EXECUTION COPY
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
as Depositor
and
WILMINGTON TRUST COMPANY
as Owner Trustee
-----------------------------------------
AMENDED AND RESTATED TRUST AGREEMENT
Dated as of January 29, 1998
------------------------------------------
Home Equity Loan-Backed Certificates,
Series 1998-HS1
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Table of Contents
Section Page
ARTICLE IDefinitions
1.01. Definitions..................................................1
1.02. Other Definitional Provisions................................1
ARTICLE IIOrganization
2.01. Name.........................................................3
2.02. Office.......................................................3
2.03. Purposes and Powers..........................................3
2.04. Appointment of Owner Trustee.................................4
2.05. Initial Capital Contribution of Owner Trust Estate...........4
2.06. Declaration of Trust.........................................4
2.07. Liability of the Holders of the Certificates.................4
2.08. Title to Trust Property......................................4
2.09. Situs of Trust...............................................4
2.10. Representations and Warranties of the Depositor..............5
2.11. Payment of Trust Fees........................................5
2.12. Purchase and Pledge of RFC Demand Note.......................6
ARTICLE IIIConveyance of the Revolving Credit Loans; Certificates
3.01. Conveyance of the Revolving Credit Loans.....................7
3.02. Initial Ownership............................................7
3.03. The Certificates.............................................7
3.04. Authentication of Certificates...............................8
3.05. Registration of and Limitations on Transfer and Exchange of
Certificates...............................................8
3.06. Mutilated, Destroyed, Lost or Stolen Certificates...........11
3.07. Persons Deemed Certificateholders...........................11
3.08. Access to List of Certificateholders' Names and Addresses...11
3.09. Maintenance of Office or Agency.............................11
3.10. Certificate Paying Agent....................................12
3.11. Cooperation.................................................13
ARTICLE IVAuthority and Duties of Owner Trustee
4.01. General Authority...........................................15
4.02. General Duties..............................................15
4.03. Action upon Instruction.....................................15
4.04. No Duties Except as Specified under Specified Documents or in
Instructions..............................................16
4.05. Restrictions................................................16
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Section Page
4.06. Prior Notice to Certificateholders and the Credit Enhancer with
Respect to Certain Matters................................16
4.07. Action by Certificateholders with Respect to Certain Matters17
4.08. Action by Certificateholders with Respect to Bankruptcy.....17
4.09. Restrictions on Certificateholders' Power...................17
4.10. Majority Control............................................17
4.11. Doing Business in Other Jurisdictions.......................18
ARTICLE VApplication of Trust Funds
5.01. Distributions...............................................19
5.02. Method of Payment...........................................19
5.03. Signature on Returns........................................19
5.04. Statements to Certificateholders............................20
5.05. Tax Reporting...............................................20
ARTICLE VIConcerning the Owner Trustee
6.01. Acceptance of Trusts and Duties.............................21
6.02. Furnishing of Documents.....................................22
6.03. Representations and Warranties..............................22
6.04. Reliance; Advice of Counsel.................................23
6.05. Not Acting in Individual Capacity...........................23
6.06. Owner Trustee Not Liable for Certificates or Related Documents23
6.07. Owner Trustee May Own Certificates and Notes................24
ARTICLE VIICompensation of Owner Trustee
7.01. Owner Trustee's Fees and Expenses...........................25
7.02. Indemnification.............................................25
ARTICLE VIIITermination of Trust Agreement
8.01. Termination of Trust Agreement..............................27
ARTICLE IXSuccessor Owner Trustees and Additional Owner Trustees
9.01. Eligibility Requirements for Owner Trustee..................29
9.02. Replacement of Owner Trustee................................29
9.03. Successor Owner Trustee.....................................30
9.04. Merger or Consolidation of Owner Trustee....................30
9.05. Appointment of Co-Trustee or Separate Trustee...............30
ARTICLE XMiscellaneous
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Section Page
10.01. Amendments..................................................32
10.02. No Legal Title to Owner Trust Estate........................33
10.03. Limitations on Rights of Others.............................33
10.04. Notices.....................................................34
10.05. Severability................................................34
10.06. Separate Counterparts.......................................34
10.07. Successors and Assigns......................................34
10.08. No Petition.................................................34
10.09. No Recourse.................................................35
10.10. Headings....................................................35
10.11. Governing Lw................................................35
10.12. Integration.................................................35
10.13. Rights of Credit Enhancer to Exercise Rights of
Certificateholders........35
Signatures .................................................................40
EXHIBIT
Exhibit A - Form of Certificate............................................A-1
Exhibit B - Certificate of Trust of Residential Home Equity
Loan Trust 1998-HS1 ...................................B-1
Exhibit C - Form of 144A Investment Representation.........................C-1
Exhibit D - Form of Investor Representation Letter.........................D-1
Exhibit E - Form of Transferor Representation Letter.......................E-1
Exhibit F - Form of Certificate of Non-Foreign Status......................F-1
Exhibit G - Form of ERISA Representation Letter............................G-1
Exhibit H - Form of Representation Letter..................................H-1
Exhibit I - RFC Demand Note..............................................I-1
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This Amended and Restated Trust Agreement, dated as of January 29, 1998
(as amended from time to time, this "Trust Agreement"), between RESIDENTIAL
FUNDING MORTGAGE SECURITIES II, INC., a Delaware corporation, as depositor (the
"Depositor") and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as
owner trustee (the
"Owner Trustee"),
WITNESSETH THAT:
WHEREAS, the Depositor and the Owner Trustee entered into a trust
agreement dated as of January 20, 1998, in connection with the formation of a
Delaware business trust (the "Original Trust Agreement");
WHEREAS, the Depositor and the Owner Trustee wish to amend and restate the
Original Trust Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the Depositor and the Owner Trustee agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. For all purposes of this Trust Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in Appendix A to the Indenture dated January 29, 1998
(the "Indenture"), between Home Equity Loan Trust 1998- HS1, as issuer, and The
Chase Manhattan Bank, as indenture trustee. All other capitalized
terms used herein shall have the meanings specified herein.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Trust Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Trust Agreement or in any such certificate or other document,
and accounting terms partly defined in this Trust Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this Trust
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Trust Agreement or in any such certificate or
other document shall control.
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(c) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Trust Agreement shall refer to this Trust Agreement as a whole
and not to any particular provision of this Trust Agreement; Article, Section
and Exhibit references contained in this Trust Agreement are references to
Articles, Sections and Exhibits in or to this Trust Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation".
(d) The definitions contained in this Trust Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
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ARTICLE II
Organization
Section 2.01. Name. The trust created hereby (the "Trust") shall be known
as "Home Equity Loan Trust 1998-HS1," in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued.
Section 2.02. Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Certificateholders
and the Depositor.
Section 2.03. Purposes and Powers. The purpose of the Trust is to engage in
the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Trust Agreement and to sell the Notes and
the Certificates;
(ii) to purchase the Revolving Credit Loans and to pay the
organizational, start-up and transactional expenses of the Trust;
(iii) to assign, grant, transfer, pledge and convey the Revolving
Credit Loans pursuant to the Indenture and to hold, manage and distribute
to the Certificateholders pursuant to Section 5.01 any portion of the
Revolving Credit Loans released from the Lien of, and remitted to the
Trust pursuant to the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith, including,
without limitation, to accept additional contributions of equity that are
not subject to the Lien of the Indenture; and
(vi) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation
of the Owner Trust Estate and the making of distributions to the
Certificateholders and the Noteholders.
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 Trust Agreement or the
Basic Documents while any Note is outstanding without the consent of the Holders
of a majority of the Certificate Percentage Interest of the Certificates and the
Indenture Trustee.
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Section 2.04. Appointment of Owner Trustee. The Depositor hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
Section 2.05. Initial Capital Contribution of Owner Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Trust,
as of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges
receipt in trust from the Depositor, as of the date hereof, of the foregoing
contribution, which shall constitute the initial corpus of the Trust and shall
be deposited in the Certificate Distribution Account. The Owner Trustee also
acknowledges on behalf of the Issuer, the receipt in trust of the Revolving
Credit Loans and a Credit Enhancement Instrument assigned to the Trust pursuant
to Section 3.01, which shall constitute the Owner Trust Estate.
Section 2.06. Declaration of Trust. The Owner Trustee hereby declares that
it shall hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholders, subject to
the obligations of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Trust Agreement constitute the governing instrument
of such business trust. Effective as of the date hereof, the Owner Trustee shall
have all rights, powers and duties set forth herein and in the Business Trust
Statute with respect to accomplishing the purposes of the Trust. It is the
intention of the parties hereto that, solely for federal, state and local income
and franchise tax purposes, the Trust shall be treated as an entity wholly owned
by the Depositor or an affiliate thereof, with the assets of the entity being
the Trust Estate, and the Notes being debt of the entity and the provisions of
this Trust Agreement shall be interpreted to further this intention. If more
than one person owns the Certificates, then it is the intention of the parties
hereto, that solely for federal, state and local income and franchise tax
purposes the Trust shall be treated as a partnership, with the assets of the
partnership being the Trust Estate, the partners of the partnership being the
Certificateholders and the Notes being debt of the partnership and the
provisions of this Trust Agreement shall be interpreted to further this
intention. The parties agree that, unless otherwise required by appropriate tax
authorities, the Owner Trust will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the characterization
of the Owner Trust as an entity wholly owned by the Depositor or an affiliate
thereof, or if two or more persons own the Certificates, as a partnership for
such tax purposes.
Section 2.07. Liability of the Holders of the Certificates. The Holders of
the Certificates shall be liable for any entity level taxes imposed on the Owner
Trust.
Section 2.08. Title to Trust Property. Legal title to the Owner Trust
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Owner Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
Section 2.09. Situs of Trust. The Trust will be located and administered in
the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware or the State of
New York. The Trust shall not have any
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employees in any state other than Delaware; provided, however, that nothing
herein shall restrict or prohibit the Owner Trustee from having employees within
or without the State of Delaware or taking actions outside the State of Delaware
in order to comply with Section 2.03. Payments will be received by the Trust
only in Delaware or New York, and payments will be made by the Trust only from
Delaware or New York. The only office of the Trust will be at the Corporate
Trust Office in Delaware.
Section 2.10. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee that:
(i) The Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently
conducted.
(ii) The Depositor is duly qualified to do business as a foreign
corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of its
property or the conduct of its business shall require such qualifications
and in which the failure to so qualify would have a material adverse
effect on the business, properties, assets or condition (financial or
other) of the Depositor and the ability of the Depositor to perform under
this Trust Agreement.
(iii) The Depositor has the power and authority to execute and
deliver this Trust Agreement and to carry out its terms; the Depositor has
full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trust as part of the Trust and the
Depositor has duly authorized such sale and assignment and deposit to the
Trust by all necessary corporate action; and the execution, delivery and
performance of this Trust Agreement have been duly authorized by the
Depositor by all necessary corporate action.
(iv) The consummation of the transactions contemplated by this Trust
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Depositor, or any indenture, agreement or
other instrument to which the Depositor is a party or by which it is
bound; nor result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents); nor violate
any law or, to the best of the Depositor's knowledge, any order, rule or
regulation applicable to the Depositor of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties.
Section 2.11. Payment of Trust Fees. The Owner Trustee shall pay the
Trust's fees and expenses incurred with respect to the performance of the
Trust's duties under the Indenture.
Section 2.12. Purchase and Pledge of RFC Demand Note.
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On the Closing Date, the Owner Trustee on behalf of the Issuer shall
purchase from the Seller the RFC Demand Note, which shall be issued with a
principal amount of $7,652,710 and in the form attached hereto as Exhibit I, in
exchange for cash equal to such principal amount which shall be paid from the
proceeds to the Issuer of the sale of the Term Notes. The Issuer shall then
immediately deliver to the Indenture Trustee the RFC Demand Note (with the
Indenture Trustee indicated as payee thereon), and shall pledge the RFC Demand
Note together with all proceeds thereof to the Indenture Trustee in accordance
with the Indenture. Any amounts paid under the terms of the RFC Demand Note that
are not distributed to the Noteholders, and that are released from the lien of
the Indenture to the Certificate Paying Agent in accordance with Section 3.29
thereof, shall be distributed to the Certificateholders in accordance with
Section 5.01(a) hereof.
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ARTICLE III
Conveyance of the Revolving Credit Loans;
Certificates
Section 3.01. Conveyance of the Revolving Credit Loans. The Depositor,
concurrently with the execution and delivery hereof, does hereby transfer,
convey, sell and assign to the Trust, on behalf of the Holders of the Notes and
the Certificates and the Credit Enhancer, without recourse, all its right, title
and interest in and to the Revolving Credit Loans. The Depositor will also
provide the Trust with the Credit Enhancement Instrument.
The parties hereto intend that the transaction set forth herein be a sale
by the Depositor to the Trust of all of its right, title and interest in and to
the Revolving Credit Loans. In the event that the transaction set forth herein
is not deemed to be a sale, the Depositor hereby grants to the Trust a security
interest in all of its right, title and interest in, to and under the Owner
Trust Estate, all distributions thereon and all proceeds thereof; and this Trust
Agreement shall constitute a security agreement under applicable law.
Section 3.02. Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.05 and until the conveyance
of the Revolving Credit Loans pursuant to Section 3.01 and the issuance of the
Certificates, the Depositor shall be the sole Certificateholder.
Section 3.03. The Certificates. The Certificates shall be issued in
minimum denominations of a Certificate Percentage Interest of 10.0000% and
integral multiples of 0.0001% in excess thereof; provided, however, that
Certificates may be issued in minimum denominations of less than 10.0000% in
accordance with the provisions of Section 3.12.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee and
authenticated in the manner provided in Section 3.04. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefit of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of authentication and delivery of such
Certificates. A Person shall become a Certificateholder and shall be entitled to
the rights and subject to the obligations of a Certificateholder hereunder upon
such Person's acceptance of a Certificate duly registered in such Person's name,
pursuant to Section 3.05.
A transferee of a Certificate shall become a Certificateholder and shall
be entitled to the rights and subject to the obligations of a Certificateholder
hereunder upon such transferee's acceptance of a Certificate duly registered in
such transferee's name pursuant to and upon satisfaction of the conditions set
forth in Section 3.05.
Section 3.04. Authentication of Certificates. Concurrently with the
acquisition of the Revolving Credit Loans by the Trust, the Owner Trustee or the
Certificate Paying Agent shall
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cause the Certificates in an initial Certificate Percentage Interest of 100.00%
to be executed on behalf of the Trust, authenticated and delivered to or upon
the written order of the Depositor, signed by its chairman of the board, its
president or any vice president, without further corporate action by the
Depositor, in authorized denominations. No Certificate shall entitle its holder
to any benefit under this Trust Agreement or be valid for any purpose unless
there shall appear on such Certificate a certificate of authentication
substantially in the form set forth in Exhibit A, executed by the Owner Trustee
or the Certificate Paying Agent, by manual signature; such authentication shall
constitute conclusive evidence that such Certificate shall have been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication.
Section 3.05. Registration of and Limitations on Transfer and Exchange of
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.09, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Indenture
Trustee shall be the initial Certificate Registrar. If the Certificate Registrar
resigns or is removed, the Owner Trustee shall appoint a successor Certificate
Registrar.
Subject to satisfaction of the conditions set forth below, upon surrender
for registration of transfer of any Certificate at the office or agency
maintained pursuant to Section 3.09, the Owner Trustee shall execute,
authenticate and deliver (or shall cause the Certificate Registrar as its
authenticating agent to authenticate and deliver), in the name of the designated
transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate amount dated the date of authentication by the
Owner Trustee or any authenticating agent. At the option of a Certificateholder,
Certificates may be exchanged for other Certificates of authorized denominations
of a like aggregate amount upon surrender of the Certificates to be exchanged at
the office or agency maintained pursuant to Section 3.09.
Every Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Certificateholder
or such Certificateholder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or exchange shall be
cancelled and subsequently disposed of by the Certificate Registrar in
accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar 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 Certificates.
Except as described below, each Certificateholder shall establish its
non-foreign status by submitting to the Certificate Paying Agent an IRS Form W-9
and the Certificate of Non-Foreign Status set forth in Exhibit F hereto.
A Certificate may be transferred to a Certificateholder unable to
establish its non-foreign status as described in the preceding paragraph only if
such Certificateholder provides an Opinion
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of Counsel, which Opinion of Counsel shall not be an expense of the Trust, the
Owner Trustee, the Certificate Registrar or the Depositor, satisfactory to the
Depositor and the Credit Enhancer, that such transfer (1) will not affect the
tax status of the Owner Trust and (2) will not adversely affect the interests of
any Certificateholder, Noteholder or the Credit Enhancer, including, without
limitation, as a result of the imposition of any United States federal
withholding taxes on the Trust (except to the extent that such withholding taxes
would be payable solely from amounts otherwise distributable to the Certificate
of the prospective transferee). If such transfer occurs and such foreign
Certificateholder becomes subject to such United States federal withholding
taxes, any such taxes will be withheld by the Indenture Trustee. Each
Certificateholder unable to establish its non-foreign status shall submit to the
Certificate Paying Agent a copy of its Form W-8 and shall resubmit such Form W-8
every three years.
No transfer, sale, pledge or other disposition of a Certificate shall be
made unless such transfer, sale, pledge or other disposition is exempt from the
registration requirements of the Securities Act and any applicable state
securities laws or is made in accordance with said Act and laws. In the event of
any such transfer, the Certificate Registrar or the Depositor shall prior to
such transfer require the transferee to execute (A) either (i) (a) an investment
letter in substantially the form attached hereto as Exhibit C (or in such form
and substance reasonably satisfactory to the Certificate Registrar and the
Depositor) which investment letters shall not be an expense of the Trust, the
Owner Trustee, the Certificate Registrar, the Master Servicer or the Depositor
and which investment letter states that, among other things, such transferee (a)
is a "qualified institutional buyer" as defined under Rule 144A, acting for its
own account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (b) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the Securities Act,
provided by Rule 144A or (ii) (a) a written Opinion of Counsel acceptable to and
in form and substance satisfactory to the Certificate Registrar and the
Depositor that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from said Act and laws or is
being made pursuant to said Act and laws, which Opinion of Counsel shall not be
an expense of the Trust, the Owner Trustee, the Certificate Registrar, the
Master Servicer or the Depositor and (b) the transferee executes a
representation letter, substantially in the form of Exhibit D hereto, and the
transferor executes a representation letter, substantially in the form of
Exhibit E hereto, each acceptable to and in form and substance satisfactory to
the Certificate Registrar and the Depositor certifying the facts surrounding
such transfer, which representation letters shall not be an expense of the
Trust, the Owner Trustee, the Certificate Registrar, the Master Servicer or the
Depositor and (B) the Certificate of Non-Foreign Status (in substantially the
form attached hereto as Exhibit F) acceptable to and in form and substance
reasonably satisfactory to the Certificate Registrar and the Depositor, which
certificate shall not be an expense of the Trust, the Owner Trustee, the
Certificate Registrar or the Depositor. If the Certificateholder is unable to
provide a Certificate of Non-Foreign Status, the Certificateholder must provide
an Opinion of Counsel as described in the preceding paragraph. The
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trust, the Owner Trustee, the Certificate Registrar, the
Master Servicer and the Depositor against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of Certificates or any interest therein shall be made to any
employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts
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and annuities, Xxxxx plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that are subject to ERISA, or Section 4975 of the
Code (collectively, "Plan"), any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "plan
assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss.2510.3-101 ("Plan Assets") unless the Depositor, the
Owner Trustee, the Certificate Registrar and the Master Servicer are provided
with an Opinion of Counsel which establishes to the satisfaction of the
Depositor, the Owner Trustee, the Certificate Registrar and the Master Servicer
that the purchase of Certificates is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Depositor, the Owner Trustee, the
Certificate Registrar or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Owner Trustee, the Certificate
Registrar or the Master Servicer. In lieu of such Opinion of Counsel, a Plan,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with Plan Assets of a Plan may provide a
certification in the form of Exhibit G to this Agreement, which the Depositor,
the Owner Trustee, the Certificate Registrar and the Master Servicer may rely
upon without further inquiry or investigation. Neither an Opinion of Counsel nor
a certification will be required in connection with the initial transfer of any
such Certificate by the Depositor to an affiliate of the Depositor (in which
case, the Depositor or any affiliate thereof shall be deemed to have represented
that such affiliate is not a Plan or a Person investing Plan Assets of any Plan)
and the Owner Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Owner Trustee, shall be a written
representation) from the Depositor of the status of such transferee as an
affiliate of the Depositor.
In addition, no transfer of a Certificate shall be permitted, and no such
transfer shall be registered by the Certificate Registrar or be effective
hereunder, unless evidenced by an Opinion of Counsel, which establishes that
such transfer or the registration of such transfer would not cause the Trust to
be classified as a publicly traded partnership, by having more than 100
Certificateholders at any time during the taxable year of the Trust, an
association taxable as a corporation, a corporation or a taxable mortgage pool
for federal and relevant state income tax purposes, which Opinion of Counsel
shall not be an expense of the Certificate Registrar and shall be an expense of
the proposed transferee. No Opinion of Counsel will be required if such transfer
is made to a nominee of an existing beneficial holder of a Certificate.
In addition, no transfer, sale, assignment, pledge or other disposition of
a Certificate shall be made unless the proposed transferee executes a
representation letter substantially in the form of Exhibit D, or substantially
in the form of Exhibit H hereto, that (1) the transferee is acquiring the
Certificate for its own behalf and is not acting as agent or custodian for any
other Person or entity in connection with such acquisition and (2) if the
transferee is a partnership, grantor trust or S corporation for federal income
tax purposes, the Certificates are not more than 50% of the assets of the
partnership, grantor trust or S corporation.
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate shall be surrendered to the Certificate Registrar, or if
the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and
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(b) there shall be delivered to the Certificate Registrar and the Owner Trustee
such security or indemnity as may be required by them to save each of them and
the Issuer from harm, then in the absence of notice to the Certificate Registrar
or the Owner Trustee that such Certificate has been acquired by a bona fide
purchaser, the Owner Trustee shall execute on behalf of the Trust and the Owner
Trustee or the Certificate Paying Agent, as the Trust's authenticating agent,
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and denomination. In connection with the issuance of any new Certificate
under this Section 3.06, the Owner Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section 3.06 shall constitute conclusive evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 3.07. Persons Deemed Certificateholders. Prior to due presentation
of a Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar or any Certificate Paying Agent may treat the Person in
whose name any Certificate is registered in the Certificate Register as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 5.02 and for all other purposes whatsoever, and none of the Trust, the
Owner Trustee, the Certificate Registrar or any Paying Agent shall be bound by
any notice to the contrary.
Section 3.08. Access to List of Certificateholders' Names and Addresses.
The Certificate Registrar shall furnish or cause to be furnished to the
Depositor or the Owner Trustee, within 15 days after receipt by the Certificate
Registrar of a written request therefor from the Depositor or the Owner Trustee,
a list, in such form as the Depositor or the Owner Trustee, as the case may be,
may reasonably require, of the names and addresses of the Certificateholders as
of the most recent Record Date. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Trust, the
Depositor, the Certificate Registrar or the Owner Trustee accountable by reason
of the disclosure of its name and address, regardless of the source from which
such information was derived.
Section 3.09. Maintenance of Office or Agency. The Owner Trustee, on
behalf of the Trust, shall maintain in the City of New York an office or offices
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Owner Trustee
in respect of the Certificates and the Basic Documents may be served. The Owner
Trustee initially designates the Corporate Trust Office of the Indenture Trustee
as its office for such purposes. The Owner Trustee shall give prompt written
notice to the Depositor and the Certificateholders of any change in the location
of the Certificate Register or any such office or agency.
Section 3.10. Certificate Paying Agent. (a) The Certificate Paying Agent
shall make distributions to Certificateholders from the Certificate Distribution
Account on behalf of the Trust in accordance with the provisions of the
Certificates and Section 5.01 hereof from payments remitted to the Certificate
Paying Agent by the Indenture Trustee pursuant to Section 3.05 of the Indenture.
The Trust hereby appoints the Indenture Trustee as Certificate Paying Agent and
the Indenture Trustee hereby accepts such appointment and further agrees that it
will
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be bound by the provisions of this Trust Agreement relating to the Certificate
Paying Agent and shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Certificates in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(ii) give the Owner Trustee notice of any default by the Trust of
which it has actual knowledge in the making of any payment required to be
made with respect to the Certificates;
(iii) at any time during the continuance of any such default, upon
the written request of the Owner Trustee, forthwith pay to the Owner
Trustee on behalf of the Trust all sums so held in Trust by such
Certificate Paying Agent;
(iv) immediately resign as Certificate Paying Agent and forthwith
pay to the Owner Trustee on behalf of the Trust all sums held by it in
trust for the payment of Certificates if at any time it ceases to meet the
standards required to be met by the Certificate Paying Agent at the time
of its appointment;
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Certificates of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith; and
(vi) deliver to the Owner Trustee a copy of the report to
Certificateholders prepared with respect to each Payment Date by the
Master Servicer pursuant to Section 4.01 of the Servicing Agreement.
(b) The Trust may revoke such power and remove the Certificate Paying
Agent if the Owner Trustee determines in its sole discretion that the
Certificate Paying Agent shall have failed to perform its obligations under this
Trust Agreement in any material respect. The Indenture Trustee shall be
permitted to resign as Certificate Paying Agent upon 30 days' written notice to
the Owner Trustee; provided the Indenture Trustee is also resigning as Paying
Agent under the Indenture at such time. In the event that the Indenture Trustee
shall no longer be the Certificate Paying Agent under this Trust Agreement and
Paying Agent under the Indenture, the Owner Trustee shall appoint a successor to
act as Certificate Paying Agent (which shall be a bank or trust company) and
which shall also be the successor Paying Agent under the Indenture. The Owner
Trustee shall cause such successor Certificate Paying Agent or any additional
Certificate Paying Agent appointed by the Owner Trustee to execute and deliver
to the Owner Trustee an instrument to the effect set forth in this Section 3.10
as it relates to the Certificate Paying Agent. The Certificate Paying Agent
shall return all unclaimed funds to the Trust and upon removal of a Certificate
Paying Agent such Certificate Paying Agent shall also return all funds in its
possession to the Trust. The provisions of Sections 6.01, 6.03, 6.04 and 7.01
shall apply to the Certificate Paying Agent to the extent applicable. Any
reference in this Agreement to the Certificate Paying Agent shall include any
co-paying agent unless the context requires otherwise.
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(c) The Certificate Paying Agent shall establish and maintain with itself
the Certificate Distribution Account in which the Certificate Paying Agent shall
deposit, on the same day as it is received from the Indenture Trustee, each
remittance received by the Certificate Paying Agent with respect to payments
made pursuant to the Indenture. The Certificate Paying Agent shall make all
distributions of Certificate Distribution Amounts on the Certificates, from
moneys on deposit in the Certificate Distribution Account.
Section 3.11. Cooperation. The Owner Trustee shall cooperate in all
respects with any reasonable request by the Credit Enhancer for action to
preserve or enforce the Credit Enhancer's rights or interest under this Trust
Agreement or the Insurance Agreement, consistent with this Trust Agreement and
without limiting the rights of the Certificateholders as otherwise expressly set
forth in this Trust Agreement.
Section 3.12. Additional Certificate Security Balances Upon Issuance of
Capped Funding Notes. (a) On any date on which Variable Funding Notes are
exchanged for Capped Funding Notes pursuant to Section 4.01(d) of the Indenture,
the Security Balance of one or more Certificates shall be increased in an amount
equal to the Additional Certificate Security Balance as required pursuant to the
Opinion of Counsel required to be delivered pursuant to Section 4.01(d) of the
Indenture in connection with the issuance of the Capped Funding Notes. In
addition, on any Payment Date on which the Additional Balance Differential for
such Payment Date if added to the aggregate Security Balance of the Variable
Funding Notes (after application of any principal payments to be made thereon on
such Payment Date) would cause the aggregate Security Balance thereof to exceed
the Maximum Variable Funding Balance, then the Security Balance of one or more
Certificates shall be increased by the amount of such excess.
(b) 100.00% of the value of the Additional Certificate Security Balance
shall be added to any Certificate held by the Seller or an Affiliate thereof
without the consent of the other Certificateholders; or if no such Certificate
exists, a new Certificate or Certificates shall be issued at the direction of
the Seller or an Affiliate thereof having in the aggregate a Security Balance
equal to such 100.00% of such value. Alternatively, the Depositor may allocate
any portion of such value to a Certificateholder other than the Depositor or an
Affiliate thereof, provided that such Certificateholder provides its written
consent to the Depositor and the Owner Trustee.
(c) Following such increase, the Certificate Percentage Interest of each
Certificate shall be recalculated, the numerator of which shall be the value
thereof including the respective value of the portion of the Additional
Certificate Security Balance added thereto pursuant to this Section 3.12, and
the denominator of which shall be the value of all the Certificates following
such increase. The Owner Trustee shall issue new Certificates with new
Certificate Percentage Interests to each Holder of the Certificates, with such
Certificate Percentage Interests calculated to four decimal places. In addition,
the new Certificates may be issued in minimum denominations of 0.0001% and
integral multiples of 0.0001% in excess thereof. This subsection, and
subsections (d) and (e) below, shall not apply in the event that any Additional
Certificate Security Balance is allocated in accordance with subsection (b)
either (i) at any time when there is only one Certificateholder, or (ii) at any
time when there is more than one Certificateholder if such Additional
Certificate Security Balance is allocated on a pro rata basis among all
Certificates.
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(d) For purposes of the foregoing, the "value" of any Certificate or any
Additional Certificate Security Balance added thereto shall be determined by the
Seller in its sole discretion based on reasonable cash flow assumptions and
valuation methods, and any such determination shall be binding on the
Certificateholders. If the Seller is unable to determine the "value," the Owner
Trustee shall determine the "value" using the same assumptions and methods.
(e) The Owner Trustee, the Indenture Trustee and the Issuer agree to
cooperate with each other and the Depositor and the Seller and to cause no
unreasonable delay in adjusting the Certificate Percentage Interests of the
Certificates pursuant to this Section 3.12 and the issuing of Capped Funding
Notes in connection with Section 4.01(d) of the Indenture.
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ARTICLE IV
Authority and Duties of Owner Trustee
Section 4.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to be
a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party and any
amendment or other agreement or instrument described herein, in each case, in
such form as the Owner Trustee shall approve, as evidenced conclusively by the
Owner Trustee's execution thereof. In addition to the foregoing, the Owner
Trustee is obligated to take all actions required of the Trust pursuant to the
Basic Documents.
Section 4.02. General Duties. The Owner Trustee shall be responsible to
administer the Trust pursuant to the terms of this Trust Agreement and the Basic
Documents to which the Trust is a party and in the interest of the
Certificateholders, subject to the Basic Documents and in accordance with the
provisions of this Trust Agreement.
Section 4.03. Action upon Instruction. (a) Subject to this Article IV and
in accordance with the terms of the Basic Documents, the Certificateholders may
by written instruction direct the Owner Trustee in the management of the Trust.
Such direction may be exercised at any time by written instruction of the
Certificateholders pursuant to this Article IV.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be required
to take any action hereunder or under any Basic Document if the Owner Trustee
shall have reasonably determined, or shall have been advised by counsel, that
such action is likely to result in liability on the part of the Owner Trustee or
is contrary to the terms hereof or of any Basic Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Trust Agreement or
under any Basic Document, or in the event that the Owner Trustee is unsure as to
the application of any provision of this Trust Agreement or any Basic Document
or any such provision is ambiguous as to its application, or is, or appears to
be, in conflict with any other applicable provision, or in the event that this
Trust Agreement permits any determination by the Owner Trustee or is silent or
is incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Certificateholders (with a copy to the Credit Enhancer) requesting
instruction as to the course of action to be adopted, and to the extent the
Owner Trustee acts in good faith in accordance with any written instructions
received from Holders of Certificates representing a majority of the Security
Balance thereof, the Owner Trustee shall not be liable on account of such action
to any Person. If the Owner Trustee shall not have received appropriate
instruction within 10 days of such notice (or within such shorter period of time
as reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Trust Agreement or the Basic
Documents, as it shall deem to be in the best interests of the
Certificateholders, and the Owner Trustee shall have no liability to any Person
for such action or inaction.
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Section 4.04. No Duties Except as Specified under Specified Documents or
in Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Trust Agreement, (ii) in accordance with the Basic
Documents and (iii) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 4.03; and no implied duties or obligations
shall be read into this Trust Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Securities and Exchange Commission filing
for the Trust or to record this Trust Agreement or any Basic Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any liens on any part of the
Owner Trust Estate that result from actions by, or claims against, the Owner
Trustee that are not related to the ownership or the administration of the Owner
Trust Estate.
Section 4.05. Restrictions. (a) The Owner Trustee shall not take any
action (x) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (y) that, to the actual knowledge of the Owner Trustee, would
result in the Trust becoming taxable as a corporation for federal income tax
purposes. The Certificateholders shall not direct the Owner Trustee to take
action that would violate the provisions of this Section 4.05.
(b) The Owner Trustee shall not convey or transfer any of the Trust's
properties or assets, including those included in the Trust Estate, to any
person unless (a) it shall have received an Opinion of Counsel to the effect
that such transaction will not have any material adverse tax consequence to the
Trust or any Certificateholder and (b) such conveyance or transfer shall not
violate the provisions of Section 3.16(b) of the Indenture.
Section 4.06. Prior Notice to Certificateholders and the Credit Enhancer
with Respect to Certain Matters. With respect to the following matters, the
Owner Trustee shall not take action unless, at least 30 days before the taking
of such action, the Owner Trustee shall have notified the Certificateholders and
the Credit Enhancer in writing of the proposed action and Holders of
Certificates representing a majority of the Security Balance thereof and the
Credit Enhancer shall not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that such Certificateholders and the
Credit Enhancer have withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims or
lawsuits brought in connection with the collection of cash distributions due and
owing under the Revolving Credit Loans) and the compromise of any action, claim
or lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of cash distributions due and
owing under the Revolving Credit Loans);
(b) the election by the Trust to file an amendment to the Certificate of
Trust (unless such amendment is required to be filed under the Business Trust
Statute);
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(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
and
(e) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Trust Agreement
of a successor Certificate Registrar or Certificate Paying Agent or the consent
to the assignment by the Note Registrar, Paying Agent, Indenture Trustee,
Certificate Registrar or Certificate Paying Agent of its obligations under the
Indenture or this Trust Agreement, as applicable.
Section 4.07. Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the direction
of Certificateholders evidencing not less than a majority of the outstanding
Security Balance of the Certificates, and with the consent of the Credit
Enhancer, to (a) remove the Master Servicer under the Servicing Agreement
pursuant to Section 7.01 thereof or (b) except as expressly provided in the
Basic Documents, sell the Revolving Credit Loans after the termination of the
Indenture. The Owner Trustee shall take the actions referred to in the preceding
sentence only upon written instructions signed by Certificateholders evidencing
not less than a majority of the outstanding Security Balance of the Certificates
and with the consent of the Credit Enhancer.
Section 4.08. Action by Certificateholders with Respect to Bankruptcy. The
Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Certificateholders and with the consent of the Credit Enhancer and the delivery
to the Owner Trustee by each such Certificateholder of a certificate certifying
that such Certificateholder reasonably believes that the Trust is insolvent.
Section 4.09. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or to refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Trust Agreement or any of the Basic
Documents or would be contrary to Section 2.03, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
Section 4.10. Majority Control. Except as expressly provided herein, any
action that may be taken by the Certificateholders under this Trust Agreement
may be taken by the Certificateholders evidencing not less than a majority of
the outstanding Security Balance of the Certificates. Except as expressly
provided herein, any written notice of the Certificateholders delivered pursuant
to this Trust Agreement shall be effective if signed by Certificateholders
evidencing not less than a majority of the outstanding Security Balance of the
Certificates at the time of the delivery of such notice.
Section 4.11. Doing Business in Other Jurisdictions. Notwithstanding
anything contained herein to the contrary, neither Wilmington Trust Company nor
the Owner Trustee shall be required to take any action in any jurisdiction other
than in the State of Delaware if the taking of such action will, even after the
appointment of a co-trustee or separate trustee in accordance
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with Section 9.05 hereof, (i) require the consent or approval or authorization
or order of or the giving of notice to, or the registration with or the taking
of any other action in respect of, any state or other governmental authority or
agency of any jurisdiction other than the State of Delaware; (ii) result in any
fee, tax or other governmental charge under the laws of the State of Delaware
becoming payable by Wilmington Trust Company, or (iii) subject Wilmington Trust
Company to personal jurisdiction in any jurisdiction other than the State of
Delaware for causes of action arising from acts unrelated to the consummation of
the transactions by Wilmington Trust Company or the Owner Trustee, as the case
may be, contemplated hereby.
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ARTICLE V
Application of Trust Funds
Section 5.01. Distributions. (a) On each Payment Date, the Certificate
Paying Agent shall distribute to the Certificateholders all funds on deposit in
the Certificate Distribution Account and available therefor (as provided in
Section 3.05 of the Indenture), as the Certificate Distribution Amount for such
Payment Date. All distributions made pursuant to this Section shall be
distributed to the Certificateholders on a pro rata basis based on the
Certificate Percentage Interests thereof.
(b) In the event that any withholding tax is imposed on the distributions
(or allocations of income) to a Certificateholder, such tax shall reduce the
amount otherwise distributable to the Certificateholder in accordance with this
Section 5.01. The Certificate Paying Agent is hereby authorized and directed to
retain or cause to be retained from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is legally
owed by the Trust (but such authorization shall not prevent the Owner Trustee
from contesting any such tax in appropriate proceedings, and withholding payment
of such tax, if permitted by law, pending the outcome of such proceedings). The
amount of any withholding tax imposed with respect to a Certificateholder shall
be treated as cash distributed to such Certificateholder at the time it is
withheld by the Certificate Paying Agent and remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is payable with
respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Certificate Paying Agent may in its sole discretion
withhold such amounts in accordance with this paragraph (b).
(c) Distributions to Certificateholders shall be subordinated to the
creditors of the Trust, including the Noteholders.
(d) Allocations of profits and losses, as determined for federal income
tax purposes, shall be made to the Certificateholders on a pro rata basis based
on the Certificate Percentage Interests thereof.
Section 5.02. Method of Payment. Subject to Section 8.01(c), distributions
required to be made to Certificateholders on any Payment Date as provided in
Section 5.01 shall be made to each Certificateholder of record on the preceding
Record Date either by, in the case of any Certificateholder owning Certificates
having denominations aggregating at least $1,000,000, wire transfer, in
immediately available funds, to the account of such Holder at a bank or other
entity having appropriate facilities therefor, if such Certificateholder shall
have provided to the Certificate Registrar appropriate written instructions at
least five Business Days prior to such Payment Date or, if not, by check mailed
to such Certificateholder at the address of such Holder appearing in the
Certificate Register.
Section 5.03. Signature on Returns. The Owner Trustee shall sign on behalf
of the Trust the tax returns of the Trust.
Section 5.04. Statements to Certificateholders. On each Payment Date, the
Certificate Paying Agent shall send to each Certificateholder the statement or
statements provided to the
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Owner Trustee and the Certificate Paying Agent by the Master Servicer pursuant
to Section 4.01 of the Servicing Agreement with respect to such Payment Date.
Section 5.05. Tax Reporting. So long as the Depositor or any affiliate of
the Depositor owns 100% of the Certificates (the "Original Certificateholder"),
then no separate federal and state income tax returns and information returns or
statements will be filed with respect to the Trust. If the Original
Certificateholder is no longer the sole Certificateholder, the subsequent
holders of the Certificates by their acceptance hereof, agree to appoint the
Original Certificateholder as their agent for the tax matters partner and the
Original Certificateholder, as agent for such holders, agrees to perform all
duties necessary to comply with federal and state income tax laws.
The Certificateholders agree by their purchase of 100% of the Certificates
to treat the Trust as an entity wholly owned by the Depositor or any affiliate
of the Depositor for purposes of federal and state income tax, franchise tax and
any other tax measured in whole or in part by income, with the assets of the
entity being the assets held by the Trust, and the Notes being debt of the
Trust.
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ARTICLE VI
Concerning the Owner Trustee
Section 6.01. Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Trust Agreement. The
Owner Trustee and the Certificate Paying Agent also agree to disburse all moneys
actually received by it constituting part of the Owner Trust Estate upon the
terms of the Basic Documents and this Trust Agreement. The Owner Trustee shall
not be answerable or accountable hereunder or under any Basic Document under any
circumstances, except (i) for its own willful misconduct, negligence or bad
faith or negligent failure to act or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 6.03 expressly made by the Owner
Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) No provision of this Trust Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights, duties or powers
hereunder or under any Basic Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;
(b) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(c) The Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Trust Agreement or for the due execution hereof
by the Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate, or for or in respect of the validity
or sufficiency of the Basic Documents, the Notes, the Certificates, other than
the certificate of authentication on the Certificates, if executed by the Owner
Trustee and the Owner Trustee shall in no event assume or incur any liability,
duty, or obligation to any Noteholder or to any Certificateholder, other than as
expressly provided for herein or expressly agreed to in the Basic Documents;
(d) The execution, delivery, authentication and performance by it of this
Trust Agreement will not require the authorization, consent or approval of, the
giving of notice to, the filing or registration with, or the taking of any other
action with respect to, any governmental authority or agency;
(e) The Owner Trustee shall not be liable for the default or misconduct of
the Depositor, the Indenture Trustee or the Master Servicer under any of the
Basic Documents or otherwise and the Owner Trustee shall have no obligation or
liability to perform the obligations of the Trust under this Trust Agreement or
the Basic Documents that are required to be performed by the Indenture Trustee
under the Indenture or the Seller under the Revolving Credit Loan Purchase
Agreement; and
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(f) The Owner Trustee shall be under no obligation to exercise any of the
rights or powers vested in it or duties imposed by this Trust Agreement, or to
institute, conduct or defend any litigation under this Trust Agreement or
otherwise or in relation to this Trust Agreement or any Basic Document, at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders have offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner Trustee
to perform any discretionary act enumerated in this Trust Agreement or in any
Basic Document shall not be construed as a duty, and the Owner Trustee shall not
be answerable for other than its negligence, bad faith or willful misconduct in
the performance of any such act.
Section 6.02. Furnishing of Documents. The Owner Trustee shall furnish to
the Securityholders promptly upon receipt of a written reasonable request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Trust under the Basic Documents.
Section 6.03. Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Trust Agreement;
(b) It has taken all corporate action necessary to authorize the execution
and delivery by it of this Trust Agreement, and this Trust Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Trust Agreement on its behalf;
(c) Neither the execution nor the delivery by it of this Trust Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene any
federal or Delaware law, governmental rule or regulation governing the banking
or trust powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or bylaws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound;
(d) This Trust Agreement, assuming due authorization, execution and
delivery by the Owner Trustee and the Depositor, constitutes a valid, legal and
binding obligation of the Owner Trustee, enforceable against it in accordance
with the terms hereof subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally and to general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law;
(e) The Owner Trustee is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default might have consequences that
would materially and adversely affect the condition (financial or other) or
operations of the Owner Trustee or its properties or might have consequences
that would materially adversely affect its performance hereunder; and
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(f) No litigation is pending or, to the best of the Owner Trustee's
knowledge, threatened against the Owner Trustee which would prohibit its
entering into this Trust Agreement or performing its obligations under this
Trust Agreement.
Section 6.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the Trust hereunder and in the
performance of its duties and obligations under this Trust Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) if such persons have been selected by the Owner Trustee with
reasonable care, and (ii) may consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it at the
expense of the Trust. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written opinion
or advice of any such counsel, accountants or other such Persons and not
contrary to this Trust Agreement or any Basic Document.
Section 6.05. Not Acting in Individual Capacity. Except as provided in
this Article VI, in accepting the trusts hereby created Wilmington Trust Company
acts solely as Owner Trustee hereunder and not in its individual capacity, and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Trust Agreement or any Basic Document shall
look only to the Owner Trust Estate for payment or satisfaction thereof.
Section 6.06. Owner Trustee Not Liable for Certificates or Related
Documents. The recitals contained herein and in the Certificates (other than the
signatures of the Owner Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Trust Agreement, of any Basic Document or of the
Certificates (other than the signatures of the Owner Trustee on the
Certificates) or the Notes, or of any Related Documents. The Owner Trustee shall
at no time have any responsibility or liability with respect to the sufficiency
of the Owner Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Trust Agreement or the Noteholders
under the Indenture, including, the compliance by the Depositor or the Seller
with any warranty or representation made under any Basic Document or in any
related document
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or the accuracy of any such warranty or representation, or any action of the
Certificate Paying Agent, the Certificate Registrar or the Indenture Trustee
taken in the name of the Owner Trustee.
Section 6.07. Owner Trustee May Own Certificates and Notes. The Owner
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates or Notes and may deal with the Depositor, the Seller, the
Certificate Paying Agent, the Certificate Registrar and the Indenture Trustee in
transactions with the same rights as it would have if it were not Owner Trustee.
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ARTICLE VII
Compensation of Owner Trustee
Section 7.01. Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof, and the Owner Trustee shall be
reimbursed for its reasonable expenses hereunder and under the Basic Documents,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Owner Trustee may reasonably
employ in connection with the exercise and performance of its rights and its
duties hereunder and under the Basic Documents which shall be payable by the
Master Servicer pursuant to Section 3.09 of the Servicing Agreement.
Section 7.02. Indemnification. The holder of the majority of the
Certificate Percentage Interest of the Certificates shall indemnify, defend and
hold harmless the Owner Trustee and its successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against the Owner Trustee or any Indemnified Party in any way relating to or
arising out of this Trust Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, provided, that:
(i) the holder of the majority of the Certificate Percentage
Interest of the Certificates shall not be liable for or required to
indemnify an Indemnified Party from and against Expenses arising or
resulting from the Owner Trustee's willful misconduct, negligence or bad
faith or as a result of any inaccuracy of a representation or warranty
contained in Section 6.03 expressly made by the Owner Trustee;
(ii) with respect to any such claim, the Indemnified Party shall
have given the holder of the majority of the Certificate Percentage
Interest of the Certificates written notice thereof promptly after the
Indemnified Party shall have actual knowledge thereof;
(iii) while maintaining control over its own defense, the holder
of the majority of the Certificate Percentage Interest of the Certificates
shall consult with the Indemnified Party in preparing such defense; and
(iv) notwithstanding anything in this Agreement to the contrary,
the holder of the majority of the Certificate Percentage Interest of the
Certificates shall not be liable for settlement of any claim by an
Indemnified Party entered into without the prior consent of the holder of
the majority of the Certificate Percentage Interest of the Certificates
which consent shall not be unreasonably withheld.
The indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Trust Agreement. In
the event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section 7.02, the Owner
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Trustee's choice of legal counsel, if other than the legal counsel retained by
the Owner Trustee in connection with the execution and delivery of this Trust
Agreement, shall be subject to the approval of the holder of the majority of the
Certificate Percentage Interest of the Certificates, which approval shall not be
unreasonably withheld. In addition, upon written notice to the Owner Trustee and
with the consent of the Owner Trustee which consent shall not be unreasonably
withheld, the holder of the majority of the Certificate Percentage Interest of
the Certificates has the right to assume the defense of any claim, action or
proceeding against the Owner Trustee.
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ARTICLE VIII
Termination of Trust Agreement
Section 8.01. Termination of Trust Agreement. (a) This Trust Agreement
(other than this Article VIII) and the Trust shall terminate and be of no
further force or effect upon the earliest of (i) the final distribution of all
moneys or other property or proceeds of the Owner Trust Estate in accordance
with the terms of the Indenture and this Trust Agreement, (ii) the Payment Date
in June 2023, or (iii) the purchase by the Master Servicer of all Revolving
Credit Loans pursuant to Section 8.08(a) of the Servicing Agreement. The
bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not (x) operate to terminate this Trust Agreement or the
Trust or (y) 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 all or any part of the Trust or the Owner Trust
Estate or (z) otherwise affect the rights, obligations and liabilities of the
parties hereto.
(b) Except as provided in Section 8.01(a), neither the Depositor nor any
Certif-icateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which Certificateholders shall surrender their Certificates to the
Certificate Paying Agent for payment of the final distribution and cancellation,
shall be given by the Certificate Paying Agent by letter to Certificateholders
and the Credit Enhancer mailed within five Business Days of receipt of notice of
such termination from the Owner Trustee, stating (i) the Payment Date upon or
with respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the Certificate
Paying Agent therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Certificate Payment Agent therein specified.
The Certificate Paying Agent shall give such notice to the Owner Trustee and the
Certificate Registrar at the time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Certificate Paying
Agent shall cause to be distributed to Certificateholders amounts distributable
on such Payment Date pursuant to Section 5.01.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Certificate Paying Agent shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. Subject to applicable laws with respect to escheat of funds, if within
one year following the Payment Date on which final payment of the Certificates
was to have been made pursuant to Section 3.10, all the Certificates shall not
have been surrendered for cancellation, the Certificate Paying Agent may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Trust Agreement. Any funds remaining in the Certificate
Distribution Account after exhaustion of such remedies shall be distributed by
the Certificate Paying Agent to the holder of the majority of the Certificate
Percentage Interest of the Certificates.
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(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810(c) of the Business Trust Statute.
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ARTICLE IX
Successor Owner Trustees and Additional Owner Trustees
Section 9.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute; authorized 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 authorities; and
having (or having a parent that has) long-term debt obligations with a rating of
at least A by Moody's and/or Standard & Poor's. If such corporation shall
publish reports of condition at least annually pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose 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 Owner Trustee
shall cease to be eligible in accordance with the provisions of this Section
9.01, the Owner Trustee shall resign immediately in the manner and with the
effect specified in Section 9.02.
Section 9.02. Replacement of Owner Trustee. The Owner Trustee may at any
time resign and be discharged from the trusts hereby created by giving 30 days'
prior written notice thereof to the Credit Enhancer and the Depositor. Upon
receiving such notice of resignation, the Indenture Trustee shall promptly
appoint a successor Owner Trustee with the consent of the Credit Enhancer which
will not be unreasonably withheld, by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Owner Trustee and one
copy to the successor Owner Trustee. If no successor Owner Trustee shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Owner Trustee may petition any
court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 9.01 and shall fail to resign after written
request therefor by the Indenture Trustee, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Indenture Trustee may and shall at the direction of the
Credit Enhancer remove the Owner Trustee. If the Indenture Trustee shall remove
the Owner Trustee under the authority of the immediately preceding sentence, the
Indenture Trustee shall promptly appoint a successor Owner Trustee acceptable to
the Credit Enhancer by written instrument, in duplicate, one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed and one
copy to the successor Owner Trustee, and shall pay all fees owed to the outgoing
Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 9.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee.
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Section 9.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to the
Indenture Trustee and to its predecessor Owner Trustee an instrument accepting
such appointment under this Trust Agreement, and thereupon the resignation or
removal of the predecessor Owner Trustee shall become effective, and such
successor Owner Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor under this Trust Agreement, with like effect as if originally named
as Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees
and expenses deliver to the successor Owner Trustee all documents and statements
and monies held by it under this Trust Agreement; and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section 9.03 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 9.03, the Indenture Trustee shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders and the Rating
Agencies. If the Indenture Trustee shall fail to mail such notice within 10 days
after acceptance of such appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the
Indenture Trustee.
Section 9.04. Merger or Consolidation of Owner Trustee. Any Person into
which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding;
provided, that such Person shall be eligible pursuant to Section 9.01 and,
provided, further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
Section 9.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Trust Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate may at the time be located, the Owner Trustee
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons to act as co-trustee, jointly with the Owner Trustee, or as
separate trustee or trustees, of all or any part of the Owner Trust Estate, and
to vest in such Person, in such capacity, such title to the Trust or any part
thereof and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Owner Trustee may consider
necessary or desirable. No co-trustee or separate trustee under this Trust
Agreement shall be required to meet the terms of eligibility as a successor
Owner Trustee pursuant to Section 9.01 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 9.03.
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Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed upon
the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Owner 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 Owner Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Owner Trustee;
(b) No trustee under this Trust Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Trust Agreement;
and
(c) The Owner Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner 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 Trust Agreement and the
conditions of this Article. 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 Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Trust Agreement, specifically including every provision of this Trust
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as 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
Trust 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 Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
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ARTICLE X
Miscellaneous
Section 10.01. Amendments. (a) This Trust Agreement may be amended from
time to time by the parties hereto as specified in this Section 10.01, provided
that any amendment, except as provided in subparagraph (e) below, be accompanied
by an Opinion of Counsel, to the Owner Trustee to the effect that such amendment
(i) complies with the provisions of this Section and (ii) will not cause the
Trust to be subject to an entity level tax.
(b) If the purpose of the amendment (as detailed therein) is to correct
any mistake, eliminate any inconsistency, cure any ambiguity or deal with any
matter not covered (i.e., to give effect to the intent of the parties), it shall
not be necessary to obtain the consent of any Holders, but the Owner Trustee
shall be furnished with (A) a letter from the Rating Agencies that the amendment
will not result in the downgrading or withdrawal of the rating then assigned to
any Security if determined without regard to the Credit Enhancement Instrument
and (B) an Opinion of Counsel to the effect that such action will not adversely
affect in any material respect the interests of any Holders, and the consent of
the Credit Enhancer shall be obtained.
(c) If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Security is outstanding (i.e.,
technical in nature), it shall not be necessary to obtain the consent of any
Holder, but the Owner Trustee shall be furnished with an Opinion of Counsel that
such amendment is necessary or helpful to prevent the imposition of such taxes
and is not materially adverse to any Holder and the consent of the Credit
Enhancer shall be obtained.
(d) If the purpose of the amendment is to add or eliminate or change any
provision of the Trust Agreement other than as contemplated in (b) and (c)
above, the amendment shall require (A) the consent of the Credit Enhancer and an
Opinion of Counsel to the effect that such action will not adversely affect in
any material respect the interests of any Holders and (B) either (a) a letter
from the Rating Agency that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to any security if determined without
regard to the Credit Enhancement Instrument or (b) the consent of Holders of
Certificates evidencing a majority of the Certificate Percentage Interest of the
Certificates and the Indenture Trustee; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received that are required to be distributed on any Certificate without
the consent of the related Certificateholder and the Credit Enhancer, or (ii)
reduce the aforesaid percentage of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.
(e) If the purpose of the amendment is to provide for the holding of any
of the Certificates in book-entry form, it shall require the consent of Holders
of all such Certificates then outstanding; provided, that the Opinion of Counsel
specified in subparagraph (a) above shall not be required.
(f) If the purpose of the amendment is to provide for the issuance of
additional certificates representing an interest in the Trust, it shall not be
necessary to obtain the consent
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of any Holder, but the Owner Trustee shall be furnished with (A) an Opinion of
Counsel to the effect that such action will not adversely affect in any material
respect the interests of any Holders and (B) a letter from the Rating Agencies
that the amendment will not result in the downgrading or withdrawal of the
rating then assigned to any Security, if determined without regard to the Credit
Enhancement Instrument and the consent of the Credit Enhancer shall be obtained.
(g) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee, the
Credit Enhancer and each of the Rating Agencies. It shall not be necessary for
the consent of Certificateholders or the Indenture Trustee pursuant to this
Section 10.01 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Certificateholders provided for in this Trust Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe.
(h) In connection with the execution of any amendment to any agreement to
which the Trust is a party, other than this Trust Agreement, the Owner Trustee
shall be entitled to receive and conclusively rely upon an Opinion of Counsel to
the effect that such amendment is authorized or permitted by the documents
subject to such amendment and that all conditions precedent in the Basic
Documents for the execution and delivery thereof by the Trust or the Owner
Trustee, as the case may be, have been satisfied.
Promptly after the execution of any amendment to the Certificate of Trust,
the Owner Trustee shall cause the filing of such amendment with the Secretary of
State of the State of Delaware.
Section 10.02. No Legal Title to Owner Trust Estate. The
Certificateholders shall not have legal title to any part of the Owner Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided beneficial interest therein only in accordance with
Articles V and VIII. No transfer, by operation of law or otherwise, of any
right, title or interest of the Certificateholders to and in their ownership
interest in the Owner Trust Estate shall operate to terminate this Trust
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Owner Trust Estate
Section 10.03. Limitations on Rights of Others. Except for Section 2.07,
the provisions of this Trust Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Certificateholders, the Credit Enhancer and, to the
extent expressly provided herein, the Indenture Trustee and the Noteholders, and
nothing in this Trust Agreement (other than Section 2.07), whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of this
Trust Agreement or any covenants, conditions or provisions contained herein.
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Section 10.04. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt, if to the Owner Trustee, addressed to Wilmington
Trust Company, Corporate Trust Administration, Xxxxxx Square North, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000; if to the Depositor, addressed to
Residential Funding Mortgage Securities II, Inc., 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000; if to the Credit Enhancer,
addressed to Ambac Assurance Corporation, Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxxx; if to the Rating Agencies,
addressed to Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000 and Standard & Poor's Ratings Services, 00 Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Department - MBS
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
(b) Any notice required or permitted to be given 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 mailed within the
time prescribed in this Trust Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder receives such notice.
(c) A copy of any notice delivered to the Owner Trustee or the Trust shall
also be delivered to the Depositor.
Section 10.05. Severability. Any provision of this Trust Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.06. Separate Counterparts. This Trust Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 10.07. Successors and Assigns. All representations, warranties,
covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, each of the Depositor, the Owner Trustee and its successors and
each Certificateholder and its successors and permitted assigns, all as herein
provided and the Credit Enhancer. Any request, notice, direction, consent,
waiver or other instrument or action by a Certificateholder shall bind the
successors and assigns of such Certificateholder.
Section 10.08. No Petition. The Owner Trustee, by entering into this Trust
Agreement and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against the
Depositor or the Trust, or join in any institution against the Depositor or the
Trust of, any bankruptcy proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations to the
Certificates,
the Notes, this Trust Agreement or any of the Basic Documents.
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Section 10.09. No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Depositor, the Seller, the Owner Trustee, the Indenture
Trustee or any Affiliate thereof and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contemplated in this
Trust
Agreement, the Certificates or the Basic Documents.
Section 10.10. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 10.11. GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.12. Integration. This Trust Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understanding pertaining thereto.
Section 10.13. Rights of Credit Enhancer to Exercise Rights of
Certificateholders. By accepting its Certificate, each Certificateholder agrees
that unless a Credit Enhancer Default exists, the Credit Enhancer shall have the
right to exercise all rights of the Certificateholders under this Agreement
without any further consent of the Certificateholders. Nothing in this Section,
however, shall alter or modify in any way, the fiduciary obligations of the
Owner Trustee to the Certificateholders pursuant to this Agreement, or create
any fiduciary obligation of the Owner Trustee to the Credit Enhancer.
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
35
IN WITNESS WHEREOF, the Depositor and the Owner Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC.
By:
Name: Xxxxx Xxxx
Title: Vice President
WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee, except with respect
to the representations and warranties contained in Section
6.03 hereof,
By:
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Acknowledged and Agreed:
The Chase Manhattan Bank
Indenture Trustee, as Certificate
Registrar and Certificate
Paying Agent
By:
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
36
EXHIBIT A
FORM OF CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO
THE TERM NOTES AND THE VARIABLE FUNDING NOTES AS DESCRIBED IN THE
AGREEMENT (AS DEFINED HEREIN).
THIS CERTIFICATE IS ISSUED IN THE CERTIFICATE PERCENTAGE INTEREST
BELOW; HOWEVER, THE CERTIFICATE PERCENTAGE INTEREST OF THIS CERTIFICATE MAY
CHANGE IN ACCORDANCE WITH SECTION 3.12 OF THE AGREEMENT. THE HOLDER OF THIS
CERTIFICATE HEREBY CONSENTS TO ANY CHANGE IN ITS CERTIFICATE PERCENTAGE INTEREST
IN ACCORDANCE WITH SUCH SECTION.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE AMENDED AND RESTATED TRUST
AGREEMENT ("THE AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED EITHER (i) A REPRESENTATION LETTER FROM THE
TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO THE PROHIBITED TRANSACTION RESTRICTIONS AND THE
FIDUCIARY RESPONSIBILITY REQUIREMENTS OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE"), ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF
ANY SUCH PLAN OR ANY PERSON USING "PLAN ASSETS," WITHIN THE MEANING OF THE
DEPARTMENT OF LABOR REGULATION AT 29 C.F.R. ss.2510.3-101, TO ACQUIRE THIS
CERTIFICATE (COLLECTIVELY A "PLAN INVESTOR"), OR (ii) IF THIS CERTIFICATE IS
PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN INVESTOR, AN OPINION OF
COUNSEL, OR A CERTIFICATION IN THE FORM OF EXHIBIT G TO THE AGREEMENT IN LIEU OF
SUCH OPINION OF COUNSEL, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT
IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) AND WILL NOT
SUBJECT THE COMPANY, THE OWNER TRUSTEE, THE MASTER SERVICER OR THE CERTIFICATE
REGISTRAR TO ANY
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OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.
THE TRANSFEREE OF THIS CERTIFICATE SHALL BE SUBJECT TO
UNITED STATES FEDERAL WITHHOLDING TAX UNLESS THE CERTIFICATE
REGISTRAR SHALL HAVE RECEIVED A CERTIFICATE OF NON-FOREIGN STATUS
CERTIFYING AS TO THE TRANSFEREE'S STATUS AS A U.S. PERSON OR
CORPORATION OR PARTNERSHIP UNDER U.S. LAW.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR
OBLIGATION OF THE SELLER, THE COMPANY, THE MASTER SERVICER, THE
INDENTURE TRUSTEE, OR THE OWNER TRUSTEE OR ANY OF THEIR
RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE
AGREEMENT OR THE BASIC DOCUMENTS.
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A-2
Certificate No. ____
Cut-off Date:
January 1, 1998
Date of Trust Agreement:
January 29, 1998
First Payment Date: Certificate Percentage Interest of
February 20, 1998 this Certificate: ____________%]
Assumed Final Payment Date: CUSIP [_____]
HOME EQUITY LOAN-BACKED CERTIFICATE
SERIES 1998-HS1
evidencing a fractional undivided interest in the Owner Trust Estate, the
property of which consists primarily of the Revolving Credit Loans, created by
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC. (hereinafter called the
"Company," which term includes any successor entity under the Agreement referred
to below).
This Certificate is payable solely from the assets of the Owner
Trust Estate, and does not represent an obligation of or interest in the
Company, the Seller, the Master Servicer, the Indenture Trustee, the Owner
Trustee or GMAC Mortgage Group, Inc. or any of their affiliates. This
Certificate is not guaranteed or insured by any governmental agency or
instrumentality or by the Company, the Seller, the Master Servicer, the
Indenture Trustee, the Owner Trustee or GMAC Mortgage Group, Inc. or any of
their affiliates. None of the Company, the Seller, the Master Servicer, the
Indenture Trustee, the Owner Trustee, GMAC Mortgage Group, Inc. or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that [name of Holder] is the registered owner of the
Security Balance evidenced by this Certificate (as set forth on the face hereof)
in certain distributions with respect to the Owner Trust Estate, consisting
primarily of the Revolving Credit Loans, created by Residential Funding Mortgage
Securities II, Inc. The Trust (as defined herein) was created pursuant to a
Trust Agreement dated as specified above (as amended and supplemented from time
to time, the "Agreement") between the Company and Wilmington Trust Company, as
owner trustee (the "Owner Trustee," which term includes any successor entity
under the Agreement), a summary of certain of the pertinent provisions of which
is set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This 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.
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A-3
Pursuant to the terms of the Agreement, a distribution will be made
on the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (the "Payment Date"), commencing on the first
Payment Date specified above, 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"),
in an amount equal to the pro rata portion evidenced by this Certificate (based
on the Certificate Percentage Interest stated on the face hereon) of the
Certificate Distribution Amount, if any, required to be distributed to Holders
of Certificates on such Payment Date. Distributions on this Certificate will be
made as provided in the Agreement by the Certificate Paying Agent by wire
transfer or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon.
Except as otherwise provided in the Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Certificate Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained by the Certificate Registrar for that purpose in the City and State
of New York. The initial Security Balance of this Certificate is set forth
above. The Security Balance hereof will be reduced to the extent of the
distributions allocable to principal.
No transfer of this Certificate will be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event that such a transfer is to be made, (i) the
Certificate Registrar or the Company may require an opinion of counsel
acceptable to and in form and substance satisfactory to the Certificate
Registrar and the Company that such transfer is exempt (describing the
applicable exemption and the basis therefor) from or is being made pursuant to
the registration requirements of the Securities Act of 1933, as amended, and of
any applicable statute of any state and (ii) the transferee shall execute an
investment letter in the form described in the Agreement and (iii) the
Certificate Registrar shall require the transferee to execute an investment
letter and a Certificate of Non-Foreign Status in the form described by the
Agreement (or if a Certificate of Non-Foreign Status is not provided, an Opinion
of Counsel as described in the Agreement), which investment letter and
certificate or Opinion of Counsel shall not be at the expense of the Trust, the
Owner Trustee, the Certificate Registrar or the Company. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trust, the Owner Trustee, the Company, the Master Servicer and the Certificate
Registrar against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws. In connection
with any such transfer, the Certificate Registrar (unless otherwise directed by
the Company) will also require either (i) 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 restrictions or the
fiduciary responsibility requirements of ERISA or Section 4975 of the Code
("Plan"), any person acting, directly or indirectly, on behalf of any such plan
or any person using the "plan assets," within the meaning of the Department of
Labor regulations at 29 C.F.R. ss.2510.3-101, to effect such acquisition
(collectively, a "Plan Investor") or (ii) if such transferee is a Plan Investor,
an opinion of counsel acceptable to and in form and substance satisfactory to
the Company, the Owner Trustee, the Master Servicer and the
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A-4
Certificate Registrar, or a certification in the form of Exhibit G to the
Agreement, to the effect that the purchase or holding of the Certificate is
permissible under applicable law, will not constitute or result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments) and will not subject the
Company, the Owner Trustee, the Master Servicer or the Certificate Registrar to
any obligation or liability in addition to those undertaken in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Home Equity Loan-Backed Certificates of the Series specified
hereon (herein collectively called the "Certificates"). All terms used in this
Certificate which are defined in the Agreement shall have the meanings assigned
to them in the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Certificate Distribution
Account that have been released from the Lien of the Indenture for payment
hereunder and that neither the Owner Trustee in its individual capacity nor the
Company is personally liable to the Certificateholders for any amount payable
under this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
The Holder of this Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Certificate are subordinated
to the rights of the Noteholders as described in the Indenture, dated as of
January 29, 1998 between Home Equity Loan Trust 1998- HS1 (the "Trust") and The
Chase Manhattan Bank, as Indenture Trustee (the "Indenture").
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Company, or join in any institution against the Company or the Trust
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Certificates, the Notes, the Agreement or any of the Basic Documents.
The Agreement permits the amendment thereof as specified below,
provided that any amendment be accompanied by the consent of the Credit Enhancer
and an Opinion of Counsel to the Owner Trustee to the effect that such amendment
complies with the provisions of the Agreement and will not cause the Trust to be
subject to an entity level tax. If the purpose of the amendment is to correct
any mistake, eliminate any inconsistency, cure any ambiguity or deal with any
matter not covered, it shall not be necessary to obtain the consent of any
Holder, but the Owner Trustee shall be furnished with a letter from the Rating
Agencies that the amendment will not result in the downgrading or withdrawal of
the rating then assigned to any Security if determined without regard to the
Credit Enhancement Instrument and the counsel of the Credit Enhancer shall be
obtained. If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Security is outstanding, it shall
not be necessary to obtain the consent of any Holder, but the Owner Trustee
shall be furnished with an Opinion of Counsel that such amendment is necessary
or helpful to prevent the imposition of such taxes and is not materially adverse
to any Holder and the consent of the Credit Enhancer shall be obtained. If the
purpose of the amendment is to add or eliminate or change any provision of the
Agreement, other than as specified in the preceding two sentences, the amendment
shall require
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
A-5
either (a) a letter from the Rating Agencies that the amendment will not result
in the downgrading or withdrawal of the rating then assigned to any Security, if
determined without regard to the Credit Enhancement Instrument or (b) the
consent of Holders of a majority of the Certificate Percentage Interests of the
Controlling Certificates and the Indenture Trustee; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the time
of, payments received that are required to be distributed on any Certificate
without the consent of the related Certificateholder and the Credit Enhancer, or
(ii) reduce the aforesaid percentage of Certificates the Holders of which are
required to consent to any such amendment without the consent of the Holders of
all such Certificates then outstanding.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained in
the City and State of New York, accompanied by a written instrument of transfer
in form satisfactory to 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 Certificate Percentage Interest will be issued to the designated
transferee. The initial Certificate Registrar appointed under the Agreement is
the Owner Trustee.
Except as provided in the Agreement, the Certificates are issuable
only in minimum denominations of a 10.0000% Certificate Percentage Interest and
in integral multiples of a 0.0001% Certificate Percentage Interest in excess
thereof. As provided in the Agreement and subject to certain limitations therein
set forth, the Certificates are exchangeable for new Certificates of authorized
denominations, as requested by the Holder surrendering the same. This
Certificate is issued in the Certificate Percentage Interest above; however, the
Certificate Percentage Interest of this Certificate may change in accordance
with Section 3.12 of the Agreement. The Holder of this Certificate hereby
consents to any change in its Certificate Percentage Interest in accordance with
such Section.
No service charge will be made for any such registration of transfer
or exchange, but the Owner Trustee or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge payable in
connection therewith.
The Owner Trustee, the Certificate Paying Agent, the Certificate
Registrar and any agent of the Owner Trustee, the Certificate Paying Agent, 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 Owner Trustee,
the Certificate Paying Agent, the Certificate Registrar or any such agent shall
be affected by any notice to the contrary.
This Certificate shall be governed by and construed in accordance
with the laws of the State of Delaware.
The obligations created by the Agreement in respect of the
Certificates and the Trust created thereby shall terminate upon the earliest of
(i) the final distribution of all moneys or other property or proceeds of the
Owner Trust Estate in accordance with the terms of the Indenture and the
Agreement, (ii) the Payment Date in June 2023, or (iii) the purchase by the
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A-6
Master Servicer of all Revolving Credit Loans pursuant to Section 8.08(a) of the
Servicing Agreement.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, or an authenticating
agent by manual signature, this Certificate shall not be entitled to any benefit
under the Agreement or be valid for any purpose.
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A-7
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Certificate to be duly executed.
HOME EQUITY LOAN
TRUST 1998-HS1
by WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as Owner
Trustee
Dated:
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By:______________________________
Authorized Signatory
or __________________________________,
as Authenticating Agent of the Trust
By:______________________________
Authorized Signatory
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A-8
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing to transfer said Certificate on the books of the
Certificate Registrar, with full power of substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
-----------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
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A-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately available funds to
----------------------------------------------
----------------------------------------------------------------- for the
account of ________________________________________, account number
______________, or, if mailed by check, to ______________.
Applicable statements should be mailed to__________________.
------------------------------
Signature of assignee or agent
(for authorization of wire
transfer only)
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X-00
XXXXXXX X
TO THE TRUST AGREEMENT
CERTIFICATE OF TRUST
OF
HOME EQUITY LOAN TRUST 1998-HS1
THE UNDERSIGNED, ______________________, as owner trustee (the "Trustee"),
for the purpose of forming a business trust does hereby certify as follows:
1. The name of the business trust is:
HOME EQUITY LOAN TRUST 1998-HS1
2. The name and business address of the Trustee of the business trust in
the State of Delaware is ______________________, _________________, __________,
Delaware _____.
3. The business trust reserves the right to amend, alter, change, or
repeal any provision contained in this Certificate of Trust in the manner now or
hereafter prescribed by law.
4. This Certificate of Trust shall be effective upon filing.
THE UNDERSIGNED, being the Trustee hereinbefore named, for the purpose of
forming a business trust pursuant to the provisions of the Delaware Business
Trust Act, does make this certificate of trust, hereby declaring and further
certifying that this is its act and deed and that to the best of the
undersigned's knowledge and belief the facts herein stated are true.
[NAME OF OWNER TRUSTEE],
not in its individual capacity but
solely as owner trustee under an
Amended and Restated Trust
Agreement dated as of January 29,
1998
By:
Name:
Title:
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
B-1
EXHIBIT C
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
===============================================
===============================================
The undersigned seller, as registered holder (the "Seller"), intends
to transfer the Rule 144A Securities described above to the undersigned buyer
(the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the
Owner Trustee and the Depositor (as defined in the Amended and Restated Trust
Agreement (the "Agreement"), dated as of January 29, 1998 between Residential
Funding Mortgage Securities II, Inc., as Depositor and Wilmington Trust Company
as Owner Trustee pursuant to Section 3.05 of the Agreement and The Chase
Manhattan Bank as indenture trustee, as follows:
a. The Buyer understands that the Rule 144A Securities have
not been registered under the 1933 Act or the securities laws of any
state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information regarding
the Rule 144A Securities that it has requested from the Seller, the
Indenture Trustee, the Owner Trustee or the Master Servicer.
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C-1
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security with,
any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action,
that would constitute a distribution of the Rule 144A Securities under the
1933 Act or that would render the disposition of the Rule 144A Securities
a violation of Section 5 of the 1933 Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it authorize any
person to act, in such manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term
is defined in Rule 144A under the 1933 Act and has completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex
2. The Buyer is aware that the sale to it is being made in reliance on
Rule 144A. The Buyer is acquiring the Rule 144A Securities for its own
account or the accounts of other qualified institutional buyers,
understands that such Rule 144A Securities may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the 1933 Act.
3. The Buyer represents that:
(i) either (a) or (b) is satisfied, as marked below:
____ a. The Buyer is not any employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or the Internal Revenue Code of 1986 (the "Code"), a Person acting,
directly or indirectly, on behalf of any such plan or any Person acquiring
such Certificates with "plan assets" of a Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101; or
____ b. The Buyer will provide the Depositor, the Owner
Trustee, the Certificate Registrar and the Master Servicer with either:
(x) an opinion of counsel, satisfactory to the Depositor, the Owner
Trustee, the Certificate Registrar and the Master Servicer, to the effect
that the purchase and holding of a Certificate by or on behalf of the
Buyer is permissible under applicable law, will not constitute or result
in a prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code (or comparable provisions of any subsequent enactments) and will
not subject the Depositor, the Owner Trustee, the Certificate Registrar or
the Master Servicer to any obligation or liability (including liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken
in the Trust Agreement, which opinion of counsel shall not be an expense
of the Depositor, the Owner Trustee, the Certificate Registrar or the
Master
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
C-2
Servicer; or (y) in lieu of such opinion of counsel, a certification in the form
of Exhibit G to the Trust Agreement; and
(ii) the Buyer is familiar with the prohibited transaction restrictions
and fiduciary responsibility requirements of Sections 406 and 407 of ERISA
and Section 4975 of the Code and understands that each of the parties to
which this certification is made is relying and will continue to rely on
the statements made in this paragraph 3.
4. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document
as of the date set forth below.
Print Name of Seller Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. No.
Date: Date:
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C-3
ANNEX 1 TO EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $______________________1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is
supervised by the State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
--------
1 Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
C-4
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15
of the
-------------
Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit of its
employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
___ Investment Adviser. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established
and maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as participants individual
retirement accounts or H.R.
10 plans.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
C-5
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Rule 144A
Securities are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
C-6
ANNEX 2 TO EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $______________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
C-7
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Print Name of Buyer
By:
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
C-8
EXHIBIT D
FORM OF INVESTOR REPRESENTATION LETTER
, 19
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Re: Home Equity Loan-Backed Certificates
Series 1998-HS1
Ladies and Gentlemen:
(the "Purchaser") intends to purchase from (the "Seller") a ___%
Certificate Percentage Interest of Certificates of Series 1998-HS1 (the
"Certificates"), issued pursuant to the Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of January 29, 1998, between Residential
Funding Mortgage Securities II, Inc. as depositor (the "Company") and Wilmington
Trust Company, as owner trustee (the "Owner Trustee"), as acknowledged and
agreed by The Chase Manhattan Bank as Certificate Registrar. All terms used
herein and not otherwise defined shall have the meanings set forth in the Trust
Agreement. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Company and the Certificate Registrar that:
1. The Purchaser understands that (a) the Certificates have
not been and will not be registered or qualified under the
Securities Act of 1933, as amended (the "Act") or any state
securities law, (b) the Company is not required to so register or
qualify the Certificates, (c) the Certificates may be resold only if
registered and qualified pursuant to the provisions of the Act or
any state securities law, or if an exemption from such registration
and qualification is available, (d) the Trust Agreement contains
restrictions regarding the transfer of the Certificates and (e) the
Certificates will bear a legend to the foregoing effect.
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
D-1
2. The Purchaser is acquiring the Certificates for its own
account for investment only and not with a view to or for sale in
connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such matters
related to securities similar to the Certificates, such that it is
capable of evaluating the merits and risks of investment in the
Certificates, (b) able to bear the economic risks of such an
investment and (c) an "accredited investor" within the meaning of
Rule 501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an
opportunity to review (a) [a copy of the Private Placement
Memorandum, dated , 19 , relating to the Certificates (b)] a copy of
the Trust Agreement and [b] [c] such other information concerning
the Certificates, the Revolving Credit Loans and the Company as has
been requested by the Purchaser from the Company or the Seller and
is relevant to the Purchaser's decision to purchase the
Certificates. The Purchaser has had any questions arising from such
review answered by the Company or the Seller to the satisfaction of
the Purchaser. [If the Purchaser did not purchase the Certificates
from the Seller in connection with the initial distribution of the
Certificates and was provided with a copy of the Private Placement
Memorandum (the "Memorandum") relating to the original sale (the
"Original Sale") of the Certificates by the Company, the Purchaser
acknowledges that such Memorandum was provided to it by the Seller,
that the Memorandum was prepared by the Company solely for use in
connection with the Original Sale and the Company did not
participate in or facilitate in any way the purchase of the
Certificates by the Purchaser from the Seller, and the Purchaser
agrees that it will look solely to the Seller and not to the Company
with respect to any damage, liability, claim or expense arising out
of, resulting from or in connection with (a) error or omission, or
alleged error or omission, contained in the Memorandum, or (b) any
information, development or event arising after the date of the
Memorandum.]
5. The Purchaser has not and will not nor has it authorized or
will it authorize any person to (a) offer, pledge, sell, dispose of
or otherwise transfer any Certificate, any interest in any
Certificate or any other similar security to any person in any
manner, (b) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other similar
security with any person in any manner, (d) make any general
solicitation by means of general advertising or in any other manner
or (e) take any other action, that (as to any of (a) through (e)
above) would constitute a distribution of any Certificate under the
Act, that would render the disposition of any Certificate a
violation of Section 5 of the Act or any state securities law, or
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
D-2
that would require registration or qualification pursuant thereto.
The Purchaser will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions of the Trust
Agreement.
6. The Purchaser represents:
(i) that either (a) or (b) is satisfied, as marked below:
____ a. The Purchaser is not any employee benefit plan subject
to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the Internal Revenue Code of 1986 (the "Code"), a Person
acting, directly or indirectly, on behalf of any such plan or any Person
acquiring such Certificates with "plan assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C.F.R.
ss.2510.3-101; or
____ b. The Purchaser will provide the Depositor, the Owner
Trustee, the Certificate Registrar and the Master Servicer with either:
(x) an opinion of counsel, satisfactory to the Depositor, the Owner
Trustee, the Certificate Registrar and the Master Servicer, to the effect
that the purchase and holding of a Certificate by or on behalf of the
Purchaser is permissible under applicable law, will not constitute or
result in a prohibited transaction under Section 406 of ERISA or Section
4975 of the Code (or comparable provisions of any subsequent enactments)
and will not subject the Depositor, the Owner Trustee, the Certificate
Registrar or the Master Servicer to any obligation or liability (including
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Trust Agreement, which opinion of counsel shall not be
an expense of the Depositor, the Owner Trustee, the Certificate Registrar
or the Master Servicer; or (y) in lieu of such opinion of counsel, a
certification in the form of Exhibit G to the Trust Agreement; and
(ii) the Purchaser is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406 and
407 of ERISA and Section 4975 of the Code and understands that each of the
parties to which this certification is made is relying and will continue
to rely on the statements made in this paragraph 6.
7. The Purchaser is acquiring the Certificate for its own
behalf and is not acting as agent or custodian for any other person or
entity in connection with such acquisition;
8. The Purchaser is not a partnership, grantor trust or S
corporation for federal income tax purposes, or, if the Purchaser is a
partnership, grantor trust or S corporation for federal income tax
purposes, the Certificates are not more than 50% of the assets of the
partnership, grantor trust or S corporation.
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
D-3
9. The Purchaser is not a non-United States person.
Very truly yours,
By:
Name:
Title:
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
D-4
EXHIBIT E
FORM OF TRANSFEROR REPRESENTATION LETTER
, 19
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Re: Home Equity Loan-Backed Certificates
Series 1998-HS1
Ladies and Gentlemen:
(the "Purchaser") intends to purchase from (the "Seller") a ___%
Certificate Percentage Interest of [Certificates] of Series 1998-HS1 (the
"Certificates"), issued pursuant to the Amended and Restated Trust Agreement
(the "Trust Agreement"), dated as of January 29, 1998 between Residential
Funding Mortgage Securities II, Inc. as depositor (the "Company") and Wilmington
Trust Company, as owner trustee (the "Owner Trustee"), as acknowledged and
agreed by The Chase Manhattan Bank as Certificate Registrar. 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 Certificate Registrar that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
E-1
pursuant thereto. The Seller will not act, in any manner set forth in the
foregoing sentence with respect to any Certificate. The Seller has not and will
not sell or otherwise transfer any of the Certificates, except in compliance
with the provisions of the Trust Agreement.
Very truly yours,
(Seller)
By:
Name:
Title:
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
E-2
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("certificate") is delivered
pursuant to Section 3.05 of the Amended and Restated Trust Agreement, dated as
of January 29, 1998 (the "Trust Agreement"), between Residential Funding
Mortgage Securities II, Inc., as depositor and Wilmington Trust Company, as
Owner Trustee, in connection with the acquisition of, transfer to or possession
by the undersigned, whether as beneficial owner (the "Beneficial Owner"), or
nominee on behalf of the Beneficial Owner of the Residential Home Equity
Loan-Backed Certificates, Series 1998-HS1 (the "Certificate"). Capitalized terms
used but not defined in this certificate have the respective meanings given them
in the Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a nominee),
and in all cases sign and otherwise complete Part III.
In addition, each holder shall submit with the Certificate an IRS Form W-9
relating to such holder.
To confirm to the Trust that the provisions of Sections 871, 881 or 1446
of the Internal Revenue Code (relating to withholding tax on foreign partners)
do not apply in respect of the Certificate held by the undersigned, the
undersigned hereby certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is ) not a non-resident
alien for purposes of U.S. income taxation;
2. My (The Beneficial Owner's) name and home address are:
; and
3. My (The Beneficial Owner's) U.S. taxpayer identification
number (Social Security Number) is .
B. Corporate, Partnership or Other Entity as Beneficial Owner
1. (Name of the Beneficial Owner) is not a foreign
corporation, foreign partnership, foreign trust or
foreign estate (as those terms are defined in the Code
and Treasury Regulations;
2. The Beneficial Owner's office address and place of
incorporation (if applicable) is
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
F-1
; and
3. The Beneficial Owner's U.S. employer
identification number is .
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner, the
undersigned certifies that this certificate has been made in reliance upon
information contained in:
an IRS Form W-9
a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trust at least thirty (30) days prior to the date that the
form relied upon becomes obsolete, and (ii) in connection with change in
Beneficial Owners, the undersigned agrees to submit a new Certificate of
Non-Foreign Status to the Trust promptly after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees to
notify the Trust within sixty (60) days of the date that the Beneficial Owner
becomes a foreign person. The undersigned understands that this certificate may
be disclosed to the Internal Revenue Service by the Trust and any false
statement contained therein could be punishable by fines, imprisonment or both.
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
F-2
Under penalties of perjury, I declare that I have examined this
certificate and to the best of my knowledge and belief it is true, correct and
complete and will further declare that I will inform the Trust of any change in
the information provided above, and, if applicable, I further declare that I
have the authority* to sign this document.
Name
Title (if applicable)
Signature and Date
*NOTE: If signed pursuant to a power of attorney, the power of attorney must
accompany this certificate.
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
F-3
EXHIBIT G
FORM OF ERISA REPRESENTATION LETTER
_____________, 199__
Residential Funding Mortgage
Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
[CERTIFICATE REGISTRAR]
Re: Residential Funding Mortgage Securities II, Inc.
Home Equity Loan-Backed Certificates, Series 1998-HS1
Dear Sirs:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") a ___% Certificate
Percentage Interest of Residential Mortgage Securities II, Inc. Home Equity
Loan-Backed Certificates, Series 1998-HS1 (the "Certificates"), issued pursuant
to an Amended and Restated Trust Agreement (the "Trust Agreement") dated January
29, 1998 among Residential Funding Mortgage Securities II, Inc., as depositor
(the "Depositor") and Wilmington Trust Company, as trustee (the "Owner
Trustee"). Capitalized terms used herein and not otherwise defined shall have
the meanings assigned thereto in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Owner Trustee, the Certificate Registrar and
the Master Servicer that either:
(1) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or other retirement arrangement, including individual retirement
accounts and annuities, Xxxxx plans and bank collective investment funds
and insurance company general or separate accounts in which such plans,
accounts or arrangements are invested, that is subject to Section 406
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
of ERISA or Section 4975 of the Internal Revenue Code of 1986 (the "Code")
(any of the foregoing, a "Plan"), (ii) are not being acquired with "plan
assets" of a Plan within the meaning of the Department of Labor ("DOL")
regulation, 29 C.F.R. ss. 2510.3-101, and (iii) will not be transferred to
any entity that is deemed to be investing in plan assets within the
meaning of the DOL regulation, 29 C.F.R. ss. 2510.3-101; or
(2) The purchase of the Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under
ERISA or Section 4975 of the Code, will not subject the Depositor or the
Trustee to any obligation in addition to those undertaken in the Trust
Agreement and, with respect to each source of funds being used by the
Transferee to acquire the Certificates (each being referred to as a
"Source") and the following statements in either (a) or (b):
(a) the Transferee is an insurance company and (i) the Source
is assets of its "general account," (ii) the conditions set forth in
PTCE 95-60 issued by the DOL have been satisfied and the purchase
and holding of Certificates by or on behalf of the Transferee are
exempt under PTCE 95-60 and (iii) the amount of reserves and
liabilities for such general account contracts held by or on behalf
of any Plan do not exceed 10% of the total reserves and liabilities
of such general account plus surplus as of the date hereof (for
purposes of this clause, all Plans maintained by the same employer
(or affiliate thereof) or employee organization are deemed to be a
single Plan) in connection with its purchase and holding of such
Certificates; or
(b) the Transferee is an insurance company and (i) the Source
is assets of its "general account," (ii) the requirements of Section
401(c) of ERISA and the DOL regulations to be promulgated thereunder
("401(c) Regulations") have been satisfied and will continue to be
satisfied and (iii) the Transferee represents that it understands
that the operation of the general account after December 31, 1999
may affect its ability to continue to hold the Certificates after
the date which is 18 months after the 401(c) Regulations become
final and unless a class exemption issued by the DOL or an exception
under Section 401(c) of ERISA is then available for the continued
holding of Certificates, if the assets of the general account
constitute Plan Assets, it will dispose of the Certificates prior to
the date which is 18 months after the 401(c) Regulations become
final.
(3) The Transferee is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406 and
407 of ERISA and Section 4975 of the Code and understands that each of the
parties to which this certification is made is relying and will continue
to rely on the statements made herein.
Very truly yours,
By:
Name:
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
G-2
Title:
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
G-3
EXHIBIT H
FORM OF REPRESENTATION LETTER
_____________, 199__
Residential Funding Mortgage
Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
[CERTIFICATE REGISTRAR]
Re: Residential Funding Mortgage Securities II, Inc.
Home Equity Loan-Backed Certificates, Series 1998-HS1
Dear Sirs:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") a ___% Certificate
Percentage Interest of Residential Mortgage Securities II, Inc. Home Equity
Loan-Backed Certificates, Series 1998-HS1 (the "Certificates"), issued pursuant
to a Amended and Restated Trust Agreement (the "Trust Agreement") dated January
29, 1998 among Residential Funding Mortgage Securities II, Inc., as depositor
(the "Depositor") and Wilmington Trust Company, as trustee (the "Owner
Trustee"). Capitalized terms used herein and not otherwise defined shall have
the meanings assigned thereto in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Owner Trustee, the Certificate Registrar and
the Master Servicer that:
(1) the Transferee is acquiring the Certificate for its own behalf
and is not acting as agent or custodian for any other person or entity in
connection with such acquisition; and
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
(2) the Transferee is not a partnership, grantor trust or S
corporation for federal income tax purposes, or, if the Transferee is a
partnership, grantor trust or S corporation for federal income tax
purposes, the Certificates are not more than 50% of the assets of the
partnership, grantor trust or S corporation.
Very truly yours,
By:
Name:
Title:
[TPW: NY01:631506.5] 16069-00438 02/02/98 11:03AM
G-2
