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RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.,
as Depositor
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
______________________________________________
AMENDED AND RESTATED TRUST AGREEMENT
Dated as of September 28, 2006
_____________________________________________
Home Loan-Backed Certificates,
Series 2006-HI4
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................................1
Section 1.01. Definitions.......................................................1
Section 1.02. Other Definitional Provisions.....................................1
ARTICLE II ORGANIZATION..............................................................2
Section 2.01. Name..............................................................2
Section 2.02. Office............................................................2
Section 2.03. Purposes and Powers...............................................2
Section 2.04. Appointment of Owner Trustee......................................3
Section 2.05. Initial Capital Contribution of Owner Trust Estate................3
Section 2.06. Declaration of Trust..............................................3
Section 2.07. Liability of the Holders of the Certificates......................3
Section 2.08. Title to Trust Property...........................................4
Section 2.09. Situs of Trust....................................................4
Section 2.10. Representations and Warranties of the Depositor...................4
Section 2.11. Payment of Trust Fees.............................................5
ARTICLE III CONVEYANCE OF THE HOME
LOANS;
CERTIFICATES..............................................................5
Section 3.01. Conveyance of the Home Loans......................................5
Section 3.02. Initial Ownership.................................................5
Section 3.03. The Certificates..................................................5
Section 3.04. Authentication of Certificates....................................6
Section 3.05. Registration of and Limitations on Transfer and Exchange of
Certificates......................................................6
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates.................9
Section 3.07. Persons Deemed Certificateholders.................................9
Section 3.08. Access to List of Certificateholders' Names and Addresses.........9
Section 3.09. Maintenance of Office or Agency...................................9
Section 3.10. Certificate Paying Agent.........................................10
Section 3.11. Cooperation......................................................11
ARTICLE IV AUTHORITY AND DUTIES OF OWNER TRUSTEE....................................11
Section 4.01. General Authority................................................11
Section 4.02. General Duties...................................................11
Section 4.03. Action upon Instruction..........................................12
Section 4.04. No Duties Except as Specified under Specified Documents or in
Instructions.....................................................12
Section 4.05. Restrictions.....................................................13
Section 4.06. Prior Notice to Certificateholders and the Credit Enhancer with
Respect to Certain Matters.......................................13
Section 4.07. Action by Certificateholders with Respect to Certain Matters.....14
Section 4.08. Action by Certificateholders with Respect to Bankruptcy..........14
Section 4.09. Restrictions on Certificateholders' Power........................14
Section 4.10. Majority Control.................................................14
Section 4.11. Doing Business in Other Jurisdictions............................14
ARTICLE V APPLICATION OF TRUST FUNDS...............................................15
Section 5.01. Distributions....................................................15
Section 5.02. Method of Payment................................................15
Section 5.03. Signature on Returns.............................................15
Section 5.04. Statements to Certificateholders.................................16
Section 5.05. Tax Reporting....................................................16
Section 5.06. Derivative Contracts.............................................16
ARTICLE VI CONCERNING THE OWNER TRUSTEE.............................................17
Section 6.01. Acceptance of Trusts and Duties..................................17
Section 6.02. Furnishing of Documents..........................................18
Section 6.03. Representations and Warranties...................................18
Section 6.04. Reliance; Advice of Counsel......................................19
Section 6.05. Not Acting in Individual Capacity................................19
Section 6.06. Owner Trustee Not Liable for Certificates or Related Documents...19
Section 6.07. Owner Trustee May Own Certificates and Notes.....................20
ARTICLE VII COMPENSATION OF OWNER TRUSTEE............................................20
Section 7.01. Owner Trustee's Fees and Expenses................................20
Section 7.02. Indemnification..................................................20
ARTICLE VIII TERMINATION OF TRUST AGREEMENT...........................................20
Section 8.01. Termination of Trust Agreement...................................20
ARTICLE IX SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES...................22
Section 9.01. Eligibility Requirements for Owner Trustee.......................22
Section 9.02. Replacement of Owner Trustee.....................................22
Section 9.03. Successor Owner Trustee..........................................23
Section 9.04. Merger or Consolidation of Owner Trustee.........................23
Section 9.05. Appointment of Co-Trustee or Separate Trustee....................23
ARTICLE X MISCELLANEOUS............................................................25
Section 10.01. Amendments.......................................................25
Section 10.02. No Legal Title to Owner Trust Estate.............................26
Section 10.03. Limitations on Rights of Others..................................27
Section 10.04. Notices..........................................................27
Section 10.05. Severability.....................................................27
Section 10.06. Separate Counterparts............................................27
Section 10.07. Successors and Assigns...........................................27
Section 10.08. No Petition......................................................28
Section 10.09. No Recourse......................................................28
Section 10.10. Headings.........................................................28
Section 10.11. GOVERNING LAW....................................................28
Section 10.12. Integration......................................................28
Section 10.13. Rights of Credit Enhancer to Exercise Rights of Certificateholders28
ARTICLE XI COMPLIANCE WITH REGULATION AB............................................29
Section 11.01. Intent of the Parties; Reasonableness............................29
Section 11.02. Additional Representations and Warranties of the Owner Trustee...29
Section 11.03. Information to Be Provided by the Owner Trustee..................30
Section 11.04. Indemnification; Remedies........................................31
Exhibit A......Form of Home Loan Backed Certificate
Exhibit B......Certificate of Trust of Home Loan Trust 2006-HI4
Exhibit C......Form of Rule 144A Investment Representation
Exhibit D......Form of Investor Representation Letter
Exhibit E......Form of Transferor Representation Letter
Exhibit F......Certificate of Non-Foreign Status
Exhibit G......Form of ERISA Representation Letter
This Amended and Restated Trust Agreement, dated as of September 28, 2006 (as amended from
time to time, this "Trust Agreement"), between RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC., a
Delaware corporation, as depositor (the "Depositor") and WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as owner trustee (the "Owner Trustee"),
WITNESSETH THAT:
WHEREAS, the Depositor and the Owner Trustee entered into a trust agreement dated as of
September 19, 2006, in connection with the formation of a Delaware statutory trust (the "Original
Trust Agreement");
WHEREAS, the Depositor and the Owner Trustee wish to amend and restate the Original Trust
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the Depositor
and the Owner Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. For all purposes of this Trust Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in Appendix A to the
Indenture dated September 28, 2006 (the "Indenture"), between Home Loan Trust 2006-HI4, as issuer,
and JPMorgan Chase Bank, National Association, as indenture trustee. All other capitalized terms
used herein shall have the meanings specified herein.
Section 1.02 Other Definitional Provisions.
(a) All terms defined in this Trust Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any certificate or other document made or delivered
pursuant hereto or thereto, accounting terms not defined in this Trust Agreement or in any such
certificate or other document, and accounting terms partly defined in this Trust Agreement or in
any such certificate or other document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Trust Agreement or in any such certificate or other
document are inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Trust Agreement or in any such certificate or other
document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar import when used in this
Trust Agreement shall refer to this Trust Agreement as a whole and not to any particular provision
of this Trust Agreement; Article, Section and Exhibit references contained in this Trust Agreement
are references to Articles, Sections and Exhibits in or to this Trust Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation".
(d) The definitions contained in this Trust Agreement are applicable to the singular as well as
the plural forms of such terms and to the masculine as well as to the feminine and neuter genders
of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or in any instrument or
certificate delivered in connection herewith means such agreement, instrument or statute as from
time to time amended, modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
ORGANIZATION
Section 2.01 Name. The trust created hereby (the "Trust") shall be known as "Home Loan Trust
2006-HI4," in which name the Owner Trustee may conduct the business of the Trust, make and execute
contracts and other instruments on behalf of the Trust and xxx and be sued.
Section 2.02 Office. The office of the Trust shall be in care of the Owner Trustee at the
Corporate Trust Office or at such other address in Delaware as the Owner Trustee may designate by
written notice to the Certificateholders and the Depositor.
Section 2.03 Purposes and Powers. The purpose of the Trust is to engage in the following
activities:(i) to issue the Notes pursuant to the Indenture and the Certificates pursuant to this
Trust Agreement and to sell the Notes and the Certificates; (ii) to purchase the Home Loans and to
pay the organizational, start-up and transactional expenses of the Trust; (iii) to assign, grant,
transfer, pledge and convey the Home Loans pursuant to the Indenture and to hold, manage and
distribute to the Certificateholders pursuant to Section 5.01 any portion of the Home Loans
released from the Lien of, and remitted to the Trust pursuant to, the Indenture; (iv) to enter
into and perform its obligations under the Basic Documents to which it is to be a party; (v) to
engage in those activities, including entering into agreements, that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected therewith,
including, without limitation, to accept additional contributions of equity that are not subject
to the Lien of the Indenture; and (vi) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with conservation of the Trust Estate
and the making of distributions to the Certificateholders and the Noteholders. The Trust is
hereby authorized to engage in the foregoing activities. The Trust shall not engage in any
activity other than in connection with the foregoing or other than as required or authorized by
the terms of this Trust Agreement or the Basic Documents while any Note is outstanding without the
consent of the Holders of a majority of the Certificate Percentage Interest of the Certificates
and the Indenture Trustee.
Section 2.04 Appointment of Owner Trustee. The Depositor hereby appoints the Owner Trustee as
trustee of the Trust effective as of the date hereof, to have all the rights, powers and duties
set forth herein.
Section 2.05 Initial Capital Contribution of Owner Trust Estate. The Depositor hereby sells,
assigns, transfers, conveys and sets over to the Trust, as of the date hereof, the sum of $1. The
Owner Trustee hereby acknowledges receipt in trust from the Depositor, as of the date hereof, of
the foregoing contribution, which shall constitute the initial corpus of the Trust and shall be
deposited in the Certificate Distribution Account. The Owner Trustee also acknowledges on behalf
of the Issuer, the receipt in trust of the Home Loans and such other collateral assigned to the
Trust pursuant to Section 3.01, which shall constitute the Owner Trust Estate.
Section 2.06 Declaration of Trust. The Owner Trustee hereby declares that it shall hold the
Owner Trust Estate in trust upon and subject to the conditions set forth herein for the use and
benefit of the Certificateholders, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that the Trust constitute a statutory trust
under the Statutory Trust Statute and that this Trust Agreement constitute the governing
instrument of such statutory trust. Effective as of the date hereof, the Owner Trustee shall have
all rights, powers and duties set forth herein and in the Statutory Trust Statute with respect to
accomplishing the purposes of the Trust. For purposes of this Declaration of Trust, "Statutory
Trust Statute" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C.ss.3801 et. Seq. as
the same may be amended or supplemented from time to time. It is the intention of the parties
hereto that, solely for federal, state and local income and franchise tax purposes, the Trust
shall be treated as an entity disregarded from the sole holder of 100% of the Certificates, which
Certificates shall initially be owned by the Depositor or an affiliate thereof, and the provisions
of this Trust Agreement shall be interpreted to further this intention. If more than one person
owns the Certificates for federal income tax purposes, then it is the intention of the parties
hereto, that solely for federal, state and local income and franchise tax purposes the Trust shall
be treated as a partnership (other than a publicly traded partnership), with the assets of the
partnership being the Trust Estate, the partners of the partnership being the Certificateholders
and the Notes being debt of the partnership and the provisions of this Trust Agreement shall be
interpreted to further this intention. The parties agree that, unless otherwise required by
appropriate tax authorities, the Owner Trustee will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the characterization of the Trust as an
entity wholly owned by the Depositor or an affiliate thereof, or, if two or more persons own the
Certificates, as a partnership (other than a publicly traded partnership) for such tax purposes.
Section 2.07 Liability of the Holders of the Certificates. The Holders of the Certificates
shall be liable for any entity level taxes imposed on the Trust.
Section 2.08 Title to Trust Property. Legal title to the Owner Trust Estate shall be vested at
all times in the Trust as a separate legal entity except where applicable law in any jurisdiction
requires title to any part of the Owner Trust Estate to be vested in a trustee or trustees, in
which case title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a separate
trustee, as the case may be.
Section 2.09 Situs of Trust. The Trust will be located and administered in the State of
Delaware. All bank accounts maintained by the Owner Trustee on behalf of the Trust shall be
located in the State of Delaware or the State of New York. The Trust shall not have any employees
in any state other than Delaware; provided, however, that nothing herein shall restrict or
prohibit the Owner Trustee from having employees within or without the State of Delaware or taking
actions outside the State of Delaware in order to comply with Section 2.03. Payments will be
received by the Trust only in Delaware or New York, and payments will be made by the Trust only
from Delaware or New York. The only office of the Trust will be at the Corporate Trust Office in
Delaware.
Section 2.10 Representations and Warranties of the Depositor. The Depositor hereby represents
and warrants to the Owner Trustee that:
(i) The Depositor is duly organized and validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to own its properties and
to conduct its business as such properties are currently owned and such business is
presently conducted.
(ii) The Depositor is duly qualified to do business as a foreign corporation in good standing
and has obtained all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of its property or the conduct of its business shall require such
qualifications and in which the failure to so qualify would have a material adverse effect
on the business, properties, assets or condition (financial or other) of the Depositor and
the ability of the Depositor to perform under this Trust Agreement.
(iii) The Depositor has the power and authority to execute and deliver this Trust Agreement and
to carry out its terms; the Depositor has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Trust as part of the Trust and
the Depositor has duly authorized such sale and assignment and deposit to the Trust by all
necessary corporate action; and the execution, delivery and performance of this Trust
Agreement have been duly authorized by the Depositor by all necessary corporate action.
(iv) The consummation of the transactions contemplated by this Trust Agreement and the
fulfillment of the terms hereof do not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or bylaws of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it is bound;
nor result in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than pursuant to the
Basic Documents); nor violate any law or, to the best of the Depositor's knowledge, any
order, rule or regulation applicable to the Depositor of any court or of any federal or
state regulatory body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
Section 2.11 Payment of Trust Fees. The Owner Trustee shall pay the Trust's fees and expenses
incurred with respect to the performance of the Trust's duties under the Indenture.
ARTICLE III
CONVEYANCE OF THE HOME LOANS;
CERTIFICATES
Section 3.01. Conveyance of the Home Loans. The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, convey, sell and assign to the Trust, on behalf of the
Holders of the Notes and the Certificates and the Credit Enhancer, without recourse, all its
right, title and interest in and to (i) the Home Loans, all interest accruing thereon and all
collections in respect thereof received on or after the Cut-off Date, (ii) property which secured
a Home Loan and which has been acquired by foreclosure or deed in lieu of foreclosure, (iii) the
interest of the Depositor in any insurance policies in respect of the Home Loans, and (iv) all
proceeds of the foregoing. The Depositor will also provide the Trust with the Credit Enhancement
Instrument.
The parties hereto intend that the transaction set forth herein be a sale by the Depositor
to the Trust of all of its right, title and interest in and to the Home Loans. In the event that
the transaction set forth herein is not deemed to be a sale, the Depositor hereby grants to the
Trust a security interest in all of its right, title and interest in, to and under (i) the Home
Loans, all interest accruing thereon and all collections in respect thereof received on or after
the Cut-off Date, (ii) property which secured a Home Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure, (iii) the interest of the Depositor in any insurance
policies in respect of the Home Loans, and (iv) all proceeds of the foregoing and all
distributions thereon and all proceeds thereof; and this Trust Agreement shall constitute a
security agreement under applicable law.
Section 3.02. Initial Ownership. Upon the formation of the Trust by the contribution by the
Depositor pursuant to Section 2.05 and until the conveyance of the Home Loans pursuant to Section
3.01 and the issuance of the Certificates, the Depositor shall be the sole Certificateholder.
Section 3.03. The Certificates. The Certificates shall be issued in a single denomination of a
100% Certificate Percentage Interest.
The Certificates shall be executed on behalf of the Trust by manual or facsimile signature
of an authorized officer of the Owner Trustee and authenticated in the manner provided in Section
3.04. Certificates bearing the manual or facsimile signatures of individuals who were, at the
time when such signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefit of this Trust Agreement, notwithstanding that
such individuals or any of them shall have ceased to be so authorized prior to the authentication
and delivery of such Certificates or did not hold such offices at the date of authentication and
delivery of such Certificates. A Person shall become a Certificateholder and shall be entitled to
the rights and subject to the obligations of a Certificateholder hereunder upon such Person's
acceptance of a Certificate duly registered in such Person's name, pursuant to Section 3.05.
A transferee of a Certificate shall become a Certificateholder and shall be entitled to the
rights and subject to the obligations of a Certificateholder hereunder upon such transferee's
acceptance of a Certificate duly registered in such transferee's name pursuant to and upon
satisfaction of the conditions set forth in Section 3.05.
Section 3.04. Authentication of Certificates. Concurrently with the acquisition of the Home
Loans by the Trust, the Owner Trustee or the Certificate Paying Agent shall cause the Certificates
in an initial Certificate Percentage Interest of 100% to be executed on behalf of the Trust,
authenticated and delivered to or upon the written order of the Depositor, signed by its chairman
of the board, its president or any vice president, without further corporate action by the
Depositor, in authorized denominations. No Certificate shall entitle its holder to any benefit
under this Trust Agreement or be valid for any purpose unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth in Exhibit A,
executed by the Owner Trustee or the Certificate Paying Agent, by manual signature; such
authentication shall constitute conclusive evidence that such Certificate shall have been duly
authenticated and delivered hereunder. All Certificates shall be dated the date of their
authentication.
Section 3.05. Registration of and Limitations on Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 3.09, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided. The Indenture
Trustee shall be the initial Certificate Registrar. If the Certificate Registrar resigns or is
removed, the Owner Trustee shall appoint a successor Certificate Registrar.
Subject to satisfaction of the conditions set forth below, upon surrender for registration
of transfer of any Certificate at the office or agency maintained pursuant to Section 3.09, the
Owner Trustee shall execute, authenticate and deliver (or shall cause the Certificate Registrar as
its authenticating agent to authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of a like aggregate amount
dated the date of authentication by the Owner Trustee or any authenticating agent. At the option
of a Certificateholder, Certificates may be exchanged for other Certificates of authorized
denominations of a like aggregate amount upon surrender of the Certificates to be exchanged at the
office or agency maintained pursuant to Section 3.09.
Every Certificate presented or surrendered for registration of transfer or exchange shall
be accompanied by a written instrument of transfer in form satisfactory to the Certificate
Registrar duly executed by the Certificateholder or such Certificateholder's attorney duly
authorized in writing. Each Certificate surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Certificate Registrar in accordance with
its customary practice.
No service charge shall be made for any registration of transfer or exchange of
Certificates, but the Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
Except as described below, no transfer of any Certificate or interest therein shall be made
to any Person that is not a United States Person. Each Certificateholder shall establish its
non-foreign status by submitting to the Certificate Paying Agent an IRS Form W-9 and the
Certificate of Non-Foreign Status set forth in Exhibit F hereto.
A Certificate may be transferred to a Certificateholder unable to establish its non-foreign
status as described in the preceding paragraph only if such Certificateholder provides an Opinion
of Counsel, which Opinion of Counsel shall not be an expense of the Trust, the Owner Trustee, the
Certificate Registrar or the Depositor, satisfactory to the Depositor and the Credit Enhancer,
that such transfer (1) will not affect the tax status of the Trust and (2) will not adversely
affect the interests of any Certificateholder, any Noteholder or the Credit Enhancer, including,
without limitation, as a result of the imposition of any United States federal withholding taxes
on the Trust (except to the extent that such withholding taxes would be payable solely from
amounts otherwise distributable to the Certificate of the prospective transferee). If such
transfer occurs and such foreign Certificateholder becomes subject to such United States federal
withholding taxes, any such taxes will be withheld by the Indenture Trustee. Each
Certificateholder unable to establish its non-foreign status shall submit to the Certificate
Paying Agent a copy of its Form W-8BEN and shall resubmit such Form W-8BEN every three years.
(b) (i) No transfer, sale, pledge or other disposition of a Certificate shall be made unless
such transfer, sale, pledge or other disposition is exempt from the registration requirements of
the Securities Act and any applicable state securities laws or is made in accordance with said Act
and laws. In the event of any such transfer, the Certificate Registrar or the Depositor shall
prior to such transfer require the transferee to execute (A) either (i) an investment letter in
substantially the form attached hereto as Exhibit C (or in such form and substance reasonably
satisfactory to the Certificate Registrar and the Depositor) which investment letters shall not be
an expense of the Trust, the Owner Trustee, the Certificate Registrar, the Master Servicer or the
Depositor and which investment letter states that, among other things, such transferee (a) is a
"qualified institutional buyer" as defined under Rule 144A, acting for its own account or the
accounts of other "qualified institutional buyers" as defined under Rule 144A, and (b) is aware
that the proposed transferor intends to rely on the exemption from registration requirements under
the Securities Act, provided by Rule 144A or (ii) (a) a written Opinion of Counsel acceptable to
and in form and substance satisfactory to the Certificate Registrar and the Depositor that such
transfer may be made pursuant to an exemption, describing the applicable exemption and the basis
therefor, from said Act and laws or is being made pursuant to said Act and laws, which Opinion of
Counsel shall not be an expense of the Trust, the Owner Trustee, the Certificate Registrar, the
Master Servicer or the Depositor and (b) the transferee executes a representation letter,
substantially in the form of Exhibit D hereto, and the transferor executes a representation
letter, substantially in the form of Exhibit E hereto, each acceptable to and in form and
substance satisfactory to the Certificate Registrar and the Depositor certifying the facts
surrounding such transfer, which representation letters shall not be an expense of the Trust, the
Owner Trustee, the Certificate Registrar, the Master Servicer or the Depositor and (B) the
Certificate of Non-Foreign Status (in substantially the form attached hereto as Exhibit F)
acceptable to and in form and substance reasonably satisfactory to the Certificate Registrar and
the Depositor, which certificate shall not be an expense of the Trust, the Owner Trustee, the
Certificate Registrar or the Depositor. If the Certificateholder is unable to provide a
Certificate of Non-Foreign Status, the Certificateholder must provide an Opinion of Counsel as
described in the preceding paragraph. The Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trust, the Owner Trustee, the Certificate
Registrar, the Master Servicer and the Depositor against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and state laws.
(ii) No transfer of Certificates or any interest therein shall be made to any Person
unless the Depositor, the Owner Trustee, the Certificate Registrar and the Master Servicer are
provided with an Opinion of Counsel acceptable to and in form and substance satisfactory to the
Depositor, the Owner Trustee, the Certificate Registrar and the Master Servicer to the effect that
the purchase and holding of Certificates is permissible under applicable law, will not constitute
or result in any prohibited transaction under ERISA or Section 4975 of the Code (or comparable
provisions of any subsequent enactments) and will not subject the Depositor, the Owner Trustee,
the Certificate Registrar or the Master Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Trust Agreement, which Opinion of Counsel shall not be an expense of the
Depositor, the Owner Trustee, the Certificate Registrar or the Master Servicer. In lieu of such
Opinion of Counsel, a Person acquiring such Certificates may provide a certification in the form
of Exhibit G to this Trust Agreement, which the Depositor, the Owner Trustee, the Certificate
Registrar and the Master Servicer may rely upon without further inquiry or investigation, or such
other certifications as the Depositor, the Owner Trustee, the Certificate Registrar or the Master
Servicer may deem desirable or necessary in order to establish that such Person is not an employee
benefit plan or other plan subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code (each, a "Plan"), or any Person (including, without limitation, an insurance
company investing its general accounts, an investment manager, a named fiduciary or a trustee of
any Plan) who is using "plan assets," within the meaning of the U.S. Department of Labor
regulation promulgated at 29 C.F.R. Section 2510.3-101, of any Plan (each, a "Plan Investor") to
effect such acquisition. Neither an Opinion of Counsel nor a certification will be required in
connection with the initial transfer of any such Certificate by the Depositor to an affiliate of
the Depositor (in which case, the Depositor or any affiliate thereof shall be deemed to have
represented that such affiliate is not a Plan or a Plan Investor and the Owner Trustee shall be
entitled to conclusively rely upon a representation (which, upon the request of the Owner Trustee,
shall be a written representation) from the Depositor of the status of such transferee as an
affiliate of the Depositor.
(iii) In addition, no transfer of a Certificate shall be permitted, and no such transfer
shall be registered by the Certificate Registrar or be effective hereunder, unless evidenced by an
Opinion of Counsel, which establishes that such transfer or the registration of such transfer
would not cause the Trust to be classified as a publicly traded partnership, an association
taxable as a corporation, a corporation or a taxable mortgage pool for federal and relevant state
income tax purposes, which Opinion of Counsel shall not be an expense of the Certificate Registrar
and shall be an expense of the proposed transferee. No Opinion of Counsel will be required if
such transfer is made to a nominee of an existing beneficial holder of a Certificate.
(iv) In addition, no transfer, sale, assignment, pledge or other disposition of a
Certificate shall be made unless the proposed transferee certifies, in form and substance
reasonably satisfactory to the Certificate Registrar and the Depositor that (1) the transferee is
acquiring the Certificate for its own behalf and is not acting as agent or custodian for any other
person or entity in connection with such acquisition and (2) the transferee is not a partnership,
grantor trust or S corporation for federal income tax purposes.
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any mutilated
Certificate shall be surrendered to the Certificate Registrar, or if the Certificate Registrar
shall receive evidence to its satisfaction of the destruction, loss or theft of any Certificate
and (b) there shall be delivered to the Certificate Registrar and the Owner Trustee such security
or indemnity as may be required by them to save each of them and the Issuer from harm, then in the
absence of notice to the Certificate Registrar or the Owner Trustee that such Certificate has been
acquired by a bona fide purchaser, the Owner Trustee shall execute on behalf of the Trust and the
Owner Trustee or the Certificate Paying Agent, as the Trust's authenticating agent, shall
authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor and denomination. In connection with the
issuance of any new Certificate under this Section 3.06, the Owner Trustee or the Certificate
Registrar may require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section 3.06 shall constitute conclusive evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.
Section 3.07. Persons Deemed Certificateholders. Prior to due presentation of a Certificate for
registration of transfer, the Owner Trustee, the Certificate Registrar or any Certificate Paying
Agent may treat the Person in whose name any Certificate is registered in the Certificate Register
as the owner of such Certificate for the purpose of receiving distributions pursuant to Section
5.02 and for all other purposes whatsoever, and none of the Trust, the Owner Trustee, the
Certificate Registrar or any Paying Agent shall be bound by any notice to the contrary.
Section 3.08. Access to List of Certificateholders' Names and Addresses. The Certificate
Registrar shall furnish or cause to be furnished to the Depositor or the Owner Trustee, within 15
days after receipt by the Certificate Registrar of a written request therefor from the Depositor
or the Owner Trustee, a list, in such form as the Depositor or the Owner Trustee, as the case may
be, may reasonably require, of the names and addresses of the Certificateholders as of the most
recent Record Date. Each Holder, by receiving and holding a Certificate, shall be deemed to have
agreed not to hold any of the Trust, the Depositor, the Certificate Registrar or the Owner Trustee
accountable by reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
Section 3.09. Maintenance of Office or Agency. The Owner Trustee, on behalf of the Trust, shall
maintain in the City of New York an office or offices or agency or agencies where Certificates may
be surrendered for registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Certificates and the Basic Documents may be served. The Owner
Trustee initially designates the Corporate Trust Office of the Indenture Trustee as its office for
such purposes. The Owner Trustee shall give prompt written notice to the Depositor and the
Certificateholders of any change in the location of the Certificate Register or any such office or
agency.
Section 3.10. Certificate Paying Agent. (a) The Certificate Paying Agent shall make
distributions to Certificateholders from the Certificate Distribution Account on behalf of the
Trust in accordance with the provisions of the Certificates and Section 5.01 hereof from payments
remitted to the Certificate Paying Agent by the Indenture Trustee pursuant to Section 3.05 of
the Indenture. The Trust hereby appoints the Indenture Trustee as Certificate Paying Agent (the
"Certificate Paying Agent") and the Indenture Trustee hereby accepts such appointment and further
agrees that it will be bound by the provisions of this Trust Agreement relating to the Certificate
Paying Agent and shall:
(i) hold all sums held by it for the payment of amounts due with respect to the Certificates in
trust for the benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(ii) give the Owner Trustee notice of any default by the Trust of which it has actual knowledge
in the making of any payment required to be made with respect to the Certificates;
(iii) at any time during the continuance of any such default, upon the written request of the
Owner Trustee, forthwith pay to the Owner Trustee on behalf of the Trust all sums so held
in trust by such Certificate Paying Agent;
(iv) immediately resign as Certificate Paying Agent and forthwith pay to the Owner Trustee on
behalf of the Trust all sums held by it in trust for the payment of Certificates if at any
time it ceases to meet the standards required to be met by the Certificate Paying Agent at
the time of its appointment;
(v) comply with all requirements of the Code with respect to the withholding from any payments
made by it on any Certificates of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith; and
(vi) deliver to the Owner Trustee a copy of the report to Certificateholders prepared with
respect to each Payment Date by the Master Servicer pursuant to Section 4.01 of the
Servicing Agreement.
(b) The Trust may revoke such power and remove the Certificate Paying Agent if the Owner
Trustee determines in its sole discretion that the Certificate Paying Agent shall have failed to
perform its obligations under this Trust Agreement in any material respect. The Indenture Trustee
shall be permitted to resign as Certificate Paying Agent upon 30 days' written notice to the Owner
Trustee; provided the Indenture Trustee is also resigning as Paying Agent under the Indenture at
such time. In the event that the Indenture Trustee shall no longer be the Certificate Paying
Agent under this Trust Agreement and Paying Agent under the Indenture, the Owner Trustee shall
appoint a successor to act as Certificate Paying Agent (which shall be a bank or trust company)
and which shall also be the successor Paying Agent under the Indenture. The Owner Trustee shall
cause such successor Certificate Paying Agent or any additional Certificate Paying Agent appointed
by the Owner Trustee to execute and deliver to the Owner Trustee an instrument to the effect set
forth in this Section 3.10 as it relates to the Certificate Paying Agent. The successor
Certificate Paying Agent shall covenant and agree that it will not at any time institute against
the Depositor or the Trust, or join in any institution against the Depositor or the Trust of, any
bankruptcy proceedings under any United States federal or state bankruptcy or similar law in
connection with any obligations with respect to any Certificate, this Trust Agreement or any of
the other Basic Documents. The Certificate Paying Agent shall return all unclaimed funds to the
Trust and upon removal of a Certificate Paying Agent such Certificate Paying Agent shall also
return all funds in its possession to the Trust. The provisions of Sections 6.01, 6.03, 6.04 and
7.01 shall apply to the Certificate Paying Agent to the extent applicable. Any reference in this
Trust Agreement to the Certificate Paying Agent shall include any co-paying agent unless the
context requires otherwise.
(c) The Certificate Paying Agent shall establish and maintain with itself the Certificate
Distribution Account in which the Certificate Paying Agent shall deposit, on the same day as it is
received from the Indenture Trustee, each remittance received by the Certificate Paying Agent with
respect to payments made pursuant to the Indenture. The Certificate Paying Agent shall make all
distributions of Certificate Distribution Amounts on the Certificates, from moneys on deposit in
the Certificate Distribution Account.
Section 3.11. Cooperation. The Owner Trustee shall cooperate in all respects with any reasonable
request by the Credit Enhancer for action to preserve or enforce the Credit Enhancer's rights or
interest under this Trust Agreement or the Insurance Agreement, so long as such cooperation is
consistent with this Trust Agreement and does not limit the rights of the Certificateholders,
except as otherwise expressly set forth in this Trust Agreement.
ARTICLE IV
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 4.01. General Authority. The Owner Trustee is authorized and directed to execute and
deliver the Basic Documents to which the Trust is to be a party and each certificate or other
document attached as an exhibit to or contemplated by the Basic Documents to which the Trust is to
be a party and any amendment or other agreement or instrument described herein, in each case, in
such form as the Owner Trustee shall approve, as evidenced conclusively by the Owner Trustee's
execution thereof. In addition to the foregoing, the Owner Trustee is obligated to take all
actions required of the Trust pursuant to the Basic Documents.
Section 4.02. General Duties. The Owner Trustee shall be responsible to administer the Trust
pursuant to the terms of this Trust Agreement and the Basic Documents to which the Trust is a
party and in the interest of the Certificateholders, subject to the Basic Documents and in
accordance with the provisions of this Trust Agreement.
Section 4.03. Action upon Instruction. (a) Subject to this Article IV and in accordance with
the terms of the Basic Documents, the Certificateholders may by written instruction direct the
Owner Trustee in the management of the Trust. Such direction may be exercised at any time by
written instruction of the Certificateholders pursuant to this Article IV.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably determined, or
shall have been advised by counsel, that such action is likely to result in liability on the part
of the Owner Trustee or is contrary to the terms hereof or of any Basic Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative courses of action
permitted or required by the terms of this Trust Agreement or under any Basic Document, or in the
event that the Owner Trustee is unsure as to the application of any provision of this Trust
Agreement or any Basic Document or any such provision is ambiguous as to its application, or is,
or appears to be, in conflict with any other applicable provision, or in the event that this Trust
Agreement permits any determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a particular set of
facts, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under
the circumstances) to the Certificateholders (with a copy to the Credit Enhancer) requesting
instruction as to the course of action to be adopted, and to the extent the Owner Trustee acts in
good faith in accordance with any written instructions received from Holders of Certificates
representing a majority of the Certificate Percentage Interest thereof, the Owner Trustee shall
not be liable on account of such action to any Person. If the Owner Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary under the circumstances) it
may, but shall be under no duty to, take or refrain from taking such action not inconsistent with
this Trust Agreement or the Basic Documents, as it shall deem to be in the best interests of the
Certificateholders, and the Owner Trustee shall have no liability to any Person for such action or
inaction.
Section 4.04. No Duties Except as Specified under Specified Documents or in Instructions. The
Owner Trustee shall not have any duty or obligation to manage, make any payment with respect to,
register, record, sell, dispose of, or otherwise deal with the Owner Trust Estate, or to otherwise
take or refrain from taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly provided (i) in accordance with
the powers granted to and the authority conferred upon the Owner Trustee pursuant to this Trust
Agreement, (ii) in accordance with the Basic Documents and (iii) in accordance with any document
or instruction delivered to the Owner Trustee pursuant to Section 4.03; and no implied duties or
obligations shall be read into this Trust Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain the perfection of
any security interest or lien granted to it hereunder or to prepare or file any Securities and
Exchange Commission filing for the Trust or to record this Trust Agreement or any Basic Document.
The Owner Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all
action as may be necessary to discharge any liens on any part of the Trust Estate that result from
actions by, or claims against, the Owner Trustee that are not related to the ownership or the
administration of the Owner Trust Estate.
Section 4.05. Restrictions. (a) The Owner Trustee shall not take any action (x) that is
inconsistent with the purposes of the Trust set forth in Section 2.03 or (y) that, to the actual
knowledge of the Owner Trustee, would result in the Trust becoming taxable as a corporation for
federal income tax purposes. The Certificateholders shall not direct the Owner Trustee to take
action that would violate the provisions of this Section 4.05.
(b) The Owner Trustee shall not convey or transfer any of the Trust's properties or assets,
including those included in the Trust Estate, to any person unless (x) it shall have received an
Opinion of Counsel to the effect that such transaction will not have any material adverse tax
consequence to the Trust or any Certificateholder and (y) such conveyance or transfer shall not
violate the provisions of Section 3.16(b) of the Indenture.
Section 4.06. Prior Notice to Certificateholders and the Credit Enhancer with Respect to Certain
Matters. With respect to the following matters, the Owner Trustee shall not take action unless,
at least 30 days before the taking of such action, the Owner Trustee shall have notified the
Certificateholders and the Credit Enhancer in writing of the proposed action and Holders of
Certificates representing a majority of the Certificate Percentage Interest thereof and the Credit
Enhancer shall not have notified the Owner Trustee in writing prior to the 30th day after such
notice is given that such Certificateholders and the Credit Enhancer have withheld consent or
provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims or lawsuits brought in
connection with the collection of cash distributions due and owing under the Home Loans)
and the compromise of any action, claim or lawsuit brought by or against the Trust (except
with respect to the aforementioned claims or lawsuits for collection of cash distributions
due and owing under the Home Loans);
(b) the election by the Trust to file an amendment to the Certificate of Trust (unless such
amendment is required to be filed under the Statutory Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture in circumstances where the
consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in circumstances where the
consent of any Noteholder is not required and such amendment materially adversely affects
the interest of the Certificateholders; and
(e) the appointment pursuant to the Indenture of a successor Note Registrar, Paying Agent or
Indenture Trustee or pursuant to this Trust Agreement of a successor Certificate Registrar
or Certificate Paying Agent or the consent to the assignment by the Note Registrar, Paying
Agent, Indenture Trustee, Certificate Registrar or Certificate Paying Agent of its
obligations under the Indenture or this Trust Agreement, as applicable.
Section 4.07. Action by Certificateholders with Respect to Certain Matters. The Owner Trustee
shall not have the power, except upon the direction of Certificateholders evidencing not less than
a majority of the outstanding Certificate Percentage Interest of the Certificates, and with the
consent of the Credit Enhancer (so long as no Credit Enhancer Default has occurred and is
continuing), to (a) remove the Master Servicer under the Servicing Agreement pursuant to Section
7.01 thereof or (b) except as expressly provided in the Basic Documents, sell the Home Loans after
the termination of the Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by Certificateholders evidencing not less
than a majority of the outstanding Certificate Percentage Interest of the Certificates and with
the consent of the Credit Enhancer (so long as no Credit Enhancer Default has occurred and is
continuing).
Section 4.08. Action by Certificateholders with Respect to Bankruptcy. The Owner Trustee shall
not have the power to commence a voluntary proceeding in bankruptcy relating to the Trust without
the unanimous prior approval of all Certificateholders and with the consent of the Credit Enhancer
(so long as no Credit Enhancer Default has occurred and is continuing) and the delivery to the
Owner Trustee by each such Certificateholder of a certificate certifying that such
Certificateholder reasonably believes that the Trust is insolvent.
Section 4.09. Restrictions on Certificateholders' Power. The Certificateholders shall not
direct the Owner Trustee to take or to refrain from taking any action if such action or inaction
would be contrary to any obligation of the Trust or the Owner Trustee under this Trust Agreement
or any of the Basic Documents or would be contrary to Section 2.03, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
Section 4.10. Majority Control. Except as expressly provided herein, any action that may be
taken by the Certificateholders under this Trust Agreement may be taken by the Certificateholders
evidencing not less than a majority of the outstanding Certificate Percentage Interest of the
Certificates. Except as expressly provided herein, any written notice of the Certificateholders
delivered pursuant to this Trust Agreement shall be effective if signed by Certificateholders
evidencing not less than a majority of the outstanding Certificate Percentage Interest of the
Certificates at the time of the delivery of such notice.
Section 4.11. Doing Business in Other Jurisdictions. Notwithstanding anything contained herein
to the contrary, neither Wilmington Trust Company nor the Owner Trustee shall be required to take
any action in any jurisdiction other than in the State of Delaware if the taking of such action
will, even after the appointment of a co-trustee or separate trustee in accordance with Section
9.05 hereof, (i) require the consent or approval or authorization or order of or the giving of
notice to, or the registration with or the taking of any other action in respect of, any state or
other governmental authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State of Delaware
becoming payable by Wilmington Trust Company, or (iii) subject Wilmington Trust Company to
personal jurisdiction in any jurisdiction other than the State of Delaware for causes of action
arising from acts unrelated to the consummation of the transactions by Wilmington Trust Company or
the Owner Trustee, as the case may be, contemplated hereby.
ARTICLE V
APPLICATION OF TRUST FUNDS
Section 5.01. Distributions. (a) On each Payment Date, the Certificate Paying Agent shall
distribute to the Certificateholders all funds on deposit in the Certificate Distribution Account
and available therefor (as provided in Section 3.05 of the Indenture), as the Certificate
Distribution Amount for such Payment Date. Upon termination of the Indenture in accordance with
the terms thereof, distributions to the Certificateholder shall continue to be determined in
accordance with the provisions for distributions in Section 3.05 of the Indenture. All
distributions made pursuant to this Section shall be distributed to the Certificateholders on a
pro rata basis based on the Certificate Percentage Interests thereof.
(b) In the event that any withholding tax is imposed on the distributions (or allocations of
income) to a Certificateholder, such tax shall reduce the amount otherwise distributable to the
Certificateholder in accordance with this Section 5.01. The Certificate Paying Agent is hereby
authorized and directed to retain or cause to be retained from amounts otherwise distributable to
the Certificateholders sufficient funds for the payment of any tax that is legally owed by the
Trust (but such authorization shall not prevent the Owner Trustee from contesting any such tax in
appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings). The amount of any withholding tax imposed with respect to a
Certificateholder shall be treated as cash distributed to such Certificateholder at the time it is
withheld by the Certificate Paying Agent and remitted to the appropriate taxing authority. If
there is a possibility that withholding tax is payable with respect to a distribution (such as a
distribution to a non-U.S. Certificateholder), the Certificate Paying Agent may in its sole
discretion withhold such amounts in accordance with this paragraph (b).
(c) Distributions to Certificateholders shall be subordinated to the creditors of the Trust,
including the Noteholders.
(d) Allocations of profits and losses, as determined for federal income tax purposes, shall be
made to the Certificateholders on a pro rata basis based on the Certificate Percentage Interests
thereof.
Section 5.02. Method of Payment. Subject to Section 8.01(c), distributions required to be made
to Certificateholder on any Payment Date as provided in Section 5.01 shall be made to the
Certificateholder of record on the preceding Record Date either by wire transfer, in immediately
available funds, to the account of such Holder at a bank or other entity having appropriate
facilities therefor, if the Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five (5) Business Days prior to such Payment Date or, if
not, by check mailed to such Certificateholder at the address of the Holder appearing in the
Certificate Register.
Section 5.03. Signature on Returns. To the extent required and unless otherwise required by
law, the Owner Trustee shall sign on behalf of the Trust the tax returns of the Trust.
Section 5.04. Statements to Certificateholders. On each Payment Date, the Certificate Paying
Agent shall make available electronically at xxx.xxxxxxxx.xxx/xxx the statement or statements
provided to the Owner Trustee and the Certificate Paying Agent by the Master Servicer pursuant to
Section 4.01 of the Servicing Agreement with respect to such Payment Date.
Section 5.05. Tax Reporting. So long as the Depositor or any affiliate of the Depositor owns
100% of the Certificates (the "Original Certificateholder"), then no separate federal and state
income tax returns and information returns or statements will be filed with respect to the Trust
and a federal employer identification number shall not be applied for from the IRS. If the
Original Certificateholder is no longer the sole Certificateholder and the Certificates are held
by the Original Certificateholder and one or more persons for federal income tax purposes, the
subsequent holders of the Certificates by their acceptance hereof, agree to appoint the Original
Certificateholder as their agent for the tax matters partner and the Original Certificateholder,
as agent for such holders, agrees to perform (itself or through its agent) all duties necessary to
comply with federal and state income tax laws including but not limited to applying for a federal
employer identification number and filing tax returns.
Section 5.06. Derivative Contracts. (a) The Owner Trustee shall, at the direction of the
Master Servicer, on behalf of the Trust Estate, enter into Derivative Contracts, solely for the
benefit of the Certificateholder. Any such Derivative Contract shall constitute a fully prepaid
agreement. The Master Servicer shall determine, in its sole discretion, whether any Derivative
Contract conforms to the requirements of Section 5.06(b) and (c). All collections, proceeds and
other amounts in respect of the Derivative Contracts payable by the Derivative Counterparty shall
be distributed to the Certificateholder on the Payment Date following receipt thereof by the Owner
Trustee.
(b) Any Derivative Contract that provides for any payment obligation on the part of the Trust
Estate must (i) be without recourse to the assets of the Trust Estate, (ii) contain a non-petition
covenant provision from the Derivative Counterparty, (iii) limit payment dates thereunder to
Payment Dates and (iv) contain a provision limiting any cash payment due to the Derivative
Counterparty on any day under such Derivative Contract solely to funds available therefor in the
Custodial Account available to make payment to the Certificateholder on such Payment Date.
(c) Each Derivative Contract must (i) provide for the direct payment of any amounts by the
Derivative Counterparty thereunder to the Custodial Account at least one (1) Business Day prior to
the related Payment Date, (ii) contain an assignment of all of the Trust Estate rights (but none
of its obligations) under such Derivative Contract to the Owner Trustee on behalf of the
Certificateholder and shall include an express consent to the Derivative Counterparty to such
assignment, (iii) provide that in the event of the occurrence of a Servicer Default, such
Derivative Contract shall terminate upon the direction of a majority Percentage Interest of the
Owner Trust Certificates, and (iv) prohibit the Derivative Counterparty from "setting-off" or
"netting" other obligations of the Trust Estate and its Affiliates against such Derivative
Counterparty's payment obligations thereunder.
(d) Notwithstanding the provisions of paragraphs (a), (b) and (c) of this Section 5.06, no
Derivative Contract shall (i) provide for the payment of any amounts that would otherwise be
payable to the Holders of any Class of Notes, or (ii) materially adversely affect the rights of
the Holders of any Class of Notes or the Credit Enhancer.
ARTICLE VI
CONCERNING THE OWNER TRUSTEE
Section 6.01. Acceptance of Trusts and Duties. The Owner Trustee accepts the trusts hereby
created and agrees to perform its duties hereunder with respect to such trusts but only upon the
terms of this Trust Agreement. The Owner Trustee and the Certificate Paying Agent also agree to
disburse all moneys actually received by it constituting part of the Owner Trust Estate upon the
terms of the Basic Documents and this Trust Agreement. The Owner Trustee shall not be answerable
or accountable hereunder or under any Basic Document under any circumstances, except (i) for its
own willful misconduct, negligence or bad faith or negligent failure to act or (ii) in the case of
the inaccuracy of any representation or warranty contained in Section 6.03 expressly made by the
Owner Trustee. In particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) No provision of this Trust Agreement or any Basic Document shall require the Owner Trustee
to expend or risk funds or otherwise incur any financial liability in the performance of any of
its rights, duties or powers hereunder or under any Basic Document if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured or provided to it;
(b) Under no circumstances shall the Owner Trustee be liable for indebtedness evidenced by or
arising under any of the Basic Documents, including the principal of and interest on the Notes;
(c) The Owner Trustee shall not be responsible for or in respect of the validity or sufficiency
of this Trust Agreement or for the due execution hereof by the Depositor or for the form,
character, genuineness, sufficiency, value or validity of any of the Owner Trust Estate, or for or
in respect of the validity or sufficiency of the Basic Documents, the Notes, the Certificates,
other than the certificate of authentication on the Certificates, if executed by the Owner Trustee
and the Owner Trustee shall in no event assume or incur any liability, duty, or obligation to any
Noteholder or to any Certificateholder, other than as expressly provided for herein or expressly
agreed to in the Basic Documents;
(d) The execution, delivery, authentication and performance by it of this Trust Agreement will
not require the authorization, consent or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action with respect to, any governmental authority
or agency;
(e) The Owner Trustee shall not be liable for the default or misconduct of the Depositor, the
Indenture Trustee or the Master Servicer under any of the Basic Documents or otherwise and the
Owner Trustee shall have no obligation or liability to perform the obligations of the Trust under
this Trust Agreement or the Basic Documents that are required to be performed by the Indenture
Trustee under the Indenture or the Seller under the Home Loan Purchase Agreement; and
(f) The Owner Trustee shall be under no obligation to exercise any of the rights or powers
vested in it or duties imposed by this Trust Agreement, or to institute, conduct or defend any
litigation under this Trust Agreement or otherwise or in relation to this Trust Agreement or any
Basic Document, at the request, order or direction of any of the Certificateholders, unless such
Certificateholders have offered to the Owner Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discretionary act enumerated in this Trust
Agreement or in any Basic Document shall not be construed as a duty, and the Owner Trustee shall
not be answerable for other than its negligence, bad faith or willful misconduct in the
performance of any such act.
Section 6.02. Furnishing of Documents. The Owner Trustee shall furnish to the Securityholders
promptly upon receipt of a written reasonable request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and any other instruments
furnished to the Trust under the Basic Documents.
Section 6.03. Representations and Warranties. The Owner Trustee hereby represents and warrants
to the Depositor, for the benefit of the Certificateholders, that:
(a) It is a banking corporation duly organized and validly existing in good standing under the
laws of the State of Delaware. It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Trust Agreement;
(b) It has taken all corporate action necessary to authorize the execution and delivery by it
of this Trust Agreement, and this Trust Agreement will be executed and delivered by one of
its officers who is duly authorized to execute and deliver this Trust Agreement on its
behalf;
(c) Neither the execution nor the delivery by it of this Trust Agreement, nor the consummation
by it of the transactions contemplated hereby nor compliance by it with any of the terms or
provisions hereof will contravene any federal or Delaware law, governmental rule or
regulation governing the banking or trust powers of the Owner Trustee or any judgment or
order binding on it, or constitute any default under its charter documents or bylaws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound;
(d) This Trust Agreement, assuming due authorization, execution and delivery by the Owner
Trustee and the Depositor, constitutes a valid, legal and binding obligation of the Owner
Trustee, enforceable against it in accordance with the terms hereof subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement
of creditors' rights generally and to general principles of equity, regardless of whether
such enforcement is considered in a proceeding in equity or at law;
(e) The Owner Trustee is not in default with respect to any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or governmental agency, which
default might have consequences that would materially and adversely affect the condition
(financial or other) or operations of the Owner Trustee or its properties or might have
consequences that would materially adversely affect its performance hereunder; and
(f) No litigation is pending or, to the best of the Owner Trustee's knowledge, threatened
against the Owner Trustee which would prohibit its entering into this Trust Agreement or
performing its obligations under this Trust Agreement.
Section 6.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall incur no liability to
anyone in acting upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond, or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such body and that the
same is in full force and effect. As to any fact or matter the method of determination of which
is not specifically prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer or other authorized
officers of the relevant party, as to such fact or matter and such certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon.
(b) In the exercise or administration of the Trust hereunder and in the performance of its
duties and obligations under this Trust Agreement or the Basic Documents, the Owner Trustee (i)
may act directly or through its agents, attorneys, custodians or nominees (including persons
acting under a power of attorney) pursuant to agreements entered into with any of them, and the
Owner Trustee shall not be liable for the conduct or misconduct of such agents, attorneys,
custodians or nominees (including persons acting under a power of attorney) if such persons have
been selected by the Owner Trustee with reasonable care, and (ii) may consult with counsel,
accountants and other skilled persons to be selected with reasonable care and employed by it at
the expense of the Trust. The Owner Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the opinion or advice of any such counsel,
accountants or other such Persons and not contrary to this Trust Agreement or any Basic Document.
Section 6.05. Not Acting in Individual Capacity. Except as provided in this Article VI, in
accepting the trusts hereby created Wilmington Trust Company acts solely as Owner Trustee
hereunder and not in its individual capacity, and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Trust Agreement or any Basic Document
shall look only to the Owner Trust Estate for payment or satisfaction thereof.
Section 6.06. Owner Trustee Not Liable for Certificates or Related Documents. The recitals
contained herein and in the Certificates (other than the signatures of the Owner Trustee on the
Certificates) shall be taken as the statements of the Depositor, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Trust Agreement, of any Basic Document or of the Certificates
(other than the signatures of the Owner Trustee on the Certificates) or the Notes, or of any
Related Documents. The Owner Trustee shall at no time have any responsibility or liability with
respect to the sufficiency of the Owner Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Trust Agreement or the Noteholders under the
Indenture, including, the compliance by the Depositor or the Seller with any warranty or
representation made under any Basic Document or in any related document or the accuracy of any
such warranty or representation, or any action of the Certificate Paying Agent, the Certificate
Registrar or the Indenture Trustee taken in the name of the Owner Trustee.
Section 6.07. Owner Trustee May Own Certificates and Notes. The Owner Trustee in its individual
or any other capacity may become the owner or pledgee of Certificates or Notes and may deal with
the Depositor, the Seller, the Certificate Paying Agent, the Certificate Registrar and the
Indenture Trustee in transactions with the same rights as it would have if it were not Owner
Trustee.
ARTICLE VII
COMPENSATION OF OWNER TRUSTEE
Section 7.01. Owner Trustee's Fees and Expenses. The Owner Trustee shall receive as
compensation for its services hereunder such fees as have been separately agreed upon before the
date hereof, and the Owner Trustee shall be reimbursed for its reasonable expenses hereunder and
under the Basic Documents, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Owner Trustee may reasonably employ in
connection with the exercise and performance of its rights and its duties hereunder and under the
Basic Documents which shall be payable by the Master Servicer pursuant to Section 3.09 of the
Servicing Agreement.
Section 7.02. Indemnification. The Master Servicer shall indemnify, defend and hold harmless
the Owner Trustee as provided in Section 6.06 of the Servicing Agreement.
ARTICLE VIII
TERMINATION OF TRUST AGREEMENT
Section 8.01. Termination of Trust Agreement. (a) This Trust Agreement (other than this Article
VIII) and the Trust shall terminate and be of no further force or effect upon the earliest of (i)
the final distribution of all moneys or other property or proceeds of the Owner Trust Estate in
accordance with the terms of the Indenture and this Trust Agreement, (ii) the Payment Date in
September 2036, or (iii) the purchase by the Master Servicer of all Home Loans pursuant to Section
8.08(a) of the Servicing Agreement. The bankruptcy, liquidation, dissolution, death or incapacity
of any Certificateholder shall not (x) operate to terminate this Trust Agreement or the Trust or
(y) entitle such Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all or any part of the
Trust or the Owner Trust Estate or (z) otherwise affect the rights, obligations and liabilities of
the parties hereto.
(b) Except as provided in Section 8.01(a), neither the Depositor nor any Certificateholder
shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date upon which
Certificateholders shall surrender their Certificates to the Certificate Paying Agent for payment
of the final distribution and cancellation, shall be given by the Certificate Paying Agent by
letter to Certificateholders and the Credit Enhancer mailed within five (5) Business Days of
receipt of notice of such termination from the Owner Trustee, stating (i) the Payment Date upon or
with respect to which final payment of the Certificates shall be made upon presentation and
surrender of the Certificates at the office of the Certificate Paying Agent therein designated,
(ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to
such Payment Date is not applicable, payments being made only upon presentation and surrender of
the Certificates at the office of the Certificate Paying Agent therein specified. The Certificate
Paying Agent shall give such notice to the Owner Trustee and the Certificate Registrar at the time
such notice is given to Certificateholders. Upon presentation and surrender of the Certificates,
the Certificate Paying Agent shall cause to be distributed to Certificateholders amounts
distributable on such Payment Date pursuant to Section 5.01.
In the event that all of the Certificateholders shall not surrender their Certificates for
cancellation within six months after the date specified in the above mentioned written notice, the
Certificate Paying Agent shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution with respect
thereto. Subject to applicable laws with respect to escheat of funds, if within one year
following the Payment Date on which final payment of the Certificates was to have been made
pursuant to Section 3.10, all the Certificates shall not have been surrendered for cancellation,
the Certificate Paying Agent may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Trust Agreement. Any funds remaining in the Certificate Distribution
Account after exhaustion of such remedies shall be distributed by the Certificate Paying Agent to
the holder of the majority of the Certificate Percentage Interest of the Certificates.
(d) Upon the winding up of the Trust and its termination, the Owner Trustee shall cause the
Certificate of Trust to be cancelled by filing a certificate of cancellation with the Secretary of
State in accordance with the provisions of Section 3810(c) of the Statutory Trust Statute.
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 9.01. Eligibility Requirements for Owner Trustee. The Owner Trustee shall at all times
be a corporation satisfying the provisions of Section 3807(a) of the Statutory Trust Statute;
authorized to exercise corporate trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state authorities; and having
(or having a parent that has) long-term debt obligations with a rating of at least A by Moody's
and/or Standard & Poor's. If such corporation shall publish reports of condition at least
annually pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.01, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 9.02.
Section 9.02. Replacement of Owner Trustee. The Owner Trustee may at any time resign and be
discharged from the trusts hereby created by giving 30 days' prior written notice thereof to the
Credit Enhancer and the Depositor. Upon receiving such notice of resignation, the Indenture
Trustee shall promptly appoint a successor Owner Trustee with the consent of the Credit Enhancer
(so long as no Credit Enhancer Default has occurred and is continuing), which consent shall not be
unreasonably withheld, by written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner Trustee. If no
successor Owner Trustee shall have been so appointed and have accepted appointment within 30 days
after the giving of such notice of resignation, the resigning Owner Trustee may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance with the
provisions of Section 9.01 and shall fail to resign after written request therefor by the
Indenture Trustee, or if at any time the Owner Trustee shall be legally unable to act, or shall be
adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or liquidation, then the
Indenture Trustee may with the consent of the Credit Enhancer (so long as no Credit Enhancer
Default has occurred and is continuing), which consent shall not be unreasonably withheld, and
shall at the direction of the Credit Enhancer, remove the Owner Trustee. If the Indenture Trustee
shall remove the Owner Trustee under the authority of the immediately preceding sentence, the
Indenture Trustee shall promptly appoint a successor Owner Trustee acceptable to the Credit
Enhancer by written instrument, in duplicate, one copy of which instrument shall be delivered to
the outgoing Owner Trustee so removed and one copy to the successor Owner Trustee, and shall pay
all fees owed to the outgoing Owner Trustee. Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner Trustee pursuant to
Section 9.03 and payment of all fees and expenses owed to the outgoing Owner Trustee.
Section 9.03. Successor Owner Trustee. Any successor Owner Trustee appointed pursuant to
Section 9.02 shall execute, acknowledge and deliver to the Indenture Trustee and to its
predecessor Owner Trustee an instrument accepting such appointment under this Trust Agreement, and
thereupon the resignation or removal of the predecessor Owner Trustee shall become effective, and
such successor Owner Trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor under this Trust
Agreement, with like effect as if originally named as Owner Trustee. The predecessor Owner
Trustee shall upon payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Trust Agreement; and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and confirming in the successor Owner
Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this Section 9.03 unless
at the time of such acceptance such successor Owner Trustee shall be eligible pursuant to Section
9.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to this Section
9.03, the Indenture Trustee shall mail notice thereof to all Certificateholders, the Indenture
Trustee, the Noteholders and the Rating Agencies. If the Indenture Trustee shall fail to mail
such notice within 10 days after acceptance of such appointment by the successor Owner Trustee,
the successor Owner Trustee shall cause such notice to be mailed at the expense of the Indenture
Trustee.
Section 9.04. Merger or Consolidation of Owner Trustee. Any Person into which the Owner Trustee
may be merged or converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the Owner Trustee, shall
be the successor of the Owner Trustee hereunder, without the execution or filing of any instrument
or any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that such Person shall be eligible pursuant to Section 9.01 and,
provided, further, that the Owner Trustee shall mail notice of such merger or consolidation to the
Rating Agencies.
Section 9.05. Appointment of Co-Trustee or Separate Trustee. Notwithstanding any other
provisions of this Trust Agreement, at any time, for the purpose of meeting any legal requirements
of any jurisdiction in which any part of the Owner Trust Estate may at the time be located, the
Owner Trustee shall have the power and shall execute and deliver all instruments to appoint one or
more Persons to act as co-trustee, jointly with the Owner Trustee, or as separate trustee or
trustees, of all or any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Trust or any part thereof and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Owner Trustee may consider
necessary or desirable. No co-trustee or separate trustee under this Trust Agreement shall be
required to meet the terms of eligibility as a successor Owner Trustee pursuant to Section 9.01
and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant
to Section 9.03.
Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed
and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed upon the Owner Trustee
shall be conferred upon and exercised or performed by the Owner Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Owner Trustee joining in such act), except
to the extent that under any law of any jurisdiction in which any particular act or acts
are to be performed, the Owner Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations (including the
holding of title to the Owner Trust Estate or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or co-trustee, but solely
at the direction of the Owner Trustee;
(b) No trustee under this Trust Agreement shall be personally liable by reason of any act or
omission of any other trustee under this Trust Agreement;
(c) The Owner Trustee may at any time accept the resignation of or remove any separate trustee
or co-trustee; and
(d) All steps have been taken prior to any such appointment to perfect any security interest
granted pursuant to the Indenture.
Any notice, request or other writing given to the Owner Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as effectively as if given to
each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this
Trust Agreement and the conditions of this Article. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Owner Trustee or separately, as may be
provided therein, subject to all the provisions of this Trust Agreement, specifically including
every provision of this Trust Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee.
Any separate trustee or co-trustee may at any time appoint the Owner Trustee as its agent
or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any
lawful act under or in respect of this Trust Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Owner
Trustee, to the extent permitted by law, without the appointment of a new or successor co-trustee
or separate trustee.
ARTICLE X
MISCELLANEOUS
Section 10.01. Amendments. (a) This Trust Agreement may be amended from time to time by the
parties hereto as specified in this Section 10.01, provided that any amendment, except as provided
in subparagraph (e) below, be accompanied by an Opinion of Counsel to the Owner Trustee to the
effect that such amendment (i) complies with the provisions of this Section and (ii) will not
cause the Trust to be subject to an entity level tax.
(b) If the purpose of the amendment (as detailed therein) is to correct any mistake, eliminate
any inconsistency, cure any ambiguity or deal with any matter not covered (i.e., to give effect to
the intent of the parties), it shall not be necessary to obtain the consent of any Holders, but
the Owner Trustee shall be furnished with (A) a letter from the Rating Agencies that the amendment
will not result in the downgrading or withdrawal of the rating then assigned to any Security if
determined without regard to the Credit Enhancement Instrument and (B) an Opinion of Counsel to
the effect that such action will not adversely affect in any material respect the interests of any
Holders and the consent of the Credit Enhancer (so long as no Credit Enhancer Default has occurred
and is continuing) shall be obtained.
(c) If the purpose of the amendment is to prevent the imposition of any federal or state taxes
at any time that any Security is outstanding (i.e., technical in nature), it shall not be
necessary to obtain the consent of any Holder, but the Owner Trustee shall be furnished with an
Opinion of Counsel that such amendment is necessary or helpful to prevent the imposition of such
taxes and is not materially adverse to any Holder and the consent of the Credit Enhancer (so long
as no Credit Enhancer Default has occurred and is continuing) shall be obtained.
(d) If the purpose of the amendment is to add or eliminate or change any provision of the Trust
Agreement other than as contemplated in (b) and (c) above, the amendment shall require (A) the
consent of the Credit Enhancer (so long as no Credit Enhancer Default has occurred and is
continuing) and an Opinion of Counsel to the effect that such action will not adversely affect in
any material respect the interests of any Holders and (B) either (a) a letter from the Rating
Agencies that the amendment will not result in the downgrading or withdrawal of the rating then
assigned to any Security if determined without regard to the Credit Enhancement Instrument or (b)
the consent of Holders of Certificates evidencing a majority of the Certificate Percentage
Interest of the Certificates and the Indenture Trustee; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments received that are
required to be distributed on any Certificate without the consent of the related Certificateholder
and the Credit Enhancer, or (ii) reduce the aforesaid percentage of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the Holders of all
such Certificates then outstanding.
(e) If the purpose of the amendment is to provide for the holding of any of the Certificates in
book-entry form, it shall require the consent of Holders of all such Certificates then
outstanding; provided, that the Opinion of Counsel specified in subparagraph (a) above shall not
be required.
(f) If the purpose of the amendment is to provide for the issuance of additional certificates
representing an interest in the Trust, it shall not be necessary to obtain the consent of any
Holder, but the Owner Trustee shall be furnished with (A) an Opinion of Counsel to the effect that
such action will not adversely affect in any material respect the interests of any Holders and (B)
a letter from the Rating Agencies that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to any Security, if determined without regard to the Credit
Enhancement Instrument and the consent of the Credit Enhancer (so long as no Credit Enhancer
Default has occurred and is continuing) shall be obtained.
(g) Promptly after the execution of any such amendment or consent, the Owner Trustee shall
furnish written notification of the substance of such amendment or consent to each
Certificateholder, the Indenture Trustee, the Credit Enhancer and each of the Rating Agencies. It
shall not be necessary for the consent of Certificateholders or the Indenture Trustee pursuant to
this Section 10.01 to approve the particular form of any proposed amendment or consent, but it
shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this Trust Agreement
or in any other Basic Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner Trustee may
prescribe.
(h) In connection with the execution of any amendment to any agreement to which the Trust is a
party, other than this Trust Agreement, the Owner Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel to the effect that such amendment is authorized or
permitted by the documents subject to such amendment and that all conditions precedent in the
Basic Documents for the execution and delivery thereof by the Trust or the Owner Trustee, as the
case may be, have been satisfied.
(i) Any amendment to this Trust Agreement affecting the rights, duties and obligations of the
Indenture Trustee, Certificate Registrar or the Certificate Paying Agent shall be consented to by
such party and such party shall be an addressee on any Opinion of Counsel and receive any rating
letter provided in connection therewith.
Promptly after the execution of any amendment to the Certificate of Trust, the Owner
Trustee shall cause the filing of such amendment with the Secretary of State of the State of
Delaware.
Section 10.02. No Legal Title to Owner Trust Estate. The Certificateholders shall not have legal
title to any part of the Owner Trust Estate. The Certificateholders shall be entitled to receive
distributions with respect to their undivided beneficial interest therein only in accordance with
Articles V and VIII. No transfer, by operation of law or otherwise, of any right, title or
interest of the Certificateholders to and in their ownership interest in the Owner Trust Estate
shall operate to terminate this Trust Agreement or the trusts hereunder or entitle any transferee
to an accounting or to the transfer to it of legal title to any part of the Owner Trust Estate.
Section 10.03. Limitations on Rights of Others. Except for Section 2.07, the provisions of this
Trust Agreement are solely for the benefit of the Owner Trustee, the Depositor, the
Certificateholders, the Credit Enhancer and, to the extent expressly provided herein, the
Indenture Trustee and the Noteholders, and nothing in this Trust Agreement (other than Section
2.07), whether express or implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the Owner Trust Estate or under or in respect of this Trust
Agreement or any covenants, conditions or provisions contained herein.
Section 10.04. Notices. (a) Unless otherwise expressly specified or permitted by the terms
hereof, all notices shall be in writing and shall be deemed given upon receipt, if to the Owner
Trustee, addressed to Wilmington Trust Company, Corporate Trust Administration, Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration; if to the Indenture Trustee, addressed to JPMorgan Chase Bank, National
Association, 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Worldwide
Securities Services/Structured Finance Services, Home Loan Trust 2006-HI4, if to the Depositor,
addressed to Residential Funding Mortgage Securities II, Inc., 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000; if to the Credit Enhancer, addressed to Financial
Guaranty Insurance Company, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured
Finance Surveillance (Home Loan Trust 2006-HI4); if to the Rating Agencies, addressed to Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Standard &
Poor's, 00 Xxxxx Xxxxxx - 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance
Department - MBS or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder shall be given by
first-class mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Trust Agreement shall be
conclusively presumed to have been duly given, whether or not the Certificateholder receives such
notice.
(c) A copy of any notice delivered to the Owner Trustee or the Trust shall also be delivered to
the Depositor.
Section 10.05. Severability. Any provision of this Trust Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.06. Separate Counterparts. This Trust Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be an original, but
all such counterparts shall together constitute but one and the same instrument.
Section 10.07. Successors and Assigns. All representations, warranties, covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of the Depositor, the
Owner Trustee and its successors and each Certificateholder and its successors and permitted
assigns, all as herein provided and the Credit Enhancer. Any request, notice, direction, consent,
waiver or other instrument or action by a Certificateholder shall bind the successors and assigns
of such Certificateholder.
Section 10.08. No Petition. The Owner Trustee, by entering into this Trust Agreement and each
Certificateholder, by accepting a Certificate, hereby covenant and agree that they will not at any
time institute against the Depositor or the Trust, or join in any institution against the
Depositor or the Trust of, any bankruptcy proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations with respect to the Certificates, the
Notes, this Trust Agreement or any of the Basic Documents.
Section 10.09. No Recourse. Each Certificateholder by accepting a Certificate acknowledges that
such Certificateholder's Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Depositor, the Seller, the Owner Trustee, the
Indenture Trustee or any Affiliate thereof and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated in this Trust Agreement, the
Certificates or the Basic Documents.
Section 10.10. Headings. The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or provisions hereof.
Section 10.11. GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 10.12. Integration. This Trust Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and
understanding pertaining thereto.
Section 10.13. Rights of Credit Enhancer to Exercise Rights of Certificateholders.
(a) By accepting its Certificate, each Certificateholder agrees that unless a Credit Enhancer
Default exists, the Credit Enhancer shall have the right to exercise all rights of the
Certificateholders under this Trust Agreement without any further consent of the
Certificateholders. Nothing in this Section, however, shall alter or modify in any way, the
fiduciary obligations of the Owner Trustee to the Certificateholders pursuant to this Trust
Agreement, or create any fiduciary obligation of the Owner Trustee to the Credit Enhancer. The
Credit Enhancer is an express third-party beneficiary to this Agreement.
(b) From and after the date on which the Notes are no longer outstanding under the Indenture
and no amounts are owed to the Credit Enhancer pursuant to the terms of the Insurance Agreement,
including but not limited to, amounts owed to the Credit Enhancer in respect of draws made on the
Credit Enhancement Instrument and for unpaid premiums, the Credit Enhancer shall have no rights or
benefits hereunder and all references to the Credit Enhancer in this Trust Agreement shall be
disregarded.
ARTICLE XI
COMPLIANCE WITH REGULATION AB
Section 11.01. Intent of the Parties; Reasonableness. The Depositor and the Owner Trustee
acknowledge and agree that the purpose of this Article XI is to facilitate compliance by the
Depositor with the provisions of Regulation AB and related rules and regulations of the
Commission. The Depositor shall not exercise its right to request delivery of information or
other performance under these provisions other than in good faith, or for purposes other than
compliance with the Securities Act, the Exchange Act and the rules and regulations of the
Commission under the Securities Act and the Exchange Act. The Owner Trustee acknowledges that
interpretations of the requirements of Regulation AB may change over time, whether due to
interpretive guidance provided by the Commission or its staff, consensus among participants in the
mortgage-backed securities markets, advice of counsel, or otherwise, and agrees to comply with
reasonable requests made by the Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. The Owner Trustee shall
cooperate in good faith with any reasonable request by the Depositor for information regarding the
Owner Trustee that is necessary or required, in the reasonable good faith determination of the
Depositor, to permit the Depositor to comply with the provisions of Regulation AB.
Section 11.02. Additional Representations and Warranties of the Owner Trustee.
(a) The Owner Trustee shall be deemed to represent and warrant to the Depositor as of the date
hereof and on each date on which information is provided to the Depositor under Sections 11.01,
11.02(b) or 11.03 that, except as disclosed in writing to the Depositor prior to such date: (i)
it is not aware and has not received notice that any default, early amortization or other
performance triggering event has occurred as to any other Securitization Transaction due to any
default of the Owner Trustee; (ii) there are no aspects of its financial condition that could have
a material adverse effect on the performance by it of its trustee obligations under this Trust
Agreement or any other Securitization Transaction as to which it is the trustee; (iii) there are
no material legal or governmental proceedings pending (or known to be contemplated) against it
that would be material to Noteholders; (iv) there are no relationships or transactions (as
described in Item 1119(b) of Regulation AB) relating to the Owner Trustee with respect to the
Depositor or any sponsor, issuing entity, servicer, trustee, originator, significant obligor,
enhancement or support provider or other material transaction party (as each of such terms are
used in Regulation AB) relating to the Securitization Transaction contemplated by this Trust
Agreement, as identified by the Depositor to the Owner Trustee in writing as of the Closing Date
(each, a "Transaction Party") that are outside the ordinary course of business or on terms other
than would be obtained in an arm's length transaction with an unrelated third party, apart from
the Securitization Transaction, and that are material to the investors' understanding of the
Notes; and (v) the Owner Trustee is not an affiliate (as contemplated by Item 1119(a) of
Regulation AB) of any Transaction Party. The Depositor shall notify the Owner Trustee of any
change in the identity of a Transaction Party after the Closing Date at least five (5) Business
Days prior to January 31 of each calendar year.
(b) If so requested by the Depositor on any date following the Closing Date, the Owner Trustee
shall, within five (5) Business Days following such request, confirm in writing the accuracy of
the representations and warranties set forth in paragraph (a) of this Section or, if any such
representation and warranty is not accurate as of the date of such confirmation, provide the
pertinent facts, in writing, to the Depositor. Any such request from the Depositor shall not be
given more than once each calendar quarter, unless the Depositor shall have a reasonable basis for
questioning the accuracy of any of the representations and warranties.
Section 11.03. Information to Be Provided by the Owner Trustee.
(a) For so long as the Notes are outstanding, for the purpose of satisfying the Depositor's
reporting obligation under the Exchange Act with respect to any class of Notes, the Owner Trustee
shall provide to the Depositor a written description of (i) the commencement of, a material
development in or, if applicable, the termination of, any and all legal proceedings against the
Owner Trustee or any and all proceedings of which any property of the Owner Trustee is the
subject, that would be material to Noteholders; and (ii) any such proceedings known to be
contemplated by governmental authorities that would be material to Noteholders. The Owner Trustee
shall also notify the Depositor, in writing, as promptly as practicable following notice to or
discovery by a Responsible Officer of the Owner Trustee of any material changes to proceedings
described in the preceding sentence. In addition, the Owner Trustee will furnish to the
Depositor, in writing, the necessary disclosure regarding the Owner Trustee describing such
proceedings required to be disclosed under Item 1117 of Regulation AB, for inclusion in reports
filed by or on behalf of the Depositor pursuant to the Exchange Act. The Depositor will allow the
Owner Trustee to review any disclosure relating to material litigation against the Owner Trustee
prior to filing such disclosure with the Commission to the extent the Depositor changes the
information provided by the Owner Trustee. Any descriptions required with respect to legal
proceedings, as well as updates to previously provided descriptions, under this Section 11.03(a)
shall be given no later than five (5) Business Days prior to the Determination Date following the
month in which the relevant event occurs.
(b) For so long as the Notes are outstanding, for the purpose of satisfying the Depositor's
reporting obligation under the Exchange Act with respect to any class of Notes, the Owner Trustee
shall, no later than January 31 of each calendar year, (i) provide to the Depositor such
information regarding the Owner Trustee as is required for the purpose of compliance with Item
1119 of Regulation AB; provided, however, the Owner Trustee shall not be required to provide such
information in the event that there has been no change to the information previously provided by
the Owner Trustee to the Depositor; and (ii) as promptly as practicable following notice to or
discovery by a Responsible Officer of the Owner Trustee of any changes to such information,
provide to the Depositor, in writing, such updated information. Such information shall include,
at a minimum, a description of any affiliation between the Owner Trustee and any of the following
parties to the Securitization Transaction contemplated by this Trust Agreement, as such parties
and their affiliates are identified to the Owner Trustee by the Depositor in connection with the
closing of each Securitization Transaction or, if there has been a change in any such party, as
such party is identified by the Depositor in a written notice to the Owner Trustee at least five
(5) Business Days prior to January 31 of each calendar year:
(i) the sponsor;
(ii) any depositor;
(iii) the issuing entity;
(iv) any servicer;
(v) any other trustee;
(vi) any originator;
(vii) any significant obligor;
(viii) any enhancement or support provider; and
(ix) any other material party related to any Securitization Transaction.
In addition, the Owner Trustee shall provide a description of whether there is, and if so
the general character of, any business relationship, agreement, arrangement, transaction or
understanding between the Owner Trustee and any above-listed party that is entered into outside
the ordinary course of business or is on terms other than would be obtained in an arm's length
transaction with an unrelated third party, apart from the Securitization Transaction contemplated
by this Trust Agreement, that currently exists or that existed during the past two years and that
is material to an investor's understanding of the Notes.
(c) As of the related Payment Date with respect to each Report on Form 10-D with respect to the
Notes filed by or on behalf of the Depositor, and as of March 15 preceding the date each Report on
Form 10-K with respect to the Notes is filed, the Owner Trustee shall be deemed to represent and
warrant that any information previously provided by the Owner Trustee under this Article XI is
materially correct and does not have any material omissions unless the Owner Trustee has provided
an update to such information.
Section 11.04. Indemnification; Remedies.
(a) The Owner Trustee shall indemnify the Depositor, each affiliate of the Depositor, the
Master Servicer and each affiliate of the Master Servicer, and the respective present and former
directors, officers, employees and agents of each of the foregoing, and shall hold each of them
harmless from and against any claims, losses, liabilities (including penalties), actions, suits,
judgments, demands, damages, costs and expenses (including reasonable fees and expenses of
attorneys or, as necessary, consultants and auditors and reasonable costs of investigations) that
any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or alleged to be contained in any
information, report, certification or other material provided under this Article XI by or
on behalf of the Owner Trustee (collectively, the "Owner Trustee Information"), or (B) the
omission or alleged omission to state in the Owner Trustee Information a material fact
required to be stated in the Owner Trustee Information or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; or
(ii) any failure by the Owner Trustee to deliver any information, report, certification or other
material when and as required under this Article XI.
(b) In the case of any failure of performance described in clause (ii) of Section
11.04(a), the Owner Trustee shall (i) promptly reimburse the Depositor for all costs reasonably
incurred by the Depositor in order to obtain the information, report, certification or other
material not delivered by the Owner Trustee as required and (ii) cooperate with the Depositor to
mitigate any damages that may result from such failure.
(c) The Depositor and the Master Servicer shall indemnify the Owner Trustee, each affiliate of
the Owner Trustee and the respective present and former directors, officers, employees and agents
of the Owner Trustee, and shall hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain arising out of or based upon (i) any untrue
statement of a material fact contained or alleged to be contained in any information provided
under this Trust Agreement by or on behalf of the Depositor or the Master Servicer for inclusion
in any report filed with Commission under the Exchange Act (collectively, the "RFC Information"),
or (ii) the omission or alleged omission to state in the RFC Information a material fact required
to be stated in the RFC Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(d) Notwithstanding any provision in this Section 11.04 to the contrary, the parties agree that
none of the Owner Trustee, the Depositor or the Master Servicer shall be liable to the other for
any consequential or punitive damages whatsoever, whether in contract, tort (including negligence
and strict liability), or any other legal or equitable principle; provided, however, that such
limitation shall not be applicable with respect to third party claims made against a party.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Depositor and the Owner Trustee have caused their names to be
signed hereto by their respective officers thereunto duly authorized, all as of the day and year
first above written.
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
By:/s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Vice President
WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee, except with
respect to the representations and warranties contained
in Sections 6.03 and 11.02 hereof,
By:/s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Financial Services Officer
Acknowledged and Agreed:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
as Indenture Trustee, Certificate Registrar
and Certificate Paying Agent
By:/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Assistant Vice President
Acknowledged and Agreed
solely with respect to Article XI:
RESIDENTIAL FUNDING CORPORATION
By:/s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Associate
EXHIBIT A
FORM OF HOME LOAN BACKED CERTIFICATE
THIS CERTIFICATE (THE "CERTIFICATE") IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES AS
DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT UPON SATISFACTION OF THE CONDITIONS IN SECTION
3.05 OF THE AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE
EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE AMENDED AND RESTATED TRUST AGREEMENT ("THE
AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO ANY PERSON, UNLESS
THE TRANSFEREE PROVIDES THE COMPANY, THE OWNER TRUSTEE, THE CERTIFICATE REGISTRAR AND THE MASTER
SERVICER WITH EITHER (A) A CERTIFICATION IN THE FORM OF EXHIBIT G TO THE AGREEMENT OR (B) AN
OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, THE OWNER
TRUSTEE, THE CERTIFICATE REGISTRAR AND THE MASTER SERVICER TO THE EFFECT THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN
A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) AND WILL NOT SUBJECT
THE COMPANY, THE OWNER TRUSTEE, THE CERTIFICATE REGISTRAR OR THE MASTER SERVICER TO ANY OBLIGATION
OR LIABILITY (INCLUDING OBLIGATIONS AND LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF
THE COMPANY, THE OWNER TRUSTEE, THE CERTIFICATE REGISTRAR OR THE MASTER SERVICER.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER, THE
COMPANY, THE MASTER SERVICER, THE INDENTURE TRUSTEE, OR THE OWNER TRUSTEE OR ANY OF THEIR
RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE AGREEMENT OR THE BASIC DOCUMENTS.
-------------------------------------------- ------ ---------------------------------------------
Certificate No. ____ Assumed Final Payment Date:
September 25, 2036
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Cut-off Date: Certificate Percentage Interest of
September 1, 2006 this Certificate: 100%
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Date of Amended and
Restated Trust Agreement:
September 28, 2006
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First Payment Date:
October 25, 2006
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HOME LOAN-BACKED CERTIFICATE
SERIES 2006-HI4
Evidencing a 100% interest in the Trust Estate, the property of which consists primarily of
the Home Loans, created by RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC. (hereinafter called
the "Company," which term includes any successor entity under the Agreement referred to below).
This Certificate is payable solely from the assets of the Trust Estate, and does not
represent an obligation of or interest in the Company, the Seller, the Master Servicer, the
Indenture Trustee, the Owner Trustee or any of their affiliates. This Certificate, is not
guaranteed or insured by any governmental agency or instrumentality or by the Company, the Seller,
the Master Servicer, the Indenture Trustee, the Owner Trustee or any of their affiliates. None of
the Company, the Seller, the Master Servicer, the Indenture Trustee, the Owner Trustee or any of
their affiliates will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that [name of Holder] is the registered owner of the Certificate Percentage
Interest evidenced by this Certificate (as set forth on the face hereof) in certain distributions
with respect to the Trust Estate, consisting primarily of the Home Loans, created by Residential
Funding Mortgage Securities II, Inc. The Trust (as defined herein) was created pursuant to a
Trust Agreement, dated as of September 19, 2006 and an Amended and Restated Trust Agreement, dated
as specified above (as amended and supplemented from time to time, the "Agreement") between the
Company and Wilmington Trust Company, as owner trustee (the "Owner Trustee," which term includes
any successor entity under the Agreement), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each
month or, if such 25th day is not a Business Day, the Business Day immediately following (the
"Payment Date"), commencing on the first Payment Date specified above, to the Person in whose name
this Certificate is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the month immediately
preceding the month of such distribution (the "Record Date"), in an amount equal to the pro rata
portion evidenced by this Certificate (based on the Certificate Percentage Interest stated on the
face hereon) of the Certificate Distribution Amount, if any, required to be distributed to Holder
of Certificate on such Payment Date. Distributions on this Certificate will be made as provided
in the Agreement by the Certificate Paying Agent by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation or surrender of
this Certificate or the making of any notation hereon.
Except as otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Certificate Paying Agent of
the pendency of such distribution and only upon presentation and surrender of this Certificate at
the office or agency maintained by the Certificate Registrar for that purpose in the City and
State of New York.
No transfer of this Certificate will be made unless such transfer is exempt from the
registration requirements of the Securities Act of 1933, as amended, and any applicable state
securities laws or is made in accordance with said Act and laws. In the event that such a
transfer is to be made, the Certificate Registrar or the Company shall require either (i) an
opinion of counsel acceptable to and in form and substance satisfactory to the Certificate
Registrar and the Company that such transfer is exempt (describing the applicable exemption and
the basis therefor) from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state or (ii) an
investment letter executed by the Transferee in the form described in the Agreement and which
investment letter or Opinion of Counsel shall not be at the expense of the Trust, the Owner
Trustee, the Indenture Trustee, the Certificate Registrar or the Company. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the Trust, the Owner
Trustee, the Company, the Master Servicer, the Indenture Trustee and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
As described above, no transfer of this Certificate (or any interest herein) shall be made
unless the transferee provides the Company, the Owner Trustee, the Certificate Registrar and the
Master Servicer with either (a) a certification in the form of Exhibit G to the Agreement stating
that the transferee is not an employee benefit plan or other plan subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code (each, a "Plan"), or any Person
(including, without limitation, an insurance company investing its general accounts, an investment
manager, a named fiduciary or a trustee of any Plan) who is using "plan assets," within the
meaning of the U.S. Department of Labor regulation promulgated at 29 C.F.R. Section 2510.3-101, of
any Plan (each, a "Plan Investor") to effect such acquisition, or (b) an opinion of counsel
acceptable to and in form and substance satisfactory to the Company, the Owner Trustee, the
Certificate Registrar and the Master Servicer to the effect that the purchase and holding of this
Certificate is permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), and will not subject the Company, the Owner Trustee, the
Certificate Registrar and the Master Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Agreement, which opinion of counsel shall not be an expense of the Company, the
Owner Trustee, the Certificate Registrar or the Master Servicer.
In addition, no transfer of a Certificate shall be permitted, and no such transfer shall be
registered by the Certificate Registrar or be effective hereunder, unless evidenced by an Opinion
of Counsel which establishes that such transfer or the registration of such transfer would not
cause the Trust to be classified as a publicly traded partnership, an association taxable as a
corporation, a corporation or a taxable mortgage pool for federal and relevant state income tax
purposes, which Opinion of Counsel shall not be an expense of the Certificate Registrar and shall
be an expense of the proposed transferee. No Opinion of Counsel will be required if such transfer
is made to a nominee of an existing beneficial holder of a Certificate.
This Certificate is issued pursuant to a duly authorized issue of Certificate designated as
Home Loan-Backed Certificate of the Series specified hereon. All terms used in this Certificate
which are defined in the Agreement shall have the meanings assigned to them in the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that it will look
solely to the funds on deposit in the Certificate Distribution Account that have been released
from the Lien of the Indenture for payment hereunder and that neither the Owner Trustee in its
individual capacity nor the Company is personally liable to the Certificateholder for any amount
payable under this Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
The Holder of this Certificate acknowledges and agrees that its rights to receive
distributions in respect of this Certificate are subordinated to the rights of the Noteholders as
described in the Indenture, dated as of September 28, 2006 between Home Loan Trust 2006-HI4 (the
"Trust") and JPMorgan Chase Bank, National Association, as Indenture Trustee (the "Indenture").
The Certificateholder, by its acceptance of this Certificate, covenants and agrees that
such Certificateholder will not at any time institute against the Company, or join in any
institution against the Company or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to the Certificate,
the Notes, the Agreement or any of the Basic Documents.
The Agreement permits the amendment thereof as specified below, provided that any amendment
be accompanied by the consent of the Credit Enhancer (so long as no Credit Enhancer Default has
occurred and is continuing) and an Opinion of Counsel to the Owner Trustee to the effect that such
amendment complies with the provisions of the Agreement and will not cause the Trust to be subject
to an entity level tax. If the purpose of the amendment is to correct any mistake, eliminate any
inconsistency, cure any ambiguity or deal with any matter not covered, it shall not be necessary
to obtain the consent of any Holder, but the Owner Trustee shall be furnished with a letter from
the Rating Agencies that the amendment will not result in the downgrading or withdrawal of the
rating then assigned to any Security if determined without regard to the Credit Enhancement
Instrument and the consent of the Credit Enhancer (so long as no Credit Enhancer Default has
occurred and is continuing) shall be obtained. If the purpose of the amendment is to prevent the
imposition of any federal or state taxes at any time that any Security is outstanding, it shall
not be necessary to obtain the consent of the Holder, but the Owner Trustee shall be furnished
with an Opinion of Counsel that such amendment is necessary or helpful to prevent the imposition
of such taxes and is not materially adverse to the Holder and the consent of the Credit Enhancer
(so long as no Credit Enhancer Default has occurred and is continuing) shall be obtained. If the
purpose of the amendment is to add or eliminate or change any provision of the Agreement, other
than as specified in the preceding two sentences, the amendment shall require the consent of the
Credit Enhancer (so long as no Credit Enhancer Default has occurred and is continuing), an Opinion
of counsel to the effect that such action will not adversely affect in any material respect the
interests of any Holders and either (a) a letter from the Rating Agencies that the amendment will
not result in the downgrading or withdrawal of the rating then assigned to any Security, if
determined without regard to the Credit Enhancement Instrument or (b) the consent of the
Certificateholder and the Indenture Trustee; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the time of, payments received that are required to
be distributed on the Certificate without the consent of the Certificateholder and the Credit
Enhancer (so long as no Credit Enhancer Default has occurred and is continuing), or (ii) reduce
the aforesaid percentage of the Certificate without the consent of the Holder of the Certificate.
As provided in the Agreement and subject to certain limitations therein set forth, the
transfer of this Certificate is registerable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the offices or agencies of the Certificate Registrar
maintained in the City and State of New York, accompanied by a written instrument of transfer in
form satisfactory to the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same Class and aggregate Certificate Percentage Interest will be
issued to the designated transferee. The initial Certificate Registrar appointed under the
Agreement is the Indenture Trustee.
The Certificate is issuable only in minimum denominations of a 100% Certificate Percentage
Interest.
The Certificate is intended to be a certificated security under Article 8 of the UCC of the
State of New York and under the corresponding provisions of the UCC of any other State that may be
applicable.
No service charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any
tax or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Paying Agent, the Certificate Registrar and any agent of
the Owner Trustee, the Certificate Paying Agent, or the Certificate Registrar may treat the Person
in whose name this Certificate is registered as the owner hereof for all purposes, and none of the
Owner Trustee, the Certificate Paying Agent, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of the
State of Delaware.
The obligations created by the Agreement in respect of the Certificate and the Trust
created thereby shall terminate upon the earliest of (i) the final distribution of all moneys or
other property or proceeds of the Trust Estate in accordance with the terms of the Indenture and
the Agreement, (ii) the Payment Date in September 2036 or (iii) the purchase by the Master
Servicer of all the Home Loans pursuant to Section 8.08(a) of the Servicing Agreement.
Unless the certificate of authentication hereon shall have been executed by an authorized
officer of the Owner Trustee, or an authenticating agent by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in its individual
capacity, has caused this Certificate to be duly executed.
HOME LOAN TRUST 2006-HI4
by WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee
Dated: __________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the within mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: ______________________________
Authorized Signatory
or ______________________________,
as Authenticating Agent of the Trust
By: ______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_____________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably constituting and appointing
_____________________________________________________________________________
to transfer said Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:_______________________
_________________________________*/
Signature Guaranteed:
____________________*/
_____________
*/ NOTICE: The signature to this assignment must correspond with the name as it appears upon the
face of the within Certificate in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by a member firm of the New York Stock Exchange or a
commercial bank or trust company.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the Certificate Paying
Agent:
Distribution shall be made by wire transfer in immediately available funds to
______________________________________________________________________________ for the account of
________________________________________, account number ______________, or, if mailed by check,
to ______________.
Applicable statements should be mailed to __________________.
______________________________
Signature of assignee or agent
(for authorization of wire transfer only)
EXHIBIT B
TO THE TRUST AGREEMENT
CERTIFICATE OF TRUST
OF
HOME LOAN TRUST 2006-HI4
THIS Certificate of Trust of HOME LOAN TRUST 2006-HI4 (the "Trust") is being duly executed
and filed on behalf of the Trust by the undersigned, as trustee, to form a statutory trust under
the Delaware Statutory Trust Act (12 Del. X.xx. 3801 et seq.) (the "Act").
1. Name. The name of the statutory trust formed by this Certificate of Trust is HOME
LOAN TRUST 2006-HI4.
2. Delaware Trustee. The name and business address of the trustee of the Trust in the
State of Delaware are ________________, __________________, ______________, Delaware ___________.
3. Effective Date. This Certificate of Trust shall be effective upon filing.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Trust in
accordance with Section 3811(a)(1) of the Act.
[NAME OF OWNER TRUSTEE],
not in its individual capacity
but solely as Owner Trustee
By:
Name:
Title:
EXHIBIT C
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
____________________________________________
____________________________________________
____________________________________________
____________________________________________
The undersigned seller, as registered holder (the "Seller"), intends to transfer the
Rule 144A Securities described above to the undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller hereby certifies the following
facts: Neither the Seller nor anyone acting on its behalf has offered, transferred, pledged, sold
or otherwise disposed of the Rule 144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with respect to the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar security with, any
person in any manner, or made any general solicitation by means of general advertising or in any
other manner, or taken any other action, that would constitute a distribution of the Rule 144A
Securities under the Securities Act of 1933, as amended (the "1933 Act"), or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, and that the Seller has not offered the Rule 144A Securities to any
person other than the Buyer or another "qualified institutional buyer" as defined in Rule 144A
under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the Owner Trustee
and the Depositor (as defined in the Amended and Restated Trust Agreement (the "Agreement"), dated
as of September 28, 2006 between Residential Funding Mortgage Securities II, Inc., as Depositor
and Wilmington Trust Company as Owner Trustee pursuant to Section 3.05 of the Agreement and
JPMorgan Chase Bank, National Association, as indenture trustee, as follows:
a. The Buyer understands that the Rule 144A Securities have not been registered
under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information regarding the Rule 144A
Securities that it has requested from the Seller, the Indenture Trustee, the Owner Trustee
or the Master Servicer.
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
Rule144A Securities or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Rule 144A Securities, any interest in
the Rule 144A Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or taken any
other action, that would constitute a distribution of the Rule 144A Securities under the
1933 Act or that would render the disposition of the Rule 144A Securities a violation of
Section 5 of the 1933 Act or require registration pursuant thereto, nor will it act, nor
has it authorized or will it authorize any person to act, in such manner with respect to
the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is defined in
Rule144A under the 1933 Act and has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Buyer is aware that the sale to it is
being made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A Securities for
its own account or the accounts of other qualified institutional buyers, understands that
such Rule144A Securities may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the 1933 Act.
3. The Buyer represents that:
(i) either (a) or (b) is satisfied, as marked below:
____ a. The Buyer is not an employee benefit plan or other plan subject to
the prohibited transaction provisions of ERISA or Section 4975 of the Code (each, a "Plan"), or
any Person (including, without limitation, an insurance company investing its general accounts, an
investment manager, a named fiduciary or a trustee of any Plan) who is using "plan assets," within
the meaning of the U.S. Department of Labor regulation promulgated at 29 C.F.R. Section
2510.3-101, of any Plan (each, a "Plan Investor") to effect such acquisition; or
____ b. The Buyer will provide the Depositor, the Owner Trustee, the
Certificate Registrar and the Master Servicer with an opinion of counsel acceptable to and in form
and substance satisfactory to the Depositor, the Owner Trustee, the Certificate Registrar and the
Master Servicer to the effect that the purchase and holding of this Certificate is permissible
under applicable law, will not constitute or result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Depositor, the Owner Trustee, the Certificate Registrar and
the Master Servicer to any obligation or liability (including obligations or liabilities under
ERISA or Section 4975 of the Code) in addition to those undertaken in the Agreement, which opinion
of counsel shall not be an expense of the Depositor, the Owner Trustee, the Certificate Registrar
or the Master Servicer; and
4. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so executed, shall be
deemed to be an original; such counterparts, together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as of the date
set forth below.
Print Name of Seller Print Name of Buyer
By: _____________________________ By: __________________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. ____________________________ No. _______________________________
Date: ___________________________ Date: _______________________________
ANNEX 1 TO
EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A Investment
Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial Officer,
Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified institutional
buyer" as that term is defined in Rule 144A under the Securities Act of 1933 ("Rule 144A") because
(i) the Buyer owned and/or invested on a discretionary basis $__________________(1) in securities
(except for the excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii) the Buyer
satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank, savings and loan
association or similar institution), Massachusetts or similar statutory 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.
___ 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.
_______________
(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.
___ Investment Adviser. The Buyer is an investment adviser registered under the
Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business Investment
Act of 1958.
___ Business Development Company. The Buyer is a business development company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust company and
whose participants are exclusively (a) plans established and maintained by a State,
its political subdivisions, or any agency or instrumentality of the State or its
political subdivisions, for the benefit of its employees, or (b) employee benefit
plans within the meaning of Title I of the Employee Retirement Income Security Act
of 1974, but is not a trust fund that includes as participants individual retirement
accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of issuers that
are affiliated with the Buyer, (ii) securities that are part of an unsold allotment to or
subscription by the Buyer, if the Buyer is a dealer, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned and/or invested
on a discretionary basis by the Buyer, the Buyer used the cost of such securities to the Buyer and
did not include any of the securities referred to in the preceding paragraph. Further, in
determining such aggregate amount, the Buyer may have included securities owned by subsidiaries of
the Buyer, but only if such subsidiaries are consolidated with the Buyer in its financial
statements prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's direction. However, such
securities were not included if the Buyer is a majority-owned, consolidated subsidiary of another
enterprise and the Buyer is not itself a reporting company under the Securities Exchange Act of
1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands that the
seller to it and other parties related to the Rule 144A Securities are relying and will continue
to rely on the statements made herein because one or more sales to the Buyer may be in reliance on
Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that, in
connection with any purchase of securities sold to the Buyer for the account of a third party
(including any separate account) in reliance on Rule 144A, the Buyer will only purchase for the
account of a third party that at the time is a "qualified institutional buyer" within the meaning
of Rule 144A. In addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from such third party or
taken other appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given, the Buyer's
purchase of Rule 144A Securities will constitute a reaffirmation of this certification as of the
date of such purchase.
Print Name of Buyer
By: _______________________
Name:
Title:
Date:
ANNEX 2 TO
EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act of 1933 ("Rule 144A") because Buyer is
part of a Family of Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an investment company
registered under the Investment Company Act of 1940, and (ii) as marked below, the Buyer alone, or
the Buyer's Family of Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer's most recent fiscal year.
For purposes of determining the amount of securities owned by the Buyer or the Buyer's Family of
Investment Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in the aggregate
$______________ in securities (other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same investment adviser or
investment advisers that are affiliated (by virtue of being majority owned subsidiaries of the
same parent or because one investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of Investment
Companies, (ii) bank deposit notes and certificates of deposit, (iii) loan participations, (iv)
repurchase agreements, (v) securities owned but subject to a repurchase agreement and (vi)
currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of the parties
to which this certification is made are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer will be in reliance on Rule 144A. In addition, the
Buyer will only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which this certification
is made of any changes in the information and conclusions herein. Until such notice, the Buyer's
purchase of Rule 144A Securities will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
______________________________
Print Name of Buyer
By: __________________________
Name:
Title:
IF AN ADVISER:
_____________________________
Print Name of Buyer
Date: _______________________
EXHIBIT D
FORM OF INVESTOR REPRESENTATION LETTER
___________, 20__
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
JPMorgan Chase Bank, National Association
[4 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Worldwide Securities Services/Structured Finance Services]
Re: Home Loan-Backed Certificates
Series 2006-HI4
Ladies and Gentlemen:
__________________ (the "Purchaser") intends to purchase from (the "Seller") a ___%
Certificate Percentage Interest of Certificates of Series 2006-HI4 (the "Certificates"), issued
pursuant to the Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of
September 28, 2006 between Residential Funding Mortgage Securities II, Inc. as depositor (the
"Company") and Wilmington Trust Company, as owner trustee (the "Owner Trustee"), as acknowledged
and agreed by JPMorgan Chase Bank, National Association, as Certificate Registrar. All terms used
herein and not otherwise defined shall have the meanings set forth in the Trust Agreement. The
Purchaser hereby certifies, represents and warrants to, and covenants with, the Company and the
Certificate Registrar that:
1. The Purchaser understands that (a) the Certificates have not been and will
not be registered or qualified under the Securities Act of 1933, as amended (the "Act") or
any state securities law, (b) the Company is not required to so register or qualify the
Certificates, (c) the Certificates may be resold only if registered and qualified pursuant
to the provisions of the Act or any state securities law, or if an exemption from such
registration and qualification is available, (d) the Trust Agreement contains restrictions
regarding the transfer of the Certificates and (e) the Certificates will bear a legend to
the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own account for
investment only and not with a view to or for sale in connection with any distribution
thereof in any manner that would violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters, and, in particular,
in such matters related to securities similar to the Certificates, such that it is capable
of evaluating the merits and risks of investment in the Certificates, (b) able to bear the
economic risks of such an investment and (c) an "accredited investor" within the meaning of
Rule 501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity to review
(a) [a copy of the Private Placement Memorandum, dated ___________, 20__, relating to the
Certificates (b)] a copy of the Trust Agreement and [b] [c] such other information
concerning the Certificates, the Home Loans and the Company as has been requested by the
Purchaser from the Company or the Seller and is relevant to the Purchaser's decision to
purchase the Certificates. The Purchaser has had any questions arising from such review
answered by the Company or the Seller to the satisfaction of the Purchaser. [If the
Purchaser did not purchase the Certificates from the Seller in connection with the initial
distribution of the Certificates and was provided with a copy of the Private Placement
Memorandum (the "Memorandum") relating to the original sale (the "Original Sale") of the
Certificates by the Company, the Purchaser acknowledges that such Memorandum was provided
to it by the Seller, that the Memorandum was prepared by the Company solely for use in
connection with the Original Sale and the Company did not participate in or facilitate in
any way the purchase of the Certificates by the Purchaser from the Seller, and the
Purchaser agrees that it will look solely to the Seller and not to the Company with respect
to any damage, liability, claim or expense arising out of, resulting from or in connection
with (a) error or omission, or alleged error or omission, contained in the Memorandum, or
(b) any information, development or event arising after the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will it authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any Certificate,
any interest in any Certificate or any other similar security to any person in any manner,
(b) solicit any offer to buy or to accept a pledge, disposition of other transfer of any
Certificate, any interest in any Certificate or any other similar security from any person
in any manner, (c) otherwise approach or negotiate with respect to any Certificate, any
interest in any Certificate or any other similar security with any person in any manner,
(d) make any general solicitation by means of general advertising or in any other manner or
(e) take any other action, that (as to any of (a) through (e) above) would constitute a
distribution of any Certificate under the Act, that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or that would
require registration or qualification pursuant thereto. The Purchaser will not sell or
otherwise transfer any of the Certificates, except in compliance with the provisions of the
Trust Agreement.
6. The Purchaser represents:
(i) that either (a) or (b) is satisfied, as marked below:
____ a. The Purchaser is not an employee benefit plan or other plan subject
to the prohibited transaction provisions of ERISA or Section 4975 of the Code (each, a "Plan"), or
any Person (including, without limitation, an insurance company investing its general accounts, an
investment manager, a named fiduciary or a trustee of any Plan) who is using "plan assets," within
the meaning of the U.S. Department of Labor regulation promulgated at 29 C.F.R. Section
2510.3-101, of any Plan (each, a "Plan Investor") to effect such acquisition; or
____ b. The Purchaser will provide the Company, the Owner Trustee, the
Certificate Registrar and the Master Servicer with an opinion of counsel acceptable to and in form
and substance satisfactory to the Company, the Owner Trustee, the Certificate Registrar and the
Master Servicer to the effect that the purchase and holding of this Certificate is permissible
under applicable law, will not constitute or result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Company, the Owner Trustee, the Certificate Registrar and
the Master Servicer to any obligation or liability (including obligations or liabilities under
ERISA or Section 4975 of the Code) in addition to those undertaken in the Agreement, which opinion
of counsel shall not be an expense of the Company, the Owner Trustee, the Certificate Registrar or
the Master Servicer; and
7. The Purchaser is acquiring the Certificate for its own behalf and is not
acting as agent or custodian for any other person or entity in connection with such
acquisition;
8. The Purchaser is not a non-United States person for federal income tax
purposes.
Very truly yours,
__________________________
By: ___________________________________
Name:
Title:
EXHIBIT E
FORM OF TRANSFEROR REPRESENTATION LETTER
__________, 20__
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
JPMorgan Chase Bank, National Association
[4 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Worldwide Securities Services/Structured Finance Services]
Re: Home Loan-Backed Certificates
Series 2006-HI4
Ladies and Gentlemen:
____________________ (the "Purchaser") intends to purchase from (the "Seller") a
___% Certificate Percentage Interest of Certificates of Series 2006-HI4 (the "Certificates"),
issued pursuant to the Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of
September 28, 2006 between Residential Funding Mortgage Securities II, Inc. as depositor (the
"Company") and Wilmington Trust Company, as owner trustee (the "Owner Trustee"), as acknowledged
and agreed by JPMorgan Chase Bank, National Association, as Certificate Registrar. All terms used
herein and not otherwise defined shall have the meanings set forth in the Trust Agreement. The
Seller hereby certifies, represents and warrants to, and covenants with, the Company and the
Certificate Registrar that:
Neither the Seller nor anyone acting on its behalf has (a) offered, pledged, sold,
disposed of or otherwise transferred the Certificate, any interest in the Certificate or any other
similar security to any person in any manner, (b) has solicited any offer to buy or to accept a
pledge, disposition or other transfer of the Certificate, any interest in the Certificate or any
other similar security from any person in any manner, (c) has otherwise approached or negotiated
with respect to the Certificate, any interest in the Certificate or any other similar security
with any person in any manner, (d) has made any general solicitation by means of general
advertising or in any other manner, or (e) has taken any other action, that (as to any of (a)
through (e) above) would constitute a distribution of the Certificates under the Securities Act of
1933 (the "Act"), that would render the disposition of the Certificate a violation of Section 5 of
the Act or any state securities law, or that would require registration or qualification pursuant
thereto. The Seller will not act, in any manner set forth in the foregoing sentence with respect
to the Certificate. The Seller has not and will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions of the Trust Agreement.
Very truly yours,
__________________________________________
(Seller)
By: _____________________________________
Name:
Title:
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("certificate") is delivered pursuant to Section
3.05 of the Amended and Restated Trust Agreement, dated as of September 28, 2006 (the "Trust
Agreement"), between Residential Funding Mortgage Securities II, Inc., as depositor and Wilmington
Trust Company, as Owner Trustee, in connection with the acquisition of, transfer to or possession
by the undersigned, whether as beneficial owner (the "Beneficial Owner"), or nominee on behalf of
the Beneficial Owner of the Residential Home Loan-Backed Certificates, Series 2006-HI4 (the
"Certificate"). Capitalized terms used but not defined in this certificate have the respective
meanings given them in the Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a nominee), and in all cases
sign and otherwise complete Part III.
In addition, each holder shall submit with the Certificate an IRS Form W-9 relating to such
holder.
To confirm to the Trust that the provisions of Sections 871, 881 or 1446 of the Internal
Revenue Code (relating to withholding tax on foreign shareholders and partners) do not apply in
respect of the Certificate held by the undersigned, the undersigned hereby certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is) not a non-resident alien for purposes of U.S.
income taxation;
2. My (The Beneficial Owner's) name and home address are:
_____________________________
_____________________________
_____________________________; and
3. My (The Beneficial Owner's) U.S. taxpayer identification number (Social
Security Number) is _______________.
B. Corporate, Partnership or Other Entity as Beneficial Owner
1. (Name of the Beneficial Owner) is not a foreign corporation, foreign
partnership, foreign trust or foreign estate (as those terms are defined in
the Code and Treasury Regulations;
2. The Beneficial Owner's office address and place of incorporation (if
applicable) is ______________; and
3. The Beneficial Owner's U.S. employer identification number is ______________.
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner, the undersigned certifies that
this certificate has been made in reliance upon information contained in:
_____ an IRS Form W-9
_____ a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the undersigned agrees to notify the
Trust at least thirty (30) days prior to the date that the form relied upon becomes obsolete, and
(ii) in connection with change in Beneficial Owners, the undersigned agrees to submit a new
Certificate of Non-Foreign Status to the Trust promptly after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees to notify the Trust
within sixty (60) days of the date that the Beneficial Owner becomes a foreign person. The
undersigned understands that this certificate may be disclosed to the Internal Revenue Service by
the Trust and any false statement contained therein could be punishable by fines, imprisonment or
both.
Under penalties of perjury, I declare that I have examined this certificate and to the best
of my knowledge and belief it is true, correct and complete and will further declare that I will
inform the Trust of any change in the information provided above, and, if applicable, I further
declare that I have the authority* to sign this document.
________________________
Name
________________________
Title (if applicable)
________________________
Signature and Date
*NOTE: If signed pursuant to a power of attorney, the power of attorney must accompany this
certificate.
EXHIBIT G
FORM OF ERISA REPRESENTATION LETTER
_____________, 20__
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
[CERTIFICATE REGISTRAR]
Re: Residential Funding Mortgage Securities II, Inc.
Home Loan-Backed Certificates, Series 2006-HI4
Dear Sirs:
__________________________________ (the "Transferee") intends to acquire from
_____________________ (the "Transferor") a ___% Certificate Percentage Interest of Residential
Mortgage Securities II, Inc. Home Loan-Backed Certificates, Series 2006-HI4 (the "Certificates"),
issued pursuant to an Amended and Restated Trust Agreement (the "Trust Agreement") dated September
28, 2006 among Residential Funding Mortgage Securities II, Inc., as depositor (the "Depositor")
and Wilmington Trust Company, as trustee (the "Owner Trustee"). Capitalized terms used herein and
not otherwise defined shall have the meanings assigned thereto in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to, and covenants with, the
Depositor, the Owner Trustee, the Certificate Registrar and the Master Servicer that:
(1) The Transferee is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code (each, a "Plan"), or
any Person (including, without limitation, an insurance company investing its general
accounts, an investment manager, a named fiduciary or a trustee of any Plan) who is using
"plan assets," within the meaning of the U.S. Department of Labor regulation promulgated at
29 C.F.R. Section 2510.3-101, of any Plan (each, a "Plan Investor") to effect such
acquisition; or
(2) The Transferee has provided the Depositor, the Owner Trustee, the Certificate
Registrar and the Master Servicer with an opinion of counsel acceptable to and in form and
substance satisfactory to the Depositor, the Owner Trustee, the Certificate Registrar and
the Master Servicer to the effect that the purchase and holding of this Certificate is
permissible under applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), and will not subject the Depositor, the Owner
Trustee, the Certificate Registrar and the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code) in addition
to those undertaken in the Agreement, which opinion of counsel shall not be an expense of
the Depositor, the Owner Trustee, the Certificate Registrar or the Master Servicer.
In addition, the Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Owner Trustee, the Certificate Registrar and the Master
Servicer that the Transferee will not transfer such Certificates to any transferee unless such
transferee meets the requirements set forth in either (1) or (2).
Very truly yours,
_________________________________________
By:
Name:
Title:
