B-1
 	
            Variable(2)
 	
            $       2,595,000.00
 	
            July 25, 2030
 
	
            B-2
 	
            Variable(2)
 	
            $       3,460,000.00
 	
            July 25, 2030
 
	
            B-3
 	
            0.000%
 	
            $       1,730,000.00 
 	
            July 25, 2030
 
	
            B-4
 	
            0.000%
 	
            $       1,730,000.00 
 	
            July 25, 2030
 
	
            E
 	
            Variable(3)
 	
            $       1,730,146.96
 	
            July 25, 2030
 

___________________

	
            (1)
 	
            For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Payment Date in the month following the maturity date for the HELOC with the latest maturity date has been designated as the “latest possible maturity date” for each Note and Certificate described above.
 

	
            (2)
 	
            Calculated in accordance with the definition of “Pass-Through Rate” herein.  
 

	
            (3)
 	
            The Class E Certificate will accrue interest at its variable interest rate calculated in accordance with the definition of “Class E Interest Rate” on the Notional Amount of the Class E Certificate outstanding from time to time, which shall equal the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests. The Class E Certificate will not accrue interest on its Certificate Principal Balance.
 

 

	
            Section 10.02
 	
            REMIC Elections and REMIC Distributions.  
 

(a)        The Securities Administrator shall elect that each of REMIC I and REMIC II shall be treated as a REMIC under Section 860D of the Code. Any inconsistencies or ambiguities in this Indenture or any of the Basic Documents or in the administration of this Indenture or the Basic Documents shall be resolved in a manner that preserves the validity of such REMIC elections.    

(b)        On each Payment Date, the following amounts, in the following order of priority, shall be distributed by REMIC I to REMIC II on account of the REMIC I Regular Interests or withdrawn from the Payment Account and distributed to the Holders of the Class S Certificates, as the case may be:

(i)         to the holders of each REMIC I Regular Interest the Interest Collection Amount, pro rata, in an amount equal to (A) the Uncertificated Accrued Interest for such REMIC I Regular Interest for such Payment Date, plus (B) any amounts in respect thereof remaining unpaid from previous Payment Dates. Amounts payable as Uncertificated Accrued Interest in respect of REMIC I Regular Interest ZZ shall be reduced when the REMIC I Overcollateralization Amount is less than the REMIC I Required Overcollateralization Amount, by the lesser of (x) the amount of such difference and (y) the Maximum Uncertificated Accrued Interest Deferral Amount, and such amount will be payable to the holders of REMIC I Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest M-1,
REMIC I Regular Interest M-2, REMIC I Regular Interest B-1, REMIC I Regular Interest B-2, REMIC I Regular Interest B-3 and REMIC I Regular Interest B-4 in the same proportion as the Overcollateralization Increase Amount is allocated to the Corresponding Certificates, and the Uncertificated Principal Balance of REMIC I Regular Interest ZZ shall be increased by such amount;

 

 

(ii)         to the holders of REMIC I Regular Interests the Available Principal Payment Amount for such Payment Date, allocated as follows:

(A)              98% of such amount to the holders of REMIC I Regular Interest AA, until the Uncertificated Principal Balance of such REMIC I Regular Interest is reduced to zero;

(B)              2% of such remainder, first, to the holders of REMIC I Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest B-1, REMIC I Regular Interest B-2, REMIC I Regular Interest B-3 and REMIC I Regular Interest B-4 in an aggregate amount equal to 1% of and in the same proportion as principal payments are allocated to the Corresponding Certificates for each such REMIC I Regular Interest, until the Uncertificated Principal Balances of such REMIC I Regular Interests are reduced to zero; and second, to the holders of REMIC I Regular Interest ZZ, until the Uncertificated Principal Balance of such REMIC I Regular Interest is reduced to zero; then

	
            (C)
 	
            any remaining amount to the Holders of the Class S Certificates.
 

(c)        On each Payment Date, an amount equal to the amounts distributed pursuant to Sections 3.03(a)(5) and (8), 3.03(b)(4) and (6) and 3.03(c)(4) and (6) on such date shall be deemed distributed to the Class E Certificate in respect of the Class E Distribution Amount.

 

	
            Section 10.03
 	
            Allocation of Charge-Off Amounts.
 

All Charge-Off Amounts on the HELOCs shall be allocated on each Payment Date to the following REMIC I Regular Interests in the specified percentages, as follows:  first, to Uncertificated Accrued Interest payable to the REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98.00% and 2.00%, respectively; and second, to the Uncertificated Principal Balances of the REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC I Principal Loss Allocation Amount, 98.00% and 2.00%, respectively.  Any subsequent allocation of Charge-Off Amounts to the Notes and the Class S Certificates pursuant to Section 3.24 shall be allocated on each Payment Date (i) to the following REMIC I Regular Interests in the specified percentages, as follows: first, to the Uncertificated
Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest B-4 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest B-4 has been reduced to zero; second, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest B-3 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest B-3 has been reduced to zero; third, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest B-2 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest B-2 has been reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest B-1 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively,
until the Uncertificated Principal Balance of REMIC I Regular Interest B-1 has been reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest M-2 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest M-2 has been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest M-1 and REMIC I Regular Interest ZZ, 98.00%, 

 

1.00%, and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest M-1 has been reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest A-2 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest A-2 has been reduced to zero; and eighth, to the Uncertificated Principal Balances of REMIC I Regular Interest AA, REMIC I Regular Interest A-1 and REMIC I Regular Interest ZZ, 98.00%, 1.00% and 1.00%, respectively, until the Uncertificated Principal Balance of REMIC I Regular Interest A-1 has been reduced to zero, and (ii) to the Class S Certificates, in the same proportion as between the Notes and the Class S Certificates, respectively.

 

	
            Section 10.04
 	
            Tax Administration.
 

 

It is intended that the Trust Estate shall constitute, and that the affairs of the Trust Estate shall be conducted so that each REMIC formed hereunder qualifies as, a “real estate mortgage investment conduit” as defined in and in accordance with the REMIC Provisions. In furtherance of such intention, the Securities Administrator covenants and agrees that it shall act as agent (and the Securities Administrator is hereby appointed to act as agent) on behalf of the Trust Estate. The Securities Administrator, as agent on behalf of the Trust Estate, shall do or refrain from doing, as applicable, the following:  (a) the Securities Administrator shall prepare and file, or cause to be prepared and filed, in a timely manner, U.S. Real Estate Mortgage Investment Conduit Income Tax Returns (Form 1066 or any successor form adopted by the Internal Revenue Service) and prepare and file or
cause to be prepared and filed with the Internal Revenue Service and applicable state or local tax authorities income tax or information returns for each taxable year with respect to each such REMIC containing such information and at the times and in the manner as may be required by the Code or state or local tax laws, regulations, or rules, and furnish or cause to be furnished to Noteholders and Certificateholders the schedules, statements or information at such times and in such manner as may be required thereby; (b) the Securities Administrator shall apply for an employer identification number with the Internal Revenue Service via a Form SS-4 or other comparable method for each REMIC that is or becomes a taxable entity, and within thirty days of the Closing Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms 8811 or as otherwise may be required by the Code, the name, title, address, and telephone number of the Person that the Holders of the Notes and
Certificates may contact for tax information relating thereto, together with such additional information as may be required by such Form, and update such information at the time or times in the manner required by the Code for the Trust Estate; (c) the Securities Administrator shall make or cause to be made elections, on behalf of each REMIC formed hereunder to be treated as a REMIC on the federal tax return of such REMIC for its first taxable year (and, if necessary, under applicable state law); (d) the Securities Administrator shall prepare and forward, or cause to be prepared and forwarded, to the Noteholders and Certificateholders and to the Internal Revenue Service and, if necessary, state tax authorities, all information returns and reports as and when required to be provided to them in accordance with the REMIC Provisions, including without limitation, the calculation of any original issue discount using the Prepayment Assumption; (e) the Securities Administrator shall provide
information necessary for the computation of tax imposed on the Transfer of a Residual Certificate to a Person that is not a Permitted Transferee, or an agent (including a broker, nominee or other middleman) of a Person that is not a Permitted Transferee, or a pass-through entity in which a Person that is not a Permitted Transferee is the record holder of an interest (the reasonable cost of computing and furnishing such information may be charged to the Person liable for such tax); (f) the Securities Administrator shall, to the extent under its control, conduct the affairs of the Trust Estate at all times that any Notes or Certificates are outstanding so as to maintain the status of each REMIC formed hereunder as a REMIC under the REMIC Provisions; (g) the Securities Administrator shall not knowingly or intentionally take any action or omit to take any action that would cause the termination of the REMIC status of any REMIC formed 

 

hereunder; (h) the Securities Administrator shall pay, from the sources specified in the penultimate paragraph of this Section 10.04, the amount of any federal, state and local taxes, including prohibited transaction taxes as described below, imposed on any REMIC formed hereunder prior to the termination of the Trust Estate when and as the same shall be due and payable (but such obligation shall not prevent the Securities Administrator or any other appropriate Person from contesting any such tax in appropriate proceedings and shall not prevent the Securities Administrator from withholding payment of such tax, if permitted by law, pending the outcome of such proceedings); (i) the Securities Administrator shall maintain records relating to each REMIC formed hereunder including but not limited to the income, expenses, assets and liabilities of each such REMIC and adjusted basis of the Trust Estate property
determined at such intervals as may be required by the Code, as may be necessary to prepare the foregoing returns, schedules, statements or information; (j) the Securities Administrator shall, for federal income tax purposes, maintain books and records with respect to the REMICs on a calendar year and on an accrual basis; (k) the Securities Administrator shall not enter into any arrangement not otherwise provided for in this Indenture or the Basic Documents by which the REMICs will receive a fee or other compensation for services nor permit the REMICs to receive any income from assets other than “qualified mortgages” as defined in Section 860G(a)(3) of the Code or “permitted investments” as defined in Section 860G(a)(5) of the Code; and (l) as and when necessary and appropriate, the Securities Administrator, at the expense of the Trust Estate, shall represent the Trust Estate in any administrative or judicial proceedings relating to an examination or audit by any
governmental taxing authority, request an administrative adjustment as to any taxable year of any REMIC formed hereunder, enter into settlement agreements with any governmental taxing agency, extend any statute of limitations relating to any tax item of the Trust Estate, and otherwise act on behalf of each REMIC formed hereunder in relation to any tax matter involving any such REMIC.

In order to enable the Securities Administrator to perform its duties as set forth herein, the Depositor shall provide, or cause to be provided, to the Securities Administrator within 10 days after the Closing Date all information or data that the Securities Administrator requests in writing and determines to be relevant for tax purposes to the valuations and offering prices of the Notes and Certificates, including, without limitation, the price, yield, prepayment assumption and projected cash flows of the Notes and Certificates and the HELOCs. Thereafter, the Depositor shall provide to the Securities Administrator promptly upon written request therefor, any such additional information or data that the Securities Administrator may, from time to time, request in order to enable the Securities Administrator to perform its duties as set forth herein. The Depositor hereby indemnifies the
Securities Administrator for any losses, liabilities, damages, claims or expenses of the Securities Administrator arising from any errors or miscalculations of the Securities Administrator that result from any failure of the Depositor to provide, or to cause to be provided, accurate information or data to the Securities Administrator on a timely basis.

In the event that any tax is imposed on “prohibited transactions” as defined in Section 860F(a)(2) of the Code of any REMIC created hereunder, on the “net income from foreclosure property” of the Trust Estate as defined in Section 860G(c) of the Code, on any contribution to any REMIC created hereunder after the Closing Date pursuant to Section 860G(d) of the Code, or any other tax is imposed, including, without limitation, any federal, state or local tax or minimum tax imposed upon any REMIC created hereunder, and is not paid as otherwise provided for herein, such tax shall be paid by (i) the Indenture Trustee, the Securities Administrator or Owner Trustee, if any such other tax arises out of or results from a breach by the Indenture Trustee, the Securities Administrator or Owner Trustee of any of its obligations under this Indenture or the Basic Documents, (ii) any
party hereto (other than the Indenture Trustee, the Securities Administrator and Owner Trustee) to the extent any such other tax arises out of or results from a breach by such other party of any of its obligations under this Indenture or the Basic Documents or (iii) in all other cases, or in the event that any liable 

 

party hereto fails to honor its obligations under the preceding clauses (i) or (ii), any such tax will be paid first with amounts otherwise to be distributed to the Residual Certificateholders, and second with amounts otherwise to be distributed to all Noteholders and Class E Certificateholders in the following order of priority:  first, to the Class B-4 Notes, second, to the Class B-3 Notes, third, to the Class B-2 Notes, fourth, to the Class B-1 Notes, fifth, to the Class M-2 Certificates, sixth, to the Class M-1 Certificates, and seventh, to the Class A Notes (pro rata, based on the amounts to be distributed. Notwithstanding anything to the contrary contained herein, to the extent that such tax is payable by the Holder of any Notes or Certificates, the Securities Administrator is hereby authorized to retain on any Payment Date, from the Holders of the
Residual Certificates (and, if necessary, second, from the Holders of the Notes and Class E Certificates in the priority specified in the preceding sentence), funds otherwise distributable to such Holders in an amount sufficient to pay such tax. The Securities Administrator shall promptly notify in writing the party liable for any such tax of the amount thereof and the due date for the payment thereof.

The Securities Administrator agrees that, in the event it should obtain any information necessary for the other party to perform its obligations pursuant to this Section 11.04, it will promptly notify and provide such information to such other party.

 

	
            Section 10.05
 	
            [Reserved].
 

 

 

 

ARTICLE XI

 

MISCELLANEOUS

Section 11.01   Compliance Certificates and Opinions, etc.  (a)  Upon any application or request by the Issuer to the Indenture Trustee or the Securities Administrator to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee, the Securities Administrator and the Note Insurer (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and (ii) 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, no additional certificate or opinion
need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(1)        a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

(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 or opinion are based;

(3)        a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with;

(4)        a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with; and

(5)        if the signatory of such certificate or opinion is required to be Independent, the statement required by the definition of the term “Independent”.

(b)  (i) Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 10.01 (a) or elsewhere in this Indenture, furnish to the Indenture Trustee and the Note Insurer an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days prior to such deposit) to the Issuer of the Collateral or other property or securities to be so deposited and a report from a nationally recognized accounting firm verifying such value.

(ii)         Whenever the Issuer is required to furnish to the Indenture Trustee, the Securities Administrator and the Note Insurer an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate from a nationally recognized accounting firm as to the same matters, if the fair value of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or more of the Note Principal Balances of the Notes, but such a certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof as set 

 

forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the then outstanding Note Principal Balances of the Notes.

(iii)        Whenever any property or securities are to be released from the lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days prior to such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

(iv)        Whenever the Issuer is required to furnish to the Indenture Trustee, the Securities Administrator and the Note Insurer an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee and the Securities Administrator an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property or securities released from the lien of this Indenture since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10% or more of the Note Principal Balances of the Notes, but such certificate need not be furnished in the case of any release of property or securities if the fair value
thereof as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the then outstanding Note Principal Balances of the Notes.

Section 11.02   Form of Documents Delivered to Indenture Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Seller or the Issuer, stating that the information with respect to such factual matters is in the possession of the Seller or the Issuer, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to
such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The 

 

foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.

Section 11.03   Acts of Noteholders.  (a)  Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section 10.03 hereof.

(b)  The fact and date of the execution by any person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.

	
            (c)
 	
            The ownership of Notes shall be proved by the Note Registrar.
 

(d)  Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

Section 11.04   Notices etc., to Indenture Trustee Issuer, Securities Administrator, Note Insurer and Rating Agencies.  Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture shall be in writing and if such request, demand, authorization, direction, notice, consent, waiver or act of Noteholders is to be made upon, given or furnished to or filed with:

(i)         the Indenture Trustee by any Noteholder or by the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Indenture Trustee at its Corporate Trust Office. The Indenture Trustee shall promptly transmit any notice received by it from the Noteholders to the Issuer and the Note Insurer; 

(ii)         the Securities Administrator by any Noteholder or by the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Securities Administrator at the Corporate Trust Office, or such other address as may hereafter be furnished to the other parties hereto in writing. The Securities Administrator shall promptly transmit any notice received by it from the Noteholders to the Issuer; 

	
            (iii)
 	
            the Note Insurer, Assured Guaranty Corp., 1325 Avenue of the Americas
 

New York, New York  10019, Attention:  Risk Management Department (SACO I Trust 2005-GP1, Policy No. D-2005-69)

, with a copy to the General Counsel at the above address, and in each case in which a demand, notice or other communication to the Note Insurer refers to a Default, an Event of Default or any event with respect to which failure on the part of the Note Insurer to respond shall be deemed to constitute consent or acceptance, then such demand, notice or other communication shall be marked to indicate "URGENT MATERIAL ENCLOSED"; or

(iv)        the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing and mailed first-class, postage prepaid to the Issuer addressed to: SACO I Trust 2005-GP1, in care of Owner Trustee at the Corporate Trust Office, or at any 

 

other address previously furnished in writing to the Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee.

Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee, the Securities Administrator or the Owner Trustee shall be in writing, mailed first-class postage pre-paid: in the case of Moody’s, to Moody’s, at the following address: Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007; in the case of S&P, Standard & Poor's, a division of The McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041; and in the case of Fitch, One State Street Plaza, New York, New York 10004, or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

Section 11.05   Notices to Noteholders; Waiver.  Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at such Person’s address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively
be presumed to have been duly given regardless of whether such notice is in fact actually received.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

Where this Indenture provides for notice to the Rating Agency, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute an Event of Default.

Section 11.06   Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

Section 11.07   Effect of Headings.  The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

 

 

Section 11.08   Successors and Assigns.  All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents.

Section 11.09   Separability.  In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 11.10   Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.

Section 11.11   GOVERNING LAW.  THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS, WHICH SHALL APPLY HERETO), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 11.12   Counterparts.  This Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 11.13   Recording of Indenture.  If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel at its expense (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

Section 11.14   Issuer Obligation.  No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Securities Administrator on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Securities Administrator, the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Securities Administrator, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

 

 

Section 11.15   No Petition.  The Indenture Trustee and the Securities Administrator, by entering into this Indenture, each Noteholder, by accepting a Note and each Certificateholder, by accepting a Certificate, hereby covenant and agree that they will not at any time prior to one year from the date of termination hereof, 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 Notes, this Indenture or any of the Basic Documents; provided however, that nothing herein shall prohibit the Indenture Trustee from filing proofs of claim in any proceeding.

Section 11.16   Inspection.  The Issuer agrees that, at its expense, on reasonable prior notice, it shall permit any representative of the Indenture Trustee, the Note Insurer or the Securities Administrator, during the Issuer’s normal business hours, to examine all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees, and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested. The Indenture Trustee and the Note Insurer shall cause its representatives to hold in confidence all such information except to the extent disclosure
may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee, the Note Insurer or the Securities Administrator may reasonably determine that such disclosure is consistent with its obligations hereunder.

Section 11.17   Benefits of Indenture.  The Note Insurer and its successors and assigns shall be a third-party beneficiary to the provisions of this Indenture.  To the extent that this Indenture confers upon or gives or grants to the Note Insurer any right, remedy or claim under or by reason of this Indenture, the Note Insurer may enforce any such right, remedy or claim conferred, given or granted hereunder.  Nothing in this Indenture or in the, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders and the Note Insurer, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 11.18   Securities Administrator to Hold Policy.  The Indenture Trustee (or the Securities Administrator on its behalf) will hold the Policy in trust as agent for the Class A-1 and Class M-1 Noteholders  for the purpose of making claims thereon and distributing the proceeds thereof.  Each Class A-1 and Class M-1 Noteholder, by accepting its Note, appoints the Indenture Trustee (and the Securities Administrator on its behalf) as attorney-in-fact for the purpose of making claims on the Policy.  The Indenture Trustee (or the Securities Administrator on its behalf) shall surrender the Policy to the Note Insurer for cancellation upon the expiration of the term of the Policy following the retirement of the Class A-1 Notes and Class M-1 Notes.

 

 

 

IN WITNESS WHEREOF, the Issuer, the Securities Administrator and the Indenture Trustee have caused their names to be signed hereto by their respective officers thereunto duly authorized, all as of the day and year first above written.

SACO I TRUST 2005-GP1, 

as Issuer

By:  Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee

By:  /s/ Patricia Evans

Name:  Patricia Evans

Title: Vice President 

LASALLE BANK NATIONAL ASSOCIATION, 

as Securities Administrator

By:  /s/ Susan L. Abbott

Name:  Susan L. Abbott

Title:  Assistant Vice President

CITIBANK, N.A., 

as Indenture Trustee

By:  /s/ John Hannon

Name:  John Hannon 

Title: Assistant Vice President

 

 

 

 

	
            STATE OF_____________
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF___________
 	
            )
 	
             
 

 

On the 9th day of September, 2005, before me, a notary public in and for said State, personally appeared ___________________________________________, known to me to be a(n)______________________ of LaSalle Bank National Association, the entity that executed the within instrument, and also known to me to be the person who executed it on behalf of said entity, and acknowledged to me that such entity 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.

____________________________________

Notary Public

 

[NOTARIAL SEAL]

 

 

 

	
            STATE OF DELAWARE
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF___________
 	
            )
 	
             
 

 

On the 9th day of September, 2005, before me personally appeared ________________ to me known, who being by me duly sworn, did depose and say, that he/she is a(n) ____________________of the Owner Trustee, one of the entities described in and which executed the above instrument; and that he/her signed his/her name thereto by like order.

____________________________________

Notary Public

 

[NOTARIAL SEAL]

 

 

 

	
            STATE OF_____________
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF___________
 	
            )
 	
             
 

 

On the 9th day of September, 2005, before me personally appeared _____________ to me known, who being by me duly sworn, did depose and say, that he/she is a(n) _________________ of the Indenture Trustee, one of the corporations described in and which executed the above instrument; and that he/she signed his/her name thereto by like order.

_____________________________________

Notary Public

 

[NOTARIAL SEAL]

 

 

 

 

APPENDIX A

DEFINITIONS

Accepted Master Servicing Practices: With respect to any HELOC, those customary mortgage master servicing practices of prudent mortgage master servicing institutions that master service HELOCs of the same type and quality as such HELOCs in the jurisdiction where the related Mortgaged Property is located, to the extent applicable to the Master Servicer (except in its capacity as successor to the Servicer).

Account: The Master Servicer Collection Account, the Payment Account, the Net WAC Cap Rate Carryover Reserve Account and the Protected Account, as the context may require.

Accrual Period: With respect to the Notes (other than the Class B-3 Notes and Class B-4 Notes) and the Class E Certificates and any Payment Date, the period from and including the preceding Payment Date (or from the Closing Date, in the case of the first Payment Date) to and including the day prior to the current Payment Date.  Calculations of interest on the Notes (other than the Class B-3 Notes and Class B-4 Notes) and the Class E Certificates will be based on a 360-day year and the actual number of days elapsed during the related accrual period.

Administration Agreement: The Administration Agreement, dated as of September 9, 2005, among the Issuer, the Depositor, the Owner Trustee and the Securities Administrator.

Adjustment Date: As to each HELOC, each date set forth in the related Mortgage Note on which an adjustment to the interest rate on such HELOC becomes effective.

Affiliate: With respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, “control” means the power to direct the management and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative to the foregoing.

Aggregate Master Servicing Compensation: For any Payment Date, any investment income on funds on deposit in the Master Servicer Collection Account that is payable to the Master Servicer on such Payment Date pursuant to the Sale and Servicing Agreement.

Applicable Credit Rating: For any long-term deposit or security, a credit rating of AAA from S&P. For any short-term deposit or security, a rating of A-l+ from S&P.

Appraised Value: For any Mortgaged Property related to a HELOC, the amount set forth as the appraised value of such Mortgaged Property in an appraisal made for the mortgage originator in connection with its origination of the related HELOC.

Assigned Contracts: Any pledged asset loan agreement governing the pledge of the Pledged Assets.

 

 

Assignment Agreement: The agreement whereby the Servicing Agreement was assigned to the Indenture Trustee for the benefit of the Noteholders and the Note Insurer.

Assignment of Mortgage: An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form, which is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale of the Mortgage, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering Mortgages secured by Mortgaged Properties located in the same county, if permitted by law.

Authorized Newspaper: A newspaper of general circulation in the Borough of Manhattan, The City of New York, printed in the English language and customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays.

Authorized Officer: With respect to the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Owner Trustee to the Indenture Trustee and Securities Administrator on the Closing Date (as such list may be modified or supplemented from time to time thereafter).

Available Principal Payment Amount: With respect to the Notes and any Payment Date, the sum of:

(i) the greater of (A) zero and (B)

(1) with respect to any Payment Date during the Managed Amortization Period and if the Seller's Pro Rata Test is not met, the Principal Collection Amount less (a) the aggregate Draws for such Payment Date and (b) the aggregate Certificate Principal Balance of the Class S Certificates immediately prior to that Payment Date;

(2) with respect to any Payment Date during the Managed Amortization Period and if the Seller's Certificate Pro Rata Test is met, the Floating Allocation Percentage of the Principal Collection Amount less the aggregate Draws for the related Payment Date; and

(3) with respect to any Payment Date during the Rapid Amortization Period, the Floating Allocation Percentage of the Principal Collection Amount; and

(ii) the Overcollateralization Increase Amount for that Payment Date,

minus

(iii) the Overcollateralization Reduction Amount for that Payment Date; and

(iv) the servicing fees and Extraordinary Trust Fund Expenses (subject to the Extraordinary Trust Fund Expense Cap), to the extent not already covered by a reduction to the Interest Collection Amount

 

 

Bankruptcy Code: The United States Bankruptcy Code, as amended as codified in 11 U.S.C. §§ 101-1330.

Bankruptcy Loss: With respect to any HELOC, any Deficient Valuation or Debt Service Reduction related to such HELOC as reported by the Servicer to the Master Servicer.

Basic Documents: The Sale and Servicing Agreement, the Servicing Agreement, the Indenture, the Trust Agreement, the Mortgage Loan Purchase Agreement, the Custodial Agreement, the Administration Agreement, the Insurance Agreement and the other documents and certificates delivered in connection with any of the above.

Beneficial Owner: With respect to any Note or Certificate, the Person who is the beneficial owner of such Note or Certificate as reflected on the books of the Depository or on the books of a Person maintaining an account with such Depository (directly as a Depository Participant or indirectly through a Depository Participant, in accordance with the rules of such Depository).

Book-Entry Notes: Beneficial interests in the Class A-1, Class A-2, Class M-1, Class M-2 and Class B-1 Notes, ownership and transfers of which shall be made through book entries by the Depository as described in the Indenture.

Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day on which the New York Stock Exchange or Federal Reserve is closed or on which banking institutions in the jurisdiction in which the Indenture Trustee, the Owner Trustee, the Master Servicer, the Servicer or the Securities Administrator is located are authorized or obligated by law or executive order to be closed.

Calendar Quarter: A calendar quarter shall consist of one of the following time periods in any given year: January 1 through March 31, April 1 through June 30, July 1 through September 30, and October 1 through December 31.

Certificate Paying Agent: Initially, the Securities Administrator, in its capacity as Certificate Paying Agent, or any successor to Securities Administrator in such capacity.

Certificate Register: The register maintained by the Certificate Registrar in which the Certificate Registrar shall provide for the registration of Certificates and of transfers and exchanges of Certificates.

Certificate Registrar: Initially, the Securities Administrator, in its capacity as Certificate Registrar, or any successor to the Securities Administrator in such capacity pursuant to the Trust Agreement.

Certificate of Trust: The Certificate of Trust filed for the Trust pursuant to Section 3810(a) of the Statutory Trust Statute.

Certificateholder: The Person in whose name a Certificate is registered in the Certificate Register.  Owners of Certificates that have been pledged in good faith may be regarded as Holders if the pledgee establishes to the satisfaction of the Securities Administrator 

 

or the Owner Trustee, as the case may be, the pledgee’s right so to act with respect to such Certificates and that the pledgee is not the Issuer, any other obligor upon the Certificates or any Affiliate of any of the foregoing Persons.

Certificate Principal Balance:  With respect to the Class S Certificates shall equal the amount by which on any payment date Draws exceed the Principal Collection Amount, minus (i) all amounts in respect of principal distributed to the Class S Certificates on previous Payment Dates and (ii) any Charge-Off Amounts allocated to such Class on previous Payment Dates

Certificates: The Class E, Class S and Class R Certificates.

Charge-Off Amount: With respect to any Charged-Off HELOC, the amount of the Stated Principal Balance of such HELOC that has been written down.

Charged-Off HELOC: Any HELOC that is more than 180 days (or, earlier, in accordance with the Servicer’s servicing practices) past due.

Class: Any of the Class A, Class M or Class B Notes, or any of the Class E, Class S or Class R Certificates.

Class A Notes: The Class A-1 Notes and Class A-2 Notes, each in the form attached as Exhibit A-1 to the Indenture.

Class A Principal Payment Amount: With respect to any Payment Date is the lesser of (I) the Available Principal Payment Amount and, with respect to the Class A-1 Notes, any amounts drawn on the Policy for Charged-Off HELOCs, for such Payment Date and (II) an amount equal to the excess (if any) of (A) the aggregate Note Principal Balance of the Class A Notes immediately prior to such Payment Date over (B) the lesser of (x) the product of (1) the Invested Amount as of the end of the related Collection Period multiplied by (2) approximately 58.00% and (y) (1) the Invested Amount as of the end of the related Collection Period, less (2) the Overcollateralization Floor.

Class B Notes: The Class B-1, Class B-2, Class B-3 and Class B-4 Notes, each in the form attached as Exhibit A-3 to the Indenture.

Class B-1 Principal Payment Amount: With respect to any Payment Date is the lesser of (I) the Available Principal Payment Amount remaining after payment of the Class A, Class M-1 and Class M-2 Principal Payment Amount on such Payment Date and (II) an amount equal to the excess (if any) of (A) the sum of (1) the Note Principal Balances of the Class A-1, Class A-2, Class M-1 and Class M-2 Notes (after taking into account the payment of the Class A, Class M-1 and Class M-2 Principal Payment Amount for that Payment Date) and (2) the Note Principal Balance of the Class B-1 Notes immediately prior to such Payment Date over (B) the lesser of (x) the product of (1) the Invested Amount as of the end of the related Collection Period multiplied by (2) approximately 95.00% and (y) (1) the Invested Amount as of the end of the related Collection Period, less (2) the
Overcollateralization Floor.

 

 

Class B-2 Principal Payment Amount: With respect to any Payment Date is the lesser of (I) the Available Principal Payment Amount remaining after payment of the Class A, Class M-1, Class M-2 and Class B-1 Principal Payment Amount on such Payment Date and (II) an amount equal to the excess (if any) of (A) the sum of (1) the Note Principal Balances of the Class A-1, Class A-2, Class M-1, Class M-2 and Class B-1 Notes (after taking into account the payment of the Class A, Class M-1, Class M-2 and Class B-1 Principal Payment Amount for that Payment Date) and (2) the Note Principal Balance of the Class B-2 Notes immediately prior to such Payment Date over (B) the lesser of (x) the product of (1) the Invested Amount as of the end of the related Collection Period multiplied by (2) approximately 97.00% and (y) (1) the Invested Amount as of the end of the related
Collection Period, less (2) the Overcollateralization Floor.

Class B-3 Principal Payment Amount: With respect to any Payment Date is the lesser of (I) the Available Principal Payment Amount remaining after payment of the Class A, Class M-1, Class M-2, Class B-1 and Class B-2 Principal Payment Amount on such Payment Date and (II) an amount equal to the excess (if any) of (A) the sum of (1) the Note Principal Balances of the Class A-1, Class A-2, Class M-1, Class M-2, Class B-1 and Class B-2 Notes (after taking into account the payment of the Class A, Class M-1, Class M-2, Class B-1 and Class B-2 Principal Payment Amount for that Payment Date) and (2) the Note Principal Balance of the Class B-3 Notes immediately prior to such Payment Date over (B) the lesser of (x) the product of (1) the Invested Amount as of the end of the related Collection Period multiplied by (2) approximately 98.00% and (y) (1) the Invested Amount as
of the end of the related Collection Period, less (2) the Overcollateralization Floor.

Class B-4 Principal Payment Amount: With respect to any Payment Date is the lesser of (I) the Available Principal Payment Amount remaining after payment of the Class A, Class M-1, Class M-2, Class B-1, Class B-2 and Class B-3 Principal Payment Amount on such Payment Date and (II) an amount equal to the excess (if any) of (A) the sum of (1) the Note Principal Balances of the Class A-1, Class A-2, Class M-1, Class M-2, Class B-1, Class B-2 and Class B-3 Notes (after taking into account the payment of the Class A, Class M-1, Class M-2, Class B-1, Class B-2 and Class B-3 Principal Payment Amount for that Payment Date) and (2) the Note Principal Balance of the Class B-4 Notes immediately prior to such Payment Date over (B) the lesser of (x) the product of (1) the Invested Amount as of the end of the related Collection Period multiplied by (2) approximately 99.00%
and (y) (1) the Invested Amount as of the end of the related Collection Period, less (2) the Overcollateralization Floor.

Class E Distribution Amount:  With respect to any Payment Date, the sum of (i) the Current Interest for the Class E Certificates for such Payment Date, (ii) any Overcollateralization Reduction Amount for such Payment Date and (iii) without duplication, any Subsequent Recoveries not distributed to the Notes on such Payment Date; provided, however that on any Payment Date after the Payment Date on which the Note Principal Balances of the Notes have been reduced to zero, the Class E Distribution Amount shall include the Overcollateralization Amount.

 

Class E Interest Rate:  With respect to the Class E Certificates and any Payment Date, a rate per annum equal to the percentage equivalent of a fraction, the numerator of which is the sum of the amount determined for each REMIC I Regular Interest equal to (x) the excess of 

 

the Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular Interest over the Marker Rate, applied to (y) a notional amount equal to the Uncertificated Principal Balance of such REMIC I Regular Interest, and the denominator of which is the aggregate Uncertificated Principal Balance of such REMIC I Regular Interests.

Class M Notes: The Class M-1 Notes and Class M-2 Notes, each in the form attached as Exhibit A-2 to the Indenture.

Class M-1 Principal Payment Amount: With respect to any Payment Date is the lesser of (I) the Available Principal Payment Amount remaining after payment of the Class A Principal Payment Amount on such Payment Date and, with respect to the Class M-1 Notes, any amounts drawn on the Policy for Charged-Off HELOCs, and (II) an amount equal to the excess (if any) of (A) the sum of (1) the Note Principal Balances of the Class A-1 Notes and Class A-2 Notes (after taking into account the payment of the Class A Principal Payment Amount for that Payment Date) and (2) the Note Principal Balance of the Class M-1 Notes immediately prior to such Payment Date over (B) the lesser of (x) the product of (1) the Invested Amount as of the end of the related Collection Period multiplied by (2) approximately 91.40% and (y) (1) the Invested Amount as of the end of the related
Collection Period, less (2) the Overcollateralization Floor.

Class M-2 Principal Payment Amount:  With respect to any Payment Date is the lesser of (I) the Available Principal Payment Amount remaining after payment of the Class A Principal Payment Amount and Class M-1 Principal Payment Amount on such Payment Date and (II) an amount equal to the excess (if any) of (A) the sum of (1) the Note Principal Balances of the Class A-1, Class A-2 and Class M-1 Notes (after taking into account the payment of the Class A Principal Payment Amount and Class M-1 Principal Payment Amount for that Payment Date) and (2) the Note Principal Balance of the Class M-2 Notes immediately prior to such Payment Date over (B) the lesser of (x) the product of (1) the Invested Amount as of the end of the related Collection Period multiplied by (2) approximately 93.50% and (y) (1) the Invested Amount as of the end of the related Collection Period, less
(2) the Overcollateralization Floor.

Class S Floating Allocation Percentage:  With respect to any Payment Date 100% minus the Floating Allocation Percentage.

Class S Principal Payment Amount:  With respect to the Class S Certificates, the sum of : (i) with respect to any Payment Date during the Managed Amortization Period and if the Seller’s Certificate Pro Rata Tests is not met, the lesser of (a) the Certificate Principal Balance of the Class S Certificates immediately prior to such Payment Date and (b) the Principal Collection Amount less the aggregate Draws for the related Payment Date, (ii) with respect to any Payment Date during the Managed Amortization Period and if the Seller’s Certificate Pro Rata Tests is met, the Class S Floating Allocation Percentage of the Principal Collection Amount less the aggregate Draws for the related Payment Date, and (iii) with respect to any Payment Date during the Rapid Amortization Period, the Class S Floating Allocation Percentage of the Principal Collection Amount.

Closing Date: September 9, 2005.

 

 

Code: The Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

Collateral: The meaning specified in the Granting Clause of the Indenture.

Collection Period: With respect to any Payment Date (other than the first Payment Date) and the HELOCs, the period beginning on the 11th day of the calendar month immediately preceding the month in which such Payment Date occurs and ending on the 10th day of the month in which such Payment Date occurs, and with respect to the first Payment Date, the period beginning on August 24, 2005 and ending on September 10, 2005

Commission: The Securities and Exchange Commission.

Constant Draw Rate:  A constant rate of additional balances drawn on the HELOCs.

Corporate Trust Office: With respect to the Indenture Trustee, the principal corporate trust office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this instrument is located at 388 Greenwich Street, 14th Floor, New York, NY  10013, Attention:  Agency and Trust. With respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Trust Agreement is located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:  Corporate Trust Administration.  With respect to the Securities Administrator, Certificate Registrar, Note
Registrar and Paying Agent, the Corporate Trust Office of the Note Registrar and the Certificate Registrar for purposes of presentment and surrender of the Notes and the Certificates for the final payment or distribution thereon and for transfer is located at 135 South LaSalle Street, Chicago, IL 60603, Attention: Global Securities and Trust Services Group – SACO I Trust 2005-GP1, or any other address that the Securities Administrator may designate from time to time by notice to the Noteholders and the Certificateholders.

Corresponding Note:  With respect to each REMIC I Regular Interest (other than REMIC I Regular Interests AA and ZZ), the Note with the corresponding designation.

CPR:  A constant rate of prepayment on the HELOCs

Cumulative Charge-Off Percentage: With respect to the Notes and any Payment Date is equal to the percentage obtained by dividing (x) the aggregate Charge-Off Amounts on the HELOCs incurred since the Cut-off Date through the end of the related Collection Period, minus the principal portion of any amounts received in respect of the HELOCs following the charge-off, by (y) the aggregate Stated Principal Balance of the HELOCs as of the Cut-off Date.

Current Interest: With respect to each Class of Notes (other than the Class B-3 Notes and Class B-4 Notes) and each Payment Date is the interest accrued at the applicable Note Interest Rate for the applicable accrual period on the Note Principal Balance of such Class.  With respect to the Class E Certificates and each Payment Date is the interest accrued at the Class E Interest Rate for the applicable Accrual Period on the Notional Amount of such Class.

 

 

Current Specified Enhancement Percentage: With respect to any Payment Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Note Principal Balance of the Class M Notes and Class B Notes and (ii) the Overcollateralization Amount, in each case prior to the payment of the Available Principal Payment Amount on such Payment Date, by (y) the Invested Amount as of the end of the related Collection Period

Custodial Agreement: The custodial agreement, dated as of September 9, 2005, among the Indenture Trustee, the Custodian, the Seller, the Master Servicer and the Depositor, relating to the SACO I Trust 2005-GP1, Mortgage-Backed Notes, Series 2005-GP1. 

Custodian: LaSalle Bank National Association, and its successors and assigns.

Cut-off Date: With respect to the HELOCs, August 23, 2005.

Cut-off Date Balance: $345,978,146.90.

Cut-off Date Principal Balance: With respect to any HELOC, the unpaid principal balance thereof as of the Cut-off Date after applying the principal portion of Monthly Payments due on or before such date, whether or not received, and without regard to any payments due after such date.

Debt Service Reduction: Any reduction of the Scheduled Payments which a Mortgagor is obligated to pay with respect to a HELOC as a result of any proceeding under the Bankruptcy Code or any other similar state law or other proceeding.

Default: Any occurrence which is or with notice or the lapse of time or both would become an Event of Default.

Deficiency Amount:  The meaning specified in the Policy. 

Deficient Valuation: With respect to any HELOC, a valuation of the Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding indebtedness under the HELOC, which valuation results from a proceeding initiated under the Bankruptcy Code or any other similar state law or other proceeding.

Definitive Notes: The meaning specified in Section 4.08 of the Indenture.

Depositor: Bear Stearns Asset Backed Securities I LLC, a Delaware limited liability company, or its successor in interest.

Depository: The Depository Trust Company, the nominee of which is Cede & Co., or any successor thereto.

Depository Participant: A Person for whom, from time to time, the Depository effects book-entry transfers and pledges of securities deposited with the Depository.

Designated Depository Institution: A depository institution (commercial bank, federal savings bank, mutual savings bank or savings and loan association) or trust company 

 

(which may include the Indenture Trustee), the deposits of which are fully insured by the FDIC to the extent provided by law.

Draw:  With respect to any HELOC, an additional borrowing by the related mortgagor subsequent to the Cut-off Date in accordance with the related mortgage note.

Draw Period:  With respect to any HELOC, the period during which the related mortgagor is permitted to make Draws.

Due Date: With respect to each HELOC, the day of the month on which each scheduled Monthly Payment is due.

Eligible Account: An account that is any of the following: (i) maintained with a depository institution the short-term debt obligations of which have been rated by each Rating Agency in its highest rating category available, or (ii) an account or accounts in a depository institution in which such accounts are fully insured to the limits established by the FDIC, provided that any deposits not so insured shall, to the extent acceptable to each Rating Agency, as evidenced in writing, be maintained such that (as evidenced by an Opinion of Counsel delivered to the Indenture Trustee, each Rating Agency and the Note Insurer) the Indenture Trustee 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 with which such account is maintained, or (iii) in the case of the Master Servicer Collection Account and the Payment Account, a trust account or accounts maintained in the corporate trust division of the Master Servicer or Securities Administrator, or (iv) an account or accounts of a depository institution acceptable to each Rating Agency and the Note Insurer (as evidenced in writing by each Rating Agency that use of any such account as the Master Servicer Collection Account or the Payment Account will not reduce the rating assigned to any of the Notes by such Rating Agency as of the Closing Date by such Rating Agency).

EMC:  EMC Mortgage Corporation, or its successor in interest.

ERISA: The Employee Retirement Income Security Act of 1974, as amended.

Event of Default: With respect to the Indenture, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(i)         a failure by the Issuer to pay Current Interest on the Class A-1, Class A-2, Class M-1, Class M-2, Class B-1 and Class B-2 Notes on any Payment Date and such default shall continue for a period of five days; or

(ii)         the failure by the Issuer on the Final Scheduled Payment Date to pay all Current Interest of any Class of Notes (other than the Class B-3 Notes and Class B-4 Notes), all remaining Net WAC Cap Rate Carryover Amounts to any of the Class of Notes (other than the Class B-3 Notes and Class B-4 Notes) and to reduce the Note Principal Balances of any Class of Notes to zero; or

 

 

(iii)        there occurs a default in the observance or performance of any covenant or agreement of the Issuer made in the Indenture, or any representation or warranty of the Issuer made in the Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee (with a copy to the Note Insurer) or to the Issuer and the Indenture Trustee by the Note Insurer or Holders of at least 25% of the
aggregate Note Principal Balance of the Outstanding Notes, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of default hereunder; or

(iv)        there occurs the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or ordering the winding-up or liquidation of the Issuer’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

(v)        there occurs the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the assets of the Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of any action by the Issuer in furtherance of any of the foregoing.

Event of Servicer Termination: The occurrence of an event permitting termination or removal of the Servicer under the Servicing Agreement as servicer of the HELOCs.

Excess Liquidation Proceeds: To the extent that such amount is not required by law to be paid to the related Mortgagor, the amount, if any, by which Liquidation Proceeds with respect to a Charged-Off HELOC exceed the sum of (i) the Outstanding Principal Balance of such HELOC and accrued but unpaid interest at the related Mortgage Interest Rate through the last day of the month in which the related Liquidation Date occurs, (ii) related Liquidation Expenses (including Liquidation Expenses which are payable therefrom to the Servicer or the Master Servicer in accordance with the related Servicing Agreement or Sale and Servicing Agreement) and (iii) unreimbursed advances by the Servicer or the Master Servicer and Monthly Advances.

Excess Overcollateralization Amount: With respect to HELOCs and any Payment Date, the excess, if any, of the Overcollateralization Amount on that Payment Date over the Overcollateralization Target Amount.

 

 

Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

	
            Expenses: The meaning specified in Section 7.02 of the Trust Agreement
 

Extraordinary Trust Fund Expenses:  Any amounts reimbursable to the Securities Administrator or the Indenture Trustee, or any director, officer, employee or agent of the Securities Administrator or the Indenture Trustee, from the Trust Estate, any amounts reimbursable to the Depositor, the Master Servicer, the Securities Administrator, the Custodian, or any director, officer, employee or agent thereof, and any other amounts payable or reimbursable from the Trust Estate as Extraordinary Trust Fund Expenses pursuant to the terms of the Sale and Servicing Agreement, the Indenture, the Trust Agreement, the Administration Agreement, the Custodial Agreement, the Policy or the Insurance Agreement, including Extraordinary Trust Fund Expenses that are not reimbursed in any calendar year as a result of the Extraordinary Trust Fund Expenses Cap. Extraordinary Trust Fund
Expenses for any calendar year, to the extent they may exceed the Extraordinary Trust Fund Expenses Cap, shall be paid pro rata among the parties entitled thereto from the amounts available therefor.

Extraordinary Trust Fund Expenses Cap:  $250,000 for each calendar year; provided, however, that such cap will not apply to any costs and expenses (i) of the Indenture Trustee incurred in connection with the termination of the Securities Administrator or the Master Servicer, the transfer of master servicing to a successor master servicer and any costs incurred with the replacement of the Custodian or (ii) of the Master Servicer incurred in connection with the termination of the Servicer and the transfer of servicing to a successor servicer.

Fannie Mae:  Fannie Mae (formerly, Federal National Mortgage Association), or any successor thereto.

FDIC: The Federal Deposit Insurance Corporation or any successor thereto.

Final Certification: The final certification delivered by the Custodian pursuant to Section 2.3(c) of the Custodial Agreement in the form attached thereto as Exhibit Three.

Final Scheduled Payment Date: With respect to each Class of Notes, the Payment Date in August 2030.

Floating Allocation Percentage: With respect to any Payment Date, the percentage equivalent of a fraction with a numerator of the Invested Amount at the end of the previous related Collection Period (in the case of the first Payment Date, the Invested Amount as of the Closing Date) and a denominator equal to the aggregate Stated Principal Balance of the HELOCs at the end of the previous Collection Period (in the case of the first Payment Date, the Closing Date), provided such percentage shall not be greater than 100%.

Formula Rate:  With respect to any Class of Notes (other than the Class B-3 Notes and Class B-4 Notes) and, for purposes of the definition of “Note Interest Rate”, REMIC I Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest B-1 and REMIC I Regular Interest B-2, a per annum rate equal to One-Month LIBOR plus the applicable Margin.

 

 

Freddie Mac:  Federal Home Loan Mortgage Corporation, or any successor thereto.

Grant: Pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of such collateral or other agreement or instrument and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring proceedings in the name of the granting party or otherwise, and generally to do and receive
anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

HELOC: A home equity line of credit transferred and assigned to the Trust pursuant to Section 2.01 or Section 2.04 of the Sale and Servicing Agreement, as identified in the Mortgage Loan Schedule, including a HELOC the property securing which has become an REO Property

Holder: Any Certificateholder or any Noteholder, as the context requires.

Indemnified Party: The meaning specified in Section 7.02 of the Trust Agreement.

Indenture: The indenture, dated as of September 9, 2005, among the Issuer, the Indenture Trustee and the Securities Administrator, relating to the SACO I Trust 2005-GP1, Mortgage-Backed Notes, 2005-GP1.

Indenture Trustee: Citibank, N.A., and its successors and assigns or any successor indenture trustee appointed pursuant to the terms of  the Indenture.

Independent: When used with respect to any specified Person, the Person (i) is in fact independent of the Issuer, any other obligor on the Notes, the Seller, the Master Servicer, the Depositor and any Affiliate of any of the foregoing Persons, (ii) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any of the foregoing Persons and (iii) is not connected with the Issuer, any such other obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

Independent Certificate: A certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, made by an independent appraiser or other expert appointed by an Issuer Request and approved by the Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of “Independent” in this Indenture and that the signer is Independent within the meaning thereof.

 

 

Index: The index, if any, specified in a Mortgage Note by reference to which the related Mortgage Interest Rate will be adjusted from time to time.

Initial Certification: The initial certification delivered by the Custodian pursuant to Section 2.3(a) of the Custodial Agreement in the form attached thereto as Exhibit One.

Initial Note Principal Balance: With respect to the Class A-1 Notes, $268,323,000.00, with respect to the Class A-2 Notes, $5,000,000.00, with respect to the Class M-1 Notes, $57,778,000.00,  with respect to the Class M-2 Notes, $3,632,000.00, with respect to the Class B-1 Notes, $2,595,000, with respect to the Class B-2 Notes, $3,460,000.00, with respect to the Class B-3 Notes, $1,730,000, and  with respect to the Class B-4 Notes, $1,730,000.00.

Insurance Agreement: The Insurance and Indemnity Agreement dated as of September 9, 2005, among the Insurer, the Seller, the Depositor, the Issuer, the Master Servicer, the Securities Administrator and the Indenture Trustee, including any amendments and supplements thereto in accordance with the terms thereof.

Insurance Policy: With respect to any HELOC, any standard hazard insurance policy, flood insurance policy or title insurance policy.

Insurance Proceeds: Amounts paid by the insurer under any Insurance Policy covering any HELOC or Mortgaged Property other than amounts required to be paid over to the Mortgagor pursuant to law or the related Mortgage Note or Security Instrument and other than amounts used to repair or restore the Mortgaged Property or to reimburse insured expenses.

Insured Amount:  The meaning specified in the Policy.

Interest Adjustment Date: With respect to a HELOC, the date, if any, specified in the related Mortgage Note on which the Mortgage Interest Rate is subject to adjustment.

Interest Collection Amount: With respect to each Payment Date, an amount equal to the amount received by the Servicer and consisting of interest collected during the related Collection Period on the HELOCs and allocated to interest in accordance with the terms of the Servicing Agreement, together with the interest portion of any repurchase price relating to any repurchased HELOCs and the interest portion of any substitution adjustment amount paid during the related Collection Period and any Subsequent Recoveries on HELOCs that were previously Charged-Off HELOCs, reduced, without duplication, by any Extraordinary Trust Fund Expenses (subject to the Extraordinary Trust Fund Expense Cap).

Interest Determination Date: With respect to the first Accrual Period, the second LIBOR Business Day preceding the Closing Date, and with respect to each Accrual Period thereafter, the second LIBOR Business Day preceding the related Payment Date on which such Accrual Period commences.

Interest Shortfall: With respect to any Payment Date and each HELOC that during the related Prepayment Period was the subject of a Principal Prepayment or constitutes a Relief Act HELOC, an amount determined as follows:

 

 

(a)        Partial principal prepayments received during the relevant Prepayment Period:  The difference between (i) one month’s interest at the applicable Net Rate on the amount of such prepayment and (ii) the amount of interest for the calendar month of such prepayment (adjusted to the applicable Net Rate) received at the time of such prepayment;

(b)        Principal prepayments in full received during the relevant Prepayment Period: The difference between (i) one month’s interest at the applicable Net Rate on the Stated Principal Balance of such HELOC immediately prior to such prepayment and (ii) the amount of interest for the calendar month of such prepayment (adjusted to the applicable Net Rate) received at the time of such prepayment; and

(c)        Relief Act HELOCs: As to any Relief Act HELOC, the excess of (i) 30 days’ interest (or, in the case of a principal prepayment in full, interest to the date of prepayment) on the Stated Principal Balance thereof (or, in the case of a principal prepayment in part, on the amount so prepaid) at the related Net Rate over (ii) 30 days’ interest (or, in the case of a principal prepayment in full, interest to the date of prepayment) on such Stated Principal Balance (or, in the case of a Principal Prepayment in part, on the amount so prepaid) at the Net Rate required to be paid by the Mortgagor as limited by application of the Relief Act.

Interim Certification: The interim certification delivered by the Custodian pursuant to Section 2.3(b) of the Custodial Agreement in the form attached thereto as Exhibit Two.

Invested Amount: With respect to any Payment Date, the aggregate Stated Principal Balance of the HELOCs reduced by the aggregate Certificate Principal Balance of the Class S Certificates, if any. 

Investment Company Act: The Investment Company Act of 1940, as amended, and any amendments thereto.

IRS: The Internal Revenue Service.

Issuer: SACO I Trust 2005-GP1, a Delaware statutory trust, or its successor in interest.

Issuer Request: A written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee and the Note Insurer.

Latest Possible Maturity Date:  July 25, 2030.

LIBOR Business Day: A day on which banks are open for dealing in foreign currency and exchange in London and New York City.

Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation, assignment, participation, deposit arrangement, encumbrance, lien (statutory or other), preference, priority right or interest or other security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of 

 

the foregoing and the filing of any financing statement under the UCC (other than any such financing statement filed for informational purposes only) or comparable law of any jurisdiction to evidence any of the foregoing.

Liquidation Date: With respect to any Charged-Off HELOC, the date on which the Master Servicer or the Servicer has certified that such HELOC has become a Charged-Off HELOC.

Liquidation Expenses: With respect to a HELOC in liquidation, unreimbursed expenses paid or incurred by or for the account of the Master Servicer or the Servicer in connection with the liquidation of such HELOC and the related Mortgage Property, such expenses including (a) property protection expenses, (b) property sales expenses, (c) foreclosure and sale costs, including court costs and reasonable attorneys’ fees, and (d) similar expenses reasonably paid or incurred in connection with liquidation.

Liquidation Proceeds: Cash received in connection with the liquidation of a defaulted HELOC, whether through trustee’s sale, foreclosure sale, Insurance Proceeds, condemnation proceeds or otherwise.

Loan-to-Value Ratio: With respect to any HELOC, the fraction, expressed as a percentage, the numerator of which is the original principal balance of the related HELOC and the denominator of which is the Original Value of the related Mortgaged Property.

Lost Notes: The original Mortgage Notes that have been lost, as indicated on the Mortgage Loan Schedule.

Managed Amortization Period:  With respect to the Notes is the period beginning on the Cut-off Date and ending on the occurrence of a Rapid Amortization Event.

Margin: With respect to any Payment Date on or prior to the first possible Optional Termination Date and (i) with respect to the Class A-1 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest A-1, 0.180% per annum, (ii) with respect to the Class A-2 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest A-2, 0.180% per annum, (iii) with respect to the Class M-1 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest M-1, 0.290% per annum, (iv) with respect to the Class M-2 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest M-2, 1.750% per annum, (v) with respect to the Class B-1 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest B-1, 3.000% per annum
and (vi) with respect to the Class B-2 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest B-2, 3.000% per annum; and with respect to any Payment Date after the first possible Optional Termination Date, the Margin will increase to (i) with respect to the Class A-1 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest A-1, 0.360% per annum, (ii) with respect to the Class A-2 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest A-2, 0.360% per annum, (iii) with respect to the Class M-1 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest M-1, 0.435% per annum, (iv) with respect to the Class M-2 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular 

 

Interest M-2, 2.625% per annum, (v) with respect to the Class B-1 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest B-1, 4.500% per annum and (vi) with respect to the Class B-2 Notes and, for purposes of the definition of “Formula Rate”, REMIC I Regular Interest B-2, 4.500% per annum.

Marker Rate:  With respect to the Class E Certificates and any Payment Date, a per annum rate equal to two (2) times the weighted average of the Uncertificated REMIC I Pass-Through Rates for the REMIC I Regular Interests (other than REMIC I Regular Interest AA), with the rate on each such REMIC I Regular Interest (other than REMIC I Regular Interest ZZ) subject to a cap equal to the Note Interest Rate for the Corresponding Note for the purpose of this calculation for such Payment Date, and with the rate on REMIC II Regular Interest ZZ subject to a cap of zero for the purpose of this calculation.

Master Servicer: LaSalle Bank National Association, and its successors and assigns.

Master Servicer Certification:  A written certification covering servicing of the HELOCs by the Servicer and signed by an officer of the Master Servicer that complies with (i) the Sarbanes-Oxley Act of 2002, as amended from time to time, and (ii) the February 21, 2003 Statement by the Staff of the Division of Corporation Finance of the Securities and Exchange Commission Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and 15d-14, as in effect from time to time; provided that if, after the Closing Date (a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement referred to in clause (ii) is modified or superseded by any subsequent statement, rule or regulation of the Securities and Exchange Commission or any statement of a division thereof, or (c) any future releases, rules and regulations are published by the Securities and
Exchange Commission from time to time pursuant to the Sarbanes-Oxley Act of 2002, which in any such case affects the form or substance of the required certification and results in the required certification being, in the reasonable judgment of the Master Servicer, materially more onerous than the form of the required certification as of the Closing Date, the Master Servicer Certification shall be as agreed to by the Master Servicer and the Depositor following a negotiation in good faith to determine how to comply with any such new requirements.

Master Servicer Collection Account: The trust account or accounts created and maintained pursuant to Section 4.02 of the Sale and Servicing Agreement. The Master Servicer Collection Account shall be an Eligible Account.

Master Servicer Compensation: As defined in Section 3.13 of the Sale and Servicing Agreement.

Master Servicer Event of Default: Has the meaning assigned to such term in Section 6.01 of the Sale and Servicing Agreement.

Master Servicing Officer: Any officer of the Master Servicer involved in, or responsible for, the administration and master servicing of the HELOCs whose name and specimen signature appear on a list of master servicing officers furnished to the Indenture Trustee by the Master Servicer, as such list may be amended from time to time.

 

 

Material Defect: The meaning specified in Section 2.02(a) of the Sale and Servicing Agreement.

Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage Interest Rate can adjust in accordance with its terms, regardless of changes in the applicable Index.

Maximum Uncertificated Accrued Interest Deferral Amount:  With respect to any Payment Date, the excess of (i) accrued interest at the Uncertificated REMIC I Pass-Through Rate applicable to REMIC I Regular Interest ZZ for such Payment Date on a balance equal to the Uncertificated Principal Balance of REMIC I Regular Interest ZZ minus the REMIC I Overcollateralized Amount, in each case for such Payment Date, over (ii) the aggregate amount of Uncertificated Accrued Interest for such Payment Date on the REMIC I Regular Interests (other than REMIC I Regular Interests AA and ZZ), with the rate on each such REMIC I Regular Interest subject to a cap equal to the Note Interest Rate for the Corresponding Note for the purpose of this calculation for such Payment Date.

MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.

MERS® System: The system of recording transfers of Mortgages electronically maintained by MERS.

MIN: The Mortgage Identification Number for HELOCs registered with MERS on the MERS® System.

Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage Interest Rate can adjust in accordance with its terms, regardless of changes in the applicable Index.

MOM Loan: With respect to any HELOC, MERS acting as the mortgagee of such HELOC, solely as nominee for the originator of such HELOC and its successors and assigns, at the origination thereof, or as nominee for any subsequent assignee of the originator pursuant to an assignment of mortgage to MERS.

Monthly Payment: With respect to any HELOC (including any REO Property) and any Due Date, the payment of principal and interest due thereon in accordance with the amortization schedule at the time applicable thereto (after adjustment, if any, for partial Principal Prepayments and for Deficient Valuations occurring prior to such Due Date but before any adjustment to such amortization schedule by reason of any bankruptcy, other than a Deficient Valuation, or similar proceeding or any moratorium or similar waiver or grace period).

Moody’s: Moody’s Investors Service, Inc.

Mortgage: The mortgage, deed of trust or other instrument reflected on the Mortgage Loan Schedule as securing a HELOC.

 

 

Mortgage File: The file containing the Related Documents pertaining to a particular HELOC and any additional documents required to be added to the Mortgage File pursuant to the Indenture.

Mortgage Interest Rate: The annual rate at which interest accrues from time to time on any HELOC pursuant to the related Mortgage Note, which rate is initially equal to the “Mortgage Interest Rate” set forth with respect thereto on the applicable Mortgage Loan Schedule.

Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement, dated as of September 9, 2005, between EMC Mortgage Corporation, as seller, and Bear Stearns Asset Backed Securities I LLC, as purchaser, and all amendments thereof and supplements thereto, attached to the Sale and Servicing Agreement as Exhibit E.

Mortgage Loan Schedule: The schedule, attached as Exhibit A to the Sale and Servicing Agreement with respect to the HELOCs.

Mortgage Note: The originally executed note or other evidence of the indebtedness of a Mortgagor under the related HELOC.

Mortgaged Property: Land and improvements securing the indebtedness of a Mortgagor under the related HELOC or, in the case of REO Property, such REO Property.

Mortgagor: The obligor on a Mortgage Note.

Net Collections: With respect to any Charged-Off HELOC, an amount equal to all payments on account of interest and principal on such HELOC.

Net Interest Shortfall:  With respect to any Payment Date, the Interest Shortfall, if any, for such Payment Date net of Compensating Interest made with respect to such Payment Date.

Net Liquidation Proceeds: With respect to any Charged-Off HELOC, Liquidation Proceeds and Subsequent Recoveries net of unreimbursed advances by the related Servicer, Monthly Advances, expenses incurred by the related Servicer in connection with the liquidation of such HELOC and the related Mortgaged Property, and any other amounts payable to the related Servicer under the related Servicing Agreement.

Net Rate or Net Mortgage Rate: For any HELOC, the then applicable Mortgage Rate thereon less the Servicing Fee Rate.

Net WAC Cap Rate:  With respect to any Payment Date and any Note (other than the Class B-3 Notes and Class B-4 Notes), a per annum rate equal to the weighted average of the Net Mortgage Rates of the HELOCs as of the first day of the Collection Period preceding such Payment Date, minus the premium due to the Note Insurer under the Policy multiplied by a fraction the numerator of which is the aggregate Note Principal Balance of the Class A-1, Class A-2 and Class M-1 Notes and the denominator of which is the Stated Principal Balance of the HELOCs, expressed as a per annum rate. The Net WAC Cap Rate for each Class of Notes will 

 

be calculated based on a 360-day year and the actual number of days elapsed in the related Accrual Period.  For federal income tax purposes, however, such rate shall be the equivalent of the foregoing, expressed as the weighted average of (adjusted for the actual number of days elapsed in the related Accrual Period) the Uncertificated REMIC I Pass-Through Rates on the REMIC I Regular Interests, weighted on the basis of the Uncertificated Principal Balances of each such REMIC I Regular Interest.

Net WAC Cap Rate Carryover Amount: With respect to any Class of Notes (other than the Class B-3 Notes and Class B-4 Notes) and any Payment Date, the sum of (A) the positive excess of (i) the amount of interest that would have been payable to such Class of Notes on such Payment Date if the Note Interest Rate for such class for such Payment Date were calculated at the Formula Rate, over (ii) the amount of interest payable on such Class of Notes at the Net WAC Cap Rate for such Payment Date (such excess being the “Basis Risk Shortfall” for such Payment Date) and (B) the Net WAC Cap Rate Carryover Amount for any previous Payment Dates not previously paid, together with interest thereon at a rate equal to the related Formula Rate for such Class of Notes for such Payment Date.

Net WAC Cap Rate Carryover Reserve Account:  The Account created pursuant to Section 4.06 of the Sale and Servicing Agreement.

 

Net WAC Cap Rate Carryover Reserve Account Deposit: With respect to the Net WAC Cap Rate Carryover Reserve Account, an amount equal to $5,000, which the Depositor shall deposit into the Net WAC Cap Rate Carryover Reserve Account, pursuant to Section 4.06 of the Sale and Servicing Agreement.

Note: A Class A, Class M or Class B Note.

Noteholder: The Person in whose name a Note is registered in the Note Register, except that, any Note registered in the name of the Depositor, the Issuer, the Indenture Trustee, the Seller, the Securities Administrator or the Master Servicer or any Affiliate of any of them shall be deemed not to be a Holder or Holders, nor shall any so owned be considered outstanding, for purposes of giving any request, demand, authorization, direction, notice, consent or waiver under the Indenture or the Trust Agreement; provided that, in determining whether the Indenture Trustee or Securities Administrator shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee or Securities Administrator has actual knowledge to be so owned shall be so disregarded. Owners of
Notes that have been pledged in good faith may be regarded as Holders if the pledgee establishes to the satisfaction of the Securities Administrator or the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes or any Affiliate of any of the foregoing Persons.

Note Insurer:  Assured Guaranty Corp.

Note Insurer Default:  The existence and continuance of any of the following: (a) a failure by the Note Insurer to make a payment required under the Policy in accordance with its 

 

terms; or (b)(i) the Note Insurer (A) files any petition or commences any case or proceeding under any provision or chapter of the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (B) makes a general assignment for the benefit of its creditors, or (C) has an order for relief entered against it under the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization which is final and nonappealable; or (ii) a court of competent jurisdiction, the New York or Wisconsin Department of Insurance or other competent regulatory authority enters a final and nonappealable order, judgment or decree (A) appointing a custodian, trustee, agent or receiver for the Bond Insurer or for all or any material portion of its property or (B) authorizing the taking
of possession by a custodian, trustee, agent or receiver of the Note Insurer (or the taking of possession of all or any material portion of the property of the Note Insurer.

Note Interest Rate: With respect to each Class of Notes (other than the Class B-3 Notes and Class B-4 Notes) and, for purposes of the definition of “Marker Rate” and “Maximum Uncertificated Accrued Interest Deferral Amount”, REMIC I Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest B-1 and REMIC I Regular Interest B-2, is the lesser of (a) Formula Rate and (b) the Net WAC Cap Rate.  With respect to each of the Class B-3 Notes and Class B-4 Notes, and, for purposes of the definition of “Marker Rate” and “Maximum Uncertificated Accrued Interest Deferred Amount,” 0.00% per annum.

Note Owner: The Beneficial Owner of a Note.

Note Principal Balance: With respect to any Note as of any Payment Date, will equal such Note’s initial principal balance on the Closing Date, as reduced by (i) all amounts distributed on previous Payment Dates on such Note with respect to principal, (ii) the principal portion of all Charged-Off Amounts allocated prior to such Payment Date to such Note, plus any Subsequent Recoveries added to the Note Principal Balance of such Note. With respect to any Class of Note, the Note Principal Balance thereof shall be equal to the sum of the Note Principal Balances of all Outstanding Notes of such Class.

Note Register: The register maintained by the Note Registrar in which the Note Registrar shall provide for the registration of Notes and of transfers and exchanges of Notes.

Note Registrar: The Securities Administrator, in its capacity as Note Registrar, or any successor to the Securities Administrator in such capacity.

Notional Amount:  With respect to the Class E Certificates and any Payment Date, an amount equal to the aggregate Stated Principal Balance of the HELOCs at the beginning of the related Collection Period.  The initial Notional Amount of the Class E Certificates shall be $345,978,147.00.  For federal income tax purposes, the Notional Amount of the Class E Certificates for any Payment Date shall be an amount equal to the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests for such Payment Date.

Officer’s Certificate: With respect to the Master Servicer, a certificate signed by the President, Managing Director, a Director, a Vice President or an Assistant Vice President, of 

 

the Master Servicer and delivered to the Indenture Trustee or the Securities Administrator, as applicable. With respect to the Issuer, a certificate signed by any Authorized Officer of the Issuer or a Responsible Officer of the Securities Administrator, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, and delivered to the Indenture Trustee. Unless otherwise specified, any reference in the Indenture to an Officer’s Certificate shall be to an Officer’s Certificate of any Responsible Officer of the Securities Administrator.

One-Month LIBOR: With respect to any Accrual Period, the rate determined by the Indenture Trustee or the Securities Administrator on the related Interest Determination Date on the basis of the London interbank offered rate for one-month United States dollar deposits, as such rates appear on the Telerate Screen Page 3750, as of 11:00 a.m. (London time) on such Interest Determination Date.

In the event that on any Interest Determination Date, Telerate Screen 3750 fails to indicate the London interbank offered rate for one-month United States dollar deposits, then One-Month LIBOR for the related Interest Accrual Period will be established by the Indenture Trustee as follows:

1.          If on such Interest Determination Date two or more Reference Banks provide such offered quotations, One-Month LIBOR for the related Accrual Period shall be the arithmetic mean of such offered quotations (rounded upwards if necessary to the nearest whole multiple of 1/16%).

2.          If on such Interest Determination Date fewer than two Reference Banks provide such offered quotations, One-Month LIBOR for the related Accrual Period shall be the higher of (i) One-Month LIBOR as determined on the previous Interest Determination Date and (ii) the Reserve Interest Rate.

The establishment of One-Month LIBOR on each Interest Determination Date by the Indenture Trustee or the Securities Administrator and the Indenture Trustee’s or Securities Administrator’s calculation of the rate of interest applicable for the related Accrual Period shall (in the absence of manifest error) be final and binding. 

Opinion of Counsel:  A written opinion of counsel acceptable to the Indenture Trustee (and Owner Trustee, if applicable) and the Note Insurer in their reasonable discretion which counsel may be in-house counsel for the Depositor or the Seller if acceptable to the Indenture Trustee (and Owner Trustee, if applicable), the Note Insurer and the Rating Agencies or outside counsel for the Depositor, the Seller, the Issuer or the Master Servicer, as the case may be.

Optional Termination Date:  The first date on which the majority holder of the Class E Certificates may terminate the Trust Fund (with the consent of the Note Insurer if such termination would result in a draw against the Policy).

Original Value: The lesser of (i) the Appraised Value or (ii) the sales price of a Mortgaged Property at the time of origination of a HELOC, except in instances where either 

 

clauses (i) or (ii) is unavailable, the other may be used to determine the Original Value, or if both clauses (i) and (ii) are unavailable, Original Value may be determined from other sources reasonably acceptable to the Depositor.

Outstanding: With respect to the Notes, as of the date of determination, all Notes theretofore executed, authenticated and delivered under this Indenture except:

(i)         Notes theretofore canceled by the Note Registrar or delivered to the Securities Administrator for cancellation; and

(ii)         Notes in exchange for or in lieu of which other Notes have been executed, authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Securities Administrator is presented that any such Notes are held by a holder in due course;

provided, Notes that have been paid with proceeds of the Policy will be considered outstanding for purposes of Section 4.12 of the Indenture. 

Outstanding HELOC: With respect to any Due Date, a HELOC which, prior to such Due Date, was not the subject of a Principal Prepayment in full, did not become a Charged-Off HELOC and was not purchased or replaced.

Outstanding Principal Balance: As of the time of any determination, the principal balance of a HELOC remaining to be paid by the Mortgagor, or, in the case of an REO Property, the principal balance of the related HELOC remaining to be paid by the Mortgagor at the time such property was acquired by the Trust less any Excess Liquidation Proceeds with respect thereto to the extent applied to principal.

Overcollateralization Amount:  With respect to any Payment Date is the amount, if any, by which the Invested Amount exceeds the aggregate Note Principal Balance of the Notes as of such Payment Date after giving effect to payments to be made on such Payment Date.

Overcollateralization Floor:  With respect to the Notes, 0.50% of the Invested Amount as of the Cut-Off Date.

Overcollateralization Increase Amount:  With respect to any Payment Date is the amount payable to the Notes pursuant to Section 3.03(a)(5), (b)(4) and (c)(4) of the Indenture.

Overcollateralization Reduction Amount:  With respect to the Notes and any Payment Date for which the Excess Overcollateralization Amount is, or would be, after taking into account all other payments to be made on that Payment Date, greater than zero, an amount equal to the lesser of (i) the Excess Overcollateralization Amount for that Payment Date and (ii) the Available Principal Payment Amount for that Payment Date (without giving effect to the Overcollateralization Reduction Amount).

Overcollateralization Target Amount:  With respect to any Payment Date (a) prior to the Stepdown Date, an amount equal to 0.50% of the Invested Amount as of the Cut-off Date, (b) on or after the Stepdown Date and if a Trigger Event is not in effect, the greater of (A) the 

 

lesser of (i) an amount equal to 0.50% of the Invested Amount as of the Cut-off Date and (ii) approximately 1.00% of the then current Invested Amount as of the last day of the related Collection Period and (B) the Overcollateralization Floor or (c) on or after the Stepdown Date and if a Trigger Event is in effect, the Overcollateralization Target Amount for the immediately preceding Payment Date

Owner Trust Estate: The corpus of the Issuer created by the Trust Agreement which consists of items referred to in Section 3.01 of the Trust Agreement.

Owner Trustee: Wilmington Trust Company, acting not in its individual capacity but solely as owner trustee under the Trust Agreement, and its successors and assigns or any successor owner trustee appointed pursuant to the terms of the Trust Agreement.

Paying Agent: Any paying agent or co-paying agent appointed under the Indenture, which initially shall be the Securities Administrator.

Payment Account: The trust account or accounts created and maintained pursuant to Section 3.01 of the Indenture, which shall be denominated LaSalle Bank National Association, as Securities Administrator f/b/o holders of SACO I Trust 2005-GP1, Mortgage-Backed Notes, Series 2005-GP1 - Payment Account.” The Payment Account shall be an Eligible Account.

Payment Account Deposit Date:  The Business Day prior to each Payment Date.

Payment Date: The 25th day of each month, or if such day is not a Business Day, then the next Business Day, commencing in September 2005.

Percentage Interest: With respect to any Note, the percentage obtained by dividing the Note Principal Balance of such Note by the aggregate Note Principal Balances of all Notes of that Class. With respect to any Certificate, the percentage as stated on the face thereof.

Periodic Rate Cap: With respect to any HELOC, the maximum rate, if any, by which the Mortgage Rate on such HELOC can adjust on any Adjustment Date, as stated in the related Mortgage Note or Mortgage.

Permitted Investments: Any one or more of the following obligations or securities held in the name of the Indenture Trustee for the benefit of the Noteholders or in the name of the Securities Administrator for the benefit of the Certificateholders:

(i)         direct obligations of, and obligations the timely payment of which are fully guaranteed by the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America;

(ii)         (a) demand or time deposits, federal funds or bankers’ acceptances issued by any depository institution or trust company incorporated under the laws of the United States of America or any state thereof (including the Indenture Trustee, Securities Administrator or the Master Servicer or its Affiliates acting in its commercial banking capacity) and subject to supervision and examination by federal and/or state banking authorities, provided that the 

 

commercial paper and/or the short-term debt rating and/or the long-term unsecured debt obligations of such depository institution or trust company at the time of such investment or contractual commitment providing for such investment have the Applicable Credit Rating or better from the Rating Agencies and (b) any other demand or time deposit or certificate of deposit that is fully insured by the FDIC;

(iii)        repurchase obligations with respect to (a) any security described in clause (i) above or (b) any other security issued or guaranteed by an agency or instrumentality of the United States of America, the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (ii)(a) above where the Securities Administrator holds the security therefor;

(iv)        securities bearing interest or sold at a discount issued by any corporation (including the Indenture Trustee, Securities Administrator or the Master Servicer or its Affiliates) incorporated under the laws of the United States of America or any state thereof that have the Applicable Credit Rating or better from the Rating Agencies at the time of such investment or contractual commitment providing for such investment; provided, however, that securities issued by any particular corporation will not be Permitted Investments to the extent that investments therein will cause the then outstanding principal amount of securities issued by such corporation and held as part of the Trust to exceed 10% of the aggregate Outstanding Principal Balances of all the HELOCs and Permitted Investments held as part of the Trust as determined by the Master Servicer;

(v)        commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof) having the Applicable Credit Rating or better from the Rating Agencies at the time of such investment;

(vi)        a Reinvestment Agreement issued by any bank, insurance company or other corporation or entity;

(vii)       any other demand, money market or time deposit, obligation, security or investment as may be acceptable to the Note Insurer and the Rating Agencies as evidenced in writing by the Rating Agencies to the Securities Administrator; and

(viii)      any money market or common trust fund having the Applicable Credit Rating or better from the Rating Agencies, including any such fund for which the Securities Administrator or Master Servicer or any affiliate of the Securities Administrator or Master Servicer acts as a manager or an advisor; provided, however, that no instrument or security shall be a Permitted Investment if such instrument or security evidences a right to receive only interest payments with respect to the obligations underlying such instrument or if such security provides for payment of both principal and interest  with a yield to maturity in excess of 120% of the yield to maturity at par or if such instrument or security is purchased at a price greater than par as determined by the Master Servicer.

 

 

Permitted Transferee:  Any person (x) other than (i) the United States, any State or political subdivision thereof, any possession of the United States or any agency or instrumentality of any of the foregoing, (ii) a foreign government, International Organization or any agency or instrumentality of either of the foregoing, (iii) an organization (except certain farmers’ cooperatives described in section 521 of the Code) that is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by section 511 of the Code on unrelated business taxable income) on any excess inclusions (as defined in section 860E(c)(1) of the Code) with respect to any Residual Certificate, (iv) rural electric and telephone cooperatives described in section 1381(a)(2)(C) of the Code or (v) on electing large partnership within the meaning of Section 775(a) of the Code, (y)
that is a citizen or resident of the United States, a corporation, partnership (other than a partnership that has any direct or indirect foreign partners) or other entity (treated as a corporation or a partnership for federal income tax purposes), created or organized in or under the laws of the United States, any State thereof or the District of Columbia, an estate whose income from sources without the United States is includible in gross income for United States federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States, or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust or if it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person and (z) other than any other Person so designated by the
Securities Administrator or the Indenture Trustee based upon an Opinion of Counsel addressed to the Securities Administrator and the Indenture Trustee (which shall not be an expense of the Securities Administrator or the Indenture Trustee) that states that the Transfer of an ownership interest in a Residual Certificate to such Person may cause REMIC I or REMIC II to fail to qualify as a REMIC at any time that any Notes or Certificates are Outstanding. The terms “United States,” “State” and “International Organization” shall have the meanings set forth in section 7701 of the Code or successor provisions. A corporation will not be treated as an instrumentality of the United States or of any State or political subdivision thereof for these purposes if all of its activities are subject to tax and, with the exception of Freddie Mac, a majority of its board of directors is not selected by such government unit.

Person: Any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Plan: Any employee benefit plan or certain other retirement plans and arrangements, including individual retirement accounts and annuities, Keogh plans and bank collective investment funds and insurance company general or separate accounts in which such plans, accounts or arrangements are invested, that are subject to ERISA or Section 4975 of the Code.

Plan Assets: Assets of a Plan within the meaning of Department of Labor regulation 29 C.F.R. § 2510.3-101.

Pledged Amount: With respect to any Pledged Asset Loan, the amount of money remitted to the related pledgor at the direction of or for the benefit of the related Mortgagor.

 

 

Policy: The note guaranty insurance policy (No. D-2005-69) with respect to the Class A-1 Notes and Class M-1 Notes and all endorsements thereto, if any, dated the Closing Date, issued by the Note Insurer for the benefit of the holders of the Class A-1 Notes and Class M-1 Notes only.

Pool Balance: With respect to any date of determination, the aggregate of the Stated Principal Balances of all HELOCs as of such date.

Premium Amount:  The amount of premium due to the Note Insurer in accordance with the terms of the Insurance Agreement.

Prepayment Assumption:  A specified CPR and a Constant Draw Rate of 12%.

Prepayment Period: With respect any Payment Date, the calendar month immediately preceding the month in which such payment occurs.

Principal Collection Amount:  With respect to each Payment Date, an amount equal to the amount received by the Servicer and consisting of amounts collected during the related Collection Period on the HELOCs and allocated to principal in accordance with the terms of the Servicing Agreement, together with the principal portion of any repurchase price relating to any repurchased HELOCs and substitution adjustment amount paid during the related Collection Period

Principal Prepayment: Any payment (whether partial or full) or other recovery of principal on a HELOC which is received in advance of its scheduled Due Date to the extent that it is not accompanied by an amount as to interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment, including Insurance Proceeds and Repurchase Proceeds, but excluding the principal portion of Excess Liquidation Proceeds.

Privately Offered Notes: Any of the Class B-2, Class B-3 and Class B-4 Notes.

Proceeding: Any suit in equity, action at law or other judicial or administrative proceeding.

Protected Account: The trust account or accounts created and maintained by a Servicer pursuant to the related Servicing Agreement.  Each Protected Account shall be an Eligible Account.

Publicly Offered Notes: Any of the Class A-1, Class A-2, Class M-1, Class M-2 and Class B-1 Notes.

Purchaser: Bear Stearns Asset Backed Securities I LLC, a Delaware limited liability company, and its successors and assigns.

Qualified Insurer: Any insurance company duly qualified as such under the laws of the state or states in which the related Mortgaged Property or Mortgaged Properties is or are located, duly authorized and licensed in such state or states to transact the type of insurance 

 

business in which it is engaged and approved as an insurer by the Master Servicer, so long as the claims paying ability of which is acceptable to the Rating Agencies for mortgage-backed notes having the same rating as the Notes rated by the Rating Agencies as of the Closing Date.

	
            Rapid Amortization Event:  Any one of the following events:  
 

(a)         a breach of any representations, warranties or covenants of the Seller in a material manner, with such breach continuing unremedied for a specified period of time following the submission of the applicable written notice(s);

(b)       a declaration of bankruptcy or insolvency by any of the Trust, the Depositor or the Servicer;

	
            (c)
 	
            the Trust becomes subject to the Investment Company Act of 1940; or
 
	
            (d)
 	
            the occurrence of a Rapid Amortization Trigger Event.
 	
             

If any event described in clause (a) or (d) occurs, a Rapid Amortization Event will occur only if, after the applicable grace period, either the Securities Administrator, the Note Insurer, or the Securities Administrator acting at the direction of the Noteholders holding Notes evidencing more than 51% in Note Principal Balance of the Notes then outstanding, with the consent of the Note Insurer, by written notice to the holder of the Class E Certificates, the Depositor, the Seller and the Servicer (and to the Securities Administrator, if given by the Note Insurer or the Noteholders) declare that a Rapid Amortization Event has occurred.  If any event described in clauses (b or (c) occurs, a Rapid Amortization Event will occur without any notice or other action on the part of the Securities Administrator, the Note Insurer or the Noteholders immediately on the occurrence of such
event            .

Rapid Amortization Period: The period beginning upon the occurrence of the Rapid Amortization Event.

Rapid Amortization Trigger Event: Is in effect with respect to the Notes and any Payment Date if the cumulative amount of Charge-Off Amounts (net of Subsequent Recoveries) incurred on the HELOCs from the Cut-off Date through the end of the Collection Period immediately preceding such Payment Date exceeds the applicable percentage set forth below of the aggregate Stated Principal Balance of the HELOCs as of the Cut-off Date:

 

	
            Prior to September 2009                                                       
 	
            3.00%
 
	
            September 2009 to August 2010       
 	
            4.25%
 
	
            September 2010 to August 2011       
 	
            5.00%
 
	
            September 2011 to August 2012       
 	
            5.75%
 
	
            September 2012 and thereafter                  
 	
            6.25%
 

 

Rating Agency:  Any nationally recognized statistical rating organization, or its successor, that rated the Notes at the request of the Depositor at the time of the initial issuance of 

 

the Notes. Initially, Standard & Poor’s and Moody’s. If such organization or a successor is no longer in existence, “Rating Agency” with respect to the Notes shall be such nationally recognized statistical rating organization, or other comparable Person, designated by the Depositor, notice of which designation shall be given to the Securities Administrator, the Indenture Trustee, the Note Insurer and Master Servicer. References herein to the highest short term unsecured rating category of a Rating Agency shall mean A-1 or better in the case of Standard & Poor’s, P-1 in the case of Moody’s and in the case of any other Rating Agency shall mean such equivalent ratings. References herein to the highest long-term rating category of a Rating Agency shall mean “AAA” in the case of Standard & Poor’s, “Aaa” in the case of Moody’s and in the
case of any other Rating Agency, such equivalent rating.

Rating Confirmation:  A letter from each Rating Agency then providing a rating for any of the Notes at the request of the Issuer confirming that the action proposed to be taken by the Issuer will not, in and of itself, result in a downgrade of any of the ratings then applicable to the Notes, or cause any Rating Agency to suspend or withdraw the Ratings then applicable to the Notes.

Record Date: With respect to any Class of Notes and the Trust Certificate and any Payment Date, the close of business on the last Business Day of the calendar month immediately preceding such Payment Date.  

Reference Banks: Any leading banks engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London, (ii) whose quotations appear on the Telerate Screen Page 3750 on the Interest Determination Date, (iii) which have been designated as such by the Securities Administrator and (iv) which are not Affiliates of the Depositor or the Seller.

Registered Holder: The Person in whose name a Note is registered in the Note Register on the applicable Record Date.

Regular Interest:  A “regular interest” in a REMIC within the meaning of Section 860G(a)(1) of the Code.

Related Documents: With respect to each HELOC, the documents specified in Section 2.01(b)(i)-(vii) of the Sale and Servicing Agreement, and any documents required to be added to such documents pursuant to the Sale and Servicing Agreement, the Trust Agreement, the Indenture or the Mortgage Loan Purchase Agreement.

Release: The Federal Reserve Board’s statistical Release No. H.15(519).

Relief Act: Servicemembers Civil Relief Act.

Relief Act HELOC: Any HELOC as to which the Scheduled Payment thereof has been reduced due to the application of the Relief Act.

REMIC:  A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

 

 

REMIC I:  The segregated pool of assets described in Section 10.01 of the Indenture.

 

REMIC I Regular Interest:  Any of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a Regular Interest in REMIC I. Each REMIC I Regular Interest shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Section 10.01 of the Indenture. The designations for the respective REMIC I Regular Interests are set forth in the Section 10.01 of the Indenture.

 

REMIC II:  The segregated pool of assets described in Section 10.01 of the Indenture.

REMIC I Interest Loss Allocation Amount:  With respect to any Payment Date, an amount (subject to adjustment based on the actual number of days elapsed in the respective Accrual Period) equal to (a) the product of (i) the aggregate Stated Principal Balance of the HELOCs and REO Properties then outstanding and (ii) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest AA minus the Marker Rate, divided by (b) 12.

REMIC I Overcollateralization Amount:  With respect to any date of determination, (i) 1.00% of the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests minus (ii) the aggregate Uncertificated Principal Balance of REMIC I Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest B-1, REMIC I Regular Interest B-2, REMIC I Regular Interest B-3 and REMIC I Regular Interest B-4, in each case, as of such date of determination.

REMIC I Principal Loss Allocation Amount:  With respect to any Payment Date, an amount equal to the product of (i) the aggregate Stated Principal Balance of the HELOCs and REO Properties then outstanding and (ii) 1 minus a fraction, the numerator of which is two (2) times the aggregate Uncertificated Principal Balance of REMIC I Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest B-1, REMIC I Regular Interest B-2, REMIC I Regular Interest B-3 and REMIC I Regular Interest B-4, and the denominator of which is the aggregate Uncertificated Principal Balance of REMIC I Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular Interest B-1, REMIC I Regular Interest B-2, REMIC I Regular Interest B-3, REMIC I Regular
Interest B-4 and REMIC I Regular Interest ZZ.

REMIC I Required Overcollateralization Amount:  1.00% of the Overcollateralization Target Amount.  

 

REMIC Provisions:  Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Sections 860A through 860G of the Code, and related provisions, and Treasury Regulations and published rulings, notices and 

 

announcements promulgated thereunder, as the foregoing may be in effect from time to time, as well as provisions of applicable state laws.

REO Property: A Mortgaged Property acquired in the name of the Indenture Trustee, for the benefit of the Noteholders, by foreclosure or deed-in-lieu of foreclosure in connection with a defaulted HELOC.

Repurchase Price: With respect to any HELOC (or any property acquired with respect thereto) required to be repurchased by the Seller pursuant to the Mortgage Loan Purchase Agreement or Article II of the Sale and Servicing Agreement, an amount equal to the sum of (i)(a) 100% of the Outstanding Principal Balance of such HELOC as of the date of repurchase (or if the related Mortgaged Property was acquired with respect thereto, 100% of the Outstanding Principal Balance at the date of the acquisition), plus (b) accrued but unpaid interest on the Outstanding Principal Balance at the related Net Mortgage Rate, through and including the last day of the month of repurchase, plus (c) any unreimbursed Monthly Advances and servicing advances payable to the Servicer or to the Master Servicer and (ii) any costs and damages (if any) incurred by the Trust in connection with any
violation of such HELOC of any predatory lending laws.

Repurchase Proceeds: the Repurchase Price in connection with any repurchase of a HELOC by the Seller and any cash deposit in connection with the substitution of a HELOC.

Request for Release:  A request for release in the form attached to the Custodial Agreement as Exhibit Four.

Required Insurance Policy: With respect to any HELOC, any insurance policy which is required to be maintained from time to time under the Sale and Servicing Agreement with respect to such HELOC.

Residual Certificates:  Any of the Class S Certificates or the Class R Certificates, each evidencing the sole class of Residual Interests in the related REMIC.

Residual Interest:  The sole class of “residual interests” in a REMIC within the meaning of Section 860G(a)(2) of the Code.

Responsible Officer: With respect to the Securities Administrator, any officer of the Securities Administrator with direct responsibility for the administration of the Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject; and with respect to the Indenture Trustee, any vice president, assistant vice president, any assistant secretary, any assistant treasurer, any associate or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers who at such time shall be officers to whom, with respect to a particular matter, such matter is referred because of such officer’s knowledge of and familiarity with the particular subject or who shall have
direct responsibility for the administration of the Indenture or the Trust Agreement.

 

 

Sale and Servicing Agreement: The Sale and Servicing Agreement, dated as of September 9, 2005, among the Issuer, the Seller, the Indenture Trustee, the Master Servicer, the Securities Administrator and the Depositor.

Scheduled Payment: With respect to any HELOC and any month, the scheduled payment or payments of principal and interest due during such month on such HELOC which either is payable by a Mortgagor in such month under the related Mortgage Note or, in the case of REO Property, would otherwise have been payable under the related Mortgage Note.

Scheduled Principal: The principal portion of any Scheduled Payment.

Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Securities Administrator: LaSalle Bank National Association, or its successor in interest, or any successor securities administrator.

Security: Any of the Certificates or Notes.

Securityholder or Holder: Any Noteholder or Certificateholder.

Security Instrument: A written instrument creating a valid first lien on a Mortgaged Property securing a Mortgage Note, which may be any applicable form of mortgage, deed of trust, deed to secure debt or security deed, including any riders or addenda thereto.

Seller: EMC Mortgage Corporation, and its successors and assigns.

Seller’s Certificate Pro Rata Test:  Is met with respect to any Payment Date during the Managed Amortization Period if the Certificate Principal Balance of the Class S Certificates is greater than 3.00% of the aggregate Stated Principal Balance of the HELOCs

Servicer: GMAC Mortgage Corporation or its successors and assigns.

Servicer Remittance Date: With respect to each HELOC, the date set forth in the Servicing Agreement. 

Servicing Agreement:  The Servicing Agreement, dated as of August 1, 2005, between the Servicer and the Seller. 

Servicing Fee:  As to any HELOC and Payment Date, an amount equal to the product of (i) the Stated Principal Balance of such HELOC as of the Due Date in the preceding calendar month and (ii) the applicable Servicing Fee Rate.

Servicing Fee Rate: As to any HELOC, a per annum rate of 0.50%.

60 Day Plus Delinquency Percentage: With respect to any Payment Date is the arithmetic average for each of the three successive Payment Dates ending with the applicable Payment Date of the percentage equivalent of a fraction, (A) the numerator of which is the 

 

aggregate Stated Principal Balance of (i) the HELOCs that are 60 or more days delinquent in the payment of principal or interest for the relevant Payment Date, (ii) HELOCs in foreclosure, (iii) REO Property and (iv) HELOCs with a related mortgagor subject to bankruptcy procedures, and (B) the denominator of which is the aggregate Stated Principal Balance of all of the HELOCs immediately preceding the relevant Payment Date

Standard & Poor’s: Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or its successor in interest.

Stated Principal Balance:  With respect to any HELOC and any Payment Date, the principal balance of the HELOC as of the Cut-Off date, plus the aggregate amount of all Draws conveyed to the Trust in respect of such HELOC minus all collections credited against the principal balance of such HELOC in accordance with the related mortgage note and minus all prior related Charge-Off Amounts.

Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code §§3801 et seq., as the same may be amended from time to time.

	
            Stepdown Date:  The later to occur of
 	
             

	
            (x)
 	
            the Payment Date occurring in September 2008 and
 
			

(y)        the first Payment Date for which the Current Specified Enhancement Percentage is greater than or equal to approximately 42.00%.

Subsequent Recoveries: Means any amount recovered by the related Servicer or the Master Servicer (net of reimbursable expenses) with respect to a Charged-Off HELOC with respect to which a Charged-Off Amount was incurred after the liquidation or disposition of such HELOC.

Tax Matters Person:  The person designated as “tax matters person” in the manner provided under Treasury Regulation Sections 1.860F-4(d) and 301.6231(a)(7)-1T. The Holder of the greatest Percentage Interest in a Class of Residual Certificates shall be the Tax Matters Person for the related REMIC.  The Securities Administrator, or any successor thereto or assignee thereof, shall serve as tax administrator hereunder and as agent for the related Tax Matters Person(s).

Telerate Screen Page 3750: The display designated as page 3750 on the Telerate Service (or such other page as may replace page 3750 on that service for the purpose of displaying London interbank offered rates of major banks).

Transfer:  Any direct or indirect transfer or sale of any ownership interest in a Note or a Certificate.

Treasury Regulations: Regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

 

 

Trigger Event:  With respect to any Payment Date is if any of the following tests is not satisfied: (A) the 60 Day Plus Delinquency Percentage is less than 4.50% of the aggregate Stated Principal Balance of the HELOCs, (B) for any Payment Date from and including the Payment Date in September 2005 to and including the Payment Date in August 2009, the Cumulative Charge-off Percentage for such Payment Date is less than 2.25%, (C) for any Payment Date from and including the Payment Date in September 2009 to and including the Payment Date in August 2010, the Cumulative Charge-off Percentage for such Payment Date is less than 3.25%, (D) for any Payment Date from and including the Payment Date in September 2010 to and including the Payment Date in August 2011, the Cumulative Charge-off Percentage for such Payment Date is less than 4.00%, (E) for any Payment Date
thereafter, the Cumulative Charge-off Percentage for such Payment Date is less than 4.40%.

Trust: The SACO I Trust 2005-GP1 created pursuant to the Trust Agreement.

Trust Agreement: The Trust Agreement, dated as of August 29, 2005 between the Depositor and the Owner Trustee, as amended and restated by the Amended and Restated Trust Agreement, dated as of September 9, 2005, among the Depositor, the Owner Trustee, and the Securities Administrator.

Trust Estate: The meaning specified in the Granting Clause of the Indenture.

Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as amended from time to time, as in effect on any relevant date.

UCC: The Uniform Commercial Code, as amended from time to time, as in effect in any specified jurisdiction.

Uncertificated Accrued Interest:  With respect to each REMIC I Regular Interest on each Payment Date, an amount equal to one month’s interest at the Uncertificated REMIC I Pass-Through Rate on the related Uncertificated Principal Balance of such REMIC I Regular Interest. In each case, Uncertificated Accrued Interest will be reduced by any Interest Shortfalls (allocated to such REMIC I Regular Interests as set forth in Section 1.02).

 

Uncertificated Principal Balance:  The amount of REMIC I Regular Interests outstanding as of any date of determination. As of the Closing Date, the Uncertificated Principal Balance of each REMIC I Regular Interest shall equal the amount set forth in the Section 10.01 of the Indenture as its initial uncertificated principal balance. On each Payment Date, the Uncertificated Principal Balance of the REMIC I Regular Interests shall be reduced by all distributions of principal made on such REMIC I Regular Interests on such Payment Date pursuant to Section 10.02(b) of the Indenture and, if and to the extent necessary and appropriate, shall be further reduced on such Payment Date by Charge-Off Amounts as provided in Section 10.03 of the Indenture, and the Uncertificated Principal Balance of REMIC I Regular Interest ZZ shall be increased by interest deferrals as provided
in Section 10.02(b)(i) of the Indenture. The Uncertificated Principal Balance of each REMIC I Regular Interest shall never be less than zero.  

 

Uncertificated REMIC I Pass-Through Rate: With respect to any REMIC I Regular Interest and any Payment Date, a per annum rate equal to the weighted average Net 

 

Mortgage Rate of the HELOCs as of the first day of the related Collection Period, weighted on the basis of the Stated Principal Balances thereof as of the first day of the related Collection Period, minus the premium due to the Note Insurer under the Policy multiplied by a fraction the numerator of which is the aggregate Note Principal Balance of the Class A-1, Class A-2 and Class M-1 Notes and the denominator of which is the Stated Principal Balance of the HELOCs, expressed as a percentage rate.

 

Underwriter: Bear, Stearns & Co. Inc.

Uninsured Cause: Any cause of damage to a Mortgaged Property or related REO Property such that the complete restoration of such Mortgaged Property or related REO Property is not fully reimbursable by the hazard insurance policies required to be maintained pursuant to the related Servicing Agreement, without regard to whether or not such policy is maintained.

Unpaid Interest Shortfall Amount:  With respect to any Class of Notes (other than the Class B-3 Notes and Class B-4 Notes) and (i) the first Payment Date, zero, and (ii) any Payment Date after the first Payment Date, the amount, if any, by which (A) the sum of (1) the Current Interest for such Class of Notes for the immediately preceding Payment Date and (2) the outstanding Unpaid Interest Shortfall Amount, if any, for such Class of Notes for such preceding Payment Date exceeds (B) the aggregate amount distributed on such Class of Notes in respect of interest pursuant to clause (A) above on such preceding Payment Date, plus interest on the amount of the interest due but not paid on such Class of Notes on such preceding Payment Date, to the extent permitted by law, at the Note Interest Rate for such Class for the related accrual period.

 

 

 

 

EXHIBIT A-1

FORM OF CLASS A-[__] NOTES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

THE NOTE PRINCIPAL BALANCE OF THIS NOTE WILL BE DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND CHARGE OFF AMOUNTS ALLOCABLE THERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE NOTES, THE NOTE PRINCIPAL BALANCE OF THIS NOTE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS NOTE MAY ASCERTAIN ITS NOTE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR NAMED HEREIN.

EACH HOLDER OF A NOTE OR BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS SET FORTH IN SECTION 4.02 OF THE AGREEMENT.

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE.

 

 

 

	
            Certificate No. 1
 	
            Note Interest Rate: Adjustable Rate
 
	
             
 	
             
 
	
            Class A-[__] Senior
 	
             
 
	
             
 	
             
 
	
            Cut-off Date: August 23, 2005
 	
            Aggregate Initial Note Principal Balance of this Note as of the Cut-off Date:

$[_______]
 
	
            Date of Indenture: September 9, 2005
 	
             
 
	
             
 	
             
 
	
            First Payment Date:

September 26, 2005
 	
            Initial Note Principal Balance of this Note as of the Cut-off Date:

$[_______]
 
	
             
 	
             
 
	
            Master Servicer:

LaSalle Bank National Association
 	
            CUSIP: [_______]
 
	
             
 	
             
 
	
            Final Scheduled Payment Date:

August 25, 2030
 	
             
 
	
             
 	
             
 

 

SACO I TRUST 2005-GP1

MORTGAGE-BACKED NOTES

SERIES 2005-GP1

evidencing a Percentage Interest in the distributions allocable to the Class A-[__] Notes with respect to a Trust Estate consisting primarily of a pool of home equity lines of credit that are secured by junior liens on one- to four- family residences sold by BSABS I LLC.

This Note is payable solely from the assets of the Trust Estate, and does not represent an obligation of or interest in BSABS I LLC, the Master Servicer, the Indenture Trustee or the Securities Administrator referred to below or any of their affiliates or any other person. Neither this Note nor the underlying HELOCs are guaranteed or insured by any governmental entity or by BSABS I LLC, the Master Servicer, the Indenture Trustee or the Securities Administrator or any of their affiliates or any other person. None of BSABS I LLC, the Master Servicer or any of their affiliates will have any obligation with respect to any note or other obligation secured by or payable from payments on the Notes.

This certifies that Cede & Co. is the registered owner of the Percentage Interest evidenced by this Note. This Note is one of a duly authorized issue of the Issuer’s Mortgage-Backed Notes, Series 2005-GP1 (the “Notes”), issued under an Indenture dated as of September 9, 2005 (the “Indenture”), among the Issuer, LaSalle Bank National Association, as Securities Administrator and Citibank, N.A., as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture) to which Indenture and all 

 

indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes and the terms upon which the Notes are to be authenticated and delivered. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

Interest on this Note will accrue from and including the immediately preceding Payment Date (or with respect to the First Payment Date, the Closing Date) to and including the day prior to the current Payment Date on the Note Principal Balance hereof at a per annum rate equal to the Note Interest Rate set forth above. The Securities Administrator will distribute on the 25th day of each month, or, if such 25th day is not a Business Day, the immediately following Business Day (each, a “Payment Date”), commencing on the First Payment Date specified above, to the Person in whose name this Note is registered at the close of business on the Business Day immediately preceding such Payment Date so long as such Note remains in book-entry form (and otherwise, the close of business on the last Business Day of the month immediately preceding the month of such Payment Date), an amount equal to
the product of the Percentage Interest evidenced by this Note and the amount (of interest and principal, if any) required to be distributed to the Holders of Notes of the same Class as this Note. The Final Scheduled Payment Date is the Payment Date in the month following the latest scheduled maturity date of any HELOC.

Payments on this Note will be made by the Securities Administrator by check mailed to the address of the Person entitled thereto as such name and address shall appear on the Certificate Register or, if such Person so requests by notifying the Securities Administrator in writing as specified in the Indenture. Notwithstanding the above, the final distribution on this Note will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon presentation and surrender of this Note at the office or agency appointed by the Securities Administrator for that purpose and designated in such notice. The initial Note Principal Balance of this Note is set forth above. The Note Principal Balance hereof will be reduced to the extent of distributions allocable to principal hereon and any Charge-off Amounts applicable hereto.

This Note is one of a duly authorized issue of Notes designated as set forth on the face hereof (the “Notes”). The Notes, in the aggregate, evidence the entire beneficial ownership interest in the Trust Estate formed pursuant to the Indenture.

The Noteholder, by its acceptance of this Note, agrees that it will look solely to the Trust Estate for payment hereunder and that the Securities Administrator is not liable to the Noteholders for any amount payable under this Note or the Indenture or, except as expressly provided in the Indenture, subject to any liability under the Indenture.

This does not purport to summarize the Indenture and reference is made to the Indenture for the interests, rights and limitations of rights, benefits, obligations and duties evidenced hereby, and the rights, duties and immunities of the Securities Administrator.

Each holder of a Note or beneficial ownership shall be deemed to have made the representations set forth in Section 4.02 of the Indenture.

 

 

The Indenture permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Noteholders under the Indenture from time to time by the parties thereto with the consent of the Note Insurer of each Class of Notes affected thereby evidencing over 50% of the Voting Rights of such Class or Classes.  Any such consent by the Holder of this Note shall be conclusive and binding on such Holder and upon all future Holders of this Note and of any Note issued upon the transfer hereof or in lieu hereof whether or not notation of such consent is made upon this Notes. The Indenture also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Notes.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Notes is registrable with the Securities Administrator upon surrender of this Notes for registration of transfer at the offices or agencies maintained by the Securities Administrator for such purposes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Notes in authorized denominations representing a like aggregate Percentage Interest will be issued to the designated transferee.

The Notes are issuable only as registered Notes without coupons in the Classes and denominations specified in the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for one or more new Notes evidencing the same Class and in the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made to the Noteholders for any such registration of transfer, but the Securities Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Depositor, the Master Servicer, the Securities Administrator, the Indenture Trustee and any agent of any of them may treat the Person in whose name this Note is registered as the owner hereof for all purposes, and none of Depositor, the Master Servicer, the Securities Administrator, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The obligations created by the Indenture and the Trust Estate created thereby (other than the obligations to make payments to Noteholders with respect to the termination of the Indenture) shall terminate upon the earlier of (i) the later of (A) the maturity or other liquidation (or Advance with respect thereto) of the last HELOC remaining in the Trust Estate and disposition of all property acquired upon foreclosure or deed in lieu of foreclosure of any HELOC and (B) the remittance of all funds due under the Indenture, or (ii) the optional repurchase by the party named in the Indenture of all the HELOCs and other assets of the Trust Estate in accordance with the terms of the Indenture. Such optional repurchase may be made on any Payment Date after the sum of the Note Principal Balances of the Notes is reduced to an amount less than or equal to 10% of the sum of the original Note Principal
Balances of the Notes.  The exercise of such right will effect the early retirement of the Notes. In no event, however, will the Trust Estate created by the Indenture continue beyond the earlier of (i) the expiration of 21 years after the death of certain persons identified in Section 8.03 of the Indenture and (ii) the Latest Possible Maturity Date as specified in the Indenture.

 

 

Unless this Note has been countersigned by an authorized signatory of the Securities Administrator by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Note to be duly executed.

 

	
            Dated: September 9, 2005
 	
            LASALLE BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Securities Administrator
 

 

 

By:  ________________________________

Authorized Signatory

CERTIFICATE OF AUTHENTICATION

This is one of the Class A-[__] Notes referred to in the within-mentioned Indenture.

LASALLE BANK NATIONAL ASSOCIATION, Authorized signatory of LaSalle Bank National Association , not in its individual capacity but solely as Securities Administrator

 

By:  ________________________________

Authorized Signatory

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________ (Please print or typewrite name and address including postal zip code of assignee) a Percentage Interest evidenced by the within Mortgage-Backed Notes and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Estate.

I (We) further direct the Securities Administrator to issue a new Note of a like denomination and Class, to the above named assignee and deliver such Note to the following address:

	
             
 	
             
 	
             
 
	
             
 	
             
 	
            .
 

 

	
            Dated:
 	

            _________________________________
 
	
             
 	
            Signature by or on behalf of assignor

 
 
	
             
 	
            _________________________________
 
	
             
 	
            Signature Guaranteed

 
 

 

 

PAYMENT INSTRUCTIONS

The assignee should include the following for purposes of distribution:

Payments shall be made, by wire transfer or otherwise, in immediately available funds to ____________________________________________________________________ for the account of ____________________________________ account number _____________, or, if mailed by check, to ___________________________________________________.  Applicable statements should be mailed to _____________________________________________.

This information is provided by ___________________________, the assignee named above, or ________________________, as its agent.

 

 

 

EXHIBIT A-2

FORM OF CLASS M-[__] NOTES

THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1 NOTES [,] [AND] CLASS A-2 NOTES [AND] [CLASS M-1 NOTES] AS DESCRIBED IN THE INDENTURE (AS DEFINED BELOW).

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

EACH HOLDER OF A NOTES OR BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS SET FORTH IN SECTION 4.02 OF THE INDENTURE.

THE NOTE PRINCIPAL BALANCE OF THIS NOTE WILL BE DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND CHARGE-OFF AMOUNTS ALLOCABLE THERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE NOTES, THE NOTE PRINCIPAL BALANCE OF THIS NOTE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS NOTE MAY ASCERTAIN ITS NOTE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR NAMED HEREIN.

NOTWITHSTANDING THE PREVIOUS PARAGRAPH, A CERTIFICATION WILL NOT BE REQUIRED WITH RESPECT TO THE TRANSFER OF THIS NOTE TO A DEPOSITORY, OR FOR ANY SUBSEQUENT TRANSFER OF THIS NOTE FOR SO LONG AS THIS NOTE IS A BOOK-ENTRY NOTE.  ANY TRANSFEREE OF THIS NOTE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE OR HOLDING OF THIS NOTE (OR INTEREST HEREIN) THAT SUCH TRANSFEREE IS A “QUALIFIED INSTITUTIONAL BUYER” WITHIN THE MEANING OF RULE 144A UNDER THE 1933 ACT.

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE 

 

TRUST AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE.

 

 

 

	
            Certificate No.1
 	
            Note Interest Rate: Adjustable Rate
 
	
             
 	
             
 
	
            Class M-[__] Subordinate
 	
             
 
	
             
 	
             
 
	
            Cut-off Date: August 23, 2005
 	
            Aggregate Initial Note Principal Balance of this Note as of the Cut-off Date:

$ [_______]
 
	
            Date of Indenture: September 9, 2005
 	
             
 
	
             
 	
            Initial Note Principal Balance of this Note  as of the Cut-off Date:

$ [_______]
 
	
            First Payment Date:

September 26, 2005
 	
             
 
	
             
 	
            CUSIP: [_______]
 
	
            Master Servicer:

LaSalle Bank National Association
 	
             
 
	
             
 	
             
 
	
             
 	
             
 

 

SACO I TRUST 2005-GP1

MORTGAGE-BACKED NOTE

SERIES 2005-GP1

evidencing a Percentage Interest in the distributions allocable to the Class M-[__] Notes with respect to a Trust Estate consisting primarily of a pool of home equity lines of credit that are secured by junior liens on one- to four- family residences sold by BSABS I LLC.

This Note is payable solely from the assets of the Trust Estate, and does not represent an obligation of or interest in BSABS I LLC, the Master Servicer, the Indenture Trustee or the Securities Administrator referred to below or any of their affiliates or any other person. Neither this Note nor the underlying HELOCs are guaranteed or insured by any governmental entity or by BSABS I LLC, the Master Servicer, the Indenture Trustee or the Securities Administrator or any of their affiliates or any other person. None of BSABS I LLC, the Master Servicer or any of their affiliates will have any obligation with respect to any note or other obligation secured by or payable from payments on the Notes.

This certifies that Cede & Co. is the registered owner of the Percentage Interest evidenced by this Note.  This Note is one of a duly authorized issue of the Issuer’s Mortgage-Backed Notes, Series 2005-GP1 (the “Notes”), issued under an Indenture dated as of September 9, 2005 (the “Indenture”), among the Issuer, LaSalle Bank National Association, as Securities Administrator and Citibank, N.A., as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture) to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights 

 

thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes and the terms upon which the Notes are to be authenticated and delivered. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

Interest on this Note will accrue from and including the immediately preceding Payment Date (or with respect to the First Payment Date, the Closing Date) to and including the day prior to the current Payment Date on the Note Principal Balance hereof at a per annum rate equal to the Note Interest Rate set forth above. The Securities Administrator will distribute on the 25th day of each month, or, if such 25th day is not a Business Day, the immediately following Business Day (each, a “Payment Date”), commencing on the First Payment Date specified above, to the Person in whose name this Note is registered at the close of business on the Business Day immediately preceding such Payment Date so long as such Note remains in book-entry form (and otherwise, the close of business on the last Business Day of the month immediately preceding the month of such Payment Date), an amount equal to
the product of the Percentage Interest evidenced by this Note and the amount (of interest and principal, if any) required to be distributed to the Holders of Notes of the same Class as this Note. The Final Scheduled Payment Date is the Payment Date in the month following the latest scheduled maturity date of any HELOC.

Payments on this Note will be made by the Securities Administrator by check mailed to the address of the Person entitled thereto as such name and address shall appear on the Certificate Register or, if such Person so requests by notifying the Securities Administrator in writing as specified in the Indenture. Notwithstanding the above, the final distribution on this Note will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon presentation and surrender of this Note at the office or agency appointed by the Securities Administrator for that purpose and designated in such notice. The initial Note Principal Balance of this Note is set forth above. The Note Principal Balance hereof will be reduced to the extent of distributions allocable to principal hereon and any Charge-off Amounts applicable hereto.

This Note is one of a duly authorized issue of Notes designated as set forth on the face hereof (the “Notes”). The Notes, in the aggregate, evidence the entire beneficial ownership interest in the Trust Estate formed pursuant to the Indenture.

The Noteholder, by its acceptance of this Note, agrees that it will look solely to the Trust Estate for payment hereunder and that the Securities Administrator is not liable to the Noteholders for any amount payable under this Note or the Indenture or, except as expressly provided in the Indenture, subject to any liability under the Indenture.

Each holder of a Note or beneficial ownership shall be deemed to have made the representations set forth in Section 4.02 of the Indenture.

The Indenture permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Noteholders under the Indenture from time to time by the parties thereto with the consent of the Note Insurer of each Class of Notes affected thereby evidencing over 50% of the Voting Rights of such Class or Classes.  Any such consent by the Holder of this Note shall be conclusive and binding on such Holder and upon all future Holders of this Note and of any Note issued upon the 

 

transfer hereof or in lieu hereof whether or not notation of such consent is made upon this Note. The Indenture also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Notes.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Notes is registrable with the Securities Administrator upon surrender of this Notes for registration of transfer at the offices or agencies maintained by the Securities Administrator for such purposes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Notes in authorized denominations representing a like aggregate Percentage Interest will be issued to the designated transferee.

The Notes are issuable only as registered Notes without coupons in the Classes and denominations specified in the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for one or more new Notes evidencing the same Class and in the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made to the Noteholders for any such registration of transfer, but the Securities Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Depositor, the Master Servicer, the Securities Administrator, the Indenture Trustee and any agent of any of them may treat the Person in whose name this Note is registered as the owner hereof for all purposes, and none of Depositor, the Master Servicer, the Securities Administrator, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The obligations created by the Indenture and the Trust Estate created thereby (other than the obligations to make payments to Noteholders with respect to the termination of the Indenture) shall terminate upon the earlier of (i) the later of (A) the maturity or other liquidation (or Advance with respect thereto) of the last HELOC remaining in the Trust Estate and disposition of all property acquired upon foreclosure or deed in lieu of foreclosure of any HELOC and (B) the remittance of all funds due under the Indenture, or (ii) the optional repurchase by the party named in the Indenture of all the HELOCs and other assets of the Trust Estate in accordance with the terms of the Indenture. Such optional repurchase may be made on any Payment Date after the sum of the Note Principal Balances of the Notes is reduced to an amount less than or equal to 10% of the sum of the original Note Principal
Balances of the Notes.  The exercise of such right will effect the early retirement of the Notes. In no event, however, will the Trust Estate created by the Indenture continue beyond the earlier of (i) the expiration of 21 years after the death of certain persons identified in Section 8.03 of the Indenture and (ii) the Latest Possible Maturity Date as specified in the Indenture.

Unless this Note has been countersigned by an authorized signatory of the Securities Administrator by manual signature, this Notee shall not be entitled to any benefit under the Indenture, or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Certificate to be duly executed.

	
            Dated: September 9, 2005
 	
            LASALLE BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Securities Administrator
 

 

 

By:  ________________________________

Authorized Signatory

CERTIFICATE OF AUTHENTICATION

This is one of the Class M-[__] Notes referred to in the within-mentioned Indenture.

LASALLE BANK NATIONAL ASSOCIATION, Authorized signatory of LaSalle Bank National Association , not in its individual capacity but solely as Securities Administrator

 

By:  ________________________________

Authorized Signatory

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________ (Please print or typewrite name and address including postal zip code of assignee) a Percentage Interest evidenced by the within Mortgage-Backed Notes and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Estate.

I (We) further direct the Certificate Registrar to issue a new New York of a like denomination and Class, to the above named assignee and deliver such New York to the following address: 

	
             
 	
             
 	
             
 
	
             
 	
             
 	
            .
 

 

	
            Dated:
 	
            _________________________________
 
	
             
 	
            Signature by or on behalf of assignor

 
 
	
             
 	
            _________________________________
 
	
             
 	
            Signature Guaranteed

 
 

 

 

PAYMENT INSTRUCTIONS

The assignee should include the following for purposes of distribution:

Payments shall be made, by wire transfer or otherwise, in immediately available funds to ____________________________________________________________________ for the account of ______________________________________ account number _____________, or, if mailed by check, to ____________________________________________________.  Applicable statements should be mailed to _____________________________________________.

This information is provided by ___________________________, the assignee named above, or ________________________, as its agent.

 

 

 

EXHIBIT A-3

FORM OF CLASS B-[__] NOTES

THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1, CLASS A-2, CLASS M-1 [,] [AND] CLASS M-2 NOTES [,] [AND] [CLASS B-1 NOTES] [,] [AND] [CLASS B-2 NOTES] [AND] [CLASS B-3 NOTES] AS DESCRIBED IN THE INDENTURE (AS DEFINED BELOW).

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

THE NOTE PRINCIPAL BALANCE OF THIS NOTE WILL BE DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND CHARGE OFF AMOUNTS ALLOCABLE THERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE NOTES, THE NOTE PRINCIPAL BALANCE OF THIS NOTE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS NOTE MAY ASCERTAIN ITS NOTE PRINCIPAL BALANCE BY INQUIRY OF THE SECURITIES ADMINISTRATOR NAMED HEREIN.

EACH HOLDER OF A NOTE OR BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE MADE THE REPRESENTATIONS SET FORTH IN SECTION 4.02 OF THE INDENTURE.

[For Class B-1 Notes] [UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

THIS NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE.

[For Class B-2, Class B-3, Class B-4 Notes] [THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE 

 

TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM TO AN “INSTITUTIONAL ACCREDITED INVESTOR” WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE INDENTURE TRUSTEE AND THE CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE INDENTURE AND (B) THE RECEIPT BY THE INDENTURE TRUSTEE AND THE CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE INDENTURE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.]

[For Class B-2, Class B-3, Class B-4 Notes] [THIS NOTE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A NOTE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION (“PTE”) 84-14, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL OBLIGATIONS ON THE PART OF THE ISSUER, THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE CERTIFICATE REGISTRAR, THE MASTER SERVICER OR THE INDENTURE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY NOTE OR UNLESS THE OPINION SPECIFIED IN THE INDENTURE IS PROVIDED.]

 

 

 

	
            Certificate No. 1
 	
            Note Interest Rate: Adjustable Rate
 
	
             
 	
             
 
	
            Class B-[__] Subordinate 
 	
             
 
	
             
 	
             
 
	
            Cut-off Date: August 23, 2005
 	
            Aggregate Initial Note Principal Balance of this Note as of the Cut-off Date:

$ [_______]
 
	
            Date of Indenture: September 9, 2005
 	
             
 
	
             
 	
            Initial Note Balance of this Note as of the Cut-off Date:

$ [_______]
 
	
            First Payment Date:

September 26, 2005
 	
             
 
	
             
 	
            CUSIP: [_______]
 
	
            Master Servicer:

LaSalle Bank National Association
 	
             
 
	
             
 	
             
 
	
             
 	
             
 

 

SACO I TRUST 2005-GP1

MORTGAGE-BACKED NOTES

SERIES 2005-GP1

evidencing a Percentage Interest in the distributions allocable to the Class B-[__] Notes with respect to a Trust Estate consisting primarily of a pool of home equity lines of credit that are secured by junior liens on one- to four- family residences sold by BSABS I LLC.

This Note is payable solely from the assets of the Trust Estate, and does not represent an obligation of or interest in BSABS I LLC, the Master Servicer, the Indenture Trustee or the Securities Administrator referred to below or any of their affiliates or any other person. Neither this Note nor the underlying HELOCs are guaranteed or insured by any governmental entity or by BSABS I LLC, the Master Servicer, the Indenture Trustee or the Securities Administrator or any of their affiliates or any other person. None of BSABS I LLC, the Master Servicer or any of their affiliates will have any obligation with respect to any certificate or other obligation secured by or payable from payments on the Notes.

This certifies that [___________] is the registered owner of the Percentage Interest evidenced by this Note.  This Note is one of a duly authorized issue of the Issuer’s Mortgage-Backed Notes, Series 2005-GP1 (the “Notes”), issued under an Indenture dated as of September 9, 2005 (the “Indenture”), among the Issuer, LaSalle Bank National Association, as Securities Administrator and Citibank, N.A., as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture) to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes and the terms upon 

 

which the Notes are to be authenticated and delivered. All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

Interest on this Note will accrue from and including the immediately preceding Payment Date (or with respect to the First Payment Date, the Closing Date) to and including the day prior to the current Payment Date on the Note Principal Balance hereof at a per annum rate equal to the Note Interest Rate set forth above. The Securities Administrator will distribute on the 25th day of each month, or, if such 25th day is not a Business Day, the immediately following Business Day (each, a “Payment Date”), commencing on the First Payment Date specified above, to the Person in whose name this Note is registered at the close of business on the Business Day immediately preceding such Payment Date so long as such Note remains in book-entry form (and otherwise, the close of business on the last Business Day of the month immediately preceding the month of such Payment Date), an amount equal to
the product of the Percentage Interest evidenced by this Note and the amount (of interest and principal, if any) required to be distributed to the Holders of Notes of the same Class as this Note. The Final Scheduled Payment Date is the Payment Date in the month following the latest scheduled maturity date of any HELOC.

Payments on this Note will be made by the Securities Administrator by check mailed to the address of the Person entitled thereto as such name and address shall appear on the Certificate Register or, if such Person so requests by notifying the Securities Administrator in writing as specified in the Indenture. Notwithstanding the above, the final distribution on this Note will be made after due notice by the Securities Administrator of the pendency of such distribution and only upon presentation and surrender of this Note at the office or agency appointed by the Securities Administrator for that purpose and designated in such notice. The initial Note Principal Balance of this Note is set forth above. The Note Principal Balance hereof will be reduced to the extent of distributions allocable to principal hereon and any Charge-off Amounts applicable hereto.

This Note is one of a duly authorized issue of Notes designated as set forth on the face hereof (the “Notes”). The Notes, in the aggregate, evidence the entire beneficial ownership interest in the Trust Estate formed pursuant to the Indenture.

The Noteholder, by its acceptance of this Note, agrees that it will look solely to the Trust Estate for payment hereunder and that the Securities Administrator is not liable to the Noteholders for any amount payable under this Note or the Indenture or, except as expressly provided in the Indenture, subject to any liability under the Indenture.

Each holder of a Note or beneficial ownership shall be deemed to have made the representations set forth in Section 4.02 of the Indenture.

This Note does not purport to summarize the Indenture and reference is made to the Indenture for the interests, rights and limitations of rights, benefits, obligations and duties evidenced hereby, and the rights, duties and immunities of the Securities Administrator.

The Indenture permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Noteholders under the Indenture from time to time by the parties thereto with the consent of the 

 

Holders of each Class of Notes affected thereby evidencing over 50% of the Voting Rights of such Class or Classes.  Any such consent by the Holder of this Note shall be conclusive and binding on such Holder and upon all future Holders of this Note and of any Note issued upon the transfer hereof or in lieu hereof whether or not notation of such consent is made upon this Notes. The Indenture also permits the amendment thereof, in certain limited circumstances, without the consent of the Holders of any of the Notes.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Notes is registrable with the Securities Administrator upon surrender of this Notes for registration of transfer at the offices or agencies maintained by the Securities Administrator for such purposes, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Securities Administrator duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Notes in authorized denominations representing a like aggregate Percentage Interest will be issued to the designated transferee.

The Notes are issuable only as registered Notes without coupons in the Classes and denominations specified in the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for one or more new Notes evidencing the same Class and in the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made to the Noteholders for any such registration of transfer, but the Securities Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Depositor, the Master Servicer, the Securities Administrator, the Indenture Trustee and any agent of any of them may treat the Person in whose name this Note is registered as the owner hereof for all purposes, and none of Depositor, the Master Servicer, the Securities Administrator, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The obligations created by the Indenture and the Trust Estate created thereby (other than the obligations to make payments to Noteholders with respect to the termination of the Indenture) shall terminate upon the earlier of (i) the later of (A) the maturity or other liquidation (or Advance with respect thereto) of the last HELOC remaining in the Trust Estate and disposition of all property acquired upon foreclosure or deed in lieu of foreclosure of any HELOC and (B) the remittance of all funds due under the Indenture, or (ii) the optional repurchase by the party named in the Indenture of all the HELOCs and other assets of the Trust Estate in accordance with the terms of the Indenture. Such optional repurchase may be made on any Payment Date after the sum of the Note Principal Balances of the Notes is reduced to an amount less than or equal to 10% of the sum of the original Note Principal
Balances of the Notes.  The exercise of such right will effect the early retirement of the Notes. In no event, however, will the Trust Estate created by the Indenture continue beyond the earlier of (i) the expiration of 21 years after the death of certain persons identified in Section 8.03 of the Indenture and (ii) the Latest Possible Maturity Date as specified in the Indenture. 

Unless this Note has been countersigned by an authorized signatory of the Securities Administrator by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid for any purpose.

 

 

[For the Class B-2, Class B-3, Class B-4] [No transfer of this Class B-[__] Note will be made unless such transfer is (i) exempt from the registration requirements of the Securities Act of 1933, as amended, and any applicable state securities laws or is made in accordance with said Act and laws and (ii) made in accordance with Section 4.02 of the Indenture.  In the event that such transfer is to be made the Indenture Trustee shall register such transfer if, (i) made to a transferee who has provided the Indenture Trustee with evidence as to its QIB status; or (ii) (A) the transferor has advised the Indenture Trustee in writing that the Note is being transferred to an Institutional Accredited Investor and (B) prior to such transfer the transferee furnishes to the Indenture Trustee an Investment Letter; provided that if based upon an Opinion of Counsel to the effect that (A) and (B) above are
not sufficient to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable laws, the Indenture Trustee shall as a condition of the registration of any such transfer require the transferor to furnish such other certifications, legal opinions or other information prior to registering the transfer of this Note as shall be set forth in such Opinion of Counsel.] 

[For the Class B-2, Class B-3, Class B-4] [This Note may not be acquired directly or indirectly by, or on behalf of, an employee benefit plan or other retirement arrangement which is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended, unless the transferee certifies or represents that the proposed transfer and holding of a Note and the servicing, management and operation of the Trust and its assets: (i) will not result in any prohibited transaction which is not covered under an individual or class prohibited transaction exemption, including, but not limited to, Prohibited Transaction Exemption (“PTE”) 84-14, PTE 91-38, PTE 90-1, PTE 95-60 or PTE 96-23 and (ii) will not give rise to any additional obligations on the part of the Issuer, the Depositor, the Securities Administrator,
the Certificate Registrar, the Master Servicer or the Indenture Trustee, which will be deemed represented by an owner of a Book-Entry Note or unless the opinion specified in the Indenture is provided.]

 

 

IN WITNESS WHEREOF, the Securities Administrator has caused this Note to be duly executed.

	
            Dated: September 9, 2005
 	
            LASALLE BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Securities Administrator
 

 

 

By:  ________________________________

Authorized Signatory

CERTIFICATE OF AUTHENTICATION

This is one of the Class B-[__] Note referred to in the within-mentioned Indenture.

LASALLE BANK NATIONAL ASSOCIATION, Authorized signatory of LaSalle Bank National Association , not in its individual capacity but solely as Securities Administrator

 

By:  ________________________________

Authorized Signatory

 

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________ (Please print or typewrite name and address including postal zip code of assignee) a Percentage Interest evidenced by the within Mortgage Backed Notes and hereby authorizes the transfer of registration of such interest to assignee on the Certificate Register of the Trust Estate.

I (We) further direct the Securities Administrator to issue a new Note of a like denomination and Class, to the above named assignee and deliver such Note to the following address: 

	
             
 	
             
 	
             
 
	
             
 	
             
 	
            .
 

 

	
            Dated:
 	
            _________________________________
 
	
             
 	
            Signature by or on behalf of assignor

 
 
	
             
 	
            _________________________________
 
	
             
 	
            Signature Guaranteed

 
 

 

 

PAYMENT INSTRUCTIONS

The assignee should include the following for purposes of distribution:

Payments shall be made, by wire transfer or otherwise, in immediately available funds to __________________________________________________________________ for the account of ___________________________ account number _____________________, or, if mailed by check, to __________________________________________________.  Applicable statements should be mailed to _____________________________________________.

This information is provided by ___________________________, the assignee named above, or ________________________, as its agent.

 

 

 

EXHIBIT B

MORTGAGE LOAN SCHEDULE

(Provided Upon Request)

 

 

 

EXHIBIT C

FORM OF TRANSFEREE CERTIFICATE

[Date]

[NOTE REGISTRAR] [SECURITIES ADMINISTRATOR]

	
            Re:
 	
            SACO I Trust 2005-GP1
 

Mortgage-Backed Notes, Series 2005-GP1 (the “Notes”)

Ladies and Gentlemen:

_________________________________ (the “Transferee”) intends to purchase from _________________ (the “Transferor”) the Class ___ Notes having an initial aggregate Note Balance as of September 9, 2005 (the “Closing  Date”) of $_____________ (the “Transferred Notes”).  The Notes, including the Transferred Notes, were issued pursuant to the Indenture, dated as of September 9, 2005 (the “Indenture”), between SACO I Trust 2005-GP1 (the “Issuer”), LaSalle Bank National Trust Company (the “Securities Administrator”) and Citibank, N.A. (the “Indenture Trustee”).  All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Indenture.  The Transferee hereby certifies, represents and warrants to you, as [Securities Administrator] [Note Registrar], and for the benefit of the Issuer, the
Securities Administrator, the Indenture Trustee and the Transferor, that:

1.          The Transferee is a “qualified institutional buyer” (a “Qualified Institutional Buyer”) as that term is defined in Rule 144A (“Rule l44A”) under the Securities Act of 1933, as amended (the “Securities Act”), and has completed one of the forms of certification to that effect attached hereto as Annex 1 and Annex 2.  The Transferee is aware that the sale to it of the Transferred Notes is being made in reliance on Rule 144A.  The Transferee is acquiring the Transferred Notes for its own account or for the account of a Qualified Institutional Buyer, and understands that such Transferred Notes may be resold, pledged or transferred only (i) to a person reasonably believed to be a Qualified Institutional Buyer that purchases for its own account or for the account of a Qualified Institutional Buyer
to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, or (ii) pursuant to another exemption from registration under the Securities Act.

2.          The Transferee has been furnished with all information regarding (a) the HELOCs and payments thereon, (b) the nature and performance of the HELOCs, (c) the Indenture, and (d) any credit enhancement mechanism associated with the HELOCs, that it has requested.

3.          The Transferee is neither (A) an employee benefit plan, an Archer MSA as described in Section 220(d) of the Code, an education individual retirement account as described in Section 530 of the Code or other retirement arrangement, including individual retirement accounts and annuities, Keogh plans and collective investment funds and separate accounts in which such plans, accounts or arrangements are invested, including, without limitation, insurance company general accounts, that is subject to ERISA or Section 4975 of the Code (each, a “Plan”), nor (B) any Person who is directly or indirectly purchasing such Note or interest therein 

 

on behalf of, as named fiduciary of, as trustee of, or with “plan assets” (as defined under the DOL Regulation at 29 C.F.R. Section 2510.3-101) of a Plan.

Very truly yours,

____________________________

(Transferee)

By:_________________________

Name:

Title:

 

 

ANNEX 1 TO EXHIBIT C-2

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[for Transferees other than Registered Investment Companies]

The undersigned hereby certifies as follows to [name of Transferor] (the “Transferor”) an [name of Securities Administrator] [name of Note Registrar], as [Securities Administrator] [Note Registrar], with respect to the Notes being transferred (the “Transferred Notes”) as described in the Transferee Certificate to which this certification relates and to which this certification is an Annex:

1.          As indicated below, the undersigned is the chief financial officer, a person fulfilling an equivalent function, or other executive officer of the entity purchasing the Transferred Notes (the “Transferee”).

2.          The Transferee is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”), because (i) the Transferee owned and/or invested on a discretionary basis $____________________ in securities (other than the excluded securities referred to below) as of the end of the Transferee’s  most recent fiscal year (such amount being calculated in accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the category marked below.

	
            ____
 	
            Corporation, etc. The Transferee is a corporation (other than a bank, savings and loan association or similar institution), Massachusetts or similar business trust, partnership, or any organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
 
	
            ____
 	
            Bank.  The Transferee (a) is a national bank or a banking institution organized under the laws of any State, U.S. territory or the District of Columbia, the business of which is substantially confined to banking and is supervised by the State or territorial banking commission or similar official or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto, as of a date not more than 16 months preceding the date of sale of the Note in the case of a U.S. bank, and not more than 18 months preceding such date of sale for a foreign bank or equivalent institution.
 
	
            ____
 	
            Savings and Loan.  The Transferee (a) is a savings and loan association, building and loan association, cooperative bank, homestead association or similar institution, which is supervised and examined by a State or Federal authority having supervision over any such institutions or is a foreign savings and loan association or equivalent institution and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto, as of a date not more than 16 months preceding the date of sale of the Note in the case of a U.S. savings and loan association, and not more than 18 months 
 

 

preceding such date of sale for a foreign savings and loan association or equivalent institution.

	
            ____
 	
            Broker-dealer.  The Transferee is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended.
 
	
            ____
 	
            Insurance Company.  The Transferee is an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a State, U.S. territory or the District of Columbia.
 
	
            ____
 	
            State or Local Plan.  The Transferee is a plan established and maintained by a State, its political subdivisions, or any agency or instrumentality of the State or its political subdivisions, for the benefit of its employees.
 
	
            ____
 	
            ERISA Plan.  The Transferee is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974.
 
	
            ____
 	
            Investment Advisor.  The Transferee is an investment advisor registered under the Investment Advisers Act of 1940, as amended.
 
	
            ____
 	
            Other.  (Please supply a brief description of the entity and a cross-reference to the paragraph and subparagraph under subsection (a)(1) of Rule l44A pursuant to which it qualifies.  Note that registered investment companies should complete Annex 2 rather than this Annex 1.)
 

3.          The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Transferee, (ii) securities that are part of an unsold allotment to or subscription by the Transferee, if the Transferee is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities owned but subject to a repurchase agreement and (vii) currency, interest rate and commodity swaps.  For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Transferee, the Transferee did not include any of the securities referred to in this paragraph.

4.          For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Transferee, the Transferee used the cost of such securities to the Transferee, unless the Transferee reports its securities holdings in its financial statements on the basis of their market value, and no current information with respect to the cost of those securities has been published, in which case the securities were valued at market.  Further, in determining such aggregate amount, the Transferee may have included securities owned by subsidiaries of the Transferee, but only if such subsidiaries are consolidated with the Transferee in its financial statements prepared in accordance with generally accepted accounting principles and if the investments of such subsidiaries are managed under the Transferee’s
direction.  However, such securities were not included if the Transferee is a majority-owned, 

 

consolidated subsidiary of another enterprise and the Transferee is not itself a reporting company under the Securities Exchange Act of 1934, as amended.

5.          The Transferee acknowledges that it is familiar with Rule l44A and understands that the Transferor and other parties related to the Transferred Notes are relying and will continue to rely on the statements made herein because one or more sales to the Transferee may be in reliance on Rule 144A.

	
            ____
 	
            ____
 	
            Will the Transferee be purchasing the Transferred Notes
 
	
            Yes
 	
            No
 	
            only for the Transferee’s  own account?
 	
             

6.          If the answer to the foregoing question is “no”, then in each case where the Transferee is purchasing for an account other than its own, such account belongs to a third party that is itself a “qualified institutional buyer” within the meaning of Rule 144A, and the “qualified institutional buyer” status of such third party has been established by the Transferee through one or more of the appropriate methods contemplated by Rule 144A.

7.          The Transferee will notify each of the parties to which this certification is made of any changes in the information and conclusions herein.  Until such notice is given, the Transferee’s purchase of the Transferred Notes will constitute a reaffirmation of this certification as of the date of such purchase.  In addition, if the Transferee is a bank or savings and loan as provided above, the Transferee agrees that it will furnish to such parties any updated annual financial statements that become available on or before the date of such purchase, promptly after they become available.

 

_____________________________

Print Name of Transferee

By:__________________________

Name:

Title:

Date:

 

 

ANNEX 2 TO EXHIBIT C-2

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[for Transferees that are Registered Investment Companies]

The undersigned hereby certifies as follows to [name of Transferor] (the “Transferor”) and [name of Securities Administrator] [name of Note Registrar], as [Securities Administrator] [Note Registrar], with respect to the Notes being transferred (the “Transferred Notes”) as described in the Transferee Certificate to which this certification relates and to which this certification is an Annex:

1.          As indicated below, the undersigned is the chief financial officer, a person fulfilling an equivalent function, or other executive officer of the entity purchasing the Transferred Certificates (the “Transferee”) or, if the Transferee is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”), because the Transferee is part of a Family of Investment Companies (as defined below), is an executive officer of the investment adviser (the “Adviser”).

2.          The Transferee is a “qualified institutional buyer” as defined in Rule 144A because (i) the Transferee is an investment company registered under the Investment Company Act of 1940, as amended, and (ii) as marked below, the Transferee alone owned and/or invested on a discretionary basis, or the Transferee’s Family of Investment Companies owned, at least $100,000,000 in securities (other than the excluded securities referred to below) as of the end of the Transferee’s  most recent fiscal year.  For purposes of determining the amount of securities owned by the Transferee or the Transferee’s Family of Investment Companies, the cost of such securities was used, unless the Transferee or any member of the Transferee’s Family of Investment Companies, as the case may be, reports its securities holdings in
its financial statements on the basis of their market value, and no current information with respect to the cost of those securities has been published, in which case the securities of such entity were valued at market.

	
            ____
 	
            The Transferee owned and/or invested on a discretionary basis $____________ in securities (other than the excluded securities referred to below) as of the end of the Transferee’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).
 
	
            ____
 	
            The Transferee is part of a Family of Investment Companies which owned in the aggregate $_____________ in securities (other than the excluded securities referred to below) as of the end of the Transferee’s  most recent fiscal year (such amount being calculated in accordance with Rule 144A).
 

3.          The term “Family of Investment Companies” as used herein means two or more registered investment companies (or series thereof) that have the same investment adviser or I investment advisers that are affiliated (by virtue of being majority owned subsidiaries of the same parent or because one investment adviser is a majority owned subsidiary of the other).

 

 

4.          The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Transferee or are part of the Transferee’s Family of Investment Companies, (ii) bank deposit notes and certificates of deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities owned but subject to a repurchase agreement and (vi) currency, interest rate and commodity swaps.  For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Transferee, or owned by the Transferee’s Family of Investment Companies, the securities referred to in this paragraph were excluded.

5.          The Transferee is familiar with Rule 144A and understands that the parties to which this certification is being made are relying and will continue to rely on the statements made herein because one or more sales to the Transferee will be in reliance on Rule 144A.

	
            ____
 	
            ____
 	
            Will the Transferee be purchasing the Transferred Notes
 
	
            Yes
 	
            No
 	
            only for the Transferee’s  own account?
 	
             

6.          If the answer to the foregoing question is “no”, then in each case where the Transferee is purchasing for an account other than its own, such account belongs to a third party that is itself a “qualified institutional buyer” within the meaning of Rule 144A, and the “qualified institutional buyer” status of such third party has been established by the Transferee through one or more of the appropriate methods contemplated by Rule l44A.

7.          The undersigned will notify the parties to which this certification is made of any changes in the information and conclusions herein.  Until such notice, the Transferee’s purchase of the Transferred Notes will constitute a reaffirmation of this certification by the undersigned as of the date of such purchase.

 

_____________________________

Print Name of Transferee or Adviser

By:___________________________

Name:

Title:

IF AN ADVISER:

______________________________

Print Name of Transferee

Date:

 

 

 

EXHIBIT D

FORM OF TRANSFEROR CERTIFICATE

[Date]

[SECURITIES ADMINISTRATOR]

	
            Re:
 	
            SACO I Trust 2005-GP1
 

Mortgage-Backed Notes, Series 2005-GP1 (the “Notes”)

Ladies and Gentlemen:

In connection with the sale by ___________________________________________ (the “Transferor”) to _________________________ (the “Transferee”) of the Class __ Notes having an initial aggregate Note Balance as of September 9, 2005 (the “Closing Date”) of $______________ (the “Transferred Notes”).  The Notes, including the Transferred Notes, were issued pursuant to the Indenture, dated as of September 9, 2005 (the “Indenture”), among SACO I Trust 2005-GP1 (the “Issuer”), LaSalle Bank National Trust Company (the “Securities Administrator”) and Citibank, N.A. (the “Indenture Trustee”).  All capitalized terms used but not otherwise defined herein shall have the respective meanings set forth in the Indenture.  The Transferor hereby certifies, represents and warrants to you, as [Securities Administrator] [Note Registrar],
and for the benefit of the Issuer, the Securities Administrator, the Indenture Trustee and the Transferee, that:

1.          The Transferor is the lawful owner of the Transferred Notes with the full right to transfer such Notes free from any and all claims and encumbrances whatsoever.

2.         Neither the Transferor nor anyone acting on its behalf has (a) offered, transferred, pledged, sold or otherwise disposed of any Note, any interest in any Note or any other similar security to any person in any manner, (b) solicited any offer to buy or accept a transfer, pledge or other disposition of any Note, any interest in any Note or any other similar security from any person in any manner, (c) otherwise approached or negotiated with respect to any Note, any interest in any Note or any other similar security with any person in any manner, (d) made any general solicitation by means of general advertising or in any other manner, or (e) taken any other action, which (in the case of any of the acts described in clauses (a) through (e) hereof) would constitute a distribution of any Note under the Securities Act of 1933, as amended (the
“Securities Act”), or would render the disposition of any Note a violation of Section 5 of the Securities Act or any state securities laws, or would require registration or qualification of any Note pursuant to the Securities Act or any state securities laws.

3.         The Transferor and any person acting on behalf of the Transferor in this matter reasonably believe that the Transferee is a “qualified institutional buyer” as that term is defined in Rule l44A (“Rule l44A”) under the Securities Act (a “Qualified Institutional Buyer”) purchasing for its own account or for the account of a Qualified Institutional Buyer.  In determining whether the Transferee is a Qualified Institutional Buyer, the Transferor and any person acting on behalf of the Transferor in this matter have relied upon the following method(s) 

 

of establishing the Transferee’s ownership and discretionary investments of securities (check one or more):

	
            ____
 	
            (a) The Transferee’s most recent publicly available financial statements, which statements present the information as of a date within 16 months preceding the date of sale of the Transferred Note in the case of a U.S.  purchaser and within 18 months preceding such date of sale for a foreign purchaser; or
 
	
            ____
 	
            (b) The most recent publicly available information appearing in documents filed by the Transferee with the Securities and Exchange Commission or another United States federal, state, or local governmental agency or self-regulatory organization, or with a foreign governmental agency or self-regulatory organization, which information is as of a date within 16 months preceding the date of sale of the Transferred Note in the case of a U.S.  purchaser and within 18 months preceding such date of sale for a foreign purchaser, or
 
	
            ____
 	
            (c) The most recent publicly available information appearing in a recognized securities manual, which information is as of a date within 16 months preceding the date of sale of the Transferred Note in the case of a U.S.  purchaser and within 18 months preceding such date of sale for a foreign purchaser, or
 
	
            ____
 	
            (d) A certification by the chief financial officer, a person fulfilling an equivalent function, or other executive officer of the Transferee, specifying the amount of securities owned and invested on a discretionary basis by the Transferee as of a specific date on or since the close of the Transferee’s most recent fiscal year, or, in the case of a Transferee that is a member of a “family of investment companies”, as that term is defined in Rule 144A, a certification by an executive officer of the investment adviser specifying the amount of securities owned by the “family of investment companies” as of a specific date on or since the close of the Transferee’s most recent fiscal year.
 

4.         The Transferor and any person acting on behalf of the Transferor understand that in determining the aggregate amount of securities owned and invested on a discretionary basis by an entity for purposes of establishing whether such entity is a Qualified Institutional Buyer:

(a)  the following instruments and interests shall be excluded: securities of issuers that are affiliated with the Transferee; securities that are part of an unsold allotment to or subscription by the Transferee, if the Transferee is a dealer; securities of issuers that are part of the Transferee’s  “family of investment companies”, if the Transferee is a registered investment company; bank deposit notes and certificates of deposit; loan participations; repurchase agreements; 

 

securities owned but subject to a repurchase agreement; and currency, interest rate and commodity swaps;

(b)  the aggregate value of the securities shall be the cost of such securities, except where the entity reports its securities holdings in its financial statements on the basis of their market value, and no current information with respect to the cost of those securities has been published, in which case the securities may be valued at market;

(c)  securities owned by subsidiaries of the entity that are consolidated with the entity in its financial statements prepared in accordance with generally accepted accounting principles may be included if the investments of such subsidiaries are managed under the direction of the entity, except that, unless the entity is a reporting company under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, securities owned by such subsidiaries may not be included if the entity itself is a majority-owned subsidiary that would be included in the consolidated financial statements of another enterprise.

5.         The Transferor or a person acting on its behalf has taken reasonable steps to ensure that the Transferee is aware that the Transferor is relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.

6.         The Transferor or a person acting on its behalf has furnished, or caused to be furnished, to the Transferee all information regarding (a) the HELOCs and payments thereon, (b) the nature and performance of the HELOCs, (c) the Indenture and the Trust Estate, and (d) any credit enhancement mechanism associated with the HELOCs, that the Transferee has requested.

Very truly yours,

__________________________

(Transferor)

By:_______________________

Name:

Title:

 

 

 

EXHIBIT E

FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

MORTGAGE LOAN PURCHASE AGREEMENT, dated as of September 9, 2005, as amended and supplemented by any and all amendments hereto (collectively, “this Agreement”), by and among EMC MORTGAGE CORPORATION, a Delaware corporation (a “Mortgage Loan Seller”) and BEAR STEARNS ASSET BACKED SECURITIES I LLC, a Delaware limited liability company (the “Purchaser”).

Upon the terms and subject to the conditions of this Agreement, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase, certain first and junior lien home equity lines of credit (the “HELOCs”) as described herein.  The Purchaser has established SACO I Trust 2005-GP1, a Delaware statutory trust (the “Issuer”) pursuant to a Short Form Trust Agreement, dated as of August 29, 2005, as amended and restated on September 9, 2005 (the “Trust Agreement”), among the Purchaser, Wilmington Trust Company (the “Owner Trustee”) and LaSalle Bank National Association (“LaSalle Bank” in such capacity, “Securities Administrator”).  The Purchaser intends to sell the HELOCs to the Issuer pursuant to a Sale and Servicing Agreement, dated as of September 9, 2005 (the “Sale and Servicing Agreement”) among the Purchaser,
as Depositor, the Issuer, the Mortgage Loan Seller, Citibank, N.A., as indenture trustee (the “Indenture Trustee”) and the LaSalle Bank as Securities Administrator and as master servicer (in such capacity, the “Master Servicer”).  The Issuer, pursuant to an Indenture, dated as of September 9, 2005 (the “Indenture”) among the Issuer, the Indenture Trustee and the Securities Administrator intends to pledge the HELOCs to the Indenture Trustee and, issue and transfer to the Purchaser the SACO I Trust 2005-GP1, Mortgage-Backed Notes, Series 2005-GP1 and the Certificates issued pursuant to the Trust Agreement (the “Certificates”).  Certain Certificates will be transferred by the Purchaser to the Mortgage Loan Seller as partial consideration for the sale of the HELOCs.  The Master Servicer will master service the HELOCs on behalf of the Issuer pursuant to the Sale and Servicing Agreement.  The servicing of the HELOCs will be provided by GMAC Mortgage
Corporation pursuant to its servicing agreement as specified in Appendix A to the Indenture which will be assigned to the Issuer on the Closing Date pursuant to the related Assignment Agreement.  The representations and warranties made by the related Underlying Seller and the remedies for breach thereof will be assigned to the Issuer on the Closing Date pursuant to, and to the extent provided in the related Assignment Agreement.

The Purchaser has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (Number 333-125422) relating to its Mortgage-Backed Notes and the offering of certain series thereof (including certain classes of the Certificates) from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (the “Securities Act”). Such registration statement, when it became effective under the Securities Act, and the prospectus relating to the public offering of certain classes of the Notes by the Purchaser (the “Public Offering”), as each may be amended or supplemented from time to time pursuant
to the Securities Act or otherwise, are referred to herein as the “Registration Statement” and the “Prospectus,” respectively. The “Prospectus Supplement” shall mean that supplement, dated 

 

August 31, 2005, to the Prospectus, dated June 24, 2005, relating to certain classes of the Notes. With respect to the Public Offering of certain classes of the Notes, Bear, Stearns & Co. Inc. (“Bear Stearns”) and the Purchaser have entered into a terms agreement, dated as of August 31, 2005, to an underwriting agreement, dated August 31, 2005 (together, the “Underwriting Agreement”) between Bear Stearns and the Purchaser.

Now, therefore, in consideration of the premises and the mutual agreements set forth herein, the parties hereto agree as follows:

Section 1.         Definitions.  Certain terms are defined herein.  Capitalized terms used herein but not defined herein shall have the meanings specified in the Sale and Servicing Agreement.  The following other terms are defined as follows:

Acquisition Price:  With respect to EMC and the sale of the HELOCs, cash in an amount equal to $       *         (plus $       *         in accrued interest) and the retained certificates.  

Bear Stearns: Bear, Stearns & Co. Inc.

Closing Date:  September 9, 2005.

Custodial Agreement: Any of the LaSalle Custodial Agreement.

Cut-off Date:  August 23, 2005.

Cut-off Date Balance:  Shall mean $345,978,146.90 with respect to the HELOC Loans.

Deleted Mortgage Loan:  A HELOC replaced or to be replaced by a Substitute Mortgage Loan.

Due Date:  As to any HELOC, the date in each month on which the related Scheduled Payment is due, as set forth in the related Mortgage Note.

EMC: EMC Mortgage Corporation.

HELOCs: The home equity lines of credit identified as such on the Mortgage Loan Schedule for which EMC is the Seller.

Fitch:  Fitch Inc., or its successors in interest.

LaSalle Bank: LaSalle Bank National Association, or its successors in interest.

Custodial Agreement:  The custodial agreement, dated as September 9, 2005, among the Depositor, the Seller, the Master Servicer, the Indenture Trustee and LaSalle Bank National Association as Custodian relating to the HELOCs identified in such custodial agreement.

MERS:  Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.

 

 

MERS® System: The system of recording transfers of Mortgages electronically maintained by MERS.

Moody’s:  Moody’s Investors Service, Inc., or its successors in interest.

Mortgage:  The mortgage or deed of trust or other instrument creating a first or junior lien on an interest in an estate in fee simple in real property securing a Mortgage Note.

Mortgage File:  The items referred to in Exhibit 1 pertaining to a particular HELOC and any additional documents required to be added to such documents pursuant to this Agreement.

Mortgage Rate:  The annual rate of interest borne by a Mortgage Note as stated herein.

Mortgagor:  The obligor(s) on a Mortgage Note.

Net Mortgage Rate:  As to each HELOC, and at any time, the per annum rate equal to the Mortgage Rate less the sum of (i) the Servicing Fee Rate, (ii) the Indenture Trustee Fee Rate and (iii) the rate at which the LPMI Fee is calculated, if any.

Opinion of Counsel:  A written opinion of counsel, who may be counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable to the Indenture Trustee.

Person:  Any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Purchase Price:  With respect to any HELOC required to be purchased by the Mortgage Loan Seller pursuant to the applicable provisions of this Agreement, an amount equal to the sum of (i) 100% of the principal remaining unpaid on such HELOC as of the date of purchase (including if a foreclosure has already occurred, the principal balance of the related HELOC at the time the Mortgaged Property was acquired), (ii) accrued and unpaid interest thereon at the Mortgage Interest Rate through and including the last day of the month of purchase and (iii) any costs and damages (if any) incurred by the Trust in connection with any violation of such HELOC of any anti-predatory lending laws.

Rating Agency:  Each of Moody’s, Fitch and Standard & Poor’s. 

Substitute Mortgage Loan:  A HELOC substituted for a Deleted Mortgage Loan which must meet on the date of such substitution the requirements stated herein and in the Sale and Servicing Agreement; upon such substitution, such HELOC shall be a “HELOC” hereunder.

Securities Act:  The Securities Act of 1933, as amended.

Standard & Poor’s: Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. or its successors in interest. 

 

 

Value:  The value of the Mortgaged Property at the time of origination of the related HELOC, such value being the lesser of (i) the value of such property set forth in an appraisal accepted by the applicable originator of the HELOC or (ii) the sales price of such property at the time of origination.

	
            Section 2.
 	
            Purchase and Sale of the HELOCs and Related Rights.
 

(a)        Upon satisfaction of the conditions set forth in Section 11 hereof, the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase the HELOCs sold by such Mortgage Loan Seller having an aggregate outstanding principal balance as of the Cut-off Date equal to the aggregate Cut-off Date Balances of the HELOC Loans (including all additional balances resulting from Draws made pursuant to the related HELOC Loan prior to the termination of the Trust; provided however, that the Purchaser does not assume any obligation under any HELOC Loan to fund any such future Draws, and the Purchaser will not be obligated or permitted to fund such future Draws).

(b)        The closing for the purchase and sale of the HELOCs and the closing for the issuance of the Certificates will take place on the Closing Date at the office of the Purchaser’s counsel in New York, New York, or such other place as the parties shall agree.

(c)        Upon the satisfaction of the conditions set forth in Section 10 hereof, on the Closing Date, the Purchaser shall pay to the Mortgage Loan Seller the cash portion of the Acquisition Price for the HELOCs sold by the Mortgage Loan Seller in immediately available funds by wire transfer to such account or accounts as shall be designated by the Mortgage Loan Seller and shall deliver the Certificates to the Mortgage Loan Seller or its designee.

Section 3.         Mortgage Loan Schedules.  The Mortgage Loan Seller agrees to provide to the Purchaser as of the date hereof a preliminary listing of the HELOCs (the “Preliminary Mortgage Loan Schedule”) setting forth the information listed on Exhibit 2 to this Agreement with respect to each of the HELOCs being sold by the Mortgage Loan Seller. If there are changes to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall provide to the Purchaser as of the Closing Date a final schedule (the “Final Mortgage Loan Schedule”) setting forth the information listed on Exhibit 2 to
this Agreement with respect to each of the HELOCs being sold by the Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall be delivered to the Purchaser on the Closing Date, shall be attached to an amendment to this Agreement to be executed on the Closing Date by the parties hereto and shall be in form and substance mutually agreed to by the Mortgage Loan Seller and the Purchaser (the “Amendment”). If there are no changes to the Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan Schedule shall be the Final Mortgage Loan Schedule for all purposes hereof.

Section 4.         HELOC Transfer.  (a)The Purchaser will be entitled to all scheduled payments of principal and interest on the HELOCs due after the Cut-off Date (regardless of when actually collected) and all payments thereof.  The Mortgage Loan Seller will be entitled to all scheduled payments of principal and interest on the HELOCs sold by it to the Purchaser due on or before the Cut-off Date (including payments collected after the Cut-off Date) and all payments thereof.  Such principal amounts and any interest thereon belonging to 

 

the related Mortgage Loan Seller as described above will not be included in the aggregate outstanding principal balance of the HELOCs as of the Cut-off Date as set forth on the Final Mortgage Loan Schedule.

(b)        Pursuant to various conveyancing documents to be executed on the Closing Date and pursuant to the Sale and Servicing Agreement, the Purchaser will sell, assign and transfer on the Closing Date all of its right, title and interest in and to the HELOCs to the Issuer and, pursuant to the Indenture, the Issuer will assign all of its right, title and interest to the HELOCs to the Indenture Trustee for the benefit of the Noteholders and the Note Insurer, to secure the Notes issued pursuant to the Indenture.  In connection with such transfers and assignments of the HELOCs, the Mortgage Loan Seller has delivered or will deliver or cause to be delivered to the Indenture Trustee, or the Custodian on its behalf, by the Closing Date or such later date as is agreed to by the Purchaser and the Mortgage Loan Seller (each of the Closing Date and such
later date is referred to as a “Mortgage File Delivery Date”), the items of each Mortgage File, provided, however, that in lieu of the foregoing, the Mortgage Loan Seller may deliver the following documents, under the circumstances set forth below: (i) in lieu of the original Security Instrument (including the Mortgage), assignments to the Indenture Trustee or intervening assignments thereof which have been delivered, are being delivered or will, upon receipt of recording information relating to the Security Instruments required to be included thereon, be delivered to recording offices for recording and have not been returned to the Mortgage Loan Seller in time to permit their delivery as specified above, the Mortgage Loan Seller may deliver a true copy thereof with a certification by the Mortgage Loan Seller, on the face of such copy,
substantially as follows: “Certified to be a true and correct copy of the original, which has been transmitted for recording” (ii) in lieu of the Security Instrument, assignments to the Indenture Trustee or intervening assignments thereof, if the applicable jurisdiction retains the originals of such documents (as evidenced by a certification from the Mortgage Loan Seller to such effect) the Mortgage Loan Seller may deliver photocopies of such documents containing an original certification by the judicial or other governmental authority of the jurisdiction where such documents were recorded; (iii) in lieu of the Mortgage Notes relating to the HELOCs, each identified in the list delivered by the Purchaser to the Indenture Trustee on the Closing Date and attached hereto as Exhibit 5, the Mortgage Loan Seller may deliver lost note affidavits and indemnities of the Mortgage Loan Seller; and (iv) the Mortgage Loan Seller shall not be required to deliver intervening assignments or
Mortgage Note endorsements between the related Underlying Seller and the Mortgage Loan Seller, between the Mortgage Loan Seller and the Depositor, between the Depositor and the Issuer and between the Issuer and the Indenture Trustee; and provided further, however, that in the case of HELOCs which have been prepaid in full after the Cut-off Date and prior to the Closing Date, the Mortgage Loan Seller, in lieu of delivering the above documents, may deliver to the Indenture Trustee and the Custodian a certification by the Mortgage Loan Seller or the Master Servicer to such effect and shall deposit all amounts paid in respect of such HELOCs in the Master Servicer Collection Account on the Closing Date.  The Mortgage Loan Seller shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) or such certified copies to the Indenture Trustee promptly after they are received.  The Mortgage Loan Seller shall cause the
Mortgage and intervening assignments, if any, and the assignment of the Security Instrument to be recorded not later than 180 days after the Closing Date, unless such assignment is not required to be recorded under the terms set forth in Section 6(a) hereof.

 

 

(c)        In connection with the assignment of any HELOC registered on the MERS® System, the Mortgage Loan Seller further agrees that it will cause, at the Mortgage Loan Seller’s own expense, within 30 days after the Closing Date, the MERS® System to indicate that such HELOCs have been assigned by the Mortgage Loan Seller to the Purchaser, by the Purchaser to the Issuer and by the Issuer to the Indenture Trustee in accordance with this Agreement for the benefit of the Noteholders by including (or deleting, in the case of HELOCs which are repurchased in accordance with this Agreement) in such computer files (a) the code in the field which identifies the specific Indenture Trustee and (b) the code in the field “Pool Field” which identifies the series of the Notes issued in connection with such HELOCs. The Mortgage Loan Seller
further agrees that it will not, and will not permit the Servicer or the Master Servicer to, and the Master Servicer agrees that it will not, alter the codes referenced in this paragraph with respect to any HELOC during the term of the Indenture unless and until such HELOC is repurchased in accordance with the terms of the Sale and Servicing Agreement.

(d)        The Mortgage Loan Seller and the Purchaser acknowledge hereunder that all of the HELOCs will ultimately be assigned to Citibank, N.A., as Indenture Trustee for the benefit of the Noteholders, on the date hereof. 

Section 5.         Examination of Mortgage Files.  (a)On or before the Mortgage File Delivery Date, the Mortgage Loan Seller will have made the related Mortgage Files available to the Purchaser or its agent for examination which may be at the offices of the Indenture Trustee or such Mortgage Loan Seller and/or such Mortgage Loan Seller’s custodian.  The fact that the Purchaser or its agent has conducted or has failed to conduct any partial or complete examination of the related Mortgage Files shall not affect the Purchaser’s rights to demand cure, repurchase, substitution or other relief as provided in this Agreement.  In furtherance of the foregoing, the Mortgage Loan Seller shall make the related Mortgage Files available to the Purchaser or its agent from time to time so as to permit the
Purchaser to confirm such Mortgage Loan Seller’s compliance with the delivery and recordation requirements of this Agreement and the Sale and Servicing Agreement.  In addition, upon request of the Purchaser, the Mortgage Loan Seller agrees to provide to the Purchaser, Bear Stearns and to any investors or prospective investors in the Certificates information regarding the HELOCs and their servicing, to make the related Mortgage Files available to the Purchaser, Bear Stearns and to such investors or prospective investors (which may be at the offices of the related Mortgage Loan Seller and/or such Mortgage Loan Seller’s custodian) and to make available personnel knowledgeable about the related HELOCs for discussions with the Purchaser, Bear Stearns and such investors or prospective investors, upon reasonable request during regular business hours, sufficient to permit the Purchaser, Bear Stearns and such investors or potential investors to conduct such due diligence as any such
party reasonably believes is appropriate.

(b)        Pursuant to the Custodial Agreement, on the Closing Date the Custodian, on behalf of the Indenture Trustee, for the benefit of the Noteholders, will acknowledge receipt of each HELOC, by delivery to the Mortgage Loan Seller, the Purchaser and the Issuer of an initial certification in the form attached as Exhibit One to the Custodial Agreement.

(c)        Pursuant to the Custodial Agreement and in accordance with the provisions of Section 2.02 of the Sale and Servicing Agreement, within 90 days of the Closing Date, the Indenture Trustee will review or shall cause the Custodian to review items of the 

 

Mortgage Files as set forth on Exhibit 1 and will deliver to the Mortgage Loan Seller, the Purchaser and the Indenture Trustee an interim certification substantially in the form of Exhibit Two to the Custodial Agreement to the effect that all such documents have been executed and received and that such documents relate to the HELOCs identified on the Mortgage Loan Schedule, except for any exceptions listed on Schedule A attached to such Interim Certification. The Custodian shall be under no duty or obligation to inspect, review or examine said documents, instruments, certificates or other papers to determine that the same are genuine, enforceable, or appropriate for the represented purpose or that they have actually been recorded or that they are other than what they purport to be on their face.

(d)        The Indenture Trustee or the Custodian on its behalf will review the Mortgage Files within 180 days of the Closing Date and will deliver to the Mortgage Loan Seller, the Note Insurer and the Master Servicer, and if reviewed by the Custodian, the Indenture Trustee, a final certification substantially in the form of Exhibit 3 to the Custodial Agreement.  If the Indenture Trustee or the related Custodian on its behalf is unable to deliver a final certification with respect to the items listed in Exhibit 1 due to any document that is missing, has not been executed, is unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the HELOCs identified in the Final Mortgage Loan Schedule (a “Material Defect”), the Indenture Trustee or the Custodian on its behalf shall notify the Seller, the
Note Insurer and the Indenture Trustee in writing of such Material Defect. The Mortgage Loan Seller shall correct or cure any such Material Defect within 90 days from the date of notice from the Indenture Trustee, the Depositor or the Master Servicer of the Material Defect and if the Mortgage Loan Seller does not correct or cure such Material Defect within such period and such defect materially and adversely affects the interests of the Noteholders or the Note Insurer in the related HELOC, the Mortgage Loan Seller will, in accordance with the terms of the Sale and Servicing Agreement, within 90 days of the date of notice, provide the Indenture Trustee with a Substitute Mortgage Loan (if within two years of the Closing Date) or purchase the related HELOC at the applicable Purchase Price; provided, however, that if such defect relates solely to the inability of the Mortgage Loan Seller to
deliver the original security instrument or intervening assignments thereof, or a certified copy because the originals of such documents, or a certified copy, have not been returned by the applicable jurisdiction, the Mortgage Loan Seller shall not be required to purchase such HELOC if the Mortgage Loan Seller delivers such original documents or certified copy promptly upon receipt, but in no event later than 360 days after the Closing Date. The foregoing repurchase obligation shall not apply in the event that the Mortgage Loan Seller cannot deliver such original or copy of any document submitted for recording to the appropriate recording office in the applicable jurisdiction because such document has not been returned by such office; provided that the Mortgage Loan Seller shall instead deliver a recording receipt of such recording office or, if such receipt is not available, a certificate of the Mortgage Loan Seller or a Servicing Officer confirming that such documents have been
accepted for recording, and delivery to the Indenture Trustee shall be effected by the Mortgage Loan Seller within thirty days of its receipt of the original recorded document.

(e)        At the time of any substitution, the Mortgage Loan Seller shall deliver or cause to be delivered the Substitute Mortgage Loan, the related Mortgage File and any other documents and payments required to be delivered in connection with a substitution pursuant to the Sale and Servicing Agreement. At the time of any purchase or substitution, the Indenture 

 

Trustee in accordance with the terms of the Sale and Servicing Agreement shall (i) assign to the Mortgage Loan Seller and cause the Custodian to release the documents (including, but not limited to, the Mortgage, Mortgage Note and other contents of the Mortgage File) in the possession of the Custodian relating to the Deleted Mortgage Loan and (ii) execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the Mortgage Loan Seller title to such Deleted Mortgage Loan.

Section 6.         Recordation of Assignments of Mortgage.  (a)The Mortgage Loan Seller shall cause each assignment of the Security Instrument from the Mortgage Loan Seller to the Indenture Trustee to be recorded not later than 180 days after the Closing Date, unless (a) such recordation is not required by the Rating Agencies or an Opinion of Counsel has been provided to the Indenture Trustee (with a copy to the Custodian) which states that the recordation of such assignments is not necessary to protect the interests of the Noteholders and the Note Insurer in the related HELOCs or (b) MERS is identified on the Mortgage or on a properly recorded assignment of the Mortgage, as the Mortgagee of record solely as nominee for the Mortgage Loan Seller and its successors and assigns; provided, however, notwithstanding the delivery of any such Opinion of Counsel, each assignment of Mortgage shall be submitted for recording by the Mortgage Loan Seller in the manner described above, at no expense to the Issuer or the Indenture Trustee, upon the earliest to occur of (i) reasonable direction by the Holders of Notes aggregating at least 25% of the Note Principal Balance of the Notes, (ii) the occurrence of a Master Servicer Event of Default or an Event of Default, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgage Loan Seller and, (iv) the occurrence of a servicing transfer as described in Section 6.02 of the Sale and Servicing Agreement.

While each such Mortgage or assignment is being recorded, if necessary, the Mortgage Loan Seller shall leave or cause to be left with the Indenture Trustee a certified copy of such Mortgage or assignment. In the event that, within 180 days of the Closing Date, the Indenture Trustee has not been provided with an Opinion of Counsel as described above or received evidence of recording with respect to each HELOC delivered to the Purchaser pursuant to the terms hereof or as set forth above and the related HELOC is not a MOM Loan, the failure to provide evidence of recording or such Opinion of Counsel shall be considered a Material Defect, and the provisions of Section 5(c) and (d) shall apply. All customary recording fees and reasonable expenses relating to the recordation of the assignments of mortgage to the Indenture Trustee or the Opinion of Counsel, as the case may be, shall be borne by
the Mortgage Loan Seller.

(b)        It is the express intent of the parties hereto that the conveyance of the HELOCs by the Mortgage Loan Seller to the Purchaser, as contemplated by this Agreement be, and be treated as, a sale. It is, further, not the intention of the parties that such conveyance be deemed a pledge of the HELOCs by the Mortgage Loan Seller to the Purchaser to secure a debt or other obligation of the Mortgage Loan Seller. However, in the event that, notwithstanding the intent of the parties, the HELOCs are held by a court to continue to be property of the Mortgage Loan Seller, then (i) this Agreement shall also be deemed to be a security agreement within the meaning of Articles 8 and 9 of the applicable Uniform Commercial Code; (ii) the transfer of the HELOCs provided for herein shall be deemed to be a grant by the Mortgage Loan Seller to the Purchaser of a
security interest in all of the Mortgage Loan Seller’s right, title and interest in and 

 

to the HELOCs and all amounts payable to the holders of the HELOCs in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, to the extent the Purchaser would otherwise be entitled to own such HELOCs and proceeds pursuant to Section 4 hereof, including all amounts, other than investment earnings, from time to time held or invested in any accounts created pursuant to the Indenture or the Sale and Servicing Agreement, whether in the form of cash, instruments, securities or other property; (iii) the possession by the Purchaser, the Issuer or the Indenture Trustee of Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be “possession by the secured party” for purposes of perfecting the security interest
pursuant to Section 9-313 (or comparable provision) of the applicable Uniform Commercial Code; and (iv) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, financial intermediaries, bailees or agents (as applicable) of the Purchaser for the purpose of perfecting such security interest under applicable law. Any assignment of the interest of the Purchaser pursuant to any provision hereof or pursuant to the Sale and Servicing Agreement and any subsequent assignment pursuant to the Indenture shall also be deemed to be an assignment of any security interest created hereby. The Mortgage Loan Seller and the Purchaser shall, to the extent consistent with this Agreement, take such actions as may be reasonably necessary to ensure that, if this Agreement were deemed to create a security interest in the HELOCs, such security interest
would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of the Indenture.

Section 7.        Representations and Warranties of the Mortgage Loan Seller Concerning the HELOCs. The Mortgage Loan Seller hereby represents and warrants to the Purchaser as of the Closing Date, or such other date as may be specified below with respect to each HELOC being sold by it, that:

(a)        The information set forth in the Mortgage Loan Schedule on the Closing Date is complete, true and correct.

(b)        Each HELOC is a revolving home equity loan.  Each Mortgage Note provides for (a) Monthly Payments which are at least equal to accrued interest during such Accrual Period and (b) at the maturity of the related HELOC, payment in full of the principal balance of such Mortgage Note.

	
            (c)
 	
            The Mortgage Note bears a variable Mortgage rate.
 

(d)        No HELOC had a Combined Loan to Value Ratio at the time of origination of more than 100%.

(e)        As of the Closing Date, the Mortgage Loan Seller has not received a notice of default of a senior lien which has not been cured. 

(f)         All payments required to be made prior to the Cut-off Date with respect to each HELOC have been made and no HELOC is delinquent thirty one or more days; and the related Mortgage Loan Seller has not advanced funds, or induced, solicited or knowingly 

 

received any advance of funds from a party other than the owner of the Mortgaged Property subject to the Mortgage, directly or indirectly, for the payment of any amount required under any HELOC. 

(g)        [The Mortgaged Property is a fee simple property located in the state identified in the Mortgage Loan Schedule except that with respect to real property located in jurisdictions in which the use of leasehold estates for residential properties is a widely-accepted practice, the Mortgaged Property may be a leasehold estate and consists of a single parcel of real property with a detached single family residence erected thereon, or a two- to four-family dwelling or a high-rise dwelling, or an individual residential condominium unit in a low-rise condominium project or a cooperative dwelling, or an individual unit in a planned unit development and that no residence or dwelling is (i) a mobile home or (ii) a manufactured home.]

(h)        If any of the HELOCs are secured by a leasehold interest, with respect to each leasehold interest: the use of leasehold estates for residential properties is an accepted practice in the area where the related Mortgaged Property is located; residential property in such area consisting of leasehold estates is readily marketable; the lease is recorded and no party is in any way in breach of any provision of such lease; the leasehold is in full force and effect and is not subject to any prior lien or encumbrance by which the leasehold could be terminated or subject to any charge or penalty; and the remaining term of the lease does not terminate less than ten years after the maturity date of such HELOC.

(i)         Except with respect to taxes, insurance and other amounts previously advanced by a prior servicer with respect to any HELOC, there are no delinquent taxes, water charges, sewer rents, assessments, insurance premiums, leasehold payments, including assessments payable in future installments, or other outstanding charges affecting the related Mortgaged Property.

(j)         With respect to the HELOCs, the Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor in connection with a HELOC are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered a proceeding in equity or a law).  All parties to the Mortgage Note, the Mortgage and any other such related agreement had legal capacity to enter into the HELOC and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage and
any other such related agreement have been duly and properly executed by other such related parties.  No fraud, error, omission, misrepresentation, gross negligence or similar occurrence with respect to a HELOC has taken place on the part of any Person, including without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination or servicing of the HELOC.

(k)        The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or modified in any respect, except by written instruments which in the case of the HELOCs are in the Mortgage File and have been or will be recorded, if necessary to 

 

protect the interests of the Indenture Trustee, and which have been or will be delivered to the Indenture Trustee, all in accordance with this Agreement. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required by the related policy. [No Mortgagor has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer, to the extent required by the policy, and which assumption agreement in the case of the HELOCs is part of the Mortgage File.]

(l)         The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of the Mortgage Note and the Mortgage, or the exercise of any right thereunder, render the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury and no such right of rescission, set-off, recoupment, counterclaim or defense has been asserted with respect thereto.

(m)       [All buildings upon, or comprising part of, the Mortgaged Property are insured by an insurer acceptable to Fannie Mae and Freddie Mac against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where the Mortgaged Property is located, and such insurer is licensed to do business in the state where the Mortgaged Property is located. All such insurance policies contain a standard mortgagee clause naming the originator, its successors and assigns as mortgagee and the related Mortgage Loan Seller has received no notice that all premiums thereon have not been paid. If upon origination of the HELOC, the Mortgaged Property was, or was subsequently deemed to be, in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards (and such flood insurance has
been made available), which require under applicable law that a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration (or any successor thereto) be obtained, such flood insurance policy is in effect which policy is with a generally acceptable carrier in an amount representing coverage not less than the least of (A) the Stated Principal Balance of the related HELOC, (B) the minimum amount required to compensate for damage or loss on a replacement cost basis, or (C) the maximum amount of insurance that is available under the Flood Disaster Protection Act of 1973. The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at Mortgagor’s cost and expense and, on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to maintain such insurance at Mortgagor’s cost and expense and to obtain reimbursement therefor from the Mortgagor.]

(n)        Each loan at the time it was made complied in all material respects with applicable local, state, and federal laws, including, but not limited to, all applicable anti-predatory lending laws.

(o)        The Mortgage has not been satisfied, canceled, subordinated, or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission.

(p)        The Mortgage is a valid, existing and enforceable junior lien on the Mortgaged Property, including all improvements on the Mortgaged Property, if any, subject only to (1) the lien of current real property taxes and assessments not yet due and payable, (2) 

 

covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording being acceptable to mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the HELOC and which do not adversely affect the Appraised Value of the Mortgaged Property and (3) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage. The Mortgage Loan Seller has full right to sell and assign the Mortgage to the Purchaser.

(q)        The Mortgage Note and the related Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or reorganization or general principles of equity.

(r)         All parties to the Mortgage Note and the Mortgage had the legal capacity to enter into the HELOC transaction and to execute and deliver the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and properly executed by such parties.

(s)         The proceeds of the HELOC have been fully disbursed and there is no requirement for future advances thereunder and any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the HELOC and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage.

(t)         Immediately prior to the conveyance of the HELOCs by the related Mortgage Loan Seller to the Purchaser hereunder, such Mortgage Loan Seller was the sole owner and holder of the HELOC; the related Originator or such Mortgage Loan Seller was the custodian of the related escrow account, if applicable; the HELOC had neither been assigned nor pledged, and such Mortgage Loan Seller had good and marketable title thereto, and had full right to transfer and sell the HELOC and the related servicing rights to the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest subject to the applicable servicing agreement and had full right and authority subject to no interest or participation of, or agreement with, any other party, to sell and assign the HELOC and the related servicing rights, subject to
the applicable servicing agreement, to the Purchaser pursuant to the terms of this Agreement.

(u)        All parties which have had any interest in the Mortgage, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (1) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (2) organized under the laws of such state, qualified to do business in such state, a federal savings and loan association or national bank having principal offices in such state or not deemed to be doing business in such state under applicable law.

(v)        [The HELOC is covered by an ALTA lender’s title insurance policy or equivalent form acceptable to the Department of Housing and Urban Development, or any 

 

successor thereto, and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring (subject to the exceptions contained in clause (i) above) the related Mortgage Loan Seller (as assignee), its successors and assigns as to the first priority lien of the Mortgage in the original principal amount of the HELOC. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress, and against encroachments by or upon the Mortgaged Property or any interest therein. With respect to each HELOC, the related Mortgage Loan Seller (as assignee) is the sole insured of such lender’s title insurance policy, and such lender’s title insurance policy is in full force and effect. No claims have been made under such lender’s title insurance policy, and no prior holder of the related Mortgage, including the related Mortgage Loan Seller, has done, by
act or omission, anything which would impair the coverage of such lender’s title insurance policy.]

(w)       Except as provided in clause (b), immediately prior to the Cut-off Date, there was no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and there was no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and the related Mortgage Loan Seller has not waived any default, breach, violation or event of acceleration.

(x)        There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under law could give rise to such lien) affecting the related Mortgaged Property which are or may be liens prior to or equal with, the lien of the related Mortgage.

(y)        At the time of origination, each Mortgaged Property was the subject of an appraisal which conformed to the underwriting requirements of the originator of the HELOC and, the appraisal is in a form acceptable to Fannie Mae or Freddie Mac.

(z)         The origination, servicing and collection practices with respect to each Mortgage Note and Mortgage including, the establishment, maintenance and servicing of the escrow accounts and escrow payments, if any, since origination, have been conducted in all respects in accordance with the terms of Mortgage Note and in compliance with all applicable laws and regulations and, unless otherwise required by law or Fannie Mae/Freddie Mac standards, in accordance with the proper, prudent and customary practices in the mortgage origination and servicing business. With respect to the escrow accounts and escrow payments, if any, and a HELOC all such payments are in the possession or under the control of the related Mortgage Loan Seller (including pursuant to a Subservicing Agreement) and there exists no deficiencies in connection therewith for
which customary arrangements for repayment thereof have not been made.  Any interest required to be paid pursuant to state and local law has been properly paid and credited.

(aa)       The Mortgaged Property is free of material damage and waste and there is no proceeding pending for the total or partial condemnation thereof.

(bb)      The Mortgage contains customary and enforceable provisions to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security intended to be provided thereby, including, (1) in the case 

 

of a Mortgage designated as a deed of trust, by indenture trustee’s sale, and (2) otherwise by judicial foreclosure. There is no other exemption available to the Mortgagor which would interfere with the right to sell the Mortgaged Property at a indenture trustee’s sale or the right to foreclose the Mortgage.  The Mortgagor has not notified the Mortgage Loan Seller and the Mortgage Loan Seller has no knowledge of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act.

(cc)       The Mortgage Note is not and has not been secured by any collateral except the lien of the applicable Mortgage.

(dd)      In the event the Mortgage constitutes a deed of trust, a indenture trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Certificateholders to the indenture trustee under the deed of trust, except in connection with a indenture trustee’s sale after default by the Mortgagor.

(ee)       The Mortgagor has received all disclosure materials required by applicable law with respect to the making of the HELOC.

(ff)        No HELOC was made in connection with the construction or rehabilitation of a Mortgaged Property.

(gg)       The Mortgaged Property is lawfully occupied under applicable law and all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities.

(hh)       The assignment of Mortgage with respect to a HELOC is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.

(ii)         The Mortgaged Property consists of a single parcel of real property with or without a detached single family residence erected thereon, or an individual condominium unit, a 2-4 family dwelling or an individual unit in a planned unit development as defined by Fannie Mae, or a townhouse, each structure of which is permanently affixed to the Mortgaged Property, and is legally classified as real estate.

(jj)        Each HELOC at the time of origination was underwritten in general in accordance with guidelines not inconsistent with the guidelines set forth in the Prospectus Supplement and generally accepted credit underwriting guidelines.

(kk)      No error, omission, misrepresentation, fraud or similar occurrence with respect to a HELOC has taken place on the part of either Mortgage Loan Seller or the related Originator.

(ll)         None of the HELOCs are (a) loans subject to 12 CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the regulation implementing TILA, which 

 

implements the Home Ownership and Equity Protection Act of 1994 (“HOEPA”) or (b) classified and/or defined as a “high cost home loan” (or a similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees) under any federal, state, or local law, including, but not limited to, the States of Georgia or North Carolina.

(mm)     None of the HELOCs originated on or after October 1, 2002 and before March 7, 2003 was secured by property located in the State of Georgia.

(nn)       None of the HELOCs contains provisions pursuant to which monthly payments are (a) paid or partially paid with funds deposited in any separate account established by the Mortgage Loan Seller, the mortgagor, or anyone on behalf of the mortgagor, (b) paid by any source other than the mortgagor or (c) contains any other similar provisions which may constitute a “buydown” provision.  None of the HELOCs is a graduated payment mortgage loan and no HELOC has a shared appreciation or other contingent interest feature.

(oo)      Each HELOC that contains a provision for the assumption substitution of liability, pursuant to which the original mortgagor is released from liability and another person is substituted as the mortgagor and becomes liable under the Mortgage Note, shall be effective only if such person satisfies the then current underwriting practices and procedures of prudent mortgage lenders in a state in which the mortgaged property is located.

(pp)      The Mortgaged Property and all improvements thereon comply with all requirements of any applicable zoning and subdivision laws and ordinances.

(qq)      Each Mortgage is a valid and enforceable junior lien on the property securing the related Mortgage Note and each Mortgaged Property is owned by the Mortgagor in fee simple (except with respect to common areas in the case of condominiums, PUDs and de minimis PUDs) or by leasehold for a term longer than the term of the related Mortgage, subject only to (i) the lien of current real property taxes and assessments, (ii) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording of such Mortgage, such exceptions being acceptable to mortgage lending institutions generally or specifically reflected in the appraisal obtained in connection with the origination of the related HELOC or referred to in the lender’s title insurance policy delivered to the originator of the related HELOC and
(iii) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by such Mortgage Appraisal Form 1004 or Form 2055 with an interior inspection for first lien HELOCs has been obtained.  Form 704, 2065 or 2055 with an exterior only inspection for junior lien HELOCs has been obtained.

(rr)        None of the HELOCs that are secured by property located in the State of Illinois are in violation of the provisions of the Illinois Interest Act.

(ss)       Each Prepayment Charge is enforceable and was originated in compliance with all applicable federal, state and local laws.

 

 

(tt)        With respect to any HELOC that contains a provision permitting imposition of a premium upon a prepayment prior to maturity, the prepayment premium is disclosed to the borrower in the loan documents pursuant to applicable state and federal law.

(uu)       No HELOC is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in the then current Standard & Poor’s LEVELS® Glossary which is now Version 5.6c Revised, Appendix E attached hereto as Exhibit 6).

It is understood and agreed that the representations and warranties set forth in this Section 7 will inure to the benefit of the Purchaser, its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or assignment of Mortgage or the examination of any Mortgage File.  Upon any substitution for a HELOC, the representations and warranties set forth above shall be deemed to be made by the Mortgage Loan Seller as to any Substitute Mortgage Loan as of the date of substitution.

Upon discovery or receipt of notice by the Mortgage Loan Seller, the Purchaser, the Issuer, the Note Insurer or the Indenture Trustee of a breach of any representation or warranty of the Mortgage Loan Seller set forth in this Section 7 which materially and adversely affects the value of the interests of the Purchaser, the Issuer, the Note Insurer, the Noteholders or the Indenture Trustee in any of the HELOCs delivered to the Purchaser pursuant to this Agreement, the party discovering or receiving notice of such breach shall give prompt written notice to the others.  In the case of any such breach of a representation or warranty set forth in this Section 7, within 90 days from the date of discovery by the Mortgage Loan Seller, or the date the Mortgage Loan Seller is notified by the party discovering or receiving notice of such breach (whichever occurs earlier), the Mortgage Loan Seller will
(i) cure such breach in all material respects, (ii) purchase the affected HELOC at the applicable Purchase Price, or (iii) if within two years of the Closing Date, substitute a qualifying Substitute Mortgage Loan in exchange for such HELOC ; provided that, (A) in the case of a breach of the representation and warranty concerning the Mortgage Loan Schedule contained in clause (a) of this Section 7, if such breach is material and relates to any field on the Mortgage Loan Schedule which identifies any Prepayment Charge or (B) in the case of a breach of the representation contained in clause (kk) of this Section 7, then, in each case, in lieu of purchasing such HELOC from the Trust Fund at the Purchase Price, the Mortgage Loan Seller shall pay the amount of the Prepayment Charge (net of any amount previously collected by or paid to the Trust Fund in respect of such Prepayment Charge) from its own funds and without reimbursement therefor, and the Mortgage Loan Seller shall have no
obligation to repurchase or substitute for such HELOC. The obligations of the Mortgage Loan Seller to cure, purchase or substitute a qualifying Substitute Mortgage Loan shall constitute the Purchaser’s, the Indenture Trustee’s, the Note Insuer’s and the Noteholder’s sole and exclusive remedy under this Agreement or otherwise respecting a breach of representations or warranties hereunder with respect to the HELOCs, except for the obligation of the Mortgage Loan Seller to indemnify the Purchaser for such breach as set forth in and limited by Section 14 hereof.

Any cause of action against the Mortgage Loan Seller or relating to or arising out of a breach by the Mortgage Loan Seller of any representations and warranties made in this Section 7 shall accrue as to any HELOC upon (i) discovery of such breach by the Mortgage Loan Seller or notice thereof by the party discovering such breach and (ii) failure by the Mortgage 

 

Loan Seller to cure such breach, purchase such HELOC or substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.

Section 8.         Representations and Warranties Concerning the Mortgage Loan Seller.  (a)As of the date hereof and as of the Closing Date, the Mortgage Loan Seller represents and warrants to the Purchaser as to itself in the capacity indicated as follows:

(b)        The Mortgage Loan Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) is qualified and in good standing to do business in each jurisdiction where such qualification is necessary, except where the failure so to qualify would not reasonably be expected to have a material adverse effect on the Mortgage Loan Seller’s business as presently conducted or on the Mortgage Loan Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(c)        the Mortgage Loan Seller has full power to own its property, to carry on its business as presently conducted and to enter into and perform its obligations under this Agreement;

(d)        the execution and delivery by the Mortgage Loan Seller of this Agreement has been duly authorized by all necessary action on the part of the Mortgage Loan Seller; and neither the execution and delivery of this Agreement, nor the consummation of the transactions herein contemplated, nor compliance with the provisions hereof or thereof, will conflict with or result in a breach of, or constitute a default under, any of the provisions of any law, governmental rule, regulation, judgment, decree or order binding on the Mortgage Loan Seller or its properties or the charter or by-laws of the Mortgage Loan Seller, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Mortgage Loan Seller’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(e)        the execution, delivery and performance by the Mortgage Loan Seller of this Agreement and the consummation of the transactions contemplated hereby do not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any state, federal or other governmental authority or agency, except those consents, approvals, notices, registrations or other actions as have already been obtained, given or made and, in connection with the recordation of the Mortgages, powers of attorney or assignments of Mortgages not yet completed;

(f)         this Agreement has been duly executed and delivered by the Mortgage Loan Seller and, assuming due authorization, execution and delivery by the Purchaser or the parties thereto, constitutes a valid and binding obligation of the Mortgage Loan Seller enforceable against it in accordance with its terms (subject to applicable bankruptcy and insolvency laws and other similar laws affecting the enforcement of the rights of creditors generally);

(g)        there are no actions, suits or proceedings pending or, to the knowledge of the Mortgage Loan Seller, threatened against the Mortgage Loan Seller, before or by any court, 

 

administrative agency, arbitrator or governmental body (i) with respect to any of the transactions contemplated by this Agreement or (ii) with respect to any other matter which in the judgment of the Mortgage Loan Seller could reasonably be expected to be determined adversely to the Mortgage Loan Seller and if determined adversely to the Mortgage Loan Seller materially and adversely affect the Mortgage Loan Seller’s ability to perform its obligations under this Agreement; and the Mortgage Loan Seller is not in default with respect to any order of any court, administrative agency, arbitrator or governmental body so as to materially and adversely affect the transactions contemplated by this Agreement; and

(h)        the Mortgage Loan Seller’s Information (as defined in Section 13(a) hereof) does not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

Section 9.         Representations and Warranties Concerning the Purchaser.  As of the date hereof and as of the Closing Date, the Purchaser represents and warrants to the Mortgage Loan Seller as follows:

(a)        the Purchaser (i) is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and (ii) is qualified and in good standing to do business in each jurisdiction where such qualification is necessary, except where the failure so to qualify would not reasonably be expected to have a material adverse effect on the Purchaser’s business as presently conducted or on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby;

(b)        the Purchaser has full power to own its property, to carry on its business as presently conducted and to enter into and perform its obligations under this Agreement;

(c)        the execution and delivery by the Purchaser of this Agreement has been duly authorized by all necessary action on the part of the Purchaser; and neither the execution and delivery of this Agreement, nor the consummation of the transactions herein contemplated, nor compliance with the provisions hereof, will conflict with or result in a breach of, or constitute a default under, any of the provisions of any law, governmental rule, regulation, judgment, decree or order binding on the Purchaser or its properties or the certificate of formation or limited liability agreement of the Purchaser, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to enter into this Agreement and to consummate the transactions contemplated hereby or thereby;

(d)        the execution, delivery and performance by the Purchaser of this Agreement and the consummation of the transactions contemplated hereby or thereby do not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any state, federal or other governmental authority or agency, except those consents, approvals, notices, registrations or other actions as have already been obtained, given or made;

 

 

(e)        this Agreement has been duly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Mortgage Loan Sellers, constitutes a valid and binding obligation of the Purchaser enforceable against it in accordance with its terms (subject to applicable bankruptcy and insolvency laws and other similar laws affecting the enforcement of the rights of creditors generally);

(f)         there are no actions, suits or proceedings pending or, to the knowledge of the Purchaser, threatened against the Purchaser, before or by any court, administrative agency, arbitrator or governmental body (i) with respect to any of the transactions contemplated by this Agreement or (ii) with respect to any other matter which in the judgment of the Purchaser could reasonably be expected to be determined adversely to the Purchaser and if determined adversely to the Purchaser materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement; and the Purchaser is not in default with respect to any order of any court, administrative agency, arbitrator or governmental body so as to materially and adversely affect the transactions contemplated by this Agreement; and

(g)        the Purchaser’s Information (as defined in Section 13(b) hereof) does not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

Section 10.       Conditions to Closing.  (a)The obligations of the Purchaser under this Agreement will be subject to the satisfaction, on or prior to the Closing Date, of the following conditions:

(1)        Each of the obligations of the Mortgage Loan Seller required to be performed at or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects; all of the representations and warranties of the Mortgage Loan Seller under this Agreement shall be true and correct as of the date or dates specified in all material respects; and no event shall have occurred which, with notice or the passage of time, would constitute a default under this Agreement or the Sale and Servicing Agreement; and the Purchaser shall have received certificates to that effect signed by authorized officers of the Mortgage Loan Seller.

(2)        The Purchaser shall have received all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the Purchaser, duly executed by all signatories other than the Purchaser as required pursuant to the respective terms thereof:

(i)         If required pursuant to Section 3 hereof, the Amendment dated as of the Closing Date and any documents referred to therein;

(ii)         If required pursuant to Section 3 hereof, the Final Mortgage Loan Schedule containing the information set forth on Exhibit 2 hereto, one copy to be attached to each counterpart of the Amendment;

(iii)        The Trust Agreement, in form and substance reasonably satisfactory to the Purchaser, and all documents required thereby duly executed by all signatories;

 

 

(iv)        The Sale and Servicing Agreement, in form and substance reasonably satisfactory to the Mortgage Loan Seller, Issuer, Indenture Trustee, Securities Administrator and the Purchaser, and all documents required thereby duly executed by all signatories;

(v)        The Indenture, in form and substance reasonably satisfactory to the Indenture Trustee, Securities Administrator, the Issuer and the Purchaser, and all documents required thereby duly executed by all signatories;

(vi)        A certificate of an officer of the Mortgage Loan Seller dated as of the Closing Date, in a form reasonably acceptable to the Purchaser, and attached thereto the resolutions of the Mortgage Loan Seller authorizing the transactions contemplated by this Agreement, together with copies of the charter and by-laws of the Mortgage Loan Seller;

(vii)       One or more opinions of counsel from the Mortgage Loan Seller’s counsel otherwise in form and substance reasonably satisfactory to the Purchaser, the Issuer, the Note Insurer, the Indenture Trustee and each Rating Agency;

(viii)      A letter from each of the Rating Agencies giving each Class of Notes set forth on Schedule A the rating set forth on Schedule A; and

(ix)        Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended ratings from each Rating Agency for the Notes.

(b)        The Notes to be sold to Bear Stearns pursuant to the Underwriting Agreement and the Purchase Agreement shall have been issued and sold to Bear Stearns.

(c)        The Mortgage Loan Seller shall have furnished to the Purchaser such other certificates of its officers or others and such other documents and opinions of counsel to evidence fulfillment of the conditions set forth in this Agreement and the transactions contemplated hereby as the Purchaser and its counsel may reasonably request.

Section 1.02     The obligations of the Mortgage Loan Seller under this Agreement shall be subject to the satisfaction, on or prior to the Closing Date, of the following conditions:

(a)        The obligations of the Purchaser required to be performed by it on or prior to the Closing Date pursuant to the terms of this Agreement shall have been duly performed and complied with in all material respects, and all of the representations and warranties of the Purchaser under this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date, and no event shall have occurred which would constitute a breach by it of the terms of this Agreement, and the Mortgage Loan Seller shall have received a certificate to that effect signed by an authorized officer of the Purchaser.

(b)        The Mortgage Loan Seller shall have received copies of all of the following closing documents, in such forms as are agreed upon and reasonably acceptable to the 

 

Mortgage Loan Seller, duly executed by all signatories other than the Mortgage Loan Seller as required pursuant to the respective terms thereof:

(i)         If required pursuant to Section 3 hereof, the Amendment dated as of the Closing Date and any documents referred to therein;

(ii)         The Trust Agreement, in form and substance reasonably satisfactory to the Mortgage Loan Seller, and all documents required thereby duly executed by all signatories;

(iii)        The Sale and Servicing Agreement, in form and substance reasonably satisfactory to the Mortgage Loan Seller, Issuer, the Note Insurer, Indenture Trustee, Securities Administrator and the Purchaser, and all documents required thereby duly executed by all signatories;

(iv)        The Indenture, in form and substance reasonably satisfactory to the Indenture Trustee, the Note Insurer, Securities Administrator, the Issuer and the Purchaser, and all documents required thereby duly executed by all signatories;

(v)        A certificate of an officer of the Purchaser dated as of the Closing Date, in a form reasonably acceptable to the Mortgage Loan Seller, and attached thereto the resolutions of the Purchaser authorizing the transactions contemplated by this Agreement and the Sale and Servicing Agreement, together with copies of the Purchaser’s articles of incorporation, and evidence as to the good standing of the Purchaser dated as of a recent date;

(vi)        One or more opinions of counsel from the Purchaser’s counsel in form and substance reasonably satisfactory to the Mortgage Loan Seller; and

(vii)       Such other documents, certificates (including additional representations and warranties) and opinions as may be reasonably necessary to secure the intended rating from each Rating Agency for the Notes;

Section 11.       Fees and Expenses.  Subject to Section 16 hereof, the Mortgage Loan Seller shall pay on the Closing Date or such later date as may be agreed to by the Purchaser (i) the fees and expenses of the Mortgage Loan Seller’s attorneys and the reasonable fees and expenses of the Purchaser’s attorneys, (ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee for the use of Purchaser’s Registration Statement based on the aggregate original principal amount of the Notes and the filing fee of the Commission as in effect on the date on which the Registration Statement was declared effective, (iv) the fees and expenses including counsel’s fees and expenses in connection with any “blue sky” and legal investment matters, (v) the fees and expenses of the Indenture
Trustee which shall include without limitation the fees and expenses of the Indenture Trustee (and the fees and disbursements of its counsel) with respect to (A) legal and document review of this Agreement, the Trust Agreement, the Indenture, the Sale and Servicing Agreement, the Notes and related agreements, (B) attendance at the Closing and (C) review of the HELOCs to be performed by the Custodian, (vi) the expenses for printing or otherwise reproducing the Notes, the Prospectus and the Prospectus Supplement, (vii) the fees and expenses of each Rating Agency (both initial and ongoing), (viii) the fees and 

 

expenses relating to the preparation and recordation of mortgage assignments (including intervening assignments, if any and if available, to evidence a complete chain of title from the originator to the Indenture Trustee) from the Mortgage Loan Seller to the Indenture Trustee or the expenses relating to the Opinion of Counsel referred to in Section 6(a) hereof, as the case may be, and (ix) Mortgage File due diligence expenses and other out-of-pocket expenses incurred by the Purchaser in connection with the purchase of the HELOCs and by Bear Stearns in connection with the sale of the Notes. The Mortgage Loan Seller additionally agrees to pay directly to any third party on a timely basis the fees provided for above which are charged by such third party and which are billed periodically.

Section 12.       Accountants’ Letters.  (a)Deloitte & Touche LLP will review the characteristics of a sample of the HELOCs described in the Final Mortgage Loan Schedule and will compare those characteristics to the description of the HELOCs contained in the Prospectus Supplement under the captions “Summary—HELOCs” and “The Mortgage Pool” and in Schedule A thereto. The Mortgage Loan Seller will cooperate with the Purchaser in making available all information and taking all steps reasonably necessary to permit such accountants to complete the review and to deliver the letters required of them under the Underwriting Agreement. Deloitte & Touche LLP will also confirm certain calculations as set forth under the caption “Yield, Prepayment and Maturity Considerations”
in the Prospectus Supplement.

(b)        To the extent statistical information with respect to the Master Servicer’s or a Servicer’s servicing portfolio is included in the Prospectus Supplement under the caption “Master Servicing and Servicing of HELOCs—Delinquency and Foreclosure Experience of GMACM,” a letter from the certified public accountant for the Master Servicer and such Servicer will be delivered to the Purchaser dated the date of the Prospectus Supplement, in the form previously agreed to by the Mortgage Loan Seller and the Purchaser, with respect to such statistical information.

	
            Section 13.
 	
            Indemnification.  
 

(a)        The Mortgage Loan Seller shall indemnify and hold harmless the Purchaser and its directors, officers and controlling persons (as defined in Section 15 of the Securities Act) from and against any loss, claim, damage or liability or action in respect thereof, to which they or any of them may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon (i) any untrue statement of a material fact contained in the Mortgage Loan Seller’s Information as identified in Exhibit 3, or the omission to state in the Prospectus Supplement or Prospectus (or any amendment thereof or supplement thereto approved by the Mortgage Loan Seller and in which additional Mortgage Loan Seller’s Information is identified), in reliance upon and in conformity with Mortgage Loan
Seller’s Information a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made, not misleading, (ii) any representation or warranty assigned or made by the Mortgage Loan Seller in Section 7 or Section 8 hereof being, or alleged to be, untrue or incorrect, or (iii) any failure by the Mortgage Loan Seller to perform its obligations under this Agreement; and the Mortgage Loan Seller shall reimburse the Purchaser and each other indemnified party for any legal and other expenses reasonably incurred by them in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action.

 

 

The foregoing indemnity agreement is in addition to any liability which the Mortgage Loan Seller otherwise may have to the Purchaser or any other such indemnified party.

(b)        The Purchaser shall indemnify and hold harmless the Mortgage Loan Seller and its respective directors, officers and controlling persons (as defined in Section 15 of the Securities Act) from and against any loss, claim, damage or liability or action in respect thereof, to which they or any of them may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon (i) any untrue statement of a material fact contained in the Purchaser’s Information as identified in Exhibit 4, or the omission to state in the Prospectus Supplement or Prospectus (or any amendment thereof or supplement thereto approved by the Purchaser and in which additional Purchaser’s Information is identified), in reliance upon and in conformity with the Purchaser’s Information, a
material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, (ii) any representation or warranty made by the Purchaser in Section 9 hereof being, or alleged to be, untrue or incorrect, or (iii) any failure by the Purchaser to perform its obligations under this Agreement; and the Purchaser shall reimburse the Mortgage Loan Seller, and each other indemnified party for any legal and other expenses reasonably incurred by them in connection with investigating or defending or preparing to defend any such loss, claim, damage, liability or action. The foregoing indemnity agreement is in addition to any liability which the Purchaser otherwise may have to the Mortgage Loan Seller, or any other such indemnified party.

(c)        Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability which it may have under this Section 14 except to the extent that it has been prejudiced in any material respect by such failure or from any liability which it may have otherwise).  In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent it may
elect by written notice delivered to the indemnified party promptly (but, in any event, within 30 days) after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party.  Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to have charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there is a conflict of interest between itself or themselves and the
indemnifying party in the conduct of the defense of any claim or that the interests of the indemnified party or parties are not substantially co-extensive with those of the indemnifying party (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the indemnifying parties (provided, however, that the indemnifying party shall be liable only for the 

 

fees and expenses of one counsel in addition to one local counsel in the jurisdiction involved.  Anything in this subsection to the contrary notwithstanding, an indemnifying party shall not be liable for any settlement or any claim or action effected without its written consent; provided, however, that such consent was not unreasonably withheld.

(d)        If the indemnification provided for in paragraphs (a) and (b) of this Section 13 shall for any reason be unavailable to an indemnified party in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to in Section 13, then the indemnifying party shall in lieu of indemnifying the indemnified party contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, in such proportion as shall be appropriate to reflect the relative benefits received by the Mortgage Loan Seller on the one hand and the Purchaser on the other from the purchase and sale of the HELOCs, the offering of the Notes and the other transactions contemplated hereunder. No person found liable for a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not also found liable for such fraudulent misrepresentation.

(e)        The parties hereto agree that reliance by an indemnified party on any publicly available information or any information or directions furnished by an indemnifying party shall not constitute negligence, bad faith or willful misconduct by such indemnified party.

Section 14.       Notices.  All demands, notices and communications hereunder shall be in writing but may be delivered by facsimile transmission subsequently confirmed in writing.  Notices to the Mortgage Loan Seller shall be directed to EMC Mortgage Corporation, 909 Hidden Ridge Drive, Suite 200 Irving, Texas 75038, (Telecopy: (972 -444-2880)); notices to the Purchaser shall be directed to Bear Stearns Asset Backed Securities I LLC, 383 Madison Avenue, New York, New York  10179, (Telecopy # (212) 272-2619), Attention:  Chief Counsel; and notices to the Note Insurer shall be directed to 1325 Avenue of the Americas, New York, NY 10019 (Telecopy # [____________]), Attention: Risk Management Department (Policy No. D-2005-69) or to any other address as may hereafter be furnished by one party to the other party by
like notice.  Any such demand, notice or communication hereunder shall be deemed to have been received on the date received at the premises of the addressee (as evidenced, in the case of registered or certified mail, by the date noted on the return receipt) provided that it is received on a business day during normal business hours and, if received after normal business hours, then it shall be deemed to be received on the next business day.

Section 15.       Transfer of HELOCs.  The Purchaser retains the right to assign the HELOCs and any or all of its interest under this Agreement to the Issuer, with the understanding that the Issuer will then assign such rights to the Indenture Trustee pursuant to the Indenture, without the consent of the Mortgage Loan Seller, and, upon such assignment, the Indenture Trustee, as the ultimate assignee, shall succeed to the applicable rights and obligations of the Purchaser hereunder; provided, however, the Purchaser shall remain entitled to the benefits set forth in Sections 11, 13 and 17 hereto and as provided in Section 2(a). Notwithstanding the foregoing, the sole and exclusive right and remedy of the Issuer or the
Indenture Trustee with respect to a breach of representation or warranty of the Mortgage Loan Seller shall be the cure, purchase or substitution obligations of the Mortgage Loan Seller contained in Sections 5 and 7 hereof.

 

 

Section 16.       Termination.  This Agreement may be terminated (a) by the mutual consent of the parties hereto prior to the Closing Date, (b) by the Purchaser, if the conditions to the Purchaser’s obligation to close set forth under Section 11(a) hereof are not fulfilled as and when required to be fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the Mortgage Loan Seller’s obligation to close set forth under Section 11(b) hereof are not fulfilled as and when required to be fulfilled.  In the event of termination pursuant to clause (b), the Mortgage Loan Seller shall pay, and in the event of termination pursuant to clause (c), the Purchaser shall pay, all reasonable out-of-pocket expenses incurred by the other in connection with the transactions contemplated by this Agreement.  In
the event of a termination pursuant to clause (a), each party shall be responsible for its own expenses. 

Section 17.       Representations, Warranties and Agreements to Survive Delivery.  All representations, warranties and agreements contained in this Agreement, or contained in certificates of officers of the Mortgage Loan Seller submitted pursuant hereto, shall remain operative and in full force and effect and shall survive delivery of the HELOCs to the Purchaser (and by the Purchaser to the Indenture Trustee).  Subsequent to the delivery of the HELOCs to the Purchaser, each of the Mortgage Loan Seller’s representations and warranties contained herein with respect to the HELOCs shall be deemed to relate to the HELOCs actually delivered to the Purchaser and included in the Final Mortgage Loan Schedule and any Substitute Mortgage Loan and not to those HELOCs deleted from the Preliminary Mortgage Loan
Schedule pursuant to Section 3 hereof prior to the Closing.

Section 18.      Severability.  If any provision of this Agreement shall be prohibited or invalid under applicable law, this Agreement shall be ineffective only to such extent, without invalidating the remainder of this Agreement.

Section 19.       Counterparts.  This Agreement may be executed in counterparts, each of which will be an original, but which together shall constitute one and the same agreement.

Section 20.       Amendment.  This Agreement cannot be amended or modified in any manner without the prior written consent of each party.

Section 21.       GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

Section 22.       Further Assurances.  Each of the parties agrees to execute and deliver such instruments and take such actions as another party may, from time to time, reasonably request in order to effectuate the purpose and to carry out the terms of this Agreement including any amendments hereto which may be required by either Rating Agency.

Section 23.       Successors and Assigns.  This Agreement shall bind and inure to the benefit of and be enforceable by the Mortgage Loan Seller and the Purchaser and their permitted successors and assigns and, to the extent specified in Section 14 hereof, Bear Stearns, 

 

and their directors, officers and controlling persons (within the meaning of federal securities laws). The Mortgage Loan Seller acknowledges and agrees that the Purchaser may assign its rights under this Agreement (including, without limitation, with respect to the Mortgage Loan Seller’s representations and warranties respecting the HELOCs) to the Indenture Trustee.  Any person into which any Mortgage Loan Seller may be merged or consolidated (or any person resulting from any merger or consolidation involving such Mortgage Loan Seller), any person resulting from a change in form of such Mortgage Loan Seller or any person succeeding to the business of such Mortgage Loan Seller, shall be considered the “successor” of such Mortgage Loan Seller hereunder and shall be considered a party hereto without the execution or filing of any paper or any further act or consent on the part of any party
hereto.  Except as provided in the two preceding sentences, this Agreement cannot be assigned, pledged or hypothecated by either party hereto without the written consent of the other parties to this Agreement and any such assignment or purported assignment shall be deemed null and void.

Section 24.       The Mortgage Loan Seller. The Mortgage Loan Seller will keep in full force and effect its existence, all rights and franchises as a corporation under the laws of the State of its incorporation and will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is necessary to perform its obligations under this Agreement.

Section 25.       Entire Agreement.  This Agreement contains the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.

Section 26.       No Partnership.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto.

Section 27.       Benefit of Agreement.  The Note Insurer and any successor and assign shall be a third-party beneficiary to the provisions of this Agreement.  To the extent that this Agreement confers upon or gives or grants to the Note Insurer any right, remedy or claim under or by reason of this Agreement, the Note Insurer may enforce any such right, remedy or claim conferred, given or granted hereunder.  Nothing in this Agreement, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders and the Note Insurer, any benefit of any legal or equitable right, remedy or claim under this Agreement. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused their names to be signed hereto by their respective duly authorized officers as of the date first above written.

 

	
            EMC MORTGAGE CORPORATION
 
	
            By:______________________________________
 
	
            Name:        
 
	
            Title:                   
 
	
             
 
	
             
 
	
             
 
	
            BEAR STEARNS ASSET BACKED SECURITIES LLC
 
	
            By:______________________________________
 
	
            Name: 
 
	
            Title:                    
 

 

 

 

EXHIBIT 1

 

CONTENTS OF MORTGAGE FILE

With respect to each HELOC, the Mortgage File shall include each of the following items, which shall be available for inspection by the Purchaser or its designee, and which shall be delivered to the Purchaser or its designee pursuant to the terms of this Agreement.

(i)         The original Mortgage Note, including any riders thereto, endorsed without recourse to the order of Citibank, N.A., as Indenture Trustee for Noteholders of SACO I Trust 2005-GP1, Mortgage-Backed Notes, Series 2005-GP1,” showing to the extent available to the related Mortgage Loan Seller an unbroken chain of endorsements from the original payee thereof to the Person endorsing it to the Indenture Trustee.

(ii)         The original Mortgage and if the related HELOC is a MOM Loan, noting the presence of the MIN and language indicating that such Mortgage Loan is a MOM Loan, which shall have been recorded (or if the original is not available, a copy), with evidence of such recording indicated thereon (or if clause (x) in the proviso below applies, shall be in recordable form);

(iii)        unless the HELOC is a MOM Loan, the assignment (either an original or a copy, which may be in the form of a blanket assignment if permitted in the jurisdiction in which the Mortgaged Property is located) to the Indenture Trustee of the Mortgage with respect to each HELOC in the name of “Citibank, N.A., as Indenture Trustee for Noteholders of SACO I Trust 2005-GP1, Mortgage-Backed Notes, Series 2005-GP1,” which shall have been recorded (or if clause (x) in the proviso below applies, shall be in recordable form);

(iv)        an original or a copy of all intervening assignments of the Mortgage, if any, to the extent available to the related Mortgage Loan Seller, with evidence of recording thereon;

(v)        the original policy of title insurance or mortgagee’s certificate of title insurance or commitment or binder for title insurance, if available, or a copy thereof, or, in the event that such original title insurance policy is unavailable, a photocopy thereof, or in lieu thereof, a current lien search on the related Mortgaged Property and

(vi)        originals or copies of all available assumption, modification or substitution agreements, if any.

Provided, however, that in lieu of the foregoing, the Mortgage Loan Seller may deliver the following documents, under the circumstances set forth below:  (x) if any Mortgage, assignment thereof to the Indenture Trustee or intervening assignments thereof have been delivered or are being delivered to recording offices for recording and have not been returned in time to permit their delivery as specified above, the Purchaser may deliver a true copy thereof with a certification by the Mortgage Loan Seller or the title company issuing the commitment for 

 

title insurance, on the face of such copy, substantially as follows: “Certified to be a true and correct copy of the original, which has been transmitted for recording” and (y) in lieu of the Mortgage Notes relating to the HELOCs identified in the list set forth in Exhibit [A] to the Sale and Servicing Agreement, the Purchaser may deliver a lost note affidavit and indemnity and a copy of the original note, if available; and provided, further, however, that in the case of HELOCs which have been prepaid in full after the Cut-Off Date and prior to the Closing Date, the Purchaser, in lieu of delivering the above documents, may deliver to the Indenture Trustee and its Custodian a certification of a Servicing Officer to such effect and in such case shall deposit all amounts paid in respect of such HELOCs, in the Protected Account or in the Distribution Account on the Closing Date. In the case of the
documents referred to in clause (x) above, the Purchaser shall deliver such documents to the Indenture Trustee or its related Custodian promptly after they are received. The Mortgage Loan Seller shall cause, at its expense, the Mortgage and intervening assignments, if any, and to the extent required in accordance with the foregoing, the assignment of the Mortgage to the Indenture Trustee to be submitted for recording promptly after the Closing Date; provided that the Mortgage Loan Seller need not cause to be recorded any assignment (a) in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel addressed to the Indenture Trustee delivered by the Mortgage Loan Seller to the Indenture Trustee, and the Rating Agencies, the recordation of such assignment is not necessary to protect the Indenture Trustee’s interest in the related HELOC or (b) if MERS is identified on the Mortgage or on a properly recorded assignment of the Mortgage as mortgagee of record solely
as nominee for the Mortgage Loan Seller and its successors and assigns.  In the event that the Mortgage Loan Seller, the Purchaser or the Master Servicer gives written notice to the Indenture Trustee that a court has recharacterized the sale of the HELOCs as a financing, the Mortgage Loan Seller shall submit or cause to be submitted for recording as specified above or, should the Mortgage Loan Seller fail to perform such obligations, the Master Servicer shall cause each such previously unrecorded assignment to be submitted for recording as specified above at the expense of the Trust.  In the event a Mortgage File is released to the Mortgage Loan Seller or the Master Servicer as a result of such Person having completed a Request for Release, the related Custodian shall, if not so completed, complete the assignment of the related Mortgage in the manner specified in clause (iii) above.

 

 

EXHIBIT 2

 

MORTGAGE LOAN SCHEDULE INFORMATION

The Preliminary and Final Mortgage Loan Schedules shall set forth the following information with respect to each HELOC:

the HELOC identifying number;

the current mortgage rate;

the Master Servicing Fee;

the Indenture Trustee Fee;

the lender paid primary mortgage insurance fee, if any;

the current net mortgage rate;

the stated maturity date;

the original principal balance;

the current principal balance;

the stated original term to maturity;

the stated remaining term to maturity;

the property type;

the MIN with respect to each MOM Loan; 

a code indicating whether the HELOC is an HELOC; and

the Custodian.

Such schedule shall also set forth the aggregate Cut-off Date Principal Balance for all of the HELOCs.

 

 

 

EXHIBIT 3

 

MORTGAGE LOAN SELLERS’ INFORMATION

All information in the Prospectus Supplement described under the following Sections: “The Mortgage Pool” and “Appendix A–Mortgage Pool Information.”

 

 

EXHIBIT 4

 

PURCHASER’S INFORMATION

All information in the Prospectus Supplement, except the Mortgage Loan Seller’s Information.

 

 

EXHIBIT 5

 

SCHEDULE OF LOST NOTES

Available Upon Request

 

 

 

EXHIBIT 6

Appendix E

REVISED August 1, 2005

 

APPENDIX E – STANDARD & POOR’S PREDATORY LENDING CATEGORIES 

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry. 

STANDARD & POOR’S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Arkansas 
 	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq. 

Effective July 16, 2003 
 	
            High Cost Home Loan 
 
	
            Cleveland Heights, OH 
 	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq. 

Effective June 2, 2003 
 	
            Covered Loan 
 
	
            Colorado 
 	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq. 

Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002 
 	
            Covered Loan 
 
	
            Connecticut 
 	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et seq. 

Effective October 1, 2001 
 	
            High Cost Home Loan 
 
	
            District of Columbia 
 	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq. 

Effective for loans closed on or after January 28, 2003 
 	
            Covered Loan 
 
	
            Florida 
 	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq. 

Effective October 2, 2002 
 	
            High Cost Home Loan 
 

 

 

 

 

	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 
 	
            High Cost Home Loan 
 

STANDARD & POOR’S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective October 1, 2002 – March 6, 2003 
 	
             
 
	
            Georgia as amended (Mar. 7, 2003 – current) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective for loans closed on or after March 7, 2003 
 	
            High Cost Home Loan 
 
	
            HOEPA Section 32 
 	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34 

Effective October 1, 1995, amendments October 1, 2002 
 	
            High Cost Loan 
 
	
            Illinois 
 	
            High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq. 

Effective January 1, 2004 (prior to this date, regulations under Residential Mortgage License Act effective from May 14, 2001) 
 	
            High Risk Home Loan 
 
	
            Kansas 
 	
            Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq. 

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999; Section 16a-3-308a became effective July 1, 1999 
 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and; 
 
	
            High APR Consumer Loan (id. § 16a-3-308a) 
 
	
            Kentucky 
 	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq. 

Effective June 24, 2003 
 	
            High Cost Home Loan 
 
	
            Maine 
 	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq. 

Effective September 29, 1995 and as amended from time to time 
 	
            High Rate High Fee Mortgage 
 

 

 

 

 

	
            Massachusetts 
 	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq. 
 	
            High Cost Home Loan 
 

 

 

STANDARD & POOR’S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Effective March 22, 2001 and amended from time to time 
 	
             
 
	
            Nevada 
 	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq. 

Effective October 1, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
            High Cost Home Loan 
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            High Cost Home Loan 
 
	
            New York 
 	
            N.Y. Banking Law Article 6-l 

Effective for applications made on or after April 1, 2003 
 	
            High Cost Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            High Cost Home Loan 
 
	
            Ohio 
 	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et seq. 

Effective May 24, 2002 
 	
            Covered Loan 
 
	
            Oklahoma 
 	
            Consumer Credit Code (codified in various sections of Title 14A) 

Effective July 1, 2000; amended effective January 1, 2004 
 	
            Subsection 10 Mortgage 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code 
 	
            High Cost Home Loan 
 

 

 

STANDARD & POOR’S HIGH COST LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
             
 
	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq. 

Effective June 5, 2002 
 	
            West Virginia Mortgage Loan Act Loan 
 

 

STANDARD & POOR’S COVERED LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Covered Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective November 27, 2003 – July 5, 2004 
 	
            Covered Home Loan 
 

 

STANDARD & POOR’S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003) 
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq. 

Effective October 1, 2002 – March 6, 2003 
 	
            Home Loan 
 
	
            New Jersey 
 	
            New Jersey Home Ownership Security 
 	
            Home Loan 
 

 

 

STANDARD & POOR’S HOME LOAN CATEGORIZATION 

	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
             
 	
            Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq. 

Effective for loans closed on or after November 27, 2003 
 	
             
 
	
            New Mexico 
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq. 

Effective as of January 1, 2004; Revised as of February 26, 2004 
 	
            Home Loan 
 
	
            North Carolina 
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq. 

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit) 
 	
            Consumer Home Loan 
 
	
            South Carolina 
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq. 

Effective for loans taken on or after January 1, 2004 
 	
            Consumer Home Loan 
 

 

 

 

SCHEDULE A

 

REQUIRED RATINGS FOR EACH CLASS OF CERTIFICATES

Offered Certificates

 

	
            
Class
 
 	
            
S&P/Moody’s/Fitch
 
 
	
            A-1
 	
            AAA/Aaa/AAA
 
	
            A-2
 	
            AAA/Aaa/AAA
 
	
            M-1
 	
            AAA-/Aa1/AAA
 
	
            M-2
 	
            BBB-/Baa3/BBB
 
	
            B-1
 	
            BB+/Ba1/BBB-
 
	
            B-2
 	
            BB/Ba2/BB+
 
	
            B-3
 	
            BB-/--/BB
 
	
            B-4
 	
            B+/--/B+
 

 

 

None of the above ratings has been lowered, qualified or withdrawn since the dates of issuance of such ratings by the Rating Agencies.

Non-Offered Certificates

 

	
            
Class
 
 	
            
Moody’s/Fitch
 
 
	
            S
 	
            Not Rated
 
	
            E
 	
            Not Rated
 
	
            R
 	
            Not Rated

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