Document:

exv4w2

 

Exhibit 4.2

INDENTURE

between

SASCO MORTGAGE LOAN TRUST 2004-GEL2,

Issuer

and

U.S. BANK NATIONAL ASSOCIATION,

Indenture Trustee

Dated as of June 1, 2004

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE 	 	 	 	 
	Section 1.01
	 	Definitions	 	 	2	 
	Section 1.02
	 	Rules of Construction	 	 	7	 
	 
	 	ARTICLE TWO THE NOTES	 	 	 	 
	Section 2.01
	 	Form	 	 	8	 
	Section 2.02
	 	Execution, Authentication and Delivery	 	 	9	 
	Section 2.03
	 	Limitations on Transfer of the Notes	 	 	10	 
	Section 2.04
	 	Registration; Registration of Transfer and Exchange	 	 	13	 
	Section 2.05
	 	Mutilated, Destroyed, Lost or Stolen Notes	 	 	15	 
	Section 2.06
	 	Persons Deemed Owners	 	 	15	 
	Section 2.07
	 	Payment of Principal and Interest	 	 	16	 
	Section 2.08
	 	Cancellation	 	 	17	 
	Section 2.09
	 	Release of Collateral	 	 	17	 
	Section 2.10
	 	Book-Entry Notes	 	 	18	 
	Section 2.11
	 	Notices to Clearing Agency	 	 	19	 
	Section 2.12
	 	Definitive Notes	 	 	19	 
	Section 2.13
	 	Tax Treatment	 	 	19	 
	 
	 	ARTICLE THREE COVENANTS 	 	 	 	 
	Section 3.01
	 	Payment of Principal and Interest	 	 	19	 
	Section 3.02
	 	Maintenance of Office or Agency	 	 	20	 
	Section 3.03
	 	Money for Payments to be Held in Trust	 	 	20	 
	Section 3.04
	 	Existence	 	 	21	 
	Section 3.05
	 	Protection of Collateral	 	 	22	 
	Section 3.06
	 	Opinions as to Collateral	 	 	22	 
	Section 3.07
	 	Performance of Obligations	 	 	23	 
	Section 3.08
	 	Negative Covenants	 	 	24	 
	Section 3.09
	 	Annual Statement as to Compliance	 	 	24	 
	Section 3.10
	 	[Reserved]	 	 	25	 
	Section 3.11
	 	[Reserved]	 	 	25	 
	Section 3.12
	 	No Other Business	 	 	25	 
	Section 3.13
	 	No Borrowing	 	 	25	 
	Section 3.14
	 	[Reserved]	 	 	25	 
	Section 3.15
	 	Guarantees, Loans, Advances and Other Liabilities	 	 	25	 
	Section 3.16
	 	Capital Expenditures	 	 	25	 
	Section 3.17
	 	Removal of Administrator	 	 	25	 
	Section 3.18
	 	Restricted Payments	 	 	25	 
	Section 3.19
	 	Notice of Events of Default	 	 	26	 
	Section 3.20
	 	Further Instruments and Acts	 	 	26	 

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	 	 	 	 	Page
	Section 3.21
	 	Covenants of the Issuer	 	 	26	 
	Section 3.22
	 	Representations and Warranties of the Issuer	 	 	26	 
	 
	 	ARTICLE FOUR SATISFACTION AND DISCHARGE	 	 	 	 
	Section 4.01
	 	Satisfaction and Discharge of Indenture	 	 	27	 
	Section 4.02
	 	Application of Trust Money	 	 	28	 
	Section 4.03
	 	Repayment of Moneys Held by Paying Agent	 	 	28	 
	 
	 	ARTICLE FIVE REMEDIES	 	 	 	 
	Section 5.01
	 	Events of Default	 	 	29	 
	Section 5.02
	 	Acceleration of Maturity; Rescission and Annulment	 	 	30	 
	Section 5.03
	 	Collection of Indebtedness and Suits for Enforcement by Indenture Trustee	 	 	31	 
	Section 5.04
	 	Remedies; Priorities	 	 	33	 
	Section 5.05
	 	Optional Preservation of the Collateral	 	 	34	 
	Section 5.06
	 	Limitation of Suits	 	 	34	 
	Section 5.07
	 	Unconditional Rights of Noteholders To Receive Principal and Interest	 	 	35	 
	Section 5.08
	 	Restoration of Rights and Remedies	 	 	35	 
	Section 5.09
	 	Rights and Remedies Cumulative	 	 	36	 
	Section 5.10
	 	Delay or Omission Not a Waiver	 	 	36	 
	Section 5.11
	 	Control by Noteholders	 	 	36	 
	Section 5.12
	 	Waiver of Past Defaults	 	 	36	 
	Section 5.13
	 	Undertaking for Costs	 	 	37	 
	Section 5.14
	 	Waiver of Stay or Extension Laws	 	 	37	 
	Section 5.15
	 	Action on Notes	 	 	37	 
	Section 5.16
	 	Performance and Enforcement of Certain Obligations	 	 	37	 
	 
	 	ARTICLE SIX THE INDENTURE TRUSTEE	 	 	 	 
	Section 6.01
	 	Duties of Indenture Trustee	 	 	38	 
	Section 6.02
	 	Rights of Indenture Trustee	 	 	40	 
	Section 6.03
	 	Individual Rights of Indenture Trustee	 	 	41	 
	Section 6.04
	 	Indenture Trustee’s Disclaimer	 	 	41	 
	Section 6.05
	 	Notice of Defaults	 	 	41	 
	Section 6.06
	 	Reports by Indenture Trustee to Holders	 	 	41	 
	Section 6.07
	 	Compensation and Indemnity	 	 	41	 
	Section 6.08
	 	Replacement of Indenture Trustee	 	 	42	 
	Section 6.09
	 	Successor Indenture Trustee by Merger	 	 	43	 
	Section 6.10
	 	Appointment of Co-Indenture Trustee or Separate Indenture Trustee	 	 	43	 
	Section 6.11
	 	Eligibility; Disqualification	 	 	44	 
	Section 6.12
	 	Representations and Warranties	 	 	44	 

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	 	 	 	 	Page
	 
	 	ARTICLE SEVEN NOTEHOLDERS’ LISTS AND REPORTS	 	 	 	 
	Section 7.01
	 	Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders	 	 	45	 
	Section 7.02
	 	Preservation of Information; Communications to Noteholders	 	 	45	 
	 
	 	ARTICLE EIGHT ACCOUNTS, DISBURSEMENTS AND RELEASES 	 	 	 	 
	Section 8.01
	 	Collection of Money	 	 	46	 
	Section 8.02
	 	Trust Accounts and Certificate Distribution Account	 	 	47	 
	Section 8.03
	 	General Provisions Regarding Accounts	 	 	47	 
	Section 8.04
	 	Release of Collateral	 	 	47	 
	 
	 	ARTICLE NINE SUPPLEMENTAL INDENTURES	 	 	 	 
	Section 9.01
	 	Supplemental Indentures Without Consent of Noteholders	 	 	48	 
	Section 9.02
	 	Supplemental Indentures with Consent of Noteholders	 	 	49	 
	Section 9.03
	 	Execution of Supplemental Indentures	 	 	50	 
	Section 9.04
	 	Effect of Supplemental Indenture	 	 	50	 
	Section 9.05
	 	Reference in Notes to Supplemental Indentures	 	 	50	 
	Section 9.06
	 	Opinion of Counsel	 	 	50	 
	 
	 	ARTICLE TEN REDEMPTION OF NOTES	 	 	 	 
	Section 10.01
	 	Redemption	 	 	51	 
	Section 10.02
	 	Form of Redemption Notice	 	 	51	 
	Section 10.03
	 	Notes Payable on Redemption Date	 	 	51	 
	 
	 	ARTICLE ELEVEN MISCELLANEOUS	 	 	 	 
	Section 11.01
	 	Compliance Certificates and Opinions, etc.	 	 	52	 
	Section 11.02
	 	Form of Documents Delivered to Indenture Trustee	 	 	52	 
	Section 11.03
	 	Acts of Noteholders	 	 	53	 
	Section 11.04
	 	Notices, etc., to Indenture Trustee, Issuer and Rating Agencies	 	 	53	 
	Section 11.05
	 	Notices to Noteholders; Waiver	 	 	54	 
	Section 11.07
	 	Effect of Headings and Table of Contents	 	 	55	 
	Section 11.08
	 	Successors and Assigns	 	 	55	 
	Section 11.09
	 	Severability	 	 	55	 
	Section 11.10
	 	Benefits of Indenture and Consents of Noteholders	 	 	55	 
	Section 11.11
	 	Legal Holidays	 	 	55	 
	Section 11.12
	 	Governing Law	 	 	55	 
	Section 11.13
	 	Counterparts	 	 	55	 
	Section 11.14
	 	Recording of Indenture	 	 	55	 
	Section 11.15
	 	Trust Obligations	 	 	56	 
	Section 11.16
	 	No Petition	 	 	56	 

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	 	 	 	 	Page
	Section 11.17
	 	Inspection	 	 	56	 
	 
	 	EXHIBITS 	 	 	 	 
	EXHIBIT A
	 	Forms of Notes	 	 	 	 
	EXHIBIT B-1
	 	Form of Rule 144A Investment Letter	 	 	 	 
	EXHIBIT B-2
	 	Form of Non-Rule 144 Investment Letter	 	 	 	 
	EXHIBIT C
	 	Form of ERISA Transfer Affidavit	 	 	 	 
	EXHIBIT D
	 	Form of High-Yield Interest Transfer Affidavit	 	 	 	 
	EXHIBIT E
	 	Form of High-Yield Interest Transfer Affidavit (Initial Transfer)	 	 	 	 

iv

 

     This INDENTURE, dated as of June 1, 2004, is by and between SASCO MORTGAGE
LOAN TRUST 2004-GEL2, a Delaware statutory trust (the “Issuer”), and U.S. BANK
NATIONAL ASSOCIATION, a national banking association, as indenture trustee and
not in its individual capacity (the “Indenture Trustee”).

     Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer’s variable rate
Notes in the Classes specified herein (the “Notes”):

GRANTING CLAUSE

     The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
Indenture Trustee for the benefit of the Holders of the Notes, all of the
Issuer’s right, title and interest, whether now owned or hereafter acquired, in
and to: (i) the Trust Estate (as defined in the Transfer and Servicing
Agreement); (ii) the Issuer’s rights and benefits but none of its obligations
under the Transfer and Servicing Agreement (including the Issuer’s right to
cause the Depositor to repurchase Mortgage Loans from the Issuer under the
circumstances described therein); (iii) the Issuer’s rights and benefits but
none of its obligations under the Custodial Agreements; (iv) the Issuer’s
rights and benefits but none of its obligations under the Administration
Agreement; (v) the Issuer’s rights and benefits but none of its obligations
under the Mortgage Loan Sale Agreement; (vi) the Issuer’s rights and benefits
but none of its obligations under the Cap Agreement; (vii) the Trust Accounts,
all amounts and property in the Trust Accounts from time to time, and the
Security Entitlements to all Financial Assets credited to the Trust Accounts
from time to time; (viii) all other property of the Trust from time to time;
and (ix) all present and future claims, demands, causes of action and choses in
action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all
of the foregoing, including all proceeds of the conversion thereof, voluntary
or involuntary, into cash or other liquid property, all cash proceeds,
accounts, accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the
“Collateral”).

     The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes, and to
secure (i) the payment of all amounts due on the Notes in accordance with their
terms, (ii) the payment of all other sums payable under the Indenture with
respect to the Notes, and (iii) compliance with the provisions of this
Indenture, all as provided in this Indenture.

     The Indenture Trustee, as Indenture Trustee on behalf of the Holders of
the Notes, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that
the interests of the Holders of the Notes may be adequately and effectively
protected.

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ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

     Section 1.01. Definitions. (a) Except as otherwise specified
herein or as the context may otherwise require, the following terms have the
respective meanings set forth below for all purposes of this Indenture.

     Act: The meaning specified in Section 11.03(a).

     Authorized Officer: With respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any Vice President,
Assistant Vice President, Trust Officer or more senior officer of the
Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to
the Administration Agreement and who is identified on the list of Authorized
Officers delivered by the Administrator to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter).

     Book-Entry Notes: Beneficial interests in Notes designated as
“Book-Entry Notes” in this Indenture, ownership and transfers of which shall be
evidenced or made through book entries by a Clearing Agency as described in
Section 2.10; provided, that after the occurrence of a condition whereupon
Definitive Notes are to be issued to Note Owners, such Book-Entry Notes shall
no longer be “Book-Entry Notes.”

     Certificate of Trust: The certificate of trust of the Issuer
substantially in the form of Exhibit C to the Trust Agreement.

     Clearing Agency: An organization registered as a “clearing agency”
pursuant to Section 17A of the Exchange Act, as amended. As of the Closing
Date, the Clearing Agency shall be The Depository Trust Company.

     Clearing Agency Participant: A broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.

     Clearstream: Clearstream Banking Luxembourg, and any successor
thereto.

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

     Commission: The Securities and Exchange Commission.

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

     Definitive Notes: The meaning specified in Section 2.10.

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     Depository Institution: Any depository institution or trust
company, including the Indenture Trustee, that (a) is incorporated under the
laws of the United States of America or any State thereof, (b) is subject to
supervision and examination by federal or state banking authorities and (c) has
outstanding unsecured commercial paper or other short-term unsecured debt
obligations that are rated in the highest rating category by each Rating
Agency, or is otherwise acceptable to each Rating Agency.

     Eligible Corporation: A domestic corporation described in section
860L(a)(2) of the Code that (i) is not the obligor on any debt instrument held
as part of the Trust, and (ii) is not related, within the meaning of section
860L(g), to any person who is an obligor on any debt instrument held as part of
the Trust.

     Euroclear: Euroclear SA/NV, as operator of the Euroclear System.

     Event of Default: The meaning specified in Section 5.01.

     Exchange Act: The Securities Exchange Act of 1934, as amended.

     Executive Officer: With respect to any corporation or limited
liability company, the Chief Executive Officer, Chief Operating Officer, Chief
Financial Officer, President, Manager, Executive Vice President, any Vice
President, the Secretary or the Treasurer of such entity; and with respect to
any partnership, any general partner thereof.

     FASIT: A “FASIT” within the meaning of section 860L(a)(I) of the
Code.

     FASIT High-Yield Interest: A “high-yield interest” within the
meaning of section 860L(b)(1)(B) of the Code.

     Global Securities: The meaning specified in Section 2.01(a).

     Grant: Mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and grant a lien upon and a security
interest in and a right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the granting party or otherwise,
and generally to do and receive anything that the granting party is or may be
entitled to do or receive thereunder or with respect thereto.

     High-Yield Note: Any Class B or Class P Note, unless the Indenture
Trustee shall have received an Opinion of Counsel concluding that any such Note
is not a FASIT High-Yield Interest.

     Holder or Noteholder: A Person in whose name a Note is
registered on the Note Register.

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

     Independent Certificate: A certificate or opinion to be delivered
to the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion
or certificate shall state that the signer has read the definition of
“Independent” in this Indenture and that the signer is Independent within the
meaning thereof.

     Issuer: SASCO Mortgage Loan Trust 2004-GEL2, a Delaware statutory
trust, or any successor and, for purposes of any provision contained herein and
required by the TIA, each other obligor on the Notes.

     Issuer Order or 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.

     Non-Priority Class Note: As of any date of determination, any
Outstanding Note other than the related Priority Class Notes.

     Note: Any of the Class A1, Class A2, Class M1, Class M2, Class M3,
Class M4, Class B and Class P Notes issued pursuant to this Indenture,
substantially in the forms attached hereto as Exhibit A.

     Note Depository Agreement: The agreement dated June 30, 2004,
among the Issuer, the Administrator, the Indenture Trustee and The Depository
Trust Company, as the initial Clearing Agency, relating to the Notes.

     Note Owner or Owner: With respect to a Book-Entry Note, the
Person that is the beneficial owner of such Book-Entry Note, as reflected on
the books of the Clearing Agency or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency), and with respect to a Definitive Note, the Person that is the
registered owner of such Note as reflected in the Note Register.

     Note Register and Note Registrar: The respective meanings
specified in Section 2.04.

     Officer’s Certificate: A certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable
requirements of Section 11.01, and delivered to the Indenture Trustee.
Unless otherwise specified, any reference in this Indenture to an Officer’s
Certificate shall be to an Officer’s Certificate of any Authorized Officer of
the Issuer.

4

 

     Outstanding: As of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:

     (i) Notes theretofore cancelled by the Note Registrar or delivered
to the Note Registrar for cancellation;

     (ii) Notes the payment for which money in the necessary amount has
been theretofore deposited with the Indenture Trustee or any Paying Agent
in trust for the Holders of such Notes (provided, however, that if such
Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision for such notice has been made,
satisfactory to the Indenture Trustee); and

     (iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes
are held by a bona fide purchaser;

provided, that in determining whether the Holders of the requisite Outstanding
Balance of the Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Operative Agreement, Notes
owned by the Issuer, any other obligor upon the Notes, the Depositor, the Owner
Trustee, the Indenture Trustee, the Master Servicer, any Servicer, the
Administrator or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so disregarded
(unless such action requires the consent, waiver, request or demand of 100% of
the Outstanding Balance represented by a particular Class and 100% of the
Outstanding Balance represented by such Class is registered in the name of one
or more of the foregoing entities). Notes so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee’s right so to act with
respect to such Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes, the Depositor, the Owner Trustee, the Indenture Trustee, the
Master Servicer, any Servicer, the Administrator or any Affiliate of any of the
foregoing Persons.

     Outstanding Balance: The aggregate principal or notional amount of
the Notes (other than the Class P Notes) Outstanding as of the date of
determination.

     Paying Agent: The Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.11
and is authorized by the Issuer to make payments to and distributions from the
Trust Accounts, including payments of principal of or interest on the Notes on
behalf of the Issuer.

     Permitted Owner: In the case of any High-Yield Note, only a
domestic corporation described in Section 860L(a)(2) of the Code.

     Predecessor Note: With respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 in lieu of a mutilated,

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lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.

     Priority Class Note: Until the Class Principal Amounts (or Class
Notional Amounts) of the Class A1 and Class A2 Notes are reduced to zero and
all sums payable to the Holders of the Class A1 and Class A2 Notes have been
paid in full, the Class A1 and Class A2 Notes; when the Class Principal Amounts
(or Class Notional Amounts) of the Class A1 and Class A2 Notes have been
reduced to zero and all amounts payable to the Holders of the Class A1 and
Class A2 Notes have been paid in full, the Class M1 Notes; when the Class
Principal Amounts (or Class Notional Amounts) of the Class A1, Class A2 and the
Class M1 Notes have been reduced to zero and all sums payable to the Holders of
such Classes have been paid in full, the Class M2 Notes; when the Class
Principal Amounts (or Class Notional Amounts) of the Class A1, Class A2, Class
M1 and Class M2 Notes have been reduced to zero and all sums payable to the
Holders of such Classes have been paid in full, the Class M3 Notes; when the
Class Principal Amounts (or Class Notional Amounts) of the Class A1, Class A2,
Class M1, Class M2 and Class M3 Notes have been reduced to zero and all sums
payable to the Holders of such Classes have been paid in full, the Class M4
Notes; and when the Class Principal Amounts (or Class Notional Amounts) of the
Class A1, Class A2, Class M1, Class M2, Class M3 and Class M4 Notes have been
reduced to zero and all sums payable to the Holders of such Classes have been
paid in full, the Class B Notes.

     Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.

     Prospective Owner: Each prospective purchaser and any subsequent
transferee of a Note.

     Rating Agency Condition: With respect to any action to which the
Rating Agency Condition applies, that each Rating Agency shall have been given
10 days (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each Rating Agency shall have notified the Depositor,
the Issuer and the Indenture Trustee in writing that such action will not
result in a reduction or withdrawal of the then current rating of the rated
Notes.

     Redemption Date: In the case of a redemption of the Notes (other
than the Class P Notes) pursuant to Section 10.01, the Payment Date specified
by the Indenture Trustee in the notice delivered pursuant to Section 10.02. In
the case of a redemption of the Class P Notes, the Payment Date in May 2011,
unless the Notes (other than the Class P Notes) are redeemed earlier, in which
case the Class P Notes shall be redeemed on the Payment Date as determined
pursuant to the immediately preceding sentence.

     Redemption Price: In the case of a redemption of the Notes
pursuant to Section 10.01 hereof, (i) (a) in the case of the Notes other than
the Class P Notes, an amount equal to the outstanding Class Principal Amount of
such Notes together with accrued interest thereon (at the
applicable Note Interest Rates), to the extent unpaid and (b) in the case
of the Class P Notes, an amount equal to all Prepayment Premiums received by
the Trust to the extent unpaid under the Transfer and Servicing Agreement, and
(ii) any unpaid fees and unreimbursed expenses owed to the Owner Trustee, the
Indenture Trustee or the Administrator.

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     State: Any one of the 50 States of the United States of America or
the District of Columbia.

     Transfer and Servicing Agreement: The Transfer and Servicing
Agreement dated as of June 1, 2004, among the Issuer, Structured Asset
Securities Corporation, as depositor, The Murrayhill Company, as credit risk
manager, Aurora Loan Services Inc., as master servicer, and U.S. Bank National
Association, as indenture trustee, as such may be amended or supplemented from
time to time.

     Trust Indenture Act or TIA: The Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.

     (b) Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein shall have the
meanings assigned to them in the Transfer and Servicing Agreement.

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

     “Commission” means the Securities and Exchange Commission.

     “indenture securities” means the Notes.

     “indenture security holder” means a Noteholder.

     “indenture to be qualified” means this Indenture.

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

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

     (b) All other TIA terms used in this Indenture that are defined in the
TIA, defined by TIA reference to another statute or defined by rule of the
Securities and Exchange Commission have the respective 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;

7

 

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

     (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;

     (vii) terms defined in the UCC and not otherwise defined herein
shall have the meaning assigned to them in the UCC; and

     (viii) to “U.S. dollars”, “dollars”, or the sign “$” shall be
construed as references to United States dollars which are freely
transferable by residents and non-residents of the United States of
America and convertible by such persons into any other freely convertible
currency unless such transferability or convertibility is restricted by
any law or regulation of general application in which event references to
“U.S. dollars”, “dollars”, or the sign “$” shall be construed as
references to such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and
private debts in the United States of America, and “cents” shall be
construed accordingly.

ARTICLE TWO

THE NOTES

     Section 2.01. Form. (a) The Notes shall be designated as
the “SASCO Mortgage Loan Trust 2004-GEL2 Mortgage Backed Notes, Series
2004-GEL2.” The Notes, together with the Indenture Trustee’s certificate of
authentication, shall be in substantially the forms set forth in Exhibit A with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the officers executing
such Notes, as evidenced by their execution of the Notes. Any portion of the
text of any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note.

     The Definitive Notes and the global certificates (“Global Securities”)
representing the Book-Entry Notes shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.

     Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit A are part of the terms of this Indenture.

     (b) The Class B Notes offered and sold in reliance on the exemption from
registration under Rule 144A shall be issued initially in the form of one or
more permanent global certificates in definitive, fully registered form without
interest coupons with the applicable

8

 

legends set forth in Exhibit A added to
the forms of such Class B Notes, which shall be deposited on behalf of the
subscribers for such Notes represented thereby with the Indenture Trustee as
custodian for the Depository and registered in the name of a nominee of the
Depository, duly executed by the Issuer and authenticated by the Indenture
Trustee as hereinafter provided. The aggregate principal amounts of the Class
B Notes may from time to time be increased or decreased by adjustments made on
the records of the Indenture Trustee or the Depository or its nominee, as the
case may be, as hereinafter provided.

     The Class B Notes sold to an “accredited investor” under Rule 501(a)(1),
(2), (3) or (7) under the Act shall be issued initially in the form of one or
more Definitive Notes.

     (c) The Class P Notes offered and sold in reliance on the exemption from
registration under Rule 144A shall be issued initially in the form of one or
more Definitive Notes.

     Section 2.02. Execution, Authentication and Delivery. The
Notes shall be executed on behalf of the Issuer by any Authorized Officer of
the Owner Trustee or the Administrator. 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 Owner Trustee or the Administrator shall
bind the Issuer, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Notes or did not hold such offices at the date of such Notes.

     The Indenture Trustee shall, upon Issuer Order, authenticate and deliver
the Notes for original issue in the aggregate principal or notional amounts
with respect to each Class as specified below:

	 	 	 	 	 
	Class
	 	Class Principal Amount

	A1
	 	$	75,300,000.00	 
	A2
	 	$	32,272,000.00	 
	M1
	 	$	11,005,000.00	 
	M2
	 	$	8,875,000.00	 
	M3
	 	$	6,745,000.00	 
	M4
	 	$	2,982,000.00	 
	B
	 	$	4,830,288.00	 
	P
	 	 	(1	)

	(1)	 	The Class P Notes will be issued without a Class Principal Amount.

     The aggregate principal amounts of such Classes of Notes outstanding at
any time may not exceed such respective amounts.

     The Class A1, Class A2, Class M1, Class M2, Class M3 and Class M4 Notes
will be issued in minimum principal amount denominations of $25,000 and
integral multiples of $1 in excess thereof. The Class B Notes will be issued
in minimum principal amount denominations

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of $100,000 and integral multiples of
$1 in excess thereof. The Class P Notes shall be maintained in definitive
fully registered form in a minimum denomination equal to 10% of the Percentage
Interest of such Class. The Class P Notes will be issued without a Class
Principal Amount

     No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.

     Section 2.03. Limitations on Transfer of the Notes. (a) No
Class B or Class P Note may be offered, sold, delivered or transferred
(including, without limitation, by pledge or hypothecation) except (i) in
connection with the initial sales of the Class B or Class P Notes to Lehman
Brothers Inc. pursuant Section 4(2) of the Securities Act and (ii) thereafter,
(A) under Rule 144A under the Securities Act to Qualified Institutional Buyers
or QIBs purchasing for their own account or (B) to institutional investors that
are “accredited investors” as that term is defined in Rule 501(a)(1), (2), (3)
and (7) of Regulation D under the Securities Act. Each Class B and Class P
Note shall bear a restrictive legend to the foregoing effect substantially in
the form of the legends on the face of the form of Note at Exhibit A.

     (b) Each Prospective Owner of a Class B Note in the form of a Book-Entry
Note shall be deemed to have represented and warranted, and each Prospective
Owner of a Class B or Class P Note in the form of a Definitive Note shall
represent and warrant in writing in substantially the form set forth in Exhibit
B-1 or Exhibit B-2 hereto, as applicable, to the Indenture Trustee and the Note
Registrar and any of their respective successors that:

     (i) Such Person is duly authorized to purchase such Notes and its
purchase of investments having the characteristics of such Notes is
authorized under, and not directly or indirectly in contravention of, any
law, charter, trust instrument or other operative document, investment
guidelines or list of permissible or impermissible investments that is
applicable to the investor; and

     (ii) Such Person understands that each holder of such Note, by
virtue of its acceptance thereof, assents to the terms, provisions and
conditions of this Indenture.

     (c) Subject to subsection (f) below, each Prospective Owner of a Class B
Note in the form of a Book-Entry Note shall be deemed to have represented and
warranted, and each Prospective Owner of a Class B or Class P Note in the form
of a Definitive Note shall represent and warrant in writing, in substantially
the form set forth in Exhibit B-1 or Exhibit B-2 hereto, as applicable, to the
Indenture Trustee and the Note Registrar and any of their respective successors
that:

     (i) Such Person is (A) a qualified institutional buyer (a “QIB”) as
defined in Rule 144A under the Securities Act (“Rule 144A”) and is aware
that the seller of such Note may be relying on the exemption from the
registration requirements of the Securities Act provided by Rule 144A and
is acquiring such Note for its own account or

10

 

for the account of one or
more qualified institutional buyers for whom it is authorized to act or
(B) an institutional investor that is an “accredited investor” as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act; and

     (ii) Such Person understands that such Notes have not been
registered under the Securities Act, and that, if in the future it
decides to offer, resell, pledge or otherwise transfer such Notes, such
Notes may be offered, resold, pledged or otherwise transferred only (A)
pursuant to a registration statement which has been declared effective
under the Securities Act, (B) for so long as such Notes are eligible for
resale pursuant to Rule 144A under the Securities Act, to a person whom
the seller reasonably believes is a QIB that is purchasing such Notes for
its own account or for the account of a qualified institutional buyer to
whom notice is given that the transfer is being made in reliance on Rule
144A, or (C) to an institutional “accredited investor” as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is acquiring
such Notes for its own account or for the account of such an
institutional “accredited investor,” for investment purposes and not with
a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act, in each case in compliance with the
requirements of this Indenture.

     (d) No transfer of a Note in the form of a Definitive Note shall be made
unless the Note Registrar shall have received either (i) a representation from
the transferee of such Note, acceptable to and in form and substance
satisfactory to the Note Registrar and the Depositor (such requirement is
satisfied only by the Note Registrar’s receipt of a transfer affidavit from the
transferee substantially in the form of Exhibit C hereto), to the effect that
such transferee (i) is not acquiring such note for, or with the assets of, an
employee benefit plan or other retirement arrangement that is subject to
Section 406 of ERISA or to Section 4975 of the Code or to any substantially
similar law (“Similar Law”), or any entity deemed to hold the plan assets of
the foregoing (collectively, “Benefit Plans”), or (ii) with respect to any Note
other than a High-Yield Note, its acquisition and holding of such Notes for, or
with the assets of, a Benefit Plan will not result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code which is not
covered under Prohibited Transaction Class Exemption (“PTCE”) 84-14, PTCE 90-1,
PTCE 91-38, PTCE 95-60, PTCE 96-23 or some other applicable exemption, and will
not result in a non-exempt violation of any Similar Law.

     In the case of a Note that is a Book-Entry Note, for purposes of clauses
(i) or (ii) of the first sentence of the preceding paragraph, such
representations shall be deemed to have been made to the Note Registrar by the
transferee’s acceptance of such Note that is also a Book-Entry Note (or the
acceptance by a Note Holder of the beneficial interest in such Note).

     To the extent permitted under applicable law (including, but not limited
to, ERISA), none of the Indenture Trustee, the Note Registrar or the Depositor
shall have any liability to any Person for any registration of transfer of any
Note that is in fact not permitted by this Section 2.03(d) or for the Indenture
Trustee (or any paying agent on its behalf) making any payments due on such
Note to the Holder thereof or taking any other action with respect to such
Holder under the provisions of this Agreement so long as the transfer was
registered by the Note Registrar in accordance with the foregoing requirements.
In addition, none of the Indenture Trustee, the Note Registrar or the
Depositor shall be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to any Note in the form of a
Book-Entry Note, and

11

 

none of the Indenture Trustee, the Note Registrar or the
Depositor shall have any liability for transfers of Book-Entry Notes or any
interests therein made in violation of the restrictions on transfer described
in the Prospectus and this Agreement.

     In the event that a Note is transferred to a Person that does not meet the
requirements of this Section 2.03, such transfer shall be of no force and
effect, shall be void ab initio, and shall not operate to transfer any rights
to such Person, notwithstanding any instructions to the contrary to the Issuer,
the Indenture Trustee or any intermediary; and the Indenture Trustee shall not
make any payments on such Note for as long as such Person is the Holder of such
Note.

     The Indenture Trustee on behalf of the Depositor shall provide to any
Holder of a Class B or Class P Note (or Note Owner) and any prospective
transferee designated by any such Holder (or Note Owner), information regarding
the Class B or Class P Notes, as applicable, and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for transfer of any such Note without registration
thereof under the Securities Act pursuant to the registration exemption
provided by Rule 144A. Each Holder of a Class B or Class P Note (or Note
Owner) desiring to effect such a transfer shall, and does hereby agree to,
indemnify the Issuer, the Owner Trustee, the Indenture Trustee and the
Depositor against any liability that may result if the transfer is not so
exempt or is not made in accordance with federal and state securities laws and
any other restrictions specified in this Section 2.03. Each holder of a Class
B Note in the form of a Book-Entry Note shall be deemed to have consented to
such transfer restrictions.

     The Indenture Trustee shall cause each Note to contain a legend
substantially similar to the applicable legend provided in Exhibit A hereto
stating that transfer of such Notes is subject to certain restrictions as set
forth herein.

     (e) Any purported transfer of a Note (or any interest therein) not in
accordance with this Section 2.03 shall be null and void and shall not be given
effect for any purpose hereunder.

     (f) Notwithstanding anything to the contrary contained herein, except in
the case of the initial transfer of the Class B and Class P Notes by Lehman
Brothers Inc., as the initial Holder of the Class B and Class P Notes (the
“Initial Transferor”), to the initial transferee of the Class B
and Class P Notes (the “Initial Transferee”), no High-Yield Note may be
owned or pledged or transferred, directly or indirectly, by or to any person
unless such person is a Permitted Owner. Each Prospective Owner of a
High-Yield Note, other than the Initial Transferee, shall be deemed to have
represented and warranted to the Indenture Trustee and the Note Registrar that
such Person is a Permitted Owner.

     Prior to and as a condition of registration of any transfer, sale or other
disposition of a High-Yield Note in the form of a Definitive Note, the
Prospective Owner (other than in the case of the Initial Transferee) shall
deliver to the Indenture Trustee an affidavit substantially in the form
attached hereto as Exhibit D representing and warranting, among other things,
that such transferee is a Permitted Owner. Prior to and as a condition of
registration of any transfer, sale or other disposition of the Class B or Class
P Notes, the Initial Transferee shall deliver to the Indenture Trustee an
affidavit substantially in the form attached hereto as Exhibit E. Except in
the case of the registration of the transfer of the Class B Notes and Class P
to the Initial

12

 

Transferee, the registration in the Note Register of any
transfer, sale or other disposition of a High-Yield Note to a person other than
a Permitted Owner, shall be deemed to be of no legal force or effect whatsoever
and such person shall not be deemed to be a Note Owner for any purpose
hereunder, including but not limited to, the receipt of distributions on such
Note. The Indenture Trustee shall not be under any liability to any person for
any registration or transfer of a High-Yield Note to a person other than a
Permitted Owner or agent or nominee thereof, or for taking any other action
with respect to such Note Owner under the provisions of this Indenture, so long
as the transfer was effected in accordance with this Section 2.03(f), unless
the Indenture Trustee shall have actual knowledge at the time of such transfer
or the time of such payment or other action that the transferee is not a
Permitted Owner; provided, however, the Indenture Trustee shall have no
liability in the case of the registration or transfer of the Class B and Class
P Notes to the Initial Transferee, irrespective of the Indenture Trustee’s
actual knowledge that the Initial Transferee is not a Permitted Owner.

     In the event that a Note is transferred to a Person that does not meet the
requirements of this Section 2.03, such transfer shall be of no force and
effect, shall be void ab initio, and shall not operate to transfer any rights
to such Person, notwithstanding any instructions to the contrary to the Issuer,
the Indenture Trustee or any intermediary; and the Indenture Trustee shall not
make any payments on such Note for as long as such Person is a Holder of such
Note; provided, however, nothing in this Section 2.03 shall prevent the
recognition and effectiveness of the transfer of the Class B and Class P Notes
by the Initial Transferor to the Initial Transferee, irrespective of whether or
not the Initial Transferee is a Permitted Owner.

     If a Prospective Owner shall become a Note Owner in violation of the
provisions of this Section 2.03(f), then upon receipt of written notice to the
Indenture Trustee that such Note Owner is not a Permitted Owner, the Indenture
Trustee shall, if such Note Owner is a Holder, restore all rights in the
High-Yield Notes to the transferor from whom the Note Owner acquired the
High-Yield Notes to the transferor from whom the Note Owner acquired the
High-Yield Note, effective retroactively to the date of transfer. The
Indenture Trustee shall be under no liability to any Person for any
registration of transfer of a Note that is in fact not permitted by this
Section 2.03(f), for making any payment due on such Note to the registered
Holder thereof or for taking any other action with respect to such Holder under
the provisions of this Indenture
so long as the transfer was registered upon receipt of the applicable
affidavit described in the preceding paragraph of this Section 2.03(f).

     (g) Each Holder of a High-Yield Note, by such Holder’s acceptance thereof,
shall be deemed for all purposes to have represented that it is a Permitted
Owner.

     (h) [Reserved]

     (i) The Indenture Trustee will not have the ability to monitor transfers
of the Notes while they are in book-entry form and will have no liability for
transfers of Book-Entry Notes in violation of any of the transfer restrictions
described in this Section 2.03.

     Section 2.04. Registration; Registration of Transfer and
Exchange. The Issuer shall cause the Note Registrar to keep a
register (the “Note Register”) in which, subject to such reasonable regulations
as it may prescribe and the restrictions on transfers of the Notes set forth

13

 

herein, the Issuer shall provide for the registration of Notes and the
registration of transfers of Notes. The Indenture Trustee initially shall be
the “Note Registrar” for the purpose of registering Notes and transfers of
Notes as herein provided. Upon any resignation of any Note Registrar, the
Issuer shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Note Registrar.

     If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Holders of the Notes and
the principal amounts and number of such Notes.

     Subject to Section 2.03, upon surrender for registration of transfer of
any Note at the office or agency of the Issuer to be maintained as provided in
Section 3.02, the Issuer shall execute, and the Indenture Trustee shall
authenticate and the Noteholder shall be entitled to obtain from the Indenture
Trustee, in the name of the designated transferee or transferees, one or more
new Notes of the same Class in any authorized denominations, of a like
aggregate principal amount or Percentage Interest.

     At the option of the Holder, Notes may be exchanged for other Notes of the
same Class in any authorized denominations, of a like aggregate principal
amount or Percentage Interest, upon surrender of the Notes to be exchanged at
such office or agency. Whenever any Notes are so surrendered for exchange, the
Issuer shall execute, and the Indenture Trustee shall authenticate and the
Noteholder shall be entitled to obtain from the Indenture Trustee, the Notes
which the Noteholder making the exchange is entitled to receive.

     All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

     Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder’s attorney duly authorized in writing, with such
signature guaranteed by an “eligible guarantor institution” meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or
such other “signature guarantee program” as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP.

     No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the Note Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 2.05 or 9.05 not involving any
transfer.

14

 

     The preceding provisions of this Section notwithstanding, the Issuer shall
not be required to make and the Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to such Note.

     Section 2.05. Mutilated, Destroyed, Lost or Stolen Notes.
If (i) any mutilated Note is surrendered to the Indenture Trustee, or the
Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee
such security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of actual notice to the
Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, and upon certification provided by the
Holder of such Note that the requirements of Section 8-405 of the Relevant UCC
are met, the Issuer shall execute, and upon its request the Indenture Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note; provided,
however, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, or shall
have been called for redemption, instead of issuing a replacement Note, the
Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant
to the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment
such original Note, the Issuer and the Indenture Trustee shall be entitled to
recover such replacement Note (or such payment) from the Person to whom it was
delivered or any Person taking such replacement Note from such Person to whom
such replacement Note was delivered or any assignee of such Person, except a
bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer or the Indenture Trustee in connection therewith.

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

     Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

     The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.

     Section 2.06. Persons Deemed Owners. Prior to due
presentment for registration of transfer of any Note, the Issuer, the Indenture
Trustee and any agent of the Issuer or the Indenture Trustee may treat the
Person in whose name any Note is registered (as of the day of

15

 

determination) as
the owner of such Note for the purpose of receiving payments of principal of
and interest, if any, on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and none of the Issuer, the Indenture
Trustee or any agent of the Issuer or the Indenture Trustee shall be affected
by notice to the contrary.

     Section 2.07. Payment of Principal and Interest. (a) Each
Class of Notes (other than the Class P Notes) shall accrue interest at the Note
Interest Rate as set forth in the Transfer and Servicing Agreement, and such
interest shall be payable on each Payment Date, subject to Section 3.01.
Interest shall be computed on each Class of Notes (other than any Class of
LIBOR Notes or Class P Notes) on the basis of a 360-day year consisting of
twelve 30-day months. Interest shall be computed on each Class of LIBOR Notes
on the basis of a 360-day year and the actual number of days elapsed in each
Accrual Period. With respect to each outstanding Class of LIBOR Notes, the
Indenture Trustee shall determine LIBOR for each applicable Accrual Period on
the second London Business Day prior thereto, in accordance with the provisions
of the Transfer and Servicing Agreement. All interest payments on each Class
of Notes (other than the Class P Notes) shall be made pro rata to the
Noteholders of such Class entitled thereto. Any installment of interest or
principal payable on any Note (other than the Class P Notes) shall be paid on
the applicable Payment Date to the Person in whose name such Note (or one or
more Predecessor Notes) is registered on the Record Date by check mailed
first-class postage prepaid to such Person’s address as it appears on the Note
Register on such Record Date or, upon written request made to the Indenture
Trustee at least five Business Days prior to the related Record Date, by the
Holder of a Note having an initial Note Principal Amount of not less than
$2,500,000 by wire transfer in immediately available funds to an account
specified in the request and at the expense of such Noteholder, except that,
unless Definitive Notes have been issued pursuant to Section 2.10, with respect
to Notes registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payment will be
made by wire transfer in immediately available funds to the account designated
by such nominee, except for the final installment of principal payable with
respect to such Note on a
Payment Date or on the applicable Maturity Date for such Class of Notes
(and except for the Redemption Price for any Note called for redemption
pursuant to Section 10.01), which shall be payable as provided below. The
funds represented by any such checks returned undelivered shall be held in
accordance with Section 3.03.

     (b) The principal of the Notes (other than the Class P Notes) shall be
payable in installments on each Payment Date as provided herein and in such
Notes, subject to Section 3.01. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes (other than the Class P Notes) shall be
due and payable, if not previously paid, on the date on which an Event of
Default shall have occurred and be continuing, if the Indenture Trustee or
Holders of the Notes representing not less than a majority of the Outstanding
Balance of the Priority Class Notes, have declared the Notes to be immediately
due and payable in the manner provided in Section 5.02. All principal payments
on a Class of Notes (other than the Class P Notes) shall be made pro rata to
the Noteholders of such Class entitled thereto. The Indenture Trustee shall
notify the Person in whose name a Note (other than the Class P Notes) is
registered at the close of business on the Record Date preceding the Payment
Date on which the Issuer expects that the final installment of principal of and
interest on such Note will be paid. Such notice shall be mailed or transmitted
by facsimile no later than five Business Days prior to such final Payment Date
and shall specify that such final installment will be payable only upon
presentation and surrender of such Note and

16

 

shall specify the place where such
Note may be presented and surrendered for payment of such installment. Notices
in connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.02.

     (c) Payments on the Class P Notes shall be made pursuant to the terms of
the Transfer and Servicing Agreement. Notwithstanding the foregoing, the Class
P Notes shall be entitled to any Premium Premiums received by the Trust, to the
extent not previously paid, on the date on which an Event of Default shall have
occurred and be continuing, if the Indenture Trustee or Holders of the Notes
representing not less than a majority of the Outstanding Balance of the
Priority Class Notes, have declared the Notes to be immediately due and payable
in the manner provided in Section 5.02. All payments on the Class P Notes
shall be made pro rata to the Noteholders of such Class entitled thereto.
Notices in connection with redemptions of Class P Notes shall be mailed to
Noteholders as provided in Section 10.02.

     Section 2.08. Cancellation. All Notes surrendered for
payment, registration of transfer, exchange or redemption shall, if surrendered
to any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer
may at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Indenture Trustee. No Notes shall be authenticated in lieu of
or in exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by
an Issuer Order that they be destroyed or returned to it; provided, that such
Issuer Order is timely and the Notes have not been previously disposed of by
the Indenture Trustee.

     Section 2.09. Release of Collateral. (a) Except as otherwise
provided in subsections (b) and (c) of this Section and the terms of the
Operative Agreements, the Indenture Trustee shall release property from the
lien of this Indenture only upon receipt by it of an Issuer Request accompanied
by (i) an Officer’s Certificate, (ii) an Opinion of Counsel, (iii) certificates
in accordance with TIA Sections 314(c) and (d)(1), and (iv)(A) Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or (B) an
Opinion of Counsel in lieu of such Independent Certificates to the effect that
the TIA does not require any such Independent Certificates; provided that no
such Independent Certificates or Opinion of Counsel in lieu of such Independent
Certificates shall be necessary in respect of property released from the lien
of the Indenture in accordance with the provisions hereof if such property
consists solely of cash.

     (b) The Master Servicer or any Servicer, on behalf of the Issuer, shall be
entitled to obtain a release from the lien of this Indenture for any Mortgage
Loan and the Mortgaged Property at any time (i) after a payment by the Seller
or the Issuer of the Purchase Price of the Mortgage Loan, (ii) after a
Qualifying Substitute Mortgage Loan is substituted for such Mortgage Loan and
payment of the Substitution Amount, if any, (iii) after liquidation of the
Mortgage Loan in accordance with the applicable Servicing Agreement and the
deposit of all Liquidation Proceeds and Insurance Proceeds in the Collection
Account, (iv) upon the termination of a Mortgage Loan (due to, among other
causes, a prepayment in full of the

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Mortgage Loan and sale or other disposition
of the related Mortgaged Property), or (v) as contemplated by Section 8.02 of
the Transfer and Servicing Agreement.

     (c) The Indenture Trustee shall, if requested by the Master Servicer or
any Servicer, temporarily release or cause the applicable Custodian temporarily
to release to such party the Mortgage File pursuant to the provisions of
Section 4.15 of the Transfer and Servicing Agreement and Section 5 of the
applicable Custodial Agreement; provided, however, that the Mortgage File shall
have been stamped to signify the Issuer’s pledge to the Indenture Trustee under
the Indenture.

     Section 2.10. Book-Entry Notes. Each Class of Offered Notes and
Class B Notes will be issued in the form of typewritten Notes or Global
Securities representing Book-Entry Notes, to be delivered to, or to the
Indenture Trustee as custodian for, the initial Clearing Agency, by, or on
behalf of, the Issuer. The Book-Entry Notes shall be registered initially on
the Note Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Owner of Book-Entry Notes thereof will receive a
Definitive Note representing such Note Owner’s interest in such Book-Entry
Note, except as provided in Section 2.12. Unless and until definitive, fully
registered Notes (the “Definitive Notes”) have been issued to such Owners of
Book-Entry Notes pursuant to Section 2.12:

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

     (ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Book-Entry
Notes and the giving of instructions or
directions hereunder) as the sole holder of the Book-Entry Notes,
and shall have no obligation to the Owners of Book-Entry Notes;

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

     (iv) the rights of Owners of Book-Entry Notes shall be exercised
only through the Clearing Agency and shall be limited to those
established by law and agreements between such Owners of Book-Entry Notes
and the Clearing Agency and/or the Clearing Agency Participants pursuant
to the Note Depository Agreement. Unless and until Definitive Notes are
issued pursuant to Section 2.12, neither the Indenture Trustee nor the
Note Registrar shall register any transfer of a beneficial interest in a
Book-Entry Note; and the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
payments of principal of and interest on the Book-Entry Notes to such
Clearing Agency Participants; and

     (v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Outstanding Balance of the Notes (or the
Priority Class Notes), the Clearing Agency shall be deemed to represent
such percentage only to the extent that it has received instructions to
such effect from Owners of Book-Entry Notes and/or Clearing Agency Participants

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owning or representing, respectively, such required
percentage of the beneficial interest in the Book-Entry Notes and has
delivered such instructions to the Indenture Trustee.

     Section 2.11. Notices to Clearing Agency. Whenever a notice or
other communication to the Noteholders is required under this Indenture, unless
and until Definitive Notes shall have been issued to such Owners of Book-Entry
Notes pursuant to Section 2.12, the Indenture Trustee shall give all such
notices and communications specified herein to be given to Owners of Book-Entry
Notes to the Clearing Agency, and shall have no obligation to such Note Owners.

     Section 2.12. Definitive Notes. If (i) the Clearing Agency is no
longer willing or able to properly discharge its responsibilities with respect
to the Book-Entry Notes and the Issuer is unable to locate a qualified
successor or (ii) after the occurrence of an Event of Default hereunder, Note
Owners of the Book-Entry Notes representing beneficial interests aggregating at
least a majority of the Outstanding Balance of the Book-Entry Notes advise the
Clearing Agency in writing that the continuation of a book-entry system through
the Clearing Agency is no longer in the best interests of such Note Owners,
then the Clearing Agency shall notify all Owners of Book-Entry Notes and the
Indenture Trustee of the occurrence of any such event and of the availability
of Definitive Notes to Owners of Book-Entry Notes requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Notes representing the
Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture
Trustee shall recognize the Holders of such Definitive Notes as
Noteholders.

     Section 2.13. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes
will qualify as indebtedness of the Issuer secured by the Collateral. The
Issuer, by entering into this Indenture, and each Noteholder, by its acceptance
of a Note (and each applicable Note Owner by its acceptance of an interest in
the related Book-Entry Note), agree to treat the Notes for federal, state and
local income, single business and franchise tax purposes as indebtedness of the
Issuer.

ARTICLE THREE

COVENANTS

     Section 3.01. Payment of Principal and Interest. The Issuer will
duly and punctually pay (or will cause to be duly and punctually paid) the
principal of and interest on, and any other amounts due in respect of, the
Notes in accordance with the terms of the Notes and this Indenture. Without
limiting the foregoing, in accordance with Section 8.02(c), the Issuer will
cause to be distributed all amounts on deposit in the Note Account on a Payment
Date and deposited therein pursuant to the Transfer and Servicing Agreement for
the benefit of the Notes, to the Noteholders. Amounts properly withheld under
the Code by any Person from a payment

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to any Noteholder of interest and/or
principal shall be considered as having been paid by the Issuer to such
Noteholder for all purposes of this Indenture.

     The Notes shall be non-recourse obligations of the Issuer and shall be
limited in right of payment to amounts available from the Collateral as
provided in this Indenture. The Issuer shall not otherwise be liable for
payments of the Notes, and none of the owners, agents, officers, directors,
employees, or successors or assigns of the Issuer shall be personally liable
for any amounts payable, or performance due, under the Notes or this Indenture.
If any other provision of this Indenture shall be deemed to conflict with the
provisions of this Section 3.01, the provisions of this Section 3.01 shall
control.

     Section 3.02. Maintenance of Office or Agency. The Note Registrar
on behalf of the Issuer will maintain an office or agency where Notes may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may be
served.

     Section 3.03. Money for Payments to be Held in Trust. As provided
in Section 8.02, all payments of amounts due and payable with respect to any
Notes that are to be made from amounts withdrawn from the Note Account pursuant
to Article V of the Transfer and Servicing Agreement shall be made on behalf of
the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts
so withdrawn from the such accounts for payments
of Notes shall be paid over to the Issuer except as provided in this
Section.

     On or before the Business Day preceding each Payment Date, the Issuer
shall deposit or cause to be deposited in the Note Account an aggregate sum
sufficient to pay the amounts then becoming due under the Notes, such sum to be
held in trust for the benefit of the Persons entitled thereto, and (unless the
Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee of its action or failure so to act.

     Any Paying Agent shall be appointed by Issuer Order with written notice
thereof to the Indenture Trustee. Any Paying Agent appointed by the Issuer
shall be a Person that would be eligible to be Indenture Trustee hereunder as
provided in Section 6.11. The Issuer shall not appoint any Paying Agent (other
than the Indenture Trustee) which is not, at the time of such appointment, a
Depository Institution.

     The Issuer shall 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, that such Paying Agent will:

     (i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;

     (ii) give the Indenture Trustee notice of any default by the Issuer
of which the Paying Agent has actual knowledge in the making of any
payment required to be made with respect to the Notes;

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

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

     (v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith; provided, however, that
with respect to reporting requirements applicable to original issue
discount, the accrual of market discount or the amortization of premium
on the Notes, the Issuer shall have first provided the calculations
pertaining thereto and the amount of any resulting withholding taxes to
the Indenture Trustee.

     The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order
direct any Paying Agent to pay to the Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the
Indenture Trustee upon the same trusts as those upon which the sums were
held by such Paying Agent; 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 Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such
trust and be paid to the Issuer on Issuer Request; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York (including, but
not limited to, The Bond Buyer), notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Issuer. The Indenture Trustee shall also adopt
and employ, at the expense and direction of the Issuer, any other reasonable
means of notification of such repayment (including, but not limited to, mailing
notice of such repayment to Holders whose Notes have been called but have not
been surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).

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

21

 

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, the Collateral and each other
instrument or agreement included in the Collateral.

     (b) Any successor to the Owner Trustee appointed pursuant to Section 9.03
of the Trust Agreement shall be the successor Owner Trustee under this
Indenture without the execution or filing of any paper, instrument or further
act to be done on the part of the parties hereto.

     (c) Upon any consolidation or merger of or other succession to the Owner
Trustee, the Person succeeding to the Owner Trustee under the Trust Agreement
may exercise every right and power of the Owner Trustee under this Indenture
with the same effect as if such Person had been named as the Owner Trustee
herein.

     Section 3.05. Protection of Collateral. The Issuer will from time
to time execute, deliver and file 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) enforce any rights with respect to the Collateral; or

     (iv) preserve and defend title to the Collateral and the rights of
the Indenture Trustee and the Noteholders in such Collateral against the
claims of all persons and parties.

     The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.05 and
hereby authorizes the Indenture Trustee to file in any filing office any
financing statement, amendment to financing statement, or continuation
statement required to be executed pursuant to this Section 3.05.

     Section 3.06. Opinions as to Collateral. On the Closing Date, the
Issuer shall furnish to the Administrator and the Indenture Trustee an Opinion
of Counsel to the effect that either, 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 make effective the
lien and security interest of this Indenture, or stating that, in the opinion
of such counsel, no such action is necessary to make such lien and security
interest effective.

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     Section 3.07. Performance of Obligations. (a) The Issuer will not
take any action and will use its best efforts not to permit any action to be
taken by others that would release any Person from any of such Person’s
material covenants or obligations under any instrument or agreement included in
the Collateral or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such instrument or agreement, except as expressly
provided in this Indenture, the Transfer and Servicing Agreement or such other
instrument or agreement.

     (b) The Issuer 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. Initially, the Issuer has
contracted with the Administrator to assist the Issuer in performing its duties
under this Indenture.

     (c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Operative Agreements and in the
instruments and agreements
included in the Collateral, including but not limited to filing or causing
to be filed all financing statements and continuation statements required to be
filed by the terms of this Indenture and the Transfer and Servicing Agreement
in accordance with and within the time periods provided for herein and therein.

     (d) If a responsible officer of the Owner Trustee shall have written
notice or actual knowledge of the occurrence of an Event of Default under the
Transfer and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee and each Rating Agency thereof.

     (e) As promptly as possible after the giving of notice of termination to
the Master Servicer of the Master Servicer’s rights and powers pursuant to
Section 6.01(a) of the Transfer and Servicing Agreement, the Indenture Trustee
shall proceed in accordance with Section 6.01 and 6.02 of the Transfer and
Servicing Agreement

     (f) Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees (i) that it will not, without the prior
written consent of the Indenture Trustee or the Holders of at least a majority
in Outstanding Balance or Percentage Interest of the Notes affected thereby,
amend, modify, waive, supplement, terminate or surrender, or agree to any
amendment, modification, supplement, termination, waiver or surrender of, the
terms of any Collateral or the Operative Agreements (except to the extent
otherwise provided in any such Operative Agreement), or waive timely
performance or observance by the Master Servicer or the Depositor of its
respective duties under the Transfer and Servicing Agreement; and (ii) that any
such amendment shall not (A) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, payments that are required to be made for
the benefit of the Noteholders or (B) reduce the aforesaid percentage of the
Notes that is required to consent to any such amendment, without the consent of
the Holders of all the Outstanding Notes affected thereby. If any such
amendment, modification, supplement or waiver shall be so consented to by the
Indenture Trustee or such Holders, the Issuer agrees, promptly following a
request by the Indenture Trustee to do so, to execute and deliver, in its own
name and at its own expense, such agreements,

23

 

instruments, consents and other
documents as the Indenture Trustee may deem necessary or appropriate in the
circumstances.

     Section 3.08. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:

     (i) except as expressly permitted by this Indenture, the Mortgage
Loan Sale Agreement or the Transfer and Servicing Agreement, sell,
transfer, exchange or otherwise dispose of any of the properties or
assets of the Issuer, including those included in the Collateral, unless
directed to do so by the Indenture Trustee;

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

     (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 Notes under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the
Collateral or any part thereof or any interest therein or the proceeds
thereof (other than tax liens, mechanics’ liens and other liens that
arise by operation of law, in each case with respect to any Collateral
and arising solely as a result of an action or omission of a Borrower or
as otherwise permitted in the Transfer and Servicing Agreement) or (C)
permit the lien of this Indenture not to constitute a valid first
priority (other than with respect to any such tax, mechanics’ or other
lien) or as otherwise permitted in the Transfer and Servicing Agreement)
security interest in the Collateral;

     (iv) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person;

     (v) remove the Administrator without cause unless the Rating Agency
Condition shall have been satisfied in connection with such removal;

     (vi) take any other action or fail to take any action that would
jeopardize its status as a FASIT or result in an imposition of tax on the
Issuer (including, but not limited to, the tax on prohibited transactions
under section 860L(e) of the Code) or that would cause the Notes to fail
to qualify as FASIT regular interests within the meaning of section
860L(b)(1) of the Code; or

     (vii) except with the prior written consent of the Noteholders, take
any action described in Section 5.06 of the Trust Agreement.

     Section 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing

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with the fiscal year 2004), an Officer’s
Certificate stating, as to the Authorized Officer signing such Officer’s
Certificate, that:

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

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

     Section 3.10. Treatment of Notes as Debt for Tax Purposes. The
Issuer shall, and shall cause the Administrator and the Master Servicer to,
treat the Notes as indebtedness for all federal, state and local tax purposes.

     Section 3.11. [Reserved]

     Section 3.12. No Other Business. The Issuer shall not engage in
any business other than financing, purchasing, owning, selling and managing the
Collateral in the manner contemplated by this Indenture and the Operative
Agreements and activities incidental thereto.

     Section 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness other than the Notes.

     Section 3.14. [Reserved]

     Section 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Transfer and Servicing Agreement or this
Indenture, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another’s payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or make
any capital contribution to, any other Person.

     Section 3.16. 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 3.17. Removal of Administrator. So long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Issuer has received a letter from each Rating Agency to the effect that
such removal will not cause the then-current ratings on the Notes and the
Certificate to be qualified, reduced or withdrawn.

     Section 3.18. Restricted Payments. The Issuer shall not, directly
or indirectly, (i) pay any dividend or make any payment (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

25

 

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, the Issuer may make, or cause to be made, payments and distributions
as contemplated by, and to the extent funds are available for such purpose
under, the Transfer and Servicing Agreement, this Indenture or the Trust
Agreement. The Issuer will not, directly or
indirectly, make payments to or from the Collection Account except in
accordance with this Indenture and the Operative Agreements.

     Section 3.19. Notice of Events of Default. The Issuer shall
promptly, and in no event more than three Business Days following such event,
give the Indenture Trustee and each Rating Agency written notice of each Event
of Default hereunder, and each default on the part of the Master Servicer or
the Depositor of its obligations under the Transfer and Servicing Agreement, to
the extent a responsible officer of the Owner Trustee shall have written notice
or actual knowledge thereof.

     Section 3.20. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.

     Section 3.21. Covenants of the Issuer. All covenants of the Issuer
in this Indenture are covenants of the Issuer and are not covenants of the
Owner Trustee in its individual capacity. The Owner Trustee is, and any
successor Owner Trustee under the Trust Agreement will be, entering into this
Indenture on behalf of the Issuer solely as Owner Trustee under the Trust
Agreement and not in its respective individual capacity, and in no case
whatsoever shall the Owner Trustee or any such successor Owner Trustee be
personally liable on, or for any loss in respect of, any of the statements,
representations, warranties or obligations of the Issuer hereunder, as to all
of which the parties hereto agree to look solely to the property of the Issuer.

     Section 3.22. Representations and Warranties of the Issuer. (a)
With respect to the Mortgage Notes, the Issuer represents and warrants that:

     (i) This Indenture creates a valid and continuing security interest
(as defined in the applicable Uniform Commercial Code (the “UCC”) in the
Mortgage Notes in favor of the Indenture Trustee, which security interest
is prior to all other liens, and is enforceable as such against creditors
of and purchasers from the Issuer;

     (ii) The Mortgage Notes constitute “instruments” within the meaning
of the applicable UCC;

     (iii) The Issuer owns and has good title to the Mortgage Notes free
and clear of any lien, claim or encumbrance of any Person;

     (iv) The Issuer has received all consents and approvals required by
the terms of the Mortgage Notes to the pledge of the Mortgage Notes
hereunder to the Indenture Trustee;

26

 

     (v) All original executed copies of each Mortgage Note have been or
will be delivered to the Indenture Trustee (or its custodian), as set
forth in the Transfer and Servicing Agreement;

     (vi) The Issuer has received a written acknowledgement from the
Indenture Trustee (or its custodian) that it is holding the Mortgage
Notes solely on behalf and for the benefit of the Indenture Trustee;

     (vii) 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
Mortgage Notes. The Issuer has not authorized the filing of and is not
aware of any financing statements against the Issuer that include a
description of the collateral covering the Mortgage Notes other than a
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; and

     (viii) None of the Mortgage Notes has any marks or notations
indicating that they have been pledged, assigned or otherwise conveyed to
any Person other than the Indenture Trustee.

     (b) The representations and warranties set forth in this Section 3.22
shall survive the Closing Date and shall not be waived.

ARTICLE FOUR

SATISFACTION AND DISCHARGE

     Section 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes, except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Sections 3.03 and 4.02) and (v) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them, and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when either (I) the Transfer and Servicing Agreement has
been terminated pursuant to Section 8.01 thereof or (II)

     (A) either

       (1) all Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 2.05, (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.03 and (iii) the Class P Notes) have been delivered to
the Indenture Trustee for cancellation; or

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

	(a)	 	have become due and payable,
	 
	(b)	 	will become due and payable at the
applicable Maturity Date within one year, or
	 
	(c)	 	are to be called for redemption
within one year under arrangements satisfactory to the
Indenture Trustee for the giving of notice of redemption
by the Indenture Trustee in the name, and at the
expense, of the Issuer,

and the Issuer, in the case of (a), (b) or (c) above, has irrevocably deposited
or caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness
on such Notes not theretofore delivered to the Indenture Trustee for
cancellation when due to the Maturity Date or Redemption Date (if the Notes are
called for redemption pursuant to Section 10.01 hereof), as the case may be;

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

     (C) the Issuer has delivered to the Indenture Trustee an Officer’s
Certificate and an Opinion of Counsel (at the Issuer’s expense) and (if
required by the TIA or the Indenture Trustee) an Independent Certificate from a
firm of certified public accountants, each meeting the applicable requirements
of Section 11.01 hereof and, subject to Section 11.02 hereof, each stating that
all conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture with respect to the Notes have been complied with;
and

     (D) the Issuer has delivered to each Rating Agency notice of such
satisfaction and discharge.

     Section 4.02. Application of Trust Money. All moneys deposited
with the Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be
held in trust and applied by it, in accordance with the provisions of the Notes
and this Indenture, to the payment, either directly or through any Paying
Agent, as the Indenture Trustee may determine, to the Holders of the particular
Notes for the payment or redemption of which such moneys have been deposited
with the Indenture Trustee, of all sums due and to become due thereon for
principal and interest (or in the case of the Class P Notes, in respect of
Prepayment Premiums); but such moneys need not be segregated from other funds
except to the extent required herein or in the Transfer and Servicing Agreement
or required by law.

     Section 4.03. Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to the Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid
to the Indenture Trustee to be

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held and applied according to Section 3.03
and thereupon such Paying Agent shall be released from all further liability
with respect to such moneys.

ARTICLE FIVE

REMEDIES

     Section 5.01. Events of Default. (a) “Event of Default”, wherever
used herein, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):

     (i) subject to Section 5.01(b), default in the payment of any
Current Interest on the Priority Class Notes when the same becomes due
and payable under Section 5.03 of the Transfer and Servicing Agreement,
and such default shall continue for a period of five days;

     (ii) failure to pay the entire principal of any Note (other than the
Class P Notes) when the same becomes due and payable under the Transfer
and Servicing Agreement or on the applicable Maturity Date;

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

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

     (v) 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

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

     The Issuer shall deliver to the Indenture Trustee, within five days after
the occurrence thereof, written notice in the form of an Officer’s Certificate
of any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii), its status and what action the Issuer
is taking or proposes to take with respect thereto.

     (b) Neither (i) failure to pay the full amount of interest payable
pursuant to Section 8.02 to the Holders of any Non-Priority Class Note (other
than any Class P Notes) nor (ii) an application of Applied Loss Amounts
pursuant to Section 5.04 of the Transfer and Servicing Agreement of a
Non-Priority Class Note (other than any Class P Notes) shall constitute an
Event of Default under Section 5.01(a).

     Section 5.02. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee may, or shall, at the direction of the Holders of
Notes representing not less than a majority of the Outstanding Balance of the
Priority Class Notes, declare all the Notes to be immediately due and payable,
by a notice in writing to the Issuer (and to the Indenture Trustee if given by
Noteholders), and upon any such declaration the unpaid principal amount of such
Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.

     At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article Five provided,
the Holders of Notes representing a majority of the Outstanding Balance of the
Priority Class Notes, by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:

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

          (A) all payments of principal of and interest on all affected
Priority Class Notes and all other amounts that would then be due
hereunder or upon such Notes if the Event of Default giving rise to
such acceleration had not occurred; and

          (B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel;
and

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     (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.

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

     The Holders of Non-Priority Class Notes shall have no right to exercise
any Noteholders’ rights referred to in this Article Five, except to the extent
expressly provided herein.

     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 Current Interest on any Priority Class 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 any Note (or amounts
in respect of any Prepayment Premiums received by the Trust, in the case of the
Class P Notes) when the same becomes due and payable on the applicable Maturity
Date, the Issuer will, upon demand of the Indenture Trustee, pay to it, for the
benefit of the Holders of the Notes, the whole amount then due and payable on
such Notes for principal and interest (or Prepayment Premiums, if applicable),
with interest on the overdue principal and, to the extent payment at such rate
of interest shall be legally enforceable, on overdue installments of interest
at the rate borne by such Notes and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel.

     (b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may 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 upon such Notes and collect in the manner
provided by law out of the property of the Issuer upon such Notes, wherever
situated, the moneys adjudged or decreed to be payable.

     (c) If an Event of Default occurs and is continuing, the Indenture Trustee
may, in its discretion, or shall, at the direction of the Holders of Priority
Class Notes representing not less than a majority of the Outstanding Balance
thereof, as more particularly provided in Section 5.04, proceed to protect and
enforce its rights and the rights of the Noteholders, by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant
or agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right
vested in the Indenture Trustee by this Indenture or by law.

     (d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest
in the Collateral, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization, or
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

31

 

the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee
shall have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:

     (i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee 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) and of the
Noteholders allowed in such Proceedings;

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

     (iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and 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 or the Holders of Notes allowed in any Proceedings
relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred by it or its agents, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.

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

     (f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an

32

 

express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.

     (g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the 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, the Indenture Trustee may, and at the
direction of Holders of Priority Class Notes representing a majority of the
Outstanding Balance thereof shall, do one or more of the following (subject to
Section 5.05):

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

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

     (iii) exercise any remedies of a secured party under the Relevant
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

     (iv) sell the Collateral 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 any Collateral following an Event of Default, other than an Event of
Default described in Section 5.01(i) or (ii), unless (A) the Holders of 100% of
the Outstanding Balance or Percentage Interest of the Notes consent thereto,
(B) the proceeds of such sale or liquidation distributable to the Noteholders
are sufficient to discharge in full all amounts then due and unpaid upon such
Notes for principal and interest (or Prepayment Premiums, if applicable) or (C)
the Indenture Trustee determines that the Collateral will not continue to
provide sufficient funds for the payment of principal of and interest on (or
Prepayment Premiums, if applicable) the Notes as they would have become due if
the Notes had not been declared due and payable, and the Indenture Trustee
obtains the consent of Holders of 66-2/3% of the Voting Interests of the Notes.
In determining such sufficiency or
insufficiency with respect to clauses (B) and (C), the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Collateral for such purpose.

     (b) If the Indenture Trustee collects any money or property pursuant to
this Article Five, it shall pay out the money or property in the following
order:

33

 

     first: to the Indenture Trustee, for any costs or expenses,
including any reasonable out-of-pocket attorneys’ fees, incurred by it in
connection with the enforcement of the remedies provided for in this
Article V and for any other unpaid amounts due to the Indenture Trustee
hereunder, to the Administrator for any amounts due and owing to it under
the Administration Agreement, to the Custodians for any amounts due and
owing to them under the Custodial Agreements, and to the Owner Trustee,
to the extent of any fees and expenses due and owing to it (including
pursuant to Section 7.03 of the Trust Agreement) and for any other unpaid
amounts due to the Owner Trustee hereunder;

     second: to the Master Servicer and Servicers for any Master
Servicing Fees or Servicing Fees then due and unpaid and any unreimbursed
Advances and other servicing advances;

     third: to the Notes (other than the Class P Notes), all accrued and
unpaid interest thereon and amounts in respect of principal according to
the priorities set forth in Section 5.03 of the Transfer and Servicing
Agreement; provided, however, that accrued and unpaid interest shall be
paid to Noteholders of each Class before any payments in respect of
principal and to the Class P Notes, amounts in respect of any Prepayment
Premiums pursuant to Section 5.03(e) of the Transfer and Servicing
Agreement; and

     fourth: to the Owner Trustee or its Paying Agent for any amounts to
be distributed to the Holder of the Certificate.

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

     Section 5.05. Optional Preservation of the Collateral. If the
Notes have been declared to be due and payable under Section 5.02 following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Collateral. It is the desire of the parties hereto
and the Noteholders that there be at all times sufficient funds for the payment
of principal of and interest on the Notes, and the Indenture Trustee shall take
such desire into account when determining whether or not to maintain possession
of the Collateral. In determining whether to maintain possession of the
Collateral, the Indenture Trustee may, but need not, obtain and rely upon an
opinion (at the expense of the Issuer) of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Collateral
for such purpose.

     Section 5.06. Limitation of Suits. Other than as otherwise
expressly provided herein in the case of an Event of Default, no Holder of any
Note shall have any right to institute any Proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless:

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     (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 Outstanding Balance of
the Notes have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;

     (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, 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 Outstanding Balance 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.

     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 Outstanding Balance of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.

     Section 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, (a)
(i) the Holder of any Note (other than any Class P Note) shall have the right,
which is absolute and unconditional, to receive payment of the principal of and
interest, if any, on such Note on or after the respective due dates thereof
expressed in such Note or in this Indenture (or, in the case of redemption, on
or after the Redemption Date) and (ii) each Holder of a Class P Note shall have
the right, which is absolute and unconditional, to receive payment of all
Prepayment Premiums received by the Trust, in payment of amounts due on such
Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture and (b) 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 or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no

35

 

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 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 or any Holder of any Note to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of Default
or an acquiescence therein. Every right and remedy given by this Article Five
or by law to the Indenture Trustee or to the Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture Trustee
or by the Noteholders, as the case may be.

     Section 5.11. Control by Noteholders. Except as otherwise provided
in Section 5.02, the Holders of a majority of the Outstanding Balance of the
Notes shall have the right to direct the time, method and place of conducting
any Proceeding for any remedy available to the Indenture Trustee with respect
to the Notes or exercising any trust or power conferred on the Indenture
Trustee; provided that:

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

     (ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Collateral shall be by
Holders of Notes representing not less than 100% of the Outstanding
Balance of the Notes;

     (iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Collateral
pursuant to such Section, then any direction to the Indenture Trustee by
Holders of Notes representing less than 100% of the Outstanding Balance
of the Notes to sell or liquidate the Collateral 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.

     Notwithstanding the rights of the Noteholders set forth in this Section,
subject to Section 6.01(g), the Indenture Trustee need not take any action that
it determines might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action.

     Section 5.12. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Outstanding Balance of the
Notes may waive, in writing, any past Default or

36

 

Event of Default and its consequences except a Default (a) in payment of
principal of or interest on any of the Notes or (b) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Note. In the case of any such waiver, the Issuer, the Indenture
Trustee and the Holders of the Notes shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereto.

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

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

     Section 5.14. 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 will not hinder, delay or impede the execution of any power herein
granted to the Indenture Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

     Section 5.15. Action on Notes. The Indenture Trustee’s right to
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Collateral or upon any of the assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied in accordance with Section
5.04(b).

     Section 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly

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following a request from the Indenture Trustee to do so and at the
Administrator’s expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and
observance by the Seller, the Depositor or the Master Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the
Mortgage Loan Sale Agreement and Transfer and Servicing Agreement, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Transfer and Servicing Agreement
to the extent and in the manner directed by the Indenture Trustee, including
the transmission of notices of default on the part of the Seller, the Depositor
or the Master Servicer under the Mortgage Loan Sale Agreement and Transfer and
Servicing Agreement and the institution of legal or administrative actions or
proceedings to compel or secure performance by the Seller, the Depositor or the
Master Servicer of each of their obligations under the Mortgage Loan Sale
Agreement and Transfer and Servicing Agreement.

     (a) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of a
majority of the Outstanding Balance of the Priority Class Notes shall, exercise
all rights, remedies, powers, privileges and claims of the Issuer against the
Depositor or the Master Servicer under or in connection with the Transfer and
Servicing Agreement or the Seller under or in connection with the Mortgage Loan
Sale Agreement, including the right or power to take any action to compel or
secure performance or observance by the Seller, the Depositor or the Master
Servicer, of each of their obligations to the Issuer thereunder and to give any
consent, request, notice, direction, approval, extension or waiver under the
Transfer and Servicing Agreement, and any right of the Issuer to take such
action shall be suspended.

ARTICLE SIX

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 its 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 shall not
be liable except for the performance of such duties and obligations 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 on their face conforming
to the requirements of this Indenture; however, the Indenture

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Trustee shall examine the certificates and opinions to determine
whether or not they conform on their face 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, its own willful misconduct
or its own bad faith, except that:

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

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

     (iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with this
Indenture or upon a direction received by it from the requisite
Noteholders pursuant to Article V; and

     (iv) the Indenture Trustee shall not be required to take notice or
be deemed to have notice or knowledge of (a) any failure by the Issuer to
comply with its obligations hereunder or in the Operative Agreements or
(b) any Default or Event of Default, unless a Responsible Officer of the
Indenture Trustee assigned to and working in its corporate trust
department obtains actual knowledge of such Default or Event of Default
or shall have received written notice thereof. In the absence of such
actual knowledge or notice, the Indenture Trustee may conclusively assume
that there is no Default or Event of Default.

     (d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to the provisions of this Section.

     (e) The Indenture Trustee shall not be liable for indebtedness evidenced
by or arising under any of the Operative Agreements, including principal of or
interest on the Notes, or interest on any money received by it except as the
Indenture Trustee may agree in writing with the Issuer.

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

     (g) No provision of this Indenture shall require the Indenture Trustee to
expend, advance or risk its own funds or otherwise incur financial liability in
the performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it provided, however, that the Indenture Trustee shall
not refuse or fail to perform any of its duties hereunder solely as a result of
nonpayment of its normal fees and expenses.

     (h) Every provision of this Indenture or any Operative Agreement 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, Section
6.02 and to the provisions of the TIA.

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     (i) The Indenture Trustee shall execute and deliver the Transfer and
Servicing Agreement and such other documents and instruments as shall be
necessary or appropriate in accordance with its duties and obligations under
this Indenture.

     (j) The Indenture Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Collateral, or to otherwise take or refrain from taking
any action under, or in connection with, any document contemplated hereby to
which the Indenture Trustee is a party, except as expressly provided (i) in
accordance with the powers granted to and the authority conferred upon the
Indenture Trustee pursuant to this Agreement or any other Operative Agreement,
and (ii) in accordance with any document or instruction delivered to the
Indenture Trustee pursuant to the terms of this Agreement; and no implied
duties or obligations shall be read into this Agreement or any Operative
Agreement against the Indenture Trustee. The Indenture Trustee agrees that it
will, at its own cost and expense, promptly take all action as may be necessary
to discharge any liens on any part of the Collateral that result from actions
by, or claims against itself that are not related to the administration of the
Collateral.

     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, which shall not be
at the expense of the Indenture Trustee. 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. The right of the Indenture
Trustee to perform any discretionary act enumerated in this Indenture or in any
Operative Agreement shall not be construed as a duty and the Indenture Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act.

     (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, that the Indenture Trustee’s conduct does not
constitute willful misconduct, negligence or bad faith.

     (e) The Indenture Trustee may consult with counsel, and any Opinion of
Counsel with respect to legal matters relating to this Indenture, any Operative
Agreement 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 any Opinion of Counsel of such
counsel.

     (f) In the event that the Indenture Trustee is also acting as Paying
Agent, Note Registrar, Custodian or Administrator hereunder or under any
Operative Agreement, the rights and protections afforded to the Indenture
Trustee pursuant to this Article Six shall be afforded to such Paying Agent,
Note Registrar, Custodian and Administrator.

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     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. Any
Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Indenture Trustee must comply with Section
6.11.

     Section 6.04. Indenture Trustee’s Disclaimer. The Indenture
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of any of the Operative Agreements or the Notes or the
sufficiency of the Collateral; 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 or the Servicer in this Indenture, any Operative
Agreement or in any other document issued in connection with the sale of the
Notes or in the Notes other than the Indenture Trustee’s certificate of
authentication.

     Section 6.05. Notice of Defaults. If a Default occurs and is
continuing and if a Responsible Officer of the Indenture Trustee has actual
knowledge thereof, the Indenture Trustee shall give prompt written notice
thereof to each Noteholder.

     Section 6.06. Reports by Indenture Trustee to Holders. The
Indenture Trustee shall deliver to each Noteholder such information with
respect to the Notes as may be required to enable such holder to prepare its
federal and state income tax returns and shall file such information returns
with the Internal Revenue Service with respect to payments or accruals of
interest on the Notes as are required to be filed under the Code or applicable
Treasury Regulations.

     Section 6.07. Compensation and Indemnity. The Indenture Trustee
shall be entitled, as compensation for its services, to the Indenture Trustee
Fee, as provided in the Transfer and Servicing Agreement. The Indenture
Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Indenture Trustee and any co-trustee shall be
reimbursed by the Issuer, as provided in the Transfer and Servicing Agreement,
for all reasonable ordinary out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services
(as provided in the Transfer and Servicing Agreement). Reimbursable expenses
under this Section shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee’s agents, counsel,
accountants and experts. The Issuer shall indemnify the Indenture Trustee, any
co-trustee and their respective employees, directors and agents, as provided in
the Transfer and Servicing Agreement, against any and all claim, 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 or under any Operative Agreement. The Indenture Trustee or
co-trustee, as applicable, shall notify the Issuer and the Administrator
promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee or the co-trustee, as applicable, to so notify the Issuer and
the Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder. The Issuer shall defend any such claim, and the
Indenture Trustee and any co-trustee may have separate counsel and the Issuer
shall pay the fees and expenses of such counsel. The Issuer shall not be
required to reimburse any expense or indemnify against any loss, liability or
expense incurred by the Indenture Trustee or any co-trustee through the
Indenture Trustee’s or co-trustee’s, as the case may be, own willful
misconduct, negligence or bad faith.

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     The Issuer’s obligations to the Indenture Trustee and any co-trustee
pursuant to this Section shall survive the discharge of this Indenture. When
the Indenture Trustee or any co-trustee incurs expenses after the occurrence of
a Default specified in Section 5.01(iv) or (v) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title 11
of the United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.

     Section 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section. The Indenture Trustee
may resign at any time by giving 90 days’ written notice thereof to the
Depositor, the Issuer, each Noteholder and each Rating Agency. The Issuer
shall remove the Indenture Trustee if:

     (i) the Indenture Trustee fails to comply with Section 6.11;

     (ii) the Indenture Trustee is adjudged 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 promptly appoint a successor Indenture Trustee that satisfies the
eligibility requirements of Section 6.11.

     The resigning or removed Indenture Trustee agrees to cooperate with any
successor Indenture Trustee in effecting the termination of the resigning or
removed Indenture Trustee’s responsibilities and rights hereunder and shall
promptly provide such successor Indenture Trustee all documents and records
reasonably requested by it to enable it to assume the Indenture Trustee’s
functions hereunder.

     A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee 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 Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.

     If a successor Indenture Trustee does not take office within 30 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority in Outstanding Balance of the
Notes may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.

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     If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.

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

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

     Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Collateral may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Collateral, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.

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

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

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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 Six. 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 (i) satisfy the requirements of TIA Section 310(a), (ii)
have a combined capital and surplus of at least $100,000,000 as set forth in
its most recently published annual report of condition, (iii) have a long-term
debt rating equivalent to “A” or better by the Rating Agencies or be otherwise
acceptable to the Rating Agencies and (iv) not be an Affiliate of the Issuer or
the Owner Trustee. The Indenture Trustee shall comply with TIA Section 310(b),
including the optional provision permitted by the second sentence of TIA
Section 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.

     Section 6.12. Representations and Warranties. The Indenture
Trustee hereby represents that:

     (a) 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;

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     (b) 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;

     (c) 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 organization 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

     (d) to the Indenture Trustee’s best 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: (i) asserting the invalidity of
this Indenture, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Indenture or (iii) 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 6.13. Preferential Collection of Claims Against Issuer.
The Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). An Indenture Trustee which
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.

ARTICLE SEVEN

NOTEHOLDERS’ LISTS AND REPORTS

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

     Section 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of the Holders of
Notes contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished. If three or more
Noteholders, or one or more Holders of a Class of Notes evidencing not less
than 25% of the Outstanding Balance thereof (hereinafter referred to as
“Applicants”), apply in writing to the Indenture Trustee, and such application
states that the Applicants desire to communicate with other holders with
respect to their rights under this Indenture or under the Notes, then the
Indenture Trustee shall, within five Business Days after the receipt of such

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application, afford such Applicants access, during normal business hours, to
the current list of Holders. Every Holder, by receiving and holding a Note,
agrees with the Issuer and the Indenture Trustee that neither the Issuer nor
the Indenture Trustee shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders under this
Indenture, regardless of the source from which such information was derived.

     (b) Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.

     (c) The Issuer and the Indenture Trustee shall have the protection of TIA
Section 3l2(c).

     Section 7.03. Reports by Issuer. (a) The Issuer shall:

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

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

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

     Section 7.04. Reports by Indenture Trustee. If required by TIA
Section 313(a), within 60 days after each March 1, beginning with March 1,
2005, the Indenture Trustee shall mail to each Noteholder as required by TIA
Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA Section
313(b).

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

ARTICLE EIGHT

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

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Indenture Trustee shall apply all such money received by it as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Collateral, the Indenture Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article Five.

     Section 8.02. Trust Accounts and Certificate Account. (a) On or
prior to the Closing Date, the Indenture Trustee shall establish and maintain
in its name the Trust Accounts and the Certificate Account, each as provided in
Article V of the Transfer and Servicing Agreement.

     (b) On each Payment Date and Redemption Date, the Paying Agent (or, if the
Indenture Trustee acts as Paying Agent, the Indenture Trustee) shall distribute
all amounts on deposit in the Note Account as provided in Section 5.03 of the
Transfer and Servicing Agreement.

     (c) On each Payment Date and each Redemption Date, the Indenture Trustee
hereby authorizes the Owner Trustee or the Certificate Paying Agent, as
applicable, to make the distributions from the Certificate Account as required
pursuant to Section 5.07 of the Transfer and Servicing Agreement.

     Section 8.03. General Provisions Regarding Accounts. Funds in the
Trust Accounts maintained by the Indenture Trustee shall be invested as
provided in the Transfer and Servicing Agreement.

     Section 8.04. Release of Collateral. (a) Subject to the payment
of its fees and expenses pursuant to Section 6.07, the Indenture Trustee may,
and when required by the provisions of this Indenture and the Transfer and
Servicing Agreement shall, execute instruments to release property from the
lien of this Indenture, or convey the Indenture Trustee’s interest in the same,
in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture. No party relying upon an instrument executed by
the Indenture Trustee as provided in this Article Eight shall be bound to
ascertain the Indenture Trustee’s authority, inquire into the satisfaction of
any conditions precedent or see to the application of any monies.

     (b) The Indenture Trustee shall, at such time as there are no Notes
outstanding and all sums due to the Noteholders pursuant to the Transfer and
Servicing Agreement and all fees and expenses of the Indenture Trustee, the
Master Servicer, the Administrator and the Custodians pursuant to this
Indenture have been paid, release any remaining portion of the Collateral that
secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this subsection (b) only upon receipt of an Issuer
Request accompanied by an Officer’s Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA Sections
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01
hereof.

47

 

ARTICLE NINE

SUPPLEMENTAL INDENTURES

     Section 9.01. Supplemental Indentures Without Consent of
Noteholders. (a) Without the consent of the Holders of any Notes but with
prior notice to each Rating Agency, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter
into one or more indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as in force at the date of the execution
thereof), in form satisfactory to the Indenture Trustee, for any of the
following purposes:

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

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

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

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

     (v) (A) to cure any ambiguity, (B) to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provisions herein or in any supplemental
indenture or to conform the provisions hereof to those of the Offering
Document, (C) to obtain or maintain a rating for a Class of Notes from a
nationally recognized statistical rating organization, (D) to make any
other provisions with respect to matters or questions arising under this
Indenture; provided, however, that no such supplemental indenture entered
into pursuant to clause (D) of this subparagraph (v) shall adversely
affect in any material respect the interests of any Holder not consenting
thereto;

     (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 Six; or

     (vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such other
provisions as may be expressly required by the TIA.

provided, however, that no such supplemental indenture shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel stating
that entering into such

48

 

supplemental indenture will not (A) affect the status
of the Issuer as a FASIT, (B) affect the status of the Notes as FASIT regular
interests within the meaning of Section 860L(b)(1) of the Code, or (C) result
in an imposition of tax on the Issuer (including, but not limited to, the tax
on prohibited transactions under Section 860L(e) of the Code).

     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) A letter from each Rating Agency to the effect that any supplemental
indenture entered into pursuant to this Section 9.01 will not cause the
then-current ratings on the Notes to be qualified, reduced or withdrawn shall
constitute conclusive evidence that such amendment does not adversely affect in
any material respect the interests of the Noteholders.

     Section 9.02. Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to each Rating Agency and with the consent of the
Holders of not less than 66-2/3% of the Voting Interests of the Notes, by Act
of such Holders delivered to the Issuer and the Indenture Trustee, enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of the
Notes under this Indenture; provided, however, that no such supplemental
indenture shall, adversely affect the interests of the Noteholders without the
consent of the Holder of each Outstanding Note affected thereby (i) reduce in
any manner the amount of, or delay the timing of, payments in respect of any
Note, (ii) alter the obligations of the Servicer or the Indenture Trustee to
make an Advance or alter the servicing standards set forth in the Transfer and
Servicing Agreement or the Servicing Agreement, (iii) reduce the aforesaid
percentages of Notes the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of all Notes
affected thereby, or (iv) permit the creation of any lien ranking prior to or
on a parity with the lien of this Indenture with respect to any part of the
Collateral or, except as otherwise permitted or contemplated herein, terminate
the lien of this Indenture on any property at any time subject hereto or
deprive the Holder of any Note of the security provided by the lien of this
Indenture and provided, further, that such action shall not, as evidenced by an
Opinion of Counsel, (A) affect the status of the Issuer as a FASIT, (B) affect
the status of the Notes as FASIT regular interests within the meaning of
Section 860L(b)(1) of the Code, or (C) result in an imposition of tax on the
Issuer (including, but not limited to, the tax on prohibited transactions under
Section 860L(e) of the Code).

     The Indenture Trustee may rely on an Opinion of Counsel to determine
whether or not any Notes would be affected by any supplemental indenture and
any such determination shall be conclusive upon the Holders of all Notes,
whether theretofore or thereafter authenticated and delivered hereunder.

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

49

 

     Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or supplemental
indenture relates and each Rating Agency 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 Nine or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to receive,
and subject to Section 6.02, shall be fully protected in relying upon, an
Opinion of Counsel to the effect provided in Section 9.06. The Indenture
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture that affects the Indenture Trustee’s own rights, duties, liabilities
or immunities under this Indenture or otherwise.

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

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

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

     Section 9.07. Opinion of Counsel. In connection with any
supplemental indenture pursuant to this Article Nine, the Indenture Trustee
shall be entitled to receive an Opinion of Counsel to the effect that such
supplemental indenture is authorized or permitted by this Indenture and that
all conditions precedent to the execution of such supplemental indenture in
accordance with the relevant provisions of this Article Nine have been met.

     Nothing in this Section shall be construed to require that any Person
obtain the consent of the Indenture Trustee to any amendment or waiver or any
provision of any document where the

50

 

making of such amendment or the giving of
such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the
subject of the proposed amendment or waiver.

ARTICLE TEN

REDEMPTION OF NOTES

     Section 10.01. Redemption. The Notes are subject to redemption
pursuant to Section 8.02 of the Transfer and Servicing Agreement. The Issuer
shall furnish each Rating Agency notice of such redemption. If any Notes are
to be redeemed pursuant to Section 8.02 of the Transfer and Servicing
Agreement, the Master Servicer shall furnish notice of its exercise of its
option to redeem the applicable Notes to the Indenture Trustee not later than
10 days prior to the applicable Redemption Date and the party exercising its
option to redeem such Notes shall deposit by 10:00 A.M. New York City time on
the applicable Redemption Date with the Indenture Trustee in the Note Account
the Redemption Price of the Notes to be redeemed, whereupon all such applicable
Notes shall be due and payable on the applicable Redemption Date upon the
furnishing of a notice complying with Section 10.02 hereof to each Holder of
the Notes.

     Section 10.02. Form of Redemption Notice. Notice of redemption
under Section 10.01 shall be given by the Indenture Trustee by first-class
mail, postage prepaid, or by facsimile mailed or transmitted not later than 10
days prior to the applicable Redemption Date to each Holder of Notes, as of the
close of business on the Record Date preceding the applicable Redemption Date,
at such Holder’s address or facsimile number appearing in the Note Register.

     All notices of redemption shall state:

     (i) the Redemption Date;

     (ii) the Redemption Price; and

     (iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.02).

     Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.

     Section 10.03. Notes Payable on Redemption Date. The applicable
Notes or portions thereof to be redeemed shall, following notice of redemption
as required under Section 10.02 (in the case of redemption pursuant to Section
10.01) and remittance to the Indenture Trustee of the Redemption Price as
required under Section 10.01, on the applicable Redemption Date become due and
payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price.

51

 

ARTICLE ELEVEN

MISCELLANEOUS

     Section 11.01. Compliance Certificates and Opinions, etc.  Upon any
application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee: (i) an Officer’s Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, and (iii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the applicable requirements
of this Section, except that, in the case of any such application or request as
to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished.

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

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

     (ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;

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

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

     Section 11.02. Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.

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

52

 

representations by, an
officer or officers of the Servicer, the Depositor, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Depositor, the Issuer or the
Administrator, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.

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

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

     Section 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the “Act” of the Noteholders signing such instrument
or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section.

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

     (c) The ownership of Notes shall be proved by the Note Register.

     (d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.

     Section 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request,

53

 

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, or

     (ii) the Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to the address
provided in the Transfer and Servicing Agreement, or at any other address
previously furnished in writing to the Indenture Trustee by the Issuer or
the Administrator. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.

     Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to the address
provided in the Transfer and Servicing Agreement or 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 in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Holder’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.

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

     In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be
a sufficient giving of such notice.

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

     Section 11.06. 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.

54

 

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

     Section 11.07. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

     Section 11.08. 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. Severability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

     Section 11.10. Benefits of Indenture and Consents of Noteholders.
Nothing in this Indenture or in the Notes, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, the
Owner Trustee and the Noteholders, any benefit or any legal or equitable right,
remedy or claim under this Indenture. Each Noteholder and Note Owner, by
acceptance of a Note or, in the case of a Note Owner, a beneficial interest in
a Note, consents to and agrees to be bound by the terms and conditions of this
Indenture.

     Section 11.11. 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 11.12. Governing Law. THIS INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     Section 11.13. 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 11.14. 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 (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

55

 

this Indenture.

     Section 11.15. Trust Obligations. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the
Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or
any certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in their respective
individual capacities, (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 respective
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
respective individual capacities) 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 Articles Six, Seven and Eight of the Trust
Agreement.

     In addition, (i) this Indenture is executed and delivered by Wilmington
Trust Company, not individually or personally but solely as Owner Trustee, in
the exercise of the powers and authority conferred and vested in it, (ii) each
of the representations, undertakings and agreements herein made on the part of
the Issuer or the Owner Trustee is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose for binding only the Trust, (iii) nothing
herein contained shall be construed as creating any liability on Wilmington
Trust Company, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the Indenture Trustee and by any Person claiming by,
through or under the Indenture Trustee, and (iv) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken by
the Issuer under this Indenture or the Operative Agreements.

     Section 11.16. No Petition. The Indenture Trustee, by entering
into this Indenture, and each Noteholder, by accepting a Note, hereby covenant
and agree that they will not at any time institute against the 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 Operative Agreements.

     Section 11.17. Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee,
during the Issuer’s normal business hours, to examine all the books of account,
records, reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent 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

56

 

reasonably requested. The Indenture
Trustee shall, and shall cause its representatives to, hold in confidence all
such information except to the extent disclosure may be required by law (and
all reasonable applications for confidential treatment are unavailing) and
except to the extent that the Indenture Trustee may reasonably determine that
such disclosure is consistent with its obligations hereunder.

57

 

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

	 	 	 	 	 
	 	SASCO MORTGAGE LOAN TRUST 2004-GEL2, 

as Issuer

 	 
	 	By:  	WILMINGTON TRUST COMPANY,
 	 
	 	 	not in its individual capacity but solely as 	 
	 	 	Owner Trustee 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	       /s/ Linda C. Mack
 	 
	 	 	Name:  	Linda C. Mack 	 
	 	 	Title:  	Financial Services Officer 	 
	 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, not in 

its individual capacity but solely as

Indenture Trustee

 	 
	 	By:  	/s/ Charles F. Pedersen
 	 
	 	 	Name:  	Charles F. Pedersen 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

EXHIBIT A

FORMS OF NOTES

A-1

 

EXHIBIT B-1

FORM OF RULE 144A INVESTMENT LETTER

	 	 	 
	

	 	

	

	 	date

U.S. Bank National Association
  as
Indenture Trustee

Sixth and Marquette

Minneapolis, Minnesota 55479

	 	 	 
	Re:

	 	SASCO Mortgage Loan Trust 2004-GEL2
	

	 	Mortgage Backed Notes, Series 2004-GEL2, [Class B ] [Class P] Notes

Ladies and Gentlemen:

     In connection with our acquisition of the above-referenced Notes (the
“Notes”) we certify that (a) we understand that the Notes have not been
registered under the Securities Act of 1933, as amended (the “Act”), or any
state securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the Notes, (c)
we have had the opportunity to ask questions of and receive answers from
Structured Asset Securities Corporation (the “Depositor”) concerning the
purchase of the Notes and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Notes, (d) we have
not, nor has anyone acting on our behalf, offered, transferred, pledged, sold
or otherwise disposed of the Notes or any interest in the Notes, or solicited
any offer to buy, transfer, pledge or otherwise dispose of the Notes or any
interest in the Notes from any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action that would constitute a payment of the Notes under the Act or
that would render the disposition of the Notes a violation of Section 5 of the
Act or any state securities laws or require registration pursuant thereto, and
we will not act, or authorize any person to act, in such manner with respect to
the Notes, (e) we are a “qualified institutional buyer” as that term is defined
in Rule 144A under the Act (“Rule 144A”). We are aware that the sale to us is
being made in reliance on Rule 144A.

     We are acquiring the Notes for our own account or for resale pursuant to
Rule 144A and understand that such Notes may be resold, pledged or transferred
only (1) 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 (2) pursuant to another exemption
from registration under the Act.

     We hereby acknowledge that under the terms of the Indenture between SASCO
Mortgage Loan Trust 2004-GEL2, as Issuer, and U.S. Bank National Association,
as Indenture Trustee,

B-1-1

 

dated as of June 1, 2004, no transfer of the Notes shall
be permitted to be made to any person unless the Indenture Trustee has received
a certificate from such transferee in the form hereof.

     We hereby indemnify the Depositor, Indenture Trustee and the Trust against
any liability that may result to either of them if our transfer or other
disposition of any Notes (or any interest therein) is not exempt from the
registration requirements of the Act and any applicable state securities laws
or is not made in accordance with such federal and state laws, the provisions
of this certificate or the applicable provisions of the Indenture.

	 	 	 	 	 
	 	 Very truly yours,

                                                         

Print Name of Purchaser
 	 

	 	 	 	 	 
	 	 	 
	 	By:  	     _________________________________
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-1-2

 

	 	 	 	 	 

EXHIBIT B-2

FORM OF NON-RULE 144A INVESTMENT LETTER

	 	 	 
	

	 	

date

U.S. Bank National Association
  as
Indenture Trustee

Sixth and Marquette

Minneapolis, Minnesota 55479

	 	 	 
	Re:

	 	SASCO Mortgage Loan Trust 2004-GEL2
	

	 	Mortgage Backed Notes, Series 2004-GEL2, [Class B ] [Class P] Notes

Ladies and Gentlemen:

     In connection with our acquisition of the above-referenced Notes (the
“Notes”) we certify that (a) we understand that the Notes have not been
registered under the Securities Act of 1933, as amended (the “Act”), or any
state securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
are an “accredited investor,” as defined in Rule 501(a)(1), (2), (3) or (7)
under the Act, and have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of investments
in the Notes, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Notes and all matters
relating thereto or any additional information deemed necessary to our decision
to purchase the Notes, (d) we are acquiring the Notes for investment for our
own account and not with a view to any payment of such Notes (but without
prejudice to our right at all times to sell or otherwise dispose of the Notes
in accordance with clause (f) below), (e) we have not offered or sold any Notes
to, or solicited offers to buy any Notes from, any person, or otherwise
approached or negotiated with any person with respect thereto, or taken any
other action that would result in a violation of Section 5 of the Act or any
state securities laws and (f) we will not sell, transfer or otherwise dispose
of any Notes unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act and in compliance
with any relevant state securities laws or is exempt from such registration
requirements and, if requested, we will at our expense provide an opinion of
counsel satisfactory to the addressees of this certificate that such sale,
transfer or other disposition may be made pursuant to an exemption from the
Act, (2) the purchaser or transferee of such Note has executed and delivered to
you a certificate to substantially the same effect as this certificate and (3)
the purchaser or transferee has otherwise complied with any conditions for
transfer set forth in the Indenture dated as of June 1, 2004, between SASCO
Mortgage Loan Trust 2004-GEL2, as issuer, and U.S. Bank National Association,
as indenture trustee.

     We hereby acknowledge that under the terms of the Indenture between SASCO
Mortgage Loan Trust 2004-GEL2, as Issuer, and U.S. Bank National Association,
as Indenture Trustee, dated as of June 1, 2004, no transfer of the Notes shall
be permitted to be made to any person unless the Indenture Trustee has received
a certificate from such transferee in the form hereof.

B-2-1

 

     We hereby indemnify the Depositor, Indenture Trustee and the Trust against
any liability that may result to either of them if our transfer or other
disposition of any Notes (or any interest therein) is not exempt from the
registration requirements of the Act and any applicable state securities laws
or is not made in accordance with such federal and state laws, the provisions
of this certificate or the applicable provisions of the Indenture.

	 	 	 	 	 
	 	Very truly yours,

                                                         

Print Name of Purchaser

 	 

	 	 	 	 	 
	 	 	 
	 	By:  	     _________________________________
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-2-2

 

	 	 	 	 	 

EXHIBIT C

FORM OF ERISA TRANSFER AFFIDAVIT

	 	 	 
	

	 	

date

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

	 	 	 
	Re:

	 	SASCO Mortgage Loan Trust 2004-GEL2
	

	 	Mortgage Backed Notes, Series 2004-GEL2

     1. The undersigned is the                                        of (the “Investor”), a
[corporation duly organized] and existing under the laws of                    , on
behalf of which he makes this affidavit.

     2. The Investor either (i) is not, and on                     [date of transfer]
will not be, acquiring the Notes for, or on behalf of, an employee benefit plan
or other retirement arrangement that is subject to Section 406 of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), or to Section
4975 of the Internal Revenue Code of 1986, as amended (or to any substantially
similar law (“Similar Law”)) or any entity deemed to hold the plan assets of
the foregoing (a “Benefit Plan”) or (ii), with respect to any Note other than a
High-Yield Note, on                     [date of transfer] our acquisition and holding
of the Notes for, or on behalf of, a Benefit Plan will not result in a
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code which is not covered under Prohibited Transaction Class Exemption
(“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 or some other
applicable exemption, and will not result in a non-exempt violation of any
Similar Law.

     3. The Investor hereby acknowledges that under the terms of the Indenture
between SASCO Mortgage Loan Trust 2004-GEL2, as Issuer, and U.S. Bank National
Association, as Indenture Trustee, dated as of June 1, 2004, no transfer of any
Note shall be permitted to be made to any person unless the Indenture Trustee
has received a certificate from such transferee in the form hereof.

C-1

 

     IN WITNESS WHEREOF, the Investor has caused this instrument to be executed
on its behalf, pursuant to proper authority, by its duly authorized officer,
duly attested, this                     day of                                       , 20                   .

	 	 	 	 	 
	 	                                                         

[Investor]

 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                    _____________________________________
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

ATTEST:

                                                         

	 	 	 	 	 
	STATE OF
	 	 	 	)
	 
	 	 	 	)  ss.:
	COUNTY OF
	 	 	 	)

     Personally appeared before me the above-named                                       , known
or proved to me to be the same person who executed the foregoing instrument and
to be the                                        of the Investor, and acknowledged that he executed
the same as his free act and deed and the free act and deed of the Investor.

     Subscribed and sworn before me this                     day of                                        20                   .

	 	 	 	 	 
	 	                                                         

NOTARY PUBLIC

My commission expires the

            day of                       , 20            .

 	 

C-2

 

	 	 	 	 	 

EXHIBIT D

FORM OF HIGH-YIELD INTEREST TRANSFER AFFIDAVIT

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

	 	 	 
	Re:

	 	SASCO Mortgage Loan Trust
	

	 	2004-GEL2, [Class B] [Class P] Notes

     The undersigned, being first duly sworn, deposes and says as follows:

	1.	 	The undersigned is the                                       of                    (the
“Transferee”), a [corporation] duly organized and existing under the
laws of                    , on behalf of which he [she] makes this
affidavit in connection with the transfer of the above-referenced note
(the “Notes”).
	 
	2.	 	The Transferee is [an eligible corporation, within the meaning of
section 860L(a)(2) of the Internal Revenue Code of 1986, as amended] [a
FASIT, within the meaning of section 860L(a)(1) of the Internal Revenue
Code of 1986, as amended].
	 
	3.	 	The Transferee hereby acknowledges that, under the terms of the
Indenture (the “Indenture”) between SASCO Mortgage Loan Trust
2004-GEL2, as Issuer, and U.S. Bank National Association, as Indenture
Trustee, dated as of June 1, 2004, no transfer of the Notes shall be
permitted to be made to any person unless such Transferee is the type
of entity described in paragraph 2 above.

     IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this                     day of                                                           .

	 	 	 	 	 
	 	                                                         

Print Name of Transferee

 	 

	 	By:  	______________________________
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

D-1

 

	 	 	 	 	 

EXHIBIT E

FORM OF HIGH YIELD INTEREST TRANSFER AFFIDAVIT

(Initial Transfer)

                                      , 20                   

	 	 	 
	RE:

	 	SASCO Mortgage Loan Trust Mortgage Backed Notes
	

	 	Series 2004-GEL2, [Class B] [Class P] (the “Notes”) 

     The undersigned, being a duly appointed officer of Lehman Brothers Inc.
(the “Transferor”), hereby certifies that pursuant to Section 860K(a)(2) of the
Code, amounts not includable in the gross income of                                                          (the “Transferee”) pursuant to Section
860K(a)(1) of the Code by reason of its holding of the [Class B] [Class P]
Notes shall be includable (at the time such income would have otherwise been
includable by the Transferee) in the gross income of the Transferor, as the
most recent holder of such Notes which is not a “disqualified holder,”
irrespective that the Transferee, as the Noteholder, shall be entitled to all
distributions of cash with respect to such Notes.

	 	 	 	 	 
	 	Lehman Brothers Inc.,

as Transferor

 	 
	 	By:  	______________________________
 	 
	 	 	Name:  	 	 
	 	 	Title:exv4w1

 

EXHIBIT 4.1

OMNIBUS INSTRUMENT

     WHEREAS, the parties named herein desire to enter into certain Program
Documents contained herein, each such document dated as of this 9th day of
July, 2004, relating to the issuance by Principal Life Income Fundings Trust
2004-28 (the “Trust”) of Notes to investors under Principal Life’s secured
notes program;

     WHEREAS, the Trust is a trust and will be organized under and its
activities will be governed by the provisions of the Trust Agreement (set forth
in Section A of this Omnibus Instrument), dated as of the date of the Pricing
Supplement (attached to this Omnibus Instrument as Exhibit D) (the “Pricing
Supplement”), by and between the parties thereto indicated in Section F herein;

     WHEREAS, certain expense and indemnification arrangements between
Principal Life and the Trustee, on behalf of itself and on behalf of the Trust,
are governed pursuant to the provisions of the Expense and Indemnity Agreement
dated as of March 5, 2004, by and between Principal Life and the Trustee;

     WHEREAS, certain licensing arrangements between the Trust and Principal
Financial Services, Inc. will be governed pursuant to the provisions of the
License Agreement (set forth in Section B of this Omnibus Instrument), dated as
of the date of the Pricing Supplement, by and between the parties thereto
indicated in Section F herein;

     WHEREAS, certain custodial arrangements of the Funding Agreement and the
Guarantee will be governed pursuant to the provisions of the Custodial
Agreement (the “Custodial Agreement”) dated as of March 5, 2004 by and among
Bankers Trust Company, N.A., acting as custodian (the “Custodian”), the
Indenture Trustee and the Trustee, on behalf of the Trust;

     WHEREAS, the Notes will be issued pursuant to the Indenture (set forth in
Section C of this Omnibus Instrument), dated as of the Original Issue Date, by
and between the parties thereto indicated in Section F herein;

     WHEREAS, the sale of the Notes will be governed by the Terms Agreement
(set forth in Section D of this Omnibus Instrument), dated the date of the
Pricing Supplement, by and among the parties thereto indicated in Section F
herein; and

     WHEREAS, certain agreements relating to the Notes, the Funding Agreement
and the Guarantee are set forth in the Coordination Agreement (set forth in
Section E of this Omnibus Instrument), dated as of the date of the Pricing
Supplement, by and among the parties thereto indicated in Section F herein.

     All capitalized terms used herein and not otherwise defined will have the
meanings set forth in the Indenture.

[Remainder of Page Left Intentionally Blank.]

 

 

SECTION A

TRUST AGREEMENT

     This TRUST AGREEMENT (this “Trust Agreement”), dated as of the date of the
Pricing Supplement, is entered into by and between GSS Holdings II, Inc., a
Delaware corporation, as trust beneficial owner (the “Trust Beneficial Owner”),
and U.S. Bank Trust National Association, a national banking association, as
Trustee (the “Trustee”).

W I T N E S S E T H:

     WHEREAS, the Trust Beneficial Owner and the Trustee desire to authorize
the issuance of a Trust Beneficial Interest and a series of Notes in connection
with the entry into this Trust Agreement;

     WHEREAS, all things necessary to make this Trust Agreement a valid and
legally binding agreement of the Trustee and the Trust Beneficial Owner,
enforceable in accordance with its terms, have been done;

     WHEREAS, the parties intend to provide for, among other things, (i) the
issuance and sale of the Notes (pursuant to the Indenture, the Distribution
Agreement and the related Terms Agreement) and the Trust Beneficial Interest,
(ii) the use of the proceeds of the sale of the Notes and Trust Beneficial
Interest to acquire the Funding Agreement, the payment obligations of which
will be fully and unconditionally guaranteed by the Guarantee, and (iii) all
other actions deemed necessary or desirable in connection with the transactions
contemplated by this Trust Agreement; and

     WHEREAS, the parties hereto desire to incorporate by reference those
certain Standard Trust Terms, dated as of March 5, 2004, and attached to the
Omnibus Instrument as Exhibit A (the “Standard Trust Terms”) and all
capitalized terms not otherwise defined herein (including the recitals hereof)
shall have the meanings set forth in the Standard Trust Terms (the Standard
Trust Terms and this Trust Agreement, collectively, the “Trust Agreement”).

     NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which are hereby acknowledged, each party hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and
agreements set forth in the Standard Trust Terms (except to the extent
expressly modified herein) are hereby incorporated herein by reference with the
same force and effect as though fully set forth herein. To the extent that the
terms set forth in Article 2 of this Trust Agreement are inconsistent with the
terms of the Standard Trust Terms, the terms set forth in Article 2 herein
shall apply.

A-1

 

ARTICLE 2

     Section 2.01 Name. The Trust created and governed by the Trust Agreement
shall be the trust specified in the Omnibus Instrument. The name of the Trust
shall be the name specified in the first paragraph of the Omnibus Instrument,
as such name may be modified from time to time by the Trustee following written
notice to the Trust Beneficial Owner.

     Section 2.02 Jurisdiction. The Trust is hereby organized in, and formed
under and pursuant to, the laws of the State of New York.

     Section 2.03 Initial Capital Contribution and Ownership. The Trust
Beneficial Owner has paid or has caused to be paid to, or to an account at the
direction of, the Trustee, on the date hereof, the sum of $15 (or, in the case
of Notes issued with original issue discount, such amount multiplied by the
issue price of the Notes). The Trustee hereby acknowledges receipt in trust
from the Trust Beneficial Owner, as of the date hereof, of the foregoing
contribution, which shall be used along with the proceeds from the sale of the
series of Notes to purchase the Funding Agreement. Upon the creation of the
Trust and the registration of the Trust Beneficial Interest in the Securities
Register (as defined in the Trust Agreement) by the Registrar in the name of
the Trust Beneficial Owner, the Trust Beneficial Owner shall be the sole
beneficial owner of the Trust.

     Section 2.04 Acknowledgment. The Trustee, on behalf of the Trust,
expressly acknowledges its duties and obligations set forth in the Standard
Trust Terms incorporated herein.

     Section 2.05 Additional Terms.

     None

     Section 2.06 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the Trust Agreement will enter into the Trust Agreement by
executing the Omnibus Instrument.

     By executing the Omnibus Instrument, the Trustee and the Trust Beneficial
Owner hereby agree that the Trust Agreement will constitute a legal, valid and
binding agreement between the Trustee and the Trust Beneficial Owner.

     All terms relating to the Trust or the series of Notes not otherwise
included in the Trust Agreement will be as specified in the Omnibus Instrument
or Pricing Supplement, as indicated herein.

A-2

 

     Section 2.07 Governing Law. The Trust Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.

     Section 2.08 Counterparts. The Trust Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

[Remainder of Page Left Intentionally Blank.]

A-3

 

SECTION B

LICENSE AGREEMENT

     This LICENSE AGREEMENT (this “License Agreement”), dated as of the date of
the Pricing Supplement, is entered into by and between Principal Financial
Services, Inc., an Iowa corporation with its principal place of business at 711
High Street, Des Moines, Iowa 50392 (the “Licensor”), and the Principal Life
Income Fundings Trust specified in the Omnibus Instrument (the “Licensee”).

W I T N E S S E T H:

     WHEREAS, the Licensor is the owner of certain trademarks and service marks
and registrations and pending applications therefor, and may acquire additional
trademarks and service marks in the future, all as described more fully below;

     WHEREAS, the Licensee desires to use certain of the Licensor’s trademarks
and service marks in connection with the Licensee’s activities, as described
more fully below;

     WHEREAS, the Licensor and the Licensee wish to formalize the agreement
between them regarding the Licensee’s use of the Licensor’s marks; and

     WHEREAS, the parties hereto desire to incorporate by reference those
certain Standard License Agreement Terms, dated March 5, 2004, and attached to
the Omnibus Instrument as Exhibit B (the “Standard License Agreement Terms”)
and all capitalized terms not otherwise defined herein (including the recitals
hereof) shall have the meanings set forth in the Standard License Agreement
Terms (the Standard License Agreement Terms and this License Agreement,
collectively, the “License Agreement”).

     NOW, THEREFORE, in consideration of the mutual promises set forth herein
and for other good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, each party hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and
agreements set forth in the Standard License Agreement Terms (except to the
extent expressly modified herein) are hereby incorporated herein by reference
with the same force and effect as though fully set forth herein. To the extent
that the terms set forth in Article 2 of this License Agreement are
inconsistent with the terms of the Standard License Agreement Terms, the terms
set forth in Article 2 herein shall apply.

ARTICLE 2

     Section 2.01 Additional Terms.

     None

B-1

 

     Section 2.02 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the License Agreement will enter into the License Agreement
by executing the Omnibus Instrument.

     By executing the Omnibus Instrument, the Licensor and the Licensee hereby
agree that the License Agreement will constitute a legal, valid and binding
agreement between the Licensor and the Licensee.

     All terms relating to the Trust or the Notes not otherwise included in the
License Agreement will be as specified in the Omnibus Instrument or Pricing
Supplement, as indicated herein.

     Section 2.03 Counterparts. The License Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

[Remainder of Page Left Intentionally Blank.]

B-2

 

SECTION C

INDENTURE

     This INDENTURE (this “Indenture”) is entered into as of the Original Issue
Date by and between the Principal Life Income Fundings Trust specified in the
Omnibus Instrument (the “Trust”) and Citibank, N.A., as indenture trustee (the
“Indenture Trustee”).

     Citibank, N.A., in its capacity as indenture trustee, hereby accepts its
role as Registrar, Paying Agent, Transfer Agent and Calculation Agent
hereunder.

     References herein to “Indenture Trustee,” “Registrar,” “Transfer Agent,”
“Paying Agent” or “Calculation Agent” shall include the permitted successors
and assigns of any such entity from time to time.

W I T N E S S E T H:

     WHEREAS, the Trust has duly authorized the execution and delivery of this
Indenture to provide for the issuance of Notes;

     WHEREAS, all things necessary to make this Indenture a valid and legally
binding agreement of the Trust and the other parties to this Indenture,
enforceable in accordance with its terms, have been done, and the Trust
proposes to do all things necessary to make the Notes, when executed by the
Trust and authenticated and delivered pursuant hereto, valid and legally
binding obligations of the Trust as hereinafter provided; and

     WHEREAS, the parties hereto desire to incorporate by reference those
certain Standard Indenture Terms, dated as of March 5, 2004, and attached to
the Omnibus Instrument as Exhibit C (the “Standard Indenture Terms”) and all
capitalized terms not otherwise defined herein (including the recitals hereof)
shall have the meanings set forth in the Standard Indenture Terms (the Standard
Indenture Terms and this Indenture, collectively, the “Indenture”).

     NOW, THEREFORE, for and in consideration of the premises and the purchase
of the Notes by the Holders thereof, it is mutually covenanted and agreed by
each of the parties hereto as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and
agreements set forth in the Standard Indenture Terms (except to the extent
expressly modified herein) are hereby incorporated herein by reference (with
the same force and effect as though fully set forth herein). To the extent
that the terms set forth in Article 2 of this Indenture are inconsistent with
the terms of the Standard Indenture Terms, the terms set forth in Article 2
herein shall apply.

C-1

 

ARTICLE 2

     Section 2.01 Agreement to be Bound. Each of the Trust, the Indenture
Trustee, the Registrar, the Transfer Agent, the Paying Agent and the
Calculation Agent hereby agrees to be bound by all of the terms, provisions and
agreements set forth in the Indenture, with respect to all matters contemplated
in the Indenture, including, without limitation, those relating to the issuance
of the below-referenced Notes.

     Section 2.02 Designation of the Trust, the Notes, the Funding Agreement
and the Guarantee. The Trust created by the Trust Agreement and referred to in
the Indenture is the Principal Life Income Fundings Trust specified in the
Omnibus Instrument. The Notes issued by the Trust and governed by the
Indenture shall be the Notes specified in the Pricing Supplement. The Funding
Agreement designated hereby is the Funding Agreement designated in the Pricing
Supplement dated as of the Original Issue Date between the Trust and Principal
Life. The Guarantee designated hereby is the Guarantee dated as of the Original
Issue Date of PFG.

     Section 2.03 Additional Terms.

     None

     Section 2.04 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the Indenture will enter into the Indenture by executing
the Omnibus Instrument.

     By executing the Omnibus Instrument, the Indenture Trustee, the Registrar,
the Transfer Agent, the Paying Agent, the Calculation Agent and the Trust
hereby agree that the Indenture will constitute a legal, valid and binding
agreement between the Indenture Trustee, the Registrar, the Transfer Agent, the
Paying Agent, the Calculation Agent and the Trust.

     All terms relating to the Trust or the Notes not otherwise included in the
Indenture will be as specified in the Omnibus Instrument or Pricing Supplement,
as indicated herein.

     Section 2.05 Counterparts. The Indenture, through the Omnibus Instrument,
may be executed in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute one
and the same instrument.

[Remainder of Page Left Intentionally Blank.]

C-2

 

SECTION D

TERMS AGREEMENT

     This TERMS AGREEMENT (this “Terms Agreement”) is entered into as of the
Original Issue Date by and among Principal Life Insurance Company (“Principal
Life”), Principal Financial Group, Inc. (“PFG”), the Principal Life Income
Fundings Trust specified in the Omnibus Instrument (the “Trust”) and the
Purchasing Agent specified in the Pricing Supplement (the “Purchasing Agent”).

W I T N E S S E T H:

     WHEREAS, Principal Life, PFG and the agents named therein, including the
Purchasing Agent have entered into that certain Distribution Agreement dated
March 5, 2004 (the “Distribution Agreement”).

     NOW, THEREFORE, in consideration of the mutual promises set forth herein
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, each of the parties hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. The provisions of the
Distribution Agreement and the related definitions (unless otherwise specified
herein) are incorporated by reference herein and shall be deemed to have the
same force and effect as if set forth in full herein.

ARTICLE 2

     Section 2.01 Addition of Trust as Party to Distribution Agreement.

     Pursuant to Section 1 of the Distribution Agreement, each of the
undersigned parties hereby acknowledges and agrees that the Trust, upon
execution hereof by the Trust and the other parties to the Distribution
Agreement (other than any other trusts organized in connection with the
Registration Statement that are party thereto as of the date hereof), shall
become a Trust for purposes of the Distribution Agreement in accordance with
the terms thereof, in respect of the Notes, with all the authority, rights,
powers, duties and obligations of a Trust under the Distribution Agreement.
The Trust confirms that any agreement, covenant, acknowledgment, representation
or warranty under the Distribution Agreement applicable to the Trust is made by
the Trust at the date hereof, unless another time or times are specified in the
Distribution Agreement, in which case such agreement, covenant, acknowledgment,
representation or warranty shall be deemed to be confirmed by the Trust at such
specified time or times.

     Section 2.02 Purchase of Notes as Principal.

     (a) Subject in all respects to the terms and conditions of the
Distribution Agreement, the Trust hereby agrees to sell to the Purchasing Agent
and the Purchasing Agent hereby agrees to purchase the Notes having the terms
specified in the Pricing Supplement relating to such Notes.

D-1

 

     (b) In connection with any purchase of Notes from the Trust by the
Purchasing Agent as principal, the parties agrees that the items specified on
Schedule I of the Omnibus Instrument will be delivered as of the Settlement
Date.

     Section 2.03 Termination. Upon the termination of this Terms Agreement
pursuant to Section 13(b) of the Distribution Agreement the undersigned parties
hereby agree to that the expenses reasonably incurred prior to or in connection
with such termination will be borne by Principal Life and PFG.

     Section 2.04 Governing Law. This Terms Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to the principles of conflicts of laws thereof.

     Section 2.05 Notices. For purposes of Section 14 of the Distribution
Agreement, the Trust’s communications details are as set forth in Section E of
the Omnibus Instrument.

     Section 2.06 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to this Terms Agreement will enter into this Terms Agreement
by executing the Omnibus Instrument.

     By executing the Omnibus Instrument, each party hereto agrees that this
Terms Agreement will constitute a legal, valid and binding agreement by and
among such parties.

     All terms relating to the Trust or the Notes not otherwise included in
this Terms Agreement will be as specified in the Omnibus Instrument or Pricing
Supplement, as indicated herein.

     Section 2.07 Counterparts. This Terms Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

[Remainder of Page Left Intentionally Blank.]

D-2

 

SECTION E

COORDINATION AGREEMENT

     This COORDINATION AGREEMENT (this “Coordination Agreement”), dated as of
the date of the Pricing Supplement, is entered into by and among Principal Life
Insurance Company (“Principal Life”), Principal Financial Group, Inc. (“PFG”),
the Principal Life Income Fundings Trust specified in the Omnibus Instrument
(the “Trust”), Principal Financial Services, Inc. (“PFSI”), Bankers Trust
Company, N.A. and Citibank, N.A., as indenture trustee (the “Indenture
Trustee”).

W I T N E S S E T H

     WHEREAS, the Trust will enter into the Funding Agreement with Principal
Life dated as of the Original Issue Date specified in the Pricing Supplement;

     WHEREAS, PFG will issue a Guarantee to the Trust as of the Original Issue
Date specified in the Pricing Supplement, which will fully and unconditionally
guarantee the payment obligations of Principal Life under the Funding
Agreement;

     WHEREAS, the Purchasing Agent (as defined in the Distribution Agreement)
have agreed to sell the Notes in accordance with the Registration Statement;

     WHEREAS, the Trust intends to issue the Notes in accordance with the
Indenture, to collaterally assign to, and grant a security interest in, the
Funding Agreement and the Guarantee to and in favor of the Indenture Trustee in
accordance with the Indenture to secure payment of the Notes;

     WHEREAS, the Custodian will hold the Funding Agreement and the Guarantee
on behalf of the Indenture Trustee pursuant to the terms of the Custodial
Agreement; and

     WHEREAS, certain licensing arrangements between the Trust and PFSI will be
governed pursuant to the provisions of the License Agreement.

     NOW, THEREFORE, to give effect to the agreements and arrangements
established under the Terms Agreement included in the Omnibus Instrument, as
applicable, the Trust Agreement, the Indenture and the Notes, and in
consideration of the agreements and obligations set forth herein and for other
good and valuable consideration, the sufficiency of which are hereby
acknowledged, each party hereby agrees as follows:

ARTICLE 1

     Section 1.01 Delivery of the Funding Agreement and the Guarantee. The
Trust hereby authorizes the Custodian, on behalf of the Indenture Trustee, to
receive the Funding Agreement from Principal Life and the Guarantee from PFG
pursuant to the assignment of the Funding Agreement and Guarantee (the
“Assignment”), to be entered into on the Original Issue Date, included in the
closing instrument dated as of the Original Issue Date (the “Closing
Instrument”).

E-1

 

     Section 1.02 Issuance and Purchase of the Notes.

     (a) Delivery of the Funding Agreement and the Guarantee to the Custodian,
on behalf of the Indenture Trustee, pursuant to the Assignment or execution of
the cross receipt contained in the Closing Instrument shall be confirmation of
payment by the Trust for the Funding Agreement.

     (b) The Trust hereby directs the Indenture Trustee, upon receipt by the
Custodian, on behalf of the Indenture Trustee, of the Funding Agreement
pursuant to the Assignment and upon receipt by the Custodian, on behalf of the
Indenture Trustee, of the Guarantee, (i) to authenticate the certificates
representing the Notes (the “Notes Certificates”) in accordance with the
Indenture and (ii) to (A) deliver each relevant Notes Certificate to the
clearing system or systems identified in each such Notes Certificate, or to the
nominee of such clearing system, or the custodian thereof, for credit to such
accounts as the Purchasing Agent may direct, or (B) deliver each relevant Notes
Certificate to the purchasers thereof as identified by the Purchasing Agent.

ARTICLE 2

     Section 2.01 Directions Regarding Periodic Payments. As registered owner
of the Funding Agreement and the Guarantee as collateral securing payments on
the Notes, the Indenture Trustee will receive payments on the Funding Agreement
and the Guarantee on behalf of the Trust. The Trust hereby directs the
Indenture Trustee to use such funds to make payments on behalf of the Trust
pursuant to the Trust Agreement and the Indenture.

     Section 2.02 Maturity of the Funding Agreement. Upon the maturity of the
Funding Agreement and the return of funds thereunder, the Trust hereby directs
the Indenture Trustee to set aside from such funds an amount sufficient for the
repayment of the outstanding principal on the Notes and Trust Beneficial
Interest when due.

ARTICLE 3

     Section 3.01 Certificates. Principal Life hereby agrees to deliver an
Officer’s Certificate, a copy of which is attached hereto as Exhibit E, on a
quarterly basis to any rating agency currently rating the Program. The Trust
hereby agrees to deliver an Officer’s Certificate, a copy of which is attached
hereto as Exhibit F, on a quarterly basis to any rating agency currently rating
the Program.

     Section 3.02 Filings. Principal Life hereby covenants to file, or cause
to be filed, in a timely manner on behalf of the Trust all reports,
certifications or similar filings required under the Securities Exchange Act of
1934, as amended.

ARTICLE 4

     Section 4.01 No Additional Liability. Nothing in this Coordination
Agreement shall impose any liability or obligation on the part of any party to
this Coordination Agreement to make any payment or disbursement in addition to
any liability or obligation such party has under the Program Documents, except
to the extent that a party has actually received funds which it is obligated to
disburse pursuant to this Coordination Agreement.

E-2

 

     Section 4.02 No Conflict. This Coordination Agreement is intended to be
in furtherance of the agreements reflected in the documents related to the
Program Documents, and not in conflict. To the extent that a provision of this
Coordination Agreement conflicts with the provisions of one or more Program
Documents, the provisions of such Program Documents shall govern.

     Section 4.03 Governing Law. This Coordination Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
regard to the principles of conflicts of laws thereof.

     Section 4.04 Severability. If any provision in this Coordination
Agreement shall be invalid, illegal or unenforceable, such provision shall be
deemed severable from the remaining provisions of this Coordination Agreement
and shall in no way affect the validity or enforceability of such other
provisions of this Coordination Agreement.

     Section 4.05 Severability. If any provision in this Coordination
Agreement shall be invalid, illegal or unenforceable, such provision shall be
deemed severable from the remaining provisions of this Coordination Agreement
and shall in no way affect the validity or enforceability of such other
provisions of this Coordination Agreement.

     Section 4.06 Notices. All demands, notices and communications under this
Coordination Agreement shall be in writing and shall be deemed to have been
duly given upon receipt at the addresses set forth below:

	 	 	 
	To the Trust:
	 	 
	 
	

	 	Principal Life Income Fundings
Trust (followed by the number set forth in the Omnibus Instrument)
	

	 	c/o U.S. Bank Trust National Association
	

	 	100 Wall Street, 16th Floor
	

	 	New York, New York 10005
	

	 	Attention: Corporate Trust Administration
	

	 	Telephone: (212) 361-2458
	

	 	Facsimile: (212) 809-5459 and (212) 509-3384
	 
	To the Indenture Trustee:
	 	 
	 
	

	 	Citibank, N.A.
	

	 	Citibank Agency & Trust
	

	 	111 Wall Street, 14th Floor, Zone 3
	

	 	New York, New York 10005
	

	 	Attention: Nancy Forte
	

	 	Telephone: (212) 657-4703
	

	 	Facsimile: (212) 657-3862

E-3

 

	 	 	 
	To Principal Life:

	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: General Counsel
	

	 	Telephone: (515) 247-5111
	

	 	Facsimile: (515) 248-3011
	 
	 	 	With a copy to:

	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: Jim Fifield
	

	 	Telephone: (515) 248-9196
	

	 	Facsimile: (515) 235-9353
	 
	To PFG:

	 
	

	 	Principal Financial Group, Inc.
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: General Counsel
	

	 	Telephone: (515) 247-5111
	

	 	Facsimile: (515) 248-3011
	 
	 	 	With a copy to:
	 	 
	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: Jim Fifield
	

	 	Telephone: (515) 248-9196
	

	 	Facsimile: (515) 235-9353
	 
	To Principal Financial
Services, Inc.:
	 	 
	 
	

	 	Principal Financial Services, Inc.
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: General Counsel
	

	 	Telephone: (515) 247-5111
	

	 	Facsimile: (515) 248-3011

E-4

 

	 	 	 
	 	 	With a copy to:
	 	 
	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: Jim Fifield
	

	 	Telephone: (515) 248-9196
	

	 	Facsimile: (515) 235-9353
	 
	To Bankers Trust Company, N.A:
	 	 
	 
	

	 	Bankers Trust Company, N.A.
	

	 	665 Locust Street
	

	 	Des Moines, Iowa 50309-3702
	

	 	Attention: Angela C. Brick
	

	 	Telephone: (515) 245-2820
	

	 	Facsimile: (515) 247-2101

or at such other address as shall be designated by any such party in a written
notice to the other parties.

ARTICLE 5

     Section 5.01 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to this Coordination Agreement will enter into this
Coordination Agreement by executing the Omnibus Instrument.

     By executing the Omnibus Instrument, each party hereto agrees that this
Coordination Agreement will constitute a legal, valid and binding agreement by
and among the Trust, Principal Life, PFG, PFSI, the Custodian and the Indenture
Trustee.

     All terms relating to the Trust or the Notes not otherwise included in
this Coordination Agreement will be as specified in the Omnibus Instrument or
Pricing Supplement, as indicated herein.

     Section 5.02 Acknowledgment. Principal Life hereby acknowledges Section
2.10 of the Indenture and Section 6.1 of the Custodial Agreement. The Trust
hereby acknowledges and agrees to the terms of the Custodial Agreement.

     Section 5.03 Counterparts. This Coordination Agreement, through the
Omnibus Instrument, may be executed in any number of counterparts, each of
which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.

     Section 5.04 Capitalized Terms. All capitalized terms used herein and not
otherwise defined in this Coordination Agreement will have the meanings set
forth in the Indenture.

[Remainder of Page Left Intentionally Blank.]

E-5

 

SECTION F

MISCELLANEOUS AND EXECUTION PAGES

     This Omnibus Instrument may be executed by each of the parties hereto in
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.

     Each signatory, by its execution hereof, does hereby become a party to
each of the agreements or indenture identified for such party as of the date
specified in such agreements or indenture.

     IN WITNESS WHEREOF, the undersigned have executed this Omnibus Instrument
with respect to the Notes as of the date first written above.

	 	 	 	 	 
	 	 	PRINCIPAL LIFE INSURANCE COMPANY (in
executing below agrees and becomes a party
to (i) the Terms Agreement set forth in
Section D herein and (ii) the Coordination
Agreement set forth in Section E herein)
	 
	 	 	 	 
	

	 	By:
	 	/s/ Christopher P. Freese
	

	 	 	 	
 
	

	 	 	 	Name: Christopher P. Freese
	

	 	 	 	Title:   Officer
	 
	 	 	 	 
	 	 	PRINCIPAL FINANCIAL GROUP, INC. (in
executing below agrees and becomes a party
to (i) the Terms Agreement set forth in
Section D herein and (ii) the Coordination
Agreement set forth in Section E herein)
	 
	 	 	 	 
	

	 	By:
	 	/s/ Elizabeth D. Swanson
	

	 	 	 	
 
	

	 	 	 	Name: Elizabeth D. Swanson
	

	 	 	 	Title:   Counsel
	 
	 	 	 	 
	 	 	PRINCIPAL FINANCIAL SERVICES, INC. (in
executing below agrees and becomes a party
to (i) the License Agreement set forth in
Section B herein and (ii) the Coordination
Agreement set forth in Section E herein)
	 
	 	 	 	 
	

	 	By:
	 	/s/ Elizabeth D. Swanson
	

	 	 	 	
 
	

	 	 	 	Name: Elizabeth D. Swanson
	

	 	 	 	Title:   Counsel

[Execution Page 1 of 3]

 

 

	 	 	 	 	 
	 	 	THE PRINCIPAL LIFE INCOME FUNDINGS TRUST
DESIGNATED IN THIS OMNIBUS INSTRUMENT (in
executing below agrees and becomes a party
to (i) the License Agreement set forth in
Section B herein, (ii) the Indenture set
forth in Section C herein, (iii) the Terms
Agreement set forth in Section D herein and
(iv) the Coordination Agreement set forth in
Section E herein)
	 
	 	 	 	 
	 	 	By: U.S. Bank Trust National Association,
not in its individual capacity but solely in
its capacity as trustee of the Trust
	 
	 	 	 	 
	

	 	By:
	 	/s/ Ward A. Spooner
	

	 	 	 	
 
	

	 	 	 	Name: Ward A. Spooner
	

	 	 	 	Title:    Vice President
	 
	 	 	 	 
	 	 	U.S. BANK TRUST NATIONAL ASSOCIATION (in
executing below agrees and becomes a party
to the Trust Agreement set forth in Section
A herein), as Trustee
	 
	 	 	 	 
	

	 	By:
	 	/s/ Ward A. Spooner
	

	 	 	 	
 
	

	 	 	 	Name: Ward A. Spooner
	

	 	 	 	Title:    Vice President
	 
	 	 	 	 
	 	 	GSS HOLDINGS II, INC. (in executing below
agrees and becomes a party to the Trust
Agreement set forth in Section A herein), as
Trust Beneficial Owner
	 
	 	 	 	 
	

	 	By:
	 	/s/ Andrew L. Stidd
	

	 	 	 	
 
	

	 	 	 	Name: Andrew L. Stidd
	

	 	 	 	Title:    President
	 
	 	 	 	 
	 	 	CITIBANK, N.A. (in executing below agrees
and becomes a party to (i) the Indenture set
forth in Section C herein, as Indenture
Trustee, Registrar, Transfer Agent, Paying
Agent and Calculation Agent and (ii) the
Coordination Agreement set forth in Section
E herein), as Indenture Trustee, Registrar,
Transfer Agent, Paying Agent and Calculation
Agent
	 
	 	 	 	 
	

	 	By:
	 	/s/ Nancy Forte
	

	 	 	 	
 
	

	 	 	 	Name: Nancy Forte
	

	 	 	 	Title:   Assistant Vice President

[Execution Page 2 of 3]

 

 

	 	 	 	 	 
	 	 	BANKERS TRUST COMPANY, N.A. (in executing
below agrees and becomes a party to the
Coordination Agreement set forth in Section
E herein)
	 
	 	 	 	 
	

	 	By:
	 	/s/ Patty Ashbaugh
	

	 	 	 	
 
	

	 	 	 	Name: Patty Ashbaugh
	

	 	 	 	Title:   Vice President
	 
	 	 	 	 
	 	 	MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED (in executing below agrees and
becomes a party to the Terms Agreement set
forth in Section D herein)
	 
	 	 	 	 
	

	 	By:
	 	/s/ Sabina Ceddia
	

	 	 	 	
 
	

	 	 	 	Name: Sabina Ceddia
	

	 	 	 	Title:   Duly Authorized Attorney

[Execution Page 3 of 3]

 

 

INDEX OF EXHIBITS AND SCHEDULES TO THE OMNIBUS INSTRUMENT

	 	 	 
	Exhibit A

	 	Standard Trust Terms – Incorporated herein by reference to Exhibit
4.6 to Principal Life Insurance Company’s and Principal Financial
Group, Inc.’s Registration Statement on Form S-3 (Registration
Nos. 333-110499 and 333-110499-01.
	 
	 	 
	Exhibit B

	 	Standard License Agreement Terms – Incorporated herein by
reference to Exhibit 99.1 to Principal Life Insurance Company’s
Current Report on Form 8-K, filed on March 29, 2004.
	 
	 	 
	Exhibit C

	 	Standard Indenture Terms – Incorporated herein by reference to
Exhibit 4.1 to Principal Life Insurance Company’s and Principal
Financial Group, Inc.’s Registration Statement on Form S-3
(Registration Nos. 333-110499 and 333-110499-01.
	 
	 	 
	Exhibit D

	 	Pricing Supplement – Incorporated herein by reference to the
Pricing Supplement with respect to Principal Life Income Fundings
Trust 2004-28, filed on July 12, 2004, with the Securities and
Exchange Commission pursuant to Rule 424(b)(2) under the
Securities Act of 1933, as amended.
	 
	 	 
	Exhibit E

	 	Principal Life Insurance Company Officer’s Certificate
	 
	 	 
	Exhibit F

	 	Principal Life Income Fundings Trusts Trustee Officer’s Certificate
	 
	 	 
	Schedule I

	 	Terms Agreement Specifications

 

 

EXHIBIT E

Principal Life Insurance Company

Officer’s Certificate

     The undersigned, an officer of Principal Life Insurance Company, an Iowa
stock life insurance company (“Principal Life”), does hereby certify to
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., in such capacity and on behalf of Principal Life, to the knowledge of the
undersigned and after reasonable inquiry, that:

	 	 	 
	1.

	 	each of the representations and warranties of Principal Life
contained in each Expense and Indemnity Agreement entered into in
connection with the Registration Statement (defined below), and each
Funding Agreement issued in connection with the Program (the
“Specified Agreements”) (other than any representation or warranty
expressly made as of a date prior to the date hereof) are true and
correct on and as of the date hereof, with the same effect as though
such representation or warranty had been made on and as of the date
hereof;
	 
	2.

	 	no default under any of the Specified Agreements and no event
or any condition which, with notice or lapse of time or both, would
become a default, has occurred and is continuing as of the date
hereof;
	 
	3.

	 	Principal Life has performed and complied with, respectively,
in all material respects, all of the agreements, covenants,
obligations and conditions applicable to Principal Life required by
the Specified Agreements to be performed or complied with by
Principal Life on or before the date hereof;
	 
	4.

	 	the Registration Statement filed on Form S-3 (File Nos.
333-110499 and 333-110499-01) (the “Registration Statement”) by
Principal Life and Principal Financial Group, Inc. has been declared
effective by the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the
“Act”) and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been commenced by or are pending before or contemplated
by the Commission;
	 
	5.

	 	all filings, if any, required by Rule 424 and Rule 430A under
the Act have been made in a timely manner;
	 
	6.

	 	since
     , the Trusts organized in connection with the
program contemplated by the Registration Statement have issued the
following series of Notes:
	 
	

	 	[List each series of Notes.] [(collectively, the “Designated Notes”)]; and
	 
	7.

	 	the Funding Agreements issued in connection with the Designated
Notes have been executed and delivered by Principal Life in accordance
with the terms and conditions of the Program Documents.

E-1

 

          Capitalized terms used herein and not otherwise defined herein shall have the meanings set
forth in the Standard Indenture Terms attached as Exhibit 4.1 to the
Registration Statement.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
the • day of •, 200•.

	 	 	 
	

	[Name], [in his/her] capacity as an
authorized officer of Principal Life
	 
	 	By:
	 
	 	 	

	

	 	Name:
	

	 	Title:

	 	 	 	 	 

E-2

 

EXHIBIT F

Principal Life Income Fundings Trusts

Trustee Officer’s Certificate

     U.S. Bank Trust National Association, not in its individual capacity but
solely in its capacity as trustee acting on behalf of each common law trust
organized under the laws of the State of New York (in such capacity, the
“Trustee,” and each such common law trust being referred to herein as, a
“Trust”) in connection with the program contemplated by Registration Statement
Nos. 333-110499 and 333-110499-01 filed on Form S-3 (the “Registration
Statement”) by Principal Life Insurance Company and Principal Financial Group,
Inc. with the Securities and Exchange Commission, does hereby certify to
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., in such capacity and on behalf of each Trust, to the knowledge of the
Trustee, that:

	 	 	 
	1.

	 	each of the representations and warranties of each Trust
contained in the Notes issued in connection with the Program, each
Indenture entered into in connection with the Registration Statement
and the Expense and Indemnity Agreement concerning the Trusts (the
“Specified Agreements”) (other than any representation or warranty
expressly made as of a date prior to the date hereof) are true and
correct on and as of the date hereof, with the same effect as though
such representation or warranty had been made on and as of the date
hereof;
	 
	2.

	 	no default under any of the Specified Agreements and no event
or any condition which, with notice or lapse of time or both, would
become a default, has occurred and is continuing as of the date
hereof;
	 
	3.

	 	each Trust has performed and complied with, respectively, in
all material respects, all of the agreements, covenants, obligations
and conditions applicable to such Trust required by the Specified
Agreements to be performed or complied with by such Trust on or
before the date hereof;
	 
	4.

	 	the Notes issued in connection with the Program, have been
issued, in all material respects, in accordance with the terms and
conditions of the Program Documents; and
	 
	5.

	 	each Funding Agreement has been executed and delivered by the
related Trust in accordance with the terms and conditions of the
Program Documents.

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Standard Indenture Terms attached as Exhibit 4.1
to the Registration Statement. In no event shall U.S. Bank Trust National
Association in its personal corporate capacity have any liability for any of
the certifications or statements contained in this Trustee Officer’s
Certificate, such liability being solely that of each Trust.

F-1

 

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
the • day of •, 200•.

	 	 	 
	

	 	U.S. Bank Trust National Association, not
in its capacity but solely in its capacity
as Trustee acting on behalf of each Trust
	 
	 	By:
	 
	 	 	

	

	 	Name:
	

	 	Title:

F-2

 

SCHEDULE I

Terms Agreement Specifications

     In connection with Section 3(a)(iv) of the Distribution Agreement, the
Program under which the Notes are issued is rated Aa3 by Moody’s Investors
Service, Inc. (“Moody’s”) and AA by Standard & Poor’s Rating Services, a
division of The McGraw-Hill Companies, Inc. (“S&P”). Principal Life and PFG
expect that the Notes will be rated Aa3 by Moody’s. The Company’s financial
strength rating is Aa3 by Moody’s and AA by S&P.

     In accordance with Section 2.02(b) of the Terms Agreement and in
connection with the purchase of Notes from the Trust by the Purchasing Agent as
principal, the following items will be delivered on the Settlement Date:

	 	•	 	Opinion of Sidley Austin Brown & Wood LLP regarding the
enforceability of the Guarantee and the Notes.

     All capitalized terms used herein and not otherwise defined herein will
have the meanings set forth in the Distribution Agreement.

I-1

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