RESIDENTIAL RESOURCES, INC.,
Depositor,
and
----------------------------------,
Trustee
--------------------------------
TRUST AGREEMENT
Dated ___________, 20___
Mortgage Pass-Through Certificates Series _____
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................1
Section 1.01. Defined Terms....................................................................1
ARTICLE II CONVEYANCE OF THE UNDERLYING CERTIFICATES; ORIGINAL ISSUANCE OF CERTIFICATES...........8
Section 2.01. Conveyance of the Underlying Certificates........................................8
Section 2.02. Issuance of Certificates Evidencing Interests in the Trust Fund..................9
Section 2.03. Representations, Warranties and Covenants of the Depositor.......................9
ARTICLE III ADMINISTRATION OF THE UNDERLYING CERTIFICATES; PAYMENTS AND REPORTS TO
CERTIFICATEHOLDERS 10
Section 3.01. Administration of the Trust Fund and the Underlying Certificates................10
Section 3.02. Collection of Monies............................................................10
Section 3.03. Establishment of Certificate Account; Deposits in Certificate Account...........11
Section 3.04. Permitted Withdrawals From the Certificate Account..............................11
Section 3.05. Payments........................................................................12
Section 3.06. Statements to Certificateholders................................................13
Section 3.07. Access to Certain Documentation and Information.................................14
Section 3.08. Permitted Investments...........................................................14
Section 3.09. Reports of Certificate Principal Balances to the Clearing Agency]...............14
ARTICLE IV THE CERTIFICATES......................................................................15
Section 4.01. The Certificates................................................................15
Section 4.02. Registration of Transfer and Exchange of Certificates...........................15
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates...............................19
Section 4.04. Persons Deemed Owners...........................................................20
Section 4.05. Appointment of Paying Agent.....................................................20
Section 4.06. [Book-Entry Certificates].......................................................20
ARTICLE V THE TRUSTEE...........................................................................21
Section 5.01. Duties of Trustee...............................................................21
Section 5.02. Certain Matters Affecting the Trustee...........................................21
Section 5.03. Trustee Not Liable for Certificates or Underlying Certificates..................22
Section 5.04. Trustee May Own Certificates....................................................22
Section 5.05. Trustee's Fees; Indemnification.................................................22
Section 5.06. Eligibility Requirements for Trustee............................................23
Section 5.07. Resignation and Removal of the Trustee..........................................23
Section 5.08. Successor Trustee...............................................................24
Section 5.09. Merger or Consolidation of Trustee..............................................24
Section 5.10. Appointment of Co-Trustee or Separate Trustee...................................24
Section 5.11. [Appointment of Office or Agency]...............................................25
Section 5.12. Trustee May Enforce Claims Without Possession of Certificates...................25
Section 5.13. Filings with the Securities and Exchange Commission.............................25
ARTICLE VI TERMINATION; EVENTS OF DEFAULT........................................................25
Section 6.01. Termination of the Trust Fund...................................................25
Section 6.02. Termination of Underlying Trusts................................................26
ARTICLE VII THE DEPOSITOR.........................................................................26
Section 7.01. Liability of the Depositor......................................................26
Section 7.02. Merger, Consolidation or Conversion of the Depositor............................26
Section 7.03. Limitation on Liability of the Depositor........................................27
ARTICLE VIII TAX PROVISIONS........................................................................27
Section 8.01. Trust Administration............................................................27
Section 8.02. Prohibited Activities...........................................................28
Section 8.03. Tax Matters Person of Underlying Trusts.........................................28
ARTICLE IX MISCELLANEOUS PROVISIONS..............................................................28
Section 9.01. Amendment.......................................................................28
i
Section 9.02. Counterparts....................................................................29
Section 9.03. Limitation on Rights of Certificateholders......................................29
Section 9.04. Governing Law...................................................................30
Section 9.05. Notices.........................................................................30
Section 9.06. Notices to Rating Agency........................................................30
Section 9.07. Severability of Provisions......................................................31
Section 9.08. Successors and Assigns..........................................................31
Section 9.09. Article and Section Headings....................................................31
Exhibits
Exhibit A Form of Class __ Certificates
Exhibit B Form of Class __ Certificates
Exhibit C Underlying Certificate Schedule
[Exhibit D Form of Transferee Agreement]
[Exhibit E Form of Rule 144A Certificate]
[Exhibit F Form of Transfer Affidavit and Agreement]
[Exhibit G Form of ERISA Representation Letter for Insurance Companies and
Bank Collective Investment Funds]
ii
THIS TRUST AGREEMENT, dated _____________ __, 20__, between RESIDENTIAL
RESOURCES, INC., as depositor (the "Depositor") and ________________________, as
trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor desires to transfer to the Trust Fund on the date hereof the
Underlying Certificates, and the Trustee will issue [two] new Classes of
Certificates, as provided herein.
The Depositor intends to sell the Mortgage Pass-Through Certificates,
Series ____ (the "Certificates"), to be issued hereunder in [two] classes, which
in the aggregate will evidence the entire beneficial ownership in the Underlying
Certificates.
The following table sets forth the designation, aggregate Initial
Certificate Principal Balance and Maturity Date for each Class of Certificates:
INITIAL CERTIFICATE DESIGNATION PRINCIPAL BALANCE MATURITY DATE
Class __$________________ _____ __, 20__ Class __(1)_____ __, 20__
(1) Although the Class __ Certificates have no actual Certificate
Principal Balance, the initial notional Certificate Principal Balance of the
Class __ Certificates is $_____, which corresponds to the aggregate notional
Underlying Certificate Principal Balance of the Underlying Residual Certificates
as of the Cut-Off Date.
In consideration of the mutual agreements herein contained, the Depositor
and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
"Agreement": This Trust Agreement and all amendments hereof and
supplements hereto.
"Anticipated Termination Date": Any Payment Date on which the Trustee
anticipates that the Trust Fund will be terminated pursuant to Section 6.01.
"Available Distribution Amount": As of any date of determination, the
aggregate amount on deposit in the Certificate Account as of such date of
determination, net of any portion thereof which represents amounts payable
pursuant to clause (ii), (iii) or (iv) of Section 3.04.
"Beneficial Owner": With respect to a Book-Entry Certificate, the Person
who is registered as owner of that Certificate in the books of the Clearing
Agency for that Certificate or in the books of a Person maintaining an account
with such Clearing Agency.
"Book-Entry Certificates": The Class __ Certificates.
"Business Day": Any day other than a Saturday or a Sunday, or a day on
which banking institutions in the State of _________________ or such other state
or states in which the Certificate Account or any account relating to the
Underlying Certificates, are located and are required or authorized by law or
executive order to be closed.
1
"Certificate": Any Class __ Certificate or Class __ Certificate.
"Certificate Account": The trust account or accounts, which shall at all
times be Eligible Accounts, created and maintained by the Trustee pursuant to
Section 3.03. Funds deposited in the Trust Certificate Account shall be held in
trust for the Certificateholders for the uses and purposes set forth in Article
III hereof.
"Certificate Principal Balance": With respect to any Class __ Certificate,
on any date of determination, an amount equal to the Initial Certificate
Principal Balance of such Certificate as specified on the face thereof, as
adjusted pursuant to Section 3.05. The Class __ Certificates have no Certificate
Principal Balance.
"Certificate Registrar and Certificate Register": Shall each have the
meanings provided in Section 4.02.
"Certificateholder or Holder": The person in whose name a Certificate is
registered in the Certificate Register, except that, neither a Disqualified
Organization nor a non-United States Person shall be a Holder of a Class __
Certificates for any purposes hereof, and solely for the purpose of giving any
consent pursuant to this Agreement, any Certificate registered in the name of
the Depositor, the Trustee or any affiliate thereof shall be deemed not to be
Outstanding Certificates or counted in any way.
"Class": Collectively, all of the Certificates bearing the same
designation.
"Class __ Certificate": Any one of the Class __ Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit A.
"Class __ Certificate": Any one of the Class __ Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B.
"Clearing Agency": The Depository Trust Company, or any successor
organization or any other organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and
the regulations of the Securities and Exchange Commission thereunder.
"Clearing Agency Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date": _____ __, 20__.
"Code": The Internal Revenue Code of 1986, as amended.
"Commission": The Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, as amended, or
if at any time such Commission is not existing and performing the duties now
assigned to it under the such Act, then the body performing such duties at such
time under such Act or similar legislation.
"Corporate Trust Office": The principal corporate trust office of the
Trustee in the State of ____________ at which at any particular time its
corporate trust business with respect to this Agreement shall be administered,
which office at the date of the execution of this Agreement is located at
_______________, Attention: Corporate Trust Services.
"Cut-Off Date": _____ 1, 200__ (after giving effect to distributions to be
made on the Underlying Certificates on _____ [25], 20__ pursuant to the
Underlying Agreements).
"Depositor": Residential Resources, Inc., an Arizona corporation, or its
successor in interest.
2
"Disqualified Organization": Any of the following: (i) the United States
or any possession thereof, any State or political subdivision thereof, or any
agency or instrumentality of the foregoing (other than an instrumentality that
is a corporation if all of its activities are subject to tax and, except for the
Freddie Mac, a majority of its board of directors is not selected by such
governmental unit), (ii) any foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (unless such
organization is subject to the tax imposed by Section 511 of the Code on
unrelated business taxable income), or rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code and (iv) any other Person so
designated by the Trustee based upon an Opinion of Counsel provided to the
Trustee that the holding of an ownership interest in a Class __ Certificate by
such Person may cause the Trust Fund or any Person having an ownership interest
in any Class of Certificates (other than such Person) to incur liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the transfer of an ownership interest in the Class __ Certificate to such
Person. The terms "United States," "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code.
"Distribution Date": With respect to any Underlying Certificate,
"Distribution Date" shall have the meaning assigned thereto in the related
Underlying Agreement.
"Distribution Date Statement": With respect to any Underlying Certificate
and any Distribution Date, the monthly remittance report forwarded to the holder
of such Underlying Certificate with respect to such Distribution Date pursuant
to the related Underlying Agreement.
"Eligible Account": An account that is any of the following: (i)
maintained with a depository institution the short-term deposits of which have
been rated not lower than "___" by the Rating Agency and the long-term deposits
of which have been rated not lower than "___" by the Rating Agency, (ii) an
account or accounts the deposits in which such accounts are fully insured to the
limits established by the FDIC, provided that any such deposits not so insured
shall, to the extent acceptable to the Rating Agency, as evidenced in writing,
be otherwise maintained such that (as evidenced by an Opinion of Counsel
delivered to the Trustee and the Rating Agency) the registered Holders of
Certificates have a claim with respect to the funds in such account or a
perfected first security interest against any collateral (which shall be limited
to Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with which such
account is maintained, (iii) a trust account or accounts maintained in the
corporate trust department of the Trustee, or (iv) an account or accounts of a
depository institution acceptable to the Rating Agency (as evidenced in writing
by the Rating Agency that use of any such account as the Certificate Account
will not have an adverse effect on the then-current ratings assigned to the
Classes of the Certificates then rated by the Rating Agency).
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"ERISA Restricted Certificates": The Class __ Certificates.
"Fannie Mae": Fannie Mae (formerly the Federal National Mortgage
Association) or any successor.
"FDIC": The Federal Deposit Insurance Corporation or any successor.
"Final Payment Date": The Payment Date set forth in the notice delivered
by the Trustee of the final payment of the Certificates pursuant to Section
6.01.
"Freddie Mac": Freddie Mac (Formerly known as The Federal Home Loan
Mortgage Corporation) or any successor.
"Independent": When used with respect to any specified Person, such Person
who (i) is in fact independent of the Depositor, (ii) does not have any direct
financial interest in the Depositor or in an affiliate of the Depositor and
(iii) is not connected with the Depositor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
3
"Initial Certificate Principal Balance": With respect to any Class of
Certificates, the aggregate initial Certificate Principal Balance of such Class
of Certificates as of the Closing Date as set forth in the Preliminary Statement
hereto.
"Servicer": With respect to each Underlying Certificate and the Mortgage
Loans in which such Underlying Certificate evidences a beneficial ownership
interest, _____________________, and its successors and assigns, as servicer
under the related Underlying Agreement.
"Maturity Date": With respect to each Class of Certificates, the date as
designated in the Preliminary Statement hereof.
"Mortgage Loans": With respect to any Underlying Certificate, the mortgage
loans in which such Underlying Certificate evidences a beneficial ownership
interest.
"Non-United States Person": Any Person other than a United States Person.
"Notice of Final Distribution": With respect to any Underlying
Certificate, the notice to be provided pursuant to the related Underlying
Agreement to the effect that final distribution on such Underlying Certificate
shall be made only upon presentation and surrender thereof.
"Notice of Termination": Any of the notices given by the Trustee pursuant
to Section 6.01(b).
"Officer's Certificate": As required by this Agreement, a certificate
signed by (i) with respect to the Depositor, the Chairman of the Board, the
President or a Vice President or and by the Secretary of the Depositor or (ii)
with respect to the Trustee, a Responsible Officer.
"Opinion of Counsel": A written opinion of counsel, who may be counsel for
the Depositor, which opinion is reasonably acceptable to the Trustee; except
that any opinion of counsel relating to the qualification of any account
required to be maintained pursuant to this Agreement as an Eligible Account must
be an opinion of Independent counsel. No such opinion of counsel shall be deemed
unacceptable by the Trustee merely because such opinion is an opinion of counsel
who is an employee of the Person on whose behalf such opinion is rendered unless
such opinion of counsel is required to be an opinion of Independent counsel.
"Outstanding Certificates": With respect to the Certificates, as of the
date of determination, all Certificates theretofore executed and delivered under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to the
Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered pursuant to this
Agreement unless proof satisfactory to the Trustee is presented that
any such Certificates are held by a holder in due course.
"Ownership Interest": As to any Certificate or Underlying Certificate, any
ownership or security interest in such Certificate or Underlying Certificate,
including any interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner or
as pledgee.
"Paying Agent": Any Paying Agent appointed by the Trustee in accordance
with Section 4.05 hereof.
4
"Payment Date": The Business Day immediately following (a) the [25]th day
of each month or, (b) if such day is not a Business Day, then the Business Day
immediately following such [25]th day. The anticipated first Payment Date will
be _____ __, 20__.
"Percentage Interest": With respect to any Class __ Certificate, the
undivided percentage ownership interest evidenced by such Certificate in all of
the Certificates of such Class, which percentage ownership interest shall be
equal to the Initial Certificate Principal Balance of such Certificate divided
by the aggregate Initial Certificate Principal Balance of all of the
Certificates of such Class. With respect to a Class __ Certificate, the
undivided percentage ownership interest in such Class, as stated on the face of
such Certificate.
"Permitted Investments": One or more of the following:
(i) direct obligations of, or obligations fully guaranteed as to
principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States;
(ii) repurchase obligations (the collateral for which is held by a third
party or the Trustee) with respect to any security described in
clause (i) above, provided that the long-term unsecured obligations
of the party agreeing to repurchase such obligations are at the time
rated by the Rating Agency in one of its two highest short-term
rating categories available;
(iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more
than 365 days or a remaining maturity of more than 30 days) of any
U.S. depository institution or trust company incorporated under the
laws of the United States or any state thereof or of any domestic
branch of a foreign depository institution or trust company;
provided that the debt obligations of such depository institution or
trust company at the date of acquisition thereof have been rated by
the Rating Agency in one of its two highest short-term rating
categories available;
(iv) commercial paper (having original maturities of not more than 365
days) of any corporation incorporated under the laws of the United
States or any state thereof which on the date of acquisition has
been rated by the Rating Agency in its highest short-term rating
available; provided that such commercial paper shall have a
remaining maturity of not more than 30 days;
(v) a money market fund or mutual fund rated by the Rating Agency in the
highest long-term rating category available; and
(vi) other obligations or securities that are acceptable to the Rating
Agency as a Permitted Investment hereunder and will not reduce the
rating assigned to the Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency, as
evidenced in writing; provided, however, that no instrument shall be
a Permitted Investment if it represents, either (1) the right to
receive only interest payments with respect to the underlying debt
instrument or (2) the right to receive both principal and interest
payments derived from obligations underlying such instrument and the
principal payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of
such underlying obligations.
"Permitted Transferee": Any transferee of a Class __ Certificate other
than a Non-United States Person or Disqualified Organization.
5
"Person": Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan": Any employee benefit plan or certain other retirement plans and
arrangements, including individual retirement accounts and annuities, Keogh
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to the ERISA and Section 4975 of the Code.
"Rating Agency": _______________________ or its successors. If such agency
and its successor are no longer in existence, "Rating Agency" shall be such
nationally recognized statistical rating agency, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee.
"Realized Loss": With respect to any Underlying Certificate, "Realized
Loss" shall have the meaning assigned thereto in the related Underlying
Agreement.
"Record Date": With respect to any Payment Date occurring in the same
month as the related Distribution Date, the last Business Day of the month
preceding the month in which the related Distribution Date on the Underlying
Certificates occurs, and with respect to any Payment Date occurring in the month
subsequent to the month in which the related Distribution Date occurs, the last
Business Day of the second month preceding the month in which such Payment Date
occurs.
"REMIC": A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
"Responsible Officer": When used with respect to the Trustee, any officer
of the Corporate Trust Division of the Trustee, including any Senior Vice
President, any Vice President, any Assistant Vice President, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions substantially similar to those performed by any of the
above designated officers to whom, with respect to a particular matter, such
matter is referred.
"Rule 144A": Rule 144A under the Securities Act of 1933, as amended, as in
effect from time to time.
"Termination Date": The Payment Date on which the Trust Fund is terminated
pursuant to Section 6.01.
"Transfer": Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
"Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
"Trust Fund": The segregated pool of assets subject hereto, constituting
the primary trust created hereby and to be administered hereunder, consisting
of:
(i) the Underlying Certificates described in the Underlying Certificate
Schedule, attached hereto as Exhibit C;
(ii) the Certificate Account; and
(iii) all distributions on the Underlying Certificates after the Closing
Date.
6
"Trustee": _____________________, a [national banking association], its
successor in interest, or any successor trustee appointed as herein provided, as
trustee.
"Trustee Fee": With respect to any Payment Date, the related monthly fee
payable to the Trustee as compensation for its activities hereunder, which shall
be payable from amounts on deposit in the Certificate Account and which shall be
equal to an amount payable at the Trustee Fee Rate on the aggregate Underlying
Certificate Principal Balance of the Underlying Certificates immediately prior
to the related Distribution Date.
"Trustee Fee Rate": With respect to any Underlying Certificate, an annual
rate equal to _________%.
"Underlying Agreement": With respect to any Underlying Certificate, the
related agreement, together with all exhibits thereto, pursuant to which such
Underlying Certificate was issued.
"Underlying Certificate": Any one of the mortgage pass-through
certificates transferred to the Trustee by the Depositor pursuant to Section
2.01, as from time to time are held as a part of the Trust Fund and as are more
fully described in the Underlying Certificate Schedule attached hereto as
Exhibit C.
"Underlying Certificateholder": The registered holder of any Underlying
Certificate, which following the execution and delivery of this Agreement by the
parties hereto, shall be the Trustee for the benefit of the Certificateholders.
"Underlying Certificate Principal Balance": With respect to any Underlying
Certificate, as of any Distribution Date (following all distributions to be made
with respect to the Underlying Certificate on such Distribution Date), and as of
any date of determination thereafter until the next succeeding Distribution
Date, the principal balance of such Underlying Certificate as set forth in, or
calculated in accordance with the terms of the related Underlying Agreement on
the basis of, the Distribution Date Statement sent to the Trustee as Underlying
Certificateholder relating to such Distribution Date.
"Underlying Certificate Schedule": The schedule attached as Exhibit C
hereto identifying the Underlying Certificates.
"Underlying Event of Default": An "Event of Default" as defined in the
related Underlying Agreement.
"Underlying Regular Certificates": The classes of Underlying Certificates
that represent regular interests in a REMIC.
"Underlying Residual Certificates": The classes of Underlying Certificates
that represent residual interests in a REMIC.
"Underlying Trust": With respect to any Underlying Certificate, the trust
created by the related Underlying Agreement.
"Underlying Trustee": With respect to any Underlying Agreement, the
related trustee thereunder.
"United States Person": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate
whose income is subject to United States federal income tax purposes regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States fiduciaries have the authority to control all decisions of
the trust. The term "United States" shall have the meaning set forth in Section
7701 of the Code or successor provisions.
7
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. For so long as the related
Classes of Certificates remain outstanding, 99% of all of the Voting Rights
shall be allocated among Holders of the Class __ Certificates and 1% of the
Voting Rights shall be allocated to the Holders of the Class __ Certificates;
provided, however, that any Certificate registered in the name of the Depositor,
the Trustee or any affiliate thereof shall be deemed not to have any Voting
Rights.
All other capitalized terms used herein, if not otherwise defined herein
and unless the context otherwise requires, shall have the respective meanings
set forth in the applicable Underlying Agreements.
ARTICLE II
CONVEYANCE OF THE UNDERLYING CERTIFICATES; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of the Underlying Certificates.
The Depositor, concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set-over and otherwise convey to the Trustee, in
trust, for the use and benefit of the Certificateholders, without recourse, all
the right, title and interest of the Depositor in and to any and all benefits
accruing to the Depositor from (a) the Underlying Certificates, and all payments
thereon to be made after _____ 1, 20__; (b) the Certificate Account and all
investments therein and proceeds thereof, whether in the form of cash,
instruments, securities or any other properties; and (c) proceeds of the
foregoing (including, but not by way of limitation, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, rights to payment of any and every kind, and other forms of
obligations and receivables that at any time constitute all or part or are
included in the proceeds of any of the foregoing) (collectively, the "Trust
Fund").
In connection with such transfer and assignment, the Depositor does hereby
deliver or cause to be delivered to, and deposit or cause to be deposited with,
the Trustee each of the Underlying Certificates, together with the following
documents or instruments relating to each Underlying Certificate:
(i) either (A) a duly issued and authenticated certificate endorsed to
"____________, as trustee under the Trust Agreement, dated _____ __,
20__, relating to the Residential Resources _____ Mortgage
Pass-Through Certificates, Series ____-_," together with such
documents as shall be necessary to cause registration of transfer of
such certificate to be made and to obtain a duly issued and
authenticated certificate in such name, or (B) definitive evidence
that each Underlying Certificate in uncertificated or book-entry
form, or held through a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, is registered directly or on
the books of such clearing corporation or of a financial
intermediary in the name of the Trustee for the benefit of the
Certificateholders;
(ii) a copy of the related Underlying Agreement; and
(iii) copies of the most recent Distribution Date Statements delivered to
the related Underlying Certificateholder with respect to the
Underlying Certificate.
The Trustee hereby acknowledges the receipt by it of the Underlying
Certificates and the other documents and instruments referenced above, and
declares that it holds and will hold such Underlying Certificates, such other
documents and instruments and that it holds and will hold all other assets and
documents included in the Trust Fund, in trust for the exclusive use and benefit
of all present and future Certificateholders.
The transfer of the Underlying Certificates and all other assets
constituting the Trust Fund is absolute and is intended by the parties hereto as
a sale. Except as provided in Sections 2.02, 3.02(b) and 6.01 hereof, the
Trustee shall not assign, sell, dispose of or transfer any interest in the
Underlying Certificates or any other asset constituting the Trust Fund or permit
the Underlying Certificates or any other asset constituting the Trust Fund to be
subjected to any lien, claim or encumbrance arising by, through or under the
Trustee or any person claiming by, through or under the Trustee.
8
Promptly after the Closing Date, the Trustee shall cause registration of
transfer of each Underlying Certificate to be made and shall obtain, in exchange
for the documents and instruments specified in Section 2.01(i), a duly issued
and authenticated certificate registered in the name specified in Section 2.01
in respect of such Underlying Certificate. The Depositor shall promptly remit to
the Trustee (by wire transfer of immediately available funds on the date of
receipt) any amounts received by the Depositor in respect of any Underlying
Certificate on or following the date hereof. It is intended that the conveyance
of the Underlying Certificates by the Depositor to the Trustee as provided in
this Section be, and be construed as, an absolute sale of the Underlying
Certificates by the Depositor to the Trustee for the benefit of the
Certificateholders. Furthermore, it is not intended that such conveyance be
deemed a pledge of the Underlying Certificates by the Depositor to the Trustee
to secure a debt or other obligation of the Depositor. However, in the event
that, notwithstanding the intent of the parties, the Underlying Certificates are
held to be the property of the Depositor, or if for any other reason this
Agreement is held or deemed to create a security interest in the Underlying
Certificates, then it is intended that, (a) this Agreement shall also be deemed
to be a security agreement within the meaning of Articles 8 and 9 of the
____________ Uniform Commercial Code and the Uniform Commercial Code of any
applicable jurisdiction; (b) the conveyance provided for in this Section and
Section 2.02 shall be deemed to be a grant by the Depositor to the Trustee for
the benefit of the Certificateholders of a security interest in all of the
Depositor's right, title and interest in and to the Underlying Certificates and
all amounts payable to the Holders of the Underlying Certificates after the
Closing Date in accordance with the terms thereof, and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, including without limitation all amounts from time
to time held or invested in the Certificate Account, whether in the form of
cash, instruments, securities or other property; (c) the possession by the
Trustee or its agent of Underlying Certificates and such other items of property
as constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" for purposes of perfecting the
security interest pursuant to the ______________ Uniform Commercial Code and the
Uniform Commercial Code of any applicable jurisdiction (including, without
limitation, Sections 9-305, 8-313 or 8-321 thereof); and (d) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees, or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law. The Depositor and the Trustee, at
the Depositor's direction, shall to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Underlying Certificates and other
assets constituting the Trust Fund described above, such security interest would
be deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of the Agreement.
Section 2.02. Issuance of Certificates Evidencing Interests in the Trust Fund.
The Trustee acknowledges the assignment to it of the Underlying
Certificates and, concurrently therewith and in exchange therefor, pursuant to
the written request of the Depositor executed by an officer of the Depositor,
the Trustee has executed and caused to be authenticated and delivered to, or
upon the order of, the Depositor the Certificates in authorized denominations
which evidence ownership of the entire Trust Fund.
Section 2.03. Representations, Warranties and Covenants of the Depositor.
The Depositor hereby represents and warrants to the Trustee for the
benefit of Certificateholders, as of the Closing Date, that immediately prior to
the assignment of the Underlying Certificates to the Trustee, the Depositor had
good title to, and was the sole owner of, each Underlying Certificate free and
clear of any pledge, lien, encumbrance or security interest and such assignment
validly transfers ownership of the Underlying Certificates to the Trustee, free
and clear of any pledge, lien, encumbrance or security interest. It is
understood and agreed that the representations and warranties set forth in this
Section 2.03 shall survive delivery of the Underlying Certificates to the
Trustee. Upon discovery by either the Depositor or the Trustee of a breach of
any representation or warranty set forth in this Section 2.03 which materially
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and adversely affects the interests of the Certificateholders in any Underlying
Certificate, the party discovering such breach shall give prompt written notice
to the other party. In the event of such breach, the Depositor shall have 30
days, from the earlier of the discovery by the Depositor of such breach or the
receipt of such written notice, to cure such breach in all material respects or
repurchase such Underlying Certificate as provided below. If the Depositor fails
to cure such breach, the Depositor shall deposit into the Certificate Account on
the next succeeding Distribution Date an amount equal to 100% of the then
outstanding Underlying Certificate Principal Balance of such Underlying
Certificate, together with the sum of accrued interest on such Underlying
Certificate Principal Balance to the first day of the month in which the
proceeds of such repurchase are to be distributed and the aggregate of all
previously unpaid Available Interest Shortfall Amounts in respect of such
Underlying Certificate. Upon the deposit of such amount, the Trustee is hereby
authorized and shall, at the Depositor's written direction and expense, take
such actions and execute such documents and instruments as shall be necessary to
reconvey to the Depositor the Ownership Interest in such repurchased Underlying
Certificate.
ARTICLE III
ADMINISTRATION OF THE UNDERLYING CERTIFICATES;
PAYMENTS AND REPORTS TO CERTIFICATEHOLDERS
Section 3.01. Administration of the Trust Fund and the Underlying
Certificates.
If at any time the Trustee, as an Underlying Certificateholder, is
requested in such capacity to take any action or to give any consent, approval
or waiver, including without limitation in connection with an amendment of the
related Underlying Agreement or if an Underlying Event of Default occurs under
the related Underlying Agreement, the Trustee, in its capacity as an Underlying
Certificateholder, may take such action in connection with the enforcement of
any rights and remedies available to it in such capacity with respect thereto,
but only in accordance with the written directions of Holders of Certificates
entitled to at least 51% of the Voting Rights. The Trustee shall promptly notify
all of the Certificateholders in writing of any such request.
Section 3.02. Collection of Monies.
(a) In connection with its receipt of any distribution on an Underlying
Certificate on any Distribution Date, the Trustee shall review the related
Distribution Date Statement and shall confirm that the information contained
therein is arithmetically consistent; provided, however, that the Trustee shall
have no obligation to recompute, recalculate or verify any underlying
information from which the information in the Distribution Date Statement is
derived. The Trustee shall review each Distribution Date Statement received with
respect to the Underlying Certificates and use its reasonable efforts to obtain
any Distribution Date Statement not timely received and any missing information
required to be disclosed in the Distribution Date Statement pursuant to the
Underlying Agreement to the extent such information is needed to its perform its
duties hereunder. In the event that the Trustee is unable to obtain any
Distribution Date Statement or any such information, the Trustee shall notify
the Depositor and the Trustee and the Depositor shall cooperate in obtaining the
Distribution Date Statement or missing information from the Underlying Trustee.
The Trustee shall not be under any obligation to contact any Underlying Trustee
for information in the Distribution Date Statements which is not required by the
Underlying Agreement.
If the Trustee shall not have received a distribution on any Underlying
Certificate by the close of business on the date on which such distribution was
expected to be received by the Trustee, the Trustee shall notify the trustee or
other party responsible for effectuating distributions under the related
Underlying Agreement, and (i) if such distribution shall not have been received
by the Trustee one Business Day following such notice or (ii) a Responsible
Officer of the Trustee shall gain actual knowledge of any Underlying Event of
Default under and as defined in any Underlying Agreement, the Trustee shall
promptly notify the Depositor and the Certificateholders in writing and such
parties shall proceed in accordance with the terms and conditions of Section
3.01. The Trustee shall notify the Depositor if any trustee or other party
responsible for effecting distributions under the related Underlying Agreement
discontinues making payments by wire transfer and sends them by regular or
express mail. With respect to each Underlying Agreement for which the Trustee is
the underlying trustee, the Trustee shall make all payments with respect to the
related Underlying Certificate by wire transfer in immediately available funds.
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(b) Except as otherwise provided in Section 6.01, upon its receipt of a
Notice of Final Distribution, the Trustee shall present and surrender the
Underlying Certificate to which such notice applies for final payment thereon in
accordance with the terms and conditions of the related Underlying Agreement and
such Notice of Final Distribution. The Trustee shall promptly deposit in the
Certificate Account the final distribution received upon presentation and
surrender of any Underlying Certificate.
Section 3.03. Establishment of Certificate Account; Deposits in
Certificate Account.
(a) The Trustee, for the benefit of the Certificateholders, shall
establish and maintain one or more accounts (collectively, the "Certificate
Account"), each of which shall be an Eligible Account, entitled
"___________________, in trust for the registered holders of Residential
Resources, Inc. Mortgage Pass-Through Certificates, Series _-_," held in trust
by the Trustee for the benefit of the Certificateholders. The Trustee shall
cause the following payments and collections in respect of the Underlying
Certificates to be deposited directly into the Certificate Account on a daily
basis:
(i) all distributions due and received on the Underlying
Certificates subsequent to the Cut-off Date;
(ii) any amounts received in connection with the sale of the
Underlying Certificates pursuant to Section 6.01; and
(iii) any other amounts specifically required to be deposited in the
Certificate Account hereunder.
The foregoing requirements for deposit in the Certificate Account shall be
exclusive.
(b) Funds in the Certificate Account may be invested by the Trustee in
Permitted Investments in accordance with the provisions set forth in Section
3.08.
Section 3.04. Permitted Withdrawals From the Certificate Account.
The Trustee may from time to time withdraw funds from the Certificate
Account for the following purposes:
(i) to make payments in the amounts and in the manner provided for
in Section 3.05;
(ii) to pay itself any Trustee Fee and, to the extent not previously
paid, any unpaid Trustee Fees, and the costs incurred by it in making certain
filings with the Commission pursuant to Section 5.12;
(iii) to pay itself any investment income on amounts in the
Certificate Account;
(iv) to reimburse the Depositor or the Trustee for expenses incurred
by and reimbursable to the Depositor or the Trustee pursuant to Section 5.05 or
Section 7.03 or to pay any tax pursuant to Section 860E(e)(6) of the Code,
except as otherwise provided in such Sections; and
(v) to clear and terminate the Certificate Account upon the
termination of this Agreement.
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The Trustee shall determine the Payment Date in accordance with the
definition thereof. On each Payment Date (other than with respect to the
investment income in clause (iii) above, which may be paid on any date), the
Trustee shall withdraw all funds from the Certificate Account and shall use such
funds withdrawn from the Certificate Account only for the purposes described in
Sections 3.04 and 3.05.
Section 3.05. Payments.
(a) On each Payment Date, the Trustee shall withdraw from the Certificate
Account all Available Distribution Amount then on deposit, and the Trustee or
the Paying Agent appointed by the Trustee shall pay such Available Distribution
Amount in the following amounts and order of priority, in each case to the
extent of the remaining Available Distribution Amount:
t 12 (i) to the Holders of the Class __ Certificates, an amount equal to
the excess of (A) interest and principal in respect of the Underlying Regular
Certificates to the extent received by the Trustee on or before the related
Distribution Date and not previously paid over (B) amounts paid since the prior
Payment Date pursuant to clauses (ii) and (iv) of Section 3.04; and
(ii) to the Holders of the Class __ Certificates, an amount equal to
principal, interest and any other amounts in respect of the Underlying Residual
Certificates, to the extent received by the Trustee on or before the related
Distribution Date and not previously paid.
After making the foregoing payments, the Trustee will adjust the
Certificate Principal Balance of the Class __ Certificates to equal the
aggregate outstanding principal balance of the Underlying Regular Certificates.
(b) All payments made with respect to each Class on any Payment Date shall
be allocated pro rata among the Outstanding Certificates of such Class based
upon their respective Percentage Interests. Payments to the Certificateholders
of each Class on each Payment Date will be made to the Certificateholders of
record on the related Record Date. Payments to any Certificateholder on any
Payment Date shall be made by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have so
notified the Trustee or the Paying Agent in writing at least five Business Days
prior to the related Record Date (which notification shall need to be made only
once) and if such Certificateholder is the registered owner of Certificates with
an aggregate Initial Certificate Principal Balance of not less than
$_______________, or otherwise by check mailed by first class mail to the
address of such Certificateholder appearing in the Certificate Register. Final
payment on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such final
payment.
(c) Except as otherwise provided in Section 6.01, whenever the Trustee
expects that the final payment with respect to any Class of Certificates will be
made on the related Payment Date based on information in the Distribution Date
Statements, the Trustee shall mail on the Business Day prior to such Payment
Date to each Holder of such Class of Certificates a notice to the effect that:
(i) the Trustee expects that the final payment with respect to such
Class of Certificates will be made on such Payment Date but only upon
presentation and surrender of such Certificates at the office of the Trustee
therein specified; and
(ii) no interest shall accrue on such Certificates from and after
such Payment Date.
Upon presentation and surrender of the Certificates by the
Certificateholders on the Termination Date, the Trustee shall distribute to the
Certificateholders the amounts otherwise distributable on such Payment Date
pursuant to Section 3.05(a). Any funds not distributed on such Payment Date
because of the failure of any Certificateholders to tender their Certificates
shall be set aside and held uninvested in trust for the account of the
appropriate non-tendering Certificateholders. If any Certificates as to which
notice has been given pursuant to this Section 3.05(c) shall not have been
surrendered for cancellation within six months after the time specified in such
notice, the Trustee shall mail a second notice to the remaining
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Certificateholders, at their last addresses shown in the Certificate Register,
to surrender their Certificates for cancellation in order to receive, from such
funds held, the final payment with respect thereto. If within one year after the
second notice any Certificate shall not have been surrendered for cancellation,
the Trustee shall directly or through an agent, take reasonable steps to contact
the remaining Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining such funds and of contacting
Certificateholders shall be paid out of the assets which remain held. If within
two years after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee shall segregate all amounts
distributable to the Holders thereof and shall thereafter hold such amounts
uninvested for the benefit of such Holders. No interest shall accrue or be
payable to any Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificates for final payment
thereof in accordance with this Section 3.05(c). Notwithstanding the foregoing,
if in the Trustee's judgment, the escheat or unclaimed property laws of the
relevant jurisdiction provide for different procedures regarding unclaimed
funds, the Trustee shall abide by such procedures.
Section 3.06. Statements to Certificateholders.
On each Payment Date, the Trustee shall prepare (based, in part and as
applicable, on information in the Distribution Date Statements), and shall
forward by mail, a statement to each Certificateholder and to the Depositor
stating:
(i) the Available Distribution Amount for such Payment Date;
(ii) with respect to such Payment Date, amounts of interest and
principal (and other amounts if applicable) distributed to the
Certificateholders of each Class of Certificates on such Payment Date pursuant
to Section 3.05;
(iii) the Certificate Principal Balance of the Class __ Certificates
after giving effect to payments and other adjustments on such Payment Date;
(iv) the amount of the Trustee Fee for such Payment Date paid to the
Trustee on such Payment Date; the amounts of any previously unpaid Trustee Fees
paid to the Trustee on such Payment Date and any accrued but unpaid Trustee Fees
receivable by the Trustee on future Payment Dates; and amounts paid to the
Trustee on such Payment Date pursuant to Section 3.04(iv) and any unpaid amounts
receivable on future Payment Dates;
(v) with respect to the Mortgage Loans in each Underlying Trust, the
amount and percent of delinquencies (broken down by 30 days, 60 days and 90
days), foreclosures and REO;
(vi) the Realized Losses, if any, allocated to the Underlying
Certificates, by Underlying Trust, on the immediately preceding Distribution
Date and to the Class __ Certificates on that Payment Date and the aggregate
Realized Losses, if any, allocated to the Underlying Certificates, by Underlying
Trust, and to the Class __ Certificates through that Payment Date;
(vii) with respect to each Underlying Trust, the coverage amount or
principal balance of the related pool insurance policy, special hazard policy,
special hazard fund and letter of credit, as applicable, after application of
any covered losses on the immediately preceding Distribution Date and the
cumulative covered losses applied to such type of credit enhancement through the
immediately preceding Distribution Date;
(viii) the shortfall of interest, if any, allocated to Holders of
the Underlying Regular Certificates on the immediately preceding Distribution
Date that have reduced the amount of interest distributed to the holders of the
Class __ Certificates on that Payment Date and the aggregate amounts of
shortfall of interest, if any, allocated to Holders of the Underlying Regular
Certificates that have reduced the amount of interest distributed to the holders
of the Class __ Certificates through that Payment Date; and
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(ix) the aggregate Underlying Certificate Principal Balances of the
Underlying Certificates as of the close of business on the immediately preceding
Distribution Date.
In the case of the information furnished pursuant to clause (ii) above,
the amounts shall also be expressed as a dollar amount per $1,000 of the
applicable Class.
In addition, the Trustee promptly will furnish to Certificateholders and
the Depositor copies of any notices, statements, reports (other than any
servicing reports) or other communications, including any Distribution Date
Statements, for each Distribution Date received by the Trustee as the Underlying
Certificateholder.
On or before [the date of this Agreement] of each calendar year, beginning
with calendar year 20__, the Trustee shall prepare, or cause to be prepared, and
deliver, or cause to be delivered, by first class mail to each Person who at any
time during the previous calendar year was a Certificateholder of record a
statement containing the information required to be contained in the regular
monthly report to Certificateholders, as set forth in clause (ii) above
aggregated for such calendar year or the applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code and regulations thereunder as from time to time are in force.
[Upon the request of any Certificateholder, the Trustee shall furnish to
such holder such information with respect to the Trust Fund and the Certificates
as is reasonably requested by such holder for purposes of enabling such holder
to satisfy the applicable informational requirements under Rule 144A or
otherwise, to the extent that the Trustee possesses such information or can
obtain possession of such information without incurring undue burden or
expense.]
Section 3.07. Access to Certain Documentation and Information.
The Trustee shall provide to the Certificateholders access to the
Underlying Certificates and all reports, documents and records maintained by the
Trustee in respect of its duties hereunder, such access being afforded at a
reasonable charge but only upon reasonable written request and during normal
business hours at offices designated by the Trustee.
Section 3.08. Permitted Investments.
The Trustee may invest or direct any institution maintaining the
Certificate Account to invest the funds in such Certificate Account in Permitted
Investments, which shall mature not later than the Business Day immediately
preceding the next Payment Date (except that, any investment in the institution
with which the Certificate Account is maintained may mature on such Payment
Date) and shall not be sold or disposed of prior to its maturity. All such
Permitted Investments shall be made in the name of the Trustee or its nominee.
All income and gain received from any such investment shall be deposited in the
Certificate Account, and may only be withdrawn and applied for the purposes set
forth in Section 3.04. The Trustee in its individual capacity, shall deposit in
the Certificate Account the amount of any loss incurred in respect of such
Permitted Investments immediately upon realization of such loss.
Section 3.09. Reports of Certificate Principal Balances to the Clearing
Agency].
If and for so long as any Certificate is held by the Clearing Agency, on
the second Business Day before each Payment Date, the Trustee shall give oral
notice to the Clearing Agency (and shall promptly thereafter confirm in writing)
the following: (a) the amount of interest and principal to be distributed on the
Certificates of such Class on the upcoming Payment Date, as reported in the
related remittance report, (b) the Record Date for such distribution, (c) the
Payment Date for such distribution and (d) the aggregate Certificate Principal
Balance of each Class of Certificates reported in such month.]
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ARTICLE IV
THE CERTIFICATES
Section 4.01. The Certificates.
The Certificates will be substantially in the respective forms annexed
hereto as Exhibit A and Exhibit B. The Certificates will be issuable in
[registered form only]. The Class __ Certificates will be issuable in
denominations evidencing initial Certificate Principal Balances of not less than
$[100,000] and integral multiples of $[1,000] in excess thereof, except that one
Certificate of such Class may be issued in an amount evidencing the sum of the
authorized minimum denomination thereof and the remainder of the aggregate
initial Certificate Principal Balance of such Class. The Class __ Certificates
will each be issuable in denominations of any Percentage Interest representing
[5.00]% and multiples of [0.01]% in excess thereof, except that one Certificate
of such Class may be issued with a Percentage Interest representing 0.01%, as
provided in Section 8.03.
The Certificates shall, on original issue, be executed and authenticated
by the Trustee, not in its individual capacity but solely as Trustee, and
delivered by the Trustee to or upon the order of the Depositor upon receipt by
the Trustee of the Underlying Certificates and any other documents that are
required by this Agreement or that the Trustee may reasonably request. The
Certificates shall be executed by manual signature on behalf of the Trustee in
its capacity as trustee hereunder by an authorized officer. Certificates bearing
the manual signatures of individuals who were at any time the proper officers of
the Trustee shall bind the Trustee, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
Section 4.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies
to be appointed by the Trustee in accordance with the provisions of this Section
4.02 a Certificate Register in which, subject to such reasonable regulations as
it may prescribe, the Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as herein provided. The Trustee
is initially appointed Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided. The
Certificate Registrar (if not the Trustee) shall provide the Trustee with a
certified list of Certificateholders as of each Record Date prior to the Payment
Date. Upon satisfaction of the conditions set forth below, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of a like Class and aggregate Percentage Interest. In addition, the Trustee
shall notify the Depositor of every proposed transfer or exchange of the
Certificates.
(b) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of a like Class and aggregate
Percentage Interest, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for exchange
the Trustee shall execute and the Certificate Registrar shall authenticate and
deliver the Certificates of such Class which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by, the Holder thereof or his attorney duly authorized in writing.
15
(c) [Except as provided in Section 4.02(d) 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 of 1933, as amended (the "1933 Act") and such transfer will not
result in the registration of the Trust Fund as an "investment company" under
the Investment Company Act of 1940, as amended (the "1940 Act"), and the
applicable securities laws of any state or other jurisdiction or is registered
or qualified in accordance with the 1933 Act and such laws. In the event that a
Transfer of a Certificate is to be made, (i) the Depositor may direct the
Trustee to require a written Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee and the Depositor that such Transfer may
be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from the 1933 Act and such laws or is being made pursuant to the
1933 Act and such laws, and that such Transfer will not result in the Trust Fund
being deemed an "investment company" under the 1940 Act, which Opinion of
Counsel shall not be an expense of the Trustee or the Depositor and (ii) the
Trustee shall require the Transferee to execute an investor representation
letter, substantially in the form of Exhibit D hereto (a "Transferee
Agreement"), acceptable to and in form and substance satisfactory to the
Depositor and the Trustee certifying to the Trustee and the Depositor the facts
surrounding such Transfer, which Transferee Agreement shall not be an expense of
the Trustee or the Depositor; provided however that such Transferee Agreement
will not be required in connection with any transfer of any such Certificate by
the Depositor to an affiliate of the Depositor, and the Trustee shall be
entitled to conclusively rely upon a representation (which, upon the request of
the Trustee, shall be a written representation) from the Depositor of the status
of such transferee as an affiliate of the Depositor.]
[The Holder (including the Depositor) of a Certificate desiring to effect
such transfer, sale, pledge or other disposition shall, and by acceptance of
such Certificate agrees to, indemnify the Trustee and the Depositor and the
Certificate Registrar against any liability that may result if the transfer,
sale, pledge or other disposition is not so exempt or is not made in accordance
with the 1933 Act and state laws or results in the registration of the Trust
Fund as an "investment company" under the 1940 Act. Moreover, the Holder
(including the Depositor) of each Certificate, by accepting such Certificate,
covenants with the Depositor and the Trustee that neither such Holder nor anyone
acting on its behalf will (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 or 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 the Certificates under the Securities Act of
1933, as amended (the "1933 Act"), that would render the disposition of any
Certificate a violation of Section 5 of the 1933 Act or any state securities
law, that would result in the registration of the Trust Fund as an "investment
company" under the Investment Company Act of 1940, that would require
registration or qualification pursuant thereto, or that would constitute a sale
or other transfer of the Certificates, except in compliance with the provisions
of this Agreement.]
(d) No transfer of the Class __ Certificates may be made except to
"qualified institutional buyers" who have complied with the requirements of this
Section 4.02(d) hereof and who constitute Permitted Transferees or to the
Depositor or an Affiliate of the Depositor. Transfers of each Class of
Certificates may be made in accordance with this Section 4.02(d) if the
prospective transferee of a Certificate provides the Trustee and the Depositor
with an investment letter substantially in the form of Exhibit E attached hereto
(a "Rule 144A Certificate"), which Rule 144A Certificate shall not be an expense
of the Trustee or the Depositor, and which Rule 144A Certificate states that,
among other things, such transferee is a "qualified institutional buyer" as
defined under Rule 144A. Such transfers shall be deemed to have complied with
the requirements of Section 4.02(c) hereof; provided, however, that no Transfer
of any of the Certificates may be made pursuant to this Section 4.02(d) by the
Depositor. The Holder (including the Depositor) of a Certificate desiring to
effect any such Transfer hereunder does hereby agree to indemnify the Trustee
and the Depositor and the Certificate Registrar against any liability that may
result if the Transfer is not made in accordance with federal and state laws and
this Agreement.]
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(e) (i) Each Person who has or who acquires any Ownership Interest in a
Class __ Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class __ Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Class __ Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change
in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class __ Certificate to a United States Person,
the Trustee shall require delivery to it, and shall not
register the Transfer of any Class __ Certificate until its
receipt of an affidavit and agreement (a "Transfer Affidavit
and Agreement" attached hereto as Exhibit F) from the proposed
Transferee, in form and substance satisfactory to the Trustee,
representing and warranting, among other things, such
Transferee is a Permitted Transferee, that it is not acquiring
its Ownership Interest in the Class __ Certificate that is the
subject of the proposed Transfer as a nominee, trustee or
agent for any Person who is not a Permitted Transferee, that
for so long as it retains its Ownership Interest in a Class __
Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of this
Section 4.02(e) and agrees to be bound by them.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if
a Responsible Officer of the Trustee assigned to and working
in relation to this transaction has actual knowledge that the
proposed Transferee is not a Permitted Transferee or that the
proposed Transferee is acting as a nominee, trustee, or agent
for any Person who is not a Permitted Transferee in acquiring
an Ownership Interest in a Class __ Certificate, no Transfer
of an Ownership Interest in a Class __ Certificate to such
proposed Transferee shall be effected.
(D) Each Person holding or acquiring an Ownership Interest in a
Class __ Certificate shall agree to require a Transfer
Affidavit and Agreement from any other Person to whom such
Person attempts to transfer its Ownership Interest in a Class
__ Certificate.
(E) Each Person holding or acquiring an Ownership Interest in a
Class __ Certificate shall agree not to transfer such
Ownership Interest if (1) a purpose of such transfer is or
will be to impede the assessment or collection of any tax, (2)
the Transferor knows or believes that any representation
contained in the proposed Transferee's Transfer Affidavit and
Agreement is false, or (3) the Transferor has any actual
knowledge that the proposed Transferee is not a Permitted
Transferee.
(F) Each Person holding or acquiring an Ownership Interest in a
Class __ Certificate, by purchasing an Ownership Interest in
such Certificate, agrees to give the Trustee written notice
that it is a "pass-through interest holder" within the meaning
of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A)
immediately upon acquiring an Ownership Interest in a Class __
Certificate, if it is a "pass-through interest holder," or is
holding an Ownership Interest in a Class __ Certificate on
behalf of a "pass-through interest holder."
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(ii) The Trustee will register the Transfer of any Class __
Certificate only if it shall have received the Transfer Affidavit and Agreement
and all of such other documents as shall have been reasonably required by the
Trustee as a condition to such registration. Transfers of the Class __
Certificates to Non-United States Persons and Disqualified Organizations are
prohibited.
(iii) (A) If any Disqualified Organization or Non-United States Person
shall become a holder of a Class __ Certificate, then the last
preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights as Holder thereof
retroactive to the date of registration of such Transfer of
such Class __ Certificate. If a transfer of a Class __
Certificate is disregarded pursuant to the provisions of
Treasury regulation Sections 1.860E-1(c) or 1.860G-3(a), then
the last preceding Permitted Transferee shall be restored, to
the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such
Transfer of such Class __ Certificate. The Trustee shall be
under no liability to any Person for any registration of
Transfer of a Class __ Certificate that is in fact not
permitted by this Section 4.02(e) or for making any payments
due on such Certificate to the holder thereof or for taking
any other action with respect to such holder under the
provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Class
__ Certificate in violation of the restrictions in this
Section 4.02(e) and to the extent that the retroactive
restoration of the rights of the last preceding Permitted
Transferee of such Class __ Certificate as described in clause
(iii)(A) above shall be invalid, illegal or unenforceable,
then the Trustee shall have the right, without notice to the
holder or any prior holder of such Class __ Certificate, to
sell such Class __ Certificate to a purchaser selected by the
Trustee on such terms as the Trustee may choose. Such
purported Transferee shall promptly endorse and deliver each
Class __ Certificate in accordance with the instructions of
the Trustee. Such purchaser may be the Depositor, the Trustee
itself or any affiliate of the Depositor or the Trustee. The
proceeds of such sale, net of the commissions (which may
include commissions payable to the Trustee or its affiliates),
expenses and taxes due, if any, will be remitted by the
Trustee to such purported Transferee. The terms and conditions
of any sale under this clause (iii)(B) shall be determined in
the sole discretion of the Trustee, and the Trustee shall not
be liable to any Person having an Ownership Interest in a
Class __ Certificate as a result of its exercise of such
discretion. In addition, the purported Transferee shall be
obligated to reimburse the Trustee for any tax imposed on the
Trust Fund pursuant to Section 860E(e)(6) of the Code. The
Trustee may collect such reimbursement by withholding from the
proceeds of selling the Class __ Certificate to a Permitted
Transferee or by exercising any other remedies available at
law or equity against the purported Transferee.
(iv) [The Trustee shall make available to the Internal Revenue
Service and those Persons specified by the REMIC Provisions all information
necessary to compute any tax imposed as a result of the Transfer of an Ownership
Interest in a Class __ Certificate to any Person that is a regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code having as among its
record holders at any time any Person that is a Disqualified Organization.]
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(v) The Trustee may charge and shall be entitled to reasonable
compensation for providing such information as may be required from those
Persons which may have had a tax imposed upon them as specified in Section
4.02(e)(iv).
(f) Except as provided in Section 4.02(e)(v), no service charge shall be
made for any transfer or exchange of Certificates of any Class, but the Trustee
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
(g) All Certificates surrendered for transfer and exchange shall be
canceled and retained or destroyed by the Trustee in accordance with the
Trustee's standard procedures.
(h) [(1) Certificated Certificates.] The Trustee shall require an Opinion
of Counsel from a transferee prior to the transfer of any Certificate to any
Plan subject to ERISA or Section 4975 of the Code, 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"). Such
Opinion of Counsel must establish to the satisfaction of the Depositor and the
Trustee or the Certificate Registrar 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 or the Trustee 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 or the Trustee. 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 Trustee may
rely upon without further inquiry or investigation. Neither an Opinion of
Counsel or certification will not 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 have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets of any Plan) and the Trustee shall be entitled to
conclusively rely upon a representation (which, upon the request of the Trustee,
shall be a written representation) from the Depositor of the status of such
transferee as an affiliate of the Depositor.
[(2) Book-Entry Certificates. No transfer of all or any portion of
any Class of Book-Entry Certificates that are ERISA Restricted Certificates
shall be made to a transferee that is a Plan Investor.]
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates.
Each Beneficial Owner of such a Certificate shall be deemed to have
represented, by virtue of its acquisition of such a Certificate, that it is not
a Plan Investor. If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute and the Certificate Registrar shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of the same Class and initial Certificate
Principal Balance. Upon the issuance of any new Certificate under this Section,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Certificate
Registrar) connected therewith. Any replacement Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
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Section 4.04. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of transfer,
the Depositor, the Trustee, the Certificate Registrar and any agent of the
Depositor, the Trustee or the Certificate Registrar may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving payments pursuant to Section 3.05 and for all other
purposes whatsoever, and neither the Depositor, the Trustee, the Certificate
Registrar nor any agent of the Depositor, the Trustee or the Certificate
Registrar shall be affected by notice to the contrary except as provided in
Sections 4.02(c) or 4.02(d).
Section 4.05. Appointment of Paying Agent.
The Trustee initially shall be the Paying Agent. The Trustee may appoint a
Paying Agent for the purpose of making payments to Certificateholders pursuant
to Section 3.05. In the event of any such appointment, on or prior to each
Payment Date the Trustee shall deposit or cause to be deposited with the Paying
Agent a sum sufficient to make the payments to Certificateholders in the amounts
and in the manner provided for in Section 3.05, such sum to be held in trust for
the benefit of Certificateholders.
The Trustee shall cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums held by
it for the payment to Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. Any sums so held by such Paying Agent shall be held only in
Eligible Accounts to the extent such sums are not distributed to the
Certificateholders on the date of receipt by such Paying Agent.
Section 4.06. [Book-Entry Certificates].
(a) The Book-Entry Certificates will be represented initially by one or
more certificates registered in the name of CEDE & Co., as nominee of the
Clearing Agency. The Depositor and the Trustee may for all intents and purposes
(including the making of payments on the Book-Entry Certificates) deal with the
Clearing Agency as the authorized representative of the Beneficial Owners of the
Book-Entry Certificates for as long as those Certificates are registered in the
name of the Clearing Agency. The rights of Beneficial Owners of the Book-Entry
Certificates shall be limited to those established by law and agreements between
such Beneficial Owners and the Clearing Agency and Clearing Agency Participants.
The Beneficial Owners of the Book-Entry Certificates shall not be entitled to
certificates for the Book-Entry Certificates as to which they are the Beneficial
Owners, except as provided in subsection (c) below. Requests and directions
from, and votes of, the Clearing Agency, as Holder, shall not be deemed to be
inconsistent if they are made with respect to different Beneficial Owners.
Without the consent of the Depositor and the Trustee, a Book-Entry Certificate
may not be transferred by the Clearing Agency except to another Clearing Agency
that agrees to hold the Book-Entry Certificate for the account of the respective
Clearing Agency Participants and Beneficial Owners.\
(b) Neither the Depositor nor the Trustee will have any liability for any
aspect of the records relating to or payment made on account of Beneficial
Owners of the Book-Entry Certificates held by the Clearing Agency, for
monitoring or restricting any transfer of beneficial ownership in a Book-Entry
Certificate or for maintaining, supervising or reviewing any records relating to
such Beneficial Owners.
(c) The Book-Entry Certificates will be issued in fully-registered,
certificated form to Beneficial Owners of Book-Entry Certificates or their
nominees, rather than to the Clearing Agency or its nominee, only if (1) the
Depositor advises the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities as depository with
respect to the Book-Entry Certificates and the Depositor is unable to locate a
qualified successor within 30 days or (2) the Depositor, at its option, elects
to terminate the book-entry system operating through the Clearing Agency. Upon
the occurrence of either such event, the Trustee shall notify the Clearing
Agency, which in turn will notify all Beneficial Owners of Book-Entry
Certificates through Clearing Agency Participants, of the availability of
certificated Certificates. Upon surrender by the Clearing Agency of the
certificates representing the Book-Entry Certificates and receipt of
instructions for re-registration, the Trustee will reissue the Book-Entry
Certificates as certificated Certificates to the Beneficial Owners identified in
writing by the Clearing Agency. Such certificated Certificates shall not
constitute Book-Entry Certificates. All reasonable costs associated with the
preparation and delivery of certificated Certificates shall be borne by the
Depositor.]
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ARTICLE V
THE TRUSTEE
Section 5.01. Duties of Trustee.
(a) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement and each of the Underlying
Agreements. The Trustee shall notify the Certificateholders of any such
documents which do not materially conform to the requirements of this Agreement
in the event that the Trustee, after so requesting, does not receive
satisfactorily corrected documents or a satisfactory explanation regarding any
such nonconformities.
The Trustee shall forward or cause to be forwarded in a timely fashion the
notices, reports and statements required to be forwarded by the Trustee pursuant
to Sections 3.02, 3.06 and 6.01.
(b) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) The duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates, opinions or other documents (including, but not limited
to, all Distribution Date Statements) reasonably believed by the Trustee to be
genuine and to have been furnished by the proper party to the Trustee and which
on their face, do not contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Certificateholders of any Class holding Certificates which
evidence, as to such Class, Percentage Interests aggregating not less than 25%
as to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement;
(iv) Except to the extent provided in Section 5.02, no provision in
this Agreement shall require the Trustee to expend or risk its own funds or
otherwise incur any personal financial liability in the performance of any of
its duties as Trustee hereunder, or in the exercise of any of its rights or
powers, if the Trustee shall have reasonable grounds for believing that
repayment of funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
Section 5.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 5.01:
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(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, certificate
of auditors or any other certificate, statement (including any Distribution Date
Statement), instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and reasonably believed by it to
be authorized or within the discretion or rights or powers conferred upon it by
this Agreement; and
(v) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys.
Section 5.03. Trustee Not Liable for Certificates or Underlying
Certificates.
The recitals contained herein and in the Certificates (other than the
execution of the Certificates and relating to the acceptance and receipt of the
Underlying Certificates) shall be taken as the statements of the Depositor and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of the
Certificates (except that the Certificates shall be duly and validly executed
and authenticated by it as Certificate Registrar) or of the Underlying
Certificates of any related document. Except as otherwise provided herein, the
Trustee shall not be accountable for the use or application by the Depositor of
any of the Certificates or of the proceeds of such Certificates, or for the use
or application of any funds paid to the Depositor in respect of the Underlying
Certificates deposited in or withdrawn from the Certificate Account by the
Depositor.
Section 5.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights it would have if it were not
Trustee.
Section 5.05. Trustee's Fees; Indemnification.
The Trustee shall be entitled to the Trustee Fee for each Payment Date
from amounts on deposit in the Certificate Account as compensation for all
services rendered by the Trustee and any co-trustee in the execution of the
trusts hereby created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee and any co-trustee. Such compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust. The Depositor covenants and agrees to pay or
reimburse the Trustee for all reasonable expenses, disbursements and advances
incurred or made by the Trustee or any co-trustee in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
reasonable expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from the Trustee's or co-trustee's negligence, willful misconduct or bad
faith. The Trustee and any director, officer, employee or agent of the Trustee
shall be indemnified by the Trust Fund and held harmless against any claim,
loss, liability or expense (including costs and expenses of litigation, and of
investigation, counsel fees, damages, judgments and amounts paid in settlement)
incurred in connection with the Trustee's (i) enforcing its rights and remedies
and protecting the interests, and enforcing the rights and remedies, of the
Certificateholders during the continuance of an Event of Default, (ii) defending
or prosecuting any legal action in respect of this Agreement or the
Certificates, (iii) being the owner of record with respect to the Underlying
Certificates acquired for the benefit of Certificateholders, or (iv) acting or
refraining from acting in good faith at the direction of the holders of the
Certificates entitled to not less than 25% of the Voting Rights; provided,
however, that such indemnification will not extend to any loss, liability or
expense that constitutes a specific liability of the Trustee pursuant to this
Agreement, or to any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence on the part of the Trustee in the
performance of its obligations and duties hereunder, or by reason of its
reckless disregard of such obligations or duties, or as may arise from a breach
of any representation, warranty or covenant of the Trustee made herein. The
provisions of this Section 5.05 shall survive the termination of this Agreement.
Any payment made hereunder by the Depositor to the Trustee shall be from the
Depositor's own funds, without reimbursement from the Trust Fund therefor.
22
Section 5.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a national
banking association having its principal office in City of ______________,
_____________ or in a state and city acceptable to the Depositor and organized
and doing business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authority. If such corporation or national
banking association publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 5.07.
Section 5.07. Resignation and Removal of the Trustee.
(a) The Trustee may at any time upon 30 days' prior notice resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor and all Certificateholders. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 5.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Depositor
may remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
(c) The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 5.08.
23
Section 5.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 5.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all Underlying Certificates and
related documents and statements held by it hereunder, and the Depositor, the
Trustee and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 5.06.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Depositor.
Section 5.09. Merger or Consolidation of Trustee.
Any corporation or national banking association into which the Trustee may
be merged or converted or with which it may be consolidated or any corporation
or national banking association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
national banking association succeeding to all or substantially all of the
corporation trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation or national banking association shall be
eligible under the provisions of Section 5.06, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. The Trustee shall mail notice
of any such merger or consolidation to the Certificateholders at their address
as shown in the Certificate Register.
Section 5.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Trustee shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust Fund, and to vest in such Person or Persons, in
such capacity, such title to the Trust Fund, or any part thereof, and, subject
to the other provisions of this Section 5.10, such powers, duties, obligations,
rights and trusts as the Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 5.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 5.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 5.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee, and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder
successor to the Trustee hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
24
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article V. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 5.11. [Appointment of Office or Agency].
The Trustee will maintain an office or agency in the [City of _______]
where Certificates may be surrendered for registration of transfer or exchange.
The Trustee initially designates its offices located at
____________________________________________________ for the purpose of keeping
the Certificate Register. The Trustee will maintain an office at the address
stated in Section 9.05 hereof where notices and demands to or upon the Trustee
in respect of this Agreement may be served.
Section 5.12. Trustee May Enforce Claims Without Possession of
Certificates.
All rights of action and claims under this Agreement or the Certificates
may be prosecuted and enforced by the Trustee without the possession of any of
the Certificates or the production thereof in any proceeding relating thereto
and any such proceeding instituted by the Trustee shall be brought in its own
name or in its capacity as Trustee. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been recovered.
Section 5.13. Filings with the Securities and Exchange Commission.
The Trustee shall, prepare and file with the Commission any and all
reports, statements and information respecting the Trust Fund and/or the
Certificates required to be filed. Notwithstanding the foregoing, within 15 days
following the Closing Date, the Depositor shall prepare, and the Trustee shall
execute and file with the Commission, a report on Form 8-K setting forth
information with respect to the Underlying Certificates included in the Trust
Fund on the Closing Date.]
ARTICLE VI
TERMINATION; EVENTS OF DEFAULT
Section 6.01. Termination of the Trust Fund.
(a) The Trust Fund shall be terminated upon the earliest of (i) the
payment in full of the Certificates pursuant to Section 3.05 hereof, (ii)
termination of all of the Underlying Trusts pursuant to Section 6.02 hereof, or
(iii) the date that is twenty-one (21) years from the death of the survivor of
the descendants of Queen Elizabeth II, living on the date hereof.
(b) The Trustee shall give notice (a "Notice of Termination") of the
Payment Date on which the Trustee anticipates that the final payment will be
made to the Certificateholders. Such Notice of Termination shall be mailed by
the Trustee to affected Certificateholders at their addresses shown in the
Certificate Register as soon as practicable, but in any event, not more than
thirty days, and not less than ten days, prior to the Anticipated Termination
Date. The notice mailed by the Trustee to affected Certificateholders shall:
25
(i) specify the Anticipated Termination Date on which the final
payment is anticipated to be made to Holders of Certificates of the Classes
specified therein;
(ii) specify the amount of any such final payment, if known; and
(iii) state that the final payment to Certificateholders will be
made only upon presentation and surrender of Certificates at the office of the
Trustee therein specified.
If the Trust Fund is not terminated on the Anticipated Termination Date
for any reason, the Trustee shall promptly mail notice thereof to each affected
Certificateholder.
(c) Upon presentation and surrender of the Certificates by the
Certificateholders on the Termination Date, the Trustee shall distribute to the
Certificateholders the amounts otherwise distributable on such Payment Date
pursuant to Section 3.05(a). Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their Certificates
shall be set aside and held in trust for the account of the appropriate
non-tendering Certificateholders, whereupon the Trust Fund shall terminate. If
any Certificates as to which notice of the Termination Date has been given
pursuant to this Section 6.01 shall not have been surrendered for cancellation
within six months after the time specified in such notice, the Trustee shall
mail a second notice to the remaining Certificateholders, at their last
addresses shown in the Certificate Register, to surrender their Certificates for
cancellation in order to receive, from such funds held, the final payment with
respect thereto. If within one year after the second notice any Certificate
shall not have been surrendered for cancellation, the Trustee shall directly or
through an agent, take reasonable steps to contact the remaining
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining such funds and of contacting Certificateholders shall be
paid out of the assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for cancellation, the
Trustee shall segregate all amounts distributable to the Holders thereof and
shall thereafter hold such amounts uninvested for the benefit of such Holders.
No interest shall accrue or be payable to any Certificateholder on any amount
held as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section 6.01.
Section 6.02. Termination of Underlying Trusts.
As the Holder of the Underlying Residual Certificates, the Trustee has
certain rights to cause an optional termination of each of the Underlying Trusts
in accordance with the terms of the Underlying Agreements. The Trustee shall not
exercise any such right until (a) the Certificate Principal Balance of the Class
__ Certificates is reduced to 5% or less of the Initial Certificate Principal
Balance of the Class __ Certificates, (b) the Trustee's right to cause a
termination of each Underlying Trust is presently exercisable, and (c) a
majority in interest of the Class __ Certificates directs the Trustee in writing
to exercise all of such rights. The Trustee must exercise its rights to
terminate all of the Underlying Trusts if any such right is exercised.
ARTICLE VII.
THE DEPOSITOR
Section 7.01. Liability of the Depositor.
The Depositor shall be liable in accordance herewith only to the extent of
the respective obligations specifically imposed upon and undertaken by the
Depositor herein.
Section 7.02. Merger, Consolidation or Conversion of the Depositor.
26
Subject to the following paragraph, the Depositor will keep in full effect
its existence, rights and franchises as a corporation or association under the
laws of the jurisdiction of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and the Certificates and to perform its duties
under this Agreement.
The Depositor may be merged or consolidated with or into any Person, or
transfer all or substantially all of its assets to any Person, in which case any
Person resulting from any merger or consolidation to which the Depositor shall
be a party, or any Person succeeding to the business of the Depositor, shall be
the successor of the Depositor hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 7.03. Limitation on Liability of the Depositor.
Neither the Depositor, nor any of the directors, officers, employees or
agents of the Depositor, shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment. The
Depositor, and any director, officer, employee or agent of the Depositor may
rely in good faith on any document of any kind which, prima facie, is properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor and any director, officer, employee or agent of the Depositor
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations or
duties hereunder. The Depositor shall be under no obligation to appear in,
prosecute or defend any legal action unless such action is related to its duties
under this Agreement and which in its opinion does not involve it in any expense
or liability; provided, however, that the Depositor may in its discretion
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, and provided that
such action has been consented to by the Holders of Certificates entitled to at
least 51% of the Voting Rights, the legal expenses and costs of such action and
any liability resulting therefrom shall be expenses, costs and liabilities of
the Trust Fund, and the Depositor shall be entitled to be reimbursed therefor
from the Certificate Account as provided in Section 3.04.
ARTICLE VIII
TAX PROVISIONS
Section 8.01. Trust Administration.
For federal income tax purposes, the Trust Fund formed pursuant to this
Agreement will be classified as a grantor trust under Subpart E, Part 1 of
Subchapter J of the Code and not as an association taxable as a corporation.
(a) The Depositor, the Trustee, and the Certificateholders shall take any
action or cause the Trust Fund to take any action necessary to create and
maintain the status of the Trust Fund as a grantor trust for federal income tax
purposes and shall assist each other as necessary to create or maintain such
status.
(b) The Depositor, the Trustee, and the Certificateholders shall not take
any action or cause the Trust Fund to take any action that could endanger the
status of the Trust Fund as a grantor trust for federal income tax purposes,
unless the Trustee and the Depositor have received an Opinion of Counsel (at the
expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status.
(c) The Trustee or its designee may employ counsel, accountants and
professional assistance to aid in the performance of the accounting necessary
for federal and state tax reporting and compliance or the performance of the
above powers and duties. The expenses incurred by the Trustee or its designee in
connection with the foregoing shall be reimbursed as part of the administrative
expenses of the Trust Fund described in Section 3.01 hereof.
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Section 8.02. Prohibited Activities.
(a) No REMIC election has been or will be made with respect to the assets
of the Trust.
(b) Neither the Trustee nor the Depositor shall permit any modification of
any term of any of the Underlying Certificates (including, but not limited to,
the interest rate, the principal balance, the amortization schedule, the
remaining term to maturity, or any other term affecting the amount or timing of
payments on the Underlying Certificates) unless the Trustee has received an
Opinion of Counsel (at the expense of the party seeking to modify any of the
Underlying Certificates) to the effect that such modification would not be
treated as giving rise to a new debt instrument for federal income tax purposes.
(c) The Trustee shall not sell or dispose of the Underlying Certificates
(except in a disposition pursuant to (i) the default of any Underlying
Certificate, (ii) the bankruptcy of the Trust, (iii) the termination of the
Trust Fund as set forth in Section 6.01 hereof, or (iv) a disposition of an
Underlying Certificate pursuant to Section 2.03 hereof), nor acquire any assets
for the Trust, unless it has received an Opinion of Counsel that such sale,
disposition, or acquisition will not affect adversely the status of the Trust
Fund as a grantor trust under the Code.
Section 8.03. Tax Matters Person of Underlying Trusts.
_______________________, as servicer of each of the Underlying Trusts,
shall acquire a Class __ Certificate, representing a [0.01]% Percentage Interest
in such Class, in order to continue to act as the tax matters person (within the
meaning of the provisions of the Code relating to REMICs, which appear at
Sections 860A through 860G of the Code, related Code provisions, and
regulations, announcements and rulings thereunder, as the foregoing may be in
effect from time to time) of each of the REMICs related to the Underlying Trusts
as contemplated in the Underlying Agreements.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment.
(a) This Agreement may be amended from time to time by the Depositor and
the Trustee, without the consent of any of the Certificateholders, (i) to cure
any ambiguity, (ii) to correct, modify or supplement any provisions herein which
may be defective or inconsistent with any other provisions herein, (iii) to
amend this Agreement in any respect subject to the provisions below, or (iv) if
such amendment, as evidenced by an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, is reasonably necessary to
comply with any requirements imposed by the Code or any successor or amendatory
statute or any temporary or final regulation, revenue ruling, revenue procedure
or other written official announcement or interpretation relating to federal
income tax laws or any proposed such action which, if made effective, would
apply retroactively to the Trust Fund at least from the effective date of such
amendment; provided that such action (except any amendment described in (iv)
above) shall not, as evidenced by an Opinion of Counsel (provided by the Person
requesting such amendment) or by confirmation of each Rating Agency that the
credit ratings assigned to the Certificates will not be downgraded or withdrawn,
delivered to the Trustee, adversely affect in any material respect the interests
of any Certificateholder (other than Certificateholders who shall consent to
such amendment).
(b) This Agreement may also be amended from time to time by the Depositor,
and the Trustee with the consent of the Holders of Certificates evidencing in
the aggregate not less than 66 2/3% of the Percentage Interests of each Class of
Certificates affected thereby for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates of such
Class; provided, however, that no such amendment shall:
28
(i) reduce in any manner the amount of, or delay the timing of,
payments which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate,
(ii) adversely affect in any material respect the interest of the
Holders of Certificates of any Class in a manner other than as described in
clause (i) hereof without the consent of all Holders of Certificates of such
Class, or
(iii) reduce the aforesaid percentage of Certificates of any Class
the Holders of which are required to consent to any such amendment, in any such
case without the consent of the Holders of all Certificates of such Class then
outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (at the expense of the party seeking such
amendment) to the effect that such amendment or the exercise of any power
granted to the Depositor or the Trustee in accordance with such amendment will
not result in a loss of grantor trust status for, or the imposition of a tax on,
the Trust Fund.
(d) Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 9.01 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe. The cost of an Opinion
of Counsel delivered pursuant to this Section 9.01 shall be an expense of the
party requesting such amendment, but in any case shall not be an expense of the
Trustee.
(e) The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
Section 9.02. Counterparts.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 9.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
29
(c) No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a notice of a default by the
Depositor or the Trustee in the performance of any obligation hereunder, and of
the continuance thereof, as hereinbefore provided, and unless also the Holders
of Certificates entitled to at least 33% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
Section 9.04. Governing Law.
This Agreement and the Certificates shall be construed in accordance with
the laws of the State of _____________ and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.
Section 9.05. Notices.
All demands and notices hereunder shall be in writing and shall be deemed
effective upon receipt when delivered to (a) in the case of the Depositor,
Residential Resources, Inc., 333 North Wilshire Avenue, Anaheim, California
92801, Attention: President, or such other address as may hereafter be furnished
to the Trustee in writing by the Depositor, (b) in the case of the Trustee,
_______________________________, Attention: _______________________ or such
other address as may hereafter be furnished to the Depositor in writing by the
Trustee, and (c) in the case of the Rating Agency, _______________________, New
York, New York __________, Attention: ___________________, or such other address
as may hereafter be furnished to the Depositor and the Trustee in writing by the
Rating Agency. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
Section 9.06. Notices to Rating Agency.
The Depositor or the Trustee, as applicable, shall notify the Rating
Agency at such time as it is otherwise required pursuant to this Agreement to
give notice of the occurrence of any of the events described in clauses (a),
(b), (d), (e) or (f) below or provide a copy to the Rating Agency at such time
as otherwise required to be delivered pursuant to this Agreement of the
statements described in clause (c) below:
(a) a material change or amendment to this Agreement,
(b) the termination or appointment of a successor Trustee or a change in
the majority ownership of the Trustee,
(c) the statement required to be delivered to the Holders of each Class of
Certificates pursuant to Section 3.06,
(d) a change in the location of the Certificate Account,
30
(e) the occurrence of the Final Payment Date, and
(f) the repurchase of any Underlying Certificate.
Section 9.07. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 9.08. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Certificateholders.
Section 9.09. Article and Section Headings.
The article and Section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the Depositor, and the Trustee have caused their names
to be signed hereto by their respective officers thereunto duly authorized and
their respective seals, if required, duly attested, to be hereunto affixed, all
as of the day and year first above written.
RESIDENTIAL RESOURCES, INC., as Depositor
By:
-----------------------------------------
Name:
Title:
_______________________________, as Trustee
By:
-----------------------------------------
Name:
Title:
31
STATE OF _____________________ )
) ss:
COUNTY OF ____________________ )
On the _____ day of _____, 20__ before me, a notary public in and for said
State, personally appeared , known to me to be the ______ of Residential
Resources, Inc., the Arizona corporation that executed the within instrument,
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
- ----------------------------------
Notary Public
[Notarial Seal]
STATE OF _________________________ )
)ss:
COUNTY OF ________________________ )
On the ____ day of _____, 20__ before me, a notary public in and for said
State, personally appeared , known to me to be a of _______________________, the
[national banking association] that executed the within instrument, and also
known to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
- -----------------------
Notary Public
[Notarial Seal]
32
EXHIBIT A
FORM OF CLASS __ CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
RESIDENTIAL RESOURCES, INC. MORTGAGE PASS-THROUGH CERTIFICATES, SERIES ___
- - -
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN,
OR PERSON USING "PLAN ASSETS" OF ANY PLAN TO EFFECT SUCH ACQUISITION (INCLUDING
ANY INSURANCE COMPANY OR BANK COLLECTIVE INVESTMENT FUND UNDER THE CIRCUMSTANCES
DESCRIBED IN THE AGREEMENT), SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE"), UNLESS THE TRANSFEREE PROVIDES AN OPINION OF COUNSEL OR
CERTIFICATION OF FACTS UNDER THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
AGREEMENT), SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE OR THE CERTIFICATE
REGISTRAR, THAT SUCH DISPOSITION WILL NOT VIOLATE THE PROHIBITED TRANSACTION
PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.
Series ___ - - - Aggregate Initial Certificate Class Principal Balance of
all of the Class __ Certificates as[Rate]of the Closing Date: $_____________
Date of Trust Agreement and Closing Date: _____ __, 20__ Initial Certificate
Principal Balance of this Certificate:$_____________ Depositor: Residential
Resources _____ Anticipated First Payment Date: No. __________ [25], 20__
Trustee: _____________________ CUSIP:_____________________
[THE PRINCIPAL OF THIS CERTIFICATE IS SUBJECT TO PREPAYMENT FROM TIME TO
TIME WITHOUT SURRENDER OF OR NOTATION ON THIS CERTIFICATE. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET
FORTH ABOVE, AND MAY BE ZERO. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS CURRENT CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE.]
TRUST CERTIFICATE
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of mortgage pass-through certificates sold by
__________________________.
THIS CERTIFICATE IS PAYABLE SOLELY FROM THE ASSETS OF THE TRUST FUND, AND
DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE DEPOSITOR, THE TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR BY THE DEPOSITOR, THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.
33
This certifies that _____________________________ is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing
the Initial Certificate Principal Balance of this Certificate by the Aggregate
Initial Certificate Principal Balance of all of the Class __ Certificates, both
as specified above) in that certain beneficial ownership interest evidenced by
all of the Class __ Certificates in the Trust Fund, which consists primarily of
mortgage pass-through certificates (the "Underlying Certificates") sold by the
Depositor specified above (which term includes any successor entity under the
Agreement referred to below). The Trust Fund was created pursuant to an Trust
Agreement dated the date specified above (the "Agreement") between the
Depositor, as depositor, and the Trustee specified above, as trustee, a summary
of certain of the pertinent provisions of which is set forth hereinafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned thereto in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, the Trustee will pay or cause to
be paid on the Business Day immediately following (i) the [25]th day of each
month or, (ii) if such [25]th day is not a Business Day, then the next Business
Day (the "Payment Date"), commencing on the anticipated first Payment Date
specified above, to the Person in whose name this Certificate is registered (x)
with respect to any Payment Date that occurs in the same month as the related
Distribution Date, on the last Business Day of the month preceding the month of
the related Distribution Date for the Underlying Certificates or (y) with
respect to any Payment Date that occurs in the month subsequent to the month in
which the related Distribution Date occurs, the last Business Day in the second
month preceding the month in which such Payment Date occurs (the "Record Date").
Payments will be made from the Available Distribution Amount in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be paid to the Holders of Class __ Certificates on such
Payment Date. Reference is hereby made to the further provisions of this
Certificate and the Agreement set forth herein, which further provisions shall
for all purposes have the same effect as though fully set forth at this place.
[So long as this Certificate is registered in the name of a Clearing
Agency or its nominee, the Trustee will make payments of principal and interest
on this Certificate by wire transfers of immediately available funds to the
Clearing Agency or its nominee. Otherwise, all distributions made on any
Certificate pursuant to the Agreement will be made by or on behalf of the
Trustee on each Distribution Date to the Holder of such Certificate as of the
related Record Date (i) by check mailed to such Holder at its address reflected
in the Certificate Register as of the related Record Date or (ii) if such Holder
is the Holder of Certificates of this Class with aggregate initial denominations
of at least $___________, by wire transfer of immediately available funds to the
account of such Holder, upon receipt by the Trustee of a written request of such
Holder accompanied by the appropriate wiring instructions at or before the
Closing Date or, in the case of any wire instructions delivered after the
Closing Date, at least five Business Days prior to the related Record Date. A
fee may be charged by the Trustee to a Holder of Certificates for any
distribution made to such Holder by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Trustee specified
in the final distribution notice to Certificateholders.]
[All payments will be made or caused to be made by the Trustee either (i)
by check mailed to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register, or (ii) at the request of the
Person entitled thereto, if such Person shall have so notified the Trustee in
writing at least five Business Days prior to the related Record Date and such
Certificateholder is the registered holder of Certificates the aggregate Initial
Certificate Principal Balance of which is not less than $____________, in
immediately available funds by wire transfer to the account of such Person at a
bank or other entity having appropriate facilities therefor. Notwithstanding the
above, the final payment on this Certificate will be made after due notice by
the Trustee of the pendency of such payment and only upon presentation and
surrender of this Certificate at the office of the Trustee. The Certificate
Principal Balance hereof will be reduced to the extent of payments allocable to
principal and the principal portions of any Realized Losses allocable hereto.]
34
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Pass-Through Certificates of the
Series specified above (herein collectively called the "Certificates"). The
Certificates are limited in right of payment to certain distributions in respect
of the Underlying Certificates, all as more specifically set forth herein and in
the Agreement.
As provided in the Agreement, withdrawals from the Certificate Account
created for the benefit of Certificateholders may be made by the Trustee from
time to time for purposes other than payments to Certificateholders, such
purposes including reimbursement to the Depositor and the Trustee of certain
expenses incurred by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor and the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66% of the
Percentage Interests of each Class of Certificates affected thereby. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
[As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
Corporate Trust Office, duly endorsed by, or accompanied by an assignment in the
form below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate initial Certificate Principal Balance will be issued to the designated
transferee or transferees.]
[As provided in the Agreement and subject to any limitations on transfer
of this Certificate by a Clearing Agency or its nominee and certain limitations
set forth in the Agreement, the transfer of this Certificate is registrable in
the Certificate Register upon surrender of this Certificate for registration of
transfer at the principal Corporate Trust Office of the Trustee or such other
offices or agencies appointed by the Trustee for that purpose or such other
locations, if any, provided in the Agreement, duly endorsed by, or accompanied
by an assignment in the form attached hereto or other written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations will be issued to the designated transferee or
transferees.]
[No transfer of this Certificate will be made unless such transfer is
exempt from or is made in accordance with the registration and qualification
requirements of the 1933 Act and any applicable state securities laws. In the
event that such transfer is to be made without such registration or
qualification, (i) the Trustee will require the transferee to execute an
investment letter in substantially the form required under the Agreement, which
investment letter shall not be an expense of the Depositor or the Trustee, and
(ii) in the event that such transfer is not made pursuant to Rule 144A under the
1933 Act, the Depositor may direct the Trustee to require an Opinion of Counsel
satisfactory to the Depositor and the Trustee that such transfer may be made
without such registration or qualification and that such transfer will not
result in the registration of the Trust Fund as an "investment company" under
the Investment Company Act of 1940 (the "1940 Act"), which Opinion of Counsel
shall not be an expense of the Depositor or the Trustee. Neither the Depositor,
the Trustee nor any other entity will register this Certificate under the 1933
Act, qualify this Certificate under any state securities law or provide
registration rights to any purchaser. The holder of this Certificate desiring to
effect such transfer shall indemnify the Trustee 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. This Certificate may not be
transferred to any Person other than a Person that is an "accredited investor"
of the type specified in Rule 3a-7(a)(2)(i) under the Investment Company Act of
1940, as amended, or to "qualified institutional buyers" within the meaning of
Rule 144A in accordance with the provisions of Section 4.02 of the Agreement.]
35
[The Depositor, the Trustee and the Certificate Registrar and any agent of
the Depositor, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.]
In addition, no transfer of this Certificate or any interest herein will
be made to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, or any entity that is deemed to be investing plan
assets, that is subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or the Code (each a "Plan"), unless the prospective
transferee of this Certificate provides the Trustee with an Opinion of Counsel
(or, if such prospective transferee is an insurance company or a bank collective
investment fund, a certification of facts) which establishes to the satisfaction
of the Depositor and the Trustee that such transfer will not result in a
violation of Section 406 of ERISA or Section 4975 of the Code or subject the
Depositor or the Trustee to any obligation in addition to those undertaken in
the Agreement or result in the imposition of an excise tax under Section 4975 of
the Code. Neither the Depositor nor the Trustee will be required to obtain or
pay for any such Opinion of Counsel or certification of facts on behalf of any
prospective transferee of this Certificate.
[The Certificates are issuable in fully registered form and in
denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, the Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
evidencing the same aggregate Initial Certificate Principal Balance, as
requested by the Holder surrendering the same.]
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor, the Trustee and the Certificate Registrar and any agent of
the Depositor, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of ----------------------.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon payment to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following receipt of the
final distribution to be made on the last remaining Underlying Certificate in
the Trust Fund upon presentation and surrender of such Underlying Certificate in
accordance with the terms and conditions of the related Underlying Trust
Agreement. The Agreement provides for the Trustee to terminate each of the
Underlying Trusts by a terminating purchase upon the direction of a majority in
interest of the Class __ Certificates. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate of the Certificate Principal Balances of the Certificates at
the time of purchase being less than or equal to 5% of the aggregate of the
Initial Certificate Principal Balances of the Certificates at the Closing Date.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The recitals contained herein shall be taken as statements of the
Depositor or the Trustee, as the case may be.
36
IN WITNESS WHEREOF, the Trustee in its capacity as trustee under the
Agreement has caused this Certificate to be duly executed.
Dated: ______ __, 20__
___________________________________,as Trustee
By: _______________________________Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class __ Certificates referred to in the
within-mentioned Agreement.
______________________________, as Certificate Registrar
By:___________________________ Authorized Officer
37
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ----------------------------------------------------------
- ----------------------------------------------------------
- ----------------------------------------------------------
Social Security or other identifying number of assignee:
- --------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
the beneficial interest evidenced by the within Trust Certificate and hereby
authorizes the registration of transfer of such interest to the above-named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate of a
like denomination and class to the above named assignee and deliver such
Certificate(s) to the following address:___________________________
Dated:
_______________________________________ Signature by or on behalf of assignor
_______________________________________ Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
commercial bank or trust company on the continental United States or by a firm
or corporation having membership in any national securities exchange or in the
National Association of Securities Dealers, Inc.
38
PAYMENT INSTRUCTIONS
The assignee should include the following for purposes of payment:
Payments shall be made, by wire transfer or otherwise, in immediately
available funds to ______________________________________________________ for
the account of ______________ _________________________________ account number
_______________, or, if mailed by check, to ____________________. Applicable
statements should be mailed to ________________________________________________.
This information is provided by _______________________________, the assignee
named above, or _____________________________, as its agent.
39
EXHIBIT B
FORM OF CLASS __ CERTIFICATE
RESIDENTIAL RESOURCES, INC. MORTGAGE PASS-THROUGH CERTIFICATES, SERIES ____-_
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE TRANSFERRED UNLESS IT IS REGISTERED OR QUALIFIED
PURSUANT TO THE 1933 ACT AND SUCH LAWS OR IS TRANSFERRED IN A TRANSACTION WHICH
IS EXEMPT FROM REGISTRATION AND QUALIFICATION UNDER THE 1933 ACT AND UNDER
APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 4.02 OF THE TRUST AGREEMENT REFERRED TO HEREIN (THE "AGREEMENT"). THIS
CERTIFICATE MAY ONLY BE TRANSFERRED TO QUALIFIED INSTITUTIONAL BUYERS WITHIN THE
MEANING OF RULE 144A IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE
AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN, OR
PERSON USING "PLAN ASSETS" OF ANY PLAN TO EFFECT SUCH ACQUISITION (INCLUDING ANY
INSURANCE COMPANY OR BANK COLLECTIVE INVESTMENT FUND UNDER THE CIRCUMSTANCES
DESCRIBED IN THE AGREEMENT), SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR THE INTERNAL REVENUE CODE
OF 1986 (THE "CODE"), UNLESS THE TRANSFEREE PROVIDES AN OPINION OF COUNSEL OR
CERTIFICATION OF FACTS UNDER THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
AGREEMENT), SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE OR THE CERTIFICATE
REGISTRAR, THAT SUCH DISPOSITION WILL NOT VIOLATE THE PROHIBITED TRANSACTION
PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES TO THE TRUSTEE A TRANSFER AFFIDAVIT TO THE
EFFECT THAT (1) SUCH TRANSFEREE IS NOT EITHER (A) THE UNITED STATES, ANY STATE
OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY
WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO TAX AND, EXCEPT
FOR THE FEDERAL HOME LOAN MORTGAGE CORPORATION, A MAJORITY OF ITS BOARD OF
DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL AUTHORITY), (B) ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (C) ANY ORGANIZATION (OTHER THAN A FARMERS' COOPERATIVE
DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY
SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE INCOME, (D) A RURAL
ELECTRIC AND TELEPHONE COOPERATIVE DESCRIBED IN SECTION 1381(A)(2)(C) OF THE
CODE OR (E) ANY OTHER PERSON DESIGNATED BY THE TRUSTEE BASED ON AN OPINION OF
COUNSEL, (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), (C), (D)
OR (E) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (F) AN
AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS TO THE PROPOSED TRANSFER. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL
FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF PAYMENTS ON THIS CERTIFICATE. IF A TAX IS IMPOSED ON THE TRUST FUND
AS A RESULT OF THE ACQUISITION OF THIS CERTIFICATE BY A DISQUALIFIED
ORGANIZATION, SUCH DISQUALIFIED ORGANIZATION SHALL BE LIABLE TO REIMBURSE THE
TRUST FUND FOR SUCH TAX. EACH HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS
CERTIFICATE, SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
40
IF ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE IS MADE TO ANY
OF CERTAIN "PASS-THROUGH ENTITIES" DESCRIBED IN SECTION 860E(E)(6) OF THE CODE,
AND A DISQUALIFIED ORGANIZATION IS THE RECORD HOLDER OF AN INTEREST IN SUCH
ENTITY, THEN A TAX MAY BE IMPOSED ON SUCH ENTITY.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO A NON-UNITED STATES PERSON (AS
DEFINED IN THE AGREEMENT).
Series ___ - Depositor: Residential Resources _______ Class __Percentage
Interest Evidenced No. _____by this Certificate: _____; CUSIP: ___________
Anticipated First Payment Date: _____ __, 20__; Date of Trust Agreement and
Closing Date: _____ __, 20__ Trustee: ______________________
41
TRUST CERTIFICATE
evidencing a beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of mortgage pass-through certificates sold by
________________________________________.
THIS CERTIFICATE IS PAYABLE SOLELY FROM THE ASSETS OF THE TRUST FUND, AND DOES
NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE DEPOSITOR, THE TRUSTEE OR ANY
OF THEIR RESPECTIVE AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR BY THE DEPOSITOR, THE TRUSTEE OR
ANY OF THEIR RESPECTIVE AFFILIATES.
This certifies that _____________________________ is the registered owner of the
Percentage Interest specified above in that certain beneficial ownership
interest evidenced by all of the Class __ Certificates in the Trust Fund, which
consists primarily of mortgage pass-through certificates (the "Underlying
Certificates") sold by the Depositor specified above (which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Trust Agreement dated the date specified above (the
"Agreement") between the Depositor, as depositor, and the Trustee specified
above, as trustee, a summary of certain of the pertinent provisions of which is
set forth hereinafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned thereto in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, the Trustee will pay or cause to be paid
on the Business Day immediately following (i) the [25]th day of each month or,
(ii) if such [25]th day is not a Business Day, then the next Business Day (the
"Payment Date"), commencing on the anticipated first Payment Date specified
above, to the Person in whose name this Certificate is registered (x) with
respect to any Payment Date that occurs in the same month as the related
Distribution Date, on the last Business Day of the month preceding the month of
the related Distribution Date for the Underlying Certificates or (y) with
respect to any Payment Date that occurs in the month subsequent to the month in
which the related Distribution Date occurs, the last Business Day in the second
month preceding the month in which such Payment Date occurs (the "Record Date").
Payments will be made from the Available Distribution Amount in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be paid to the Holders of Class __ Certificates on such
Payment Date. Reference is hereby made to the further provisions of this
Certificate and the Agreement set forth herein, which further provisions shall
for all purposes have the same effect as though fully set forth at this place.
All payments will be made or caused to be made by the Trustee by check mailed to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register. Notwithstanding the above, the final payment
on this Certificate will be made after due notice by the Trustee of the pendency
of such payment and only upon presentation and surrender of this Certificate at
the office of the Trustee.
This Certificate is one of a duly authorized issue of Certificates issued in
several Classes designated as Mortgage Pass-Through Certificates of the Series
specified above (herein collectively called the "Certificates"). The
Certificates are limited in right of payment to certain distributions in respect
of the Underlying Certificates, all as more specifically set forth herein and in
the Agreement.
As provided in the Agreement, withdrawals from the Certificate Account created
for the benefit of Certificateholders may be made by the Trustee from time to
time for purposes other than payments to Certificateholders, such purposes
including reimbursement to the Depositor and the Trustee of certain expenses
incurred by either of them.
The Agreement permits, with certain exceptions therein provided, the amendment
of the Agreement and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66% of the
Percentage Interests of each Class of Certificates affected thereby. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
42
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at
Corporate Trust Office, duly endorsed by, or accompanied by an assignment in the
form below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate initial Certificate Principal Balance will be issued to the designated
transferee or transferees.
No transfer of this Certificate will be made unless such transfer is exempt from
or is made in accordance with the registration and qualification requirements of
the 1933 Act and any applicable state securities laws. In the event that such
transfer is to be made without such registration or qualification, (i) the
Trustee will require the transferee to execute an investment letter in
substantially the form required under the Agreement, which investment letter
shall not be an expense of the Depositor or the Trustee, and (ii) in the event
that such transfer is not made pursuant to Rule 144A under the 1933 Act, the
Depositor may direct the Trustee to require an Opinion of Counsel satisfactory
to the Depositor and the Trustee that such transfer may be made without such
registration or qualification and that such transfer will not result in the
registration of the Trust Fund as an "investment company" under the Investment
Company Act of 1940 (the "1940 Act"), which Opinion of Counsel shall not be an
expense of the Depositor or the Trustee. Neither the Depositor, the Trustee nor
any other entity will register this Certificate under the 1933 Act, qualify this
Certificate under any state securities law or provide registration rights to any
purchaser. The holder of this Certificate desiring to effect such transfer shall
indemnify the Trustee 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. This Certificate may not be transferred to any Person other than a
Person that is a "qualified institutional buyer" within the meaning of Rule 144A
in accordance with the provisions of Section 4.02 of the Agreement.
In addition, no transfer of this Certificate or any interest herein will be made
to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or
arrangements are invested, or any entity that is deemed to be investing plan
assets, that is subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or the Code (each a "Plan"), unless the prospective
transferee of this Certificate provides the Trustee with an Opinion of Counsel
(or, if such prospective transferee is an insurance company or a bank collective
investment fund, a certification of facts) which establishes to the satisfaction
of the Depositor and the Trustee that such transfer will not result in a
violation of Section 406 of ERISA or Section 4975 of the Code or subject the
Depositor or the Trustee to any obligation in addition to those undertaken in
the Agreement or result in the imposition of an excise tax under Section 4975 of
the Code. Neither the Depositor nor the Trustee will be required to obtain or
pay for any such Opinion of Counsel or certification of facts on behalf of any
prospective transferee of this Certificate.
The Certificates are issuable in fully registered form and in denominations
specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Initial Certificate Principal Balance, as requested by the Holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
43
The Depositor, the Trustee and the Certificate Registrar and any agent of the
Depositor, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws
of the State of _______________.
The obligations created by the Agreement in respect of the Certificates and the
Trust Fund created thereby shall terminate upon payment to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following receipt of the
final distribution to be made on the last remaining Underlying Certificate in
the Trust Fund upon presentation and surrender of such Underlying Certificate in
accordance with the terms and conditions of the related Underlying Trust
Agreement. The Agreement provides for the Trustee to terminate each of the
Underlying Trusts by a terminating purchase upon the direction of a majority in
interest of the Class __ Certificates. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate of the Certificate Principal Balances of the Certificates at
the time of purchase being less than or equal to 5% of the aggregate of the
Initial Certificate Principal Balances of the Certificates at the Closing Date.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
The recitals contained herein shall be taken as statements of the Depositor or
the Trustee, as the case may be.
IN WITNESS WHEREOF, the Trustee in its capacity as trustee under the Agreement
has caused this Certificate to be duly executed.
Dated: _____ __, 200__
- -------------------------------,as Trustee
By:
--------------------------------- Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class __ Certificates referred to in the within-mentioned
Agreement.
- ------------------------------------,as Certificate Registrar
By:
--------------------------------- Authorized Officer
44
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s)
unto
- ---------------------------------------------------------------
- --------------------------------------------------------------------------------
________________________________________________________________________________
Social Security or other identifying number of assignee:
(Please print or typewrite name and address including postal zip code of
assignee)
the beneficial interest evidenced by the within Trust Certificate and hereby
authorizes the registration of transfer of such interest to the above-named
assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new Certificate of a
like denomination and class to the above named assignee and deliver such
Certificate(s) to the following address:___________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
_______________________________________Signature by or on behalf of assignor
_______________________________________Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever, and must be guaranteed by a
commercial bank or trust company on the continental United States or by a firm
or corporation having membership in any national securities exchange or in the
National Association of Securities Dealers, Inc.
45
PAYMENT INSTRUCTIONS
Payments shall be made, by wire transfer or otherwise, in immediately available
funds to ______________________________________________________ for the account
of ______________ _________________________________ account number
_______________, or, if mailed by check, to ____________________. Applicable
statements should be mailed to ________________________________________________.
This information is provided by _______________________________, the assignee
named above, or _____________________________, as its agent.
46
EXHIBIT C
UNDERLYING CERTIFICATE SCHEDULE
1.
2.
3.
4.
5.
47
EXHIBIT D
FORM OF TRANSFEREE AGREEMENT
_____________, 20__
Residential Resources, Inc., 333 North Wilshire Avenue, Anaheim, California
92801, Attention: President
[Trustee] [Address] [Address] Attention: Corporate Trust Services
Re: Residential Resources, Inc. Mortgage Pass-Through Certificates Series ____,
Class __
Gentlemen:
_____________________________________ (the "Transferee") intends to
acquire from ________________________________________ (the "Transferor")
$________________ Initial Certificate Principal Balance of Residential
Resources, Inc. Mortgage Pass-Through Certificates, Series ____-_, Class ___
(the "Certificates"), issued pursuant to the Trust Agreement (the "Agreement")
dated _____ __, 20__ between Residential Resources, Inc., as depositor (the
"Depositor"), and _________________, as trustee (the "Trustee"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned
thereto in the Agreement.
In connection with such acquisition, the Transferee hereby certifies and
agrees:
1. The Transferee is acquiring the Certificates either (a) for its own
account or for accounts for which it exercises sole investment discretion and
not with a view to or for sale in connection with any distribution thereof,
subject nevertheless to any requirement of law that the disposition of the
Transferee's property shall at all times be and remain within its control, or
(b) for resale to "Qualified Institutional Buyers" within the meaning of Rule
144A under the 1933 Act and in accordance with the provisions of the Agreement.
2. The Transferee has received, and has had an opportunity to review, (a)
a copy of the [Offering Circular] dated _____ __, 20__ relating to the
Certificates (the "Memorandum"), (b) a copy of the Agreement and (b)(c) such
other information concerning the Certificates, the Trust Fund and the Depositor
as has been requested by the Transferee and is relevant to the Transferee's
decision to purchase the Certificates. The Transferee has had any questions
arising from such review answered by the Depositor to the satisfaction of the
Transferee. If the Transferee was provided with a copy of the Memorandum, the
Transferee acknowledges that the Underlying Memoranda and the Distribution Date
Statements (each as defined in the Memorandum) were not prepared by the
Depositor or any of its affiliates and that neither the Depositor nor any of its
affiliates has made any representation or warranty as to the accuracy or
completeness of the information contained therein, and the Transferee agrees
that it will not look to the Depositor or any of its affiliates with respect to
any damage, liability, claim or expense arising out of, resulting from or in
connection with (i) any error or omission, or alleged error or omission,
contained therein or (ii) any information, development or event arising after
the respective dates thereof. Further, if the Transferee did not acquire the
Certificates from the Transferor in connection with the initial distribution of
the Certificates and was provided with a copy of the Memorandum related to the
original sale (the "Original Sale") of the Certificates by the Depositor, the
Transferee acknowledges that such Memorandum was provided to it by the
Transferor, that the Memorandum was prepared by the Depositor solely for use in
connection with the Original Sale and neither the Depositor nor any of its
affiliates participated in or facilitated in any way the acquisition of the
Certificates by the Transferee from the Transferor, and the Transferee agrees
that it will look solely to the Transferor and not to the Depositor or any of
its affiliates with respect to any damage, liability, claim or expense arising
out of, resulting from or in connection with (i) any error or omission, or
alleged error or omission, contained in the Memorandum or (ii) any information,
development or event arising after the date of the Memorandum.
48
3. The Transferee is an "accredited investor" of the type specified in
Rule 3a-7(a)(2)(i) under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has such expertise, knowledge and sophistication in financial
and business matters generally, and in financial and business matters related to
securities similar to the Certificates in particular, as to be capable of
evaluating the merits and risks of an investment in the Certificates. The
Transferee (or any account referred to above) is able to bear the economic risks
of such an investment.
4. The Transferee will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Certificates by
the Transferee.
5. The Transferee understands that (a) the Certificates have not been and
will not be registered under the Securities Act of 1933, as amended (the "1933
Act"), (b) the Depositor is not required to so register the Certificates, (c)
the Certificates may be resold only if registered pursuant to the provisions of
the 1933 Act, or if an exemption from such registration is available, (d) the
Certificates may not be resold if such transfer would result in the registration
of the Trust Fund as an "investment company" under the 1940 Act, (e) the
Agreement contains restrictions regarding the transfer of the Certificates, (f)
the Certificates will bear a legend to the foregoing effect and (g) a stop order
may be placed in the certificate register relating to the Certificates against
the transfer of any Certificate subject to compliance with the 1933 Act, the
rules and regulations thereunder and state securities laws.
6. The Transferee is not an employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the Internal
Revenue Code of 1986, as amended (the "Code"), nor a Person acting, directly or
indirectly, on behalf of any such plan, and understands that registration of
transfer of any Certificate to any such employee benefit plan, or to any person
acting on behalf of such plan, will not be made unless such employee benefit
plan delivers a certification of facts and an opinion of its counsel, addressed
and satisfactory to the Trustee and the Depositor to the effect that such
transfer will not result in a violation of Section 406 of ERISA or Section 4975
of the Code or subject the Trustee or the Depositor to any obligation in
addition to these undertaken in the Agreement or result in the imposition of an
excise tax under Section 4975 of the Code.
7. The Transferee 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 or 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 1933 Act, that
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law, that would result in the registration of
the Trust Fund as an "investment company" under the 1940 Act, or that would
require registration or qualification pursuant thereto. The Transferee will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of the Agreement. Without limiting the generality of the
foregoing sentence, if the Transferee sells any of the Certificates, the
Transferee will comply with any applicable requirements set forth in Section
4.02 of the Agreement, and if the Transferee sells any of the Certificates, the
Transferee will obtain from any purchaser any representations required pursuant
to Section 4.02 of the Trust Agreement.
Very truly yours,
- -------------------------------------(Transferee)
By:_________________________________
Name:
Title:
49
EXHIBIT E
FORM OF RULE 144A CERTIFICATE
Description of Rule 144A Securities, including numbers:
RESIDENTIAL RESOURCES, INC. MORTGAGE PASS-THROUGH CERTIFICATES SERIES ____,
CLASS ___
$____________ INITIAL CERTIFICATE PRINCIPAL BALANCE
ISSUED PURSUANT TO A TRUST AGREEMENT DATED _____ __, 20__ BETWEEN RESIDENTIAL
RESOURCES, INC., AS DEPOSITOR(THE "DEPOSITOR"), AND ____________________, AS
TRUSTEE
The undersigned seller, as registered holder (the "Transferor"), 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 Transferor hereby
certifies the following facts: Neither the Transferor 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, 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, which would constitute a distribution of the Rule
144A Securities under the Securities Act of 1933, as amended (the "1933 Act"),
or which 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
Transferor 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 1933 Act.
2. The Buyer warrants and represents to, and covenants with, the
Transferor, the Trustee and the Depositor pursuant to Section 4.02 of the
Agreement 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 Transferor and the Trustee.
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.
50
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 account of other
qualified institutional buyers and 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 is not an employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the Internal
Revenue Code of 1986, as amended (the "Code"), nor a Person acting, directly or
indirectly, on behalf of any such plan, and understands that registration of
transfer of any Certificate to any such employee benefit plan, or to any person
acting on behalf of such plan, will not be made unless such employee benefit
plan delivers a certification of facts and an opinion of its counsel, addressed
and satisfactory to the Trustee and the Depositor to the effect that such
transfer will not result in a violation of Section 406 of ERISA or Section 4975
of the Code or subject the Trustee or the Depositor to any obligation in
addition to these undertaken in the Agreement or result in the imposition of an
excise tax under Section 4975 of the Code.
[3/4].If the Buyer was provided with a copy of the [Offering Circular]
dated _____ __, 20__ (the "Memorandum") relating to the Rule 144A Securities,
the Buyer acknowledges that the Underlying Memoranda and the Distribution Date
Statements (each as defined in the Memorandum) were not prepared by the
Depositor or any of its affiliates and that neither the Depositor nor any of its
affiliates has made any representation or warranty as to the accuracy or
completeness of the information contained therein, and the Buyer agrees that it
will not look to the Depositor or any of its affiliates with respect to any
damage, liability, claim or expense arising out of, resulting from or in
connection with (i) any error or omission, or alleged error or omission,
contained therein or (ii) any information, development or event arising after
the respective dates thereof.
[4/5]. 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 Transferor Print Name of Buyer
By:
---------------------------------
Name:
Title::
Taxpayer Identification: Taxpayer Identification:
No. ____________________________________
Date: __________________________________
Date:___________________________________
51
ANNEX 1 TO EXHIBIT E
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.
___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.
(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.
___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, 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.
52
___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.
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 Certificates
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.
6. Will the Buyer be purchasing the Rule 144A Securities only for the
Buyer's own account?
Yes____ No____.
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 during the
period between the date of this certification and the date
53
the Buyer purchases the Rule 144A Securities. Unless such notice is given, the
Buyer's purchase of the 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:
----------------------------------
54
ANNEX 2 TO EXHIBIT E
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.
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.
55
6. The Buyer will notify each of the parties to which this certification
is made of any changes in the information and conclusions herein during the
period between the date of this certification and the date the Buyer purchases
the Rule 144A Securities. Unless such notice is given, the Buyer's purchase of
the Rule 144A Securities will constitute a reaffirmation of this certification
as of the date of such purchase.
Print Name of Buyer
By:
-------------------------------------
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
-----------------------------------
56
EXHIBIT F
TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF ______________________ )
)ss.
COUNTY OF ______________________ )
___________________, being first duly sworn, deposes, represents and
warrants:
1. That he is [Title of Officer] of [Name of Owner] a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of ___________] [the United States], (the "Owner"), record or beneficial
owner of Residential Resources, Inc. Mortgage Pass-Through Certificates, Series
____, Class __ (the "Class __ Certificates"), on behalf of which he makes this
affidavit and agreement. The Class __ Certificates were issued pursuant to the
Trust Agreement dated _____ __, 20__ (the "Agreement") between Residential
Resources, Inc., as depositor, and __________, as trustee (the "Trustee").
2. That the Owner (i) is and will be a "Permitted Transferee" as of
_______________, 200__ and (ii) is acquiring the Class __ Certificates for its
own account or for the account of another Owner from which it has received an
affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
Non-United States Person. For this purpose, a "disqualified organization" means
any of the following: (i) the United States, any State or political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for the Freddie Mac, a
majority of its board of directors is not selected by such governmental unit),
(ii) a foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Internal Revenue
Code of 1986 (the "Code")) which is exempt from the tax imposed by Chapter 1 of
the Code (unless such organization is subject to the tax imposed by Section 511
of the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code and (v)
any other Person so designated based upon an Opinion of Counsel that the holding
of an Ownership Interest in a Class __ Certificate by such Person may cause the
Trust Fund or any Person having an Ownership Interest in any Class of
Certificates, other than such Person, to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Class __ Certificate to such Person. The terms
"United States", "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
3. That the Owner is aware (i) of the tax that would be imposed on the
Trust Fund if a Class __ Certificate is transferred to a disqualified
organization under Section 860E(e)(6) of the Code and that any Owner that is a
disqualified organization will be obligated to reimburse the Trust Fund for any
such tax; (ii) that the Underlying Residual Certificates may be "noneconomic
residual interests" within the meaning of Treasury regulation Section 1.860E-
1(c)(2) and that the transferor of an ownership interest in a "noneconomic
residual interest" will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
is to enable the transferor to impede the assessment or collection of tax; and
(iii) that the Underlying Residual Certificates may have "tax avoidance
potential" within the meaning of Treasury regulation Section 1.860G-3(a)(2) and
that the transferor of an ownership interest in an Underlying Residual
Certificate with "tax avoidance potential" to a Non-United States Person will
remain liable for any taxes due with respect to the income on such certificate.
4. That the Owner is aware of the tax imposed on a "pass-through entity"
holding the Class __ Certificates if at any time during the taxable year of the
pass-through entity a disqualified organization is the record holder of an
interest in such entity. For this purpose, a "pass through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.
57
5. That the Owner is aware that the Trustee will not register the transfer
of any Class __ Certificates unless the transferee, or the transferee's agent,
delivers to the Trustee, among other things, an affidavit in substantially the
same form as this affidavit. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. That the Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class __ Certificates will only be owned,
directly or indirectly, by Owners that are Permitted Transferees.
7. That the Owner's taxpayer identification number is __________.
8. That the Owner has reviewed the restrictions set forth on the face of
the Class __ Certificates and the provisions of Section 4.02 of the Agreement
under which the Class __ Certificates were issued (and, in particular, the Owner
is aware that such Section authorizes the Trustee to deliver payments to a
person other than the Owner and negotiate a mandatory sale by the Trustee in the
event that the Owner holds such Class __ Certificates in violation of Section
4.02 of the Agreement); and that the Owner expressly agrees to be bound by and
to comply with such restrictions and provisions.
9. That the Owner is not acquiring and will not transfer the Class __
Certificates in order to impede the assessment or collection of any tax.
10. That the Owner anticipates that it will, so long as it holds the Class
__ Certificates, have sufficient assets to pay any taxes owed by the holder of
such Class __ Certificates.
11. That the Owner has no present knowledge that it may become insolvent
or subject to a bankruptcy proceeding for so long as it holds the Class __
Certificates.
12. That the Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the Class __
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the Person from whom it acquired the Class __
Certificates that the Owner intends to pay taxes associated with holding the
Class __ Certificates as they become due, fully understanding that it may incur
tax liabilities in excess of any cash flows generated by the Class __
Certificates.
13. That the Owner is not acquiring the Class __ Certificates with the
intent to transfer the Class __ Certificates to any person or entity that will
not have sufficient assets to pay any taxes owed by the holder of such Class __
Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class __ Certificates remain outstanding.
14. That Owner will, in connection with any transfer that it makes of the
Class __ Certificates, obtain from its transferee the representations required
by Section 4.02(d) of the Agreement under which the Class __ Certificates were
issued and will not consummate any such transfer if it knows, or knows facts
that should lead it to believe, that any such representations are false.
15. That Owner will, in connection with any transfer that it makes of the
Class __ Certificates, represent and warrant that it is not transferring the
Class __ Certificates to impede the assessment or collection of any tax and that
it has no actual knowledge that the proposed transferee: (i) has insufficient
assets to pay any taxes owed by such transferee as holder of the Class __
Certificates; (ii) may become insolvent or subject to a bankruptcy proceeding,
for so long as the Class __ Certificates remain outstanding and; (iii) is not a
"Permitted Transferee".
58
16. That the Owner is a United States Person.
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on
its behalf, by its [TITLE OF OFFICER], attested by its [Assistant Secretary],
this ___ day of _______, 200__.
[NAME OF OWNER]
By:
-----------------------------------
Name: [NAME OF OFFICER]
Title:[TITLE OF OFFICER]
ATTEST:
- --------------------------------------
[Assistant] Secretary
Personally appeared before me the above-named [NAME OF OFFICER], known or
proved to me to be the same person who executed the foregoing instrument and to
be a [TITLE OF OFFICER] of the Owner, and acknowledged to me that he or she
executed the same as his or her free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this _____ day of _______, 200_.
________________________________________ NOTARY PUBLIC
COUNTY OF _________________________ )
ss: )
STATE OF _________________________ )
My Commission expires the _______ day of __________________ , 20__.
59
EXHIBIT G
FORM OF ERISA REPRESENTATION LETTER FOR INSURANCE COMPANIES
BANK COLLECTIVE INVESTMENT FUNDS
______________, 200__
Residential Resources, Inc., 333 North Wilshire Avenue, Anaheim, California
92801 Attention: President
[Trustee] [Address] [Address] Attention: Corporate Trust Services
Re: Residential Resources, Inc. Mortgage Pass-Through Certificates Series
____-_, Class ___
Gentlemen:
__________________________________ (the "Transferee") intends to acquire
from _____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance of Residential Resources, Inc. Mortgage Pass-Through
Certificates, Series ____-_, Class ___ (the "Certificates"), issued pursuant to
a Trust Agreement (the "Agreement") dated _____ __, 20__ between Residential
Resources, Inc., as depositor (the "Depositor"), and ___________________, as
trustee (the "Trustee"). Capitalized terms used herein and not otherwise defined
shall have the meanings assigned thereto in the Agreement.
The Transferee hereby certifies, represents and warrants to, and covenants
with, the Depositor and the Trustee that:
1. The Certificates will not be transferred to any employee benefit plan
or other retirement arrangement including individual retirement accounts and
Keogh plans that is subject to Section 406 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 of the foregoing, a "Plan").
2. Either (a) the Transferee is an insurance company and (i) the source of
funds used to purchase the Certificates, is an "insurance company general
account" (as such term is defined in Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60") issued by the United States Department of Labor (the "DOL")
and there is no plan with respect to which the amount of such general account's
reserves and liabilities for contracts held by or on behalf of such Plan and all
other plans maintained by the same employer (or "affiliate" thereof, as defined
in PTCE 95-60), or by the same employee organization, exceed 10% of the total
reserves and liabilities of such general account (as determined under PTCE
95-60) as of the date of acquisition of the Certificates or (ii) the source of
funds used to purchase the Certificates is an "insurance company pooled separate
account" (as such term is defined in Prohibited Transaction Class Exemption 90-1
issued by the DOL ("PTCE 90-1")) and that there is no Plan with respect to which
the amount of such general account's reserves and liabilities for contracts held
by or on behalf of such Plan and all other Plans maintained by the same employer
(or any "affiliate" thereof, as defined in PTCE 90-1), or by the same employee
organization, exceed 10% of the total of all reserves and liabilities of such
pooled separate account (as determined under PTCE 90-1) as of the date of
acquisition of the Certificates or (b) the Transferee is a bank collective
investment fund and the source of funds used to purchase the Certificates is a
"collective investment fund" (as defined in Prohibited Transaction Class
Exemption 91-38 issued by the DOL ("PTCE 91-38")) and that there is no Plan, the
interests of which together with the interests of any other Plans maintained by
the same employer or employee organization in the collective investment fund
does not exceed 10% of the total of all assets in the collective investment fund
(as determined under PTCE 91-38) as of the date of acquisition of the
Certificates.
60
Very truly yours,
(Transferee)
By:
-----------------------------------------
Name:
Title:
61