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RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.,
as Company,
RESIDENTIAL FUNDING CORPORATION,
as Certificate Administrator,
and
JPMORGAN CHASE BANK,
as Trustee
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TRUST AGREEMENT
Dated as of May 27, 2004
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Mortgage Trust Certificates, Series 2004-SR1
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................3
Section 1.01 Defined Terms...........................................3
ARTICLE II CONVEYANCE OF THE UNDERLYING CERTIFICATES; ORIGINAL ISSUANCE
OF TRUST CERTIFICATES........................................16
Section 2.01 Conveyance of the Underlying Certificates..............16
Section 2.02 Issuance of Trust Certificates.........................18
Section 2.03 [Reserved].............................................18
Section 2.04 [Reserved].............................................18
Section 2.05 Purposes and Powers of the Trust Fund..................18
ARTICLE III ADMINISTRATION OF THE UNDERLYING CERTIFICATES; PAYMENTS AND
REPORTS TO CERTIFICATEHOLDERS................................19
Section 3.01 Administration of the Trust Fund and the
Underlying Certificates................................19
Section 3.02 Collection of Monies...................................24
Section 3.03 Establishment of Trust Certificate Account;
Deposits in Trust Certificate Account..................25
Section 3.04 Permitted Withdrawals From the Trust Certificate
Account................................................25
Section 3.05 Distributions..........................................26
Section 3.06 Statements to Certificateholders; Reports to the
Trustee and Company....................................29
Section 3.07 Access to Certain Documentation and Information........32
Section 3.08 Sale of Defective Assets...............................32
Section 3.09 Modification of Underlying Certificates................33
Section 3.10 [Reserved] ............................................33
Section 3.11 Allocation of Class A Loss Amounts.....................33
Section 3.12 Compliance with Withholding Requirements...............33
Section 3.13 Rounding Account.......................................33
Section 3.14 Principal Distributions on the Insured
Certificates...........................................34
Section 3.15 Reserve Fund...........................................39
ARTICLE IV THE TRUST CERTIFICATES...........................................40
Section 4.01 The Trust Certificates.................................40
Section 4.02 Registration of Transfer and Exchange of Trust
Certificates...........................................42
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Section 4.03 Mutilated, Destroyed, Lost or Stolen Trust
Certificates...........................................44
Section 4.04 Persons Deemed Owners..................................45
ARTICLE V THE TRUSTEE.......................................................45
Section 5.01 Duties of the Trustee..................................45
Section 5.02 Certain Matters Affecting the Trustee..................47
Section 5.03 Trustee Not Liable for Trust Certificates or
Underlying Certificates................................49
Section 5.04 Trustee May Own Trust Certificates.....................49
Section 5.05 Eligibility Requirements for Trustee...................49
Section 5.06 Resignation and Removal of the Trustee.................49
Section 5.07 Successor Trustee......................................50
Section 5.08 Merger or Consolidation of Trustee.....................51
Section 5.09 Appointment of Co-Trustee or Separate Trustee..........51
Section 5.10 Appointment of Office or Agency........................52
Section 5.11 Trustee's Fees and Expenses; Indemnification...........53
Section 5.12 Certain Actions Relating to Underlying
Certificates...........................................54
ARTICLE VI TERMINATION......................................................54
Section 6.01 Termination............................................54
Section 6.02 Additional Termination Requirements....................55
ARTICLE VII THE COMPANY AND THE CERTIFICATE ADMINISTRATOR...................56
Section 7.01 Liability of the Company...............................56
Section 7.02 Merger, Consolidation or Conversion of the Company.....56
Section 7.03 Limitation on Liability of the Company and Others......57
Section 7.04 Company and Certificate Administrator Not to
Resign.................................................57
Section 7.05 Successor Certificate Administrator....................57
Section 7.06 Representation and Warranty of Company.................58
ARTICLE VIII MISCELLANEOUS PROVISIONS.......................................58
Section 8.01 Amendment..............................................58
Section 8.02 Counterparts...........................................60
Section 8.03 Limitation on Rights of Certificateholders.............61
Section 8.04 Governing Law..........................................61
Section 8.05 Notices................................................61
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Section 8.06 Notices to the Rating Agencies and the Certificate
Insurer................................................62
Section 8.07 Severability of Provisions.............................62
Section 8.08 Successors and Assigns.................................63
Section 8.09 Article and Section Headings,..........................63
ARTICLE IX CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER................63
Section 9.01 Rights of the Certificate Insurer to Exercise
Rights of Insured Certificateholders...................63
Section 9.02 Claims Upon the Certificate Policy; Certificate
Insurance Account......................................64
Section 9.03 Effect of Payments by the Certificate Insurer;
Subrogration...........................................65
Section 9.04 Notices and Information to the Certificate Insurer.....66
Section 9.05 Trustee to Hold Certificate Policy.....................66
Section 9.06 Insurance Premium Payments.............................66
Section 9.07 Ratings................................................66
Section 9.08 Third Party Beneficiaries..............................67
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Exhibit A...Form of Class A Certificate
Exhibit B...Form of Class R Certificate
Exhibit C-1.Form of Transfer Affidavit and Agreement
Exhibit C-2.Form of Transferor Certificate
Exhibit D...Pooling and Servicing Agreement
Exhibit E...Form of Form 10K Certification
Exhibit F...Form of Back-up Certification to Form 10K Certification
Exhibit G...Certificate Policy of MBIA Insurance Corporation
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This TRUST AGREEMENT (this "Agreement"), dated as of May 27, 2004, is
among RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC., a Delaware
corporation, as the company (together with its permitted successors and
assigns, the "Company"), RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation, as certificate administrator (together with its permitted
successors and assigns, the "Certificate Administrator"), and JPMORGAN CHASE
BANK, a New York banking corporation, as Trustee (together with its permitted
successors and assigns, the "Trustee").
PRELIMINARY STATEMENT
The Company intends to sell the Trust Certificates (as defined herein),
to be issued hereunder in six classes, which in the aggregate will evidence
the entire beneficial ownership interest in the Underlying Certificates (as
defined herein). As provided herein, the REMIC Administrator will make an
election to treat the entire segregated pool of assets described in the
definition of Trust Fund (excluding the Rounding Account), as a real estate
mortgage investment conduit for federal income tax purposes, and such
segregated pool of assets will be designated as the "REMIC." The Class R
Certificates will represent the sole class of "residual interests" in the
REMIC for purposes of the REMIC Provisions (as defined herein) under federal
income tax law. The REMIC Regular Certificates (as defined herein) represent
the "regular interests" in the REMIC. The "latest possible maturity date"
(determined solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for each REMIC Regular Certificate shall be the first
Distribution Date that follows the stated maturity date for the Underlying
Certificates.
The following table sets forth the designation, type, Pass-Through Rate
(as defined herein), aggregate initial Certificate Principal Balance (as
defined herein), initial ratings and certain other features of each Class of
Trust Certificate comprising the interests in the Trust Fund (as defined
herein).
Aggregate
Initial
Certificate
Pass-Through Principal Minimum
Designation Rate Balance Features(1) Fitch/S&P Denominations(2)
Class A-1 5.50% $ 69,260,000.00 Accretion AAA/AAA $25,000.00
Directed
Class A-2 5.50% $ 40,785,800.00 Accretion AAA/AAA $25,000.00
Directed
Class A-3 5.50% $ 9,829,765.00 Accrual AAA/AAA $25,000.00
Class A-4 5.60% $ 23,100,000.00 Retail AAA/AAA $1,000.00
Lottery/Insured/
Super Senior
Class A-5 0.00% $ 798,000.00 Principal AAA/AAA $25,000.00
Only/Senior
Support
Class R 5.50% $ 100.00 Residual AAA/AAA (3)
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(1) The Class A Certificates shall be Book-Entry Certificates. The Class R
Certificates shall be delivered to the Holders thereof in physical form.
(2) The Trust Certificates, other than the Class R Certificates, shall be
issuable in minimum dollar denominations as indicated above (by Certificate
Principal Balance) and integral multiples of $1 in excess thereof (or
$1,000 in the case of the Class A-4 Certificates).
(3) The Class R Certificates shall be issuable in minimum denominations of not
less than a 20% Percentage Interest, other than the de minimis portion
transferred to the REMIC Administrator on the Closing Date.
The Underlying Certificates have an aggregate principal balance as of
the Closing Date of $143,773,665.74.
In consideration for its services hereunder, each of the Certificate
Administrator and the Trustee have been paid an upfront fee.
All things necessary to make this Agreement a valid declaration of
trust by the Company in accordance with its terms have been done.
In consideration of the promises and the mutual agreements herein
contained, the Company, the Certificate Administrator and the Trustee agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accretion Directed Certificates: The Class A-1 Certificates and
Class A-2 Certificates.
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Accretion Termination Date: The earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Accretion Directed Certificates has been reduced to zero and (ii) the Credit
Support Depletion Date.
Accrual Distribution Amount: With respect to each Distribution
Date prior to the Accretion Termination Date, an amount equal to the
aggregate amount of Accrued Certificate Interest on the Class A-3
Certificates for such date, to the extent added to the Certificate Principal
Balance thereof pursuant to Section 3.05(d); provided that, with respect to
each Distribution Date on or after the Accretion Termination Date, the
Accrued Certificate Interest on the Class A-3 Certificates for such date
remaining after reduction of the Certificate Principal Balances of the Class
A-1 Certificates and Class A-2 Certificates will be payable to the Class A-3
Certificateholders as interest pursuant to Section 3.05(a)(i) hereof on the
Accretion Termination Date; and provided further, that if the Accretion
Termination Date is the Credit Support Depletion Date, the entire amount of
Accrued Certificate Interest on the Class A-3 Certificates for that date will
be payable as interest to the Class A-3 Certificates pursuant to Section
3.05(a)(i) hereof.
Accrued Certificate Interest: With respect to any Distribution
Date, an amount equal to interest accrued during the related Interest Accrual
Period on the Certificate Principal Balance of the Trust Certificates of a
Class (other than the Class A-5 Certificates) immediately prior to such
Distribution Date at the related Pass-Through Rate with respect to such
Distribution Date and less such Class' pro rata share of interest shortfalls,
if any, allocated to the Underlying Certificates immediately preceding such
Distribution Date; including:
(1) any Prepayment Interest Shortfall to the extent not covered
by the Master Servicer pursuant to the terms of the Pooling and Servicing
Agreement;
(2) the interest portions of Realized Losses allocated to the
Underlying Certificates;
(3) the interest portion of any advances that were made with
respect to delinquencies on the Mortgage Loans that were ultimately
determined to be not recoverable by the Servicer in accordance with the
Pooling and Servicing Agreement; and
(4) any other interest shortfalls on the Mortgage Loans not
covered by subordination (as set forth in the Pooling and Servicing
Agreement), including interest shortfalls relating to the Relief Act.
Such interest shortfalls will be allocated among all of the Trust
Certificates in proportion to their respective amounts of Accrued Certificate
Interest payable on such Distribution Date.
Accrued Certificate Interest on each Class of Trust Certificates
will be calculated on the basis of a 360 day year consisting of twelve 30-day
months and will be carried out to at least three decimal places.
Adverse REMIC Event: Shall have the meaning set forth in
Section 3.01(f) hereof.
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Affiliate: An "affiliate" of, or person "affiliated" with, a
specific person, is a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control
with, the person specified.
Agreement: This Trust Agreement and all amendments hereof and
supplements hereto.
Available Funds: With respect to any Distribution Date, an
amount equal to the amount received on the Underlying Certificates on such
Distribution.
Book-Entry Certificate: Any Trust Certificate registered in the
name of the Depository or its nominee, and designated as such in the
Preliminary Statement hereto.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of New York, the State
of Michigan, the State of California or the State of Illinois (and such other
state or states in which the Custodial Account or the Trust Certificate
Account are at the time located) are required or authorized by law or
executive order to be closed.
Certificate Administrator: Residential Funding Corporation, in
its capacity as certificate administrator under this Agreement, or any
successor certificate administrator appointed under the terms of this
Agreement.
Certificate Insurance Account: The account established pursuant
to Section 9.02(b) of this Agreement.
Certificate Insurance Payment: Any payment made by the
Certificate Insurer with respect to the Insured Certificates under the
Certificate Policy.
Certificate Insurer: MBIA Insurance Corporation, a stock
insurance company organized and created under the laws of the State of New
York, and any successors thereto, issuer of the Certificate Policy.
Certificate Insurer Default: The existence and continuance of a
failure by the Certificate Insurer to make a payment required under the
Certificate Policy in accordance with its terms.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate, as
reflected on the books of an indirect participating brokerage firm for which
a Depository Participant acts as agent, if any, and otherwise on the books of
a Depository Participant, if any, and otherwise on the books of the
Depository.
Certificate Policy: The certificate guaranty insurance policy
No. 44178 issued by the Certificate Insurer for the benefit of the Holders of
the Insured Certificates, including any endorsements thereto, attached
hereto as Exhibit G.
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Certificate Principal Balance: For any Class of Trust
Certificates as of any date of determination, an amount equal to the initial
Certificate Principal Balance of such Trust Certificate, plus, in the case of
the Class A-3 Certificates, an amount equal to the aggregate Accrued
Certificate Interest added to the Certificate Principal Balance thereof prior
to such date of determination, reduced by the aggregate of (a) all amounts
allocable to principal previously distributed with respect to such Trust
Certificate and (b) any reductions in the Certificate Principal Balance of
such Trust Certificate due to allocations of the Class A Loss Amounts to such
Class of Trust Certificates; provided, however, that solely for purposes of
determining the Certificate Insurer's rights as subrogee to the Insured
Certificateholders, the Certificate Principal Balance of any Insured
Certificate shall be deemed to not be reduced by any principal amounts paid
to the Holder thereof from Certificate Insurance Payments, unless such
amounts have been reimbursed to the Certificate Insurer pursuant to Section
3.05(a)(iii).
Certificate Register: The register maintained pursuant to
Section 4.02 hereof which shall provide for the registration of Trust
Certificates and of transfers and exchanges of Trust Certificates, as herein
provided.
Certificate Registrar: The Trustee.
Certificateholder or Holder: The person in whose name a Trust
Certificate is registered in the Certificate Register and, in respect of any
Insured Certificates, the Certificate Insurer to the extent of Cumulative
Insurance Payments, except that, solely for the purpose of giving any consent
or exercising any Voting Rights pursuant to this Agreement, any Trust
Certificate registered in the name of the Company or any Affiliate shall be
deemed not to be an Outstanding Certificate or taken into account when
calculating the Voting Rights of any Certificateholder.
All references herein to "Holder" or "Certificateholder" shall
reflect the rights of Certificate Owners as they may indirectly exercise such
rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Trust Certificate is registered in the Certificate Register.
Class: Collectively, all of the Trust Certificates bearing the
same designation.
Class A Certificate: Any one of the Class X-0, Xxxxx X-0,
Class A-3, Class A-4 or Class A-5 Certificates executed and delivered by the
Trustee substantially in the form annexed hereto as Exhibit A evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
Class A Loss Amount: With respect to the Class A Certificates
and on each Distribution Date, the excess of the Certificate Principal
Balance of the Class A Certificates over the Underlying Certificate Balance,
in each case after giving effect to distributions on or prior to such
Distribution Date but prior to the allocation of such Class A Loss Amount as a
reduction to the Certificate Principal Balances of any Classes of Certificates.
Class A-4 Interest Shortfall Amount: With respect to the Class
A-4 Certificates and as of any Distribution Date on or after the Credit
Support Depletion Date, an amount equal to the excess, if any, of (i) the sum
of (x) one month's interest on the Certificate Principal Balance of the Class
A-4 Certificates (prior to giving effect to any distributions on that
Distribution Date) at a per annum rate of 5.60% and (y) the Insurance Premium
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on the Certificate Policy for that Distribution Date over (ii) one month's
interest on the aggregate Certificate Principal Balance of the Class A-4
Certificates and Class A-5 Certificates (prior to giving effect to any
distributions on that Distribution Date) at a per annum rate of 5.50%.
Class R Certificate: Any one of the Class R Certificates
executed and delivered hereunder by the Trustee substantially in the form
annexed hereto as Exhibit B, evidencing an interest designated as the
"residual interest" in the Trust Fund for purposes of the REMIC Provisions.
Closing Date: May 27, 2004.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Commitment Letter: The Commitment Letter dated as of May 26,
2004 between the Certificate Insurer and Xxxxxxx, Xxxxx & Co.
Company: Residential Mortgage Securities I, Inc. or any
successors in interest.
Corporate Trust Office: The principal office of the Trustee at
which at any particular time its corporate trust business with respect to
this Agreement shall be administered, which office at the date of the
execution of this instrument is located at JPMorgan Chase Bank, 000 Xxxx
Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Residential
Funding Corporation Series 2004-SR1.
Credit Support Depletion Date: The date on which the principal
balances of the 2003-S17 Certificates, Class M and Class B, have been reduced
to zero.
Cumulative Insurance Payments: As of any time of determination,
the aggregate of all Certificate Insurance Payments previously made by the
Certificate Insurer under the Certificate Policy minus the aggregate of all
payments previously made to the Certificate Insurer pursuant to Section
3.05(a)(iii) of this Agreement as reimbursement for Certificate Insurance
Payments.
Custodial Account: The custodial account or accounts created and
maintained pursuant to Section 3.07 of the Pooling and Servicing Agreement in
the name of a depository institution, as custodian for the holders of the
Underlying Certificates, for the holders of certain other interests in
mortgage loans serviced or sold by the Certificate Administrator or owned by
the Certificate Administrator, into which the amounts set forth in Section
3.07 of the Pooling and Servicing Agreement shall be deposited directly. Any
such account or accounts shall be an Eligible Account.
Deceased Holder: A Certificate Owner of an Insured Certificate
who was a natural person living at the time such interest was acquired and
whose authorized personal representative, surviving tenant by the entirety,
surviving joint tenant or surviving tenant in common or other person
empowered to act on behalf of a deceased Certificate Owner causes to be
furnished to the Depository Participant evidence of death satisfactory to the
Depository Participant and any tax waivers requested by the Depository
Participant.
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Deficiency Amount: With respect to the Insured Certificates and
as of any Distribution Date, an amount equal to:
(i) any interest shortfall contemplated in the definition of "Accrued
Certificate Interest" allocated to the Insured Certificates, except for
(a) any Prepayment Interest Shortfalls allocated to the Insured
Certificates and (b) any interest shortfalls caused by the application
of the Relief Act allocated to the Insured Certificates;
(ii) any Class A-4 Interest Shortfall Amount;
(iii) the principal portion of any Class A Loss Amounts allocated to the
Insured Certificates, to the extent not covered by the Class A-5
Certificates; and
(iv) the Certificate Principal Balance of the Insured Certificates to
the extent unpaid on the Scheduled Final Distribution Date after taking
into account all distributions to be made on such date.
Definitive Certificate: Any definitive, fully registered Trust
Certificate.
Depository: The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for
purposes of registering those Trust Certificates that are to be Book-Entry
Certificates is Cede & Co. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to any Distribution Date, the
second Business Day prior to such Distribution Date.
Distribution Date: The 25th day of each month, or if such 25th
day is not a Business Day, the next succeeding Business Day, commencing on
the First Distribution Date.
Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the debt obligations of which have
been rated by each Rating Agency in its highest rating available, or (ii) an
account or accounts in a depository institution in which such accounts are
fully insured to the limits established by the FDIC, provided that any
deposits not so insured shall, to the extent acceptable to each Rating
Agency, as evidenced in writing, be maintained such that (as evidenced by an
Opinion of Counsel delivered to the Trustee and each Rating Agency) the
registered Holders of Trust Certificates have a claim with respect to the
funds in such account or a perfected first security interest against any
collateral securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account
is maintained, or (iii) in the case of the Custodial Account, a trust account
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or accounts maintained in the corporate trust department of JPMorgan Chase
Bank, or (iv) in the case of the Trust Certificate Account, a trust account
or accounts maintained in the corporate trust division of the Trustee, or (v)
an account or accounts of a depository institution acceptable to each Rating
Agency (as evidenced in writing by each Rating Agency that use of any such
account as the Custodial Account or the Trust Certificate Account will not
reduce the rating assigned to any Class of Trust Certificates by such Rating
Agency below the lower of the then-current rating or the rating assigned to
such Trust Certificates as of the Closing Date by such Rating Agency).
ERISA: The Employment Retirement Income Security Act of 1974, as
amended.
Exchange Act: Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation or any successor.
First Distribution Date: June 25, 2004.
Fitch: Fitch, Inc. or any successor thereto.
Independent: When used with respect to any specified Person,
such a Person who (i) is in fact independent of the Company, (ii) does not
have any direct financial interest in the Company or in an Affiliate, and
(iii) is not connected with the Company as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions.
Individual Insured Certificate: An Insured Certificate that
evidences $1,000 Initial Certificate Principal Balance.
Initial Certificate Principal Balance: With respect to each
Class of Trust Certificates, the Certificate Principal Balance of such Class
of Trust Certificates as of the Closing Date, as set forth in the Preliminary
Statement hereto.
Insurance Premium: With respect to any Distribution Date, an
amount equal to 1/12th of the product of (a) the Certificate Principal
Balance of the Class A-4 Certificates as of such Distribution Date (prior to
giving effect to any distributions thereon on such Distribution Date) and (b)
the Premium Percentage (as defined in the Commitment Letter).
Insured Certificates: Any one of the Class A-4 Certificates.
Insured Payment: With respect to the Insured Certificates, (a)
as of any Distribution Date, any Deficiency Amount, and (b) any Preference
Amount.
Interest Accrual Period: With respect to any Distribution Date
and for all Classes of Trust Certificates, the calendar month preceding the
month in which such Distribution Date occurs.
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Interest Distribution Amount: With respect to any Distribution
Date, the aggregate amount of Accrued Certificate Interest to be paid to the
Certificateholders for such Distribution Date, including the Accrual
Distribution Amount.
Living Owner: A Certificate Owner of an Insured Certificate other
than a Deceased Holder.
Loss Amount: A Class A Loss Amount.
Maturity Date: With respect to each Class of Trust Certificates,
the Distribution Date in September of 2033.
Mortgage Loans: The mortgage loans in which the Underlying
Certificates evidence a beneficial ownership interest.
Non-United States Person: Any Person other than a United States
Person.
Notice of Final Distribution: With respect to the Underlying
Certificates, the notice to be provided pursuant to the Pooling and Servicing
Agreement to the effect that final distribution on the Underlying
Certificates shall be made only upon presentation and surrender thereof.
Notice of Termination: Any of the notices given by the Trustee
pursuant to Section 6.01(b).
Officer's Certificate: A certificate signed by the Chairman of
the Board, the President, a Vice President, Assistant Vice President,
Director, Managing Director, the Treasurer, the Secretary, an Assistant
Treasurer or an Assistant Secretary of the Company or the Certificate
Administrator, as the case may be, and delivered to the Trustee, as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to
the Trustee and the Certificate Administrator, who may be counsel for the
Company or the Certificate Administrator, provided that any opinion of
counsel (i) referred to in the definition of "Disqualified Organization" in
the Pooling and Servicing Agreement or (ii) relating to the qualification of
any REMIC formed under the Pooling and Servicing Agreement, this Agreement or
in compliance with the REMIC Provisions must, unless otherwise specified, be
an opinion of Independent counsel.
Outstanding Certificates: With respect to any of the Trust
Certificates, as of the date of determination, all Trust Certificates
theretofore executed and delivered under this Agreement except:
(i) Trust Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Trust Certificates in exchange for which or in lieu of
which other Trust Certificates have been executed and delivered pursuant to
this Agreement unless proof satisfactory to the Trustee is presented that any
such Trust Certificates are held by a holder in due course.
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Ownership Interest: As to any Trust Certificate, any ownership
or security interest in such Trust Certificate, including any interest in
such Trust Certificate as the Holder thereof and any other interest therein,
whether direct or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Rate: For all Classes of Trust Certificates, the
per annum rate set forth in the Pass-Through Rate column in the first table
in the Preliminary Statement hereto.
Percentage Interest: With respect to any Trust Certificate
(other than a Class R Certificate), the undivided percentage ownership
interest in the related Class evidenced by such Trust Certificate, which
percentage ownership interest shall be equal to the Initial Certificate
Principal Balance thereof divided by the aggregate Initial Certificate
Principal Balance of all the Trust Certificates of the same Class. With
respect to a Class R Certificate, the interest in distributions to be made
with respect to such Class evidenced thereby, expressed as a percentage, as
stated on the face of each such Trust Certificate.
Permitted Transferee: Any Transferee of a Class R Certificate
other than (i) the United States, any state or any political subdivision
thereof, any possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which
is a corporation if all of its activities are subject to tax and, except for
the Federal Home Loan Mortgage Corporation, a majority of its board of
directors is not selected by any such governmental unit), (ii) a foreign
government, international organization or any agency or instrumentality of
either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from tax
imposed by Chapter 1 of the Code (unless such organization is subject to the
tax imposed by Section 511 of the Code on unrelated business taxable income),
(iv) rural electric and telephone cooperatives described in Section 1381 of
the Code, (v) an electing large partnership under Section 775 of the Code and
(vi) any other Person so designated by the Trustee based upon an Opinion of
Counsel that the holding of an Ownership Interest in a Class R Certificate by
such Person may cause the Trust Fund or any Person having an Ownership
Interest in any Class of Trust Certificates, other than such Person, to incur
a liability for any tax imposed under the Code that would not otherwise be
imposed but for the Transfer of an Ownership Interest in a Class R
Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section
7701 of the Code or successor provisions.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pooling and Servicing Agreement: The Series Supplement, dated as
of September 1, 2003 together with the Standard Terms of Pooling and
Servicing Agreement, dated as of March 1, 2003, and attached as Exhibit D
hereto, among the Company, the Certificate Administrator, and the Trustee, as
such agreement is amended from time to time.
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Preference Amount: Any amount previously distributed to an
Insured Certificateholder on an Insured Certificate that is recoverable and
sought to be recovered as a voidable preference by a trustee in bankruptcy
pursuant to the United States Bankruptcy Code (11 U.S.C.), as amended from
time to time, in accordance with a final nonappealable order of a court
having competent jurisdiction.
Prepayment Assumption: A prepayment assumption of 300% of the
prepayment speed assumption, used for determining the accrual of original
issue discount and market discount and premium on the Certificates for
federal income tax purposes. The prepayment speed assumption assumes a
constant rate of prepayment of mortgage loans of 0.2% per annum of the then
outstanding principal balance of such mortgage loans in the first month of
the life of the mortgage loans, increasing by an additional 0.2% per annum in
each succeeding month until the thirtieth month, and a constant 6% per annum
rate of prepayment thereafter for the life of the mortgage loans.
Prepayment Interest Shortfall: As to any Distribution Date and
the Underlying Certificates that received an interest distribution on the
related Distribution Date that was reduced pursuant to the terms of the
Pooling and Servicing Agreement because of a principal prepayment in full on
a Mortgage Loan or Mortgage Loans relating to the Underlying Certificates,
the amount of such reduction.
Principal Distribution Amount: With respect to any Distribution
Date, the balance of the Available Funds remaining after the Interest
Distribution Amount and the Insurance Premium have been distributed.
Random Lot: With respect to any Distribution Date, the method by
which the Depository will determine which Insured Certificates will be paid,
using its established random lot procedures or, if the Insured Certificates
are no longer represented by a Book-Entry Certificate, using the Trustee's
procedures.
Rating Agencies: Fitch and S&P.
Realized Losses: Losses on the Mortgage Loans applied in
reduction of the aggregate principal balance of a 2003-S17 Certificate that
is not accompanied by a cash payment in respect of such reduction.
Record Date: With respect to any Distribution Date, the close of
business on the last day of the month preceding such Distribution Date.
Regular Certificates: The Class A Certificates.
Relief Act: The Servicemembers Civil Relief Act or similar
legislation or regulations as in effect from time to time.
Relief Act Shortfalls: Shortfalls in interest payable by a
Mortgagor that is not collectable from the Mortgagor pursuant to the Relief
Act.
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REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code. As used herein, the term "the REMIC"
shall mean the segregated pool of assets, with respect to which a real estate
mortgage investment conduit election is made pursuant to this Agreement,
consisting of:
(a) the Underlying Certificates,
(b) all payments on and collections in respect of the
Underlying Certificates due after the Closing Date as shall be on deposit in
the Trust Certificate Account and identified as belonging to the Trust Fund,
and
(c) all proceeds of clauses (a) and (b) above.
REMIC Administrator: Residential Funding Corporation, provided
that if Residential Funding Corporation is found by a court of competent
jurisdiction to no longer be able to fulfill its obligations as REMIC
Administrator under this Agreement, the Certificate Administrator or Trustee
acting as Certificate Administrator shall appoint a successor REMIC
Administrator, subject to assumption of the REMIC Administrator obligations
under this Agreement.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at
Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and
related provisions, and temporary and final regulations (or, to the extent
not inconsistent with such temporary or final regulations, proposed
regulations) and published rulings, notices and announcements promulgated
thereunder, as the foregoing may be in effect from time to time.
REMIC Regular Certificate: Any Trust Certificate, other than a
Class R Certificate.
Reserve Fund: Any one or more segregated trust accounts
established pursuant to Section 3.15 that are Eligible Accounts, which shall
be titled "Reserve Fund, JPMorgan Chase Bank, as trustee for the registered
holders of Residential Funding Mortgage Securities I, Inc., Mortgage Trust
Certificates, Series 2004-SR1, Class A-4."
Reserve Fund Deposit: $5,000.
Reserve Fund Withdrawal: As defined in Section 3.15.
Rounding Account: With respect to the Insured Certificates, the
account created and maintained for such Insured Certificates pursuant to
Section 3.13.
Rounding Amount: With respect to the Rounding Account, the amount
of funds, if any, needed to be withdrawn and used to round the amount of any
distributions in reduction of the Certificate Principal Balance of the
Insured Certificates upward to the next higher integral multiple of $1,000.
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Responsible Officer: When used with respect to the Trustee, any
officer of the Corporate Trust Department of the Trustee, including any
Senior Vice President, any Vice President, any Assistant Vice President, any
Assistant Secretary, any Trust Officer or Assistant Trust Officer with
particular responsibility for this transaction, or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers to whom, with respect to a particular matter,
such matter is referred.
S&P: Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or its successor in interest.
Scheduled Final Distribution Date: September 25, 2033.
Senior Support Certificates: The Class A-5 Certificates.
Servicing Officer: Any officer of the Certificate Administrator
involved in, or responsible for, the administration of the Underlying
Certificates.
Super Senior Certificates: The Class A-4 Certificates.
Super Senior Optimal Percentage: As to any Distribution Date on
or after the Credit Support Depletion Date and with respect to the Super
Senior Certificates, a fraction, expressed as a percentage, the numerator of
which is the Certificate Principal Balance of such Super Senior Certificates
immediately prior to such Distribution Date and the denominator of which is
the aggregate Certificate Principal Balance of the Certificates immediately
prior to such Distribution Date.
Super Senior Optimal Principal Distribution Amount: As to any
Distribution Date on or after the related Credit Support Depletion Date and
with respect to the Super Senior Certificates, the product of (a) the
then-applicable Super Senior Optimal Percentage and (b) the Principal
Distribution Amount.
Tax Returns: The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of any REMIC formed under the Pooling and
Servicing Agreement and under the REMIC Provisions, together with any and all
other information, reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any
other governmental taxing authority under any applicable provisions of
federal, state or local tax laws.
Termination Date: The Distribution Date following the
Distribution Date on which the Underlying Certificate Balance has been
reduced to zero.
Transfer: Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Trust Certificate.
Transferee: Any Person who is acquiring by Transfer any
Ownership Interest in a Trust Certificate.
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Transferor: Any Person who is disposing by Transfer of any
Ownership Interest in a Trust Certificate.
Trust Certificate: Any Class A Certificate or Class R
Certificate.
Trust Certificate Account: The separate account or accounts
created and maintained pursuant to Section 3.03 hereof, which shall be
entitled "JPMorgan Chase Bank, as trustee, in trust for the registered
holders of Residential Funding Mortgage Securities I, Inc., Mortgage Trust
Certificates, Series 2004-SR1" and which must be an Eligible Account. Funds
deposited in the Trust Certificate Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in Article III hereof.
Trustee: JPMorgan Chase Bank or its successor in interest, or
any successor trustee appointed as herein provided.
Trust Fund: The corpus of the trust created by and to be
administered under this Agreement consisting of: (i) the Underlying
Certificates, (ii) all distributions thereon after but not including the
Distribution Date occurring in May 2004, (iii) the Trust Certificate Account,
the Rounding Account and such assets that are deposited therein from time to
time, (iv) with respect to the Class A-4 Certificates only, the Certificate
Policy and (v) any and all income, proceeds and payments with respect thereto.
2003-S17 Certificates: Residential Funding Mortgage Securities
I, Inc. Mortgage Pass-Through Certificates, Series 2003-S17.
Underlying Certificates: A certificate that represents a 75%
interest in the Residential Funding Mortgage Securities I, Inc. Series
2003-S17 Mortgage Pass-Through Certificates, Class A-5. The outstanding
principal balance, as of the Closing Date, of the Residential Funding
Mortgage Securities I, Inc. Series 2003-S17 Mortgage Pass-Through
Certificates, Class A-5 is $191,698,220.99.
Underlying Certificate Balance: With respect to the Underlying
Certificates, as of any Distribution Date (following all distributions to be
made with respect to the Underlying Certificate on such Distribution Date),
and as of any date of determination thereafter until the next succeeding
Distribution Date, the aggregate outstanding principal balance of the
Underlying Certificates, determined by reference to the Underlying
Distribution Date Statement sent to the Trustee as Underlying
Certificateholder, relating to such Distribution Date, which is to be
determined in accordance with the terms of the Pooling and Servicing
Agreement.
Underlying Certificateholder: The registered owner of the
Underlying Certificates.
Underlying Distribution Date Statement: With respect to the
Underlying Certificates and any Distribution Date, the monthly remittance
report forwarded to the holder thereof with respect to such Distribution
Date pursuant to the terms of the Pooling and Servicing Agreement.
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United States Person: A citizen or resident of the United
States, a corporation, partnership or other entity created or organized in,
or under the laws of, the United States or any political subdivision thereof,
or an estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within
the United States.
Voting Rights: Ninety-nine percent (99%) of all of the Voting
Rights shall be allocated among Holders of Trust Certificates, other than the
Class R Certificates, in proportion to the outstanding Certificate Principal
Balances of their respective Trust Certificates; one percent (1%) of all
Voting Rights shall be allocated among the Holders of the Class R
Certificates in accordance with their respective Percentage Interests.
Notwithstanding the foregoing, so long as there does not exist a failure by
the Certificate Insurer to make a required payment under the Certificate
Policy, the Insurer shall have the right to exercise all rights of the
Holders of the Insured Certificates without any consent of such holders, and
such Holders may exercise such rights only with the prior written consent of
the Certificate Insurer.
Additionally, all references to the words "real estate mortgage
investment conduit" herein shall have the meaning assigned to such words in
Section 860D of the Code.
ARTICLE II
CONVEYANCE OF THE UNDERLYING CERTIFICATES;
ORIGINAL ISSUANCE OF TRUST CERTIFICATES
Section 2.01 Conveyance of the Underlying Certificates.
(a) The Company, concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set-over and otherwise convey to the Trustee,
in trust, for the use and benefit of the Certificateholders, without
recourse, all the right, title and interest of the Company in and to the
Underlying Certificates and all other assets constituting the Trust Fund.
Such assignment includes, without limitation, all amounts payable to and all
rights of the Underlying Certificateholder pursuant to the Pooling and
Servicing Agreement.
In connection with such transfer and assignment, on the Closing
Date the Company will deliver to, and deposit with, the Trustee the
Underlying Certificates, together with a duly issued and authenticated
certificate or certificates for the Underlying Certificates, evidencing the
entire interest in such Underlying Certificates, with appropriate
endorsements and other documentation sufficient under the Pooling and
Servicing Agreement to transfer such Underlying Certificates to the Trustee.
Notwithstanding the foregoing, to the extent that the Underlying
Certificates are Book-Entry Certificates, delivery of the Underlying
Certificates will be satisfied if the Company meets the requirements of the
Depository to sell, transfer, assign, set-over and otherwise convey to the
Trustee the Underlying Certificates in accordance with the rules of the
Depository and applicable provisions of the Uniform Commercial Code as in
force in the relevant jurisdiction from time to time.
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The Trustee hereby acknowledges the receipt by it of the
Underlying Certificates and the other documents and instruments referenced
above, and declares that it holds and will hold the Underlying Certificates,
and such other documents and instruments, and all other assets and documents
included in the Trust Fund, in trust for the exclusive use and benefit of all
present and future Certificateholders.
(b) It is intended that the conveyance by the Company to the Trustee of the
Underlying Certificates as provided for in this Section 2.01 be construed as
a sale by the Company to the Trustee of the Underlying Certificates for the
benefit of the Certificateholders. Further, it is not intended that such
conveyance be deemed to be a pledge of the Underlying Certificates by the
Company to the Trustee to secure a debt or other obligation of the Company.
Nonetheless, (a) this Agreement is intended to be and hereby is a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in Section 2.01 shall be deemed
to be, and hereby is, a grant by the Company to the Trustee of a security
interest in all of the Company's right (including the power to convey title
thereto), title and interest, whether now owned or hereafter acquired, in and
to any and all general intangibles, payment intangibles, accounts, chattel
paper, instruments, documents, money, deposit accounts, certificates of
deposit, goods, letters of credit, advices of credit and investment property
and other property of whatever kind or description now existing or hereafter
acquired consisting of, arising from or relating to any of the following: (A)
Underlying Certificates, (B) all amounts payable pursuant to the holders of
the Underlying Certificates in accordance with the terms thereof of the
Pooling and Servicing Agreement, and (C) all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities
or other property, including without limitation all amounts from time to time
held or invested in the Trust Certificate Account, whether in the form of
cash, instruments, securities or other property; (c) the possession by the
Trustee or any agent of the Trustee of the Underlying Certificates or such
other items of property as constitute instruments, money, payment
intangibles, negotiable documents, goods, deposit accounts, letters of
credit, advices of credit, investment property, certificated securities or
chattel paper shall be deemed to be "possession by the secured party," or
possession by a purchaser or a person designated by such secured party, for
purposes of perfecting the security interest pursuant to the Minnesota
Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction as in effect (including, without limitation, Sections
8-106, 9-313 and 9-106 thereof); and (d) notifications to persons holding
such property, and acknowledgments, receipts or confirmations from persons
holding such property, shall be deemed notifications to, or acknowledgments,
receipts or confirmations from, securities intermediaries, bailees or agents
of, or persons holding for (as applicable) the Trustee for the purpose of
perfecting such security interest under applicable law.
15
(c) The Company, the Certificate Administrator and the Trustee shall, to
the extent consistent with this Agreement, take such reasonable actions as
may be necessary to ensure that, if this Agreement were determined to create
a security interest in the Underlying Certificates and the other property
described above, such security interest would be determined to be a perfected
security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement. Without limiting
the generality of the foregoing, the Company shall prepare and deliver to the
Trustee not less than 15 days prior to any filing date and, the Trustee shall
forward for filing, or shall cause to be forwarded for filing, at the expense
of the Company, all filings necessary to maintain the effectiveness of any
original filings necessary under the Uniform Commercial Code as in effect in
any jurisdiction to perfect the Trustee's security interest in or lien on the
Underlying Certificates, as evidenced by an Officers' Certificate of the
Company, including without limitation (x) continuation statements, and (y)
such other statements as may be occasioned by (1) any change of name of the
Company or the Trustee (such preparation and filing shall be at the expense
of the Trustee, if occasioned by a change in the Trustee's name) or (2) any
change of location of the place of business or the chief executive office of
the Company.
Section 2.02 Issuance of Trust Certificates.
The Trustee acknowledges the transfer, delivery and assignment to
it of the Underlying Certificates, together with the assignment to it of all
other assets included in the Trust Fund, and declares that it holds and will
hold the Underlying Certificates and all other assets included in the Trust
Fund in trust for the benefit of all present and future Certificateholders.
Concurrently with such transfer and delivery, the Trustee has duly executed,
authenticated and delivered, to or upon the order of the Company, the Trust
Certificates in authorized denominations, registered in such names as the
Company has requested, and such Trust Certificates evidence the beneficial
interest in the entire REMIC.
Section 2.03 [Reserved].
Section 2.04 [Reserved].
Section 2.05 Purposes and Powers of the Trust Fund.
The purpose of the trust, as created hereunder, is to engage in
the following activities:
(a) to sell the Trust Certificates to the Company in exchange for the
Underlying Certificates;
(b) to enter into and perform its obligations under this Agreement;
(c) to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and
(d) subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust
Fund and the making of distributions to the Certificateholders.
16
The trust is hereby authorized to engage in the foregoing
activities. The trust shall not engage in any activity other than in
connection with the foregoing or other than as required or authorized by the
terms of this Agreement while any Trust Certificate is outstanding without
the consent of the Certificateholders evidencing a majority of the aggregate
Voting Rights of the Trust Certificates.
ARTICLE III
ADMINISTRATION OF THE UNDERLYING CERTIFICATES;
PAYMENTS AND REPORTS TO CERTIFICATEHOLDERS
Section 3.01 Administration of the Trust Fund and the Underlying
Certificates.
(a) The REMIC Administrator shall make an election to treat the Trust Fund
as a real estate mortgage investment conduit under the Code and, if
necessary, under applicable state law. The assets of the REMIC are set forth
in this Agreement. Such election will be made on Form 1066 or other
appropriate federal tax or information return (including Form 8811) or any
appropriate state return for the taxable year ending on the last day of the
calendar year in which the Trust Certificates are issued. For the purposes
of the REMIC elections in respect of the Trust Fund, the Trust Certificates
and interests to be designated as the "regular interests" and sole class of
"residual interests" in the REMIC are set forth below.
The Class X-0, Xxxxx X-0, Class A-3, Class A-4 and
Class A-5 Certificates will be "regular interests" in the REMIC, and the
Class R Certificates will be the sole class of "residual interests" therein
for purposes of the REMIC Provisions (as defined herein) under federal income
tax law.
(b) The Closing Date is hereby designated as the "startup day" of the Trust
Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate representing a
0.01% Percentage Interest of the Class R Certificates and shall be designated
as "the tax matters person" with respect to the REMIC in the manner provided
under Treasury regulations section 1.860F-4(d) and Treasury regulations
section 301.6231(a)(7)-1. The REMIC Administrator, as tax matters person,
shall (i) act on behalf of the REMIC in relation to any tax matter or
controversy involving the Trust Fund and (ii) represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by
any governmental taxing authority with respect thereto. If the REMIC
Administrator is no longer the Certificate Administrator hereunder, at its
option the REMIC Administrator may continue its duties as REMIC Administrator
and shall be paid reasonable compensation not to exceed $3,000 per year by
any successor certificate administrator hereunder for so acting as the REMIC
Administrator.
17
(d) The REMIC Administrator shall prepare or cause to be prepared all of
the Tax Returns that it determines are required with respect to the REMIC and
deliver such Tax Returns in a timely manner to the Trustee and the Trustee
shall sign and file such Tax Returns in a timely manner. The expenses of
preparing such returns shall be borne by the REMIC Administrator without any
right of reimbursement therefor. The REMIC Administrator agrees to indemnify
and hold harmless the Trustee with respect to any tax or liability arising
from the Trustee's signing of Tax Returns that contain errors or omissions.
The Trustee and Certificate Administrator shall promptly provide the REMIC
Administrator with such information as the REMIC Administrator may from time
to time request for the purpose of enabling the REMIC Administrator to
prepare Tax Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a
Class R Certificate such information as is necessary for the application of
any tax relating to the transfer of a Class R Certificate to any Person who
is not a Permitted Transferee, (ii) to the Trustee, and the Trustee shall
forward to the Certificateholders, such information or reports as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption) and (iii) to the Internal Revenue Service the name,
title, address and telephone number of the person who will serve as the
representative of the REMIC.
18
(f) The Certificate Administrator and the REMIC Administrator shall take
such actions and shall cause the REMIC created hereunder to take such actions
as are reasonably within the Certificate Administrator's or the REMIC
Administrator's control and the scope of its duties more specifically set
forth herein as shall be necessary or desirable to maintain the status of the
REMIC as a real estate mortgage investment conduit under the REMIC Provisions
(and the Trustee shall assist the Certificate Administrator and the REMIC
Administrator, to the extent reasonably requested by the Certificate
Administrator and the REMIC Administrator to do so). The Certificate
Administrator and the REMIC Administrator shall not knowingly or
intentionally take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action reasonably within
their respective control that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of any portion of
the REMIC as a real estate mortgage investment conduit or (ii) result in the
imposition of a tax upon the REMIC (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the
tax on contributions to a real estate mortgage investment conduit set forth
in Section 860G(d) of the Code) (either such event, in the absence of an
Opinion of Counsel or the indemnification referred to in this sentence, an
"Adverse REMIC Event") unless the Certificate Administrator or the REMIC
Administrator, as applicable, has received an Opinion of Counsel (at the
expense of the party seeking to take such action or, if such party fails to
pay such expense, and the Certificate Administrator or the REMIC
Administrator, as applicable, determines that taking such action is in the
best interest of the Trust Fund and the Certificateholders, at the expense of
the Trust Fund, but in no event at the expense of the Certificate
Administrator, the REMIC Administrator or the Trustee) to the effect that the
contemplated action will not, with respect to the REMIC, endanger such status
or, unless the Certificate Administrator, the REMIC Administrator or both, as
applicable, determine in its or their sole discretion to indemnify the Trust
Fund against the imposition of such a tax, result in the imposition of such a
tax. Wherever in this Agreement a contemplated action may not be taken
because the timing of such action might result in the imposition of a tax on
the Trust Fund, or may only be taken pursuant to an Opinion of Counsel that
such action would not impose a tax on the Trust Fund, such action may
nonetheless be taken provided that the indemnity given in the preceding
sentence with respect to any taxes that might be imposed on the Trust Fund
has been given and that all other preconditions to the taking of such action
have been satisfied. The Trustee shall not take or fail to take any action
(whether or not authorized hereunder) as to which the Certificate
Administrator or the REMIC Administrator, as applicable, has advised it in
writing that it has received an Opinion of Counsel to the effect that an
Adverse REMIC Event could occur with respect to such action. In addition,
prior to taking any action with respect to the REMIC or any related assets
thereof, or causing the REMIC to take any action, which is not expressly
permitted under the terms of this Agreement, the Trustee will consult with
the Certificate Administrator or the REMIC Administrator, as applicable, or
its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to the REMIC, and the Trustee shall
not take any such action or cause the REMIC to take any such action as to
which the Certificate Administrator or the REMIC Administrator, as
applicable, has advised it in writing that an Adverse REMIC Event could
occur. The Certificate Administrator or the REMIC Administrator, as
applicable, may consult with counsel to make such written advice, and the
cost of the same shall be borne by the party seeking to take the action not
expressly permitted by this Agreement, but in no event at the expense of the
Certificate Administrator or the REMIC Administrator. At all times as may be
required by the Code, the Certificate Administrator will to the extent within
its control and scope of its duties more specifically set forth herein,
maintain substantially all of the assets of the REMIC as "qualified
mortgages" as defined in Section 860G(a)(3) of the Code and "permitted
investments" as defined under Section 860G(a)(5) of the Code.
19
(g) In the event that any tax is imposed on "prohibited transactions" of
the REMIC as defined in Section 860F(a)(2) of the Code, on "net income from
foreclosure property" of the REMIC as defined in Section 860G(c) of the Code,
on any contributions to the REMIC after the startup day therefor pursuant to
Section 860G(d) of the Code, or any other tax is imposed by the Code or any
applicable provisions of state or local tax laws, such tax shall be charged
(i) to the Certificate Administrator, if such tax arises out of or results
from a breach by the Certificate Administrator of any of its obligations
under this Agreement or the Certificate Administrator has in its sole
discretion determined to indemnify the Trust Fund against such tax, (ii) to
the Trustee, if such tax arises out of or results from a breach by the
Trustee of any of its obligations under this Article III, (iii) to the REMIC
Administrator, if such tax arises out of or results from a breach by the
REMIC Administrator of any of its obligations under this Agreement or if in
its sole discretion it has determined to indemnify the Trust Fund for such
tax; or (iv) otherwise against amounts on deposit in the Trust Certificate
Account as provided hereunder and on the Distribution Date(s) following such
reimbursement the aggregate of such taxes shall be allocated in reduction of
the Accrued Certificate Interest on each Class entitled thereto in the same
manner as if such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Certificate Administrator shall, for federal income
tax purposes, maintain books and records with respect to the REMIC on a
calendar year and on an accrual basis or as otherwise may be required by the
REMIC Provisions.
(i) Following the startup day for the REMIC, neither the Certificate
Administrator nor the Trustee shall accept any contributions of assets to the
REMIC unless (subject to Section 3.01(f) hereof) the Certificate
Administrator and the Trustee shall have received an Opinion of Counsel (at
the expense of the party seeking to make such contribution) to the effect
that the inclusion of such assets in the REMIC will not cause the REMIC to
fail to qualify as a real estate mortgage investment conduit at any time that
any Trust Certificates are outstanding or subject the REMIC to any tax under
the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
(j) Neither the Certificate Administrator nor the Trustee shall (subject to
Section 3.01(f) hereof) enter into any arrangement by which the REMIC will
receive a fee or other compensation for services nor permit the REMIC to
receive any income from assets other than "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in
Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the Certificate
Principal Balance of each Class of Trust Certificates representing a regular
interest in the REMIC would be reduced to zero is the Maturity Date for each
such Trust Certificate.
20
(l) Within 30 days after the Closing Date, the REMIC Administrator shall
prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of
Collateralized Debt Obligations" for the REMIC.
(m) Neither the Certificate Administrator nor the Trustee shall (i) sell,
dispose of or substitute for the Underlying Certificates (except in
connection with (A) the default, imminent default or foreclosure of the
Underlying Certificates, (B) the bankruptcy of the REMIC, or (C) the
termination of the trust fund relating to the Underlying Certificates
pursuant to Article IX of the Pooling and Servicing Agreement), (ii) acquire
any assets for the REMIC, (iii) sell or dispose of any investments in the
Trust Certificate Account for gain nor accept any contributions to the REMIC
after the Closing Date unless it has received an Opinion of Counsel that such
sale, disposition, substitution or acquisition will not (A) affect adversely
the status of the REMIC as a real estate mortgage investment conduit or (B)
cause the REMIC to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.
(n) The Trustee agrees to indemnify the Trust Fund, the Company, the REMIC
Administrator and the Certificate Administrator for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Company or the Certificate Administrator, as
a result of a breach of the Trustee's covenants set forth in Article V or
this Article III.
(o) The REMIC Administrator agrees to indemnify the Trust Fund, the
Company, the Certificate Administrator and the Trustee for any taxes and
costs (including, without limitation, any reasonable attorneys' fees) imposed
on or incurred by the Trust Fund, the Company, the Certificate Administrator
or the Trustee, as a result of a breach of the REMIC Administrator's
covenants set forth in this Article III with respect to compliance with the
REMIC Provisions, including without limitation, any penalties arising from
the Trustee's execution of Tax Returns prepared by the REMIC Administrator
that contain errors or omissions; provided, however, that such liability will
not be imposed to the extent such breach is a result of an error or omission
in information provided to the REMIC Administrator by the Certificate
Administrator in which case Section 3.01(p) will apply.
(p) The Certificate Administrator agrees to indemnify the Trust Fund, the
Company, the REMIC Administrator and the Trustee for any taxes and costs
(including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Company, the REMIC Administrator or the
Trustee, as a result of a breach of the Certificate Administrator's covenants
set forth in this Article III with respect to compliance with the REMIC
Provisions, including without limitation, any penalties arising from the
Trustee's execution of Tax Returns prepared by the Certificate Administrator
that contain errors or omissions.
21
(q) In connection with the requirements of Section 3.06(e) herein, the
Certificate Administrator will deliver to the Company, the Certificate
Insurer and the Trustee on or before the earlier of (a) March 31 of each
year, beginning with the first March 31 that occurs at least six months after
May 1, 2004 or (b) with respect to any calendar year during which the
Company's annual report on Form 10-K is required to be filed in accordance
with the Exchange Act and the rules and regulations of the Commission, the
date on which the annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the
Commission, an Officers' Certificate stating, as to each signer thereof, that
(i) a review of the activities of the Certificate Administrator during the
preceding calendar year related to its servicing of the Underlying
Certificates and its performance under pooling and servicing agreements, and
this Agreement, has been made under such officers' supervision, (ii) to the
best of such officers' knowledge, based on such review, the Certificate
Administrator has complied in all material respects with the servicing or
similar standards set forth in this Agreement and has fulfilled all of its
material obligations relating to this Agreement in all material respects
throughout such year, or, if there has been material noncompliance with such
servicing or similar standards or a default in the fulfillment in all
material respects of any such obligation relating to this Agreement, such
statement shall include a description of such noncompliance or specify each
such default, as the case may be, known to such officer and the nature and
status thereof.
(r) In connection with the requirements of Section 3.06(e) herein, on or
before the earlier of (a) March 31 of each year, beginning with the first
March 31 that occurs at least six months after May 1, 2004 or (b) with
respect to any calendar year during which the Company's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, the date on which the annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and
the rules and regulations of the Commission, the Certificate Administrator at
its expense shall cause a firm of independent public accountants, which shall
be members of the American Institute of Certified Public Accountants, to
furnish a report to the Company, the Certificate Insurer and the Trustee
stating its opinion that, on the basis of an examination conducted by such
firm substantially in accordance with established or stated criteria as set
forth in the professional standards of the American Institute of Certified
Public Accountants, the assertions made pursuant to Section 3.01(q)
regarding compliance with the minimum servicing or similar standards during
the preceding calendar year are fairly stated in all material respects,
subject to such exceptions and other qualifications that, in the opinion of
such firm, such accounting standards require it to report.
Section 3.02 Collection of Monies.
Except as otherwise provided in Section 6.01, upon its receipt of
a Notice of Final Distribution, the Trustee shall present and surrender the
Underlying Certificates to the trustee under the Pooling and Servicing
Agreement, for final payment thereon in accordance with the terms and
conditions of Pooling and Servicing Agreement and such Notice of Final
Distribution. The Trustee shall promptly deposit in the Trust Certificate
Account the final distribution received by it upon presentation and surrender
of the Underlying Certificates.
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Section 3.03 Establishment of Trust Certificate Account; Deposits in
Trust Certificate Account.
(a) The Trustee shall establish and maintain the Trust Certificate
Account. The Trustee shall cause the following payments and collections in
respect of the Underlying Certificates to be deposited directly into the
Trust Certificate Account:
(i) all distributions due and received by it on the Underlying Certificates
subsequent to the Closing Date;
(ii) any amounts received in connection with the sale of the Underlying
Certificates pursuant to Section 6.01 in accordance with a plan of
complete liquidation of the Trust Fund; and
(iii) any other amounts specifically required to be deposited in the Trust
Certificate Account hereunder.
The foregoing requirements for deposit in the Trust Certificate
Account shall be exclusive.
(b) Funds in the Trust Certificate Account shall be held uninvested.
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Section 3.04 Permitted Withdrawals From the Trust Certificate Account.
The Trustee may from time to time withdraw funds from the Trust
Certificate Account for the following purposes:
(a) to make distributions in the amounts and in the manner provided for in
Section 3.05; and
(b) to clear and terminate the Trust Certificate Account upon the
termination of this Agreement.
Section 3.05 Distributions.
(a) On each Distribution Date the Trustee shall distribute (i) to the
Certificate Insurer the Insurance Premium and, the amount, if any, required
to be distributed to the Certificate Insurer pursuant to Section 3.05(a)(iii)
and (ii) based on information received in writing from the Certificate
Administrator pursuant to Section 3.06(f), to each Certificateholder of
record on the related Record Date (other than as provided in Section 6.01
respecting the final distribution) either in immediately available funds (by
wire transfer or otherwise) to the account of such Certificateholder at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder has so notified the Trustee, or, if such Certificateholder
has not so notified the Trustee by the Record Date, by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register such Certificateholder's share (which shall be based on the
aggregate of the Percentage Interests represented by Trust Certificates of
the applicable Class held by such Holder) of the following amounts, in the
following order of priority, in each case to the extent of the Available
Funds remaining (net of the Insurance Premium), together with, as to the
Insured Certificates, any Reserve Fund Withdrawal pursuant to Section 3.15
and any Insured Payment pursuant to Section 9.02:
(i) To the Class A Certificates and Class R Certificates (other than the
Class A-5 Certificates and prior to the Accretion Termination Date, the
Class A-3 Certificates, to the extent of the Accrual Distribution
Amount), on a pro rata basis, any Accrued Certificate Interest payable
on such Trust Certificates with respect to such Distribution Date, plus
any Accrued Certificate Interest thereon remaining unpaid from any
previous Distribution Date;
(ii) (a) Prior to the occurrence of the Credit Support Depletion Date:
(i) an amount equal to the Accrual Distribution
Amount shall be distributed to the Class A-1 Certificates and
Class A-2 Certificates, in that order, in each case until the
Certificate Principal Balance thereof has been reduced to zero;
(ii) the Principal Distribution Amount shall be
distributed to the Class R Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(iii) an amount equal to the lesser of (a)
$23,898 and (b) the balance of the Principal Distribution Amount
remaining after the distributions, if any, described in clause
(ii) above, shall be distributed for each distribution date
commencing on the distribution date in June 2007, to the Class
A-4 Certificates and Class A-5 Certificates, concurrently on a
pro rata basis, in each case until the Certificate Principal
Balance thereof has been reduced to zero;
(iv) the balance of the Principal Distribution
Amount remaining after the distributions, if any, described in
clauses (ii) and (iii) above shall be distributed to the Class
A-1, Class A-2 and Class A-3 Certificates, in that order, in each
case until the Certificate Principal Balance thereof has been
reduced to zero; and
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(v) the balance of the Principal Distribution
Amount remaining after the distributions, if any, described in
clauses (ii) through (iv) above shall be distributed to the Class
A-4 Certificates and Class A-5 Certificates, concurrently on a
pro rata basis, in each case until the Certificate Principal
Balance thereof has been reduced to zero.
(b) On or after the occurrence of the Credit Support
Depletion Date but prior to the reduction of the Certificate Principal
Balances of the Senior Support Certificates to zero, all priorities
relating to distributions as described in clause (ii)(a) above relating
to principal among the Trust Certificates will be disregarded, and
(i) the remaining Principal Distribution Amount will be distributed to
the Trust Certificates pro rata in accordance with their respective
outstanding Certificate Principal Balances; provided that the aggregate
amount distributable to the Super Senior Certificates and the Senior
Support Certificates in respect of their aggregate pro rata portion of
the Principal Distribution Amount will be distributed among those
certificates in the following priority: first, to the Super Senior
Certificates, up to an amount equal to the Super Senior Optimal
Principal Distribution Amount, in reduction of the Certificate
Principal Balance thereof, until the Certificate Principal Balance
thereof has been reduced to zero; and second, to the Senior Support
Certificates, the remainder, until the Certificate Principal Balance
thereof has been reduced to zero.
(c) On or after the occurrence of the Credit Support
Depletion Date and after the reduction of the Certificate Principal Balance
of the Senior Support Certificates to zero, all priorities relating to
distributions as described in clause (ii)(a) above relating to principal
among the Certificates will be disregarded. Instead, the Principal
Distribution Amount will be distributed to the remaining Certificates pro
rata in accordance with their respective outstanding Certificate Principal
Balances.
(iii) to the Certificate Insurer, as subrogee of the Insured
Certificateholders, an amount necessary to reimburse the Certificate
Insurer for claims paid under the Certificate Policy, to the extent of
Cumulative Insurance Payments on the Insured Certificates.
(b) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be solely
responsible for crediting the amount of such distribution to the accounts of
its Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution
to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm") for which it acts as
agent. Each brokerage firm shall be responsible for disbursing funds to the
Certificate Owners that it represents. None of the Trustee, the Certificate
Registrar, the Company or the Certificate Administrator shall have any
responsibility therefor.
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(c) Except as otherwise provided in Section 6.01, if the Certificate
Administrator anticipates that a final distribution with respect to any Class
of Trust Certificates will be made on the next Distribution Date, the
Certificate Administrator shall, no later than the fifteen days prior to such
final distribution, notify the Trustee and the Trustee shall, no later than
two (2) Business Days after such notification, mail on such date to each
Holder of such Class of Trust Certificates a notice to the effect that: (i)
the Trustee anticipates that the final distribution with respect to such
Class of Trust Certificates will be made on such Distribution Date but only
upon presentation and surrender of such Trust Certificates at the office of
the Trustee specified therein or as otherwise specified therein, and (ii) no
interest shall accrue on such Trust Certificates from and after the end of
the related Interest Accrual Period. In the event that Certificateholders
required to surrender their Trust Certificates pursuant to Section 6.01(b) do
not surrender their Trust Certificates for final cancellation, the Trustee
shall cause funds distributable with respect to such Trust Certificates to be
withdrawn from the Trust Certificate Account and credited to a separate
escrow account for the benefit of such Certificateholders as provided in
Section 6.01(b). The funds in such escrow account shall not be invested.
(d) On each Distribution Date prior to the Accretion Termination Date, an
amount equal to the Accrued Certificate Interest that would otherwise be
distributed on the Class A-3 Certificates shall be added to the Certificate
Principal Balance of the Class A-3 Certificates, to the extent that such
amount is required to be distributed to the Holders of the Class A-2
Certificates and Class A-3 Certificates, pursuant to Section
3.05(a)(ii)(a)(i); the remaining amount of Accrued Certificate Interest on
the Class A-3 Certificates, if any, will be paid to such Certificates as
principal. On or after the Accretion Termination Date, the entire amount of
Accrued Certificate Interest on the Class A-3 Certificates for such
Distribution Date shall be payable to the Class A-3 Certificateholders,
pursuant to Section 3.05(a)(i) to the extent not required to reduce the
Certificate Principal Balances of the Class A-1 Certificates and Class A-2
Certificates to zero on such Accretion Termination Date; provided that if the
Accretion Termination Date is the Credit Support Depletion Date, the entire
amount of Accrued Certificate Interest on the Class A-3 Certificates for such
Distribution Date will be paid to the Class A-3 Certificateholders, to the
extent of Accrued Certificate Interest on such Class of Certificates for the
related Distribution Date. Any such Accrued Certificate Interest on the
Class A-3 Certificates which is required to be paid to the Holders of the
Class A-1 Certificates and Class A-2 Certificates, in reduction of their
Certificate Principal Balances on the Accretion Termination Date will be
added to the Certificate Principal Balance of the Certificates in the manner
described in the first sentence of this Section 3.05(d).
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(e) Notwithstanding the priorities relating to distributions of principal
among the Insured Certificates described above, on any Distribution Date,
distributions in respect of principal on the Insured Certificates will be
allocated among the Certificate Owners of the Insured Certificates as set
forth in Section 3.14. On each Distribution Date on which amounts are
available for distributions in reduction of the Certificate Principal Balance
of the Insured Certificates the aggregate amount available for such
distributions will be rounded upward by the Rounding Amount. Such rounding
will be accomplished on the first Distribution Date on which distributions
in reduction of the Certificate Principal Balance of the Insured
Certificates are made by withdrawing from the Rounding Account the Rounding
Amount for deposit into the Trust Certificate Account, and such Rounding
Amount will be added to the amount that is available for distributions in
reduction of the Certificate Principal Balance of the Insured Certificates.
On each succeeding Distribution Date on which distributions in reduction of
the Certificate Principal Balance of the Insured Certificates are made,
first, the aggregate amount available for distribution in reduction of the
Certificate Principal Balance of the Insured Certificates will be applied to
repay the Rounding Amount withdrawn from the Rounding Account on the prior
Distribution Date and then, the remainder of such allocable amount, if any,
will be similarly rounded upward through another withdrawal from the
Rounding Account and such determined Rounding Amount will be added to the
amount that is available for distribution in reduction of the Certificate
Principal Balance of the Insured Certificates. Any funds remaining in the
Rounding Account after the Certificate Principal Balance of the Insured
Certificates is reduced to zero shall be distributed to the Class R
Certificateholders.
Section 3.06 Statements to Certificateholders; Reports to the Trustee
and Company.
(a) Concurrently with each distribution charged to the Trust Certificate
Account and with respect to each Distribution Date the Certificate
Administrator shall forward to the Trustee and the Trustee shall either
forward by mail or make available to each Holder, the Certificate Insurer and
the Company, via the Trustee's internet website, a statement (and at its
option, any additional files containing the same information in an
alternative format) setting forth the following information as to each Class
of Trust Certificates:
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(i) the Available Funds for such Distribution Date;
(ii) with respect to such Distribution Date, the aggregate amount of Accrued
Certificate Interest, the Pass-Through Rate and the aggregate Principal
Distribution Amount and the amounts of principal and interest
distributed to the Certificateholders of each Class of Trust
Certificates on such Distribution Date pursuant to Section 3.05;
(iii) the aggregate amount of distributions on the Class R Certificate on
such Distribution Date pursuant to Section 3.05, if any;
(iv) the Certificate Principal Balance of each Class of the Class A
Certificates after giving effect to distributions of principal of such
Trust Certificates on such Distribution Date;
(v) the Underlying Certificate Balance as of such Distribution Date, after
giving effect to the distribution of principal made thereon and the
amount of any Realized Losses with respect to the Underlying
Certificates applied to reduce the Underlying Certificate Balance
thereof on such Distribution Date;
(vi) the Accrual Distribution Amount ;
(vii) the amount of any reductions in the Certificate Principal Balance of
the Class A Certificates by the Class A Loss Amount, if any;
(viii) the Insured Payment for such Distribution Date, and the
respective portions thereof allocable to principal and interest for the
Insured Certificates; and
(ix) the amount of any Certificate Insurance Payment made on such
Distribution Date, the amount of any reimbursement payment made to the
Certificate Insurer on such Distribution Date pursuant to Section
3.05(a)(iii) and the amount of Cumulative Insurance Payments after
giving effect to any such Certificate Insurance Paymentor any such
reimbursement payment to the Certificate Insurer..
The Trustee shall mail to the Certificate Insurer and each Holder
that requests a paper copy by telephone a paper copy via first class mail.
The Trustee may modify the distribution procedures set forth in this
Section 3.06 provided that such procedures are no less convenient for the
Certificateholders or the Certificate Insurer. The Trustee shall provide
prior notification to the Company, the Certificate Administrator, the
Certificate Insurer and the Certificateholders regarding any such
modification. In addition, the Certificate Administrator shall provide to
any manager of a trust fund consisting of some or all of the Trust
Certificates, upon reasonable request, such additional information as is
reasonably obtainable by the Certificate Administrator at no additional
expense to the Certificate Administrator.
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(b) In addition, the Trustee promptly will make available to
Certificateholders and the Certificate Insurer copies of any notices,
statements, reports or other communications including, without limitation,
the Underlying Distribution Date Statements, received by the Trustee as the
Underlying Certificateholder.
(c) Within a reasonable period of time after the end of each calendar year,
the Certificate Administrator shall prepare, or cause to be prepared, and
shall forward, or cause to be forwarded, to each Person who at any time
during the calendar year was the Holder of a Trust Certificate, other than a
Class R Certificate, a statement containing the information set forth in
clause (a)(ii) above aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of
the Certificate Administrator shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Certificate Administrator pursuant to any requirements of the Code.
(d) Within a reasonable period of time after the end of each calendar year,
the Certificate Administrator shall prepare, or cause to be prepared, and
shall forward, or cause to be forwarded, to each Person who at any time
during the calendar year was the Holder of a Class R Certificate, a statement
containing the applicable distribution information provided pursuant to this
Section (a)(iii) aggregated for such calendar year or applicable portion
thereof during which such Person was the Holder of a Class R Certificate.
Such obligation of the Certificate Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Certificate Administrator pursuant to any requirements of the
Code.
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(e) The Company shall, on behalf of and in respect of the Trust Fund, sign
and cause to be filed with the Commission any periodic reports required to be
filed under the provisions of the Exchange Act, and the rules and regulations
of the Commission thereunder. Any Form 8-K or other filing of the statements
provided under Section 3.06(a), shall include a copy of the corresponding
Underlying Distribution Date Statement. In connection with the preparation
and filing of such periodic reports, the Trustee shall timely provide to the
Company (i) a list of Certificateholders as shown on the Certificate
Register as of the end of each calendar year, (ii) copies of all pleadings,
other legal process and any other documents relating to any claims, charges
or complaints involving the Trustee, as trustee hereunder, or the Trust Fund
that are received by the Trustee, (iii) notice of all matters that, to the
actual knowledge of a Responsible Officer of the Trustee, have been submitted
to a vote of the Certificateholders, other than those matters that have been
submitted to a vote of the Certificateholders at the request of the Company
or the Certificate Administrator, and (iv) notice of any failure of the
Trustee to make any distribution to the Certificateholders as required
pursuant to this Agreement. Neither the Company nor the Trustee shall have
any liability with respect to the Company's failure to properly prepare or
file such periodic reports resulting from or relating to the Company's
inability or failure to obtain any information not resulting from the
Company's own negligence or willful misconduct. Any Form 10-K filed with the
Commission in connection with this Section 3.06(e) shall include a
certification, signed by a senior officer of the Company, in the form
attached as Exhibit E hereto or such other form as may be required or
permitted by the Commission (the "Form 10-K Certification"), in compliance
with Rules 13a-14 and 15d-14 under the Exchange Act and any additional
directives of the Commission. In connection with the Form 10-K
Certification, the Trustee shall provide the Company with a back-up
certification substantially in the form attached hereto as Exhibit F. This
Section 3.06(e) may be amended in accordance with this Agreement without the
consent of the Certificateholders.
(f) Prior to the close of business on the second Business Day prior to each
Distribution Date, the Certificate Administrator shall furnish a written
statement to the Trustee, the Certificate Insurer and the Company (the
information in such statement to be made available to Certificateholders by
the Certificate Administrator on request) setting forth (i) the Available
Funds and (ii) the amounts required to be distributed pursuant to Section
3.05(a). The determination by the Certificate Administrator of such amounts
shall, in the absence of obvious error, be presumptively deemed to be correct
for all purposes hereunder and the Trustee shall be protected in relying upon
the same without any independent check or verification.
Section 3.07 Access to Certain Documentation and Information.
The Trustee shall provide to the Certificateholders and the
Certificate Insurer access to the Trust Certificates and all reports,
documents and records maintained by the Trustee in respect of its duties
hereunder, such access being afforded without charge but only upon reasonable
written request no less than two Business Days prior to such access and
during normal business hours at offices designated by the Trustee.
Section 3.08 Sale of Defective Assets.
Upon the discovery by, or written notice to, the Company or the
Trustee that the Underlying Certificates are not regular interests of the
REMIC or that any other asset of the REMIC is not a permitted asset of the
REMIC, the party discovering such fact shall give prompt written notice to
the other party. The Trustee shall sell the Underlying Certificates (or
other asset, as the case may be) upon the terms and at the direction of the
Company within 90 days of such discovery and any tax resulting therefrom not
borne by the Trustee pursuant to Section 5.01(d) hereof shall be payable out
of the Trust Fund.
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Section 3.09 Modification of Underlying Certificates
Notwithstanding any contrary provision herein, the Trustee will
not permit the modification of the Underlying Certificates unless (a) such
modification is in accordance with the Pooling and Servicing Agreement and
(b) the Trustee has received an Opinion of Counsel (which shall not be an
expense of the Trustee) that such modification would not endanger the status
of the REMIC as a real estate mortgage investment conduit.
Section 3.10 [Reserved] .
Section 3.11 Allocation of Class A Loss Amounts.
Class A Loss Amounts will be allocated to the Class A
Certificates on a pro rata basis in accordance with their respective
Certificate Principal Balances, except that Class A Loss Amounts allocable to
the Super Senior Certificates will be allocated to the Senior Support
Certificates; provided, however, in determining the Certificate Principal
Balance of the Class A-3 Certificates for the purpose of allocating any
portion of a Class A Loss Amount thereto, the Certificate Principal Balance
of the Class A-3 Certificates shall be deemed to be equal to the lesser of
(a) the original Certificate Principal Balance of such Class of Certificates
and (b) the Certificate Principal Balance of such Class of Certificates prior
to giving effect to distributions made on such Distribution Date; and
provided, further, that until the Certificate Principal Balance of the
Class A-5 Certificates has been reduced to zero, any Class A Loss Amounts (other
than Class A Loss Amounts attributable to Excess Bankruptcy Losses, Excess Fraud
Losses, Excess Special Hazard Losses or Extraordinary Losses (each as defined in
the Pooling and Servicing Agreement) on the Mortgage Loans) allocable to the
Class A-4 Certificates will be allocated to the Class A-5 Certificates.
Thereafter, any Class A Loss Amounts allocable to the Class A-4 Certificates
will be covered by the Certificate Policy.
Section 3.12 Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders, including interest or original issue discount
payments or advances thereof that the Trustee reasonably believes are
applicable under the Code. The consent of Certificateholders shall not be
required for such withholding. In the event the Trustee does withhold any
amount from interest or original issue discount payments or advances thereof
to any Certificateholder pursuant to federal withholding requirements, the
Trustee shall indicate the amount withheld to such Certificateholder pursuant
to the terms of such requirements.
Section 3.13 Rounding Account.
No later than the Closing Date, the Trustee will establish and
maintain with itself a segregated trust account that is an Eligible Account,
which shall be titled "Rounding Account, JPMorgan Chase Bank, as trustee for
the registered holders of Residential Funding Mortgage Securities I, Inc.,
Mortgage Trust Certificates, Series 2004-SR1, Class A-4." On the Closing
Date, Xxxxxxx, Xxxxx & Co. shall deposit with the Trustee, and the Trustee
shall deposit into the Rounding Account, cash in an amount equal to $999.99.
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The Trustee on each Distribution Date shall, based upon the
written information provided by the Certificate Administrator for the related
Distribution Date pursuant to Section 3.06(f), withdraw funds from the
Rounding Account to pay the Rounding Amount to the Holders of the Insured
Certificates pursuant to Section 3.05(e). In addition, the Trustee on each
Distribution Date shall, based upon written information provided by the
Certificate Administrator for the related Distribution Date, withdraw funds
from the Trust Certificate Account to repay to the Rounding Account the
Rounding Amount from the prior Distribution Date as contemplated in Section
3.05(e).
Section 3.14 Principal Distributions on the Insured Certificates.
Distributions in reduction of the Certificate Principal Balance
of the Insured Certificates will be made in integral multiples of $1,000 at
the request of the appropriate representatives of Deceased Holders of such
Insured Certificates and at the request of Living Owners of such Insured
Certificates or by mandatory distributions by Random Lot, pursuant to clauses
(a) and (d) below, or on a pro rata basis pursuant to clause (e) below.
(a) On each Distribution Date on which distributions in reduction of the
Certificate Principal Balance of the Insured Certificates are made, such
distributions will be made in the following priority among the Certificate
Owners of the Insured Certificates:
(i) any request by the personal representatives of a Deceased Holder or by
a surviving tenant by the entirety, by a surviving joint tenant or by a
surviving tenant in common, but not exceeding an aggregate amount of
$100,000 per request; and
(ii) any request by a Living Owner, but not exceeding an aggregate amount of
$10,000 per request.
Thereafter, distributions will be made, with respect to the
Insured Certificates, as provided in clauses (i) and (ii) above up to a
second $100,000 and $10,000, respectively. This sequence of priorities will
be repeated for each request for principal distributions made by the
Certificate Owners of the Insured Certificates until all such requests have
been honored.
Requests for distributions in reduction of the Certificate
Principal Balance of the Insured Certificates presented on behalf of Deceased
Holders in accordance with the provisions of clause (i) above will be
accepted in order of their receipt by the Depository. Requests for
distributions in reduction of the Certificate Principal Balance of the
Insured Certificates presented in accordance with the provisions of clause
(ii) above will be accepted in the order of their receipt by the Depository
after all requests presented in accordance with clause (i) above have been
honored. All requests for distributions in reduction of the Certificate
Principal Balance of the Insured Certificates will be accepted in accordance
with the provisions set forth in Section 3.14(c). All requests for
32
distributions in reduction of the Certificate Principal Balance of the
Insured Certificates with respect to any Distribution Date must be received
by the Depository and on the Depository's "participant terminal system" and
received by the Trustee no later than the close of business on the related
Record Date. Requests for distributions that are on the Depository's
participant terminal system and received by the Trustee after the related
Record Date and requests, in either case, for distributions not accepted with
respect to any Distribution Date, will be treated as requests for
distributions in reduction of the Certificate Principal Balance of Insured
Certificates on the next succeeding Distribution Date, and each succeeding
Distribution Date thereafter, until such request is accepted or is withdrawn
as provided in Section 3.14(c). Such requests as are not so withdrawn shall
retain their order of priority without the need for any further action on the
part of the appropriate Certificate Owner of the related Insured Certificate,
all in accordance with the procedures of the Depository and the Trustee. Upon
the transfer of the beneficial ownership of the Insured Certificate, any
distribution request previously submitted with respect to such Certificate
will be deemed to have been withdrawn only upon the receipt by the Trustee on
or before the Record Date for such Distribution Date of notification of such
withdrawal in the manner set forth in Section 3.14(c) on the Depository's
participant terminal system.
Distributions in reduction of the Certificate Principal Balance
of the Insured Certificates will be applied in an amount equal to the
Principal Distribution Amount allocable to such Class pursuant to Section
3.05(a)(ii), plus, with respect to the Insured Certificates, any amounts
available for distribution from the Rounding Account established as provided
in Section 3.13, provided that the aggregate distribution in reduction of the
Certificate Principal Balance of the Insured Certificates on any Distribution
Date shall be made in an integral multiple of $1,000.
To the extent that the portion of the Group I Senior Principal
Distribution Amount allocable to distributions in reduction of the
Certificate Principal Balance of the Insured Certificates on any Distribution
Date exceeds the aggregate Certificate Principal Balance of the Insured
Certificates with respect to which distribution requests, as set forth above,
have been received (plus any amounts required to be distributed pursuant to
the Rounding Account with respect to the Insured Certificates), distributions
in reduction of the Certificate Principal Balance of the Insured Certificates
will be made by mandatory distribution pursuant to Section 3.14(d).
33
(b) An Insured Certificate shall be deemed to be held by a Deceased Holder
for purposes of this Section 3.14 if the death of the Certificate Owner
thereof is deemed to have occurred. Insured Certificates beneficially owned
by tenants by the entirety, joint tenants or tenants in common will be
considered to be beneficially owned by a single owner. The death of a tenant
by the entirety, joint tenant or tenant in common will be deemed to be the
death of the Certificate Owner, and the Insured Certificates so beneficially
owned will be eligible for priority with respect to distributions in
reduction of the Certificate Principal Balance thereof, subject to the
limitations stated above. Insured Certificates beneficially owned by a trust
will be considered to be beneficially owned by each beneficiary of the trust
to the extent of such beneficiary's beneficial interest therein, but in no
event will a trust's beneficiaries collectively be deemed to be Certificate
Owners of a number of Individual Insured Certificates of which such trust is
the owner. The death of a beneficiary of a trust will be deemed to be the
death of a Certificate Owner of the Insured Certificates, as applicable,
owned by the trust to the extent of such beneficiary's beneficial interest in
such trust. The death of an individual who was a tenant by the entirety,
joint tenant or tenant in common in a tenancy which is the beneficiary of a
trust will be deemed to be the death of the beneficiary of such trust. The
death of a person who, during his or her lifetime, was entitled to
substantially all of the beneficial ownership interests in Individual Insured
Certificates will be deemed to be the death of the Certificate Owner of the
Insured Certificates regardless of the registration of ownership, if such
beneficial interest can be established to the satisfaction of the Depository
Participant. Such beneficial interest will be deemed to exist in typical
cases of street name or nominee ownership, ownership by a trustee, ownership
under the Uniform Gifts to Minors Act and community property or other joint
ownership arrangements between a husband and wife. Certificate beneficial
interests shall include the power to sell, transfer or otherwise dispose of
an Insured Certificate and the right to receive the proceeds therefrom, as
well as interest and distributions in reduction of the Certificate Principal
Balance of the Insured Certificates, as applicable, payable with respect
thereto. The Trustee shall not be under any duty to determine independently
the occurrence of the death of any deceased Certificate Owner. The Trustee
may rely entirely upon documentation delivered to it pursuant to Section
3.14(c) in establishing the eligibility of any Certificate Owner to receive
the priority accorded Deceased Holders in Section 3.14(a).
(c) Requests for distributions in reduction of the Certificate Principal
Balance of Insured Certificates must be made by delivering a written request
therefor to the Depository Participant or Indirect Depository Participant
that maintains the account evidencing such Certificate Owner's interest in
Insured Certificates. In the case of a request on behalf of a Deceased
Holder, appropriate evidence of death and any tax waivers are required to be
forwarded to the Depository Participant under separate cover. The Depository
Participant shall forward a certification, satisfactory to the Trustee,
certifying the death of the Deceased Holder and the receipt of the
appropriate death and tax waivers. The Depository Participant should in turn
make the request of the Depository (or, in the case of an Indirect Depository
Participant, such Indirect Depository Participant must notify the related
Depository Participant of such request, which Depository Participant should
make the request of the Depository) on the Depository's participant terminal
system. The Depository may establish such procedures as it deems fair and
equitable to establish the order of receipt of requests for such
distributions received by it on the same day. None of the Company, the
Certificate Administrator or the Trustee shall be liable for any delay in
delivery of requests for distributions or withdrawals of such requests by the
Depository, a Depository Participant or any Indirect Depository Participant.
34
The Depository shall maintain a list of those Depository
Participants representing the appropriate Certificate Owners of Insured
Certificates that have submitted requests for distributions in reduction of
the Certificate Principal Balance of Insured Certificates, together with the
order of receipt and the amounts of such requests on the Depository's
participant terminal system. The Depository will honor requests for
distributions in the order of their receipt (subject to the priorities
described in Section 3.14(a) above). The Trustee shall notify the Depository
as to which requests should be honored on each Distribution Date at least two
Business Days prior to such Distribution Date based on the written
information received by the Trustee from the Certificate Administrator
pursuant to Section 3.06(f) and shall notify the Depository as to the amount
of the Principal Distribution amount to be distributed to the Insured
Certificates by Random Lot pursuant to Section 3.14(d). Requests shall be
honored by the Depository in accordance with the procedures, and subject to
the priorities and limitations, described in this Section 3.14. The exact
procedures to be followed by the Trustee and the Depository for purposes of
determining such priorities and limitations will be those established from
time to time by the Trustee or the Depository, as the case may be. The
decisions of the Trustee and the Depository concerning such matters will be
final and binding on all affected persons.
Individual Insured Certificates that have been accepted for a
distribution shall be due and payable on the applicable Distribution Date.
Such Certificates shall cease to bear interest after the last day of the
month preceding the month in which such Distribution Date occurs.
Any Certificate Owner of an Insured Certificate that has
requested a distribution may withdraw its request by so notifying in writing
the Depository Participant or Indirect Depository Participant that maintains
such Certificate Owner's account. In the event that such account is
maintained by an Indirect Depository Participant, such Indirect Depository
Participant must notify the related Depository Participant which in turn must
forward the withdrawal of such request on the Depository's participant
terminal system. If such withdrawal of a request for distribution has not
been received on the Depository's participant terminal system on or before
the Record Date for the next Distribution Date, the previously made request
for distribution will be irrevocable with respect to the making of
distributions in reduction of the Certificate Principal Balance of the
Insured Certificates on such Distribution Date.
In the event any requests for distributions in reduction of the
Certificate Principal Balance of the Insured Certificates are rejected by the
Trustee for failure to comply with the requirements of this Section 3.14, the
Trustee shall return such request to the appropriate Depository Participant
with a copy to the Depository with an explanation as to the reason for such
rejection.
35
(d) To the extent, if any, that distributions in reduction of the
Certificate Principal Balance of the Insured Certificates on a Distribution
Date exceed the outstanding Certificate Principal Balance of the Insured
Certificates with respect to which distribution requests have been received
by the related Record Date, as provided in Section 3.14(a) above, the
additional distributions in reduction of the Certificate Principal Balance of
the Insured Certificates will be made by mandatory distributions in reduction
thereof. Such mandatory distributions on Individual Insured Certificates will
be made by Random Lot in accordance with the then-applicable Random Lot
procedures of the Depository, the Depository Participants and the Indirect
Depository Participants representing the Certificate Owners. The Trustee
shall notify the Depository of the aggregate amount of the mandatory
distribution in reduction of the Certificate Principal Balance of the Insured
Certificates to be made on any such Distribution Date. The Depository shall
then allocate such aggregate amount among its Depository Participants on a
Random Lot basis. Each Depository Participant and, in turn, each Indirect
Depository Participant will then select, in accordance with its own
procedures, Individual Insured Certificates from among those held in its
accounts to receive mandatory distributions in reduction of the Certificate
Principal Balance of the Insured Certificates, such that the total amount so
selected is equal to the aggregate amount of such mandatory distributions
allocated to such Depository Participant by the Depository and to such
Indirect Depository Participant by its related Depository Participant, as the
case may be. Depository Participants and Indirect Depository Participants
that hold Insured Certificates selected for mandatory distributions in
reduction of the Certificate Principal Balance thereof are required to
provide notice of such mandatory distributions to the affected Certificate
Owners. The Certificate Administrator agrees to notify the Trustee of the
amount of distributions in reduction of the Certificate Principal Balance of
the Insured Certificates to be made on each Distribution Date in a timely
manner in accordance with Section 3.06(f) hereof such that the Trustee may
fulfill its obligations pursuant to the letter of representations dated the
Closing Date among the Company, the Trustee and the Depository.
(e) Notwithstanding any provisions herein to the contrary, on any
Distribution Date on which (i) any Class A Loss Amounts are allocated to the
Insured Certificates and (ii) a Certificate Insurer Default has occurred
and/or is continuing, distributions in reduction of the Certificate Principal
Balance of the Insured Certificates will be made pro rata on the basis of
their respective Percentage Interests with the respect to the Insured
Certificates among the Certificate Owners of the Insured Certificates and
will not be made in integral multiples of $1,000 nor pursuant to requests for
distribution as permitted by this Section 3.14 or mandatory distributions by
Random Lot.
(f) In the event that Definitive Certificates representing the Insured
Certificates are issued pursuant to Section 4.01, an amendment to this
Agreement, which may be approved without the consent of any
Certificateholders, shall establish procedures relating to the manner in
which distributions in reduction of the Certificate Principal Balance of such
Insured Certificates are to be made; provided that such procedures shall be
consistent, to the extent practicable and customary for certificates similar
to the Insured Certificates, with the provisions of this Section 3.14.
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Section 3.15 Reserve Fund.
No later than the Closing Date, the Trustee will establish and
maintain the Reserve Fund. On the Closing Date Xxxxxxx, Sachs & Co. shall
deposit with the Trustee, and the Trustee shall deposit into the Reserve
Fund, cash in an amount equal to the Reserve Fund Deposit.
The Certificate Administrator shall direct the Trustee in
writing, prior to the close of business two Business Days prior to each
Distribution Date, to withdraw amounts on deposit in the Reserve Fund for
deposit into the Trust Certificate Account, and to pay to the holders of the
Insured Certificates pursuant to Section 3.05(a)(i), the amount of Prepayment
Interest Shortfalls and Relief Act Shortfalls otherwise allocable to the
Insured Certificates pursuant to the definition of Accrued Certificate
Interest and to the extent of funds on deposit in the Reserve Fund (the
amount of such withdrawal for any Distribution Date, the "Reserve Fund
Withdrawal").
For federal income tax purposes, Xxxxxxx, Xxxxx & Co. shall be
the owner of the Reserve Fund and shall report all items of income,
deduction, gain or loss arising therefrom. Notwithstanding anything herein
to the contrary, the Reserve Fund shall not be an asset of any REMIC. The
Reserve Fund shall be invested in Permitted Investments at the written
direction of Xxxxxxx, Sachs & Co. All income and gain realized from
investment of funds deposited in the Reserve Fund shall be deposited in the
Reserve Fund for the sole use and exclusive benefit of the Reserve Fund.
The amount of any loss incurred in respect of any such investments shall be
deposited in the Reserve Fund by Xxxxxxx, Xxxxx & Co.out of its own funds
immediately as realized without any right of reimbursement. The balance, if
any, remaining in the Reserve Fund on the Distribution Date on which the
Certificate Principal Balance of the Insured Certificates is reduced to zero
will be distributed by the Trustee to Xxxxxxx, Sachs & Co.. To the extent
that the Reserve Fund constitutes a reserve fund for federal income tax
purposes, (1) it shall be an outside reserve fund and not an asset of the
REMIC and (2) it shall be owned by Xxxxxxx, Xxxxx & Co., all within the
meaning of Section 1.860G-2(h) of the Treasury Regulations. The Reserve Fund
may not be owned by more than one Person and for all federal tax purposes,
any amounts transferred by the REMIC to the Reserve Fund will be treated as
amounts distributed by the REMIC to Xxxxxxx, Sachs & Co.
37
ARTICLE IV
THE TRUST CERTIFICATES
Section 4.01 The Trust Certificates.
The Class A and Class R Certificates shall be substantially in
the forms set forth in Exhibits A and B, respectively, and shall, on original
issue, be executed and delivered by the Trustee to the Certificate Registrar
for authentication and delivery to or upon the order of the Company upon
receipt by the Trustee of the documents specified in Section 2.01. The Trust
Certificates shall be issuable in the minimum denominations designated in the
Preliminary Statement hereto.
The Trust Certificates shall be executed by manual or facsimile
signature on behalf of an authorized officer of the Trustee. Trust
Certificates bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Trust Certificate or
did not hold such offices at the date of such Trust Certificates. No Trust
Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless there appears on such Trust Certificate a
certificate of authentication substantially in the form provided for herein
executed by the Certificate Registrar by manual signature, and such
certificate upon any Trust Certificate shall be conclusive evidence, and the
only evidence, that such Trust Certificate has been duly authenticated and
delivered hereunder. All Trust Certificates shall be dated the date of their
authentication.
The Class A Certificates shall initially be issued as one or more
Trust Certificates registered in the name of the Depository or its nominee
and, except as provided below, registration of such Trust Certificates may
not be transferred by the Trustee except to another Depository that agrees to
hold such Trust Certificates for the respective Certificate Owners with
Ownership Interests therein. The Holders of the Book-Entry Certificates
shall hold their respective Ownership Interests in and to each of the
Book-Entry Certificates through the book-entry facilities of the Depository
and, except as provided below, shall not be entitled to Definitive
Certificates in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by
the Depository Participant or brokerage firm representing such Certificate
Owner. Each Depository Participant shall transfer the Ownership Interests
only in the Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the
Depository's normal procedures.
Except as provided below, registration of Book-Entry Certificates
may not be transferred by the Trustee except to another Depository that
agrees to hold such Trust Certificates for the respective Certificate Owners
with Ownership Interests therein. The Holders of the Book-Entry Certificates
shall hold their respective Ownership Interests in and to each of such Trust
Certificates through the book-entry facilities of the Depository and, except
as provided below, shall not be entitled to Definitive Certificates in
respect of such Ownership Interests. All transfers by Certificate Owners of
their respective Ownership Interests in the Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall transfer the Ownership Interests only in the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures.
38
The Trustee, the Certificate Administrator and the Company may
for all purposes (including the making of payments due on the respective
Classes of Book-Entry Certificates) deal with the Depository as the
authorized representative of the Certificate Owners with respect to the
respective Classes of Book-Entry Certificates for the purposes of exercising
the rights of Certificateholders hereunder. The rights of Certificate Owners
with respect to the respective Classes of Book-Entry Certificates shall be
limited to those established by law and agreements between such Certificate
Owners and the Depository Participants and brokerage firms representing such
Certificate Owners. Multiple requests and directions from, and votes of, the
Depository as Holder of any Class of Book-Entry Certificates with respect to
any particular matter shall not be deemed inconsistent if they are made with
respect to different Certificate Owners. The Trustee may establish a
reasonable record date in connection with solicitations of consents from or
voting by Certificateholders and shall give notice to the Depository of such
record date.
If (i)(A) the Company advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Company is unable to locate a
qualified successor or (ii) the Company at its option, with the consent of
the Depository Participants, advises the Trustee in writing that it elects to
terminate the book-entry system through the Depository, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of
any such event and of the availability of Definitive Certificates to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book-Entry Certificates by the Depository, accompanied by registration
instructions from the Depository for registration of transfer, the Trustee
shall issue the Definitive Certificates. None of the Company, the
Certificate Administrator, the Certificate Insurer or the Trustee shall be
liable for any actions taken by the Depository or its nominee, including,
without limitation, any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Depository in
connection with the issuance of the Definitive Certificates pursuant to this
Section 4.01 shall be deemed to be imposed upon and performed by the Trustee,
and the Trustee and the Certificate Administrator shall recognize the Holders
of the Definitive Certificates as Certificateholders hereunder.
39
Section 4.02 Registration of Transfer and Exchange of Trust Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies to
be appointed by the Trustee in accordance with the provisions of this Section
4.02, a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Trustee shall provide for the registration of Trust
Certificates and of transfers and exchanges of Trust Certificates as herein
provided. Upon satisfaction of the conditions set forth below, the Trustee
shall execute and the Certificate Registrar shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new
Trust Certificates of a like Class and aggregate Percentage Interest. In
addition, the Trustee shall notify the Company of each transfer or exchange
of the Trust Certificates.
(b) At the option of the Certificateholders, Trust Certificates may be
exchanged for other Trust Certificates of authorized denominations of a like
Class and aggregate Percentage Interest, upon surrender of the Trust
Certificates to be exchanged at any such office or agency. Whenever any
Trust Certificates are so surrendered for exchange the Trustee shall execute
and the Certificate Registrar shall authenticate and deliver the Trust
Certificates of such Class which the Certificateholder making the exchange is
entitled to receive. Every Trust Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in
writing.
(c) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions.
The rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a United States Person and a Permitted
Transferee and shall promptly notify the Trustee of any change or impending
change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate to a United States Person, the Trustee
shall require delivery to it, and shall not register the Transfer of any
Class R Certificate until its receipt of, (I) an affidavit and agreement (a
"Transfer Affidavit and Agreement" attached hereto as Exhibit C-1) from the
proposed Transferee, representing and warranting, among other things, that it
is a United States Person, that such Transferee is a Permitted Transferee,
that it is not acquiring its Ownership Interest in the Class R Certificate
that is the subject of the proposed Transfer as a nominee, trustee or agent
for any Person who is not a Permitted Transferee, that for so long as it
retains its Ownership Interest in a Class R Certificate, it will endeavor to
remain a Permitted Transferee, and that it has reviewed the provisions of
this Section 4.02(c) and agrees to be bound by them and (II) a certificate,
attached hereto as Exhibit C-2, from the Holder wishing to transfer the Class
R Certificate, representing and warranting, among other things, that no
purpose of the proposed Transfer is to impede the assessment or collection of
tax.
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(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if the Trustee has
actual knowledge that the proposed Transferee is not a Permitted Transferee,
no Transfer of an Ownership Interest in a Class R Certificate to such
proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to transfer its
Ownership Interest in a Class R Certificate and (y) not to transfer its
Ownership Interest unless it provides a certificate to the Trustee in the
form attached hereto as Exhibit C-2.
(E) Each Person holding or acquiring an Ownership Interest in a Class
R Certificate, by purchasing an Ownership Interest in such Trust Certificate,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of Temporary Treasury Regulations 1.67-3T(a)(2)(A)
immediately upon acquiring an Ownership Interest in a Class R Certificate, if
it is, or is holding an Ownership Interest in a Class R Certificate on behalf
of, a "pass-through interest holder."
(ii) The Trustee will register the Transfer of any Class R Certificate
only if it shall have received the Transfer Affidavit and Agreement, a
certificate of the Holder requesting such transfer in the form attached
hereto as Exhibit C-2 and all of such other documents as shall have been
reasonably required by the Trustee as a condition to such registration.
Transfers of the Class R Certificate to Non-United States Persons and Persons
other than Permitted Transferees are prohibited.
(iii) The Trustee shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in fact not
permitted by this Section 4.02(c) or for making any payments due on such
Trust Certificate to the holder thereof or for taking any other action with
respect to such holder under the provisions of this Agreement.
(iv) The Certificate Administrator, on behalf of the Trustee, shall
make available all information necessary to compute any tax imposed (A) as a
result of the Transfer of an Ownership Interest to any Person who is not a
Permitted Transferee, including the information regarding "excess inclusions"
of such Class R Certificate required to be provided to the Internal Revenue
Service and certain Persons as described in Treasury Regulation Sections
1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result of any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organizations described in Section 1381 of the
Code having as among its record holders at any time any Person who is not a
Permitted Transferee. Reasonable compensation for providing such information
may be required by the Certificate Administrator.
(v) The provisions of this Section 4.02(c) set forth prior to this
Section (v) may be modified, added or eliminated, provided that the following
shall have been delivered to the Trustee:
41
(A) a written notification from the Rating Agency to the effect that
the modification, addition or elimination of such provisions will not cause
such Rating Agency to downgrade its then-current ratings of the Trust
Certificates; and
(B) subject to Section 3.01(f) hereof, an Opinion of Counsel, which
shall not be an expense of the Trustee, to the effect that such modification,
addition or absence of such provisions will not cause the Trust Fund to cease
to qualify as a real estate mortgage investment conduit and will not cause
(x) the Trust Fund to be subject to an entity-level tax caused by the
Transfer of any Class R Certificate to a Person that is not a Permitted
Transferee or (y) a Certificateholder or another Person to be subject to a
real estate mortgage investment conduit related tax caused by the Transfer of
a Class R Certificate to a Non-United States Person or a Person that is not a
Permitted Transferee.
(d) In the case of any Class R Certificate presented for registration
in the name of any Person, either (A) the Trustee shall require an Opinion of
Counsel acceptable to and in form and substance satisfactory to the Trustee,
the Company, the Certificate Insurer and the Certificate Administrator to the
effect that the purchase or holding of such Class R 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 Trustee, the Company, the Certificate Insurer or the
Certificate Administrator to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in
addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Company, the Certificate Insurer
or the Certificate Administrator or (B) the prospective Transferee shall be
required to provide the Trustee, the Company, the Certificate Insurer and the
Certificate Administrator with a certification to the effect set forth in
paragraph fifteen of Exhibit C-1, which the Trustee may rely upon without
further inquiry or investigation, or such other certifications as the 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 or arrangement subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code a ("Plan"), or
any Person (including an investment manager, a named fiduciary or a trustee
of any Plan) who is using "plan assets" of any Plan to effect such
acquisition, within the meaning of the Department of Labor regulation 29
C.F.R. Section 2510.3-101.
(e) No service charge shall be made for any transfer or exchange of
Trust Certificates of any Class, but the 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 Trust Certificates.
(f) All Trust Certificates surrendered for transfer and exchange
shall be destroyed by the Certificate Registrar in accordance with its
customary procedures.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If (i) any mutilated Trust Certificate is surrendered to the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any Trust
Certificate, and (ii) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each
42
of them harmless, then, in the absence of notice to the Trustee or the
Certificate Registrar that such Trust Certificate has been acquired by a bona
fide purchaser, the Trustee shall execute and the Certificate Registrar shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
tenor, Class and Percentage Interest but bearing a number not
contemporaneously outstanding. Upon the issuance of any new Trust
Certificate under this Section, the 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 Trustee and the Certificate Registrar) connected therewith. Any
duplicate Trust Certificate issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Certificate shall be found at any time.
Section 4.04 Persons Deemed Owners.
Prior to due presentation of a Trust Certificate for registration
of transfer, the Company, the Trustee, the Certificate Registrar, the
Certificate Insurer, the Certificate Administrator and any agent of the
Company, the Trustee, the Certificate Insurer, the Certificate Administrator
or the Certificate Registrar may treat the Person in whose name any Trust
Certificate is registered as the owner of such Trust Certificate for the
purpose of receiving distributions pursuant to Section 3.05 and for all other
purposes whatsoever, and none of the Company, the Trustee, the Certificate
Insurer, the Certificate Administrator, the Certificate Registrar or any
agent of the Company, the Trustee, the Certificate Insurer, the Certificate
Administrator or the Certificate Registrar shall be affected by notice to the
contrary.
ARTICLE V
THE TRUSTEE
Section 5.01 Duties of the Trustee.
(a) The Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement and, if applicable, the Pooling
and Servicing Agreement. The Trustee shall notify the Certificateholders of
any such documents which do not materially conform to the requirements of
this Agreement or the Pooling and Servicing Agreement in the event that the
Trustee, after so requesting, does not receive satisfactorily corrected
documents.
The Trustee shall forward or cause to be forwarded in a timely
fashion the notices, reports and statements required to be forwarded by the
Trustee pursuant to this Agreement. The Trustee shall furnish in a timely
fashion to the Certificate Administrator such information as the Certificate
Administrator may reasonably request from time to time for the Certificate
Administrator to fulfill its duties as set forth in this Agreement. The
Trustee covenants and agrees that it shall perform its obligations hereunder
in a manner so as to maintain the status of any portion of the REMIC as a
43
real estate mortgage investment conduit under the REMIC Provisions and
(subject to Section 3.01(f) hereof) to prevent the imposition of any federal,
state or local income, prohibited transaction, contribution or other tax on
the Trust Fund to the extent that maintaining such status and avoiding such
taxes are reasonably within the control of the Trustee and are reasonably
within the scope of its duties under this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) The duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished by the Company to the Trustee and which on their
face, do not contradict the requirements of this Agreement;
44
(ii) The Trustee shall not be personally liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;
(iii) The 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 Certificateholders of any Class
holding Trust Certificate which evidence, as to such Class, Percentage
Interests aggregating not less than 25% as to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Agreement;
(iv) The Trustee shall not be charged with knowledge of any default under
the Pooling and Servicing Agreement unless a Responsible Officer of the
Trustee assigned to and working in the Corporate Trust Office obtains
actual knowledge of such failure or event or the Trustee receives
written notice of such failure or event at its Corporate Trust Office
from the Company or any Certificateholder; and
(v) No provision in this Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur any personal financial liability
in the performance of any of its duties as Trustee hereunder, or in the
exercise of any of its rights or powers, if the 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) The Trustee shall timely pay, from its own funds, the amount of any and
all federal, state and local taxes imposed on the Trust Fund or its assets or
transactions including, without limitation, (A) "prohibited transaction"
penalty taxes as defined in Section 860F of the Code, if, when and as the
same shall be due and payable, (B) any tax on contributions to the REMIC
after the Closing Date imposed by Section 860G(d) of the Code and (C) any tax
on "net income from foreclosure property" as defined in Section 860G(c) of
the Code, but only if such taxes arise out of a breach by the Trustee of its
obligations hereunder, which breach constitutes negligence or willful
misconduct of the Trustee.
Section 5.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 5.01:
45
(i) The Trustee may request and may rely and shall be protected in acting
or refraining from acting upon any resolution, Officer's 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 Trustee may consult with counsel and any written advice of its
counsel or 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
advice or Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby;
(iv) The 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 Agreement;
(v) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do
by Holders of Trust Certificates of any Class evidencing, as to such
Class, Percentage Interests aggregating not less than 50%; provided,
however, that if the payment within a reasonable time to the 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 Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the 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
Certificateholder requesting the investigation; and
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys.
(b) Following the issuance of the Trust Certificates, the Trustee shall not
accept any contribution of assets to the Trust Fund unless it shall have
obtained or been furnished with an Opinion of Counsel from the party seeking
to contribute assets and at such party's expense to the effect that such
contribution will not (i) cause the Trust Fund to fail to qualify as a real
estate mortgage investment conduit at any time that any Trust Certificates
are outstanding or (subject to Section 3.01(f) hereof) (ii) cause the Trust
Fund to be subject to any federal tax as a result of such contribution
(including the imposition of any federal tax on "prohibited transactions" of
the Trust Fund imposed under Section 860F(a) of the Code).
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Section 5.03 Trustee Not Liable for Trust Certificates or Underlying
Certificates.
The recitals contained herein and in the Trust Certificates
(other than the execution of the Trust Certificates and relating to the
acceptance and receipt of the Underlying Certificates) shall be taken as the
statements of the Company or the Certificate Administrator as the case may
be, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Agreement or of the Trust Certificates (except that the Trust Certificates
shall be duly and validly executed by it as Trustee and authenticated by it
as Certificate Registrar) or of the Underlying Certificates of any related
document. Except as otherwise provided herein, the Trustee shall not be
accountable for the use or application by the Company or the Certificate
Administrator of any of the Trust Certificates or of the proceeds of such
Trust Certificates, or for the use or application of any funds paid to the
Company in respect of the Underlying Certificates deposited in or withdrawn
from the Trust Certificate Account by the Company.
Section 5.04 Trustee May Own Trust Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Trust Certificates and may transact business with the
Company and the parties to the Pooling and Servicing Agreement with the same
rights it would have if it were not Trustee.
Section 5.05 Eligibility Requirements for Trustee.
The 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 Company 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 Trustee shall cease to be eligible in accordance with the provisions
of this Section, the Trustee shall resign immediately in the manner and with
the effect specified in Section 5.06.
Section 5.06 Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Company. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
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(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 5.05 and shall fail to resign after written
request therefor by the Company, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Company may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee. In addition,
in the event that the Company determines that the Trustee has failed (i) to
distribute or cause to be distributed to the Certificateholders any amount
required to be distributed hereunder, if such amount is held by the Trustee
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 Trustee by the Company, then the Company may
remove the Trustee and appoint a successor trustee by written instrument
delivered as provided in the preceding sentence. In connection with the
appointment of a successor trustee pursuant to the preceding sentence, the
Company 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 trustee will not result in the reduction of
the ratings on any class of the Certificates below the lesser of the then
current or original ratings on such Certificates.
(c) The Holders of Regular Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered to the Company, one complete set to the
Trustee so removed and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 5.07.
Section 5.07 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 5.06 shall
execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee shall become effective and such successor 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 trustee herein. The
predecessor trustee shall deliver to the successor trustee the Underlying
Certificates and related documents and statements held by it hereunder, and
the Company, the Certificate Administrator and the predecessor 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 trustee all such rights, powers, duties and obligations.
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(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 5.05.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Company shall mail notice of the succession of such trustee
hereunder to all Holders of Trust Certificates at their addresses as shown in
the Certificate Register. If the Company fails to mail such notice within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Company.
Section 5.08 Merger or Consolidation of Trustee.
Any corporation or national banking association into which the
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 Trustee shall be a party, or any
corporation or national banking association succeeding to the business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of Section 5.05, 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 Trustee shall mail notice of any such
merger or consolidation to the Certificateholders at their address as shown
in the Certificate Register.
Section 5.09 Appointment of Co-Trustee or Separate 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 Trust Fund or property securing the same may at the time be
located, the Certificate Administrator and the Trustee acting jointly shall
have the power and shall execute and deliver all instruments to appoint one
or more Persons approved by the Trustee to act as co-trustee or co-trustees,
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity, such title to the Trust Fund, or any part thereof, and, subject to
the other provisions of this Section 5.09, such powers, duties, obligations,
rights and trusts as the Certificate Administrator and the Trustee may
consider necessary or desirable. If the Certificate Administrator shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 5.05
hereunder and no notice to Holders of Trust Certificates of the appointment
of co-trustee(s) or separate trustee(s) shall be required under Section 5.07
hereof.
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(b) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 5.09 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee, and such separate trustee or
co-trustee jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed, the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the
holding of title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article V. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the
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 Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 5.10 Appointment of Office or Agency.
The Trustee will maintain an office or agency where Trust
Certificates may be surrendered for registration of transfer or exchange, or
presented for final distribution, and where the office of the Certificate
Registrar is located. The Trustee initially designates such office to be
located at 0000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxx 00000, Attention:
Institutional Trust Services Transfer Dept. - 2004-SR1.
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Section 5.11 Trustee's Fees and Expenses; Indemnification.
(a) The Trustee and any co-trustee shall be entitled to be paid, from time
to time, reasonable compensation (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust) for
all services rendered by each of them in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee and any co-trustee, to be paid by Xxxxxxx, Xxxxx &
Co. pursuant to an agreement between the Trustee and Xxxxxxx, Sachs & Co.,
pursuant to which Xxxxxxx, Xxxxx & Co. will pay or reimburse the Trustee and
any co-trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee or any co-trustee in accordance with
any of the provisions of this Agreement (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ, and the expenses incurred by the Trustee
or any co-trustee in connection with the appointment of an office or agency
pursuant to Section 5.10) except any such expense, disbursement or advance as
may arise from its negligence or bad faith.
(b) The Certificate Administrator agrees to indemnify the Trustee for, and
to hold the Trustee harmless against, any loss, liability or expense incurred
without negligence or willful misconduct on the Trustee's part, arising out
of, or in connection with, the acceptance and administration of the Trust
Fund, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against any claim in connection with the
exercise or performance of any of its powers or duties under this Agreement,
provided that:
(i) with respect to any such claim, the Trustee shall have given the
Certificate Administrator written notice thereof promptly after the
Trustee shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee shall
cooperate and consult fully with the Certificate Administrator in
preparing such defense; and
(iii) notwithstanding anything in this Agreement to the contrary, the
Certificate Administrator shall not be liable for settlement of any
claim by the Trustee entered into without the prior consent of the
Certificate Administrator which consent shall not be unreasonably
withheld.
No termination of this Agreement shall affect the obligations
created by this Section 5.11(b) of the Certificate Administrator to indemnify
the Trustee under the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by
the Certificate Administrator in this Section 5.11(b) shall not pertain to
any loss, liability or expense of the Trustee, including the costs and
expenses of defending itself against any claim, incurred in connection with
any actions taken by the Trustee at the direction of the Certificateholders
pursuant to the terms of this Agreement.
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Section 5.12 Certain Actions Relating to Underlying Certificates.
In the event that there are any matters arising under the Pooling
and Servicing Agreement or the operative documents relating to transactions
contemplated by the Pooling and Servicing Agreement which require the vote,
consent or direction of the holders of the Underlying Certificates, the
Trustee, as holder of the Underlying Certificates, shall vote the Underlying
Certificates in accordance with the written instructions received from the
Certificateholders evidencing at least a majority of the Percentage Interest
in the Trust Certificates. Any Certificateholder that provides instructions
to the Trustee pursuant to the preceding sentence shall also provide the
Trustee and its officers, directors, agents and employees with an indemnity
(which shall be satisfactory to the Trustee) for any loss, liability or
expense incurred by the Trustee that arises out of, or in connection with,
such instructions. In the absence of any instruction or indemnification from
the Certificateholders, the Trustee will abstain from taking any action with
respect to any matter described in the first sentence of this Section 5.12.
The Trustee shall forward to each Certificateholder copies of any
communications received regarding matters that require action by holders of
the Underlying Certificates.
ARTICLE VI
TERMINATION
Section 6.01 Termination.
(a) Subject to Section 6.02, the respective obligations and
responsibilities of the Company, the Certificate Administrator and the
Trustee created hereby with respect to the Trust Certificates (other than the
obligation to make certain payments and to send certain notices to
Certificateholders as hereinafter set forth) shall terminate immediately upon
the occurrence of the last action required to be taken by the Trustee on the
Termination Date; provided, however, that in no event shall the trust created
hereby continue beyond the expiration of twenty-one years from the death of
the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the United Kingdom, living on the date
hereof.
(b) Upon presentation and surrender of the Trust Certificates by the
Certificateholders on the Termination Date, the Trustee shall distribute to
the Certificateholders the amounts otherwise distributable on such
Distribution Date pursuant to Section 3.05(a). Any funds not distributed on
the Termination Date because of the failure of any Certificateholders to
tender their Trust Certificates shall be set aside and held in trust for the
account of the appropriate non-tendering Certificateholders, whereupon the
Trust Fund shall terminate, and such funds shall not be invested. If any
Trust Certificates as to which notice of the Termination Date has been given
pursuant to this Section 6.01 shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining Certificateholders, at
their last addresses shown in the Certificate Register, to surrender their
Trust Certificates for cancellation in order to receive, from such funds
held, the final distribution with respect thereto. If within one year after
the second notice any Trust Certificate shall not have been surrendered for
cancellation, the Trustee shall so notify the Company who shall upon receipt
of such notice, directly or through an agent, take reasonable steps to
contact the remaining Certificateholders concerning surrender of their Trust
Certificates. The costs and expenses of maintaining such funds and of
contacting Certificateholders shall be paid out of the assets which remain
held. If within two years after the second notice any Trust Certificates
shall not have been surrendered for cancellation, the Trustee shall pay to
the Company all amounts distributable to the Holders thereof and the Company
shall thereafter hold such amounts for the benefit of such Holders. No
interest shall accrue or be payable to any Certificateholder on any amount
held as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section 6.01.
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Section 6.02 Additional Termination Requirements.
(a) Within 90 days prior to the anticipated Termination Date, the
Certificate Administrator shall adopt and the Certificate Administrator shall
sign a plan of complete liquidation of the Trust Fund meeting the
requirements of Section 860F(a)(4)(A) of the Code pursuant to which the
Trustee shall sell or otherwise dispose of all the remaining assets of the
Trust Fund, unless the Trustee and the Certificate Administrator have
received an Opinion of Counsel to the effect that the failure of the Trust
Fund to comply with the requirements of this Section 6.02(a) will not (i)
result in the imposition of taxes on "prohibited transactions" of the Trust
Fund as described in Section 860F of the Code, or (subject to Section 3.01(f)
hereof) (ii) cause the Trust Fund to fail to qualify as a real estate
mortgage investment conduit at any time that any Trust Certificate is
outstanding.
(b) Each Holder of a Trust Certificate hereby irrevocably approves and
appoints the Certificate Administrator as its attorney-in-fact for the
purposes of, adoption of the plan of complete liquidation in accordance with
the terms and conditions of this Agreement.
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ARTICLE VII
THE COMPANY AND THE CERTIFICATE ADMINISTRATOR
Section 7.01 Liability of the Company.
The Company and the Certificate Administrator shall each be
liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by the Company and
the Certificate Administrator herein.
Section 7.02 Merger, Consolidation or Conversion of the Company.
(a) The Company and the Certificate Administrator will each keep in full
effect its existence, rights and franchises as a corporation under the laws
of the state of its incorporation, and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Trust Certificates, the Underlying
Certificates or any of the Mortgage Loans and to perform its respective
duties under this Agreement.
(b) Any Person into which the Company or the Certificate Administrator may
be merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Company or the Certificate Administrator shall be
a party, or any Person succeeding to the business of the Company or the
Certificate Administrator, shall be the successor of the Company or the
Certificate Administrator, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that each Rating Agency's ratings, if any, of the Trust Certificates
in effect immediately prior to such merger or consolidation will not be
qualified, reduced or withdrawn as a result thereof (as evidenced by a letter
to such effect from each Rating Agency).
(c) Notwithstanding anything else in this Section 7.02 and Section 7.04 to
the contrary, the Certificate Administrator may assign its rights and
delegate its duties and obligations under this Agreement; provided that the
Person accepting such assignment or delegation shall execute and deliver to
the Company and the Trustee an agreement, in form and substance reasonably
satisfactory to the Company and the Trustee, which contains an assumption by
such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the Certificate
Administrator under this Agreement; provided further that each Rating
Agency's rating of the Classes of Trust Certificates that have been rated in
effect immediately prior to such assignment and delegation will not be
qualified, reduced or withdrawn as a result of such assignment and delegation
(as evidenced by a letter to such effect from each Rating Agency). In the
case of any such assignment and delegation, the Certificate Administrator
shall be released from its obligations under this Agreement, except that the
Certificate Administrator shall remain liable for all liabilities and
obligations incurred by it as Certificate Administrator hereunder prior to
the satisfaction of the conditions to such assignment and delegation set
forth in the preceding sentence.
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Section 7.03 Limitation on Liability of the Company and Others.
(a) Neither the Company, the Certificate Administrator nor any of the
directors, officers, employees or agents of the Company or the Certificate
Administrator shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of
any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Company, the Certificate Administrator or any such Person against any breach
of warranties or representations made herein or any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Company, the Certificate Administrator
and any director, officer, employee or agent of the Company or the
Certificate Administrator may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder.
(b) Neither the Company nor the Certificate Administrator shall be under
any obligation to appear in, prosecute or defend any legal or administrative
action, proceeding, hearing or examination that is not incidental to its
respective duties under this Agreement and which in its opinion may involve
it in any expense or liability; provided, however, that the Company or the
Certificate Administrator may in its discretion undertake any such action,
proceeding, hearing or examination that it may deem necessary or desirable in
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action, proceeding, hearing or examination and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Company and the Certificate Administrator shall be
entitled to be reimbursed therefor out of amounts attributable to the
Underlying Certificates on deposit in the Trust Certificate Account as
provided by Section 3.04 and, on the Distribution Date(s) following such
reimbursement, the aggregate of such expenses and costs shall be allocated in
reduction of the Accrued Certificate Interest on each Class entitled thereto
in the same manner as if such expenses and costs constituted a Prepayment
Interest Shortfall.
Section 7.04 Company and Certificate Administrator Not to Resign.
Subject to the provisions of Section 7.02, neither the Company
nor the Certificate Administrator shall resign from its respective
obligations and duties hereby imposed on it except upon determination that
its duties hereunder are no longer permissible under applicable law. Any
such determination permitting the resignation of the Company or the
Certificate Administrator shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation by the Certificate
Administrator shall become effective until the Trustee or a successor
certificate administrator shall have assumed the Certificate Administrator's
responsibilities and obligations hereunder.
Section 7.05 Successor Certificate Administrator.
In the event that the Master Servicer is removed or replaced in
accordance with the terms of the Pooling and Servicing Agreement, the
Certificate Administrator shall be removed as Certificate Administrator
hereunder and the Trustee shall become the successor certificate
administrator hereunder. The Certificate Administrator agrees to cooperate
with the Trustee in effecting the termination of the Certificate
Administrator's responsibilities and rights hereunder. No such termination
shall release the Certificate Administrator for any liability that it would
otherwise have hereunder for any act or omission prior to the effective time
of such termination.
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Section 7.06 Representation and Warranty of Company.
Immediately prior to the conveyance of the Underlying
Certificates to the Trustee pursuant to Section 2.01, the Company had good
title to, and was the sole owner of, the Underlying Certificates free and
clear of any pledge, lien, encumbrance or security interest and such
conveyance validly transfers ownership of the Underlying Certificates to the
Trustee free and clear of any pledge, lien, encumbrance or security interest.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment.
(a) This Agreement may be amended from time to time by the Certificate
Administrator, the Company and the Trustee, without the consent of any of the
Certificateholders:
56
(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
Trust Fund as a real estate mortgage investment conduit at all times
that any Trust Certificate is outstanding or to avoid or minimize the
risk of the imposition of any tax on the Trust Fund pursuant to the
Code that would be a claim against the Trust Fund, 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 Certificateholder,
(iv) to change the timing and/or nature of deposits into the Trust
Certificate Account, provided that (A) such change shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Certificateholder and (B) such change
shall not adversely affect the then-current rating of the Trust
Certificates, as evidenced by a letter from each Rating Agency then
rating the Trust Certificates to such effect,
(v) to modify, eliminate or add to the provisions of Section 4.02(c) or any
other provision hereof restricting transfer of the Class R Certificate
by virtue of their being the "residual interest" in the REMIC, provided
that (A) such change shall not adversely affect the then current
ratings of the Trust Certificates, as evidenced by a letter from the
Rating Agency to such effect, and (B) such change shall not, as
evidenced by an Opinion of Counsel, cause either the Trust Fund or any
of the Certificateholders (other than the transferor) to be subject to
a tax caused by a transfer to a Non-United States Person or a Person
that is not a Permitted Transferee, or
(vi) to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be materially inconsistent
with the provisions of this Agreement, provided that such action shall
not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by the Certificate
Administrator, the Company and the Trustee with the consent of the Holders of
Trust Certificates evidencing in the aggregate not less than 66% of the
Percentage Interests of each Class of Trust Certificates affected thereby for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Trust Certificates of such Class;
provided, however, that no such amendment shall:
57
(i) reduce in any manner the amount of, or delay the timing of, payments
which are required to be distributed on any Trust Certificate without
the consent of the Holder of such Trust Certificate, or
(ii) reduce the aforesaid percentage of Trust Certificates of any Class the
Holders of which are required to consent to any such amendment, in any
such case without the consent of the Holders of all Trust Certificates
of such Class then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this 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 Company or the Trustee in accordance
with such amendment is permitted hereunder and will not result in the
imposition of a federal tax on the Trust Fund or cause the Trust Fund to fail
to qualify as a real estate mortgage investment conduit at any time that any
Trust Certificate is outstanding.
(d) Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder. It shall not be necessary for the consent of
Certificateholders 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 Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
Section 8.02 Counterparts.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this 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.
58
Section 8.03 Limitation on Rights of Certificateholders.
(i) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such
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 Trust Fund, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of
them.
(ii) No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms
of the Trust Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to
any third party by reason of any action taken by the parties to this
Agreement pursuant to any provision hereof.
(iii) No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or
at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a notice of a default
by the Company or the Trustee in the performance of any obligation
hereunder, and of the continuance thereof, as hereinbefore provided,
and unless also the Holders of Trust Certificates entitled to at least
33% of the Voting Rights shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities
to be incurred therein or thereby, and the 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, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 8.04 Governing Law.
This Agreement and the Trust Certificates shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
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 Trustee which
shall be deemed to have been duly given only when received), to (a) in the
case of the Company, 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxxxx 00000, Attention: President, or such other address as may
hereafter be furnished to the Trustee and the Certificate Administrator in
writing by the Company, (b) in the case of the Certificate Administrator,
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000-0000,
Attention: Managing Director/Master Servicing or such other address as may
hereafter be furnished to the Trustee and the Company in writing by the
Certificate Administrator, (c) in the case of the Trustee (i) for the
purposes of Section 5.10 hereof, 0000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxx
00000, Attention: Institutional Trust Services Transfer Dept. - 2004-SR1,
and (ii) for all other purposes, Corporate Trust Office, JPMorgan Chase Bank,
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention:
Residential Funding Corporation Series 2004-SR1 or such other address as may
hereafter be furnished to the Company and the Certificate Administrator in
writing by the Trustee, (d) in the case of Fitch, Xxx Xxxxx Xxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, (e) in the case of S&P, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 and (f) in the case of the Certificate Insurer, 000 Xxxx Xxxxxx,
Xxxxxx, Xxx Xxxx 00000, Attention: Insured Portfolio Management - Structured
Finance (RFMSI 2004-SR1). Any notice required or permitted to be mailed to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such holder as shown in the Certificate Register. Any notice so
59
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder
receives such notice.
Section 8.06 Notices to the Rating Agencies and the Certificate Insurer.
The Company or the Trustee, as applicable, shall notify each
Rating Agency and the Certificate Insurer at such time as it is otherwise
required pursuant to this Agreement to give notice of the occurrence of any
of the events described in clauses (a), (b), (d), (e) or (f) below or provide
a copy to the Rating Agency and the Certificate Insurer at such time as
otherwise required to be delivered pursuant to this Agreement of any of the
statements described in clause (c) below:
(a) a material change or amendment to this Agreement,
(b) the termination or appointment of a successor Trustee or a change in
the majority ownership of the Trustee,
(c) the statement required to be delivered to the Holders of each Class of
Trust Certificates pursuant to Section 3.06,
(d) a change in the location of the Trust Certificate Account,
(e) the occurrence of the final Distribution Date,
(f) the repurchase of the Underlying Certificates, and
(g) any Certificate Insurer Default that has not been cured.
Section 8.07 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this 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
Agreement and shall in no way affect the validity or enforceability of the
other provisions of this Agreement or of the Trust Certificates or the rights
of the Holders thereof.
Section 8.08 Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure
to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the
Certificateholders.
60
Section 8.09 Article and Section Headings,
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
ARTICLE IX
CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER
Section 9.01 Rights of the Certificate Insurer to Exercise Rights of
Insured Certificateholders.
By accepting its Certificate, each Insured Certificateholder
agrees that unless a Certificate Insurer Default exists, the Certificate
Insurer shall have the right to exercise all consent, voting, direction and
other control rights of the Insured Certificateholders under this Agreement
without any further consent of the Insured Certificateholders.
61
Section 9.02 Claims Upon the Certificate Policy; Certificate Insurance
Account.
(a) If, on the Business Day next succeeding the Determination Date, the
Certificate Administrator determines that (i) the funds that will be on
deposit in the Trust Certificate Account on the related Distribution Date, to
the extent distributable to the Insured Certificateholders pursuant to
Section 3.05(a)(i) are insufficient to pay the Accrued Certificate Interest
for such Distribution Date; provided however, Accrued Certificate Interest on
the Insured Certificates will be deemed to include any portion of the amounts
allocated to such Certificates described in clauses (2) through (4) (other
than Relief Act Shortfalls) of the definition thereof on such Distribution
Date, (ii) there is a Class A-4 Interest Shortfall Amount, (iii) any Class A
Loss Amount is allocated to the Insured Certificates on such Distribution
Date and not covered by the Class A-5 Certificates or (iv) the funds
available on the Scheduled Final Distribution Date will be insufficient to
reduce the Certificate Principal Balance, of the Insured Certificates to
zero, the Certificate Administrator shall deliver to the Trustee not later
than 11:00 a.m. New York City time on the Business Day next succeeding the
Determination Date a certificate signed by a Servicing Officer directing the
Trustee to draw on the Certificate Policy and stating the amount to be drawn
and stating the Insured Payment for each Insured Certificate, and the Trustee
shall give notice by telephone or telecopy of the aggregate amount of such
deficiency, confirmed in writing in the form set forth as Exhibit A to the
Certificate Policy, to the Certificate Insurer and any fiscal agent appointed
by the Certificate Insurer at or before 12:00 noon, New York City time, on
the Business Day prior to such Distribution Date. If, subsequent to such
notice, and prior to payment by the Certificate Insurer or any fiscal agent
on behalf of the Certificate Insurer pursuant to such notice, additional
amounts are deposited in the Trust Certificate Account, the Trustee shall
reasonably promptly notify the Certificate Insurer and any fiscal agent
appointed by the Certificate Insurer and withdraw the notice or reduce the
amount claimed, as appropriate.
(b) The Trustee shall establish a separate special purpose trust account
for the benefit of Holders of the Insured Certificates and the Certificate
Insurer referred to herein as the "Certificate Insurance Account" over which
the Trustee shall have exclusive control and sole right of withdrawal. The
Trustee shall deposit any amount paid under the Certificate Policy in the
Certificate Insurance Account and distribute such amount only for purposes of
payment to Holders of Insured Certificates of the Insured Payment for which a
claim was made. Such amount may not be applied to satisfy any costs, expenses
or liabilities of the Certificate Administrator, the Trustee or the Trust
Fund. Amounts paid under the Certificate Policy shall be transferred to the
Trust Certificate Account in accordance with the next succeeding paragraph
and disbursed by the Trustee to Holders of Insured Certificates in accordance
with Section 3.05. It shall not be necessary for such payments to be made by
checks or wire transfers separate from the checks or wire transfers used to
pay the Insured Payment with other funds available to make such payment.
However, the amount of any payment of principal of or interest on the Insured
Certificates to be paid from funds transferred from the Certificate Insurance
Account shall be noted as provided in paragraph (c) below and in the
statement to be furnished to Holders of the Certificates pursuant to Section
3.06 or Section 6.01(b), as applicable. Funds held in the Certificate
Insurance Account shall not be invested by the Certificate Administrator or
any other Person.
62
On any Distribution Date with respect to which a claim has been
made under the Certificate Policy, the amount of any funds received by the
Trustee as a result of any claim under the Certificate Policy, to the extent
required to make the Insured Payment on such Distribution Date, shall be
withdrawn from the Certificate Insurance Account and deposited in the Trust
Certificate Account and applied by the Certificate Administrator on behalf of
the Trustee, together with the other funds to be distributed to the Insured
Certificateholders pursuant to Section 3.05, directly to the payment in full
of the Insured Payment due on the Insured Certificates. Any funds remaining
in the Certificate Insurance Account on the first Business Day following a
Distribution Date shall be remitted to the Certificate Insurer, pursuant to
the written instructions of the Certificate Insurer, by the end of such
Business Day.
(c) The Trustee shall keep a complete and accurate record of the amount of
interest and principal paid into the Certificate Insurance Account in respect
of the Insured Certificates from moneys received under the Certificate
Policy. The Certificate Insurer shall have the right to inspect such records
at reasonable times during normal business hours upon two Business Day's
prior written notice to the Trustee.
(d) In accordance with the terms of the Certificate Policy, any claim on
the Certificate Policy in respect of a Preference Amount, shall require the
Trustee to obtain a certified copy of the order requiring the return of a
preference payment, an opinion of counsel satisfactory to the Certificate
Insurer that the order is final and not subject to appeal, and other
documentation as required by the Certificate Policy. Any such opinion of
counsel shall be provided at the sole expense of Xxxxxxx, Xxxxx & Co.
Section 9.03 Effect of Payments by the Certificate Insurer; Subrogration.
Anything herein to the contrary notwithstanding, for purposes of
this Section 9.03, any payment with respect to principal of or interest on
the Insured Certificates which is made with monies received pursuant to the
terms of the Certificate Policy shall not be considered payment of the
Insured Certificates from the Trust Fund. The Certificate Administrator, the
Company and the Trustee acknowledge, and each Holder by its acceptance of an
Insured Certificate agrees, that without the need for any further action on
the part of the Certificate Insurer, the Certificate Administrator, the
Company, the Trustee or the Certificate Registrar, to the extent the
Certificate Insurer or any fiscal agent on behalf of the Certificate Insurer
makes payments, directly or indirectly, on account of principal of or
interest on the Insured Certificates to the Holders of such Certificates, the
Certificate Insurer will be fully subrogated to, and each Insured
Certificateholder, the Certificate Administrator, the Company and the Trustee
hereby delegate and assign to the Certificate Insurer, to the fullest extent
permitted by law, the rights of such Holders to receive such principal and
interest from the Trust Fund; provided that the Certificate Insurer shall be
paid such amounts only from the sources and in the manner explicitly provided
for herein.
The Trustee and the Certificate Administrator shall cooperate in
all respects with any reasonable request by the Certificate Insurer for
action to preserve or enforce the Certificate Insurer's rights or interests
under this Agreement without limiting the rights or affecting the interests
of the Holders as otherwise set forth herein.
63
Section 9.04 Notices and Information to the Certificate Insurer.
(a) All notices, statements, reports, certificates or opinions required by
this Agreement to be sent to any other party hereto, to the Rating Agencies
or to the Certificateholders shall also be sent to the Certificate Insurer.
(b) The Certificate Administrator shall designate a Person who shall be
available to the Certificate Insurer to provide reasonable access to
information regarding the Underlying Certificates and to all books, records,
accounts, information and other matters relating to the Certificates or this
Agreement.
Section 9.05 Trustee to Hold Certificate Policy.
The Trustee will hold the Certificate Policy in trust as agent
for the Insured Certificateholders for the purpose of making claims thereon
and distributing the proceeds thereof. Neither the Certificate Policy, nor
the amounts paid on the Certificate Policy will constitute part of the Trust
Fund or assets of any REMIC created by this Agreement. Each Insured
Certificateholder, by accepting its Certificate, appoints the Trustee as
attorney-in-fact for the purpose of making claims on the Certificate Policy.
The Trustee shall surrender the Certificate Policy to the Certificate Insurer
for cancellation upon the payment in full of the Insured Certificates. To the
extent that the Certificate Policy constitutes a reserve fund for federal
income tax purposes, (1) it shall be an outside credit support agreement and
not an asset of any REMIC and (2) it shall be owned by the Certificate
Insurer, all within the meaning of Section 1.860G-2(h) of the Treasury
Regulations.
Section 9.06 Insurance Premium Payments.
(a) The Insurance Premium paid under this Agreement shall be nonrefundable
and the right of the Certificate Insurer to receive any Insurance Premium
payable hereunder shall be absolute and unconditional, in each case without
regard to whether the Certificate Insurer or any fiscal agent on behalf of
the Insurer makes any payment under the Certificate Policy or any other
circumstances relating to the Insured Certificates or the Certificate Policy
(including payment or any provision being made for payment of the Insured
Certificateholders prior to the final date for distribution in respect of the
Insured Certificates under this Agreement).
(b) The Trustee shall pay the Insurance Premium and all other amounts
payable to the Certificate Insurer under the Certificate Policy, this
Agreement or otherwise in immediately available funds by wire transfer to
such account as the Certificate Insurer shall designate by written notice,
and in the lawful currency of the United States of America, on the dates when
due.
Section 9.07 Ratings.
The parties hereto agree that references in this Agreement to
ratings on the Certificates or interests of the Certificateholders shall be
determined without regard to the Certificate Policy.
Section 9.08 Third Party Beneficiaries.
The Certificate Insurer shall be an express third-party
beneficiary of this Agreement to the extent of its express subrogation
rights, its rights to receive the Insurance Premium pursuant to Section
3.05(a) and the amounts pursuant to Section 3.05(a)(iii) and its express
rights set forth in Article IX of this Agreement and shall have the right to
enforce the related provisions of this Agreement as if it were a party hereto.
64
IN WITNESS WHEREOF, the Company, the Certificate Administrator
and the Trustee have caused their names to be signed hereto by their
respective officers thereunto duly authorized and their respective seals, if
required, duly attested, to be hereunto affixed, all as of the day and year
first above written.
RESIDENTIAL FUNDING MORTGAGE SECURITIES
I, INC.,
as Company
By:
Name: Xxx Xxxxxx
Title: Vice President
RESIDENTIAL FUNDING CORPORATION,
as Certificate Administrator
By:
Name: Xxxx Xxxxxxxx
Title: Managing Director
JPMORGAN CHASE BANK, as Trustee
By:
Name:
Title:
65
EXHIBIT A
FORM OF CLASS A CERTIFICATE
CLASS A-[__] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Certificate No. [__] [____]% Pass-Through Rate
Class A-[__] Senior
Date of Trust Agreement: Percentage Interest: [___]%
May 27, 2004
First Distribution Date: Aggregate Initial Certificate
June 25, 2004 Principal
Balance of the Class A-[__]
Certificates:
$[_________]
Certificate Administrator: Initial Certificate Principal Balance
Residential Funding Corporation of this Certificate:
$[__________]
Assumed Final Distribution Date:
September 25, 2033 CUSIP: 76111X [____]
MORTGAGE TRUST CERTIFICATE
SERIES 2004-SR1
evidencing a percentage interest in the distributions allocable
to the Class A-[__] Certificates with respect to a Trust Fund
consisting primarily of a senior class of mortgage pass-through
certificates issued by a trust established by RESIDENTIAL FUNDING
MORTGAGE SECURITIES I, INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Residential Funding
Mortgage Securities I, Inc., the Certificate Administrator, the Trustee
referred to below or GMAC Mortgage Group, Inc. or any of their affiliates.
Neither this Certificate nor the Underlying Certificates (as defined below)
are guaranteed or insured by any governmental agency or instrumentality or by
Residential Funding Mortgage Securities I, Inc., the Certificate
Administrator, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Company, the Certificate Administrator, 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 Certificates.
This certifies that [_____________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class A-[__] Certificates, both
as specified above) in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a portion of the Residential Funding
Mortgage Securities I, Inc. Mortgage Pass-Through Certificates, Series
2003-S17, Class A-5 (the "Underlying Certificates"). The Trust Fund was
created pursuant to the Trust Agreement dated as of May 27, 2004 (the "Trust
Agreement" or the "Agreement"), among the Company, the Certificate
Administrator and JPMorgan Chase Bank as trustee (the "Trustee"), 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 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this 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 following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this 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 (the "Record
Date"), from the Available Funds in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of [interest
and] principal, if any, required to be distributed to Holders of Class A-[__]
Certificates on such Distribution Date.
Distributions on this Certificate will be made by the Certificate
Administrator acting on behalf of the Trustee in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled
thereto if such Person shall have so notified the Certificate Administrator,
or by check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and specified in such notice. The
Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the
extent of distributions allocable to principal and any Class A Loss Amounts
allocable hereto.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Trust Certificates of the
Series specified hereon (herein collectively called the "Certificates").
The Trust Certificates are limited in right of payment to certain
distributions made to the Underlying Certificates.
As provided in the Agreement, withdrawals from the Trust Certificate
Account created for the benefit of Certificateholders may be made by the
Certificate Administrator from time to time for purposes other than
distributions to Certificateholders, such purposes including without
limitation reimbursement to the Company, the Certificate Administrator or
the Trustee of certain expenses incurred by any of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations
of the Company, the Certificate Administrator and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Certificate Administrator and the Trustee with the consent of the Holders of
Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Certificates affected thereby. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such
Holder and upon all future holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon the Certificate. The
Agreement also permits the amendment thereof in certain circumstances without
the consent of the Holders of any of the Certificates and, in certain
additional circumstances, without the consent of the Holders of certain
Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the offices or agencies appointed by the Trustee in the City and State of New
York, duly endorsed by, or accompanied by an assignment in the form below or
other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Trust Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Trust Certificates are exchangeable for new Trust Certificates of
authorized denominations evidencing the same Class and aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Certificate Insurer, the Certificate Administrator,
the Trustee and the Certificate Registrar and any agent of the Company, the
Certificate Insurer, the Certificate Administrator, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Company, the
Certificate Insurer, the Certificate Administrator, the Trustee or any such
agent shall be affected by notice to the contrary.
This 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 Certificates
and the Trust Fund created thereby shall terminate immediately upon the
occurrence of the last action required to be taken by the Trustee on the
Termination Date. The Pooling and Servicing Agreement permits, but does not
require, the Master Servicer to (i) purchase at a price determined as
provided in the Pooling and Servicing Agreement all remaining Mortgage Loans
and all property acquired in respect of any Mortgage Loan or (ii) purchase in
whole, but not in part, all of the RFMSI Series 2003-S17 Certificates from
the Holders thereof; provided, that any such option may only be exercised if
the Pool Stated Principal Balance (as defined in the Pooling and Servicing
Agreement) of the Mortgage Loans as of the Distribution Date upon which the
proceeds of any such purchase are distributed is less than ten percent of the
Cut-off Date Principal Balance (as defined in the Pooling and Servicing
Agreement) of the Mortgage Loans.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: May 27, 2004 JPMORGAN CHASE BANK, as Trustee
By:
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[__] Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK, as Certificate
Registrar
By:
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
__________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) a Percentage Interest evidenced by the within Mortgage Trust
Certificate and hereby authorizes the transfer of registration of such interest
to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a
like denomination and Class, to
the above named assignee and deliver such Certificate to the following
address:
______________________________________________________________________________
Dated:___________________
_____________________________________
Signature by or on behalf of assignor
______________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________ for the account of
________________________ account number _______________________________ , or, if
mailed by check, to ______________________. Applicable statements should be
mailed to ___________________________.
This information is provided by ________________________, the assignee
named above, or __________________, as its agent.
EXHIBIT B
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 4.02(d) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CERTIFICATE
ADMINISTRATOR, THE CERTIFICATE INSURER, THE COMPANY AND THE TRUSTEE THAT THE
PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A 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 AND WILL NOT SUBJECT THE CERTIFICATE
ADMINISTRATOR, THE CERTIFICATE INSURER, THE COMPANY OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
CERTIFICATE ADMINISTRATOR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A)
THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION
OF THE UNITED STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS
ACTIVITIES ARE SUBJECT TO TAX AND EXCEPT FOR THE XXXXXXX MAC, A MAJORITY OF
ITS BOARD OF DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C) ANY ORGANIZATION (OTHER THAN
CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION
IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING THE TAX
IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE INCOME), (D)
RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN SECTION 1381(a)(2)(C)
OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER SECTION 775(a) OF THE
CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), (C), (D)
OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (F) AN
AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON
THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS
CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
Certificate No. [__] [____]% Pass-Through Rate
Class R Senior
Date of Trust Agreement: Percentage Interest: [_____]%
May 27, 2004
First Distribution Date: Aggregate Initial Certificate
June 25, 2004 Principal Balance of the
Class R Certificates: $[______]
Certificate Administrator: Initial Certificate Principal
Residential Funding Corporation Balance of this Certificate: $[_____]
Assumed Final Distribution Date:
September 25, 2033 CUSIP: 76111X [____]
MORTGAGE TRUST CERTIFICATE
SERIES 2004-SR1
evidencing a percentage interest in the distributions allocable
to the Class R Certificates with respect to a Trust Fund
consisting primarily of a senior class of mortgage pass-through
certificates issued by a trust established by RESIDENTIAL FUNDING
MORTGAGE SECURITIES I, INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Residential Funding
Mortgage Securities I, Inc., the Certificate Administrator, the Trustee
referred to below or GMAC Mortgage Group, Inc. or any of their affiliates.
Neither this Certificate nor the Underlying Certificates (as defined below)
are guaranteed or insured by any governmental agency or instrumentality or by
Residential Funding Mortgage Securities I, Inc., the Certificate
Administrator, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Company, the Certificate Administrator, 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 Certificates.
This certifies that [______________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class R Certificates, both as
specified above) in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a portion of the Residential Funding
Mortgage Securities I, Inc. Mortgage Pass-Through Certificates, Series
2003-S17, Class A-5 (the "Underlying Certificates"). The Trust Fund was
created pursuant to the Trust Agreement dated as of May 27, 2004 (the "Trust
Agreement" or the "Agreement"), among the Company, the Certificate
Administrator and JPMorgan Chase Bank as trustee (the "Trustee"), 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 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this 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 following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this 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 (the "Record
Date"), from the Available Funds in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to Holders of Class R
Certificates on such Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i)
each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer
of any Ownership Interest in this Certificate will be conditioned upon the
delivery to the Trustee of, among other things, an affidavit to the effect
that it is a United States Person and Permitted Transferee, (iii) any
attempted or purported transfer of any Ownership Interest in this Certificate
in violation of such restrictions will be absolutely null and void and will
vest no rights in the purported transferee, and (iv) if any person other than
a United States Person and a Permitted Transferee acquires any Ownership
Interest in this Certificate in violation of such restrictions, then the
Company will have the right, in its sole discretion and without notice to the
Holder of this Certificate, to sell this Certificate to a purchaser selected
by the Company, which purchaser may be the Company, or any affiliate of the
Company, on such terms and conditions as the Company may choose.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose and specified in such notice. The
Initial Certificate Principal Balance of this Certificate is set forth
above. Notwithstanding the reduction of the Certificate Principal Balance
hereof to zero, this Certificate will remain outstanding under the Agreement
and the Holder hereof may have additional obligations with respect to this
Certificate, including tax liabilities, and may be entitled to certain
additional distributions hereon, in accordance with the terms and provisions
of the Agreement.
No transfer of this Class R Certificate will be made unless the Trustee
has received either (i) an opinion of counsel as required by Section 4.02(d)
of the Agreement acceptable to and in form and substance satisfactory to the
Trustee, the Company, the Certificate Insurer and the Certificate
Administrator with respect to the permissibility of such transfer under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
Section 4975 of the Internal Revenue Code (the "Code") and stating, among
other things, that the transferee's acquisition of a Class R Certificate will
not constitute or result in a non-exempt prohibited transaction under Section
406 of ERISA or Section 4975 of the Code and will not subject the Certificate
Administrator, the Certificate Insurer, the Company or the Trustee to any
obligation or liability in addition to those undertaken in the Agreement or
(ii) a representation letter, in the form as described by the Agreement,
stating that the transferee is not an employee benefit or other plan subject
to the prohibited transaction provisions of ERISA or Section 4975 of the Code
(a "Plan"), or any other person (including an investment manager, a named
fiduciary or a trustee of any Plan) acting, directly or indirectly, on behalf
of or purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Trust Certificates of the
Series specified hereon (herein collectively called the "Certificates").
The Trust Certificates are limited in right of payment to certain
distributions made to the Underlying Certificates.
As provided in the Agreement, withdrawals from the Certificate Account
created for the benefit of Certificateholders may be made by the Certificate
Administrator from time to time for purposes other than distributions to
Certificateholders, such purposes including without limitation reimbursement
to the Company and the Certificate Administrator or the Trustee certain
expenses incurred by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations
of the Company, the Certificate Administrator and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Certificate Administrator and the Trustee with the consent of the Holders of
Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Certificates affected thereby. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such
Holder and upon all future holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon the Certificate. The
Agreement also permits the amendment thereof in certain circumstances without
the consent of the Holders of any of the Certificates and, in certain
additional circumstances, without the consent of the Holders of certain
Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
the offices or agencies appointed by the Trustee in the City and State of New
York, duly endorsed by, or accompanied by an assignment in the form below or
other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Trust Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Trust Certificates are exchangeable for new Trust Certificates of
authorized denominations evidencing the same Class and aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Certificate Insurer, the Certificate Administrator,
the Trustee and the Certificate Registrar and any agent of the Company, the
Certificate Insurer, the Certificate Administrator, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Company, the
Certificate Insurer, the Certificate Administrator, the Trustee or any such
agent shall be affected by notice to the contrary.
This 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 Certificates
and the Trust Fund created thereby shall terminate immediately upon the
occurrence of the last action required to be taken by the Trustee on the
Termination Date. The Pooling and Servicing Agreement permits, but does not
require, the Master Servicer to (i) purchase at a price determined as
provided in the Pooling and Servicing Agreement all remaining Mortgage Loans
and all property acquired in respect of any Mortgage Loan or (ii) purchase in
whole, but not in part, all of the RFMSI Series 2003-S17 Certificates from
the Holders thereof; provided, that any such option may only be exercised if
the Pool Stated Principal Balance (as defined in the Pooling and Servicing
Agreement) of the Mortgage Loans as of the Distribution Date upon which the
proceeds of any such purchase are distributed is less than ten percent of the
Cut-off Date Principal Balance (as defined in the Pooling and Servicing
Agreement) of the Mortgage Loans.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: May 27, 2004 JPMORGAN CHASE BANK, as Trustee
By:
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK, as Certificate
Registrar
By:
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
__________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) a Percentage Interest evidenced by the within Mortgage Trust
Certificate and hereby authorizes the transfer of registration of such interest
to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a
like denomination and Class, to
the above named assignee and deliver such Certificate to the following
address:
______________________________________________________________________________
Dated:___________________
_____________________________________
Signature by or on behalf of assignor
______________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________ for the account of
________________________ account number _______________________________ , or, if
mailed by check, to ______________________. Applicable statements should be
mailed to ___________________________.
This information is provided by ________________________, the assignee
named above, or __________________, as its agent.
EXHIBIT C-1
TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
)ss.
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or
beneficial owner of the Mortgage Pass-Through Certificates, Series _______,
Class R (the "Owner")), a [savings institution] [corporation] duly organized
and existing under the laws of [the State of ] [the United States], on behalf
of which he makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" or an electing large partnership as of [date of transfer]
within the meaning of Sections 860E(e)(5) and 775, respectively, of the
Internal Revenue Code of 1986, as amended (the "Code") or an electing large
partnership under Section 775(a) of the Code, (ii) will endeavor to remain
other than a disqualified organization for so long as it retains its
ownership interest in the Class R Certificates, and (iii) is acquiring the
Class R Certificates for its own account or for the account of another Owner
from which it has received an affidavit and agreement in substantially the
same form as this affidavit and agreement. (For this purpose, a "disqualified
organization" means an electing large partnership under Section 775 of the
Code, the United States, any state or political subdivision thereof, any
agency or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to tax and, except
for the Federal Home Loan Mortgage Corporation, a majority of whose board of
directors is not selected by any such governmental entity) or any foreign
government, international organization or any agency or instrumentality of
such foreign government or organization, any rural electric or telephone
cooperative, or any organization (other than certain farmers' cooperatives)
that is generally exempt from federal income tax unless such organization is
subject to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations or electing
large partnerships, under the Code, that applies to all transfers of Class R
Certificates after March 31, 1988; (ii) that such tax would be on the
transferor (or, with respect to transfers to electing large partnerships, on
each such partnership), or, if such transfer is through an agent (which
person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person (other than with respect to
transfers to electing large partnerships) otherwise liable for the tax shall
be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization
and, at the time of transfer, such person does not have actual knowledge that
the affidavit is false; and (iv) that the Class R Certificates may be
"noneconomic residual interests" within the meaning of Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding Class R Certificates if either the pass-through entity is an
electing large partnership under Section 775 of the Code or if at any time
during the taxable year of the pass-through entity a disqualified
organization is the record holder of an interest in such entity. (For this
purpose, a "pass through entity" includes a regulated investment company, a
real estate investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives.)
5. The Owner is either (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity treated as a
corporation or a partnership for U.S. federal income tax purposes and created
or organized in or under the laws of the United States, any state thereof or
the District of Columbia (other than a partnership that is not treated as a
United States person under any applicable Treasury regulations), (iii) an
estate that is described in Section 7701(a)(30)(D) of the Code, or (iv) a
trust that is described in Section 7701(a)(30)(E) of the Code.
6. The Owner hereby agrees that it will not cause income from the
Class R Certificates to be attributable to a foreign permanent establishment
or fixed base (within the meaning of an applicable income tax treaty) of the
Owner of another United States taxpayer.
7. That the Owner is aware that the Trustee will not register the
transfer of any Class R Certificates unless the transferee, or the
transferee's agent, delivers to it an affidavit and agreement, among other
things, in substantially the same form as this affidavit and agreement. The
Owner expressly agrees that it will not consummate any such transfer if it
knows or believes that any of the representations contained in such affidavit
and agreement are false.
8. That the Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 4.02(c) of the
Trust Agreement under which the Class R Certificates were issued. The Owner
expressly agrees to be bound by and to comply with such restrictions and
provisions.
9. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to
constitute a reasonable arrangement to ensure that the Class R Certificates
will only be owned, directly or indirectly, by an Owner that is not a
disqualified organization.
10. The Owner's Taxpayer Identification Number is ________________.
11. This affidavit and agreement relates only to the Class R
Certificates held by the Owner and not to any other holder of the Class R
Certificates. The Owner understands that the liabilities described herein
relate only to the Class R Certificates.
12. That no purpose of the Owner relating to the transfer of any of
the Class R Certificates by the Owner is or will be to impede the assessment
or collection of any tax; in making this representation, the Owner warrants
that the Owner is familiar with (i) Treasury Regulation Section 1.860E-1(c)
and recent amendments thereto, effective as of July 19, 2002, and (ii) the
preamble describing the adoption of the amendments to such regulation, which
is attached hereto as Exhibit 1.
13. That the Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of
the Certificates remain outstanding. In this regard, the Owner hereby
represents to and for the benefit of the person from whom it acquired the
Class R Certificate that the Owner intends to pay taxes associated with
holding such Class R Certificate as they become due, fully understanding that
it may incur tax liabilities in excess of any cash flows generated by the
Class R Certificate.
14. That the Owner has no present knowledge or expectation that it
will become insolvent or subject to a bankruptcy proceeding for so long as
any of the Class R Certificates remain outstanding.
15. (a) The Owner is not an employee benefit plan or other plan
subject to the prohibited transaction provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or an investment
manager, named fiduciary or a trustee of any such plan, or any other Person
acting, directly or indirectly, on behalf of or purchasing any Certificate
with "plan assets" of any such plan; or
(b) The Owner has provided the Trustee, the Company and the
Certificate Administrator with an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee, the Company and the
Certificate Administrator to the effect that the purchase of Certificates is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Trustee, the Company or the Certificate Administrator to
any obligation or liability (including obligations or liabilities under ERISA
or Section 4975 of the Code) in addition to those undertaken in the Trust
Agreement.
In addition, the Owner hereby certifies, represents and warrants to,
and covenants with, the Company, the Trustee and the Certificate
Administrator that the Owner will not transfer such Certificates to any Plan
or person unless either such Plan or person meets the requirements set forth
in either (a) or (b) above.
Capitalized terms used but not defined herein shall have the meanings
assigned in the Trust Agreement.
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed
on its behalf, pursuant to the authority of its Board of Directors, by its
[Title of Officer] and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this day of _____,___ 200__.
[NAME OF OWNER]
By:
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument
and to be the [Title of Officer] of the Owner, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Owner.
Subscribed and sworn before me this ___ day of ________, 200 __.
NOTARY PUBLIC
COUNTY OF
STATE
OF
My Commission expires the ____ day
of _____, 20__ .
EXHIBIT 1
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9004]
RIN 1545-AW98
Real Estate Mortgage Investment Conduits
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations relating to safe
harbor transfers of noneconomic residual interests in real estate
mortgage investment conduits (REMICs). The final regulations provide
additional limitations on the circumstances under which transferors may
claim safe harbor treatment.
DATES: Effective Date: These regulations are effective July 19, 2002.
Applicability Date: For dates of applicability, see Sec. 1.860E-
(1)(c)(10).
FOR FURTHER INFORMATION CONTACT: Xxxxxxxx Xxxxxxxxxx at (000) 000-0000
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information in this final rule has been reviewed
and, pending receipt and evaluation of public comments, approved by the
Office of Management and Budget (OMB) under 44 U.S.C. 3507 and assigned
control number 1545-1675.
The collection of information in this regulation is in Sec. 1.860E -
1(c)(5)(ii). This information is required to enable the IRS to verify
that a taxpayer is complying with the conditions of this regulation.
The collection of information is mandatory and is required. Otherwise,
the taxpayer will not receive the benefit of safe harbor treatment as
provided in the regulation. The likely respondents are businesses and
other for-profit institutions.
Comments on the collection of information should be sent to the
Office of Management and Budget, Attn: Desk Officer for the Department
of the Treasury, Office of Information and Regulatory Affairs,
Xxxxxxxxxx, XX, 00000, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, W:CAR:MP:FP:S, Xxxxxxxxxx, XX
00000. Comments on the collection of information should be received by
September 17, 2002. Comments are specifically requested concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including
whether the information will have practical utility;
The accuracy of the estimated burden associated with the collection
of information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced;
How the burden of complying with the collection of information may
be minimized, including through the application of automated collection
techniques or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of service to provide information.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
control number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on
an estimated number of respondents of 470 and an estimated average
annual burden hours per respondent of one hour.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Background
This document contains final regulations regarding the proposed
amendments to 26 CFR part 1 under section 860E of the Internal Revenue
Code (Code). The regulations provide the circumstances under which a
transferor of a noneconomic REMIC residual interest meeting the
investigation and representation requirements may avail itself of the
safe harbor by satisfying either the formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules
governing the transfer of noneconomic REMIC residual interests. In
general, a transfer of a noneconomic residual interest is disregarded
for all tax purposes if a significant purpose of the transfer is to
[[Page 47452]]
enable the transferor to impede the assessment or collection of tax. A
purpose to impede the assessment or collection of tax (a wrongful
purpose) exists if the transferor, at the time of the transfer, either
knew or should have known that the transferee would be unwilling or
unable to pay taxes due on its share of the REMIC's taxable income.
Under a safe harbor, the transferor of a REMIC noneconomic residual
interest is presumed not to have a wrongful purpose if two requirements
are satisfied: (1) the transferor conducts a reasonable investigation
of the transferee's financial condition (the investigation
requirement); and (2) the transferor secures a representation from the
transferee to the effect that the transferee understands the tax
obligations associated with holding a residual interest and intends to
pay those taxes (the representation requirement).
The IRS and Treasury have been concerned that some transferors of
noneconomic residual interests claim they satisfy the safe harbor even
in situations where the economics of the transfer clearly indicate the
transferee is unwilling or unable to pay the tax associated with
holding the interest. For this reason, on February 7, 2000, the IRS
published in the Federal Register (65 FR 5807) a notice of proposed
rulemaking (REG-100276-97; REG-122450-98) designed to clarify the safe
harbor by adding the "formula test," an economic test. The proposed
regulation provides that the safe harbor is unavailable unless the
present value of the anticipated tax liabilities associated with
holding the residual interest does not exceed the sum of: (1) The
present value of any consideration given to the transferee to acquire
the interest; (2) the present value of the expected future
distributions on the interest; and (3) the present value of the
anticipated tax savings associated with holding the interest as the
REMIC generates losses.
The notice of proposed rulemaking also contained rules for FASITs.
Section 1.860H-6(g) of the proposed regulations provides requirements
for transfers of FASIT ownership interests and adopts a safe harbor by
reference to the safe harbor provisions of the REMIC regulations.
In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3
I.R.B. 335) to set forth an alternative safe harbor that taxpayers
could use while the IRS and the Treasury considered comments on the
proposed regulations. Under the alternative safe harbor, if a
transferor meets the investigation requirement and the representation
requirement but the transfer fails to meet the formula test, the
transferor may invoke the safe harbor if the transferee meets a two-
prong test (the asset test). A transferee generally meets the first
prong of this test if, at the time of the transfer, and in each of the
two years preceding the year of transfer, the transferee's gross assets
exceed $100 million and its net assets exceed $10 million. A transferee
generally meets the second prong of this test if it is a domestic,
taxable corporation and agrees in writing not to transfer the interest
to any person other than another domestic, taxable corporation that
also satisfies the requirements of the asset test. A transferor cannot
rely on the asset test if the transferor knows, or has reason to know,
that the transferee will not comply with its written agreement to limit
the restrictions on subsequent transfers of the residual interest.
Rev. Proc. 2001-12 provides that the asset test fails to be
satisfied in the case of a transfer or assignment of a noneconomic
residual interest to a foreign branch of an otherwise eligible
transferee. If such a transfer or assignment were permitted, a
corporate taxpayer might seek to claim that the provisions of an
applicable income tax treaty would resource excess inclusion income as
foreign source income, and that, as a consequence, any U.S. tax
liability attributable to the excess inclusion income could be offset
by foreign tax credits. Such a claim would impede the assessment or
collection of U.S. tax on excess inclusion income, contrary to the
congressional purpose of assuring that such income will be taxable in
all events. See, e.g., sections 860E(a)(1), (b), (e) and 860G(b) of the
Code.
The Treasury and the IRS have learned that certain taxpayers
transferring noneconomic residual interests to foreign branches have
attempted to rely on the formula test to obtain safe harbor treatment
in an effort to impede the assessment or collection of U.S. tax on
excess inclusion income. Accordingly, the final regulations provide
that if a noneconomic residual interest is transferred to a foreign
permanent establishment or fixed base of a U.S. taxpayer, the transfer
is not eligible for safe harbor treatment under either the asset test
or the formula test. The final regulations also require a transferee to
represent that it will not cause income from the noneconomic residual
interest to be attributable to a foreign permanent establishment or
fixed base.
Section 1.860E -1(c)(8) provides computational rules that a taxpayer
may use to qualify for safe harbor status under the formula test.
Section 1.860E-1(c)(8)(i) provides that the transferee is presumed to
pay tax at a rate equal to the highest rate of tax specified in section
11(b). Some commentators were concerned that this presumed rate of
taxation was too high because it does not take into consideration
taxpayers subject to the alternative minimum tax rate. In light of the
comments received, this provision has been amended in the final
regulations to allow certain transferees that compute their taxable
income using the alternative minimum tax rate to use the alternative
minimum tax rate applicable to corporations.
Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present
values in the formula test are to be computed using a discount rate
equal to the applicable Federal short-term rate prescribed by section
1274(d). This is a change from the proposed regulation and Rev. Proc.
2001-12. In those publications the provision stated that "present
values are computed using a discount rate equal to the applicable
Federal rate prescribed in section 1274(d) compounded semiannually"
and that "[a] lower discount rate may be used if the transferee can
demonstrate that it regularly borrows, in the course of its trade or
business, substantial funds at such lower rate from an unrelated third
party." The IRS and the Treasury Department have learned that, based
on this provision, certain taxpayers have been attempting to use
unrealistically low or zero interest rates to satisfy the formula test,
frustrating the intent of the test. Furthermore, the Treasury
Department and the IRS believe that a rule allowing for a rate other
than a rate based on an objective index would add unnecessary
complexity to the safe harbor. As a result, the rule in the proposed
regulations that permits a transferee to use a lower discount rate, if
the transferee can demonstrate that it regularly borrows substantial
funds at such lower rate, is not included in the final regulations; and
the Federal short-term rate has been substituted for the applicable
Federal rate. To simplify taxpayers' computations, the final
regulations allow use of any of the published short-term rates,
provided that the present values are computed with a corresponding
period of compounding. With the exception of the provisions relating to
transfers to foreign branches, these changes generally have the
proposed applicability date of February 4, 2000, but taxpayers may
choose to apply the interest rate formula set forth in the proposed
regulation and Rev. Proc. 2001-12 for transfers occurring before August
19, 2002.
It is anticipated that when final regulations are adopted with
respect to
[[Page 47453]]
FASITs, Sec. 1.860H-6(g) of the proposed regulations will be adopted in
substantially its present form, with the result that the final
regulations contained in this document will also govern transfers of
FASIT ownership interests with substantially the same applicability
date as is contained in this document.
Effect on Other Documents
Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is obsolete for transfers of
noneconomic residual interests in REMICs occurring on or after August
19, 2002.
Special Analyses
It is hereby certified that these regulations will not have a
significant economic impact on a substantial number of small entities.
This certification is based on the fact that it is unlikely that a
substantial number of small entities will hold REMIC residual
interests. Therefore, a Regulatory Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. It has
been determined that this Treasury decision is not a significant
regulatory action as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It also has been determined that
sections 553(b) and 553(d) of the Administrative Procedure Act (5
U.S.C. chapter 5) do not apply to these regulations.
Drafting Information
The principal author of these regulations is Xxxxxxxx Xxxxxxxxxx.
However, other personnel from the IRS and Treasury Department
participated in their development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record keeping requirements.
26 CFR Part 602
Reporting and record keeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602 are amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
EXHIBIT C-2
Form of Transferor Certificate
__________ , 2
Residential Funding Mortgage Securities I, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
JPMorgan Chase Bank
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Residential Funding Corporation Series 2004-SR1
Re: Mortgage Trust Certificates,
Series 2004-SR1, Class R
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_____________________ (the "Seller") to _____________________(the
"Purchaser") of $______________ Initial Certificate Principal Balance of
Mortgage Trust Certificates, Series 2004-SR1, Class R (the "Certificates"),
pursuant to Section 4.02 of the Trust Agreement dated as of May 27, 2004 (the
"Trust Agreement") among Residential Funding Mortgage Securities I, Inc., as
seller (the "Company"), Residential Funding Corporation, as certificate
administrator, and JPMorgan Chase Bank as trustee (the "Trustee"). All terms
used herein and not otherwise defined shall have the meanings set forth in
the Trust Agreement. The Seller hereby certifies, represents and warrants to,
and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the transfer of the
Certificate by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee and the Certificate Administrator a transfer affidavit and agreement
in the form attached to the Trust Agreement as Exhibit C-1. The Seller does
not know or believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E- 1(c)(4)(i) and, as a result of that
investigation, the Seller has determined that the Purchaser has historically
paid its debts as they become due and has found no significant evidence to
indicate that the Purchaser will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of a Class R
Certificate may not be respected for United States income tax purposes (and
the Seller may continue to be liable for United States income taxes
Associated therewith) unless the Seller has conducted such an investigation.
4. The Seller has no actual knowledge that the proposed Transferee
is not both a United States Person and a Permitted Transferee.
Very truly yours,
(Seller)
By:
Name:
Title:
EXHIBIT D
Pooling and Servicing Agreement
EXHIBIT E
Form of Form 10K Certification
I, [identify the certifying individual], certify that:
1. I have reviewed the annual report on Form 10-K for the fiscal
year [____], and all reports on Form 8-K containing distribution or servicing
reports filed in respect of periods included in the year covered by that
annual report, of the trust (the "Trust") created pursuant to the Trust
Agreement (the "Trust Agreement") among Residential Funding Mortgage
Securities I, Inc. (the "Company"), Residential Funding Corporation (the
"Certificate Administrator") and [Name of Trustee] (the "Trustee");
2. Based on my knowledge, the information in these reports, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required to be
provided to the Trustee by the Certificate Administrator under the Trust
Agreement for inclusion in these reports is included in these reports;
4. I am responsible for reviewing the activities performed by the
Certificate Administrator under the Trust Agreement and based upon my
knowledge and the annual compliance review required under the Trust
Agreement, and, except as disclosed in the reports, the Certificate
Administrator has fulfilled its obligations under the Trust Agreement; and
5. The reports disclose all significant deficiencies relating to the
Certificate Administrator's compliance with the minimum servicing or similar
standards based upon the report provided by an independent public accountant,
after conducting a review in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar procedures as set forth in the Trust
Agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: [the
Trustee].
Date:_______________________
____________________________*
Name:
Title:
* to be signed by the senior officer of the Company
EXHIBIT F
Form of Back-up Certification to Form 10K Certification
The undersigned, a Responsible Officer of [_________] (the "Trustee")
certifies that:
(a) The Trustee has performed all of the duties specifically required
to be performed by it pursuant to the provisions of the Trust Agreement dated
as of May 27, 2004 (the "Agreement") by and among Residential Funding
Mortgage Securities I, Inc., Residential Funding Corporation and the Trustee
in accordance with the standards set forth therein.
(b) Based on my knowledge, the list of Certificateholders as shown on
the Certificate Register as of the end of each calendar year that is provided
by the Trustee pursuant to the Agreement is accurate as of the last day of
the 20[__] calendar year.
Capitalized terms used and not defined herein shall have the meanings given
such terms in the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of
_________, 20__.]
Name:_________________________
Title:
EXHIBIT G
Certificate Policy of MBIA Insurance Corporation
CERTIFICATE GUARANTY INSURANCE POLICY
OBLIGATIONS: RFMSI Series 2004-SR1 Trust POLICY NUMBER: 44178
Mortgage Trust Certificates, Series 2004-SR1
$23,100,000 5.60% Class A-4 Certificates
MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner that an amount equal to each full and complete
Insured Payment will be received from the Insurer by JPMorgan Chase Bank, or
its successors, as trustee for the Owners (the "Trustee"), on behalf of the
Owners, for distribution by the Trustee to each Owner of each Owner's
proportionate share of the Insured Payment. The Insurer's obligations
hereunder with respect to a particular Insured Payment shall be discharged to
the extent funds equal to the applicable Insured Payment are received by the
Trustee, whether or not such funds are properly applied by the Trustee.
Insured Payments shall be made only at the time set forth in this Policy, and
no accelerated Insured Payments shall be made regardless of any acceleration
of the Obligations, unless such acceleration is at the sole option of the
Insurer. This Policy does not provide credit enhancement for any Class of
Certificates other than the Class A-4 Certificates.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust, any REMIC or
the Trustee for withholding taxes, if any (including interest and penalties
in respect of any such liability).
The Insurer will pay any Insured Payment that is a Preference Amount on
the Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (a) a certified copy of the order requiring the return of
a preference payment, (b) an opinion of counsel satisfactory to the Insurer
that such order is final and not subject to appeal, (c) an assignment in such
form as is reasonably required by the Insurer, irrevocably assigning to the
Insurer all rights and claims of the Owner relating to or arising under the
Obligations against the debtor which made such preference payment or
otherwise with respect to such preference payment and (d) appropriate
instruments to effect the appointment of the Insurer as agent for such Owner
in any legal proceeding related to such preference payment, such instruments
being in a form satisfactory to the Insurer, provided that if such documents
are received after 12:00 noon, New York City time, on such Business Day, they
will be deemed to be received on the following Business Day. Such payments
shall be disbursed to the receiver or trustee in bankruptcy named in the
final order of the court exercising jurisdiction on behalf of the Owner and
not to any Owner directly unless such Owner has returned principal or
interest paid on the Obligations to such receiver or trustee in bankruptcy,
in which case such payment shall be disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on
which the related Deficiency Amount is due or the first Business Day
following receipt in New York, New York on a Business Day by U.S. Bank Trust
National Association, as Fiscal Agent for the Insurer, or any successor
fiscal agent appointed by the Insurer (the "Fiscal Agent"), of a Notice (as
described below), provided that if such Notice is received after 12:00 noon,
New York City time, on such Business Day, it will be deemed to be received on
the following Business Day. If any such Notice received by the Fiscal Agent
is not in proper form or is otherwise insufficient for the purpose of making
claim hereunder, it shall be deemed not to have been received by the Fiscal
Agent for purposes of this paragraph, and the Insurer or the Fiscal Agent, as
the case may be, shall promptly so advise the Trustee and the Trustee may
submit an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any
amount held by the Trustee for the payment of such Insured Payment and
legally available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds
to make payments due under this Policy.
Subject to the terms of the Agreement, the Insurer will be subrogated
to the rights of each Owner to receive payments under Obligations to the
extent of any payment by the Insurer under this Policy.
As used herein, the following terms shall have the following meanings:
"Agreement" means the Trust Agreement dated as of May 27, 2004 among
Residential Funding Mortgage Securities I, Inc., as Depositor, Residential
Funding Corporation, as Certificate Administrator, and the Trustee, as
trustee, without regard to any amendment or supplement thereto, unless such
amendment or supplement has been approved in writing by the Insurer.
"Business Day" means any day other than (a) a Saturday or a Sunday
(b) a day on which the Insurer is closed or (c) a day on which banking
institutions in New York City or in the city in which the corporate trust
office of the Trustee under the Agreement is located are authorized or
obligated by law or executive order to close.
"Deficiency Amount" means, as of any Distribution Date, an amount equal
to: (i) any interest shortfall contemplated in the definition of "Accrued
Certificate Interest" as defined in the Agreement allocated to the Class A-4
Certificates, except for (a) any Prepayment Interest Shortfalls allocated to
the Class A-4 Certificates and (b) any Relief Act Shortfalls allocated to the
Class A-4 Certificates; (ii) any Class A-4 Interest Shortfall Amount; (iii)
the principal portion of any Loss Amount allocated to the Class A-4
Certificates, to the extent not covered by the Class A-5 Certificates; and
(iv) the Certificate Principal Balance of the Class A-4 Certificates to the
extent unpaid on the Scheduled Final Distribution Date after taking into
account all distributions to be made on such date.
"Insured Payment" means (a) as of any Distribution Date, any Deficiency
Amount and (b) any Preference Amount.
"Notice" means the telephonic or telegraphic notice, promptly confirmed
in writing by facsimile substantially in the form of Exhibit A attached
hereto, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Payment which shall
be due and owing on the applicable Distribution Date.
"Owner" means each Holder (as defined in the Agreement) who, on the
applicable Distribution Date, is entitled under the terms of the applicable
Class A-4 Certificate to payment thereunder.
"Preference Amount" means any amount previously distributed to an Owner
on the Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code (11 U.S.C.), as amended from time to time, in accordance with
a final nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Agreement as of the date of
execution of this Policy, without giving effect to any subsequent amendment
to or modification of the Agreement unless such amendment or modification has
been approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be
made at the address listed below for the Fiscal Agent or such other address
as the Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 00 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Municipal Registrar and Paying Agency,
or such other address as the Fiscal Agent shall specify to the Trustee in
writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE
CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the
New York Insurance Law.
This Policy is not cancelable for any reason. The premium on this
Policy is not refundable for any reason, including payment, or provision
being made for payment, prior to maturity of the Obligations.
IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed
and attested this 27th day of May, 2004.
MBIA INSURANCE CORPORATION
By
President
Attest:
By _______________________________
Assistant Secretary
EXHIBIT A
TO CERTIFICATE GUARANTY INSURANCE
POLICY NUMBER: 44178
NOTICE UNDER CERTIFICATE GUARANTY
INSURANCE POLICY NUMBER: 44178
U.S. Bank Trust National Association, as Fiscal Agent
for MBIA Insurance Corporation
00xx Xxxxx
00 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Municipal Registrar and
Paying Agency
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
The undersigned, a duly authorized officer of [Name of Trustee], as trustee
(the "Trustee"), hereby certifies to U.S. Bank Trust National Association
(the "Fiscal Agent") and MBIA Insurance Corporation (the "Insurer"), with
reference to Certificate Guaranty Insurance Policy Number: 44178 (the
"Policy") issued by the Insurer in respect of the RFMSI Series 2004-SR1 Trust
Mortgage Trust Certificates, Series 2004-SR1 $23,100,000 5.60% Class A-4
Certificates (the "Obligations"), that:
(a) the Trustee is the trustee under the Trust Agreement dated
as of May 27, 2004 among Residential Funding Mortgage Securities I,
Inc., as Depositor, Residential Funding Corporation, as Certificate
Administrator, and the Trustee, as trustee for the owners;
(b) the amount due under clause (i) of the definition of
Deficiency Amount for the Distribution Date occurring on
[ ] (the "Applicable Distribution Date") is
$[ ];
(c) the amount due under clause (ii) of the definition of
Deficiency Amount for the Applicable Distribution Date is
$[ ]
(d) the amount due under clause (iii) of the definition of
Deficiency Amount for the Applicable Distribution Date is
$[ ];
(e) the amount due under clause (iv) of the definition of
Deficiency Amount for the Applicable Distribution Date is
$[ ];
(f) the sum of the amounts listed in paragraphs (b), (c), (d)
and (e) above is $[ ] (the "Deficiency Amount");
(g) the amount of previously distributed payments on the
Obligations that is recoverable and sought to be recovered as a
voidable preference by a trustee in bankruptcy pursuant to the
Bankruptcy Code in accordance with a final nonappealable order of a
court having competent jurisdiction is $[ ] (the
"Preference Amount");
(h) the total Insured Payment due is $[ ], which
amount equals the sum of the Deficiency Amount and the Preference
Amount;
(i) the Trustee is making a claim under and pursuant to the
terms of the Policy for the dollar amount of the Insured Payment set
forth in (f) above to be applied to the payment of the Deficiency
Amount for the Applicable Distribution Date in accordance with the
Agreement and for the dollar amount of the Insured Payment set forth in
(g) above to be applied to the payment of any Preference Amount; and
(j) the Trustee directs that payment of the Insured Payment be
made to the following account by bank wire transfer of federal or other
immediately available funds in accordance with the terms of the
Policy: [TRUSTEE'S ACCOUNT NUMBER].
Any capitalized term used in this Notice and not otherwise defined
herein shall have the meaning assigned thereto in the Policy.
Any Person Who Knowingly And With Intent To Defraud Any Insurance Company Or
Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A
Civil Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The
Claim For Each Such Violation.
IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the [ ] day of [ ], [ ].
[NAME OF TRUSTEE], as
Trustee
By ______________________
Title
