RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
as Depositor
and
WILMINGTON TRUST COMPANY
as Owner Trustee
-----------------------------------------
AMENDED AND RESTATED TRUST AGREEMENT
Dated as of March 27, 1997
------------------------------------------
Home Equity Loan-Backed Certificates,
Series 1997-HS2
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
Table of Contents
Section Page
ARTICLE I
Definitions
1.01. Definitions................................................. 1
-----------
1.02. Other Definitional Provisions............................... 1
-----------------------------
ARTICLE II
Organization
2.01. Name........................................................ 3
----
2.02. Office...................................................... 3
------
2.03. Purposes and Powers......................................... 3
-------------------
2.04. Appointment of Owner Trustee................................ 4
----------------------------
2.05. Initial Capital Contribution of Owner Trust Estate.......... 4
--------------------------------------------------
2.06. Declaration of Trust........................................ 4
--------------------
2.07. Liability of the Holder of the Designated Certificate....... 4
-----------------------------------------------------
2.08. Title to Trust Property..................................... 5
-----------------------
2.09. Situs of Trust.............................................. 5
--------------
2.10. Representations and Warranties of the Depositor............. 5
-----------------------------------------------
2.11. Payment of Trust Fees....................................... 6
---------------------
ARTICLE III
Conveyance of the Revolving Credit Loans;
Certificates
3.01. Conveyance of the Revolving Credit Loans.................... 7
----------------------------------------
3.02. Initial Ownership........................................... 7
-----------------
3.03. The Certificates............................................ 7
----------------
3.04. Authentication of Certificates.............................. 8
------------------------------
3.05. Registration of and Limitations on Transfer and Exchange of
-----------------------------------------------------------
Certificates................................................ 8
------------
3.06. Mutilated, Destroyed, Lost or Stolen Certificates........... 11
-------------------------------------------------
3.07. Persons Deemed Certificateholders........................... 11
---------------------------------
3.08. Access to List of Certificateholders' Names and Addresses... 11
---------------------------------------------------------
3.09. Maintenance of Office or Agency............................. 11
-------------------------------
3.10. Certificate Paying Agent.................................... 11
------------------------
3.11. Cooperation................................................. 13
-----------
3.12. The Designated Certificate.................................. 13
--------------------------
3.13. Restricted Certificates..................................... 13
-----------------------
ARTICLE IV
Authority and Duties of Owner Trustee
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
i
Section Page
4.01.General Authority...................................................16
-----------------
4.02.General Duties......................................................16
--------------
4.03.Action upon Instruction.............................................16
-----------------------
0.00.Xx Duties Except as Specified under Specified Documents or in
-------------------------------------------------------------
Instructions........................................................17
------------
4.05.Restrictions........................................................17
------------
4.06.Prior Notice to Certificateholders and the Credit Enhancer with
---------------------------------------------------------------
Respect to Certain Matters..........................................17
--------------------------
4.07.Action by Certificateholders with Respect to Certain Matters........18
------------------------------------------------------------
4.08.Action by Certificateholders with Respect to Bankruptcy.............18
-------------------------------------------------------
4.09.Restrictions on Certificateholders' Power...........................18
-----------------------------------------
4.10.Majority Control....................................................18
----------------
4.11.Doing Business in Other Jurisdictions...............................19
-------------------------------------
ARTICLE V
Application of Trust Funds
5.01.Distributions.......................................................20
-------------
5.02.Method of Payment...................................................20
-----------------
5.03.Signature on Returns................................................21
--------------------
5.04.Statements to Certificateholders....................................21
--------------------------------
0.00.Xxx Reporting; Tax Elections........................................21
----------------------------
ARTICLE VI
Concerning the Owner Trustee
6.01.Acceptance of Trusts and Duties.....................................22
-------------------------------
6.02.Furnishing of Documents.............................................23
-----------------------
6.03.Representations and Warranties......................................23
------------------------------
0.00.Xxxxxxxx; Advice of Counsel.........................................24
---------------------------
6.05.Not Acting in Individual Capacity...................................24
---------------------------------
6.06.Owner Trustee Not Liable for Certificates or Related Documents......24
--------------------------------------------------------------
6.07.Owner Trustee May Own Certificates and Notes........................25
--------------------------------------------
ARTICLE VII
Compensation of Owner Trustee
7.01.Owner Trustee's Fees and Expenses...................................26
---------------------------------
7.02.Indemnification.....................................................26
---------------
ARTICLE VIII
Termination of Trust Agreement
8.01.Termination of Trust Agreement......................................28
------------------------------
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
ii
8.02.Dissolution upon Bankruptcy of the Holder of the Designated
Certificate.......................................................... 29
-----------
8.03.Distribution of Assets on Termination Resulting from an Event of
----------------------------------------------------------------
Liquidation.......................................................... 29
ARTICLE IX
Successor Owner Trustees and Additional Owner Trustees
9.01.Eligibility Requirements for Owner Trustee........................... 31
------------------------------------------
9.02.Replacement of Owner Trustee......................................... 31
----------------------------
9.03.Successor Owner Trustee.............................................. 32
-----------------------
9.04.Merger or Consolidation of Owner Trustee............................. 32
----------------------------------------
9.05.Appointment of Co-Trustee or Separate Trustee........................ 32
---------------------------------------------
ARTICLE X
Miscellaneous
10.01Amendments........................................................... 34
----------
10.02No Legal Title to Owner Trust Estate................................. 35
------------------------------------
10.03Limitations on Rights of Others...................................... 35
-------------------------------
10.04Notices.............................................................. 36
-------
10.05Severability......................................................... 36
------------
10.06Separate Counterparts................................................ 36
---------------------
10.07Successors and Assigns............................................... 36
----------------------
10.08No Petition.......................................................... 36
-----------
10.09No Recourse.......................................................... 37
-----------
10.10Headings............................................................. 37
--------
10.11GOVERNING LAW........................................................ 37
-------------
10.12Integration.......................................................... 37
-----------
10.13Rights of Credit Enhancer To Exercise Rights of Certificateholders... 37
------------------------------------------------------------------
Signatures ................................................................40
EXHIBIT
Exhibit A - Form of Certificate...........................................A-1
Exhibit B - Certificate of Trust of Residential Home Equity
Loan Trust 1997-HS2 .........................B-1
Exhibit C - Form of 144A Investment Representation........................C-1
Exhibit D - Form of Investor Representation Letter........................D-1
Exhibit E - Form of Transferor Representation Letter......................E-1
Exhibit F - Form of Certificate of Non-Foreign Status.....................F-1
Exhibit G - Form of ERISA Representation Letter...........................G-1
Exhibit H - Form of Representation Letter.................................H-1
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
iii
This Amended and Restated Trust Agreement, dated as of March 27, 1997
(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 March 15, 1997, in connection with the formation of a
Delaware business trust (the "Original Trust Agreement");
WHEREAS, the Depositor and the Owner Trustee wish to amend and restate the
Original Trust Agreement; NOW, THEREFORE, in consideration of the mutual
agreements herein
contained, the Depositor and the Owner Trustee agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. For all purposes of this Trust Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in Appendix A to the Indenture dated March 27, 1997 (the
"Indenture"), between Home Equity Loan Trust 1997-HS2, as issuer, and The Chase
Manhattan Bank, as indenture trustee. All other capitalized terms used herein
shall have the meanings specified herein.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Trust Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Trust Agreement or in any such certificate or other document,
and accounting terms partly defined in this Trust Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this Trust
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Trust Agreement or in any such certificate or
other document shall control.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
(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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
2
ARTICLE II
Organization
Section 2.01. Name. The trust shall be known as "Home Equity Loan Trust
1997-HS2" (the "Owner Trust" or "Trust"), in which name the Owner Trustee may
engage in the transactions contemplated hereby, make and execute contracts and
other instruments on behalf of the Trust and xxx and be sued.
Section 2.02. Office. The office of the Trust shall be in care of the Owner
Trustee at the Corporate Trust Office or at such other address in Delaware as
the Owner Trustee may designate by written notice to the Certificateholders and
the Depositor.
Section 2.03. Purposes and Powers. The purpose of the Trust is to engage in
the following activities:
(i) to issue the Notes pursuant to the Indenture and the Certificates
pursuant to this Trust Agreement and to sell the Notes and the Certificates;
(ii) to purchase the Revolving Credit Loans and to pay the organizational,
start- up and transactional expenses of the Trust;
(iii) to assign, grant, transfer, pledge and convey the
Revolving Credit Loans pursuant to the Indenture and to hold, manage
and distribute to the Certificateholders pursuant to Section 5.01 any
portion of the Revolving Credit Loans released from the Lien of, and
remitted to the Trust pursuant to the Indenture;
(iv) to enter into and perform its obligations under the Basic Documents to
which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith,
including, without limitation, to accept additional contributions of
equity that are not subject to the Lien of the Indenture; and
(vi) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Trust Agreement or the
Basic Documents while any Note is outstanding without the consent of the Holders
of a majority of the Certificate Percentage Interests of the Controlling
Certificates and the Indenture Trustee.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
3
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 Trust, the receipt in trust of the Revolving
Credit Loans and a Credit Enhancement Instrument assigned to the Trust pursuant
to Section 3.01, which shall constitute the Owner Trust Estate.
Section 2.06. Declaration of Trust. The Owner Trustee hereby declares
that it shall hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Owner Trust under the Basic Documents. It is
the intention of the parties hereto that the Owner Trust constitute a business
trust under the Business Trust Statute and that this Trust Agreement constitute
the governing instrument of such business trust. It is the intention of the
parties hereto that, solely for federal, state and local income and franchise
tax purposes, the Owner Trust shall be treated as a partnership, with the assets
of the partnership being the Owner 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. Solely for federal, state and local income and franchise tax
purposes, the rights of the Certificateholders (other than the Holder of the
Designated Certificate) will be those of limited partners and the rights of the
Holder of the Designated Certificate will be those of a general partner in a
partnership formed under the Delaware Revised Uniform Limited Partnership Act.
The parties agree that, unless otherwise required by appropriate tax
authorities, the Owner Trust will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the characterization
of the Owner Trust as a partnership for such tax purposes. Effective as of the
date hereof, the Owner Trustee shall have all rights, powers and duties set
forth herein and in the Business Trust Statute with respect to accomplishing the
purposes of the Owner Trust.
Section 2.07. Liability of the Holder of the Designated Certificate.
(a) The Holder of the Designated Certificate shall be liable directly to and
shall indemnify any injured party for all losses, claims, damages, liabilities
and expenses of the Owner Trust (including Expenses, to the extent not paid out
of the Owner Trust Estate) to the extent that the Holder of the Designated
Certificate would be liable if the Owner Trust were a partnership under the
Delaware Revised Uniform Limited Partnership Act in which the Holder of the
Designated Certificate were a general partner; provided, however, that the
Holder of the Designated Certificate shall not be liable for payments required
to be made on the Securities, or for any losses incurred by a Certificateholder
in the capacity of an investor in the Certificates or a Noteholder in the
capacity of an investor in the Notes or the Credit Enhancer for any amount due
and owing under the Credit Enhancement Instrument. The Holder of the Designated
Certificate shall be liable for any entity level taxes imposed on the Owner
Trust. In addition, any third party creditors of the Owner Trust, including the
Credit Enhancer (other than in connection with the obligations described in the
first sentence of this Section 2.07 for which the Holder of the Designated
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
4
Certificate shall not be liable) shall be deemed third party beneficiaries of
this paragraph. The obligations of the Holder of the Designated Certificate
under this paragraph shall be evidenced by the Designated Certificate.
(b) Subject to subsection (a) above, the Certificateholders shall be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
5
(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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
6
ARTICLE III
Conveyance of the Revolving Credit Loans;
Certificates
Section 3.01. Conveyance of the Revolving Credit Loans. The Depositor,
concurrently with the execution and delivery hereof, does hereby transfer,
convey, sell and assign to the Trust, on behalf of the Holders of the Notes and
the Certificates and the Credit Enhancer, without recourse, all its right, title
and interest in and to the Revolving Credit Loans. The Depositor will also
provide the Trust with the Credit Enhancement Instrument.
The parties hereto intend that the transaction set forth herein be a
sale by the Depositor to the Trust of all of its right, title and interest in
and to the Revolving Credit Loans. In the event that the transaction set forth
herein is not deemed to be a sale, the Depositor hereby grants to the Trust a
security interest in all of its right, title and interest in, to and under the
Owner Trust Estate, all distributions thereon and all proceeds thereof; and this
Trust Agreement shall constitute a security agreement under applicable law.
Section 3.02. Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.05 and until the conveyance
of the Revolving Credit Loans pursuant to Section 3.01 and the issuance of the
Certificates, the Depositor shall be the sole Certificateholder.
Section 3.03. The Certificates. The Certificates shall be issued in
minimum denominations of a Certificate Percentage Interest of 10.0000% and
integral multiples of 0.0001% in excess thereof; provided, however, that the
Designated Certificate initially issued pursuant to Section 3.12 may be issued
in a Certificate Percentage Interest of 1.0000%; and provided further, that
Certificates may be issued in minimum denominations of less than 10.0000% in
accordance with the provisions of Section 3.14.
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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
7
Section 3.04. Authentication of Certificates. Concurrently with the
acquisition of the Revolving Credit Loans by the Trust, the Owner Trustee or the
Certificate Paying Agent shall cause the Certificates in an initial Certificate
Percentage Interest of 100.00% to be executed on behalf of the Trust,
authenticated and delivered to or upon the written order of the Depositor,
signed by its chairman of the board, its president or any vice president,
without further corporate action by the Depositor, in authorized denominations.
No Certificate shall entitle its holder to any benefit under this Trust
Agreement or be valid for any purpose unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee or the Certificate Paying Agent, by
manual signature; such authentication shall constitute conclusive evidence that
such Certificate shall have been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
Section 3.05. Registration of and Limitations on Transfer and Exchange
of Certificates. The Certificate Registrar shall keep or cause to be kept, at
the office or agency maintained pursuant to Section 3.09, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Indenture
Trustee shall be the initial Certificate Registrar. If the Certificate Registrar
resigns or is removed, the Owner Trustee shall appoint a successor Certificate
Registrar.
Subject to satisfaction of the conditions set forth below and to the
provisions of Section 3.12 with respect to the Designated Certificate and
Section 3.13 with respect to the Restricted Certificates, 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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
8
Except as described below, each Certificateholder shall establish its
non-foreign status by submitting to the Certificate Paying Agent an IRS Form W-9
and the Certificate of Non-Foreign Status set forth in Exhibit F hereto.
A Certificate may be transferred to a Certificateholder unable to
establish its non-foreign status as described in the preceding paragraph only if
such Certificateholder provides an Opinion of Counsel, which Opinion of Counsel
shall not be an expense of the Trust, the Owner Trustee, the Certificate
Registrar or the Depositor, satisfactory to the Depositor and the Credit
Enhancer, that such transfer (1) will not affect the tax status of the Owner
Trust and (2) will not adversely affect the interests of any Certificateholder,
Noteholder or the Credit Enhancer, including, without limitation, as a result of
the imposition of any United States federal withholding taxes on the Trust
(except to the extent that such withholding taxes would be payable solely from
amounts otherwise distributable to the Certificate of the prospective
transferee). If such transfer occurs and such foreign Certificateholder becomes
subject to such United States federal withholding taxes, any such taxes will be
withheld by the Indenture Trustee at the direction of the Trust Tax Matters
Person. Each Certificateholder unable to establish its non-foreign status shall
submit to the Certificate Paying Agent a copy of its Form W-8 and shall resubmit
such Form W-8 every three years.
No transfer, sale, pledge or other disposition of a Certificate shall
be made unless such transfer, sale, pledge or other disposition is exempt from
the registration requirements of the Securities Act and any applicable state
securities laws or is made in accordance with said Act and laws. In the event of
any such transfer, the Certificate Registrar or the Depositor shall prior to
such transfer require the transferee to execute (A) either (i) (a) an investment
letter in substantially the form attached hereto as Exhibit C (or in such form
and substance reasonably satisfactory to the Certificate Registrar and the
Depositor) which investment letters shall not be an expense of the Trust, the
Owner Trustee, the Certificate Registrar, the Master Servicer or the Depositor
and which investment letter states that, among other things, such transferee (a)
is a "qualified institutional buyer" as defined under Rule 144A, acting for its
own account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (b) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the Securities Act of
1933, as amended, 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
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
9
of Counsel as described in the preceding paragraph. The Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trust, the Owner Trustee, the Certificate Registrar, the Master Servicer and the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
No transfer of Certificates or any interest therein shall be made to
any employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and bank
collective investment funds and insurance company general or separate accounts
in which such plans, accounts or arrangements are invested, that are subject to
ERISA, or Section 4975 of the Code (collectively, "Plan"), any Person acting,
directly or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "plan assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101 ("Plan Assets")
unless the Depositor, the Owner Trustee, the Certificate Registrar and the
Master Servicer are provided with an Opinion of Counsel which establishes to the
satisfaction of the Depositor, the Owner Trustee, the Certificate Registrar and
the Master Servicer that the purchase of Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Depositor, the
Owner Trustee, the Certificate Registrar or the Master Servicer to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Depositor, the Owner
Trustee, the Certificate Registrar or the Master Servicer. In lieu of such
Opinion of Counsel, a Plan, any Person acting, directly or indirectly, on behalf
of any such Plan or any Person acquiring such Certificates with Plan Assets of a
Plan may provide a certification in the form of Exhibit G to this Agreement,
which the Depositor, the Owner Trustee, the Certificate Registrar and the Master
Servicer may rely upon without further inquiry or investigation. Neither an
Opinion of Counsel nor a certification will be required in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets of any Plan) and the Owner Trustee shall be entitled to
conclusively rely upon a representation (which, upon the request of the Owner
Trustee, shall be a written representation) from the Depositor of the status of
such transferee as an affiliate of the Depositor.
In addition, no transfer of a Certificate shall be permitted, and no
such transfer shall be registered by the Certificate Registrar or be effective
hereunder, if such transfer or the registration of such transfer would cause the
Trust to be classified as a publicly traded partnership, taxable as a
corporation for federal income tax purposes by causing the Trust to have more
than 100 Certificateholders at any time during the taxable year of the Trust.
In addition, no transfer, sale, assignment, pledge or other disposition
of a Certificate shall be made unless the proposed transferee executes a
representation letter substantially in the form of Exhibit D, or substantially
in the form of Exhibit H hereto, that (1) the transferee is acquiring the
Certificate for its own behalf and is not acting as agent or custodian for any
other person or entity in connection with such acquisition and (2) if the
transferee is a partnership, grantor trust or S corporation for federal income
tax purposes, the Certificates are not more than 50% of the assets of the
partnership, grantor trust or S corporation.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
10
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 Trust 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 Certificate 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, 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, the Holder
of the Designated Certificate 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
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
11
the Trust in accordance with the provisions of the Certificates and Section 5.01
hereof from payments remitted to the Certificate Paying Agent by the Indenture
Trustee pursuant to Section 3.05 of the Indenture. The Trust hereby appoints the
Indenture Trustee as Certificate Paying Agent and the Indenture Trustee hereby
accepts such appointment and further agrees that it will be bound by the
provisions of this Trust Agreement relating to the Certificate Paying Agent and
shall:
(i) hold all sums held by it for the payment of amounts
due with respect to the Certificates in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(ii) give the Owner Trustee notice of any default by the
Trust of which it has actual knowledge in the making of any payment
required to be made with respect to the Certificates;
(iii) at any time during the continuance of any such
default, upon the written request of the Owner Trustee forthwith pay to
the Owner Trustee on behalf of the Trust all sums so held in Trust by
such Certificate Paying Agent;
(iv) immediately resign as Certificate Paying Agent and
forthwith pay to the Owner Trustee on behalf of the Trust all sums held
by it in trust for the payment of Certificates if at any time it ceases
to meet the standards required to be met by the Certificate Paying
Agent at the time of its appointment;
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on any
Certificates of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection
therewith; and
(vi) deliver to the Owner Trustee a copy of the report
to Certificateholders prepared with respect to each Payment Date by the
Master Servicer pursuant to Section 4.01 of the Servicing Agreement.
(b) The Trust may revoke such power and remove the Certificate Paying
Agent if the Owner Trustee determines in its sole discretion that the
Certificate Paying Agent shall have failed to perform its obligations under this
Trust Agreement in any material respect. The Indenture Trustee shall be
permitted to resign as Certificate Paying Agent upon 30 days written notice to
the Owner Trustee; provided the Indenture Trustee is also resigning as Paying
Agent under the Indenture at such time. In the event that the Indenture Trustee
shall no longer be the Certificate Paying Agent under this Trust Agreement and
Paying Agent under the Indenture, the Owner Trustee shall appoint a successor to
act as Certificate Paying Agent (which shall be a bank or trust company) and
which shall also be the successor Paying Agent under the Indenture. The Owner
Trustee shall cause such successor Certificate Paying Agent or any additional
Certificate Paying Agent appointed by the Owner Trustee to execute and deliver
to the Owner Trustee an instrument to the effect set forth in this Section 3.10
as it relates to the Certificate Paying Agent. The Certificate Paying Agent
shall return all unclaimed funds to the Trust and upon removal of a Certificate
Paying Agent such Certificate Paying Agent shall also return all
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
12
funds in its possession to the Trust. The provisions of Sections 6.01, 6.03,
6.04 and 7.01 shall apply to the Certificate Paying Agent to the extent
applicable. Any reference in this Agreement to the Certificate Paying Agent
shall include any co-paying agent unless the context requires otherwise.
(c) The Certificate Paying Agent shall establish and maintain with
itself the Certificate Distribution Account in which the Certificate Paying
Agent shall deposit, on the same day as it is received from the Indenture
Trustee, each remittance received by the Certificate Paying Agent with respect
to payments made pursuant to the Indenture. The Certificate Paying Agent shall
make all distributions of Certificate Distribution Amounts on the Certificates,
from moneys on deposit in the Certificate Distribution Account.
Section 3.11. Cooperation. The Owner Trustee shall cooperate in all
respects with any reasonable request by the Credit Enhancer for action to
preserve or enforce the Credit Enhancer's rights or interest under this Trust
Agreement or the Insurance Agreement, consistent with this Trust Agreement and
without limiting the rights of the Certificateholders as otherwise expressly set
forth in this Trust Agreement.
Section 3.12. The Designated Certificate. (a) MATI shall on the Closing
Date purchase a Certificate representing a 1.00% Certificate Percentage Interest
of the Certificates (the "Designated Certificate") and shall thereafter retain
beneficial and record ownership of the Designated Certificates. The Owner
Trustee shall cause the Designated Certificates to contain a legend stating
"THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT UPON SATISFACTION OF THE CONDITIONS
IN SECTION 3.12(b) OF THE TRUST AGREEMENT."
(b) The Designated Certificates shall, for federal, state and local
income and franchise tax purposes, be treated as the general partnership
interest of the Owner Trust in accordance with Sections 2.06 and 2.07. The
Designated Certificates shall not be transferred by MATI or any subsequent
Holder unless (a) the transferee shall be either (1) the Seller or an Affiliate
of the Seller, or (2) any other permitted transferee in which case the prior
written consent of the Credit Enhancer is obtained, which will not be
unreasonably withheld, (b) the applicable provisions of Section 3.05 are
satisfied, (c) the Certificate Registrar receives an Opinion of Counsel to the
effect that the transfer of the Designated Certificates shall not cause the
Owner Trust to be subject to an entity level tax and (d) the Rating Agencies
shall consent to such transfer.
Section 3.13. Restricted Certificates. (a) The Seller or an Affiliate
thereof shall on the Closing Date purchase a Certificate representing a 19.00%
Certificate Percentage Interest of the Certificate (the "Restricted
Certificates") and shall thereafter retain beneficial and record ownership of
the Restricted Certificates. The Owner Trustee shall cause the Restricted
Certificates to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE
EXCEPT UPON SATISFACTION OF THE CONDITIONS IN SECTION 3.13(b) OF THE TRUST
AGREEMENT."
(b) The Restricted Certificates shall not be transferred by the Seller
or any subsequent Holder unless (a) the applicable provisions of Section 3.05
are satisfied and (b) either (1) the Certificate Registrar receives an Opinion
of Counsel to the effect that the transfer of the
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
13
Restricted Certificates shall not cause the Owner Trust to be treated as a
corporation for federal or state income tax purposes or (2) if such Restricted
Certificates are to be transferred to a Person other than the Holder of all of
the Certificates (other than the Restricted Certificates and the Designated
Certificates) or an Affiliate of any such Holder, the Certificate Registrar
receives the written consent to such transfer of the Restricted Certificates
from each of the Holders of the Certificates which are not Restricted
Certificates or Designated Certificates, and one of such Holders is not an
Affiliate of the person transferring such Restricted Certificates.
(c) Without the consent of the other Certificateholders, the Holder of
any Restricted Certificate may enter into a contract with one or two
third-parties, including the owner of any Certificate (other than the Designated
Certificate), which shall provide that the cash flows otherwise payable to the
Restricted Certificates of such Holder shall be paid to the third-party or
third-parties. Such third-party or third-parties must satisfy the provisions of
Section 3.05 as though it were to acquire a Certificate, including the execution
of any documents required in connection therewith. Following the execution of
such contract, the Holder of the Restricted Certificates shall provide such
contract to the Owner Trustee and the Certificate Paying Agent, along with any
documents required by Section 3.05, and the Owner Trustee and the Certificate
Paying Agent shall pay to such third-party or third-parties directly any amounts
received with respect to the Restricted Certificates. Notwithstanding the
foregoing, all other rights under this Agreement of the Restricted Certificates,
including, without limitation, the right to take any action or grant any
approval, shall be retained by the Holder of the Restricted Certificates, and
the Owner Trustee and the Certificate Paying Agent shall treat the Holder of the
Restricted Certificates as the Holder thereof for such purposes.
Section 3.14. Additional Certificate Security Balances Upon Issuance of
Capped Funding Notes. (a) On any date on which Variable Funding Notes are
exchanged for Capped Funding Notes pursuant to Section 4.01(d) of the Indenture,
the Security Balance of one or more Certificates may be increased in an amount
equal to the Additional Certificate Security Balance as required pursuant to the
Opinion of Counsel required to be delivered pursuant to Section 4.01(d) of the
Indenture in connection with the issuance of the Capped Funding Notes.
(b) 1.00% of the value of the Additional Certificate Security Balance
shall be added to the Security Balance of the existing Designated Certificate.
(c) 19.00% of the value of the Additional Certificate Security Balance
shall be added to the Security Balance of the Restricted Certificate held by the
Seller or an Affiliate thereof on a pro rata basis; provided, that if the
Restricted Certificate is not held by the Depositor or an Affiliate thereof, a
new Restricted Certificate shall be issued at the direction of the Depositor.
(d) 80.00% of the value of the Additional Certificate Security Balance
shall be added to any Certificate (other than a Restricted Certificate or the
Designated Certificate) held by the Seller or an Affiliate thereof without the
consent of the other Certificateholders; or if no such Certificate exists, a new
Certificate or Certificates shall be issued at the direction of the Seller or an
Affiliate thereof having in the aggregate a Security Balance equal to such
80.00% of such value. Alternatively, the Depositor may allocate any portion of
such value to a Certificateholder other than the Depositor or an Affiliate
thereof, provided that such Certificateholder provides its written consent to
the Depositor and the Owner Trustee.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
14
(e) Following such increase, the Certificate Percentage Interest of
each Certificate shall be recalculated, the numerator of which shall be the
value thereof including the respective value of the portion of the Additional
Certificate Security Balance added thereto pursuant to this Section 3.14, and
the denominator of which shall be the value of all the Certificates following
such increase. The Owner Trustee shall issue new Certificates with new
Certificate Percentage Interests to each Holder of the Certificates (other than
the Designated Certificate), with such Certificate Percentage Interests
calculated to four decimal places. In addition, the new Certificates may be
issued in minimum denominations of 0.0001% and integral multiples of 0.0001% in
excess thereof.
(f) For purposes of the foregoing, the "value" of any Certificate or
any Additional Certificate Security Balance added thereto shall be determined by
the Seller in its sole discretion based on reasonable cash flow assumptions and
valuation methods, and any such determination shall be binding on the
Certificateholders. If the Seller is unable to determine the "value," the Owner
Trustee shall determine the "value" using the same assumptions and methods.
(g) The Owner Trustee, the Indenture Trustee and the Issuer agree to
cooperate with each other and the Depositor and the Seller and to cause no
unreasonable delay in adjusting the Certificate Percentage Interests of the
Certificates pursuant to this Section 3.14 and the issuing of Capped Funding
Notes in connection with Section 4.01(d) of the Trust Agreement.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
15
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 a majority of the Certificate Percentage Interest of
the Controlling Certificates, 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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
16
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 to prepare or file any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Trust Agreement or any Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any liens
on any part of the Owner Trust Estate that result from actions by, or claims
against, the Owner Trustee that are not related to the ownership or the
administration of the Owner Trust Estate.
Section 4.05. Restrictions. (a) The Owner Trustee shall not take any
action (x) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (y) that, to the actual knowledge of the Owner Trustee, would
result in the Trust becoming taxable as a corporation for federal income tax
purposes. The Certificateholders shall not direct the Owner Trustee to take
action that would violate the provisions of this Section 4.05.
(b) The Owner Trustee shall not convey or transfer any of the Trust's
properties or assets, including those included in the Trust Estate, to any
person unless (a) it shall have received an Opinion of Counsel to the effect
that such transaction will not have any material adverse tax consequence to the
Trust or any Certificateholder and (b) such conveyance or transfer shall not
violate the provisions of Section 3.16(b) of the Indenture.
Section 4.06. Prior Notice to Certificateholders and the Credit
Enhancer with Respect to Certain Matters. With respect to the following matters,
the Owner Trustee shall not take action unless at least 30 days before the
taking of such action, the Owner Trustee shall have notified the
Certificateholders and the Credit Enhancer in writing of the proposed action and
Holders of a majority of the Certificate Percentage Interests of the Controlling
Certificates 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 or the Credit Enhancer have withheld consent or provided
alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of cash distributions due
and owing under the Revolving Credit Loans) and the compromise of any action,
claim or lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of cash distributions due and
owing under the Revolving Credit Loans);
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
17
(b) the election by the Trust to file an amendment to the Certificate of
Trust (unless such amendment is required to be filed under the Business Trust
Statute);
(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 Certificate
Percentage Interests of the Controlling Certificates, and with the consent of
the Credit Enhancer, to (a) remove the Master Servicer under the Servicing
Agreement pursuant to Sections 7.01 and 8.05 thereof or (b) except as expressly
provided in the Basic Documents, sell the Revolving Credit Loans after the
termination of the Indenture. The Owner Trustee shall take the actions referred
to in the preceding sentence only upon written instructions signed by
Certificateholders evidencing not less than a majority of the Certificate
Percentage Interests of the Controlling Certificates and with the consent of the
Credit Enhancer.
Section 4.08. Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Certificateholders and with the consent of the Credit Enhancer and the delivery
to the Owner Trustee by each such Certificateholder of a certificate certifying
that such Certificateholder reasonably believes that the Trust is insolvent.
Section 4.09. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or to refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Trust Agreement or any of the Basic
Documents or would be contrary to Section 2.03, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
Section 4.10. Majority Control. Except as expressly provided herein,
any action that may be taken by the Certificateholders under this Trust
Agreement may be taken by the Certificateholders evidencing not less than a
majority of the Certificate Percentage Interests of the Controlling
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
Certificate Percentage Interests of the Controlling Certificates at the time of
the delivery of such notice.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
18
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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
19
ARTICLE V
Application of Trust Funds
Section 5.01. Distributions. (a) On each Payment Date, the Certificate
Paying Agent shall distribute to the Certificateholders all funds on deposit in
the Certificate Distribution Account and available therefor (as provided in
Section 3.05 of the Indenture), as the Certificate Distribution Amount for such
Payment Date. All distributions made pursuant to this Section shall be
distributed to the Certificateholders on a pro rata basis based on the
Certificate Percentage Interests thereof.
(b) In the event that any withholding tax is imposed on the
distributions (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in accordance
with this Section 5.01. The Certificate Paying Agent is hereby authorized and
directed to retain or cause to be retained from amounts otherwise distributable
to the Certificateholders sufficient funds for the payment of any tax that is
legally owed by the Trust (but such authorization shall not prevent the Owner
Trustee from contesting any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The amount of any withholding tax imposed with respect to a
Certificateholder shall be treated as cash distributed to such Certificateholder
at the time it is withheld by the Certificate Paying Agent. The amount of any
such withholding tax shall be remitted by the Certificate Paying Agent to the
Trust Tax Matters Person, who shall then remit such amounts, as required, to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Certificate Paying Agent may in its sole discretion
withhold such amounts in accordance with this paragraph (b).
(c) Distributions to Certificateholders shall be subordinated to the
creditors of the Trust, including the Noteholders.
(d) Allocations of profits and losses, as determined for federal income
tax purposes, shall be made to the Certificateholders on a pro rata basis based
on the Certificate Percentage Interests thereof.
Section 5.02. Method of Payment. Subject to Section 8.01(c),
distributions required to be made to Certificateholders on any Payment Date as
provided in Section 5.01 shall be made to each Certificateholder of record on
the preceding Record Date either by, in the case of any Certificateholder owning
Certificates, other than the Designated Certificate, having denominations of at
least $1,000,000, in immediately available funds, to the account of such Holder
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Certificate Registrar appropriate
written instructions at least five Business Days prior to such Payment Date or,
if not, by check mailed to such Certificateholder at the address of such Holder
appearing in the Certificate Register. All distributions in respect of the
Designated Certificate shall be made to MATI or its permitted assignees, as the
case may be, by wire transfer, in immediately available funds, to the account of
such entity at a bank or other entity having appropriate facilities therefor, as
specified in written instructions to the Certificate Paying Agent on or prior to
the first Payment Date.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
20
Section 5.03. Signature on Returns. The Owner Trustee shall sign on behalf
of the Trust the tax returns of the Trust.
Section 5.04. Statements to Certificateholders. On each Payment Date,
the Certificate Paying Agent shall send to each Certificateholder the statement
or statements provided to the 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; Tax Elections. The Holder of the
Designated Certificate hereby designates Residential Funding Corporation (the
initial "Trust Tax Matters Person") (i) to cause the Trust to file or cause to
be filed federal and state income tax returns and information statements as a
partnership for each of its taxable years, (ii) to cause the Trust to file or
cause to be filed any information returns or reports and to make any elections
or take any other similar action required for the Trust to be classified as a
partnership for federal income tax purposes, and (iii) as its agent, to act as
"tax matters partner" (as defined in Section 6231(a)(7) of the Code) for the
Trust. Within 90 days after the end of each calendar year, the Trust Tax Matters
Person shall cause the Trust to provide to each Certificateholder an Internal
Revenue Service "K-1" or any successor schedule and supplemental information, if
required by law, to enable each Certificateholder to file its federal and state
income tax returns. The Trust Tax Matters Person may from time to time make and
revoke such tax elections with respect to the Trust as it deems necessary or
desirable in its sole discretion to carry out the business of the Trust or the
purposes of this Trust Agreement if permitted by applicable law. Notwithstanding
the foregoing, an election under Section 754 of the Code shall not be made
without the written consent of the Holders of a majority of the Certificate
Percentage Interests of the Controlling Certificates.
The Trust Tax Matters Person, acting as the tax matters partner of the
Trust, shall (i) act on behalf of the Trust in relation to any tax matter or
controversy involving the Trust and (ii) represent the Trust in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The legal expenses,
including without limitation attorneys' or accountants' fees, and costs of any
such proceeding and any liability resulting therefrom shall be expenses of the
Trust and the Trust Tax Matters Person shall be entitled to reimbursement
therefor out of amounts attributable to the Revolving Credit Loans on deposit in
the Custodial Account as provided by Section 3.03 of the Servicing Agreement
unless such legal expenses and costs are incurred by reason of the Trust Tax
Matters Person's willful misfeasance, bad faith or gross negligence.
If the Designated Certificate is transferred, the new Holder of the
Designated Certificate may designate a new Trust Tax Matters Person.
The Certificateholders agree by their purchase of Certificates to treat
the Trust as a partnership solely for purposes of federal and state income tax,
franchise tax and any other tax measured in whole or in part by income, with the
assets of the partnership being the assets held by the Trust, the partners of
the partnership being the Certificateholders, and the Notes being debt of the
partnership.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
21
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 the Holder of the Designated Certificate 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 Holder of the Designated Certificate, the Depositor, Indenture Trustee or
the Master Servicer under any of the Basic Documents or otherwise and the Owner
Trustee shall have no obligation or liability to perform the obligations of the
Trust under this Trust Agreement or the Basic Documents that are required to be
performed by the Indenture Trustee under the Indenture or the Seller under the
Revolving Credit Loan Purchase Agreement; and
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
22
(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
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
23
(f) No litigation is pending or, to the best of the Owner Trustee's
knowledge, threatened against the Owner Trustee which would prohibit its
entering into this Trust Agreement or performing its obligations under this
Trust Agreement.
Section 6.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the Trust hereunder and in the
performance of its duties and obligations under this Trust Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) if such persons have been selected by the Owner Trustee with
reasonable care, and (ii) may consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it at the
expense of the Trust. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written opinion
or advice of any such counsel, accountants or other such Persons and not
contrary to this Trust Agreement or any Basic Document.
Section 6.05. Not Acting in Individual Capacity. Except as provided in
this Article VI, in accepting the trusts hereby created Wilmington Trust Company
acts solely as Owner Trustee hereunder and not in its individual capacity, and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Trust Agreement or any Basic Document shall
look only to the Owner Trust Estate for payment or satisfaction thereof.
Section 6.06. Owner Trustee Not Liable for Certificates or Related
Documents. The recitals contained herein and in the Certificates (other than the
signatures of the Owner Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Trust Agreement, of any Basic Document or of the
Certificates (other than the signatures of the Owner Trustee on the
Certificates) or the Notes, or of any Related Documents. The Owner Trustee shall
at no time have any responsibility or liability with respect to the sufficiency
of the Owner Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Trust Agreement or the Noteholders
under the Indenture, including, the compliance by the Depositor or the Seller
with any warranty or representation made under any Basic Document or in any
related document
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
24
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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
25
ARTICLE VII
Compensation of Owner Trustee
Section 7.01. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof, and the Owner Trustee shall be
reimbursed for its reasonable expenses hereunder and under the Basic Documents,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Owner Trustee may reasonably
employ in connection with the exercise and performance of its rights and its
duties hereunder and under the Basic Documents which shall be payable by the
Master Servicer pursuant to Section 3.09 of the Servicing Agreement.
Section 7.02. Indemnification. The Holder of the Designated Certificate
shall indemnify, defend and hold harmless the Owner Trustee, both as Owner
Trustee and in its individual capacity, and its successors, assigns, agents and
servants (collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against the Owner Trustee or any Indemnified Party in any way relating to or
arising out of this Trust Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, provided, that:
(i) the Holder of the Designated Certificate shall not
be liable for or required to indemnify an Indemnified Party from and
against Expenses arising or resulting from the Owner Trustee's willful
misconduct, negligence or bad faith or as a result of any inaccuracy of
a representation or warranty contained in Section 6.03 expressly made
by the Owner Trustee;
(ii) with respect to any such claim, the Indemnified
Party shall have given the Holder of the Designated Certificate written
notice thereof promptly after the Indemnified Party shall have actual
knowledge thereof;
(iii) while maintaining control over its own defense, the
Holder of the Designated Certificate shall consult with the Indemnified
Party in preparing such defense; and
(iv) notwithstanding anything in this Agreement to the
contrary, the Holder of the Designated Certificate shall not be liable
for settlement of any claim by an Indemnified Party entered into
without the prior consent of the Holder of the Designated Certificate
which consent shall not be unreasonably withheld.
The indemnities contained in this Section shall survive the resignation
or termination of the Owner Trustee or the termination of this Trust Agreement.
In the event of any claim, action or proceeding for which indemnity will be
sought pursuant to this Section 7.02, the Owner Trustee's choice of legal
counsel, if other than the legal counsel retained by the Owner Trustee
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
26
in connection with the execution and delivery of this Trust Agreement, shall be
subject to the approval of the Holder of the Designated Certificate, which
approval shall not be unreasonably withheld. In addition, upon written notice to
the Owner Trustee and with the consent of the Owner Trustee which consent shall
not be unreasonably withheld, the Holder of the Designated Certificate has the
right to assume the defense of any claim, action or proceeding against the Owner
Trustee.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
27
ARTICLE VIII
Termination of Trust Agreement
Section 8.01. Termination of Trust Agreement. (a) This Trust shall
dissolve 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 2022,
(iii) at the time provided in Section 8.02 or (iv) the purchase by the Master
Servicer of all Revolving Credit Loans pursuant to Section 8.08(a) of the
Servicing Agreement. The bankruptcy, liquidation, dissolution, death or
incapacity of any Certificateholder, other than the Holder of the Designated
Certificate as described in Section 8.02, 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), none of the Depositor, the
Holder of the Designated Certificate or any other Certificateholder shall be
entitled to revoke or terminate the Trust.
(c) Notice of any dissolution of the Trust, specifying the Payment Date
upon which Certificateholders shall surrender their Certificates to the
Certificate Paying Agent for payment of the final distribution and cancellation,
shall be given by the Certificate Paying Agent by letter to Certificateholders
and the Credit Enhancer mailed within five Business Days of receipt of notice of
such dissolution from the Owner Trustee, stating (i) the Payment Date upon or
with respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the Certificate
Paying Agent therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Certificate Payment Agent therein specified.
The Certificate Paying Agent shall give such notice to the Owner Trustee and the
Certificate Registrar at the time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Certificate Paying
Agent shall cause to be distributed to Certificateholders amounts distributable
on such Payment Date pursuant to Section 5.01.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Certificate Paying Agent shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. Subject to applicable laws with respect to escheat of funds, if within
one year following the Payment Date on which final payment of the Certificates
was to have been made pursuant to Section 3.10, all the Certificates shall not
have been surrendered for cancellation, the Certificate Paying Agent may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Trust Agreement. Any funds remaining in the Certificate
Distribution Account after exhaustion
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
28
of such remedies shall be distributed by the Certificate Paying Agent to the
Holder of the Designated Certificate.
(d) Upon the completion of the winding up of the Trust and notification
to the Owner Trustee as to the satisfaction of the obligations of the Trust, the
Owner Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810(c) of the Business Trust Statute, upon which filing
the Trust shall terminate.
Section 8.02. Dissolution upon Bankruptcy of the Holder of the
Designated Certificate. In the event that an Insolvency Event shall occur with
respect to the Holder of the Designated Certificate, the Trust shall be
dissolved in accordance with Section 8.01, 90 days after the date of such
Insolvency Event, unless, before the end of such 90-day period, the Owner
Trustee shall have received written instructions from (a) if no Credit Enhancer
Default shall have occurred and be continuing, Holders of Certificates (other
than the Holder of the Designated Certificate) representing a majority of the
Certificate Percentage Interests of the Certificates (not including the
Certificate Percentage Interest of the Designated Certificate), to the effect
that such Holders disapprove of the termination of the Owner Trust or (b) if a
Credit Enhancer Default shall have occurred and be continuing, (i) each of the
Holders of Certificates (other than the Holder of the Designated Certificate),
(ii) each of the Holders of Term Notes, and (iii) each of the Holders of
Variable Funding Notes (other than Holders of Variable Funding Notes held by the
Seller or an Affiliate of the Seller), to the effect that such Holders
disapprove of the termination of the Owner Trust. Promptly after the occurrence
of any Insolvency Event with respect to the Holder of the Designated Certificate
(A) the Holder of the Designated Certificate shall give the Indenture Trustee,
the Credit Enhancer and the Owner Trustee written notice of such Insolvency
Event, (B) the Owner Trustee shall, upon the receipt of such written notice from
the Holder of the Designated Certificate, give prompt written notice to the
Certificateholders of the occurrence of such event and (C) the Indenture Trustee
shall give prompt written notice of such event to the Noteholders; provided,
however, that any failure to give a notice required by this sentence shall not
prevent or delay, in any manner, a termination of the Owner Trust pursuant to
the first sentence of this Section 8.02. Upon a termination pursuant to this
Section 8.02, the Owner Trustee shall direct the Indenture Trustee promptly to
sell the assets of the Owner Trust (other than the Payment Account) in a
commercially reasonable manner and on commercially reasonable terms. Such sale
shall be effected by the Indenture Trustee, as trustee for the benefit of the
Holders of the Notes, by the liquidation of the assets of the Owner Trust and
distribution thereof as provided in Section 8.03.
Section 8.03. Distribution of Assets on Termination Resulting from an
Event of Liquidation. Upon the dissolution of the Owner Trust caused by the
occurrence of an Event of Liquidation, as provided in Section 8.02, the
Indenture Trustee shall take full account of the assets and liabilities of the
Owner Trust, shall liquidate the assets, in a commercially reasonable manner and
on commercially reasonable terms, as promptly as is consistent with obtaining
the fair value thereof, and shall apply and distribute the proceeds therefrom in
the following order:
first, to the payment of the debts and liabilities of
the Owner Trust to creditors in satisfaction of such debts and
liabilities, and to the payment of necessary expenses of liquidation;
and
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
29
second, for deposit into the Payment Account for
distribution in accordance with Section 5.04(b) of the Indenture.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
30
ARTICLE IX
Successor Owner Trustees and Additional Owner Trustees
Section 9.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute; authorized to exercise corporate trust
powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authorities; and
having (or having a parent that has) long term debt obligations with a rating of
at least A by Moody's and/or Standard & Poor's. If such corporation shall
publish reports of condition at least annually pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Owner Trustee
shall cease to be eligible in accordance with the provisions of this Section
9.01, the Owner Trustee shall resign immediately in the manner and with the
effect specified in Section 9.02.
Section 9.02. Replacement of Owner Trustee. The Owner Trustee may at
any time resign and be discharged from the trusts hereby created by giving 30
days prior written notice thereof to the Credit Enhancer and the Depositor. Upon
receiving such notice of resignation, the Indenture Trustee shall promptly
appoint a successor Owner Trustee with the consent of the Credit Enhancer which
will not be unreasonably withheld, by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Owner Trustee and to the
successor Owner Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Owner Trustee may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 9.01 and shall fail to resign after
written request therefor by the Indenture Trustee, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Indenture Trustee may and shall at the
direction of the Credit Enhancer remove the Owner Trustee. If the Indenture
Trustee shall remove the Owner Trustee under the authority of the immediately
preceding sentence, the Indenture Trustee shall promptly appoint a successor
Owner Trustee acceptable to the Credit Enhancer by written instrument, in
duplicate, one copy of which instrument shall be delivered to the outgoing Owner
Trustee so removed and one copy to the successor Owner Trustee, and shall pay
all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 9.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
31
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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
32
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Owner Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Owner Trustee;
(b) No trustee under this Trust Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Trust Agreement;
and
(c) The Owner Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Trust
Agreement and the conditions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Owner Trustee or separately, as may be provided therein,
subject to all the provisions of this Trust Agreement, specifically including
every provision of this Trust Agreement relating to the conduct of, affecting
the liability of, or affording protection to, the Owner Trustee. Each such
instrument shall be filed with the Owner Trustee.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Trust Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
33
ARTICLE X
Miscellaneous
Section 10.01. Amendments. (a) This Trust Agreement may be amended from
time to time by the parties hereto as specified in this Section 10.01, provided
that any amendment, except as provided in subparagraph (e) below, be accompanied
by an Opinion of Counsel, to the Owner Trustee to the effect that such amendment
(i) complies with the provisions of this Section and (ii) will not cause the
Trust to be subject to an entity level tax.
(b) If the purpose of the amendment (as detailed therein) is to correct
any mistake, eliminate any inconsistency, cure any ambiguity or deal with any
matter not covered (i.e. to give effect to the intent of the parties), it shall
not be necessary to obtain the consent of any Holders, but the Owner Trustee
shall be furnished with (A) a letter from the Rating Agencies that the amendment
will not result in the downgrading or withdrawal of the rating then assigned to
any Security if determined without regard to the Credit Enhancement Instrument
and (B) an Opinion of Counsel to the effect that such action will not adversely
affect in any material respect the interests of any Holders, and the consent of
the Credit Enhancer shall be obtained.
(c) If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Security is outstanding (i.e.
technical in nature), it shall not be necessary to obtain the consent of any
Holder, but the Owner Trustee shall be furnished with an Opinion of Counsel that
such amendment is necessary or helpful to prevent the imposition of such taxes
and is not materially adverse to any Holder and the consent of the Credit
Enhancer shall be obtained.
(d) If the purpose of the amendment is to add or eliminate or change
any provision of the Trust Agreement other than as contemplated in (b) and (c)
above, the amendment shall require (A) the consent of the Credit Enhancer and an
Opinion of Counsel to the effect that such action will not adversely affect in
any material respect the interests of any Holders and (B) either (a) a letter
from the Rating Agency that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to any security if determined without
regard to the Credit Enhancement Instrument or (b) the consent of Holders of a
majority of the Certificate Percentage Interests of the Controlling Certificates
and the Indenture Trustee; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the 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
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
34
of any Holder, but the Owner Trustee shall be furnished with (A) an Opinion of
Counsel to the effect that such action will not adversely affect in any material
respect the interests of any Holders and (B) a letter from the Rating Agencies
that the amendment will not result in the downgrading or withdrawal of the
rating then assigned to any Security, if determined without regard to the Credit
Enhancement Instrument and the consent of the Credit Enhancer shall be obtained.
(g) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee, the
Credit Enhancer and each of the Rating Agencies. It shall not be necessary for
the consent of Certificateholders or the Indenture Trustee pursuant to this
Section 10.01 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Certificateholders provided for in this Trust Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe.
(h) In connection with the execution of any amendment to any agreement
to which the Trust is a party, other than this Trust Agreement, the Owner
Trustee shall be entitled to receive and conclusively rely upon an Opinion of
Counsel to the effect that such amendment is authorized or permitted by the
documents subject to such amendment and that all conditions precedent in the
Basic Documents for the execution and delivery thereof by the Trust or the Owner
Trustee, as the case may be, have been satisfied.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State of the State of Delaware.
Section 10.02. No Legal Title to Owner Trust Estate. The
Certificateholders shall not have legal title to any part of the Owner Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided beneficial interest therein only in accordance with
Articles V and VII. 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 Holder of the Designated Certificate, 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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
35
Section 10.04. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt, if to the Owner Trustee, addressed to Wilmington
Trust Company, Corporate Trust Administration, Xxxxxx Square North, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000; if to the Depositor, addressed to
Residential Funding Mortgage Securities II, Inc., 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000; if to MATI, addressed to
Mortgage Assets Trading Inc., 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: CFO; if to the Credit Enhancer,
addressed to AMBAC Indemnity Corporation, Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance-MBS; if to the Rating
Agencies, addressed to Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and Standard & Poor's Ratings Services, 00
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance
Department - MBS or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Trust Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder receives such notice.
(c) A copy of any notice delivered to the Owner Trustee or the Trust shall
also be delivered to the Depositor.
Section 10.05. Severability. Any provision of this Trust Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 10.06. Separate Counterparts. This Trust Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 10.07. Successors and Assigns. All representations, warranties,
covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, each of the Depositor, the Owner Trustee and its successors and
each Certificateholder and its successors and permitted assigns, all as herein
provided and the Credit Enhancer. Any request, notice, direction, consent,
waiver or other instrument or action by a Certificateholder shall bind the
successors and assigns of such Certificateholder.
Section 10.08. No Petition. The Owner Trustee, by entering into this
Trust Agreement and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against the
Depositor or the Trust, or join in any institution against the Depositor or the
Trust of, any bankruptcy proceedings under any United States
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
36
federal or state bankruptcy or similar law in connection with any obligations to
the Certificates, the Notes, this Trust Agreement or any of the Basic Documents.
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 Holder of the Designated Certificate, the
Seller, the Owner Trustee, the Indenture Trustee or any Affiliate thereof and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated in this Trust Agreement, the Certificates or
the Basic Documents.
Section 10.10. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 10.11. GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.12. Integration. This Trust Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understanding pertaining thereto.
Section 10.13. Rights of Credit Enhancer To Exercise Rights of
Certificateholders. By accepting its Certificate, each Certificateholder agrees
that unless a Credit Enhancer Default exists, the Credit Enhancer shall have the
right to exercise all rights of the Certificateholders under this Agreement
(other than the right to vote to disapprove of a termination of the Trust
pursuant to Section 8.02) without any further consent of the Certificateholders.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
37
IN WITNESS WHEREOF, the Depositor and the Owner Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC.
By:
Name: Xxxxx Xxxx
Title: Vice President
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee, except with respect
to the representations and
warranties contained in Section 6.03
hereof,
By:
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Acknowledged and Agreed:
The Chase Manhattan Bank
Indenture Trustee, as Certificate
Registrar and Certificate
Paying Agent
By:
Name: Xxxxxx Xxxxxx
Title: Vice President
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
38
EXHIBIT A
FORM OF CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO
THE TERM NOTES AND THE VARIABLE FUNDING NOTES AS DESCRIBED IN THE
AGREEMENT (AS DEFINED HEREIN).
[THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT UPON
SATISFACTION OF THE CONDITIONS IN SECTION [3.12(b)] [3.13(b)] OF THE
TRUST AGREEMENT.]
[THIS CERTIFICATE IS ISSUED IN THE CERTIFICATE PERCENTAGE
INTEREST BELOW; HOWEVER, THE CERTIFICATE PERCENTAGE INTEREST OF
THIS CERTIFICATE MAY CHANGE IN ACCORDANCE WITH SECTION 3.14 OF THE
AGREEMENT. THE HOLDER OF THIS CERTIFICATE HEREBY CONSENTS TO
ANY CHANGE IN ITS CERTIFICATE PERCENTAGE INTEREST IN ACCORDANCE
WITH SUCH SECTION.]
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE TRUST AGREEMENT ("THE
AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
CERTIFICATE REGISTRAR SHALL HAVE RECEIVED EITHER (i) A REPRESENTATION LETTER
FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE PROHIBITED TRANSACTION RESTRICTIONS
AND THE FIDUCIARY RESPONSIBILITY REQUIREMENTS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE"), ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, ON
BEHALF OF ANY SUCH PLAN OR ANY PERSON USING "PLAN ASSETS," WITHIN THE MEANING OF
THE DEPARTMENT OF LABOR REGULATION AT 29 C.F.R. ss.2510.3-101, TO ACQUIRE THIS
CERTIFICATE (COLLECTIVELY A "PLAN INVESTOR"), OR (ii) IF THIS CERTIFICATE IS
PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN INVESTOR, AN OPINION OF
COUNSEL, OR A CERTIFICATION IN THE FORM OF EXHIBIT G TO THE AGREEMENT IN LIEU OF
SUCH OPINION OF COUNSEL, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT
IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
OF THE CODE (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) AND WILL NOT
SUBJECT THE COMPANY, THE OWNER TRUSTEE, THE MASTER SERVICER OR THE CERTIFICATE
REGISTRAR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.
THE TRANSFEREE OF THIS CERTIFICATE SHALL BE SUBJECT TO UNITED
STATES FEDERAL WITHHOLDING TAX UNLESS THE CERTIFICATE REGISTRAR SHALL HAVE
RECEIVED A CERTIFICATE OF NON-FOREIGN STATUS CERTIFYING AS TO THE TRANSFEREE'S
STATUS AS A U.S. PERSON OR CORPORATION OR PARTNERSHIP UNDER U.S. LAW.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR
OBLIGATION OF THE SELLER, THE COMPANY, THE MASTER SERVICER, THE INDENTURE
TRUSTEE, OR THE OWNER TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS
EXPRESSLY PROVIDED IN THE AGREEMENT OR THE BASIC DOCUMENTS.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
A-2
Certificate No. ____
Date of Trust Agreement
and Cut-off Date:
March 27, 1997
First Payment Date: Certificate Percentage Interest of
April 21, 1997 this Certificate: ____________%]
Assumed Final Payment Date: CUSIP [_____]
HOME EQUITY LOAN-BACKED CERTIFICATE
SERIES 1997-HS2
evidencing a fractional undivided interest in the Owner Trust Estate,
the property of which consists primarily of the Revolving Credit Loans, created
by RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC. (hereinafter called the
"Company," which term includes any successor entity under the Agreement referred
to below).
This Certificate is payable solely from the assets of the
Owner Trust Estate, and does not represent an obligation of or interest in the
Company, the Seller, the Master Servicer, the Indenture Trustee, the Owner
Trustee or GMAC Mortgage Group, Inc. or any of their affiliates. This
Certificate is not guaranteed or insured by any governmental agency or
instrumentality or by the Company, the Seller, the Master Servicer, the
Indenture Trustee, the Owner Trustee or GMAC Mortgage Group, Inc. or any of
their affiliates. None of the Company, the Seller, the Master Servicer, the
Indenture Trustee, the Owner Trustee, GMAC Mortgage Group, Inc. or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that [name of Holder] is the registered owner
of the Security Balance evidenced by this Certificate (as set forth on the face
hereof) in certain distributions with respect to the Owner Trust Estate,
consisting primarily of the Revolving Credit Loans, created by Residential
Funding Mortgage Securities II, Inc. The Trust (as defined herein) was created
pursuant to a Trust Agreement dated as specified above (as amended and
supplemented from time to time, the "Agreement") between the Company and
Wilmington Trust Company, as owner trustee (the "Owner Trustee," which term
includes any successor entity under the Agreement), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
A-3
Pursuant to the terms of the Agreement, a distribution will be
made on the 20th day of each month or, if such 20th day is not a Business Day,
the Business Day immediately following (the "Payment Date"), commencing on the
first Payment Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
in an amount equal to the pro rata portion evidenced by this Certificate (based
on the Certificate Percentage Interest stated on the face hereon) of the
Certificate Distribution Amount, if any, required to be distributed to Holders
of Certificates on such Payment Date. Distributions on this Certificate will be
made as provided in the Agreement by the Certificate Paying Agent by wire
transfer or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon.
Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Certificate Paying Agent of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency maintained by the Certificate Registrar for that purpose in the
City and State of New York. The initial Security Balance of this Certificate is
set forth above. The Security Balance hereof will be reduced to the extent of
the distributions allocable to principal.
No transfer of this Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Certificate Registrar or the Company may require an opinion of
counsel acceptable to and in form and substance satisfactory to the Certificate
Registrar and the Company that such transfer is exempt (describing the
applicable exemption and the basis therefor) from or is being made pursuant to
the registration requirements of the Securities Act of 1933, as amended, and of
any applicable statute of any state and (ii) the transferee shall execute an
investment letter in the form described in the Agreement and (iii) the
Certificate Registrar shall require the transferee to execute an investment
letter and a Certificate of Non-Foreign Status in the form described by the
Agreement (or if a Certificate of Non-Foreign Status is not provided, an Opinion
of Counsel as described in the Agreement), which investment letter and
certificate or Opinion of Counsel shall not be at the expense of the Trust, the
Owner Trustee, the Certificate Registrar or the Company. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trust, the Owner Trustee, the Company, the Master Servicer and the Certificate
Registrar against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws. In connection
with any such transfer, the Certificate Registrar (unless otherwise directed by
the Company) will also require either (i) a representation letter, in the form
as described by the Agreement, stating that the transferee is not an employee
benefit or other plan subject to the prohibited transaction restrictions or the
fiduciary responsibility requirements of ERISA or Section 4975 of the Code
("Plan"), any person acting, directly or indirectly, on behalf of any such plan
or any person using the "plan assets," within the meaning of the Department of
Labor regulations at 29 C.F.R. ss.2510.3-101, to effect such acquisition
(collectively, a "Plan Investor") or (ii) if such transferee is a Plan Investor,
an opinion of counsel acceptable to and in form and substance satisfactory to
the Company, the Owner Trustee, the Master Servicer and the
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
A-4
Certificate Registrar, or a certification in the form of Exhibit G to the
Agreement, to the effect that the purchase or holding of the Certificate is
permissible under applicable law, will not constitute or result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments) and will not subject the
Company, the Owner Trustee, the Master Servicer or the Certificate Registrar to
any obligation or liability in addition to those undertaken in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Home Equity Loan-Backed Certificates of the Series
specified hereon (herein collectively called the "Certificates"). All terms used
in this Certificate which are defined in the Agreement shall have the meanings
assigned to them in the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Certificate
Distribution Account that have been released from the Lien of the Indenture for
payment hereunder and that neither the Owner Trustee in its individual capacity
nor the Company is personally liable to the Certificateholders for any amount
payable under this Certificate or the Agreement or, except as expressly provided
in the Agreement, subject to any liability under the Agreement.
The Holder of this Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Certificate are
subordinated to the rights of the Noteholders as described in the Indenture,
dated as of March 27, 1997 between Home Equity Loan Trust 1997- HS2 (the
"Trust") and The Chase Manhattan Bank, as Indenture Trustee (the "Indenture").
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Company, or join in any institution against the Company or the Trust
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Certificates, the Notes, the Agreement or any of the Basic Documents.
The Agreement permits the amendment thereof as specified
below, provided that any amendment be accompanied by the consent of the Credit
Enhancer and an Opinion of Counsel to the Owner Trustee to the effect that such
amendment complies with the provisions of the Agreement and will not cause the
Trust to be subject to an entity level tax. If the purpose of the amendment is
to correct any mistake, eliminate any inconsistency, cure any ambiguity or deal
with any matter not covered, it shall not be necessary to obtain the consent of
any Holder, but the Owner Trustee shall be furnished with a letter from the
Rating Agencies that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to any Security if determined without
regard to the Credit Enhancement Instrument and the counsel of the Credit
Enhancer shall be obtained. If the purpose of the amendment is to prevent the
imposition of any federal or state taxes at any time that any Security is
outstanding, it shall not be necessary to obtain the consent of the any Holder,
but the Owner Trustee shall be furnished with an Opinion of Counsel that such
amendment is necessary or helpful to prevent the imposition of such taxes and is
not materially adverse to any Holder and the consent of the Credit Enhancer
shall be obtained. If the purpose of the amendment is to add or eliminate or
change any provision of the Agreement, other than as specified in the preceding
two sentences, the amendment shall require
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
A-5
either (a) a letter from the Rating Agencies that the amendment will not result
in the downgrading or withdrawal of the rating then assigned to any Security, if
determined without regard to the Credit Enhancement Instrument or (b) the
consent of Holders of a majority of the Certificate Percentage Interests of the
Controlling Certificates and the Indenture Trustee; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the time
of, payments received that are required to be distributed on any Certificate
without the consent of the related Certificateholder and the Credit Enhancer, or
(ii) reduce the aforesaid percentage of Certificates the Holders of which are
required to consent to any such amendment without the consent of the Holders of
all such Certificates then outstanding.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registerable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
in the City and State of New York, accompanied by a written instrument of
transfer in form satisfactory to the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Certificate Percentage Interest will be issued to
the designated transferee. The initial Certificate Registrar appointed under the
Agreement is the Owner Trustee.
Except as provided in the Agreement, the Certificates are
issuable only in minimum denominations of a 10.0000% Certificate Percentage
Interest and in integral multiples of a 0.0001% Certificate Percentage Interest
in excess thereof. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations, as requested by the Holder
surrendering the same. This Certificate is issued in the Certificate Percentage
Interest above; however, the Certificate Percentage Interest of this Certificate
may change in accordance with Section 3.14 of the Agreement. The Holder of this
Certificate hereby consents to any change in its Certificate Percentage Interest
in accordance with such Section.
No service charge will be made for any such registration of
transfer or exchange, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee, the Certificate Paying Agent, the
Certificate Registrar and any agent of the Owner Trustee, the Certificate Paying
Agent, or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Owner Trustee, the Certificate Paying Agent, the Certificate Registrar or any
such agent shall be affected by any notice to the contrary.
This Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
The obligations created by the Agreement in respect of the
Certificates and the Trust created thereby shall terminate upon the earliest of
(i) the final distribution of all moneys or other property or proceeds of the
Owner Trust Estate in accordance with the terms of the Indenture and the
Agreement, (ii) the Payment Date in September 2022, (iii) the bankruptcy or
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
A-6
insolvency of the Holder of the Designated Certificate and the satisfaction of
other conditions specified in Section 8.02 of the Agreement or (iv) the purchase
by the Master Servicer of all Revolving Credit Loans pursuant to Section 8.08(a)
of the Servicing Agreement.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, or an
authenticating agent by manual signature, this Certificate shall not be entitled
to any benefit under the Agreement or be valid for any purpose.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
A-7
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Certificate to be duly
executed.
HOME EQUITY LOAN
TRUST 1997-HS2
by WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as Owner
Trustee
Dated:
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By:______________________________
Authorized Signatory
or __________________________________,
as Authenticating Agent of the Trust
By:______________________________
Authorized Signatory
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
A-8
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
to transfer said Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
-----------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
A-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately available funds
to ----------------------------------------------
----------------------------------------------------------------- for the
account of ________________________________________, account number
______________, or, if mailed by check, to ______________.
Applicable statements should be mailed to__________________.
------------------------------
Signature of assignee or agent
(for authorization of wire
transfer only)
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
X-00
XXXXXXX X
TO THE TRUST AGREEMENT
CERTIFICATE OF TRUST
OF
HOME EQUITY LOAN TRUST 1997-HS2
THE UNDERSIGNED, ______________________, as owner trustee (the
"Trustee"), for the purpose of forming a business trust does hereby certify as
follows:
1. The name of the business trust is:
HOME EQUITY LOAN TRUST 1997-HS2
2. The name and business address of the Trustee of the business trust in
the State of Delaware is ______________________, _________________, __________,
Delaware _____.
3. The bu
siness trust reserves the right to amend, alter, change, or
repeal any provision contained in this Certificate of Trust in the manner now or
hereafter prescribed by law.
4. This Certificate of Trust shall be effective upon filing.
THE UNDERSIGNED, being the Trustee hereinbefore named, for the purpose
of forming a business trust pursuant to the provisions of the Delaware Business
Trust Act, does make this certificate of trust, hereby declaring and further
certifying that this is its act and deed and that to the best of the
undersigned's knowledge and belief the facts herein stated are true.
[NAME OF OWNER TRUSTEE],
not in its individual capacity but
solely as owner trustee under a Trust
Agreement dated as of March 27,
1997
By:
Name:
Title:
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
B-1
EXHIBIT C
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including
numbers:
===============================================
===============================================
The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with,
the Owner Trustee and the Depositor (as defined in the Trust Agreement (the
"Agreement"), dated as of _________, ____ between Residential Funding Mortgage
Securities II, Inc., as Depositor and ______________________, as Owner Trustee
pursuant to Section 3.05 of the Agreement and __________________________________
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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
C-1
d. Neither the Buyer nor anyone acting on its behalf
has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of the
1933 Act or require registration pursuant thereto, nor will it act, nor
has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the 1933 Act and has completed
either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified
institutional buyers, understands that such Rule 144A Securities may be
resold, pledged or transferred only (i) to a person reasonably believed
to be a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the 1933 Act.
3. The Buyer represents that:
(i) either (a) or (b) is satisfied, as marked below:
____ a. The Buyer is not any employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the Internal Revenue Code of 1986 (the "Code"), a
Person acting, directly or indirectly, on behalf of any such plan or
any Person acquiring such Certificates with "plan assets" of a Plan
within the meaning of the Department of Labor regulation promulgated at
29 C.F.R. ss.2510.3-101; or
____ b. The Buyer will provide the Depositor, the
Owner Trustee, the Certificate Registrar and the Master Servicer with
either: (x) an opinion of counsel, satisfactory to the Depositor, the
Owner Trustee, the Certificate Registrar and the Master Servicer, to
the effect that the purchase and holding of a Certificate by or on
behalf of the Buyer is permissible under applicable law, will not
constitute or result in a prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments) and will not subject the Depositor, the Owner
Trustee, the Certificate Registrar or the Master Servicer to any
obligation or liability (including liabilities under ERISA or Section
4975 of the Code) in addition to those undertaken in the Trust
Agreement, which opinion of counsel shall not be an expense of the
Depositor, the Owner Trustee, the Certificate Registrar or the Master
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
C-2
Servicer; or (y) in lieu of such opinion of counsel, a certification in the
form of Exhibit G to the Trust Agreement; and
(ii) the Buyer is familiar with the prohibited transaction restrictions
and fiduciary responsibility requirements of Sections 406 and 407 of
ERISA and Section 4975 of the Code and understands that each of the
parties to which this certification is made is relying and will
continue to rely on the statements made in this paragraph 3.
4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
Print Name of Seller Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. No.
Date: Date:
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
C-3
ANNEX 1 TO EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $______________________1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
--------
1 Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
C-4
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15 of
the ------------- Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State or territory or the District
of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ Investment Adviser. The Buyer is an investment adviser registered under the
Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business development company
as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or
H.R.
10 plans.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
C-5
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Rule 144A
Securities are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A Yes No Securities only for
the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Buyer will only purchase for the account of a third party that at
the time is a "qualified institutional buyer" within the meaning of Rule 144A.
In addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
C-6
ANNEX 2 TO EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used.
____ The Buyer owned $___________________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other
than the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
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
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
C-7
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:
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
C-8
EXHIBIT D
FORM OF INVESTOR REPRESENTATION LETTER
, 19
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Re: Home Equity Loan-Backed Certificates
Series 1997-HS2
Ladies and Gentlemen:
(the "Purchaser") intends to purchase from (the
"Seller") a ___% Certificate Percentage Interest of Certificates of Series
1997-HS2 (the "Certificates"), issued pursuant to the Trust Agreement (the
"Trust Agreement"), dated as of March 27, 1997 between Residential Funding
Mortgage Securities II, Inc. as depositor (the "Company") and Wilmington Trust
Company, as owner trustee (the "Owner Trustee"), as acknowledged and agreed by
The Chase Manhattan Bank as Certificate Registrar. All terms used herein and not
otherwise defined shall have the meanings set forth in the Trust Agreement. The
Purchaser hereby certifies, represents and warrants to, and covenants with, the
Company and the Certificate Registrar that:
1. The Purchaser understands that (a) the
Certificates have not been and will not be registered or
qualified under the Securities Act of 1933, as amended (the
"Act") or any state securities law, (b) the Company is not
required to so register or qualify the Certificates, (c) the
Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities
law, or if an exemption from such registration and
qualification is available, (d) the Trust Agreement contains
restrictions regarding the transfer of the Certificates and
(e) the Certificates will bear a legend to the foregoing
effect.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
D-1
2. The Purchaser is acquiring the Certificates for
its own account for investment only and not with a view to or
for sale in connection with any distribution thereof in any
manner that would violate the Act or any applicable state
securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such
matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic
risks of such an investment and (c) an "accredited investor"
within the meaning of Rule 501(a) promulgated pursuant to the
Act.
4. The Purchaser has been furnished with, and has had
an opportunity to review (a) [a copy of the Private Placement
Memorandum, dated , 19 , relating to the Certificates (b)] a
copy of the Trust Agreement and [b] [c] such other information
concerning the Certificates, the Revolving Credit Loans and
the Company as has been requested by the Purchaser from the
Company or the Seller and is relevant to the Purchaser's
decision to purchase the Certificates. The Purchaser has had
any questions arising from such review answered by the Company
or the Seller to the satisfaction of the Purchaser. [If the
Purchaser did not purchase the Certificates from the Seller in
connection with the initial distribution of the Certificates
and was provided with a copy of the Private Placement
Memorandum (the "Memorandum") relating to the original sale
(the "Original Sale") of the Certificates by the Company, the
Purchaser acknowledges that such Memorandum was provided to it
by the Seller, that the Memorandum was prepared by the Company
solely for use in connection with the Original Sale and the
Company did not participate in or facilitate in any way the
purchase of the Certificates by the Purchaser from the Seller,
and the Purchaser agrees that it will look solely to the
Seller and not to the Company with respect to any damage,
liability, claim or expense arising out of, resulting from or
in connection with (a) error or omission, or alleged error or
omission, contained in the Memorandum, or (b) any information,
development or event arising after the date of the
Memorandum.]
5. The Purchaser has not and will not nor has it
authorized or will it authorize any person to (a) offer,
pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any
offer to buy or to accept a pledge, disposition of other
transfer of any Certificate, any interest in any Certificate
or any other similar security from any person in any manner,
(c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other
similar security with any person in any manner, (d) make any
general solicitation by means of general advertising or in any
other manner or (e) take any other action, that (as to any of
(a) through (e) above) would constitute a distribution of any
Certificate under the Act, that would render the disposition
of any Certificate a violation of Section 5 of the Act or any
state securities law, or
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
D-2
that would require registration or qualification pursuant
thereto. The Purchaser will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions
of the Trust Agreement.
6. The Purchaser represents:
(i) that either (a) or (b) is satisfied, as marked below:
____ a. The Purchaser is not any employee benefit
plan subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the Internal Revenue Code of 1986 (the "Code"), a
Person acting, directly or indirectly, on behalf of any such plan or
any Person acquiring such Certificates with "plan assets" of a Plan
within the meaning of the Department of Labor regulation promulgated at
29 C.F.R. ss.2510.3-101; or
____ b. The Purchaser will provide the Depositor, the
Owner Trustee, the Certificate Registrar and the Master Servicer with
either: (x) an opinion of counsel, satisfactory to the Depositor, the
Owner Trustee, the Certificate Registrar and the Master Servicer, to
the effect that the purchase and holding of a Certificate by or on
behalf of the Purchaser is permissible under applicable law, will not
constitute or result in a prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments) and will not subject the Depositor, the Owner
Trustee, the Certificate Registrar or the Master Servicer to any
obligation or liability (including liabilities under ERISA or Section
4975 of the Code) in addition to those undertaken in the Trust
Agreement, which opinion of counsel shall not be an expense of the
Depositor, the Owner Trustee, the Certificate Registrar or the Master
Servicer; or (y) in lieu of such opinion of counsel, a certification in
the form of Exhibit G to the Trust Agreement;
(ii) the Purchaser is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406
and 407 of ERISA and Section 4975 of the Code and understands that each
of the parties to which this certification is made is relying and will
continue to rely on the statements made in this paragraph 6.
7. The Purchaser is acquiring the Certificate for its own behalf and is not
acting as agent or custodian for any other person or entity in connection with
such acquisition; 8. The Purchaser is not a partnership, grantor trust
or S corporation for federal income tax purposes, or, if the Purchaser
is a partnership, grantor trust or S corporation for federal income tax
purposes, the Certificates are not more than 50% of the assets of the
partnership, grantor trust or S corporation.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
D-3
9. The Purchaser is not a non-United States person.
Very truly yours,
By:
Name:
Title:
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
D-4
EXHIBIT E
FORM OF TRANSFEROR REPRESENTATION LETTER
, 19
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Re: Home Equity Loan-Backed Certificates
Series 1997-HS2
Ladies and Gentlemen:
(the "Purchaser") intends to purchase from (the "Seller") a ___%
Certificate Percentage Interest of [Certificates] of Series 1997-HS2 (the
"Certificates"), issued pursuant to the Trust Agreement (the "Trust Agreement"),
dated as of March 27, 1997 between Residential Funding Mortgage Securities II,
Inc. as depositor (the "Company") and Wilmington Trust Company, as owner trustee
(the "Owner Trustee"), as acknowledged and agreed by The Chase Manhattan Bank as
Certificate Registrar. All terms used herein and not otherwise defined shall
have the meanings set forth in the Trust Agreement. The Seller hereby certifies,
represents and warrants to, and covenants with, the Company and the Certificate
Registrar that: Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
E-1
pursuant thereto. The Seller will not act, in any manner set forth in the
foregoing sentence with respect to any Certificate. The Seller has not and will
not sell or otherwise transfer any of the Certificates, except in compliance
with the provisions of the Trust Agreement.
Very truly yours,
(Seller)
By:
Name:
Title:
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
E-2
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("certificate") is delivered
pursuant to Section 3.05 of the Trust Agreement, dated as of _________, ____
(the "Trust Agreement"), between Residential Funding Mortgage Securities II,
Inc., as depositor and ______________________, as Owner Trustee, in connection
with the acquisition of, transfer to or possession by the undersigned, whether
as beneficial owner (the "Beneficial Owner"), or nominee on behalf of the
Beneficial Owner of the Residential Home Equity Loan-Backed Certificates, Series
1997-HS2 (the "Certificate"). Capitalized terms used but not defined in this
certificate have the respective meanings given them in the Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a nominee), and in
all cases sign and otherwise complete Part III. In addition, each holder shall
submit with the Certificate an IRS Form W-9 relating to such holder.
To confirm to the Trust that the provisions of Sections 871, 881 or 1446 of the
Internal Revenue Code (relating to withholding tax on foreign partners) do not
apply in respect of the Certificate held by the undersigned, the undersigned
hereby certifies:
Part I - Complete Either A or B
A.Individual as Beneficial Owner
1. I am (The Beneficial Owner is ) not a non-resident alien for
purposes of U.S. income taxation;
2. My (The Beneficial Owner's) name and home address are:
; and
3. My (The Beneficial Owner's) U.S. taxpayer identification number
(Social Security Number) is .
B.Corporate, Partnership or Other Entity as Beneficial Owner
1. (Name of the Beneficial Owner) is not a
foreign corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Code and Treasury
Regulations;
2. The Beneficial Owner's office address and place of incorporation
(if applicable) is
; and
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
F-1
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.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
F-2
Under penalties of perjury, I declare that I have examined this
certificate and to the best of my knowledge and belief it is true, correct and
complete and will further declare that I will inform the Trust of any change in
the information provided above, and, if applicable, I further declare that I
have the authority* to sign this document.
Name
Title (if applicable)
Signature and Date
*NOTE: If signed pursuant to a power of attorney, the power of attorney
must accompany this certificate.
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
F-3
EXHIBIT G
FORM OF ERISA REPRESENTATION LETTER
_____________, 199__
Residential Funding Mortgage
Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
[CERTIFICATE REGISTRAR]
Re: Residential Funding Mortgage Securities II, Inc.
Home Equity Loan-Backed Certificates, Series 1997-HS2
Dear Sirs:
__________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") a ___% Certificate
Percentage Interest of Residential Mortgage Securities II, Inc. Home Equity
Loan-Backed Certificates, Series 1997-HS2 (the "Certificates"), issued pursuant
to a Trust Agreement (the "Trust Agreement") dated March 27, 1997 among
Residential Funding Mortgage Securities II, Inc., as depositor (the "Depositor")
and Wilmington Trust Company, as trustee (the "Owner Trustee"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned
thereto in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to,
and covenants with, the Depositor, the Owner Trustee, the Certificate Registrar
and the Master Servicer that either:
(1) The Certificates (i) are not being acquired by, and will
not be transferred to, any employee benefit plan within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or other retirement arrangement, including individual
retirement accounts and annuities, Xxxxx plans and bank collective
investment funds and insurance company general or separate accounts in
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
which such plans, accounts or arrangements are invested, that is
subject to Section 406 of ERISA or Section 4975 of the Internal Revenue
Code of 1986 (the "Code") (any of the foregoing, a "Plan"), (ii) are
not being acquired with "plan assets" of a Plan within the meaning of
the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be
investing in plan assets within the meaning of the DOL regulation, 29
C.F.R. ss. 2510.3-101; or
(2) The purchase of the Certificates is permissible under
applicable law, will not constitute or result in any prohibited
transaction under ERISA or Section 4975 of the Code, will not subject
the Depositor or the Trustee to any obligation in addition to those
undertaken in the Trust Agreement and, with respect to each source of
funds being used by the Transferee to acquire the Certificates (each
being referred to as a "Source") and the following statements in either
(a) or (b):
(a) the Transferee is an insurance company and (i)
the Source is assets of its "general account," (ii) the
conditions set forth in PTCE 95-60 issued by the DOL have been
satisfied and the purchase and holding of Certificates by or
on behalf of the Transferee are exempt under PTCE 95-60 and
(iii) the amount of reserves and liabilities for such general
account contracts held by or on behalf of any Plan do not
exceed 10% of the total reserves and liabilities of such
general account plus surplus as of the date hereof (for
purposes of this clause, all Plans maintained by the same
employer (or affiliate thereof) or employee organization are
deemed to be a single Plan) in connection with its purchase
and holding of such Certificates; or
(b) the Transferee is an insurance company and (i)
the Source is assets of its "general account," (ii) the
requirements of Section 401(c) of ERISA and the DOL
regulations to be promulgated thereunder ("401(c)
Regulations") have been satisfied and will continue to be
satisfied and (iii) the Transferee represents that it
understands that the operation of the general account after
December 31, 1998 may affect its ability to continue to hold
the Certificates after the date which is 18 months after the
401(c) Regulations become final and unless a class exemption
issued by the DOL or an exception under Section 401(c) of
ERISA is then available for the continued holding of
Certificates, if the assets of the general account constitute
Plan Assets, it will dispose of the Certificates prior to the
date which is 18 months after the 401(c) Regulations become
final.
(3) The Transferee is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406
and 407 of ERISA and Section 4975 of the Code and understands that each
of the parties to which this certification is made is relying and will
continue to rely on the statements made herein.
Very truly yours,
By:
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
G-2
Name:
Title:
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
G-3
EXHIBIT H
FORM OF REPRESENTATION LETTER
_____________, 199__
Residential Funding Mortgage
Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
[CERTIFICATE REGISTRAR]
Re: Residential Funding Mortgage Securities II, Inc.
Home Equity Loan-Backed Certificates, Series 1997-HS2
Dear Sirs:
__________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") a ___% Certificate
Percentage Interest of Residential Mortgage Securities II, Inc. Home Equity
Loan-Backed Certificates, Series 1997-HS2 (the "Certificates"), issued pursuant
to a Trust Agreement (the "Trust Agreement") dated March 27, 1997 among
Residential Funding Mortgage Securities II, Inc., as depositor (the "Depositor")
and Wilmington Trust Company, as trustee (the "Owner Trustee"). Capitalized
terms used herein and not otherwise defined shall have the meanings assigned
thereto in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to,
and covenants with, the Depositor, the Owner Trustee, the Certificate Registrar
and the Master Servicer that:
(1) the Transferee is acquiring the Certificate for its own behalf and is
not acting as agent or custodian for any other person or entity in connection
with such acquisition; and
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
(2) the Transferee is not a partnership, grantor trust or S
corporation for federal income tax purposes, or, if the Transferee is a
partnership, grantor trust or S corporation for federal income tax
purposes, the Certificates are not more than 50% of the assets of the
partnership, grantor trust or S corporation.
Very truly yours,
By:
Name:
Title:
[NY01B:313787.4] 16069-00394 03/27/97 3:03pm
G-2
