RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.,
Depositor,
and
THE CHASE MANHATTAN BANK,
Grantor Trustee
GRANTOR TRUST AGREEMENT
Dated June 26, 1998
Grantor Trust 1998-HI2
TABLE OF CONTENTS
Page
ARTICLE I
Section 1.01 Definitions..........................................1
Section 1.02 Other Definitional Provisions........................2
ARTICLE II
CONVEYANCE OF HOME LOANS;ORIGINAL ISSUANCE OF GRANTOR TRUST
CERTIFICATE
Section 2.01. Conveyance of Home Loans...................................3
Section 2.02. Acceptance by Grantor Trustee..............................4
Section 2.03. Representations and Warranties of the Seller...............4
Section 2.04. Issuance of Grantor Trust Certificate......................4
Section 2.05. Grantor Trust Fund.........................................5
ARTICLE IIIADMINISTRATION AND SERVICINGOF HOME LOANS
Section 3.01. Master Servicer to Act as Servicer.........................6
ARTICLE IVPAYMENTS TO GRANTOR TRUST CERTIFICATEHOLDERS
Section 4.01. Grantor Trust Certificate Account..........................7
Section 4.02. Distributions..............................................7
ARTICLE VTHE GRANTOR TRUST CERTIFICATES
Section 5.01. The Grantor Trust Certificate..............................9
Section 5.02. Registration of Transfer and Exchange of Grantor Trust
Certificate................................................9
Section 5.03. Mutilated, Destroyed, Lost or Stolen Grantor
Trust Certificate .....................................11
Section 5.04. Persons Deemed Owners.....................................12
Section 5.05. Appointment of Paying Agent...............................12
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ARTICLE VICONCERNING THE GRANTOR TRUSTEE
Section 6.01. Duties of Grantor Trustee.................................14
Section 6.02. Certain Matters Affecting the Grantor Trustee.............15
Section 6.03. Grantor Trustee Not Liable for Grantor Trust Certificate
or Home Loans..........................................17
Section 6.04. Grantor Trustee May Own Grantor Trust Certificate.........17
Section 6.05. Eligibility Requirements for Grantor Trustee..............17
Section 6.06. Resignation and Removal of the Grantor Trustee............17
Section 6.07. Successor Grantor Trustee.................................19
Section 6.08. Merger or Consolidation of Grantor Trustee................19
Section 6.09. Appointment of Co-Grantor Trustee or Separate Grantor
Trustee ...............................................19
Section 6.10. Appointment of Custodians.................................21
Section 6.11. Appointment of Office or Agency...........................21
Section 6.12. Compliance with Withholding Requirements..................21
Section 6.13. Grantor Trust Reporting...................................21
Section 6.14. Representations and Warranties............................21
Section 6.15. Compensation and Indemnity................................22
ARTICLE VIITERMINATION
Section 7.01. Termination Upon Purchase by the Master Servicer or
Liquidation of All Home Loans..........................24
ARTICLE VIIIMISCELLANEOUS PROVISIONS
Section 8.01. Amendment.................................................26
Section 8.02. Recordation of Grantor Trust Agreement; Counterparts......27
Section 8.03. Limitation on Rights of Grantor Trust Certificateholder...27
Section 8.04. Governing Law.............................................28
Section 8.05. Notices...................................................28
Section 8.06. Severability of Provisions................................29
EXHIBITS
Exhibit A Form of Grantor Trust Certificate
Exhibit B Home Loan Schedule
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This Grantor Trust Agreement, dated June 26, 1998 (as amended from time to
time, this "Grantor Trust Agreement"), between RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC., a Delaware corporation, as depositor (the "Depositor") and
THE CHASE MANHATTAN BANK, a national banking association, as trustee (the
"Grantor Trustee"),
W I T N E S S E T H T H A T:
WHEREAS, pursuant to the terms of the Home Loan Purchase Agreement,
Residential Funding Corporation (in its capacity as Seller) will sell to the
Depositor the Home Loans together with the Related Documents on the Closing
Date;
WHEREAS, pursuant to this Grantor Trust Agreement, the Depositor
will transfer the Home Loans and all of its rights and remedies under the Home
Loan Purchase Agreement to the Grantor Trustee in trust for the benefit of the
Holder of the Grantor Trust Certificate, together with the Related Documents on
the Closing Date, in exchange for the Grantor Trust Certificate;
WHEREAS, the Depositor will sell the Grantor Trust Certificate to the
Issuer on the Closing Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will
issue and transfer to or at the direction of the Depositor, the Certificate;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue and
transfer to or at the direction of the Depositor, the Notes;
WHEREAS, pursuant to the terms of the Servicing Agreement between
the Master Servicer, the Depositor and the Grantor Trustee, the Master Servicer
will service the Home
Loans directly or through one or more Subservicers; and
WHEREAS, the Home Loans have an aggregate Cut-off Date Principal
Balance equal to approximately $400,218,259. The Home Loans are fixed-rate,
fully amortizing, first lien and second lien home equity mortgage loans having
terms to maturity at origination or
modification of approximately 5, 10, 15, 20 or 25 years.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. For all purposes of this Grantor Trust Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions contained in Appendix A to the Indenture dated
June 26, 1998 (the "Indenture"), between Home Loan Trust 1998-HI2, as Issuer,
and The Chase Manhattan Bank, as Indenture Trustee, which is incorporated by
reference herein. All other capitalized terms
used herein shall have the meanings specified herein.
Section 1.02 Other Definitional Provisions. (a) All terms defined in this
----------------------------- Grantor Trust Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Grantor Trust Agreement and in any certificate
or other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Grantor Trust Agreement or in any such certificate or other
document, and accounting terms partly defined in this Grantor Trust Agreement or
in any such certificate or other document, to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Grantor Trust Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Grantor Trust Agreement or in any
such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Grantor Trust Agreement shall refer to this Grantor
Trust Agreement as a whole and not to any particular provision of this Grantor
Trust Agreement; Section and Exhibit references contained in this Grantor Trust
Agreement are references to Sections and Exhibits in or to this Grantor Trust
Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation".
(d) The definitions contained in this Grantor Trust Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as the feminine and neuter genders of such terms.
(e) 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.
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ARTICLE II
CONVEYANCE OF HOME LOANS;
ORIGINAL ISSUANCE OF GRANTOR TRUST CERTIFICATE
Section 2.01. Conveyance of Home Loans.
(a) The Depositor, by the execution and delivery of this Grantor
Trust Agreement, does hereby sell, assign, set over, and otherwise convey to the
Grantor Trustee, without recourse, all of its right, title and interest in, to
and under the following, and wherever located: (i) the Home Loans set forth on
the Home Loan Schedule, attached hereto as Exhibit B, all interest accruing
thereon and all collections in respect thereof received on or after the Cut-off
Date except for the Excluded Interest Portion ; (ii) property which secured a
Home Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure; (iii) the interest of the Depositor in any insurance policies in
respect of the Home Loans; (iv) all rights and remedies of the Depositor under
the Home Loan Purchase Agreement; and (v) all proceeds of the foregoing. Such
conveyance shall be deemed to be made as of the Closing Date.
(b) Pursuant to Section 2.01 of the Home Loan Purchase Agreement,
the Related Documents for each of the Home Loans are required to be delivered to
the Custodian. The Depositor hereby acknowledges that all Related Documents
delivered to the Custodian are to be held by the Custodian on behalf of, and
subject to the exclusive control and direction of, the Grantor Trustee for the
benefit of the Holder of the Grantor Trust Certificate.
(c) The parties hereto intend that the transactions set forth herein
constitute a sale by the Depositor to the Grantor Trustee for the benefit of the
Holder of the Grantor Trust Certificate of all the Depositor's right, title and
interest in and to the Home Loans and other property as and to the extent
described above. In the event the transactions set forth herein are deemed not
to be a sale, the Depositor hereby grants to the Grantor Trustee for the benefit
of the Holder of the Grantor Trust Certificate a security interest in all of the
Depositor's right, title and interest in, to and under the Home Loans and such
other property, to secure all of the Depositor's obligations hereunder, and this
Grantor Trust Agreement shall constitute a security agreement under applicable
law. The Depositor agrees to take or cause to be taken such actions and to
execute such documents, including without limitation the filing of all necessary
UCC-1 financing statements filed in the State of Minnesota (which shall have
been submitted for filing as of the Closing Date), any continuation statements
with respect thereto and any amendments thereto required to reflect a change in
the name or corporate structure of the Depositor or the filing of any additional
UCC-1 financing statements due to the change in the principal office of the
Depositor, as are necessary to perfect and protect the Grantor Trustee's
interests in each Home Loan and the proceeds thereof.
(d) The trust created hereunder shall be referred to as the "Grantor
Trust 1998-HI2".
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Section 2.02. Acceptance by Grantor Trustee.
The Grantor Trustee acknowledges receipt subject to a Custodial
Agreement, and based solely upon a receipt or certification executed by the
Custodian, by the respective Custodian as the duly appointed agent of the
Grantor Trustee, of the Related Documents to the extent delivered to the
Custodian and declares that it, or a Custodian as its agent, holds and will hold
such documents and the other documents constituting a part of the Loan Files
delivered to it, or a Custodian as its agent, in trust for the use and benefit
of all present and future Grantor Trust Certificateholders. The Grantor Trustee
or Custodian (such Custodian being so obligated under a Custodial Agreement)
agrees, for the benefit of Grantor Trust Certificateholders, to review each Loan
File delivered to it within 45 days after the Closing Date to ascertain that all
required documents have been executed and received, and that such documents
relate to the Home Loans identified on the Home Loan Schedule, as supplemented,
that have been conveyed to it. Upon delivery of the Loan Files by the Depositor
or the Master Servicer, the Grantor Trustee shall acknowledge receipt (or, with
respect to Home Loans subject to a Custodial Agreement, and based solely upon a
receipt or certification executed by the Custodian, receipt by the respective
Custodian as the duly appointed agent of the Grantor Trustee) of the Related
Documents. The Grantor Trustee or Custodian (such Custodian being so obligated
under a Custodial Agreement) agrees to review each Loan File delivered to it
within 45 days after receipt thereof to ascertain that all documents required to
be delivered pursuant to Section 2.01(b) have been received, and that such
documents relate to the Home Loans identified on the Home Loan Schedule, as
supplemented, that have been conveyed to it.
Section 2.03. Representations and Warranties of the Seller.
It is understood and agreed that the Seller has made certain
representations and warranties regarding the Home Loans pursuant to the Home
Loan Purchase Agreement, and that, pursuant to Section 2.01(a) hereof, such
representations and warranties and the related remedy provisions, together with
all other rights and remedies of the Depositor under the Home Loan Purchase
Agreement, have been assigned hereunder to, and are enforceable by, the Grantor
Trustee on behalf of the Grantor Trust Certificateholder against the Seller.
Section 2.04. Issuance of Grantor Trust Certificate.
The Grantor Trustee acknowledges the assignment to it of the Home
Loans and the delivery of the Loan Files to it, or any Custodian on its behalf,
subject to any exceptions noted, together with the assignment to it of all other
assets included in the Grantor Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such delivery and in exchange therefor, the
Grantor Trustee, pursuant to the written request of the Depositor executed by an
officer of the Depositor has executed and caused to be authenticated and
delivered to or upon the order of the Depositor the Grantor Trust Certificate,
which evidences the entire beneficial ownership of the Grantor Trust Fund. The
rights of the Grantor Trust Certificateholder to receive distributions from the
proceeds of the Grantor Trust Fund, and all ownership interests of the Grantor
Trust Certificateholder in such distributions, shall be as set forth in this
Grantor Trust Agreement.
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Section 2.05. Grantor Trust Fund.
The Grantor Trust Fund is intended to qualify as an "investment
trust" within the meaning of Treasury Regulation ss.301.7701-4(c), and it is
neither the purpose nor the intent of the parties hereto to create a
partnership, joint venture, or association taxable as a corporation between or
among the Grantor Trust Certificateholder, the Grantor Trustee or the Depositor.
In furtherance of the foregoing, the purpose of the Grantor Trust Fund shall be
to protect and conserve the assets of the Grantor Trust Fund, and the Grantor
Trust Fund shall not at any time engage in or carry on any kind of business or
any kind of commercial or investment activity. In no event shall the Grantor
Trustee or any other person have any power to vary the investment of the Grantor
Trust Certificateholder in the Grantor Trust Certificate or to substitute new
investments or reinvest so as to enable the Grantor Trust Fund to take advantage
of variations in the market to improve the investment of the Grantor Trust
Certificateholder in the Grantor Trust Certificate.
Section 2.06. Master Servicer as Agent and Bailee of the Grantor Trust
Certificate Holder.
Solely for purposes of perfection under Section 9-305 of the Uniform
Commercial Code or other similar applicable law, rule or regulation of the state
in which such property is held by the Master Servicer, the Grantor Trustee
hereby acknowledges that the Master Servicer is acting as agent and bailee of
the Grantor Trust Certificateholder in holding amounts on deposit in the
Custodial Account pursuant to Section 3.02 of the Servicing Agreement that are
allocable to the Grantor Trust Certificate, as well as its agent and bailee in
holding any Related Documents released to the Master Servicer pursuant to
Section 3.06(c) of the Servicing Agreement, and any other items constituting a
part of the Trust Estate which from time to time come into the possession of the
Master Servicer. It is intended that, by the Master Servicer's acceptance of
such agency pursuant to Section 3.02 of the Servicing Agreement, the Grantor
Trustee will be deemed to have possession of such Related Documents, such monies
and such other items for purposes of Section 9-305 of the Uniform Commercial
Code of the state in which such property is held by the Master Servicer.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF HOME LOANS
Section 3.01. Master Servicer to Act as Servicer.
It is understood and agreed that the Master Servicer, acting alone
or through Subservicers, shall service and administer the Home Loans in
accordance with the terms of the Servicing Agreement and the respective Home
Loans, on behalf of, and subject to the exclusive control and direction of, the
Grantor Trustee for the benefit of the holder of the Grantor Trust Certificate.
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ARTICLE IV
PAYMENTS TO GRANTOR TRUST CERTIFICATEHOLDERS
Section 4.01. Grantor Trust Certificate Account.
(a) The Grantor Trustee shall establish and maintain a Grantor Trust
Certificate Account titled "The Chase Manhattan Bank, as Grantor Trustee, for
the benefit of the Grantor Trust Certificateholder, pursuant to the Grantor
Trust Agreement, dated June 26, 1998, between Residential Funding Mortgage
Securities II, Inc. and The Chase Manhattan Bank". The Grantor Trust Certificate
Account shall be an Eligible Account. Pursuant to Section 3.03 (i) of the
Servicing Agreement, the Master Servicer shall cause to be deposited in the
Grantor Trust Certificate Account on behalf of the Grantor Trustee on the
Business Day prior to each Payment Date by wire transfer of immediately
available funds an amount equal to the sum of the Interest Remittance Amount and
Principal Remittance Amount for the immediately succeeding Payment Date.
(b) The Grantor Trustee shall, upon written request from the Master
Servicer, invest or cause the institution maintaining the Grantor Trust
Certificate Account to invest the funds in the Grantor Trust Certificate Account
in Permitted Investments designated in the name of the Grantor Trustee for the
benefit of the Grantor Trust Certificateholder, which shall mature not later
than the Business Day next preceding the Payment Date next following the date of
such investment (except that (i) any investment in the institution with which
the Grantor Trust Certificate Account is maintained may mature on such Payment
Date and (ii) any other investment may mature on such Payment Date if the
Grantor Trustee shall advance funds on such Payment Date to the Grantor Trust
Certificate Account in the amount payable on such investment on such Payment
Date, pending receipt thereof to the extent necessary to make distributions on
the Grantor Trust Certificate) and shall not be sold or disposed of prior to
maturity. All income and gain realized from any such investment shall be for the
benefit of the Master Servicer and shall be subject to its withdrawal or order
from time to time. The amount of any losses incurred in respect of any such
investments shall be deposited in the Grantor Trust Certificate Account by the
Master Servicer out of its own funds immediately as realized without any right
of reimbursement.
Section 4.02. Distributions.
(a) On each Payment Date, (i) the Grantor Trustee or (ii) the Paying
Agent appointed by the Grantor Trustee, shall distribute to the Grantor Trust
Certificateholder of record on the related Record Date (other than as provided
in Section 7.01 respecting the final distribution) either in immediately
available funds (by wire transfer or otherwise) to the account of such Grantor
Trust Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Grantor Trust Certificateholder has so notified the Grantor
Trustee or the Paying Agent, as the case may be, or, if such Grantor Trust
Certificateholder has not so notified the Grantor Trustee or the Paying Agent by
the related Record Date, by check mailed to such Grantor Trust Certificateholder
at the address of such Holder appearing in the Grantor Trust
Certificate Register, an amount equal to the sum of the Interest Remittance
Amount and the Principal Remittance Amount.
(b) If the Master Servicer anticipates that a final distribution
with respect to the Grantor Trust Certificate will be made on the next Payment
Date (including by reason of an optional purchase by the Master Servicer
pursuant to Section 8.08(a)(ii) of the Servicing Agreement), the Master Servicer
shall, no later than the Determination Date in the month of such final
distribution, notify the Grantor Trustee pursuant to Section 8.08 of the
Servicing Agreement and the Grantor Trustee shall, no later than two (2)
Business Days after such Determination Date, send on such date to the Holder of
the Grantor Trust Certificate a notice to the effect that the Grantor Trustee
anticipates that the final distribution with respect to the Grantor Trust
Certificate will be made on such Payment Date but only upon presentation and
surrender of such Grantor Trust Certificate at the office of the Grantor Trustee
or as otherwise specified therein, and no interest shall accrue on such Grantor
Trust Certificate from and after the end of the prior calendar month unless
funds for such final distribution are not available for payment on such Payment
Date. In the event that the Grantor Trust Certificateholder required to
surrender its Grantor Trust Certificate pursuant to Section 7.01(c) does not
surrender its Grantor Trust Certificate for final cancellation, the Grantor
Trustee shall cause funds distributable with respect to the Grantor Trust
Certificate to be withdrawn from the Grantor Trust Certificate Account and
credited to a separate escrow account for the benefit of the Grantor Trust
Certificateholder as provided in Section 7.01(d).
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ARTICLE V
THE GRANTOR TRUST CERTIFICATES
Section 5.01. The Grantor Trust Certificate.
The Grantor Trust Certificate shall be substantially in the form set
forth in Exhibit A and shall, on original issue, be executed and delivered by
the Grantor Trustee to the Grantor Trust Certificate Registrar for
authentication and delivery to or upon the order of the Depositor upon receipt
by the Grantor Trustee or one or more Custodians of the documents specified in
Section 2.01. The Grantor Trust Certificate shall be issuable only as a single
Certificate evidencing 100% of the Grantor Trust Certificate.
The Grantor Trust Certificate shall be executed by manual or
facsimile signature on behalf of an authorized officer of the Grantor Trustee.
The Grantor Trust Certificate bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Grantor Trustee
shall bind the Grantor Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Grantor Trust Certificate or did not hold such offices at the date of
such Grantor Trust Certificate. No Grantor Trust Certificate shall be entitled
to any benefit under this Grantor Trust Agreement, or be valid for any purpose,
unless there appears on such Grantor Trust Certificate a Grantor Trust
Certificate of Authentication substantially in the form provided for herein
executed by the Grantor Trust Certificate Registrar by manual signature, and
such Grantor Trust Certificate of Authentication upon any Grantor Trust
Certificate shall be conclusive evidence, and the only evidence, that such
Grantor Trust Certificate has been duly authenticated and delivered hereunder.
The Grantor Trust Certificate shall be dated the date of its authentication.
Section 5.02. Registration of Transfer and Exchange of Grantor Trust
Certificate.
(a) The Grantor Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Grantor Trustee in accordance with the
provisions of Section 6.11 a Grantor Trust Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Grantor Trustee
shall provide for the registration of the Grantor Trust Certificate and of
transfers and exchanges of the Grantor Trust Certificate as herein provided. The
Grantor Trustee is initially appointed Grantor Trust Certificate Registrar for
the purpose of registering the Grantor Trust Certificate and transfers and
exchanges of the Grantor Trust Certificate as herein provided. The Grantor Trust
Certificate Registrar, or the Grantor Trustee, shall notify the Master Servicer
promptly of any transfer of the Grantor Trust Certificate and the name of any
such transferee of the Grantor Trust Certificateholder.
(b) Upon surrender for registration of transfer of the Grantor Trust
Certificate at any office or agency of the Grantor Trustee maintained for such
purpose pursuant to Section 6.11 and upon satisfaction of the conditions set
forth below, the Grantor Trustee shall execute and the Grantor Trust Certificate
Registrar shall authenticate and deliver, in the name of the
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designated transferee or transferees, a new Grantor Trust Certificate
representing a 100% Percentage Interest.
(c) Notwithstanding any other provision hereof, unless an Event of
Default has occurred and is continuing the under the Grantor Trust Agreement or
the Indenture is otherwise terminated, no transfer of the Grantor Trust
Certificate shall be made. The foregoing provision shall not apply to or in any
way limit: (i) the transfer of the Grantor Trust Certificate to the Owner
Trustee pursuant to the Owner Trust Agreement, (ii) the transfer of the Grantor
Trust Certificate to the Grantor Trustee pursuant to the Grantor Trust
Agreement, or the registration of the Grantor Trust Certificate in the name of
the Grantor Trustee, (iii) the transfer of the B-2 Component to the Class B-2
Trustee pursuant to the Class B-2 Grantor Trust Agreement, (iv) the
transferability of the Notes, the Certificates and B-2 Component, and any other
securities secured thereby or representing interests therein, or (iv) the rights
of the Holder of the Grantor Trust Certificate to terminate the Grantor Trust
and take delivery of the Home Loans in accordance with Section 7.02, or any
actions that may be taken thereafter with respect to the Home Loans.
(d) No transfer, sale, pledge or other disposition of the Grantor
Trust Certificate shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with said Act and laws. Except as otherwise provided in
this Section 5.02(d), in the event that a transfer of the Grantor Trust
Certificate is to be made either (i)(A) the Grantor Trustee shall require a
written Opinion of Counsel acceptable to and in form and substance satisfactory
to the Grantor Trustee and the Depositor that such transfer may be made pursuant
to an exemption, describing the applicable exemption and the basis therefor,
from said Act and laws or is being made pursuant to said Act and laws, which
Opinion of Counsel shall not be an expense of the Grantor Trustee, the Depositor
or the Master Servicer; provided that such Opinion of Counsel will not be
required in connection with the initial transfers of the Grantor Trust
Certificate by the Depositor or any Affiliate thereof to an Affiliate of the
Depositor or to the Issuer or the Grantor Trustee as pledgee of the Issuer and
(B) the Grantor Trustee shall require the transferee to execute a representation
letter, and the Grantor Trustee shall require the transferor to execute a
representation letter, each acceptable to and in form and substance satisfactory
to the Depositor and the Grantor Trustee certifying to the Depositor and the
Grantor Trustee the facts surrounding such transfer, which representation
letters shall not be an expense of the Grantor Trustee, the Depositor or the
Master Servicer; provided, however, that such representation letters will not be
required in connection with any transfer of any such Grantor Trust Certificate
by the Depositor or any Affiliate thereof to an Affiliate of the Depositor, and
the Grantor Trustee shall be entitled to conclusively rely upon a representation
(which, upon the request of the Grantor Trustee, shall be written
representation) from the Depositor of the status, of such transferee as an
Affiliate of the Depositor or (ii) the prospective transferee of such a Grantor
Trust Certificate shall be required to provide the Grantor Trustee, the
Depositor and the Master Servicer with an investment letter in form and
substance satisfactory to the Depositor and the Grantor Trustee, which
investment letter shall not be an expense of the Grantor Trustee, the Depositor,
or the Master Servicer, and which investment letter states that, among other
things, such transferee (A)
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is a "qualified institutional buyer" as defined under Rule 144A, acting for its
own account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (B) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the 1933 Act provided by
Rule 144A. The Holder of the Grantor Trust Certificate desiring to effect any
such transfer, sale, pledge or other disposition shall, and does hereby agree
to, indemnify the Grantor Trustee, the Depositor, the Master Servicer and the
Grantor Trust Certificate Registrar against any liability that may result if the
transfer, sale, pledge or other disposition is not so exempt or is not made in
accordance with such federal and state laws and this Grantor Trust Agreement.
(e) In the case of any Grantor Trust Certificate presented for
registration in the name of any Person, either (i) the Grantor Trustee shall
require an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Grantor Trustee, the Depositor and the Master Servicer to
the effect that the purchase or holding of such Grantor Trust Certificate is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under Section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code
(or comparable provisions of any subsequent enactments), and will not subject
the Grantor Trustee, the Depositor or the Master Servicer to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in this Grantor Trust Agreement, which
Opinion of Counsel shall not be an expense of the Grantor Trustee, the Depositor
or the Master Servicer or (ii) the prospective transferee shall be required to
provide the Grantor Trustee, the Depositor and the Master Servicer with a
certification, which the Grantor Trustee may rely upon without further inquiry
or investigation, or such other certifications as the Grantor Trustee may deem
desirable or necessary in order to establish that such transferee or the Person
in whose name such registration is requested is not an employee benefit plan or
other plan subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code, or any Person (including an investment manager, a named
fiduciary or a Grantor Trustee of any such plan) who is using "plan assets" of
any such plan to effect such acquisition; provided, however, that such Opinion
of Counsel or certification will not be required in connection with the initial
transfers of the Grantor Trust Certificate by the Depositor or any Affiliate
thereof to an Affiliate of the Depositor or to the Issuer or the Grantor Trustee
as pledgee of the Issuer (in which case, the Depositor or any Affiliate thereof
or the Issuer or the Grantor Trustee shall have deemed to have represented that
such Affiliate or the Issuer or the Grantor Trustee is not a Plan or a Person
investing "plan assets" of any Plan) and the Grantor Trustee shall be entitled
to conclusively rely upon a representation (which, upon the request of the
Grantor Trustee, shall be a written representation) from the Depositor of the
status of such transferee as an Affiliate of the Depositor.
(f) No service charge shall be made for any transfer or exchange of
the Grantor Trust Certificate, but the Grantor Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of the Grantor Trust Certificate.
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(g) The Grantor Trust Certificate surrendered for transfer and
exchange shall be destroyed by the Grantor Trust Certificate Registrar.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Grantor Trust
Certificate.
If (i) any mutilated Grantor Trust Certificate is surrendered to the
Grantor Trust Certificate Registrar, or the Grantor Trustee and the Grantor
Trust Certificate Registrar receive evidence to their satisfaction of the
destruction, loss or theft of the Grantor Trust Certificate, and (ii) there is
delivered to the Grantor Trustee and the Grantor Trust Certificate Registrar
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Grantor Trustee or the Grantor
Trust Certificate Registrar that the Grantor Trust Certificate has been acquired
by a bona fide purchaser, the Grantor Trustee shall execute and the Grantor
Trust Certificate Registrar shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Grantor Trust
Certificate, a new Grantor Trust Certificate of like tenor and Percentage
Interest but bearing a number not contemporaneously outstanding. Upon the
issuance of any new Grantor Trust Certificate under this Section, the Grantor
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Grantor Trustee and the Grantor
Trust Certificate Registrar) connected therewith. Any duplicate Grantor Trust
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Grantor Trust Fund, as if originally
issued, whether or not the lost, stolen or destroyed Grantor Trust Certificate
shall be found at any time.
Section 5.04. Persons Deemed Owners.
Prior to due presentation of the Grantor Trust Certificate for
registration of transfer, the Depositor, the Master Servicer, the Grantor
Trustee, the Grantor Trust Certificate Registrar and any agent of the Depositor,
the Master Servicer, the Grantor Trustee or the Grantor Trust Certificate
Registrar may treat the Person in whose name the Grantor Trust Certificate is
registered as the owner of the Grantor Trust Certificate for the purpose of
receiving distributions pursuant to Section 4.02 and for all other purposes
whatsoever, and neither the Depositor, the Master Servicer, the Grantor Trustee,
the Grantor Trust Certificate Registrar nor any agent of the Depositor, the
Master Servicer, the Grantor Trustee or the Grantor Trust Certificate Registrar
shall be affected by notice to the contrary.
Section 5.05. Appointment of Paying Agent.
The Grantor Trustee may appoint a Paying Agent for the purpose of
making distributions to the Grantor Trust Certificateholder pursuant to Section
4.02. In the event of any such appointment, on or prior to each Payment Date the
Master Servicer on behalf of the Grantor Trustee shall deposit or cause to be
deposited with the Paying Agent a sum sufficient to make the payments to the
Grantor Trust Certificateholder in the amounts and in the manner provided for in
Section 4.02, such sum to be held in trust for the benefit of the Grantor Trust
Certificateholder.
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The Grantor Trustee shall cause each Paying Agent to execute and
deliver to the Grantor Trustee an instrument in which such Paying Agent shall
agree with the Grantor Trustee that such Paying Agent will hold all sums held by
it for the payment to the Grantor Trust Certificateholder in trust for the
benefit of the Grantor Trust Certificateholder entitled thereto until such sums
shall be paid to such Grantor Trust Certificateholder. Any sums so held by such
Paying Agent shall be held only in Eligible Accounts to the extent such sums are
not distributed to the Grantor Trust Certificateholder on the date of receipt by
such Paying Agent.
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ARTICLE VI
CONCERNING THE GRANTOR TRUSTEE
Section 6.01. Duties of Grantor Trustee.
(a) The Grantor Trustee, prior to the occurrence of a Servicing
Default and after the curing or waiver of all Servicing Defaults which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Grantor Trust Agreement. In case a Servicing
Default has occurred (which has not been cured or waived), the Grantor Trustee
shall exercise such of the rights and powers vested in it by this Grantor Trust
Agreement, and use the same degree of care and skill in their exercise as a
prudent investor would exercise or use under the circumstances in the conduct of
such investor's own affairs.
(b) The Grantor Trustee, upon receipt of all resolutions, Grantor
Trust Certificate, statements, opinions, reports, documents, orders or other
instruments furnished to the Grantor Trustee which are specifically required to
be furnished pursuant to any provision of this Grantor Trust Agreement, shall
examine them to determine whether they conform to the requirements of this
Grantor Trust Agreement. The Grantor Trustee shall notify the Grantor Trust
Certificateholder of any such documents which do not materially conform to the
requirements of this Grantor Trust Agreement in the event that the Grantor
Trustee, after so requesting, does not receive satisfactorily corrected
documents.
The Grantor Trustee shall furnish in a timely fashion to the Master
Servicer such information as the Master Servicer may reasonably request from
time to time for the Master Servicer to fulfill its duties as set forth in the
Servicing Agreement. The Grantor Trustee shall furnish promptly to the Indenture
Trustee and the Owner Trustee all reports received from the Master Servicer. The
Grantor Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of the Grantor Trust Fund as
a grantor trust under U.S. federal income tax law and to prevent the imposition
of any federal, state or local income, prohibited transaction, contribution or
other tax on the Grantor Trust Fund to the extent that maintaining such status
and avoiding such taxes are reasonably within the control of the Grantor Trustee
and are reasonably within the scope of its duties under this Grantor Trust
Agreement.
(c) No provision of this Grantor Trust Agreement shall be construed
to relieve the Grantor Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct; provided, however,
that:
(i) Prior to the occurrence of a Servicing Default, and
after the curing or waiver of all such Servicing Defaults which may have
occurred, the duties and obligations of the Grantor Trustee shall be
determined solely by the express provisions of this Grantor Trust
Agreement, the Grantor Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth
in this Grantor Trust Agreement, no implied covenants or obligations shall
be read into this Grantor
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Trust Agreement against the Grantor Trustee and, in the absence of bad
faith on the part of the Grantor Trustee, the Grantor Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any Grantor Trust Certificate or
opinions furnished to the Grantor Trustee by the Depositor or the Master
Servicer and which on their face, do not contradict the requirements of
this Grantor Trust Agreement;
(ii) The Grantor Trustee shall not be personally liable for
an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Grantor Trustee, unless it shall be proved
that the Grantor Trustee was negligent in ascertaining the pertinent
facts;
(iii) The Grantor Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Grantor Trust
Certificateholder as to the time, method and place of conducting any
proceeding for any remedy available to the Grantor Trustee, or exercising
any trust or power conferred upon the Grantor Trustee, under this Grantor
Trust Agreement;
(iv) The Grantor Trustee shall not be charged with knowledge
of any failure or event that may give rise to any Servicing Default (other
than a default in payment to the Grantor Trustee) unless a Responsible
Officer of the Grantor Trustee assigned to and working in the Corporate
Trust Office obtains actual knowledge of such failure or event or the
Grantor Trustee receives written notice of such failure or event at its
Corporate Trust Office from the Master Servicer, the Depositor or any
Grantor Trust Certificateholder; and
(v) Except to the extent provided in Sections 6.06 and 6.07,
no provision in this Grantor Trust Agreement shall require the Grantor
Trustee to expend or risk its own funds or otherwise incur any personal
financial liability in the performance of any of its duties as Grantor
Trustee hereunder, or in the exercise of any of its rights or powers, if
the Grantor Trustee shall have reasonable grounds for believing that
repayment of funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) As used in this Article, references to the rights, powers,
duties and obligations of the Grantor Trustee under this Grantor Trust Agreement
include the rights, powers, duties and obligations of the Grantor Trustee under
the Servicing Agreement.
(e) The Grantor Trustee covenants and agrees that it shall perform
its obligations hereunder in a manner so as to maintain the status of the
Grantor Trust Fund as a grantor trust under subpart E, part I of subchapter J of
the Code and not as an association taxable as a corporation, as a taxable
mortgage pool, or as a partnership and to prevent the imposition of any U.S.
federal, state or local income or other tax on the Grantor Trust Fund.
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Section 6.02. Certain Matters Affecting the Grantor Trustee.
Except as otherwise provided in Section 6.01:
(i) The Grantor Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) The Grantor Trustee may consult with counsel and any
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) The Grantor Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Grantor Trust
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of the Grantor Trust
Certificateholder pursuant to the provisions of this Grantor Trust
Agreement, unless the Grantor Trust Certificateholder shall have offered
to the Grantor Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby has
given its consent; nothing contained herein shall, however, relieve the
Grantor Trustee of the obligation, upon the occurrence of a Servicing
Default (which has not been cured), to exercise such of the rights and
powers vested in it by this Grantor Trust Agreement, and to use the same
degree of care and skill in their exercise as a prudent investor would
exercise or use under the circumstances in the conduct of such investor's
own affairs;
(iv) The Grantor Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Grantor Trust Agreement;
(v) Prior to the occurrence of a Servicing Default hereunder
and after the curing of all Servicing Default which may have occurred, the
Grantor Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
the Grantor Trust Certificateholder; provided, however, that if the
payment within a reasonable time to the Grantor Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Grantor Trustee, not reasonably
assured to the Grantor Trustee by the security afforded to it by the terms
of this Grantor Trust Agreement, the Grantor Trustee may require
reasonable indemnity against such expense or liability as a condition to
so proceeding. The reasonable expense of every such examination shall be
paid by the Master Servicer, if
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a Servicing Default shall have occurred and is continuing, and otherwise by
the Grantor Trust Certificateholder requesting the investigation; and
(vi) The Grantor 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, and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of,
or for the supervision of, any such agent, attorney, custodian or nominee
appointed with due care by it hereunder.
Section 6.03. Grantor Trustee Not Liable for Grantor Trust
Certificate or Home Loans.
The recitals contained herein and in the Grantor Trust Certificate
(other than the execution and authentication of the Grantor Trust Certificate
and relating to the acceptance and receipt of the Home Loans) shall be taken as
the statements of the Depositor, and the Grantor Trustee assumes no
responsibility for their correctness. The Grantor Trustee makes no
representations as to the validity or sufficiency of this Grantor Trust
Agreement or of the Grantor Trust Certificate (except that the Grantor Trust
Certificate shall be duly and validly executed by it and authenticated by it as
Grantor Trust Certificate Registrar) or of any Home Loan or related document.
Except as otherwise provided herein, the Grantor Trustee shall not be
accountable for the use or application by the Depositor of the Grantor Trust
Certificate or of the proceeds of the Grantor Trust Certificate, or for the use
or application of any funds paid to the Depositor in respect of the Home Loans
or deposited in or withdrawn from the Custodial Account or the Grantor Trust
Certificate Account by the Depositor or the Master Servicer.
Section 6.04. Grantor Trustee May Own Grantor Trust Certificate.
The Grantor Trustee in its individual or any other capacity may
become the owner or pledgee of the Grantor Trust Certificate with the same
rights it would have if it were not Grantor Trustee.
Section 6.05. Eligibility Requirements for Grantor Trustee.
The Grantor Trustee hereunder shall at all times be a corporation or
a national banking association having its principal office in a state and city
acceptable to the Depositor and organized and doing business under the laws of
such state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or national banking association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Grantor Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Grantor
Trustee shall resign immediately in the manner and with the effect specified in
Section 6.06.
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Section 6.06. Resignation and Removal of the Grantor Trustee.
(a) The Grantor Trustee may at any time resign and be discharged
from the trusts hereby created by giving 120 days written notice thereof to the
Depositor. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Grantor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Grantor Trustee and one copy to the successor Grantor Trustee. If no successor
Grantor Trustee shall have been so appointed and have accepted appointment
within 120 days after the giving of such notice of resignation, the resigning
Grantor Trustee may petition any court of competent jurisdiction for the
appointment of a successor Grantor Trustee.
(b) If at any time the Grantor Trustee shall cease to be eligible in
accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Grantor Trustee
shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or
a receiver of the Grantor Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Grantor Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor may remove the Grantor Trustee and appoint a
successor Grantor Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Grantor Trustee so removed and one copy to
the successor Grantor Trustee. In addition, in the event that the Depositor
determines that the Grantor Trustee has failed (i) to distribute or cause to be
distributed to the Grantor Trust Certificateholder any amount required to be
distributed hereunder, if such amount is held by the Grantor Trustee or its
Paying Agent (other than the Master Servicer or the Depositor) for distribution
or (ii) to otherwise observe or perform in any material respect any of its
covenants, agreements or obligations hereunder, and such failure shall continue
unremedied for a period of 5 days (in respect of clause (i) above) or 30 days
(in respect of clause (ii) above) after the date on which written notice of such
failure, requiring that the same be remedied, shall have been given to the
Grantor Trustee by the Depositor, then the Depositor may remove the Grantor
Trustee and appoint a successor Grantor Trustee by written instrument delivered
as provided in Section 6.06(a).
(c) The Holder of the Grantor Trust Certificate may at any time
remove the Grantor Trustee and appoint a successor Grantor Trustee by written
instrument or instruments, in triplicate, signed by such Holder or its
attorney-in-fact duly authorized, one complete set of which instruments shall be
delivered to the Depositor, one complete set to the Grantor Trustee so removed
and one complete set to the successor so appointed.
(d) Any resignation or removal of the Grantor Trustee and
appointment of a successor Grantor Trustee pursuant to any of the provisions of
this Section shall become effective upon acceptance of appointment by the
successor Grantor Trustee as provided in Section 6.07. In connection with the
appointment of a successor Grantor Trustee pursuant to the preceding sentence,
the Depositor shall, on or before the date on which any such appointment becomes
effective, obtain from each Rating Agency written confirmation that the
appointment of any such successor Grantor Trustee will not result in the
reduction of the ratings
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on any class of the Securities or the Class B-2 Notes below the lesser of the
then current or original ratings on such Securities or the Class B-2 Notes.
Section 6.07. Successor Grantor Trustee.
(a) Any successor Grantor Trustee appointed as provided in Section
6.06 shall execute, acknowledge and deliver to the Depositor and to its
predecessor Grantor Trustee an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor Grantor Trustee
shall become effective and such successor Grantor Trustee shall become effective
and such successor Grantor Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with the like effect as if originally named as
Grantor Trustee herein. The predecessor Grantor Trustee shall deliver to the
successor Grantor Trustee all Loan Files and related documents and statements
held by it hereunder (other than any Loan Files at the time held by a Custodian,
which shall become the agent of any successor Grantor Trustee hereunder), and
the Depositor, the Master Servicer and the predecessor Grantor Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the successor
Grantor Trustee all such rights, powers, duties and obligations.
(b) No successor Grantor Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
Grantor Trustee shall be eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor Grantor Trustee as
provided in this Section, the Depositor shall mail notice of the succession of
such Grantor Trustee hereunder to the Holder of the Grantor Trust Certificate at
its address as shown in the Grantor Trust Certificate Register. If the Depositor
fails to mail such notice within 10 days after acceptance of appointment by the
successor Grantor Trustee, the successor Grantor Trustee shall cause such notice
to be mailed at the expense of the Depositor.
Section 6.08. Merger or Consolidation of Grantor Trustee.
Any corporation or national banking association into which the
Grantor Trustee may be merged or converted or with which it may be consolidated
or any corporation or national banking association resulting from any merger,
conversion or consolidation to which the Grantor Trustee shall be a party, or
any corporation or national banking association succeeding to the business of
the Grantor Trustee, shall be the successor of the Grantor Trustee hereunder,
provided such corporation or national banking association shall be eligible
under the provisions of Section 6.05, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. The Grantor Trustee shall mail notice of
any such merger or consolidation to the Grantor Trust Certificateholder at its
address as shown in the Grantor Trust Certificate Register.
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Section 6.09. Appointment of Co-Grantor Trustee or Separate
Grantor Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Grantor Trust Fund or property securing the same may at the time be
located, the Master Servicer and the Grantor Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Grantor Trustee to act as co-Grantor Trustee or
co-Grantor Trustees, jointly with the Grantor Trustee, or separate Grantor
Trustee or separate Grantor Trustees, of all or any part of the Grantor Trust
Fund, and to vest in such Person or Persons, in such capacity, such title to the
Grantor Trust Fund, or any part thereof, and, subject to the other provisions of
this Section 6.09, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Grantor Trustee may consider necessary or desirable. If
the Master Servicer shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, or in case an Event of Default
shall have occurred and be continuing, the Grantor Trustee alone shall have the
power to make such appointment. No co-Grantor Trustee or separate Grantor
Trustee hereunder shall be required to meet the terms of eligibility as a
successor Grantor Trustee under Section 6.05 hereunder and no notice to the
Holder of the Grantor Trust Certificate of the appointment of co-Grantor
Trustee(s) or separate Grantor Trustee(s) shall be required under Section 6.07
hereof.
(b) In the case of any appointment of a co-Grantor Trustee or
separate Grantor Trustee pursuant to this Section 6.09 all rights, powers,
duties and obligations conferred or imposed upon the Grantor Trustee shall be
conferred or imposed upon and exercised or performed by the Grantor Trustee, and
such separate Grantor Trustee or co-Grantor Trustee jointly, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Grantor Trustee hereunder or as successor
to the Master Servicer hereunder), the Grantor 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 Grantor Trust Fund
or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate Grantor Trustee or co-Grantor Trustee at the
direction of the Grantor Trustee.
(c) Any notice, request or other writing given to the Grantor
Trustee shall be deemed to have been given to each of the then separate Grantor
Trustees and co-Grantor Trustees, as effectively as if given to each of them.
Every instrument appointing any separate Grantor Trustee or co-Grantor Trustee
shall refer to this Grantor Trust Agreement and the conditions of this Article
VI. Each separate Grantor Trustee and co-Grantor 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 Grantor Trustee or
separately, as may be provided therein, subject to all the provisions of this
Grantor Trust Agreement, specifically including every provision of this Grantor
Trust Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Grantor Trustee. Every such instrument shall be
filed with the Grantor Trustee.
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(d) Any separate Grantor Trustee or co-Grantor Trustee may, at any
time, constitute the Grantor 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 Grantor Trust Agreement on its behalf and in its
name. If any separate Grantor Trustee or co-Grantor 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 Grantor
Trustee, to the extent permitted by law, without the appointment of a new or
successor Grantor Trustee.
Section 6.10. Appointment of Custodians.
The Grantor Trustee may, with the consent of the Master Servicer and
the Depositor, appoint one or more Custodians who are not Affiliates of the
Depositor, the Master Servicer or any Seller to hold all or a portion of the
Loan Files as agent for the Grantor Trustee, by entering into a Custodial
Agreement. Subject to Article VII, the Grantor Trustee agrees to comply with the
terms of each Custodial Agreement and to enforce the terms and provisions
thereof against the Custodian for the benefit of the Grantor Trust
Certificateholder; provided, however, the Grantor Trustee shall be under no
obligation to supervise the Custodian. Each Custodian shall be a depository
institution subject to supervision by federal or state authority, shall have a
combined capital and surplus of at least $15,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any Loan. Each Custodial
Agreement may be amended only as provided in Section 8.01. The Grantor Trustee
shall notify the Grantor Trust Certificateholder of the appointment of any
Custodian (other than the Custodian appointed as of the Closing Date) pursuant
to this Section 6.10.
Section 6.11. Appointment of Office or Agency.
The Grantor Trustee will maintain an office or agency in the City of
New York where Grantor Trust Certificate may be surrendered for registration of
transfer or exchange. The Grantor Trustee will maintain an office at the address
stated in Section 8.05(c) hereof where notices and demands to or upon the
Grantor Trustee in respect of this Grantor Trust Agreement may be served.
Section 6.12. Compliance with Withholding Requirements.
Notwithstanding any other provisions of this Agreement, the Grantor
Trustee shall comply with all U.S. federal withholding requirements with respect
to distributions to the Grantor Trust Certificateholder. The consent of the
Grantor Trust Certificateholder shall not be required for any such withholding;
except that no withholding shall be made to the extent that the Grantor Trust
Certificateholder presents to the Grantor Trustee a form evidencing entitlement
to elimination or reduction of such withholding. In the event the Grantor
Trustee withholds any amount from the Grantor Trust Certificateholder pursuant
to federal withholding requirements, the Grantor Trustee shall indicate to the
Grantor Trust Certificateholder the amount so withheld.
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Section 6.13. Grantor Trust Reporting.
The Grantor Trustee shall furnish or cause to be furnished to the
Holder of the Grantor Trust Certificate and shall file or cause to be filed with
the Internal Revenue Service, together with Form 1041 or such other form as may
be applicable, such information with respect to the income and deductions of the
Grantor Trust Fund at the time or times and in the manner required by the Code,
including such other customary factual information as is available to the
Grantor Trustee to enable the Grantor Trust Certificateholder to prepare its tax
returns, including information required with respect to computing the accrual of
original issue and market discount.
Section 6.14. Representations and Warranties.
The Grantor Trustee hereby represents that:
(i) The Grantor Trustee is duly organized, validly existing and in
good standing under the laws of the State of New York with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.
(ii) The Grantor Trustee has the power and authority to execute and
deliver this Grantor Trust Agreement and to carry out its terms; and the
execution, delivery and performance of this Grantor Trust Agreement have
been duly authorized by the Grantor Trustee by all necessary corporate
action.
(iii) The consummation of the transactions contemplated by this
Grantor Trust Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under,
the articles of organization or bylaws of the Grantor Trustee or any
agreement or other instrument to which the Grantor Trustee is a party or
by which it is bound.
(iv) To the Grantor 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 Grantor Trustee or its
properties: (A) asserting the invalidity of this Grantor Trust Agreement
(B) seeking to prevent the consummation of any of the transactions
contemplated by this Grantor Trust Agreement or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Grantor Trustee of its obligations under, or the
validity or enforceability of, this Grantor Trust Agreement.
(v) The Grantor Trustee does not have notice of any adverse claim
(as such terms are used in Delaware UCC Section 8-302) with respect to the
Home Loans.
Section 6.15. Compensation and Indemnity. The Grantor Trustee
shall be compensated and indemnified by the Master Servicer in
accordance with Section 6.06 of the
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Servicing Agreement. The Grantor Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Depositor shall
reimburse the Grantor Trustee for all reasonable out-of-pocket expenses incurred
or made by it, including costs of collection, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Grantor Trustee's agents, counsel,
accountants and experts. The Depositor shall indemnify the Grantor Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Grantor Trustee shall notify the
Depositor promptly of any claim for which it may seek indemnity. Failure by the
Grantor Trustee to so notify the Depositor shall not relieve the Depositor of
its obligations hereunder. The Depositor shall defend any such claim, and the
Grantor Trustee may have separate counsel and the Depositor shall pay the fees
and expenses of such counsel. The Depositor is not obligated to reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Grantor Trustee through the Grantor Trustee's own willful misconduct, negligence
or bad faith.
The Depositor's payment obligations to the Grantor Trustee pursuant to
this Section 6.15 shall survive the discharge of this Grantor Trust Agreement.
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ARTICLE VII
TERMINATION
Section 7.01. Termination Upon Purchase by the Master Servicer or
Liquidation of All Home Loans.
(a) Unless earlier terminated pursuant to Section 7.02, the
respective obligations and responsibilities of the Depositor and the Grantor
Trustee created hereby in respect of the Grantor Trust Certificate (other than
the obligation of the Grantor Trustee to make certain payments after the Final
Payment Date to the Grantor Trust Certificateholder and the obligation of the
Depositor to send certain notices as hereinafter set forth) shall terminate upon
the last action required to be taken by the Grantor Trustee on the Final Payment
Date pursuant to this Article VII following the earlier of:
(i) the final payment or other liquidation of the last Home Loan
remaining in the Grantor Trust Fund, or
(ii) the purchase by the Master Servicer of all Home Loans
pursuant to Section 8.08(a)(ii) of the Servicing Agreement; provided,
however, that in no event shall the trust created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States
to the Court of St. James's, living on the date hereof.
(b) Notice of any termination shall be provided in accordance with Section
4.02(b).
(c) Upon presentation and surrender of the Grantor Trust Certificate
by the Grantor Trust Certificateholder, (i) if not in connection with the Master
Service's election to repurchase, the Grantor Trustee shall distribute to the
Grantor Trust Certificateholder the amount otherwise distributable on such
Payment Date, or (ii) if the Master Servicer elected to so repurchase, the
Grantor Trustee shall distribute to the Grantor Trust Certificateholder the
purchase price specified in Section 8.08(a)(ii) of the Servicing Agreement.
(d) In the event that the Grantor Trust Certificateholder shall not
surrender the Grantor Trust Certificate for final payment and cancellation on or
before the Final Payment Date (if so required by the terms hereof), the Grantor
Trustee shall on such date cause all funds in the Grantor Trust Certificate
Account not distributed in final distribution to the Grantor Trust
Certificateholder to be withdrawn therefrom and credited to the Grantor Trust
Certificateholder by depositing such funds in an escrow account for the benefit
of the Grantor Trust Certificateholder, and the Master Servicer pursuant to
Section 8.08 of the Servicing Agreement, as applicable (if it exercised its
right to purchase the assets of the Grantor Trust Fund), or the Grantor Trustee
(in any other case) shall give a second written notice to the Grantor Trust
Certificateholder to surrender the Grantor Trust Certificate for cancellation
and receive the final distribution with respect thereto. If within six months
after the second notice the Grantor Trust
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Certificate shall not have been surrendered for cancellation, the Grantor
Trustee shall take appropriate steps as directed by the Master Servicer pursuant
to Section 8.08 of the Servicing Agreement, as applicable, to contact the
Grantor Trust Certificateholder concerning surrender of the Grantor Trust
Certificate. The costs and expenses of maintaining the escrow account and of
contacting the Grantor Trust Certificateholder shall be paid out of the assets
which remain in the escrow account. If within nine months after the second
notice the Grantor Trust Certificate shall not have been surrendered for
cancellation, the Grantor Trustee shall pay to the Master Servicer, as
applicable, all amounts distributable to the holder thereof and the Master
Servicer pursuant to Section 8.08 of the Servicing Agreement, shall thereafter
hold such amounts until distributed to such holders. No interest shall accrue or
be payable to the Grantor Trust Certificateholder on any amount held in the
escrow account or by the Master Servicer, as a result of the Grantor Trust
Certificateholder's failure to surrender the Grantor Trust Certificate for final
payment thereof in accordance with this Section 7.01 and the Grantor Trust
Certificateholder shall look only to the Master Servicer for such payment.
Section 7.02 Termination by Grantor Trust Certificateholder.
Upon the occurrence of an Event of Default or the Indenture is
otherwise terminated, the Holder of the Grantor Trust Certificate shall have the
right to terminate this Grantor Trust Agreement at any time upon 30 days prior
written notice to the Grantor Trustee, with copies to the Master Servicer, the
Custodian and the Depositor specifying the effective date of such termination.
Upon presentation and surrender of the Grantor Trust Certificate by the Holder
thereof to the Grantor Trustee on such effective date: (i) the Home Loans and
all other property of the Grantor Trust shall be conveyed to such Holder; (ii)
the Grantor Trustee shall execute and deliver to such Holder all instruments
necessary to evidence such conveyance, and shall release all monies and other
property of the Grantor Trust held by the Grantor Trustee to such Holder; (iii)
the Custodian shall thereafter hold all Loan Files solely on behalf of, and
subject to the instructions of, such Holder, until the Custodial Agreement is
terminated; (iv) the Master Servicer shall continue to service the Home Loans
pursuant to the Servicing Agreement, solely for such Holder, and such Holder
shall have all rights of the Grantor Trustee thereunder, until the Servicing
Agreement is terminated; and (v) such Holder will have full right and authority
to sell, transfer and assign the Home Loans, subject to any applicable
provisions of the Owner Trust Agreement and the Grantor Trust Agreement.
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Amendment.
(a) This Agreement, the Servicing Agreement or the Custodial
Agreement may be amended from time to time by the Depositor and the Grantor
Trustee, without the consent of the Grantor Trust Certificateholder:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein,
which may be inconsistent with any other provisions herein or therein or
to correct any error,
(iii) to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or desirable to maintain the qualification of
the Grantor Trust as a Grantor Trust at all times that any Grantor Trust
Certificate is outstanding or to avoid or minimize the risk of the
imposition of any tax on the Grantor Trust pursuant to the Code that would
be a claim against the Grantor Trust, provided that the Trustee has
received an Opinion of Counsel to the effect that (A) such action is
necessary or desirable to maintain such qualification or to avoid or
minimize the risk of the imposition of any such tax and (B) such action
will not adversely affect in any material respect the interests of any
Grantor Trust Certificateholder,
(iv) to make any other provisions with respect to matters or
questions arising under this Grantor Trust Agreement, Servicing Agreement
or such Custodial Agreement which shall not be materially inconsistent
with the provisions of this Grantor Trust Agreement, provided that such
action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Grantor Trust
Certificateholder.
(b) This Grantor Trust Agreement, the Servicing Agreement or any
Custodial Agreement may also be amended from time to time by the Depositor and
the Grantor Trustee with the consent of the Holder of the Grantor Trust
Certificate, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Grantor Trust Agreement or
such Custodial Agreement or of modifying in any manner the rights of the Holder
of the Grantor Trust Certificate; provided, however, that any amendment must be
accompanied by a letter from the Rating Agencies that such amendment will not
result in a downgrading or withdrawal of the rating then assigned to the
Securities or the Class B-2 Notes.
(c) Notwithstanding any contrary provision of this Grantor Trust
Agreement, the Grantor Trustee shall not consent to any amendment to this
Grantor Trust Agreement, the Servicing Agreement or any Custodial Agreement
unless it shall have first received an Opinion of Counsel to the effect that
such amendment or the exercise of any power granted to the Master
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Servicer, the Depositor or the Grantor Trustee in accordance with such amendment
(i) is authorized or permitted by the Agreement and (ii) will not result in the
imposition of a tax on the Grantor Trust Fund or cause the Grantor Trust Fund to
fail to be classified as a grantor trust under subpart E, part I of subchapter J
of chapter 1 of the Code. The Grantor Trustee may but shall not be obligated to
enter into any amendment pursuant to this Section that affects its rights,
duties and immunities under this Grantor Trust Agreement or otherwise; provided
however, such consent shall not be unreasonably withheld.
(d) Promptly after the execution of any such amendment the Grantor
Trustee shall furnish written notification of the substance of such amendment to
the Grantor Trust Certificateholder. It shall not be necessary for the consent
of the Grantor Trust Certificateholder under this Section 8.01 to approve the
particular form of any proposed amendment, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof by Grantor
Trust Certificateholder shall be subject to such reasonable regulations as the
Grantor Trustee may prescribe.
Section 8.02. Recordation of Grantor Trust Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Grantor Trust
Agreement is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the properties subject to the Mortgages are situated, and in any
other appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer and at its expense on direction by the Grantor
Trustee (pursuant to the request of the Holder of the Grantor Trust
Certificate), but only upon direction accompanied by an Opinion of Counsel to
the effect that such recordation materially and beneficially affects the
interests of the Grantor Trust Certificateholder.
(b) For the purpose of facilitating the recordation of this Grantor
Trust Agreement as herein provided and for other purposes, this Grantor Trust
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
Section 8.03. Limitation on Rights of Grantor Trust Certificateholder.
(a) The death or incapacity of the Grantor Trust Certificateholder
shall not operate to terminate this Grantor Trust Agreement or the Grantor Trust
Fund, nor entitle such Grantor Trust Certificateholder's legal representatives
or heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of the Grantor Trust Fund, nor otherwise affect
the rights, obligations and liabilities of any of the parties hereto.
(b) No Grantor Trust Certificateholder shall have any right to vote
(except as expressly provided herein) or in any manner otherwise control the
operation and management of the Grantor Trust Fund, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Grantor Trust Certificate, be construed so as to constitute
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the Grantor Trust Certificateholder from time to time as partners or members of
an association; nor shall the Grantor Trust Certificateholder be under any
liability to any third person by reason of any action taken by the parties to
this Grantor Trust Agreement pursuant to any provision hereof.
(c) No Grantor Trust Certificateholder shall have any right by
virtue of any provision of this Grantor Trust Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Grantor Trust Agreement, unless such Holder previously shall have given to the
Grantor Trustee a written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the Holder of the Grantor Trust
Certificate, shall have made written request to the Grantor Trustee to institute
such action, suit or proceeding in its own name as Grantor Trustee hereunder and
shall have offered to the Grantor Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby shall have given its written consent, and the Grantor Trustee, for 60
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding. For
the protection and enforcement of the provisions of this Section 8.03, each and
every Grantor Trust Certificateholder and the Grantor Trustee shall be entitled
to such relief as can be given either at law or in equity.
Section 8.04. Governing Law.
This Grantor Trust Agreement and the Grantor Trust Certificate shall
be governed by and construed in accordance with the laws of the State of New
York and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
Section 8.05. Notices.
All demands and notices hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid (except for notices to the Grantor Trustee
which shall be deemed to have been duly given only when received), to (a) in the
case of the Depositor, 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxxxx 00000, Attention: Distribution-Asset-Backed Group, Home Loan Trust
1998-HI2, or such other address as may hereafter be furnished to the Master
Servicer and the Grantor Trustee in writing by the Depositor, (b) in the case of
the Master Servicer, 00 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 0000, Xxxxxxxxx Xxxx,
Xxxxxxxxxx 00000, Attention: Director, Bond Administration, or such other
address as may be hereafter furnished to the Depositor and the Grantor Trustee
by the Master Servicer in writing, (c) in the case of the Grantor Trustee, 450
W. 33rd Street, 15th Floor, New York, N.Y. 10001, Attention: Structured Finance
Services or such other address as may hereafter be furnished to the Depositor
and the Master Servicer in writing by the Grantor Trustee, (d) in the case of
Fitch, Fitch Investors Service, L.P., Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000 Attention: Residential Mortgage Pass-Through Monitoring, or
such other address as may hereafter be furnished to the Depositor, the Grantor
Trustee and the Master Servicer in writing by Fitch and (e) in the case of
Xxxxx'x, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Mortgage
Surveillance or such other
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address as may be hereafter furnished to the Depositor, Grantor Trustee and
Master Servicer by Xxxxx'x. Any notice required or permitted to be mailed to the
Grantor Trust Certificateholder shall be given by first class mail, postage
prepaid, at the address of such holder as shown in the Grantor Trust Certificate
Register. Any notice so mailed within the time prescribed in this Grantor Trust
Agreement shall be conclusively presumed to have been duly given, whether or not
the Grantor Trust Certificateholder receives such notice.
Section 8.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Grantor Trust Agreement shall be for any reason whatsoever held invalid,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Grantor
Trust Agreement and shall in no way affect the validity or enforceability of the
other provisions of this Grantor Trust Agreement or of the Grantor Trust
Certificate or the rights of the Holder thereof.
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IN WITNESS WHEREOF, the Depositor and the Grantor Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized and their respective seals, duly attested, to be hereunto
affixed, all as of the date and year first above written.
RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC.
[Seal]
By:
Name:
Title:
Attest:
Name:
Title:
THE CHASE MANHATTAN BANK,
as Grantor Trustee
[Seal]
By:
Name:
Title:
Attest:
Name:
Title:
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 26th day of June, 1998 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a Vice
President of Residential Funding Mortgage Securities II, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this Grantor Trust Certificate first above
written.
--------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 26th day of June, 1998 before me, a notary public in and for
said State, personally appeared ___________, known to me to be a Vice President
of The Chase Manhattan Bank, a national banking association that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said association, and acknowledged to me that such national banking
association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this Grantor Trust Certificate first above
written.
------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A
FORM OF GRANTOR TRUST CERTIFICATE
SERIES 1998-HI2
THIS GRANTOR TRUST CERTIFICATE IS NOT TRANSFERABLE
EXCEPT UPON SATISFACTION OF THE CONDITIONS IN SECTION 5.02 OF THE
GRANTOR TRUST AGREEMENT.
THIS GRANTOR TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH
ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND
IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE GRANTOR
TRUST AGREEMENT, DATED JUNE 26, 1998, BETWEEN RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC. AND THE CHASE MANHATTAN BANK ("THE AGREEMENT").
THIS GRANTOR TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH
ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND
IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS (i) THE GRANTOR
TRUSTEE SHALL HAVE RECEIVED AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE GRANTOR TRUSTEE, THE DEPOSITOR AND THE MASTER
SERVICER TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS GRANTOR TRUST
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT
IN ANY NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE CODE (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), AND WILL NOT
SUBJECT THE GRANTOR TRUSTEE, THE DEPOSITOR OR THE MASTER SERVICER TO ANY
OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT,
WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE GRANTOR TRUSTEE, THE
DEPOSITOR OR THE MASTER SERVICER OR (ii) THE PROSPECTIVE TRANSFEREE SHALL HAVE
PROVIDED TO THE GRANTOR TRUSTEE, THE DEPOSITOR AND THE MASTER
SERVICER A CERTIFICATION, WHICH THE GRANTOR TRUSTEE MAY RELY UPON WITHOUT
FURTHER INQUIRY OR INVESTIGATION, OR SUCH OTHER CERTIFICATIONS AS THE GRANTOR
TRUSTEE MAY DEEM DESIRABLE OR NECESSARY IN ORDER TO ESTABLISH THAT SUCH
TRANSFEREE OR THE PERSON IN WHOSE NAME SUCH REGISTRATION IS REQUESTED IS NOT AN
EMPLOYEE BENEFIT PLAN OR OTHER PLAN SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE, OR ANY PERSON (INCLUDING AN
INVESTMENT MANAGER, A NAMED FIDUCIARY OR A GRANTOR TRUSTEE OF ANY SUCH PLAN) WHO
IS USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION; PROVIDED,
HOWEVER, THAT SUCH OPINION OF COUNSEL OR CERTIFICATION WILL NOT BE REQUIRED IN
CONNECTION WITH THE INITIAL TRANSFERS OF THIS GRANTOR TRUST CERTIFICATE BY THE
DEPOSITOR OR ANY AFFILIATE THEREOF TO AN AFFILIATE OF THE DEPOSITOR OR TO THE
ISSUER OR THE INDENTURE TRUSTEE AS PLEDGEE OF THE ISSUER (IN WHICH CASE, THE
DEPOSITOR OR ANY AFFILIATE THEREOF OR THE ISSUER OR THE INDENTURE TRUSTEE SHALL
HAVE DEEMED TO HAVE REPRESENTED THAT SUCH AFFILIATE OR THE ISSUER OR THE
INDENTURE TRUSTEE IS NOT A PLAN OR A PERSON INVESTING "PLAN ASSETS" OF ANY PLAN)
AND THE GRANTOR TRUSTEE SHALL BE ENTITLED TO CONCLUSIVELY RELY UPON A
REPRESENTATION (WHICH, UPON THE REQUEST OF THE GRANTOR TRUSTEE, SHALL BE A
WRITTEN REPRESENTATION) FROM THE DEPOSITOR OF THE STATUS OF SUCH TRANSFEREE AS
AN AFFILIATE OF THE DEPOSITOR.
THIS GRANTOR TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR
OBLIGATION OF THE SELLER, THE DEPOSITOR, THE MASTER SERVICER, THE GRANTOR
TRUSTEE, GMAC MORTGAGE GROUP, INC. OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT
AS EXPRESSLY PROVIDED IN THE AGREEMENT OR THE BASIC DOCUMENTS.
Certificate No. 1
Cut-off Date: Grantor Trust Certificate Principal
June 1, 1998 Balance as of the Closing Date:
$400,218,258.50
First Payment Date: Certificate Percentage Interest
July 27, 1998 this Grantor Trust Certificate: 100%
GRANTOR TRUST CERTIFICATE
SERIES 1998-HI2
evidencing an undivided interest in the Grantor Trust Estate, the property of
which consists primarily of the Home Loans, formed and sold by RESIDENTIAL
FUNDING MORTGAGE SECURITIES II, INC. (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement referred to below).
This Grantor Trust Certificate is payable solely from the assets of
the Grantor Trust Estate, and does not represent an obligation of or interest in
the Depositor, the Seller, the Master Servicer, the Grantor Trustee or GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Grantor Trust
Certificate nor any of the Home Loans is guaranteed or insured by any
governmental agency or instrumentality or by the Depositor, the Seller, the
Master Servicer, the Grantor Trustee or GMAC Mortgage Group, Inc. or any of
their affiliates. None of the Depositor, the Seller, the Master Servicer, the
Grantor Trustee, GMAC Mortgage Group, Inc. or any of their affiliates will have
any obligation with respect to any certificate or other obligation secured by or
payable from payments on the Grantor Trust Certificate.
This certifies that [ ] is the registered owner of the Certificate
Percentage Interest evidenced by this Grantor Trust Certificate (as set forth on
the face hereof) in certain distributions with respect to the Grantor Trust
Estate, consisting primarily of the Home Loans, formed and sold by Residential
Funding Mortgage Securities II, Inc. The Grantor Trust was created pursuant to a
Grantor Trust Agreement dated as specified above (as amended and supplemented
from time to time, the "Agreement") between the Depositor and The Chase
Manhattan Bank, as grantor trustee (the "Grantor Trustee," which term includes
any successor entity under the Agreement), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Grantor Trust Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Grantor Trust Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately
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following (each, a "Payment Date"), commencing on the first Payment Date
specified above, to the Person in whose name this Grantor Trust Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (each, a "Record
Date"), in an amount equal to the sum of the Interest Remittance Amount and the
Principal Remittance Amount. Distributions on this Grantor Trust Certificate
will be made as provided in the Agreement by the Paying Agent appointed by the
Grantor Trustee by wire transfer or check mailed to the Grantor Trust
Certificateholder of record in the Grantor Trust Certificate Register without
the presentation or surrender of this Grantor Trust Certificate or the making of
any notation hereon.
Except as otherwise provided in the Agreement and notwithstanding
the above, the final distribution on this Grantor Trust Certificate will be made
after due notice by the Grantor Trustee of the pendency of such distribution and
only upon presentation and surrender of this Grantor Trust Certificate at the
office maintained by the Grantor Trustee for that purpose in the City and State
of New York.
No transfer, sale, pledge or other disposition of this Grantor Trust
Certificate shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with said Act and laws. Except as otherwise provided in
Section 5.02(d) of the Agreement, in the event that a transfer of this Grantor
Trust Certificate is to be made either (i)(A) the Grantor Trustee shall require
a written Opinion of Counsel acceptable to and in form and substance
satisfactory to the Grantor Trustee and the Depositor that such transfer may be
made pursuant to an exemption, describing the applicable exemption and the basis
therefor, from said Act and laws or is being made pursuant to said Act and laws,
which Opinion of Counsel shall not be an expense of the Grantor Trustee, the
Depositor or the Master Servicer; provided that such Opinion of Counsel will not
be required in connection with the initial transfers of this Grantor Trust
Certificate by the Depositor or any Affiliate thereof to an Affiliate of the
Depositor or to the Issuer or the Grantor Trustee as pledgee of the Issuer and
(B) the Grantor Trustee shall require the transferee to execute a representation
letter, and the Grantor Trustee shall require the transferor to execute a
representation letter, each acceptable to and in form and substance satisfactory
to the Depositor and the Grantor Trustee certifying to the Depositor and the
Grantor Trustee the facts surrounding such transfer, which representation
letters shall not be an expense of the Grantor Trustee, the Depositor or the
Master Servicer; provided, however, that such representation letters will not be
required in connection with any transfers of any such Grantor Trust Certificate
by the Depositor or any Affiliate thereof to an Affiliate of the Depositor or to
the Issuer or the Grantor Trustee as pledgee of the Issuer, and the Grantor
Trustee shall be entitled to conclusively rely upon a representation (which,
upon the request of the Grantor Trustee, shall be written representation) from
the Depositor of the status, of such transferee as an Affiliate of the Depositor
or (ii) the prospective transferee of this Grantor Trust Certificate shall be
required to provide the Grantor Trustee, the Depositor and the Master Servicer
with an investment letter, which investment letter shall not be an expense of
the Grantor Trustee, the Depositor, or the Master Servicer, and which investment
letter states that, among other things, such transferee (A)
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is a "qualified institutional buyer" as defined under Rule 144A, acting for its
own account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (B) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the 1933 Act provided by
Rule 144A. The Holder of this Grantor Trust Certificate desiring to effect any
such transfer, sale, pledge or other disposition shall, and does hereby agree
to, indemnify the Grantor Trustee, the Depositor, the Master Servicer and the
Grantor Trust Certificate Registrar against any liability that may result if the
transfer, sale, pledge or other disposition is not so exempt or is not made in
accordance with such federal and state laws and the Grantor Trust Agreement.
In connection with any such transfer, either (i) the Grantor Trustee
shall require an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Grantor Trustee, the Depositor and the Master Servicer to
the effect that the purchase or holding of this Grantor Trust Certificate is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under Section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code
(or comparable provisions of any subsequent enactments), and will not subject
the Grantor Trustee, the Depositor or the Master Servicer to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in the Agreement, which Opinion of
Counsel shall not be an expense of the Grantor Trustee, the Depositor or the
Master Servicer or (ii) the prospective transferee shall be required to provide
the Grantor Trustee, the Depositor and the Master Servicer with a certification,
which the Grantor Trustee may rely upon without further inquiry or
investigation, or such other certifications as the Grantor Trustee may deem
desirable or necessary in order to establish that such transferee or the Person
in whose name such registration is requested is not an employee benefit plan or
other plan subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code, or any Person (including an investment manager, a named
fiduciary or a Grantor Trustee of any such plan) who is using "plan assets" of
any such plan to effect such acquisition; provided, however, that such Opinion
of Counsel or certification will not be required in connection with the initial
transfers of this Grantor Trust Certificate by the Depositor or any Affiliate
thereof to an Affiliate of the Depositor or to the Issuer or the Grantor Trustee
as pledgee of the Issuer (in which case, the Depositor or any Affiliate thereof
or the Issuer or the Grantor Trustee shall have deemed to have represented that
such Affiliate is not a Plan or a Person investing "plan assets" of any Plan)
and the Grantor Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Grantor Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an Affiliate of the Depositor.
The Agreement permits the amendment thereof as specified in the
Agreement.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Grantor Trust Certificate is
registerable in the Grantor Trust Certificate Register upon surrender of this
Grantor Trust Certificate for registration of transfer at the offices or
agencies of the Grantor Trustee maintained in the City and State of New York,
accompanied by a written instrument of transfer in form satisfactory to the
Grantor Trustee duly executed by the Holder hereof or such Holder's attorney
duly authorized in writing, and thereupon one new
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Grantor Trust Certificate of authorized denomination evidencing the same
aggregate Grantor Trust Certificate Percentage Interest will be issued to the
designated transferee. The initial Grantor Trust Certificate Registrar appointed
under the Agreement is the Grantor Trustee.
The Grantor Trust Certificate is issuable only as a single
Certificate evidencing a 100% Grantor Trust Certificate Percentage Interest.
No service charge will be made for any such registration of transfer
or exchange, but the Grantor Trustee or the Grantor Trust Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Grantor Trustee, the Grantor Trust Certificate Registrar and any
agent of the Grantor Trustee, or the Grantor Trust Certificate Registrar may
treat the Person in whose name this Grantor Trust Certificate is registered as
the owner hereof for all purposes, and none of the Grantor Trustee, the Grantor
Trust Certificate Registrar or any such agent shall be affected by any notice to
the contrary.
This Grantor Trust Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
The obligations created by the Agreement in respect of the Grantor
Trust Certificate and the Grantor Trust created thereby shall terminate upon the
last action required to be taken by the Grantor Trustee on the Final Payment
Date pursuant to the Agreement following the earlier of (i) the final payment or
other liquidation of the last Home Loan remaining in the Grantor Trust Fund, or
(ii) the purchase by the Master Servicer of all Home Loans pursuant to Section
8.08(a)(ii) of the Servicing Agreement.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Grantor Trustee, by manual signature,
this Grantor Trust Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose.
-4-
IN WITNESS WHEREOF, the Grantor Trustee has caused this Grantor
Trust Certificate to be duly executed.
by THE CHASE MANHATTAN
BANK, not in its individual capacity
but solely as Grantor Trustee
Dated: June 26, 1998
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Grantor Trust Certificate referred to in the within mentioned
Agreement.
THE CHASE MANHATTAN BANK,
not in its individual capacity
but solely as Grantor Trustee Certificate Registrar
By:
Authorized Signatory
or ,
as Authenticating Agent of the Grantor Trust
By:
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Grantor Trust Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
to transfer said Grantor Trust Certificate on the books of the Grantor Trust
Certificate Registrar, with full power of substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
-----------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Grantor Trust Certificate in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by a member firm of the New York Stock Exchange or
a commercial bank or trust company.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Grantor Trust Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately available funds
to ----------------------------------------------
----------------------------------------------------------------- for the
account of ________________________________________, account number
______________, or, if mailed by check, to ______________.
Applicable statements should be mailed to__________________.
------------------------------
Signature of assignee or agent
(for authorization of wire
transfer only)