RESIDENTIAL ACCREDIT LOANS, INC.,
as Company,
RESIDENTIAL FUNDING CORPORATION,
as Certificate Administrator,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
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TRUST AGREEMENT
Dated as of October 10, 2003
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Mortgage Trust Certificates, Series 2003-QR13
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................................4
Section 1.01. Defined Terms.....................................................4
ARTICLE II CONVEYANCE OF THE UNDERLYING CERTIFICATE; ORIGINAL ISSUANCE OF
TRUST CERTIFICATES.......................................................16
Section 2.01. Conveyance of the Underlying Certificate.........................16
Section 2.02. Issuance of Trust Certificates...................................18
Section 2.03. Conveyance of Uncertificated REMIC I Regular Interests;
Acceptance by Trustee ...........................................18
Section 2.04. Issuance of Certificates Evidencing Interest in REMIC II.........18
Section 2.05. Purposes and Powers of the Trust Fund............................18
ARTICLE III ADMINISTRATION OF THE UNDERLYING CERTIFICATE; PAYMENTS AND REPORTS
TO CERTIFICATEHOLDERS....................................................19
Section 3.01. Administration of the Trust Fund and the Underlying
Certificate......................................................19
Section 3.02. Collection of Monies.............................................23
Section 3.03. Establishment of Trust Certificate Account; Deposits in
Trust Certificate Account........................................23
Section 3.04. Permitted Withdrawals From the Trust Certificate Account.........24
Section 3.05. Distributions....................................................24
Section 3.06. Statements to Certificateholders.................................26
Section 3.07. Access to Certain Documentation and Information..................28
Section 3.08. Sale of Defective Assets.........................................28
Section 3.09. Modification of Underlying Certificate...........................28
Section 3.10. Distributions of Uncertificated REMIC I Regular Interests........29
Section 3.11. Allocation of Class A Loss Amounts...............................30
Section 3.12. Compliance with Withholding Requirements.........................30
ARTICLE IV THE TRUST CERTIFICATES...................................................30
Section 4.01. The Trust Certificates...........................................30
Section 4.02. Registration of Transfer and Exchange of Trust Certificates......32
Section 4.03. Mutilated, Destroyed, Lost or Stolen Trust Certificates..........34
Section 4.04. Persons Deemed Owners............................................35
ARTICLE V THE TRUSTEE..............................................................35
Section 5.01. Duties of the Trustee............................................35
Section 5.02. Certain Matters Affecting the Trustee............................37
I
Section 5.03. Trustee Not Liable for Trust Certificates or Underlying
Certificate......................................................38
Section 5.04. Trustee May Own Trust Certificates...............................38
Section 5.05. Eligibility Requirements for Trustee.............................38
Section 5.06. Resignation and Removal of the Trustee...........................38
Section 5.07. Successor Trustee................................................39
Section 5.08. Merger or Consolidation of Trustee...............................40
Section 5.09. Appointment of Co-Trustee or Separate Trustee....................40
Section 5.10. Appointment of Office or Agency..................................41
Section 5.11. Certificate Administrator to Pay Trustee's Fees and
Expenses; Indemnification........................................41
Section 5.12. Certain Actions Relating to Underlying Certificate...............42
ARTICLE VI TERMINATION..............................................................42
Section 6.01. Termination......................................................42
Section 6.02. Additional Termination Requirements..............................43
ARTICLE VII THE COMPANY AND THE CERTIFICATE ADMINISTRATOR............................44
Section 7.01. Liability of the Company.........................................44
Section 7.02. Merger, Consolidation or Conversion of the Company...............44
Section 7.03. Limitation on Liability of the Company and Others................45
Section 7.04. Company and Certificate Administrator Not to Resign..............45
Section 7.05. Successor Certificate Administrator..............................46
Section 7.06. Representation and Warranty of Company...........................46
ARTICLE VIII MISCELLANEOUS PROVISIONS.................................................46
Section 8.01. Amendment........................................................46
Section 8.02. Counterparts.....................................................47
Section 8.03. Limitation on Rights of Certificateholders.......................48
Section 8.04. Governing Law....................................................48
Section 8.05. Notices..........................................................48
Section 8.06. Notices to the Rating Agencies...................................49
Section 8.07. Severability of Provisions.......................................49
Section 8.08. Successors and Assigns...........................................49
Section 8.09. Article and Section Headings.....................................50
II
TABLE OF CONTENTS
(CONTINUED)
Exhibit A......Form of Class A Certificate
Exhibit B......Form of Class R Certificate
Exhibit C-1....Form of Transfer Affidavit and Agreement
Exhibit C-2....Form of Transferor Certificate
Exhibit D......Pooling and Servicing Agreement
Exhibit E......Form of Form 10K Certification
Exhibit F......Form of Back-up Certification to Form 10K Certification
III
This TRUST AGREEMENT (this "Agreement"), dated as of October 10, 2003,
is among RESIDENTIAL ACCREDIT LOANS, INC., a Delaware corporation, as the
company (together with its permitted successors and assigns, the "Company"),
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation, as certificate
administrator (together with its permitted successors and assigns, the
"Certificate Administrator"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New
York banking corporation, as Trustee (together with its permitted successors and
assigns, the "Trustee").
PRELIMINARY STATEMENT
The Company intends to sell the Trust Certificates (as defined herein),
to be issued hereunder in seven classes, which in the aggregate will evidence
the entire beneficial ownership interest in the Underlying Certificate (as
defined herein). As provided herein, the REMIC Administrator will make an
election to treat the entire segregated pool of assets described in the
definition of Trust Fund, as a REMIC (as defined herein) for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC I."
The Class R-I Certificates will represent the sole class of "residual interests"
in REMIC I for purposes of the REMIC Provisions (as defined herein) under
federal income tax law. The "latest possible maturity date" (determined solely
for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for
each of the Uncertificated REMIC I Regular Interests (as defined herein) will be
the Distribution Date (as defined herein) in July of 2033.
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Uncertificated REMIC I
Regular Interests as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as REMIC II. The Class R-II
Certificates will represent the sole class of "residual interests" in REMIC II
for purposes of the REMIC Provisions under federal income tax law. The remaining
Trust Certificates (other than the Class R-I Certificates) represent the
"regular interests" in REMIC II. The "latest possible maturity date" (determined
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for each REMIC II Regular Interest shall be the first
Distribution Date that follows the stated maturity date for the Underlying
Certificate.
The following table sets forth the designation, type, Pass-Through Rate
(as defined herein), aggregate initial Certificate Principal Balance (as defined
herein), initial ratings and certain other features of each Class of Trust
Certificate comprising the interests in the Trust Fund (as defined herein).
2
AGGREGATE
INITIAL
CERTIFICATE
PASS-THROUGH PRINCIPAL MINIMUM
DESIGNATION RATE BALANCE FEATURES(1) MOODY'S/S&P DENOMINATIONS(2)
Class A-1(3) 4.00% $ 52,565,000.00 Fixed Aaa/AAA $25,000.00
Rate/PAC/Accretion
Directed/Component
Class A-2 3.20% $ 50,000,000.00 Fixed Aaa/AAA $25,000.00
Rate/PAC/Accretion
Directed
Class A-3 4.00% $ 11,000,000.00 Fixed Aaa/AAA $25,000.00
Rate/PAC/Accretion
Directed
Class A-4 4.00% $ 14,795,123.50 Fixed Rate/Accrual/ Aaa/AAA $25,000.00
Companion
Class A-5(4) 5.50% $ Fixed Aaa/AAA (4)
0.00 Rate/Interest
Only/PAC
Class R-I 4.00% $ Fixed Rate/Residual Aaa/AAA (5)
50.00
Class R-II 4.00% $ Fixed Rate/Residual Aaa/AAA (5)
50.00
_____________
(1) The Class A Certificates shall be Book-Entry Certificates. The Class R
Certificates shall be delivered to the Holders thereof in physical form.
(2) The Trust Certificates, other than the Class A-5 and Class R Certificates,
shall be issuable in minimum dollar denominations as indicated above (by
Certificate Principal Balance) and integral multiples of $1 in excess
thereof.
(3) The Class A-1 Certificates are comprised of the following three components:
INITIAL COMPONENT
COMPONENT CERTIFICATE PRINCIPAL BALANCE PASS-THROUGH RATE DESIGNATIONS
Class A-1-A $20,760,000.00 4.00% Fixed
Rate/PAC/Accretion
Directed
Class A-1-B $10,705,000.00 4.00% Fixed
Rate/PAC/Accretion
Directed
Class A-1-C $21,100,000.00 4.00% Fixed
Rate/PAC/Accretion
Directed
(4) The Class A-5 Certificates will accrue interest on the Notional Amount. The
initial Notional Amount for the Class A-5 Certificates shall be equal to
$7,272,727.27. The Class A-5 Certificates shall be issuable in minimum
denominations of not less than a $2,000,000 notional amount.
(5) The Class R Certificates shall be issuable in minimum denominations of not
less than a 20% Percentage Interest, other than the de minimis portion of
each Class of the Class R Certificates, which will be transferred to the
REMIC Administrator on the Closing Date.
The Underlying Certificate has an aggregate principal balance as
of the Closing Date of $128,360,223.50.
In consideration for its services hereunder, the Certificate
Administrator and the Trustee have been paid an upfront fee.
3
All things necessary to make this Agreement a valid declaration
of trust by the Company in accordance with its terms have been done.
In consideration of the premises and the mutual agreements herein
contained, the Company, the Certificate Administrator and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accretion Directed Certificates: The Class A-1, Class A-2 and Class A-3
Certificates.
Accretion Termination Date: The earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Class A-1, Class A-2 and Class A-3 Certificates has been reduced to zero and
(ii) the Credit Support Depletion Date.
Accrual Distribution Amount: On each Distribution Date on or
prior to the Accretion Termination Date, an amount equal to the aggregate amount
of Accrued Certificate Interest on the Class A-4 Certificates for such date,
which will be added to the Certificate Principal Balance of the Class A-4
Certificates and that amount will be distributed to the holders of the Accretion
Directed Certificates and then to the Class A-4 Certificates in the manner and
priority set forth in Section 3.05 as principal in reduction of the Certificate
Principal Balance of the Accretion Directed Certificates and Class A-4
Certificates. The amount that is added to the Certificate Principal Balance of
the Class A-4 Certificates will accrue interest at a rate of 4.00% per annum. On
each Distribution Date on or after the Accretion Termination Date, the entire
Accrued Certificate Interest on the Class A-4 Certificates for that date will be
payable to the Holders of the Class A-4 Certificates to the extent that payments
are not required to fully reduce the Accretion Directed Certificates to zero on
the Accretion Termination Date; provided, however, that if the Accretion
Termination Date is the Credit Support Depletion Date, the entire Accrual
Distribution Amount for that date will be payable as interest to the holders of
the Class A-4 Certificates.
Accrued Certificate Interest: With respect to any Distribution
Date, an amount equal to (a) in the case of each Class of the Class A
Certificates, other than the Class A-5 Certificates, interest accrued during the
related Interest Accrual Period on the Certificate Principal Balance of the
Trust Certificates of that Class immediately prior to such Distribution Date at
the related Pass-Through Rate and (b) in the case of the Class A-5 Certificates,
interest accrued during the related Interest Accrual Period on the related
Notional Amount immediately prior to such Distribution Date at the
then-applicable Pass-Through Rate on that Class for that Distribution Date; in
each case less any Class A Excess Loss Amount with respect to such Distribution
Date and less interest shortfalls, if any, allocated to the Underlying
Certificate immediately preceding such Distribution Date; including in each
case:
(1) any Prepayment Interest Shortfall to the extent not covered
by the Master Servicer pursuant to the terms of the Pooling and Servicing
Agreement;
4
(2) the interest portions of Realized Losses allocated to the
Underlying Certificate;
(3) the interest portion of any advances that were made with
respect to delinquencies on the Mortgage Loans that were ultimately determined
to be not recoverable by the Servicer in accordance with the Pooling and
Servicing Agreement; and
(4) any other interest shortfalls on the Mortgage Loans not
covered by subordination (as set forth in the Pooling and Servicing Agreement),
including interest shortfalls relating to the Soldiers' and Sailors' Civil
Relief Act of 1940, or similar legislation or regulations.
Such interest shortfalls and Class A Excess Loss Amounts will be
allocated among all of the Trust Certificates in proportion to their respective
amounts of Accrued Certificate Interest payable on such Distribution Date.
Accrued Certificate Interest on each Class of Trust Certificates
will be calculated on the basis of a 360 day year consisting of twelve 30-day
months and will be carried out to at least three decimal places.
Adverse REMIC Event: Shall have the meaning set forth in Section 3.01(f)
hereof.
Affiliate: An "affiliate" of, or person "affiliated" with, a
specific person, is a person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the person specified.
Agreement: This Trust Agreement and all amendments hereof and supplements
hereto.
Available Funds: With respect to any Distribution Date, an amount
equal to the amount received on the Underlying Certificate on such Distribution
Date less amounts withdrawn pursuant to Section 3.04(ii).
Book-Entry Certificate: Any Trust Certificate registered in the
name of the Depository or its nominee, and designated as such in the Preliminary
Statement hereto.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of New York, the State of
Michigan, the State of California or the State of Illinois (and such other state
or states in which the Custodial Account or the Trust Certificate Account are at
the time located) are required or authorized by law or executive order to be
closed.
Certificate Administrator: Residential Funding Corporation, in
its capacity as certificate administrator under this Agreement, or any successor
certificate administrator appointed under the terms of this Agreement.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate, as reflected
on the books of an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository
Participant, if any, and otherwise on the books of the Depository.
5
Certificate Principal Balance: For any Class of Trust
Certificates, other than the Class A-5 Certificates, as of any date of
determination, an amount equal to the initial Certificate Principal Balance of
such Trust Certificate, plus, in the case of the Class A-4 Certificates, an
amount equal to the aggregate Accrued Certificate Interest added to the
Certificate Principal Balance of the Class A-4 Certificates on each Distribution
Date on or prior to the Accretion Termination Date, reduced by the aggregate of
(a) all amounts allocable to principal previously distributed with respect to
such Trust Certificate and (b) any reductions in the Certificate Principal
Balance of such Trust Certificate deemed to have occurred in connection with
allocations of the Class A Loss Amounts to such Class of Trust Certificates. The
Class A-5 Certificates have no Certificate Principal Balance.
Certificate Register: The register maintained pursuant to Section
4.02 hereof which shall provide for the registration of Trust Certificates and
of transfers and exchanges of Trust Certificates, as herein provided.
Certificate Registrar: The Trustee.
Certificateholder or Holder: The person in whose name a Trust
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent or exercising any Voting Rights pursuant to
this Agreement, any Trust Certificate registered in the name of the Company or
any Affiliate shall be deemed not to be an Outstanding Certificate or taken into
account when calculating the Voting Rights of any Certificateholder.
All references herein to "Holder" or "Certificateholder" shall
reflect the rights of Certificate Owners as they may indirectly exercise such
rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Trust Certificate is registered in the Certificate Register.
Class: Collectively, all of the Trust Certificates bearing the same
designation.
Class A Certificate: Any one of the Class X-0, Xxxxx X-0, Class
A-3, Class A-4 or Class A-5 Certificates executed and delivered by the Trustee
substantially in the form annexed hereto as Exhibit A evidencing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions.
Class A Excess Loss Amount: On the Distribution Date on which the
Certificate Principal Balance of the Class A Certificates has been reduced to
zero, the greater of zero and the excess of the Class A Loss Amount not applied
in reduction of such Certificate Principal Balance of the Class A Certificates
over the Accrued Certificate Interest to be paid in respect of such Class A
Certificates.
Class A Loss Amount: With respect to the Class A Certificates and
on each Distribution Date, the excess of the Certificate Principal Balance of
the Class A Certificates over the Underlying Certificate Balance, in each case
after giving effect to distributions on or prior to such Distribution Date.
Class A-1-A Component: The component designated as Class A-1-A of
the Class A-1 Certificate set forth in the table in footnote (3) in the
Preliminary Statement hereto.
6
Class A-1-B Component: The component designated as Class A-1-B of
the Class A-1 Certificate set forth in the table in footnote (3) in the
Preliminary Statement hereto.
Class A-1-C Component: The component designated as Class A-1-C of
the Class A-1 Certificate set forth in the table in footnote (3) in the
Preliminary Statement hereto.
Class R Certificate: Any one of the Class R-I or Class R-II
Certificates executed and delivered hereunder by the Trustee substantially in
the form annexed hereto as Exhibit B, evidencing an interest designated as the
"residual interest" in the Trust Fund for purposes of the REMIC Provisions.
Closing Date: October 10, 2003.
Code: The Internal Revenue Code of 1986, as amended.
Company: Residential Accredit Loans, Inc. or any successors in interest.
Corporate Trust Office: The principal office of the Trustee at which at any
particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
instrument is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx
00000-0000, Attention: Residential Funding Corporation Series 2003-QR13. Credit
Support Depletion Date: The date on which the principal balances of the
2003-QS13 Certificates, Class M and Class B, have been reduced to zero.
Custodial Account: The custodial account or accounts created and
maintained pursuant to Section 3.07 of the Pooling and Servicing Agreement in
the name of a depository institution, as custodian for the holders of the
Underlying Certificate, for the holders of certain other interests in mortgage
loans serviced or sold by the Certificate Administrator or owned by the
Certificate Administrator, into which the amounts set forth in Section 3.07 of
the Pooling and Servicing Agreement shall be deposited directly. Any such
account or accounts shall be an Eligible Account.
Definitive Certificate: Any definitive, fully registered Trust Certificate.
Depository: The Depository Trust Company, or any successor
Depository hereafter named. The nominee of the initial Depository for purposes
of registering those Trust Certificates that are to be Book-Entry Certificates
is Cede & Co. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Securities Exchange Act of 1934, as amended.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Distribution Date: The 25th day of each month, or if such 25th
day is not a Business Day, the next succeeding Business Day, commencing on the
First Distribution Date.
7
Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the debt obligations of which have been
rated by each Rating Agency in its highest rating available, or (ii) an account
or accounts in a depository institution in which such accounts are fully insured
to the limits established by the FDIC, provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Trustee and each Rating Agency) the registered Holders of Trust Certificates
have a claim with respect to the funds in such account or a perfected first
security interest against any collateral securing such funds that is superior to
claims of any other depositors or creditors of the depository institution with
which such account is maintained, or (iii) in the case of the Custodial Account,
a trust account or accounts maintained in the corporate trust department of Bank
One, National Association, or (iv) in the case of the Trust Certificate Account,
a trust account or accounts maintained in the corporate trust division of the
Trustee, or (v) an account or accounts of a depository institution acceptable to
each Rating Agency (as evidenced in writing by each Rating Agency that use of
any such account as the Custodial Account or the Trust Certificate Account will
not reduce the rating assigned to any Class of Trust Certificates by such Rating
Agency below the lower of the then-current rating or the rating assigned to such
Trust Certificates as of the Closing Date by such Rating Agency).
FDIC: The Federal Deposit Insurance Corporation or any successor.
First Distribution Date: October 27, 2003.
Independent: When used with respect to any specified Person, such
a Person who (i) is in fact independent of the Company, (ii) does not have any
direct financial interest in the Company or in an Affiliate, and (iii) is not
connected with the Company as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
Initial Certificate Principal Balance: With respect to each Class
of Trust Certificates, the Certificate Principal Balance of such Class of Trust
Certificates as of the Closing Date, as set forth in the Preliminary Statement
hereto.
Interest Accrual Period: With respect to any Distribution Date
and for all Classes of Trust Certificates, the calendar month preceding the
month in which such Distribution Date occurs.
Interest Distribution Amount: With respect to any Distribution
Date, the aggregate amount of Accrued Certificate Interest (other than the
Accrual Distribution Amount) to be paid to the Certificateholders for such
Distribution Date.
Master Servicer: Residential Funding Corporation, in its capacity
as master servicer under the Pooling and Servicing Agreement, or any successor
master servicer appointed under the terms of the Pooling and Servicing
Agreement.
Maturity Date: With respect to each Class of Trust Certificates
and the Uncertificated REMIC I Regular Interests, July 2033.
Moody's: Xxxxx'x Investors Service, Inc. or any successor thereto.
Mortgage Loans: The mortgage loans in which the Underlying Certificate
evidences a beneficial ownership interest.
8
Non-United States Person: Any Person other than a United States Person.
Notice of Final Distribution: With respect to the Underlying
Certificate, the notice to be provided pursuant to the Pooling and Servicing
Agreement to the effect that final distribution on the Underlying Certificate
shall be made only upon presentation and surrender thereof.
Notice of Termination: Any of the notices given by the Trustee
pursuant to Section 6.01(b).
Notional Amount: As of any date of determination, the Notional
Amount of the Class A-5 Certificates is equal to the product of (i) 1 divided by
6.875 and (ii) the Certificate Principal Balance of the Class A-2 Certificates.
As of the Closing Date, the Notional Amount is equal to $7,272,727.27. Reference
to a Notional Amount with respect to the Class A-5 Certificates is solely for
convenience in specific calculations and does not represent the right to receive
any distributions allocable to principal.
Officer's Certificate: A certificate signed by the Chairman of
the Board, the President or a Vice President or Assistant Vice President, or a
Director or Managing Director, and by the Treasurer, the Secretary, or one of
the Assistant Treasurers or Assistant Secretaries of the Company or the
Certificate Administrator, as the case may be, and delivered to the Trustee, as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to
the Trustee and the Certificate Administrator, who may be counsel for the
Company or the Certificate Administrator, provided that any opinion of counsel
(i) referred to in the definition of "Disqualified Organization" in the Pooling
and Servicing Agreement or (ii) relating to the qualification of any REMIC
formed under the Pooling and Servicing Agreement, this Agreement or in
compliance with the REMIC Provisions must, unless otherwise specified, be an
opinion of Independent counsel.
Outstanding Certificates: With respect to any of the Trust
Certificates, as of the date of determination, all Trust Certificates
theretofore executed and delivered under this Agreement except:
(i) Trust Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Trust Certificates in exchange for which or in lieu of which
other Trust Certificates have been executed and delivered pursuant to this
Agreement unless proof satisfactory to the Trustee is presented that any such
Trust Certificates are held by a holder in due course.
Ownership Interest: As to any Trust Certificate, any ownership or
security interest in such Trust Certificate, including any interest in such
Trust Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
PAC Balance: As of any date of determination, the sum of the
Certificate Principal Balances of the Class A-1, Class A-2 and Class A-3
Certificates.
Pass-Through Rate: For all Classes of Trust Certificates, the per
annum rate set forth in the Pass-Through Rate column in the first table in the
Preliminary Statement hereto.
9
Percentage Interest: With respect to any Trust Certificate (other
than a Class A-5 Certificate or a Class R Certificate), the undivided percentage
ownership interest in the related Class evidenced by such Trust Certificate,
which percentage ownership interest shall be equal to the Initial Certificate
Principal Balance thereof divided by the aggregate Initial Certificate Principal
Balance of all the Trust Certificates of the same Class. With respect to a Class
A-5 Certificate or a Class R Certificate, the interest in distributions to be
made with respect to such Class evidenced thereby, expressed as a percentage, as
stated on the face of each such Trust Certificate.
Permitted Transferee: Any Transferee of a Class R Certificate
other than (i) the United States, any state or any political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
any such governmental unit), (ii) a foreign government, international
organization or any agency or instrumentality of either of the foregoing, (iii)
an organization (except certain farmers' cooperatives described in Section 521
of the Code) which is exempt from tax imposed by Chapter 1 of the Code (unless
such organization is subject to the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381 of the Code, (v) an electing large
partnership under Section 775 of the Code and (vi) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the holding of
an Ownership Interest in a Class R Certificate by such Person may cause the
Trust Fund or any Person having an Ownership Interest in any Class of Trust
Certificates, other than such Person, to incur a liability for any tax imposed
under the Code that would not otherwise be imposed but for the Transfer of an
Ownership Interest in a Class R Certificate to such Person. The terms "United
States", "State" and "international organization" shall have the meanings set
forth in Section 7701 of the Code or successor provisions.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
10
Planned Principal Balance: With respect to the Closing Date and
each Distribution Date, the amount set forth opposite that Distribution Date in
the following table:
PAC SCHEDULE
Closing Date Principal
Balance 113,565,000.00 November 2007 29,722,604.59
October 2003 112,162,641.44 December 2007 28,606,318.18
November 2003 110,645,204.91 January 2008 27,517,284.02
December 2003 109,015,173.84 February 2008 26,454,834.87
January 2004 107,275,532.08 March 2008 25,418,319.75
February 2004 105,429,436.03 April 2008 24,407,103.45
March 2004 103,480,901.67 May 2008 23,420,566.20
April 2004 101,434,760.83 June 2008 22,458,103.29
May 2004 99,296,919.41 July 2008 21,519,124.70
June 2004 97,085,164.86 August 2008 20,652,278.12
July 2004 94,843,941.86 September 2008 19,807,284.31
August 2004 92,639,331.81 October 2008 18,983,598.15
September 2004 90,470,734.34 November 2008 18,180,687.84
October 2004 88,337,558.80 December 2008 17,398,034.57
November 2004 86,239,224.10 January 2009 16,635,132.16
December 2004 84,175,158.58 February 2009 15,891,486.81
January 2005 82,144,799.82 March 2009 15,166,616.77
February 2005 80,147,594.55 April 2009 14,460,052.06
March 2005 78,182,998.43 May 2009 13,771,334.17
April 2005 76,250,475.97 June 2009 13,100,015.81
May 2005 74,349,500.35 July 2009 12,445,660.61
June 2005 72,479,553.29 August 2009 11,822,631.32
July 2005 70,640,124.92 September 2009 11,215,432.28
August 2005 68,830,713.63 October 2009 10,623,662.22
September 2005 67,050,825.95 November 2009 10,046,929.74
October 2005 65,299,976.42 December 2009 9,484,853.09
November 2005 63,577,687.44 January 2010 8,937,059.88
December 2005 61,883,489.16 February 2010 8,403,186.91
January 2006 60,216,968.47 March 2010 7,882,879.91
February 2006 58,577,667.31 April 2010 7,375,793.31
March 2006 56,965,089.80 May 2010 6,881,590.10
April 2006 55,378,795.89 June 2010 6,399,941.52
May 2006 53,818,352.70 July 2010 5,930,526.95
June 2006 52,283,334.37 August 2010 5,498,899.14
July 2006 50,773,321.95 September 2010 5,078,186.71
August 2006 49,287,903.29 October 2010 4,668,105.66
September 2006 47,826,672.94 November 2010 4,268,379.13
October 2006 46,389,232.01 December 2010 3,878,737.18
November 2006 44,975,188.12 January 2011 3,498,916.64
December 2006 43,584,155.24 February 2011 3,128,660.94
January 2007 42,215,753.63 March 2011 2,767,719.96
February 2007 40,869,609.69 April 2011 2,415,849.85
March 2007 39,545,355.92 May 2011 2,072,812.88
April 2007 38,242,630.76 June 2011 1,738,377.31
May 2007 36,961,078.57 July 2011 1,412,317.20
June 2007 35,700,349.44 August 2011 1,115,731.71
July 2007 34,460,099.18 September 2011 826,301.23
August 2007 33,239,989.19 October 2011 543,837.46
September 2007 32,039,686.35 November 2011 268,156.93
30,866,827.03 December 2011 and
October 2007 thereafter 0.00
Pooling and Servicing Agreement: The Series Supplement, dated as
of July 1, 2003 together with the Standard Terms of Pooling and Servicing
Agreement, dated as of March 1, 2003, and attached as Exhibit D hereto, among
the Company, the Certificate Administrator, and the Trustee, as such agreement
is amended from time to time.
11
Prepayment Assumption: The blended percentage of the standard
prepayment assumption and the constant prepayment rate set forth in the
following sentence with respect to the Mortgage Loans. The Prepayment Assumption
assumes a constant prepayment rate of the Mortgage Loans of 10.0% per annum of
the then outstanding principal balance of such Mortgage Loans in the first month
of the life of the mortgage loans, increasing by an additional 1.3636364% per
annum in each succeeding month until the twelfth month, and a constant 25.0% per
annum rate of prepayment thereafter for the life of the Underlying Certificate.
Prepayment Interest Shortfall: As to any Distribution Date and
the Underlying Certificate that received an interest distribution on the related
Distribution Date that was reduced pursuant to the terms of the Pooling and
Servicing Agreement because of a principal prepayment in full on a Mortgage Loan
or Mortgage Loans relating to the Underlying Certificate, the amount of such
reduction.
Principal Distribution Amount: With respect to any Distribution
Date, the balance of the Available Funds (including the Accrual Distribution
Amount) remaining after the Interest Distribution Amount has been distributed.
Rating Agencies: Xxxxx'x and S&P.
Realized Losses: Losses on the Mortgage Loans applied in
reduction of the aggregate principal balance of a 2003-QS13 Certificate that is
not accompanied by a cash payment in respect of such reduction.
Record Date: With respect to any Distribution Date, other than
the First Distribution Date, the close of business on the last day of the month
preceding such day preceding such Distribution Date, and with respect to the
First Distribution Date, the Closing Date.
Regular Certificates: The Class A Certificates.
Related Class: As to any Uncertificated REMIC I Regular Interest,
any related class of Trust Certificates identified as "Related Classes of Trust
Certificates" to such Uncertificated REMIC I Regular Interest in the definition
of Uncertificated REMIC I Regular Interest.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code. As used herein, the term "the REMIC" or
"the REMICs" shall mean one or more of the REMICs created under this Agreement.
REMIC Administrator: Residential Funding Corporation, provided
that if Residential Funding Corporation is found by a court of competent
jurisdiction to no longer be able to fulfill its obligations as REMIC
Administrator under this Agreement, the Certificate Administrator or Trustee
acting as Certificate Administrator shall appoint a successor REMIC
Administrator, subject to assumption of the REMIC Administrator obligations
under this Agreement.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and temporary and final regulations (or, to the extent not
inconsistent with such temporary or final regulations, proposed regulations) and
published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.
12
REMIC I: The segregated pool of assets, with respect to which a
REMIC election is made pursuant to this Agreement, consisting of:
(a) the Underlying Certificate,
(b) all payments on and collections in respect of the Underlying
Certificate due after the Closing Date as shall be on deposit in the Trust
Certificate Account and identified as belonging to the Trust Fund, and
(c) all proceeds of clauses (a) and (b) above.
REMIC I Certificates: The Class R-I Certificates.
REMIC II: The segregated pool of assets consisting of the
Uncertificated REMIC I Regular Interests conveyed in trust to the Trustee for
the benefit of the Holders of each Class of Trust Certificates (other than the
Class R-I Certificates) pursuant to Section 2.03, with respect to which a
separate REMIC election is to be made.
REMIC II Certificates: Any Trust Certificate, other than a Class R-I
Certificate.
REMIC II Regular Certificate: Any REMIC II Certificate, other
than a Class R-II Certificate.
Responsible Officer: When used with respect to the Trustee, any
officer of the Corporate Trust Office of the Trustee, including any managing
director, senior vice president, any vice president, any assistant vice
president, any assistant secretary, any associate with particular responsibility
for this transaction, or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers to
whom, with respect to a particular matter, such matter is referred.
S& P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., or its successor in interest.
Tax Returns: The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of any REMIC formed under the Pooling and Servicing
Agreement and under the REMIC Provisions, together with any and all other
information, reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.
Termination Date: The Distribution Date following the
Distribution Date on which the Underlying Certificate Balance has been reduced
to zero.
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Transfer: Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a Trust
Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest
in a Trust Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership
Interest in a Trust Certificate.
Trust Certificate: Any Class A Certificate or Class R Certificate.
Trust Certificate Account: The separate account or accounts
created and maintained pursuant to Section 3.03 hereof, which shall be entitled
"Deutsche Bank Trust Company Americas, as trustee, in trust for the registered
holders of Residential Accredit Loans, Inc., Mortgage Trust Certificates, Series
2003-QR13" and which must be an Eligible Account. Funds deposited in the Trust
Certificate Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in Article III hereof.
Trustee: Deutsche Bank Trust Company Americas or its successor in
interest, or any successor trustee appointed as herein provided.
Trust Fund: The corpus of the trust created by and to be
administered under this Agreement consisting of: (i) the Underlying Certificate,
(ii) all distributions thereon after but not including the Distribution Date
occurring in September 2003, and (iii) the Trust Certificate Account and such
assets that are deposited therein from time to time, together with any and all
income, proceeds and payments with respect thereto.
2003-QS13 Certificates: Residential Accredit Loans, Inc. Mortgage
Asset-Backed Pass-Through Certificates, Series 2003-QS13.
Uncertificated Accrued Interest: With respect to each
Distribution Date, as to each Uncertificated REMIC I Regular Interest, an amount
equal to the aggregate amount of Accrued Certificate Interest that would result
under the terms of the definition thereof on the Related Classes of Trust
Certificates if the Pass-Through Rate on such Classes were equal to the
Uncertificated Pass-Through Rate on such Uncertificated REMIC I Regular
Interest.
Uncertificated Pass-Through Rate: With respect to each of the
Uncertificated REMIC I Regular Interests, the per annum rate specified in the
definition of Uncertificated REMIC I Regular Interests.
Uncertificated Principal Balance: With respect to each
Uncertificated REMIC I Regular Interest, as defined in the definition of
Uncertificated REMIC I Regular Interest.
14
Uncertificated REMIC I Regular Interest: The interests identified
in the table below, each representing an undivided beneficial ownership interest
in REMIC I, and having the following characteristics:
1. The principal balance of each Uncertificated REMIC I
Regular
Interest identified in the table below shall be the amount identified as the
Aggregate Initial Principal Balance thereof in such table (each, an
"Uncertificated Principal Balance") , minus the sum of (x) the aggregate of all
amounts previously deemed distributed with respect to such interest and applied
to reduce the Uncertificated Principal Balance thereof pursuant to Section
3.10(a)(ii) and (y) the aggregate of all reductions in Uncertificated Principal
Balance deemed to have occurred in connection with Realized Losses that were
previously deemed allocated to the Uncertificated Principal Balance of such
Uncertificated REMIC I Regular Interest pursuant to Section 3.10(d), which
equals the aggregate principal balance of the Classes of Trust Certificates
identified as related to such Uncertificated REMIC I Regular Interest in such
table.
2. The Uncertificated Pass-Through Rate for each
Uncertificated
REMIC I Regular Interest identified in the table below shall be the per annum
rate set forth in the Uncertificated Pass-Through Rate column of such table.
3. The Uncertificated REMIC I Distribution Amount for each
REMIC I
Regular Interest identified in the table below shall be, for any Distribution
Date, the amount deemed distributed with respect to such Uncertificated REMIC I
Regular Interest on such Distribution Date pursuant to the provisions of Section
3.10(a).
UNCERTIFICATED
REMIC I REGULAR UNCERTIFICATED AGGREGATE INITIAL RELATED CLASSES OF TRUST
INTEREST PASS-THROUGH RATE PRINCIPAL BALANCE CERTIFICATES
W 4.00% $67,360,123.50 Class A-1 and Class A-4
X 4.00% $50,000,000.00 Class A-2 and Class A-5
Y 4.00% $11,000,000.00 Class A-3
Uncertificated REMIC I Regular Interest Distribution Amounts:
With respect to each Uncertificated REMIC I Regular Interest, the amount
specified as the Uncertificated REMIC I Regular Interest Distribution Amount
with respect thereto in the definition of Uncertificated REMIC I Regular
Interests.
Underlying Certificate: A certificate that represents a 100%
interest in the 2003-QS13 Certificates, Class A-10.
Underlying Certificate Balance: With respect to the Underlying
Certificate, as of any Distribution Date (following all distributions to be made
with respect to the Underlying Certificate on such Distribution Date), and as of
any date of determination thereafter until the next succeeding Distribution
Date, the outstanding principal balance of the Underlying Certificate,
determined by reference to the Distribution Date Statement sent to the Trustee
as Underlying Certificateholder, relating to such Distribution Date, which is to
be determined in accordance with the terms of the Pooling and Servicing
Agreement.
15
Underlying Certificateholder: The registered owner of the Underlying
Certificate.
Underlying Distribution Date Statement: With respect to the
Underlying Certificate and any Distribution Date, the monthly remittance report
forwarded to the holder thereof with respect to such Distribution Date pursuant
to the terms of the Pooling and Servicing Agreement.
United States Person: A citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
Voting Rights: Ninety-eight percent (98%) of all of the Voting
Rights shall be allocated among Holders of Trust Certificates, other than the
Class A-5 and Class R Certificates, in proportion to the outstanding Certificate
Principal Balances of their respective Trust Certificates; 1% of all Voting
Rights shall be allocated among the Holders of the Class A-5 Certificates, in
accordance with their respective Percentage Interests; and 0.5% and 0.5% of all
Voting Rights shall be allocated among the Holders of the Class R-I Certificates
and Class R-II Certificates, respectively, in accordance with their respective
Percentage Interests.
ARTICLE II
CONVEYANCE OF THE UNDERLYING CERTIFICATE;
ORIGINAL ISSUANCE OF TRUST CERTIFICATES
Section 2.01. Conveyance of the Underlying Certificate.
(a) The Company, concurrently with the execution and delivery hereof, does
hereby sell, transfer, assign, set-over and otherwise convey to the Trustee, in
trust, for the use and benefit of the Certificateholders, without recourse, all
the right, title and interest of the Company in and to the Underlying
Certificate and all other assets constituting the Trust Fund. Such assignment
includes, without limitation, all amounts payable to and all rights of the
Underlying Certificateholder pursuant to the Pooling and Servicing Agreement.
In connection with such transfer and assignment, on the Closing
Date the Company will deliver to, and deposit with, the Trustee the Underlying
Certificate, together with a duly issued and authenticated certificate or
certificates for the Underlying Certificate, evidencing the entire interest in
such Underlying Certificate, with appropriate endorsements and other
documentation sufficient under the Pooling and Servicing Agreement to transfer
such Underlying Certificate to the Trustee.
Notwithstanding the foregoing, to the extent that the Underlying
Certificate is a Book-Entry Certificate, delivery of the Underlying Certificate
will be satisfied if the Company meets the requirements of the Depository to
sell, transfer, assign, set-over and otherwise convey to the Trustee the
Underlying Certificate in accordance with the rules of the Depository and
applicable provisions of the Uniform Commercial Code as in force in the relevant
jurisdiction from time to time.
16
The Trustee hereby acknowledges the receipt by it of the
Underlying Certificate and the other documents and instruments referenced above,
and declares that it holds and will hold such Underlying Certificate, and such
other documents and instruments, and all other assets and documents included in
the Trust Fund, in trust for the exclusive use and benefit of all present and
future Certificateholders.
(b) It is intended that the conveyance by the Company to the Trustee of the
Underlying Certificate as provided for in this Section 2.01 and the
Uncertificated REMIC Regular Interests be construed as a sale by the Company to
the Trustee of the Underlying Certificate and any Uncertificated REMIC Regular
Interests for the benefit of the Certificateholders. Further, it is not intended
that such conveyance be deemed to be a pledge of the Underlying Certificate and
any Uncertificated REMIC Regular Interests by the Company to the Trustee to
secure a debt or other obligation of the Company. Nonetheless, (a) this
Agreement is intended to be and hereby is a security agreement within the
meaning of Articles 8 and 9 of the New York Uniform Commercial Code and the
Uniform Commercial Code of any other applicable jurisdiction; (b) the conveyance
provided for in Section 2.01 shall be deemed to be, and hereby is, a grant by
the Company to the Trustee of a security interest in all of the Company's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to any and all general intangibles, payment
intangibles, accounts, chattel paper, instruments, documents, money, deposit
accounts, certificates of deposit, goods, letters of credit, advices of credit
and investment property and other property of whatever kind or description now
existing or hereafter acquired consisting of, arising from or relating to any of
the following: (A) Underlying Certificate, (B) all amounts payable pursuant to
the holders of the Underlying Certificate in accordance with the terms thereof
of the Pooling and Servicing Agreement, (C) any Uncertificated REMIC Regular
Interests and (D) all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the Trust
Certificate Account, whether in the form of cash, instruments, securities or
other property; (c) the possession by the Trustee or any agent of the Trustee of
the Underlying Certificate or such other items of property as constitute
instruments, money, payment intangibles, negotiable documents, goods, deposit
accounts, letters of credit, advices of credit, investment property,
certificated securities or chattel paper shall be deemed to be "possession by
the secured party," or possession by a purchaser or a person designated by such
secured party, for purposes of perfecting the security interest pursuant to the
Minnesota Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction as in effect (including, without limitation, Sections
8-106, 9-313 and 9-106 thereof); and (d) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, securities intermediaries, bailees or agents of, or persons
holding for (as applicable) the Trustee for the purpose of perfecting such
security interest under applicable law.
(c) The Company, the Certificate Administrator and the Trustee shall, to the
extent consistent with this Agreement, take such reasonable actions as may be
necessary to ensure that, if this Agreement were determined to create a security
interest in the Underlying Certificate and the Uncertificated REMIC Regular
Interests and the other property described above, such security interest would
be determined to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of this
Agreement. Without limiting the generality of the foregoing, the Company shall
prepare and deliver to the Trustee not less than 15 days prior to any filing
date and, the Trustee shall forward for filing, or shall cause to be forwarded
17
for filing, at the expense of the Company, all filings necessary to maintain the
effectiveness of any original filings necessary under the Uniform Commercial
Code as in effect in any jurisdiction to perfect the Trustee's security interest
in or lien on the Underlying Certificate and any Uncertificated REMIC Regular
Interests, as evidenced by an Officers' Certificate of the Company, including
without limitation (x) continuation statements, and (y) such other statements as
may be occasioned by (1) any change of name of the Company or the Trustee (such
preparation and filing shall be at the expense of the Trustee, if occasioned by
a change in the Trustee's name), (2) any change of location of the place of
business or the chief executive office of the Company, or (3) any transfer of
any interest of Residential Funding Corporation or the Company in any
Uncertificated REMIC Regular Interest.
Section 2.02. Issuance of Trust Certificates.
The Trustee acknowledges the transfer, delivery and assignment to
it of the Underlying Certificate, together with the assignment to it of all
other assets included in the Trust Fund, and declares that it holds and will
hold the Underlying Certificate and all other assets included in the Trust Fund
in trust for the benefit of all present and future Certificateholders.
Concurrently with such transfer and delivery, the Trustee has duly executed,
authenticated and delivered, to or upon the order of the Company, the Trust
Certificates in authorized denominations, and registered in such names as the
Company has requested.
Section 2.03. Conveyance of Uncertificated REMIC I Regular Interests; Acceptance
by Trustee . The Company, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign without recourse all the
right, title and interest of the Company in and to the Uncertificated REMIC I
Regular Interests to the Trustee for the benefit of the Holders of each Class of
Trust Certificates (other than the Class R-I Certificates). The Trustee
acknowledges receipt of the Uncertificated REMIC I Regular Interests and
declares that it holds and will hold the same in trust for the exclusive use and
benefit of all present and future Holders of each Class of Trust Certificates
(other than the Class R-I Certificates). The rights of the Holders of each Class
of Trust Certificates (other than the Class R-I Certificates) to receive
distributions from the proceeds of REMIC II in respect of such Classes, and all
ownership interests of the Holders of such Classes in such distributions, shall
be as set forth in this Agreement.
Section 2.04. Issuance of Certificates Evidencing Interest in REMIC II. The
Trustee acknowledges the assignment to it of the Uncertificated REMIC I Regular
Interests and, concurrently therewith and in exchange therefor, pursuant to the
written request of the Company executed by an officer of the Company, the
Trustee has executed and caused to be authenticated and delivered to or upon the
order of the Company, all Classes of Trust Certificates (other than the Class
R-I Certificates) in authorized denominations, which evidence the beneficial
interest in the entire REMIC II.
Section 2.05. Purposes and Powers of the Trust Fund.
The purpose of the trust, as created hereunder, is to engage in
the following activities:
(a) to sell the Trust Certificates to the Company in exchange for
the Underlying Certificate;
18
(b) to enter into and perform its obligations under this
Agreement;
(c) to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and
(d) subject to compliance with this Agreement, to engage in such
other activities as may be required in connection with conservation of the Trust
Fund and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing
activities. The trust shall not engage in any activity other than in connection
with the foregoing or other than as required or authorized by the terms of this
Agreement while any Trust Certificate is outstanding without the consent of the
Certificateholders evidencing a majority of the aggregate Voting Rights of the
Trust Certificates.
ARTICLE III
ADMINISTRATION OF THE UNDERLYING CERTIFICATE;
PAYMENTS AND REPORTS TO CERTIFICATEHOLDERS
Section 3.01. Administration of the Trust Fund and the Underlying Certificate.
(a) The REMIC Administrator shall make an election to treat the Trust Fund as
two REMICs under the Code and, if necessary, under applicable state law. The
assets of each REMIC are set forth in this Agreement. Such election will be made
on Form 1066 or other appropriate federal tax or information return (including
Form 8811) or any appropriate state return for the taxable year ending on the
last day of the calendar year in which the Trust Certificates are issued. For
the purposes of the REMIC elections in respect of the Trust Fund, the Trust
Certificates and interests to be designated as the "regular interests" and sole
class of "residual interests" in each REMIC are set forth below.
The REMIC Administrator shall make an election to treat
the entire
segregated pool of assets described in the definition of Trust Fund as a REMIC
and shall make an election to treat the pool of assets comprised of the
Uncertificated REMIC I Regular Interests as a REMIC for federal income tax
purposes. The Uncertificated REMIC I Regular Interests will be "regular
interests" in REMIC I and the Class R-I Certificates will be the sole class of
"residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein) under the federal income tax law.
The Class A-1, Class A-2, Class A-3, Class A-4 and Class
A-5
Certificates will be "regular interests" in REMIC II, and the Class R-II
Certificates will be the sole class of "residual interests" therein for purposes
of the REMIC Provisions (as defined herein) under federal income tax law.
(b) The Closing Date is hereby designated as the "startup day" of the Trust Fund
within the meaning of Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate representing a
0.01% Percentage Interest in each Class of the Class R Certificates and shall be
designated as "the tax matters person" with respect to each REMIC in the manner
19
provided under Treasury regulations section 1.860F-4(d) and Treasury regulations
section 301.6231(a)(7)-1. The REMIC Administrator, as tax matters person, shall
(i) act on behalf of each REMIC in relation to any tax matter or controversy
involving the Trust Fund and (ii) represent the Trust Fund in any administrative
or judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto. 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 Fund and the
REMIC Administrator shall be entitled to reimbursement therefor out of amounts
attributable to the Underlying Certificate on deposit in the Trust Certificate
Account as provided by Section 3.04 unless such legal expenses and costs are
incurred by reason of the REMIC Administrator's willful misfeasance, bad faith
or gross negligence. If the REMIC Administrator is no longer the Certificate
Administrator hereunder, at its option the REMIC Administrator may continue its
duties as REMIC Administrator and shall be paid reasonable compensation not to
exceed $3,000 per year by any successor certificate administrator hereunder for
so acting as the REMIC Administrator.
(d) The REMIC Administrator shall prepare or cause to be prepared all of the Tax
Returns that it determines are required with respect to each REMIC created
hereunder and deliver such Tax Returns in a timely manner to the Trustee and the
Trustee shall sign and file such Tax Returns in a timely manner. The expenses of
preparing such returns shall be borne by the REMIC Administrator without any
right of reimbursement therefor. The REMIC Administrator agrees to indemnify and
hold harmless the Trustee with respect to any tax or liability arising from the
Trustee's signing of Tax Returns that contain errors or omissions. The Trustee
and Certificate Administrator shall promptly provide the REMIC Administrator
with such information as the REMIC Administrator may from time to time request
for the purpose of enabling the REMIC Administrator to prepare Tax Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a Class R
Certificate such information as is necessary for the application of any tax
relating to the transfer of a Class R Certificate to any Person who is not a
Permitted Transferee, (ii) to the Trustee, and the Trustee shall forward to the
Certificateholders, such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption) and
(iii) to the Internal Revenue Service the name, title, address and telephone
number of the person who will serve as the representative of each REMIC.
(f) The Certificate Administrator and the REMIC Administrator shall take such
actions and shall cause each REMIC created hereunder to take such actions as are
reasonably within the Certificate Administrator's or the REMIC Administrator's
control and the scope of its duties more specifically set forth herein as shall
be necessary or desirable to maintain the status of each REMIC as a REMIC under
the REMIC Provisions (and the Trustee shall assist the Certificate Administrator
and the REMIC Administrator, to the extent reasonably requested by the
Certificate Administrator and the REMIC Administrator to do so). The Certificate
Administrator and the REMIC Administrator shall not knowingly or intentionally
take any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action reasonably within their respective control
that, under the REMIC Provisions, if taken or not taken, as the case may be,
could (i) endanger the status of any portion of any REMIC formed under this
Agreement as a REMIC or (ii) result in the imposition of a tax upon any such
REMIC (including but not limited to the tax on prohibited transactions as
20
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) (either such event, in the
absence of an Opinion of Counsel or the indemnification referred to in this
sentence, an "Adverse REMIC Event") unless the Certificate Administrator or the
REMIC Administrator, as applicable, has received an Opinion of Counsel (at the
expense of the party seeking to take such action or, if such party fails to pay
such expense, and the Certificate Administrator or the REMIC Administrator, as
applicable, determines that taking such action is in the best interest of the
Trust Fund and the Certificateholders, at the expense of the Trust Fund, but in
no event at the expense of the Certificate Administrator, the REMIC
Administrator or the Trustee) to the effect that the contemplated action will
not, with respect to each REMIC created hereunder, endanger such status or,
unless the Certificate Administrator, the REMIC Administrator or both, as
applicable, determine in its or their sole discretion to indemnify the Trust
Fund against the imposition of such a tax, result in the imposition of such a
tax. Wherever in this Agreement a contemplated action may not be taken because
the timing of such action might result in the imposition of a tax on the Trust
Fund, or may only be taken pursuant to an Opinion of Counsel that such action
would not impose a tax on the Trust Fund, such action may nonetheless be taken
provided that the indemnity given in the preceding sentence with respect to any
taxes that might be imposed on the Trust Fund has been given and that all other
preconditions to the taking of such action have been satisfied. The Trustee
shall not take or fail to take any action (whether or not authorized hereunder)
as to which the Certificate Administrator or the REMIC Administrator, as
applicable, has advised it in writing that it has received an Opinion of Counsel
to the effect that an Adverse REMIC Event could occur with respect to such
action. In addition, prior to taking any action with respect to any REMIC
created hereunder or any related assets thereof, or causing any such REMIC to
take any action, which is not expressly permitted under the terms of this
Agreement, the Trustee will consult with the Certificate Administrator or the
REMIC Administrator, as applicable, or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
any such REMIC, and the Trustee shall not take any such action or cause any such
REMIC to take any such action as to which the Certificate Administrator or the
REMIC Administrator, as applicable, has advised it in writing that an Adverse
REMIC Event could occur. The Certificate Administrator or the REMIC
Administrator, as applicable, may consult with counsel to make such written
advice, and the cost of same shall be borne by the party seeking to take the
action not expressly permitted by this Agreement, but in no event at the expense
of the Certificate Administrator or the REMIC Administrator. At all times as may
be required by the Code, the Certificate Administrator will to the extent within
its control and scope of its duties more specifically set forth herein, maintain
substantially all of the assets of each REMIC created hereunder as "qualified
mortgages" as defined in Section 860G(a)(3) of the Code and "permitted
investments" as defined under Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of any
REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on "net
income from foreclosure property" of any such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the startup
day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Certificate Administrator, if such tax
arises out of or results from a breach by the Certificate Administrator of any
of its obligations under this Agreement or the Certificate Administrator has in
its sole discretion determined to indemnify the Trust Fund against such tax,
(ii) to the Trustee, if such tax arises out of or results from a breach by the
Trustee of any of its obligations under this Article III, (iii) to the REMIC
Administrator, if in its sole discretion it has determined to indemnify the
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Trust Fund for such tax; or (iv) otherwise against amounts on deposit in the
Trust Certificate Account as provided hereunder and on the Distribution Date(s)
following such reimbursement the aggregate of such taxes shall be allocated in
reduction of the Accrued Certificate Interest on each Class entitled thereto in
the same manner as if such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Certificate Administrator shall, for federal income tax
purposes, maintain books and records with respect to each REMIC created
hereunder on a calendar year and on an accrual basis or as otherwise may be
required by the REMIC Provisions.
(i) Following the startup day for the REMIC, neither the Certificate
Administrator nor the Trustee shall accept any contributions of assets to any
REMIC created hereunder unless (subject to Section 3.01(f) hereof) the
Certificate Administrator and the Trustee shall have received an Opinion of
Counsel (at the expense of the party seeking to make such contribution) to the
effect that the inclusion of such assets in such REMIC will not cause the REMIC
to fail to qualify as a REMIC at any time that any Trust Certificates are
outstanding or subject the REMIC to any tax under the REMIC Provisions or other
applicable provisions of federal, state and local law or ordinances.
(j) Neither the Certificate Administrator nor the Trustee shall (subject to
Section 3.01(f) hereof) enter into any arrangement by which any REMIC created
hereunder will receive a fee or other compensation for services nor permit any
such REMIC to receive any income from assets other than "qualified mortgages" as
defined in Section 860G(a)(3) of the Code or "permitted investments" as defined
in Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the Certificate
Principal Balance of each Class of Trust Certificates (other than the Class A-5
Certificates) representing a regular interest in the applicable REMIC and the
rights to the Class A-5 Certificates represented by the Class A-5 Certificate
would be reduced to zero is the Maturity Date for each such Trust Certificate.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall prepare
and file with the Internal Revenue Service Form 8811, "Information Return for
Real Estate Mortgage Investment Conduits (REMIC) and Issuers of Collateralized
Debt Obligations" for each REMIC created hereunder.
(m) Neither the Certificate Administrator nor the Trustee shall (i) sell,
dispose of or substitute for the Underlying Certificate (except in connection
with (A) the default, imminent default or foreclosure of the Underlying
Certificate, (B) the bankruptcy of either REMIC created hereunder, or (C) the
termination of the trust fund relating to the Underlying Certificate pursuant to
Article IX of the Pooling and Servicing Agreement), (ii) acquire any assets for
either REMIC, (iii) sell or dispose of any investments in the Trust Certificate
Account for gain nor accept any contributions to either REMIC after the Closing
Date unless it has received an Opinion of Counsel that such sale, disposition,
substitution or acquisition will not (A) affect adversely the status of either
REMIC as a REMIC or (B) cause either REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
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(n) The Trustee agrees to indemnify the Trust Fund, the Company, the REMIC
Administrator and the Certificate Administrator for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Company or the Certificate Administrator, as a
result of a breach of the Trustee's covenants set forth in Article V or this
Article III.
(o) The REMIC Administrator agrees to indemnify the Trust Fund, the Company, the
Certificate Administrator and the Trustee for any taxes and costs (including,
without limitation, any reasonable attorneys' fees) imposed on or incurred by
the Trust Fund, the Company, the Certificate Administrator or the Trustee, as a
result of a breach of the REMIC Administrator's covenants set forth in this
Article III with respect to compliance with the REMIC Provisions, including
without limitation, any penalties arising from the Trustee's execution of Tax
Returns prepared by the REMIC Administrator that contain errors or omissions;
provided, however, that such liability will not be imposed to the extent such
breach is a result of an error or omission in information provided to the REMIC
Administrator by the Certificate Administrator in which case Section 3.01(p)
will apply.
(p) The Certificate Administrator agrees to indemnify the Trust Fund, the
Company, the REMIC Administrator and the Trustee for any taxes and costs
(including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Company, the REMIC Administrator or the Trustee,
as a result of a breach of the Certificate Administrator's covenants set forth
in this Article III with respect to compliance with the REMIC Provisions,
including without limitation, any penalties arising from the Trustee's execution
of Tax Returns prepared by the Certificate Administrator that contain errors or
omissions.
Section 3.02. Collection of Monies.
Except as otherwise provided in Section 6.01, upon its receipt of
a Notice of Final Distribution, the Trustee shall present and surrender the
Underlying Certificate, for final payment thereon in accordance with the terms
and conditions of Pooling and Servicing Agreement and such Notice of Final
Distribution. The Trustee shall promptly deposit in the Trust Certificate
Account the final distribution received upon presentation and surrender of the
Underlying Certificate.
Section 3.03. Establishment of Trust Certificate Account; Deposits in Trust
Certificate Account.
(a) The Trustee shall establish and maintain the Trust Certificate Account. The
Trustee shall cause the following payments and collections in respect of the
Underlying Certificate to be deposited directly into the Trust Certificate
Account:
(i) all distributions due and received on the Underlying Certificate subsequent
to the Closing Date;
(ii) any amounts received in connection with the sale of the Underlying
Certificate pursuant to Section 6.01 in accordance with a plan of complete
liquidation of the Trust Fund; and
(iii) any other amounts specifically required to be deposited in the Trust
Certificate Account hereunder.
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The foregoing requirements for deposit in the Trust Certificate
Account shall be exclusive.
(b) Funds in the Trust Certificate Account shall be held uninvested.
Section 3.04. Permitted Withdrawals From the Trust Certificate Account.
The Trustee may from time to time withdraw funds from the Trust
Certificate Account for the following purposes:
(i) to make distributions in the amounts and in the manner provided for in
Section 3.05;
(ii) to reimburse the Certificate Administrator, Company or the Trustee for
expenses incurred by and reimbursable to the Certificate Administrator, Company
or the Trustee pursuant to Section 3.01(c) or 7.03 or as otherwise permitted
under this Agreement; and
(iii) to clear and terminate the Trust Certificate Account upon the termination
of this Agreement.
Section 3.05. Distributions.
(a) On each Distribution Date the Trustee shall distribute, based on information
received from the Certificate Administrator, to each Certificateholder of record
on the related Record Date (other than as provided in Section 6.01 respecting
the final distribution) either in immediately available funds (by wire transfer
or otherwise) to the account of such Certificateholder at a bank or other entity
having appropriate facilities therefor, if such Certificateholder has so
notified the Trustee, or, if such Certificateholder has not so notified the
Trustee by the Record Date, by check mailed to such Certificateholder at the
address of such Holder appearing in the Certificate Register such
Certificateholder's share (which shall be based on the aggregate of the
Percentage Interests represented by Trust Certificates of the applicable Class
held by such Holder) of the following amounts, in the following order of
priority (subject to the provisions of Section 3.05(a)(iii) below), in each case
to the extent of the Available Funds remaining:
(i) (A) Prior to the occurrence of the Accretion Termination Date to the
Class A Certificates (other than the Class A-4 Certificates), on a pro rata
basis, any Accrued Certificate Interest payable on such Trust Certificates with
respect to such Distribution Date, plus any Accrued Certificate Interest thereon
remaining unpaid from any previous Distribution Date, and (B) on or after the
occurrence of the Accretion Termination Date, to the Class A Certificates, on a
pro rata basis, any Accrued Certificate Interest payable on such Trust
Certificates with respect to such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous Distribution
Date.
(ii) Prior to the occurrence of the Credit Support Depletion Date, from the
Principal Distribution Amount for that Distribution Date shall be applied in the
following order of priority:
(A) first, to the Class R Certificates, on a pro rata basis, until the
Certificate Principal Balance of the Class R Certificates have been reduced to
zero;
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(B) second, an amount equal to the excess of the
PAC
Balance over the Planned Principal Balance for that Distribution Date shall be
applied sequentially as follows:
(1) to the Class A-1-A Component, until the Certificate Principal Balance
of the Class A-1-A Component has been reduced to zero;
(2) to the Class A-1-B Component and the Class A-2 Certificates, on a pro
rata basis in accordance with their respective Certificate Principal Balances,
until the Certificate Principal Balances of the Class A-1-B Component and Class
A-2 Certificates have been reduced to zero;
(3) to the Class A-1-C Component and the Class A-3 Certificates, on a pro
rata basis in accordance with their respective Certificate Principal Balances,
until the Certificate Principal Balances of the Class A-1-C Component and Class
A-3 Certificates have been reduced to zero;
(C) third, to the Class A-4 Certificates, until the Certificate Principal
Balance of the Class A-4 Certificates have been reduced to zero.
(D) fourth, any remaining Principal Distribution Amount shall be applied as
follows:
(1) to the Class A-1-A Component, until the Certificate Principal Balance
of the Class A-1-A Component has been reduced zero;
(2) to the Class A-1-B Component and the Class A-2 Certificates, on a pro
rata basis in accordance with their respective Certificate Principal Balances,
until the Certificate Principal Balances of the Class A-1-B Component and Class
A-2 Certificates have been reduced to zero;
(3) to the Class A-1-C Component and the Class A-3 Certificates, on a pro
rata basis in accordance with their respective Certificate Principal Balances,
until the Certificate Principal Balances of the Class A-1-C Component and Class
A-3 Certificates have been reduced to zero; and
(iii) On or after the occurrence of the Credit Support Depletion Date, all
priorities relating to distributions as described in clause (ii) above relating
to principal among the Class A Certificates, will be disregarded, and the
Principal Distribution Amount (including the Accrual Distribution Amount) will
be distributed to the Class A Certificates remaining, other than the Class A-5
Certificates, pro rata in accordance with their respective outstanding
Certificate Principal Balances and the Interest Distribution Amount will be
distributed pursuant to clause (a)(i) above.
(b) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be solely
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm") for which it acts as agent. Each brokerage
firm shall be responsible for disbursing funds to the Certificate Owners that it
represents. None of the Trustee, the Certificate Registrar, the Company or the
Certificate Administrator shall have any responsibility therefor.
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(c) Except as otherwise provided in Section 6.01, if the Certificate
Administrator anticipates that a final distribution with respect to any Class of
Trust Certificates will be made on the next Distribution Date, the Certificate
Administrator shall, no later than the fifteen days prior to such final
distribution, notify the Trustee and the Trustee shall, no later than two (2)
Business Days after such notification, mail on such date to each Holder of such
Class of Trust Certificates a notice to the effect that: (i) the Trustee
anticipates that the final distribution with respect to such Class of Trust
Certificates will be made on such Distribution Date but only upon presentation
and surrender of such Trust Certificates at the office of the Trustee specified
therein or as otherwise specified therein, and (ii) no interest shall accrue on
such Trust Certificates from and after the end of the related Interest Accrual
Period. In the event that Certificateholders required to surrender their Trust
Certificates pursuant to Section 6.01(b) do not surrender their Trust
Certificates for final cancellation, the Trustee shall cause funds distributable
with respect to such Trust Certificates to be withdrawn from the Trust
Certificate Account and credited to a separate escrow account for the benefit of
such Certificateholders as provided in Section 6.01(b). The funds in such escrow
account shall not be invested.
(d) On each Distribution Date preceding the Accretion Termination Date, Accrued
Certificate Interest that would otherwise be distributed to the Class A-4
Certificates as interest will be added to the Certificate Principal Balance of
the Class A-4 Certificates and such amount will thereafter accrue interest at a
rate of 4.00% per annum. On the Accretion Termination Date, the Accrued
Certificate Interest on the Class A-4 Certificates for such date will be payable
to the holders of the Class A-1, Class A-2 and the Class A-3 Certificates as a
distribution of principal pursuant to Section 3.05(a) until the Certificate
Principal Balances thereof have been reduced to zero, any such amount will be
added to the Certificate Principal Balance of the Class A-4 Certificates, and
any remaining amount of Accrued Certificate Interest will be paid to the holders
of the Class A-4 Certificates as a distribution of interest and will not be
added to the Certificate Principal Balance thereof; provided, however, if the
Accretion Termination Date is the Credit Support Depletion Date, the entire
amount of Accrued Certificate Interest on the Class A-4 Certificates for such
date will be payable to the holders of the Class A-4 Certificates as a
distribution of interest and will not be added to the Certificate Principal
Balance thereof.
Section 3.06. Statements to Certificateholders.
(a) Concurrently with each distribution charged to the Trust
Certificate Account and with respect to each Distribution Date the Certificate
Administrator shall forward to the Trustee and the Trustee shall either forward
by mail or make available to each Holder and the Company, via the Trustee's
internet website, a statement (and at its option, any additional files
containing the same information in an alternative format) setting forth the
following information as to each Class of Trust Certificates:
(i) the Available Funds for such Distribution Date;
(ii) with respect to such Distribution Date, the aggregate amount of Accrued
Certificate Interest, the Pass-Through Rate and the aggregate Principal
Distribution Amount and the amounts of principal and interest distributed to the
Certificateholders of each Class of Trust Certificates on such Distribution Date
pursuant to Section 3.05;
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(iii) the aggregate amount of distributions on the Class R Certificate on such
Distribution Date pursuant to Section 3.05, if any;
(iv) the Certificate Principal Balance or Notional Amount, as applicable, of
each Class of the Class A Certificates after giving effect to distributions of
principal of such Trust Certificates on such Distribution Date;
(v) the Underlying Certificate Balance as of such Distribution Date, after
giving effect to the distribution of principal made thereon and the amount of
any Realized Losses with respect to the Underlying Certificate applied to reduce
the Underlying Certificate Balance thereof on such Distribution Date;
(vi) the Accrual Distribution Amount ; and
(vii) the amount of any reductions in the Certificate Principal Balance of the
Class A Certificates by the Class A Loss Amount and the Class A Excess Loss
Amount, if any.
The Trustee shall mail to each Holder that requests a paper copy
by telephone a paper copy via first class mail. The Trustee may modify the
distribution procedures set forth in this Section 3.06 provided that such
procedures are no less convenient for the Certificateholders. The Trustee shall
provide prior notification to the Company, the Certificate Administrator and the
Certificateholders regarding any such modification. In addition, the Certificate
Administrator shall provide to any manager of a trust fund consisting of some or
all of the Trust Certificates, upon reasonable request, such additional
information as is reasonably obtainable by the Certificate Administrator at no
additional expense to the Certificate Administrator.
(b) In addition, the Trustee promptly will furnish to
Certificateholders copies of any notices, statements, reports or other
communications including, without limitation, the Underlying Distribution Date
Statements, received by the Trustee as the Underlying Certificateholder.
(c) Within a reasonable period of time after the end of each
calendar year, the Certificate Administrator shall prepare, or cause to be
prepared, and shall forward, or cause to be forwarded, to each Person who at any
time during the calendar year was the Holder of a Trust Certificate, other than
a Class R Certificate, a statement containing the information set forth in
clause (a)(ii) above aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Certificate Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Certificate
Administrator pursuant to any requirements of the Code.
(d) Within a reasonable period of time after the end of each
calendar year, the Certificate Administrator shall prepare, or cause to be
prepared, and shall forward, or cause to be forwarded, to each Person who at any
time during the calendar year was the Holder of a Class R Certificate, a
statement containing the applicable distribution information provided pursuant
to this Section (a)(iii) aggregated for such calendar year or applicable portion
thereof during which such Person was the Holder of a Class R Certificate. Such
obligation of the Certificate Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Certificate Administrator pursuant to any requirements of the
Code.
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(e) The Certificate Administrator shall, on behalf of the Company
and in respect of the Trust Fund, sign and cause to be filed with the Securities
and Exchange Commission any periodic reports required to be filed under the
provisions of the Exchange Act, and the rules and regulations of the Commission
thereunder. In connection with the preparation and filing of such periodic
reports, the Trustee shall timely provide to the Certificate Administrator (i) a
list of Certificateholders as shown on the Certificate Register as of the end of
each calendar year, (ii) copies of all pleadings, other legal process and any
other documents relating to any claims, charges or complaints involving the
Trustee, as trustee hereunder, or the Trust Fund that are received by the
Trustee, (iii) notice of all matters that, to the actual knowledge of a
Responsible Officer of the Trustee, have been submitted to a vote of the
Certificateholders, other than those matters that have been submitted to a vote
of the Certificateholders at the request of the Company or the Certificate
Administrator, and (iv) notice of any failure of the Trustee to make any
distribution to the Certificateholders as required pursuant to this Agreement.
Neither the Certificate Administrator nor the Trustee shall have any liability
with respect to the Certificate Administrator's failure to properly prepare or
file such periodic reports resulting from or relating to the Certificate
Administrator's inability or failure to obtain any information not resulting
from the Certificate Administrator's own negligence or willful misconduct. Any
Form 10-K filed with the Commission in connection with this Section 3.06(e)
shall include a certification, signed by the senior officer in charge of the
servicing functions of the Certificate Administrator, in the form attached as
Exhibit E hereto or such other form as may be required or permitted by the
Commission (the "Form 10-K Certification"), in compliance with Rules 13a-14 and
15d-14 under the Exchange Act and any additional directives of the Commission.
In connection with the Form 10-K Certification, the Trustee shall provide the
Certificate Administrator with a back-up certification substantially in the form
attached hereto as Exhibit F. This Section 3.06(e) may be amended in accordance
with this Agreement without the consent of the Certificateholders.
Section 3.07. Access to Certain Documentation and Information.
The Trustee shall provide to the Certificateholders access to the
Trust Certificates and all reports, documents and records maintained by the
Trustee in respect of its duties hereunder, such access being afforded without
charge but only upon reasonable written request no less than two Business Days
prior to such access and during normal business hours at offices designated by
the Trustee.
Section 3.08. Sale of Defective Assets.
Upon the discovery by, or written notice to, the Company or the
Trustee that the Underlying Certificate is not a REMIC regular interest or that
any other asset of the REMIC is not a permitted asset of the REMIC, the party
discovering such fact shall give prompt written notice to the other party. The
Trustee shall sell such Underlying Certificate (or other asset, as the case may
be) upon the terms and at the direction of the Company within 90 days of such
discovery and any tax resulting therefrom not borne by the Trustee pursuant to
Article V hereof shall be payable out of the Trust Fund.
Section 3.09. Modification of Underlying Certificate
Notwithstanding any contrary provision herein, the Trustee will
not permit the modification of the Underlying Certificate unless (a) such
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modification is in accordance with the Pooling and Servicing Agreement and (b)
the Trustee has received an Opinion of Counsel (which shall not be an expense of
the Trustee) that such modification would not endanger the status of the REMIC
as a REMIC.
Section 3.10. Distributions of Uncertificated REMIC I Regular Interests.
(a) On each Distribution Date the Trustee shall be deemed to distribute to
itself, as the holder of the Uncertificated REMIC I Regular Interests, the
following amounts in the following order of priority to the extent of the
Available Distribution Amount reduced by distributions made to the Class R-I
Certificates pursuant to Section 3.05(a):
(i) Uncertificated Accrued Interest on the Uncertificated REMIC I Regular
Interests for such Distribution Date, plus any Uncertificated Accrued Interest
thereon remaining unpaid from any previous Distribution Date; and
(ii) in accordance with the priority set forth in Section 3.10(b), an amount
equal to the sum of the amounts in respect of principal distributable on each
Class of Trust Certificates (other than the Class R-I Certificates) under
Section 3.05(a), as allocated thereto pursuant to Section 3.05(a).
(b) The amount described in Section 3.10(a)(ii) shall be deemed distributed to
(i) Uncertificated REMIC I Regular Interest W, (ii) Uncertificated REMIC I
Regular Interest X and (iii) Uncertificated REMIC I Regular Interest Y with the
amount to be distributed allocated among such interests in accordance with the
priority assigned to each Related Class of Trust Certificates (other than the
Class R-I Certificates), respectively, under Section 3.05(a) until the
Uncertificated Principal Balance of each such interest is reduced to zero.
(c) The portion of the Uncertificated REMIC I Regular Interest Distribution
Amounts described in Section 3.10(a)(ii) shall be deemed distributed by REMIC I
to REMIC II in accordance with the priority assigned to the REMIC II
Certificates relative to that assigned to the REMIC I Certificates under Section
3.05(a).
(d) In determining from time to time the Uncertificated REMIC I Regular Interest
Distribution:
(i) Realized Losses allocated to the Class A-1 and Class A-4 Certificates shall
be deemed allocated to Uncertificated REMIC I Regular Interest W;
(ii) Realized Losses allocated to the Class A-2 and Class A-5 Certificates shall
be deemed allocated to Uncertificated REMIC I Regular Interest X; and
(iii) Realized Losses allocated to the Class A-3 Certificates shall be deemed
allocated to Uncertificated REMIC I Regular Interest Y.
(e) On each Distribution Date the Trustee shall be deemed to distribute from
REMIC II, in the priority set forth in Section 3.05(a), to the Holders of each
Class of Trust Certificates (other than the Class R-I Certificates) the amounts
distributable thereon from the Uncertificated REMIC I Regular Interest
Distribution Amounts deemed to have been received by REMIC II from REMIC I under
this Section 3.10.
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(f) Notwithstanding the deemed distributions on the Uncertificated REMIC I
Regular Interests described in this Section 3.10, distributions of funds from
the Certificate Trust Account shall be made only in accordance with Section
3.05.
Section 3.11. Allocation of Class A Loss Amounts.
Class A Loss Amounts will be allocated to the Class A
Certificates on a pro rata basis in accordance with their respective Certificate
Principal Balances and, in the case of the Class A-1 Certificates, to the
components thereof, on a pro rata basis.
Section 3.12. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders, including interest or original issue discount
payments or advances thereof that the Trustee reasonably believes are applicable
under the Code. The consent of Certificateholders shall not be required for such
withholding. In the event the Trustee does withhold any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee shall indicate the
amount withheld to such Certificateholder pursuant to the terms of such
requirements.
ARTICLE IV
THE TRUST CERTIFICATES
Section 4.01. The Trust Certificates.
The Class A and Class R Certificates shall be substantially in
the forms set forth in Exhibits A and B, respectively, and shall, on original
issue, be executed and delivered by the Trustee to the Certificate Registrar for
authentication and delivery to or upon the order of the Company upon receipt by
the Trustee of the documents specified in Section 2.01. The Trust Certificates
shall be issuable in the minimum denominations designated in the Preliminary
Statement hereto.
The Trust Certificates shall be executed by manual or facsimile
signature on behalf of an authorized officer of the Trustee. Trust Certificates
bearing the manual or facsimile signatures of individuals who were at any time
the proper officers of the Trustee shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Trust Certificate or did not hold such
offices at the date of such Trust Certificates. No Trust Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Trust Certificate a certificate of authentication
substantially in the form provided for herein executed by the Certificate
Registrar by manual signature, and such certificate upon any Trust Certificate
shall be conclusive evidence, and the only evidence, that such Trust Certificate
has been duly authenticated and delivered hereunder. All Trust Certificates
shall be dated the date of their authentication.
The Class A Certificates shall initially be issued as one or more
Trust Certificates registered in the name of the Depository or its nominee and,
except as provided below, registration of such Trust Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold such
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Trust Certificates for the respective Certificate Owners with Ownership
Interests therein. The Holders of the Book-Entry Certificates shall hold their
respective Ownership Interests in and to each of the Book-Entry Certificates
through the book-entry facilities of the Depository and, except as provided
below, shall not be entitled to Definitive Certificates in respect of such
Ownership Interests. All transfers by Certificate Owners of their respective
Ownership Interests in the Book-Entry Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall transfer
the Ownership Interests only in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures.
Except as provided below, registration of Book-Entry Certificates
may not be transferred by the Trustee except to another Depository that agrees
to hold such Trust Certificates for the respective Certificate Owners with
Ownership Interests therein. The Holders of the Book-Entry Certificates shall
hold their respective Ownership Interests in and to each of such Trust
Certificates through the book-entry facilities of the Depository and, except as
provided below, shall not be entitled to Definitive Certificates in respect of
such Ownership Interests. All transfers by Certificate Owners of their
respective Ownership Interests in the Book-Entry Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Certificate Owner. Each Depository Participant
shall transfer the Ownership Interests only in the Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
The Trustee, the Certificate Administrator and the Company may
for all purposes (including the making of payments due on the respective Classes
of Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the respective Classes
of Book-Entry Certificates for the purposes of exercising the rights of
Certificateholders hereunder. The rights of Certificate Owners with respect to
the respective Classes of Book-Entry Certificates shall be limited to those
established by law and agreements between such Certificate Owners and the
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of any Class of Book-Entry Certificates with respect to any particular
matter shall not be deemed inconsistent if they are made with respect to
different Certificate Owners. The Trustee may establish a reasonable record date
in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Depository of such record date.
If (i)(A) the Company advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Company is unable to locate a
qualified successor or (ii) the Company at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall issue the Definitive Certificates. Neither the
Company, the Certificate Administrator nor the Trustee shall be liable for any
actions taken by the Depository or its nominee, including, without limitation,
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or to
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be performed by the Company in connection with the issuance of the Definitive
Certificates pursuant to this Section 4.01 shall be deemed to be imposed upon
and performed by the Trustee, and the Trustee and the Certificate Administrator
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
Section 4.02. Registration of Transfer and Exchange of Trust Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies to be
appointed by the Trustee in accordance with the provisions of this Section 4.02,
a Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Trustee shall provide for the registration of Trust
Certificates and of transfers and exchanges of Trust Certificates as herein
provided. Upon satisfaction of the conditions set forth below, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Trust
Certificates of a like Class and aggregate Percentage Interest. In addition, the
Trustee shall notify the Company of each transfer or exchange of the Trust
Certificates. The components relating to the Class A-1 Certificates are not
separately transferable.
(b) At the option of the Certificateholders, Trust Certificates may be exchanged
for other Trust Certificates of authorized denominations of a like Class and
aggregate Percentage Interest, upon surrender of the Trust Certificates to be
exchanged at any such office or agency. Whenever any Trust Certificates are so
surrendered for exchange the Trustee shall execute and the Certificate Registrar
shall authenticate and deliver the Trust Certificates of such Class which the
Certificateholder making the exchange is entitled to receive. Every Trust
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee or the Certificate Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder thereof or
his attorney duly authorized in writing.
(c) (i) Each Person who has or who acquires any Ownership Interest in a Class R
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following provisions. The rights of
each Person acquiring any Ownership Interest in a Class R Certificate are
expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a Class R
Certificate shall be a United States Person and a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership Interest in a
Class R Certificate to a United States Person, the Trustee shall require
delivery to it, and shall not register the Transfer of any Class R Certificate
until its receipt of, (I) an affidavit and agreement (a "Transfer Affidavit and
Agreement" attached hereto as Exhibit C-1) from the proposed Transferee,
representing and warranting, among other things, that it is a United States
Person, that such Transferee is a Permitted Transferee, that it is not acquiring
its Ownership Interest in the Class R Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person who is not a
Permitted Transferee, that for so long as it retains its Ownership Interest in a
Class R Certificate, it will endeavor to remain a Permitted Transferee, and that
it has reviewed the provisions of this Section 4.02(c) and agrees to be bound by
them and (II) a certificate, attached hereto as Exhibit C-2, from the Holder
wishing to transfer the Class R Certificate, representing and warranting, among
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other things, that no purpose of the proposed Transfer is to impede the
assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and Agreement by a
proposed Transferee under clause (B) above, if the Trustee has actual knowledge
that the proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any Ownership Interest in a Class R
Certificate shall agree (x) to require a Transfer Affidavit and Agreement from
any other Person to whom such Person attempts to transfer its Ownership Interest
in a Class R Certificate and (y) not to transfer its Ownership Interest unless
it provides a certificate to the Trustee in the form attached hereto as Exhibit
C-2.
(E) Each Person holding or acquiring an Ownership Interest in a Class R
Certificate, by purchasing an Ownership Interest in such Trust Certificate,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of Temporary Treasury Regulations 1.67-3T(a)(2)(A)
immediately upon acquiring an Ownership Interest in a Class R Certificate, if it
is, or is holding an Ownership Interest in a Class R Certificate on behalf of, a
"pass-through interest holder."
(ii) The Trustee will register the Transfer of any Class R Certificate only if
it shall have received the Transfer Affidavit and Agreement, a certificate of
the Holder requesting such transfer in the form attached hereto as Exhibit C-2
and all of such other documents as shall have been reasonably required by the
Trustee as a condition to such registration. Transfers of the Class R
Certificate to Non-United States Persons and Persons other than Permitted
Transferees are prohibited.
(iii) The Trustee shall be under no liability to any Person for any registration
of Transfer of a Class R Certificate that is in fact not permitted by this
Section 4.02(c) or for making any payments due on such Trust Certificate to the
holder thereof or for taking any other action with respect to such holder under
the provisions of this Agreement.
(iv) The Certificate Administrator, on behalf of the Trustee, shall make
available all information necessary to compute any tax imposed (A) as a result
of the Transfer of an Ownership Interest to any Person who is not a Permitted
Transferee, including the information regarding "excess inclusions" of such
Class R Certificate required to be provided to the Internal Revenue Service and
certain Persons as described in Treasury Regulation Sections 1.860D-1(b)(5) and
1.860E-2(a)(5), and (B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust, estate or
organizations described in Section 1381 of the Code having as among its record
holders at any time any Person who is not a Permitted Transferee. Reasonable
compensation for providing such information may be required by the Certificate
Administrator.
(v) The provisions of this Section 4.02(c) set forth prior to this Section (v)
may be modified, added or eliminated, provided that the following shall have
been delivered to the Trustee:
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(A) a written notification from the Rating Agency to the effect that the
modification, addition or elimination of such provisions will not cause such
Rating Agency to downgrade its then-current ratings of the Trust Certificates;
and
(B) subject to Section 3.01(f) hereof, an Opinion of Counsel, which shall not be
an expense of the Trustee, to the effect that such modification, addition or
absence of such provisions will not cause the Trust Fund to cease to qualify as
a REMIC and will not cause (x) the Trust Fund to be subject to an entity-level
tax caused by the Transfer of any Class R Certificate to a Person that is not a
Permitted Transferee or (y) a Certificateholder or another Person to be subject
to a REMIC-related tax caused by the Transfer of a Class R Certificate to a
Non-United States Person or a Person that is not a Permitted Transferee.
(d) In the case of any Class R Certificate presented for registration in the
name of any Person, either (A) the Trustee shall require an Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee, the Company
and the Certificate Administrator to the effect that the purchase or holding of
such Class R Certificate is permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under Section 406
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Trustee, the Company or the Certificate
Administrator to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Certificate Administrator or (B) the
prospective Transferee shall be required to provide the Trustee, the Company and
the Certificate Administrator with a certification to the effect set forth in
paragraph fourteen of Exhibit C-1, which the Trustee may rely upon without
further inquiry or investigation, or such other certifications as the Trustee
may deem desirable or necessary in order to establish that such Transferee or
the Person in whose name such registration is requested is not an employee
benefit plan or other plan subject to the prohibited transaction provisions of
ERISA or Section 4975 of the Code, or any Person (including an investment
manager, a named fiduciary or a trustee of any such plan) who is using "plan
assets" of any such plan to effect such acquisition (each, a "Plan Investor").
(e) No service charge shall be made for any transfer or exchange of Trust
Certificates of any Class, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Trust Certificates.
(f) All Trust Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar in accordance with its customary
procedures.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If (i) any mutilated Trust Certificate is surrendered to the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any Trust
Certificate, and (ii) there is delivered to the Trustee and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee or the Certificate
Registrar that such Trust Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute and the Certificate Registrar shall
34
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
tenor, Class and Percentage Interest but bearing a number not contemporaneously
outstanding. Upon the issuance of any new Trust Certificate under this Section,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Certificate
Registrar) connected therewith. Any duplicate Trust Certificate issued pursuant
to this Section shall constitute complete and indefeasible evidence of ownership
in the Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Trust Certificate shall be found at any time.
Section 4.04. Persons Deemed Owners.
Prior to due presentation of a Trust Certificate for registration
of transfer, the Company, the Trustee, the Certificate Registrar and any agent
of the Company, the Trustee or the Certificate Registrar may treat the Person in
whose name any Trust Certificate is registered as the owner of such Trust
Certificate for the purpose of receiving distributions pursuant to Section 3.05
and for all other purposes whatsoever, and neither the Company, the Trustee, the
Certificate Registrar nor any agent of the Company, the Trustee or the
Certificate Registrar shall be affected by notice to the contrary.
ARTICLE V
THE TRUSTEE
Section 5.01. Duties of the Trustee.
(a) The Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement and, if applicable, the Pooling
and Servicing Agreement. The Trustee shall notify the Certificateholders of any
such documents which do not materially conform to the requirements of this
Agreement or the Pooling and Servicing Agreement in the event that the Trustee,
after so requesting, does not receive satisfactorily corrected documents or a
satisfactory explanation regarding any such nonconformities.
The Trustee shall forward or cause to be forwarded in a timely
fashion the notices, reports and statements required to be forwarded by the
Trustee pursuant to this Agreement. The Trustee shall furnish in a timely
fashion to the Certificate Administrator such information as the Certificate
Administrator may reasonably request from time to time for the Certificate
Administrator to fulfill its duties as set forth in this Agreement. The Trustee
covenants and agrees that it shall perform its obligations hereunder in a manner
so as to maintain the status of any portion of any REMIC formed under this
Agreement as a REMIC under the REMIC Provisions and (subject to Section 3.01(f)
hereof) to prevent the imposition of any federal, state or local income,
prohibited transaction, contribution or other tax on the Trust Fund to the
extent that maintaining such status and avoiding such taxes are reasonably
35
within the control of the Trustee and are reasonably within the scope of its
duties under this Agreement.
(c) No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct; provided, however, that:
(i) The duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished by the Company to the Trustee and which on
their face, do not contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance with
the direction of Certificateholders of any Class holding Trust Certificate which
evidence, as to such Class, Percentage Interests aggregating not less than 25%
as to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement;
(iv) The Trustee shall not be charged with knowledge of any default under the
Pooling and Servicing Agreement unless a Responsible Officer of the Trustee
assigned to and working in the Corporate Trust Office obtains actual knowledge
of such failure or event or the Trustee receives written notice of such failure
or event at its Corporate Trust Office from the Company or any
Certificateholder; and
(v) No provision in this Agreement shall require the Trustee to expend or risk
its own funds or otherwise incur any personal financial liability in the
performance of any of its duties as Trustee hereunder, or in the exercise of any
of its rights or powers, if the Trustee shall have reasonable grounds for
believing that repayment of funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) The Trustee shall timely pay, from its own funds, the amount of any and all
federal, state and local taxes imposed on the Trust Fund or its assets or
transactions including, without limitation, (A) "prohibited transaction" penalty
taxes as defined in Section 860F of the Code, if, when and as the same shall be
due and payable, (B) any tax on contributions to a REMIC after the Closing Date
imposed by Section 860G(d) of the Code and (C) any tax on "net income from
foreclosure property" as defined in Section 860G(c) of the Code, but only if
such taxes arise out of a breach by the Trustee of its obligations hereunder,
which breach constitutes negligence or willful misconduct of the Trustee.
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Section 5.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 5.01:
(i) The Trustee may request and may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) The Trustee may consult with counsel and any written advice of its counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the trusts or
powers vested in it by this Agreement or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request, order or direction of
any of the Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby;
(iv) The Trustee shall not be personally liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(v) The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing so to do by Holders of Trust Certificates
of any Class evidencing, as to such Class, Percentage Interests aggregating not
less than 50%; provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding. The reasonable expense of
every such examination shall be paid by the Certificateholder requesting the
investigation; and
(vi) The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys.
(b) Following the issuance of the Trust Certificates, the Trustee shall not
accept any contribution of assets to the Trust Fund unless it shall have
obtained or been furnished with an Opinion of Counsel from the party seeking to
contribute assets and at such party's expense to the effect that such
contribution will not (i) cause the Trust Fund to fail to qualify as a REMIC at
any time that any Trust Certificates are outstanding or (subject to Section
3.01(f) hereof) (ii) cause the Trust Fund to be subject to any tax as a result
of such contribution (including the imposition of any tax on "prohibited
transactions" of the Trust Fund imposed under Section 860F(a) of the Code).
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Section 5.03. Trustee Not Liable for Trust Certificates or Underlying
Certificate.
The recitals contained herein and in the Trust Certificates
(other than the execution of the Trust Certificates and relating to the
acceptance and receipt of the Underlying Certificate) shall be taken as the
statements of the Company or the Certificate Administrator as the case may be,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Agreement or
of the Trust Certificates (except that the Trust Certificates shall be duly and
validly executed by it as Trustee and authenticated by it as Certificate
Registrar) or of the Underlying Certificate of any related document. Except as
otherwise provided herein, the Trustee shall not be accountable for the use or
application by the Company or the Certificate Administrator of any of the Trust
Certificates or of the proceeds of such Trust Certificates, or for the use or
application of any funds paid to the Company in respect of the Underlying
Certificate deposited in or withdrawn from the Trust Certificate Account by the
Company.
Section 5.04. Trustee May Own Trust Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Trust Certificates and may transact business with the
Company and the parties to the Pooling and Servicing Agreement with the same
rights it would have if it were not Trustee.
Section 5.05. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a banking corporation
or a national banking association having its principal office in a state and
city acceptable to the Company and organized and doing business under the laws
of such state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or national banking association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 5.06.
Section 5.06. Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Company. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may appoint or may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance with the
provisions of Section 5.05 and shall fail to resign after written request
38
therefor by the Company, or if at any time the Trustee shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Company may remove the
Trustee and appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee. In addition, in the event that the Company
determines that the Trustee has failed (i) to distribute or cause to be
distributed to the Certificateholders any amount required to be distributed
hereunder, if such amount is held by the Trustee for distribution or (ii) to
otherwise observe or perform in any material respect any of its covenants,
agreements or obligations hereunder, and such failure shall continue unremedied
for a period of 5 days (in respect of clause (i) above) or 30 days (in respect
of clause (ii) above) after the date on which written notice of such failure,
requiring that the same be remedied, shall have been given to the Trustee by the
Company, then the Company may remove the Trustee and appoint a successor trustee
by written instrument delivered as provided in the preceding sentence. In
connection with the appointment of a successor trustee pursuant to the preceding
sentence, the Company shall, on or before the date on which any such appointment
becomes effective, obtain from each Rating Agency written confirmation that the
appointment of any such successor trustee will not result in the reduction of
the ratings on any class of the Certificates below the lesser of the then
current or original ratings on such Certificates.
(c) The Holders of Regular Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Company, one complete set to the Trustee so removed
and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
5.07.
Section 5.07. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 5.06 shall execute,
acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as if
originally named as trustee herein. The predecessor trustee shall deliver to the
successor trustee the Underlying Certificate and related documents and
statements held by it hereunder, and the Company, the Certificate Administrator
and the predecessor trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers, duties
and obligations.
(b) No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 5.05.
39
(c) Upon acceptance of appointment by a successor trustee as provided in this
Section, the Company shall mail notice of the succession of such trustee
hereunder to all Holders of Trust Certificates at their addresses as shown in
the Certificate Register. If the Company fails to mail such notice within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Company.
Section 5.08. Merger or Consolidation of Trustee.
Any corporation or national banking association into which the
Trustee may be merged or converted or with which it may be consolidated or any
corporation or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or national banking association succeeding to all or substantially
all of the corporation trust business of the Trustee, shall be the successor of
the Trustee hereunder, provided such corporation or national banking association
shall be eligible under the provisions of Section 5.05, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. The Trustee shall mail notice
of any such merger or consolidation to the Certificateholders at their address
as shown in the Certificate Register.
Section 5.09. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the
Certificate Administrator and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such title
to the Trust Fund, or any part thereof, and, subject to the other provisions of
this Section 5.09, such powers, duties, obligations, rights and trusts as the
Certificate Administrator and the Trustee may consider necessary or desirable.
If the Certificate Administrator shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, the Trustee alone
shall have the power to make such appointment. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 5.05 hereunder and no notice to Holders of Trust
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 5.07 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 5.09 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee, and such separate trustee or co-trustee jointly,
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be deemed to
have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
40
of this Article V. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the Trustee,
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 5.10. Appointment of Office or Agency.
The Trustee will maintain an office or agency in the City of New
York where Trust Certificates may be surrendered for registration of transfer or
exchange, or presented for final distribution, and where the office of the
Certificate Registrar is located. The Trustee initially designates such office
to be located at DTC Transfer Services, 00 Xxxxx Xxxxxx, Xxxxxxxx Xxxx Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Section 5.11. Certificate Administrator to Pay Trustee's Fees and Expenses;
Indemnification.
(a) The Certificate Administrator covenants and agrees to pay to
the Trustee and any co-trustee from time to time, and the Trustee and any
co-trustee shall be entitled to, reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by each of them in the execution of the
trusts hereby created and in the exercise and performance of any of the powers
and duties hereunder of the Trustee and any co-trustee, and the Certificate
Administrator will pay or reimburse the Trustee and any co-trustee upon request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee or any co-trustee in accordance with any of the provisions of this
Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ, and
the expenses incurred by the Trustee or any co-trustee in connection with the
appointment of an office or agency pursuant to Section 5.10) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
(b) The Certificate Administrator agrees to indemnify the Trustee
for, and to hold the Trustee harmless against, any loss, liability or expense
incurred without negligence or willful misconduct on the Trustee's part, arising
out of, or in connection with, the acceptance and administration of the Trust
Fund, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against any claim in connection with the exercise
or performance of any of its powers or duties under this Agreement, provided
that:
(i) with respect to any such claim, the Trustee shall have given
the Certificate Administrator written notice thereof promptly after the Trustee
shall have actual knowledge thereof;
41
(ii) while maintaining control over its own defense, the Trustee
shall cooperate and consult fully with the Certificate Administrator in
preparing such defense; and
(iii) notwithstanding anything in this Agreement to the contrary,
the Certificate Administrator shall not be liable for settlement of any claim by
the Trustee entered into without the prior consent of the Certificate
Administrator which consent shall not be unreasonably withheld.
No termination of this Agreement shall affect the obligations
created by this Section 5.11(b) of the Certificate Administrator to indemnify
the Trustee under the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by
the Certificate Administrator in this Section 5.11(b) shall not pertain to any
loss, liability or expense of the Trustee, including the costs and expenses of
defending itself against any claim, incurred in connection with any actions
taken by the Trustee at the direction of the Certificateholders pursuant to the
terms of this Agreement.
Section 5.12. Certain Actions Relating to Underlying Certificate. In the event
that there are any matters arising under the Pooling and Servicing Agreement or
the operative documents relating to transactions contemplated by the Pooling and
Servicing Agreement which require the vote, consent or direction of the holders
of the Underlying Certificate, the Trustee, as holder of the Underlying
Certificate, shall vote the Underlying Certificate in accordance with the
written instructions received from the Certificateholders evidencing at least a
majority of the Percentage Interest in the Trust Certificates. Any
Certificateholder that provides instructions to the Trustee pursuant to the
preceding sentence shall also provide the Trustee and its officers, directors,
agents and employees with an indemnity (which shall be satisfactory to the
Trustee) for any loss, liability or expense incurred by the Trustee that arises
out of, or in connection with, such instructions. In the absence of any
instruction from the Certificateholders, the Trustee will abstain from taking
any action with respect to any matter described in the first sentence of this
Section 5.12. The Trustee shall forward to each Certificateholder copies of any
communications received regarding matters that require action by holders of the
Underlying Certificate.
ARTICLE VI
TERMINATION
Section 6.01. Termination.
(a) Subject to Section 6.02, the respective obligations and responsibilities of
the Company, the Certificate Administrator and the Trustee created hereby with
respect to the Trust Certificates (other than the obligation to make certain
payments and to send certain notices to Certificateholders as hereinafter set
forth) shall terminate immediately upon the occurrence of the last action
required to be taken by the Trustee on the Termination Date; provided, however,
that in no event shall the trust created hereby continue beyond the expiration
of twenty-one years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the United
Kingdom, living on the date hereof.
42
(b) Upon presentation and surrender of the Trust Certificates by the
Certificateholders on the Termination Date, the Trustee shall distribute to the
Certificateholders the amounts otherwise distributable on such Distribution Date
pursuant to Section 3.05(a). Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their Trust
Certificates shall be set aside and held in trust for the account of the
appropriate non-tendering Certificateholders, whereupon the Trust Fund shall
terminate, and such funds shall not be invested. If any Trust Certificates as to
which notice of the Termination Date has been given pursuant to this Section
6.01 shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Trustee shall mail a second notice to the
remaining Certificateholders, at their last addresses shown in the Certificate
Register, to surrender their Trust Certificates for cancellation in order to
receive, from such funds held, the final distribution with respect thereto. If
within one year after the second notice any Trust Certificate shall not have
been surrendered for cancellation, the Trustee shall so notify the Company who
shall upon receipt of such notice, directly or through an agent, take reasonable
steps to contact the remaining Certificateholders concerning surrender of their
Trust Certificates. The costs and expenses of maintaining such funds and of
contacting Certificateholders shall be paid out of the assets which remain held.
If within two years after the second notice any Trust Certificates shall not
have been surrendered for cancellation, the Trustee shall pay to the Company all
amounts distributable to the Holders thereof and the Company shall thereafter
hold such amounts for the benefit of such Holders. No interest shall accrue or
be payable to any Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 6.01.
Section 6.02. Additional Termination Requirements.
(a) Within 90 days prior to the anticipated Termination Date, the Certificate
Administrator shall adopt and the Certificate Administrator shall sign a plan of
complete liquidation of the Trust Fund meeting the requirements of Section
860F(a)(4)(A) of the Code pursuant to which the Trustee shall sell or otherwise
dispose of all the remaining assets of the Trust Fund, unless the Trustee and
the Certificate Administrator has received an Opinion of Counsel to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 6.02(a) will not (i) result in the imposition of taxes on "prohibited
transactions" of the Trust Fund as described in Section 860F of the Code, or
(subject to Section 3.01(f) hereof) (ii) cause the Trust Fund to fail to qualify
as a REMIC at any time that any Trust Certificate is outstanding.
(b) Each Holder of a Trust Certificate hereby irrevocably approves and appoints
the Certificate Administrator as its attorney-in-fact for the purposes of,
adoption of the plan of complete liquidation in accordance with the terms and
conditions of this Agreement.
43
ARTICLE VII
THE COMPANY AND THE CERTIFICATE ADMINISTRATOR
Section 7.01. Liability of the Company.
The Company and the Certificate Administrator shall each be
liable in accordance herewith only to the extent of the obligations specifically
and respectively imposed upon and undertaken by the Company and the Certificate
Administrator herein.
Section 7.02. Merger, Consolidation or Conversion of the Company.
(a) The Company and the Certificate Administrator will each keep
in full effect its existence, rights and franchises as a corporation under the
laws of the state of its incorporation, and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Trust Certificates, the Underlying
Certificate or any of the Mortgage Loans and to perform its respective duties
under this Agreement.
(b) Any Person into which the Company or the Certificate
Administrator may be merged or consolidated, or any corporation resulting from
any merger or consolidation to which the Company or the Certificate
Administrator shall be a party, or any Person succeeding to the business of the
Company or the Certificate Administrator, shall be the successor of the Company
or the Certificate Administrator, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that each Rating Agency's ratings, if any, of the Trust Certificates in
effect immediately prior to such merger or consolidation will not be qualified,
reduced or withdrawn as a result thereof (as evidenced by a letter to such
effect from each Rating Agency).
(c) Notwithstanding anything else in this Section 7.02 and
Section 7.04 to the contrary, the Certificate Administrator may assign its
rights and delegate its duties and obligations under this Agreement; provided
that the Person accepting such assignment or delegation shall execute and
deliver to the Company and the Trustee an agreement, in form and substance
reasonably satisfactory to the Company and the Trustee, which contains an
assumption by such Person of the due and punctual performance and observance of
each covenant and condition to be performed or observed by the Certificate
Administrator under this Agreement; provided further that each Rating Agency's
rating of the Classes of Trust Certificates that have been rated in effect
immediately prior to such assignment and delegation will not be qualified,
reduced or withdrawn as a result of such assignment and delegation (as evidenced
by a letter to such effect from each Rating Agency). In the case of any such
assignment and delegation, the Certificate Administrator shall be released from
its obligations under this Agreement, except that the Certificate Administrator
shall remain liable for all liabilities and obligations incurred by it as
Certificate Administrator hereunder prior to the satisfaction of the conditions
to such assignment and delegation set forth in the next preceding sentence.
44
Section 7.03. Limitation on Liability of the Company and Others.
(a) Neither the Company, the Certificate Administrator nor any of the directors,
officers, employees or agents of the Company or the Certificate Administrator
shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Company, the Certificate Administrator or
any such Person against any breach of warranties or representations made herein
or any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Company,
the Certificate Administrator and any director, officer, employee or agent of
the Company or the Certificate Administrator may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Company, the Certificate
Administrator and any director, officer, employee or agent of the Company or the
Certificate Administrator shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Trust Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder and the Company and the Certificate
Administrator shall be entitled to be reimbursed therefor out of amounts
attributable to the Underlying Certificate on deposit in the Trust Certificate
Account as provided by Section 3.04 and, on the Distribution Date(s) following
such reimbursement, the aggregate of such expenses and costs shall be allocated
in reduction of the Accrued Certificate Interest on each Class entitled thereto
in the same manner as if such expenses and costs constituted a Prepayment
Interest Shortfall.
(b) Neither the Company nor the Certificate Administrator shall be under any
obligation to appear in, prosecute or defend any legal or administrative action,
proceeding, hearing or examination that is not incidental to its respective
duties under this Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Company or the Certificate
Administrator may in its discretion undertake any such action, proceeding,
hearing or examination that it may deem necessary or desirable in respect to
this Agreement and the rights and duties of the parties hereto and the interests
of the Certificateholders hereunder. In such event, the legal expenses and costs
of such action, proceeding, hearing or examination and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Company and the Certificate Administrator shall be entitled to be reimbursed
therefor out of amounts attributable to the Underlying Certificate on deposit in
the Trust Certificate Account as provided by Section 3.04 and, on the
Distribution Date(s) following such reimbursement, the aggregate of such
expenses and costs shall be allocated in reduction of the Accrued Certificate
Interest on each Class entitled thereto in the same manner as if such expenses
and costs constituted a Prepayment Interest Shortfall.
Section 7.04. Company and Certificate Administrator Not to Resign.
Subject to the provisions of Section 7.02, neither the Company
nor the Certificate Administrator shall resign from its respective obligations
and duties hereby imposed on it except upon determination that its duties
hereunder are no longer permissible under applicable law. Any such determination
permitting the resignation of the Company or the Certificate Administrator shall
45
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
No such resignation by the Certificate Administrator shall become effective
until the Trustee or a successor servicer shall have assumed the Certificate
Administrator's responsibilities and obligations hereunder.
Section 7.05. Successor Certificate Administrator.
In the event that the Master Servicer is removed or replaced in
accordance with the terms of the Pooling and Servicing Agreement, the Trustee
shall become the successor certificate administrator hereunder. The Certificate
Administrator agrees to cooperate with the Trustee in effecting the termination
of the Certificate Administrator's responsibilities and rights hereunder. No
such termination shall release the Certificate Administrator for any liability
that it would otherwise have hereunder for any act or omission prior to the
effective time of such termination.
Section 7.06. Representation and Warranty of Company.
Immediately prior to the conveyance of the Underlying Certificate
to the Trustee pursuant to Section 2.01, the Company had good title to, and was
the sole owner of, the Underlying Certificate free and clear of any pledge,
lien, encumbrance or security interest and such conveyance validly transfers
ownership of the Underlying Certificate to the Trustee free and clear of any
pledge, lien, encumbrance or security interest.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Amendment.
(a) This Agreement may be amended from time to time by the Certificate
Administrator, the Company and the Trustee, without the consent of any of the
Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein, which may be
inconsistent with any other provisions herein or therein or to correct any
error,
(iii) to modify, eliminate or add to any of its provisions to such extent as
shall be necessary or desirable to maintain the qualification of the Trust Fund
as a REMIC at all times that any Trust Certificate is outstanding or to avoid or
minimize the risk of the imposition of any tax on the Trust Fund pursuant to the
Code that would be a claim against the Trust Fund, provided that the Trustee has
received an Opinion of Counsel to the effect that (A) such action is necessary
or desirable to maintain such qualification or to avoid or minimize the risk of
the imposition of any such tax and (B) such action will not adversely affect in
any material respect the interests of any Certificateholder,
(iv) to change the timing and/or nature of deposits into the Trust Certificate
Account, provided that (A) such change shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder and (B) such change shall not adversely affect the
then-current rating of the Trust Certificates, as evidenced by a letter from
each Rating Agency then rating the Trust Certificates to such effect,
46
(v) to modify, eliminate or add to the provisions of Section 4.02(c) or any
other provision hereof restricting transfer of the Class R Certificate by virtue
of their being the REMIC "residual interest", provided that (A) such change
shall not adversely affect the then current ratings of the Trust Certificates,
as evidenced by a letter from the Rating Agency to such effect, and (B) such
change shall not, as evidenced by an Opinion of Counsel, cause either the Trust
Fund or any of the Certificateholders (other than the transferor) to be subject
to a tax caused by a transfer to a Non-United States Person or a Person that is
not a Permitted Transferee, or
(vi) to make any other provisions with respect to matters or questions arising
under this Agreement which shall not be materially inconsistent with the
provisions of this Agreement, provided that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of any Certificateholder.
(b) This Agreement may also be amended from time to time by the Certificate
Administrator, the Company and the Trustee with the consent of the Holders of
Trust Certificates evidencing in the aggregate not less than 66% of the
Percentage Interests of each Class of Trust Certificates affected thereby for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of the Holders of Trust Certificates of such Class; provided, however, that no
such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of, payments which
are required to be distributed on any Trust Certificate without the consent of
the Holder of such Trust Certificate, or
(ii) reduce the aforesaid percentage of Trust Certificates of any Class the
Holders of which are required to consent to any such amendment, in any such case
without the consent of the Holders of all Trust Certificates of such Class then
outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel to the effect that such amendment or the exercise
of any power granted to the Company or the Trustee in accordance with such
amendment will not result in the imposition of a tax on the Trust Fund or cause
the Trust Fund to fail to qualify as a REMIC at any time that any Trust
Certificate is outstanding.
(d) Promptly after the execution of any such amendment the Trustee shall furnish
written notification of the substance of such amendment to each
Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 8.01 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Section 8.02. Counterparts.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
47
Section 8.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Trust
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third party by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision of this
Agreement to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Agreement, unless such Holder previously shall
have given to the Trustee a notice of a default by the Company or the Trustee in
the performance of any obligation hereunder, and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of Trust Certificates
entitled to at least 33% of the Voting Rights shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
Section 8.04. Governing Law.
This Agreement and the Trust Certificates shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 8.05. Notices.
All demands and notices hereunder shall be in writing and shall
be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid (except for notices to the Trustee which shall
be deemed to have been duly given only when received), to (a) in the case of the
Company, 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: President, or such other address as may hereafter be furnished
to the Trustee and the Certificate Administrator in writing by the Company, (b)
in the case of the Certificate Administrator, 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxxxx 00000-0000, Attention: Managing Director/Master Servicing or
48
such other address as may hereafter be furnished to the Trustee and the Company
in writing by the Certificate Administrator, (c) in the case of the Trustee (i)
for the purposes of Section 5.10 hereof, c/o DTC Transfer Services, 00 Xxxxx
Xxxxxx, Xxxxxxxx Xxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (ii) for all other
purposes, Corporate Trust Office, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx,
Xxxxxxxxxx 00000-0000, Attention: Residential Accredit Loans, Inc. Series
2003-QR13 or such other address as may hereafter be furnished to the Company and
the Certificate Administrator in writing by the Trustee, (d) in the case of
Xxxxx'x, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (e) in the case of S&P,
00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Any notice required or permitted to
be mailed to a Certificateholder shall be given by first-class mail, postage
prepaid, at the address of such holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 8.06. Notices to the Rating Agencies.
The Company or the Trustee, as applicable, shall notify each
Rating Agency at such time as it is otherwise required pursuant to this
Agreement to give notice of the occurrence of any of the events described in
clauses (a), (b), (d), (e) or (f) below or provide a copy to the Rating Agency
at such time as otherwise required to be delivered pursuant to this Agreement of
any of the statements described in clause (c) below:
(a) a material change or amendment to this Agreement,
(b) the termination or appointment of a successor Trustee or a change in the
majority ownership of the Trustee,
(c) the statement required to be delivered to the Holders of each Class of Trust
Certificates pursuant to Section 3.06,
(d) a change in the location of the Trust Certificate Account,
(e) the occurrence of the final Distribution Date, and
(f) the repurchase of the Underlying Certificate.
Section 8.07. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Trust Certificates or the rights of the Holders
thereof.
Section 8.08. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure
to the benefit of the respective successors and assigns of the parties hereto,
and all such provisions shall inure to the benefit of the Certificateholders.
49
Section 8.09. Article and Section Headings,
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
50
IN WITNESS WHEREOF, the Company, the Certificate Administrator
and the Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized and their respective seals, if required, duly
attested, to be hereunto affixed, all as of the day and year first above
written.
RESIDENTIAL ACCREDIT LOANS, INC.,
as Company
By:
Name:
Title:
RESIDENTIAL FUNDING CORPORATION,
as Certificate Administrator
By:
Name:
Title:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By:
Name:
Title:
By:
Name:
Title:
51
EXHIBIT A
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
A-1
Certificate No. 1 [____]% Pass-Through Rate
Class A-[___] Senior
Date of Trust Agreement: October 10, 2003 Percentage Interest: [___]%
Certificate Administrator: Aggregate Initial Certificate Principal
Residential Funding Corporation Balance of the Class A-[__] Certificates:
$[_________]
First Distribution Date: Initial Certificate Principal Balance of this
October 27, 2003 Certificate: $[__________]
Assumed Final Distribution Date: CUSIP 76110H [___]
July 25, 2033
MORTGAGE TRUST CERTIFICATE
SERIES 2003-QR13
Evidencing a percentage interest in the distributions allocable to the
Class A-[__] Certificates with respect to a Trust Fund consisting
primarily of a senior class of mortgage pass-through certificates issued
by a trust established by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund (as
defined below), and does not represent an obligation of or interest in
Residential Accredit Loans, Inc., the Certificate Administrator, the Trustee
referred to below or GMAC Mortgage Group, Inc. or any of their affiliates.
Neither this Certificate nor the Underlying Certificate (as defined below) are
guaranteed or insured by any governmental agency or instrumentality or by
Residential Accredit Loans, Inc. (hereinafter called the "Company," which term
includes any successor entity under the Agreement referred to below), the
Certificate Administrator, the Trustee or GMAC Mortgage Group, Inc. or any of
their affiliates. Neither the Company, the Certificate Administrator, GMAC
Mortgage Group, Inc. nor any of their affiliates will have any obligation with
respect to any certificate or other obligation secured by or payable from
payments on this Certificate.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Initial
Certificate Principal Balance of this Certificate by the aggregate Initial
Certificate Principal Balance of all Class A-[__] Certificates, both as
specified above) in certain distributions with respect to the Trust Fund
consisting primarily of an interest in the Residential Accredit Loans, Inc.
Mortgage Asset-Backed Pass-Though Certificates, Series 2003-QS13, Class A-10
(the "Underlying Certificate"). The Trust Fund was created pursuant to the Trust
Agreement dated as specified above (the "Agreement") among the Company, the
Certificate Administrator and Deutsche Bank Trust Company Americas, as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
A-2
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), from
Available Funds in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to Holders of Class A-[___] Certificates on such
Distribution Date.
Distributions on this Certificate will be made by the Certificate
Administrator acting on behalf of the Trustee (by wire transfer or otherwise)
for the account of the Person entitled thereto if such Person shall have so
notified the Certificate Administrator, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of certificates
issued in several Classes designated as Mortgage Trust Certificates of the
Series specified hereon. [This Class A-1 Certificate represents the interest of
the Class A-1-A Component, the Class A-1-B Component and the Class A-1-C
Component.]
The Trust Certificates are limited in right of payment to certain
distributions made to the Underlying Certificate, all as more specifically set
forth herein and in the Agreement.
As provided in the Agreement, withdrawals from the Trust Certificate
Account created for the benefit of Certificateholders may be made by the
Certificate Administrator from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement of certain expenses incurred by the Certificate Administrator, the
Company or the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Certificate Administrator and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the
Certificate Administrator and the Trustee with the consent of the Holders of
Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Trust Certificates affected thereby. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof in certain circumstances without the consent of
the Holders of any of the Certificates and, in certain additional circumstances,
without the consent of the Holders of certain Classes of Trust Certificates.
A-3
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Trust
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Trust Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Trust Certificates are exchangeable for new Trust Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Certificate Administrator, the Trustee and the
Certificate Registrar and any agent of the Company, the Certificate
Administrator, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Company, the Certificate Administrator, the Trustee nor any such
agent shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject to the
Underlying Certificate or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (ii) the
purchase by the Master Servicer from the trust fund relating to the Underlying
Certificate of all remaining Mortgage Loans and all property acquired in respect
of such Mortgage Loans, thereby effecting early retirement of the Underlying
Certificate. The Pooling and Servicing Agreement permits, but does not require,
the Master Servicer to (i) purchase at a price determined as provided in the
Pooling and Servicing Agreement all remaining Mortgage Loans and all property
acquired in respect of any Mortgage Loan or (ii) purchase in whole, but not in
part, all of the 2003-QS13 Certificates from the holders thereof; provided, that
any such option may only be exercised if the Pool Stated Principal Balance (as
defined in the Pooling and Servicing Agreement) of the Mortgage Loans as of the
Distribution Date upon which the proceeds of any such purchase are distributed
is less than ten percent of the Cut-off Date Principal Balance (as defined in
the Pooling and Servicing Agreement) of the Mortgage Loans.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-4
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated: October 10, 2003 DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By:
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[___] Certificates referred to in the
within-mentioned Agreement.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Certificate Registrar
By:
Authorized Signatory
A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
_____________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) a Percentage Interest evidenced by the within Mortgage Asset-Backed
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
______________________________________________________________________________
___________________________________________
Signature by or on behalf of assignor
___________________________________________
Signature Guaranteed
Dated:____________
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to for the account of ______________ account number
______________, or, if mailed by check, to ______________________.
Applicable statements should be mailed to ____________________________.
This information is provided by ____________________, the assignee named
above, or _____________________ as its agent.
A-7
EXHIBIT B
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON
OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 4.02(d) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE CERTIFICATE ADMINISTRATOR, THE COMPANY
AND THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE CERTIFICATE ADMINISTRATOR, THE COMPANY OR THE
TRUSTEE TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE CERTIFICATE
ADMINISTRATOR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED
STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO
TAX AND EXCEPT FOR THE FHLMC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE
OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH
TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
B-1
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
Certificate No. 2 4.00% Pass-Through Rate
Class R-[__] Senior Aggregate Initial Certificate
Principal Balance of the
Date of Trust Agreement: Class R-[___] Certificates:
October 10, 2003 $50.00
First Distribution Date: Initial Certificate Principal
October 27, 2003 Balance of this Certificate:
$[_____]
Certificate Administrator:
Residential Funding Corporation Percentage Interest: [_____]%
Assumed Final Distribution Date: CUSIP: 76110H [___]
July 25, 2033
MORTGAGE TRUST CERTIFICATE,
SERIES 2003-QR13
evidencing a percentage interest in any distributions allocable to the
Class R-[___] Certificates with respect to the Trust Fund consisting
primarily of a senior class of mortgage pass-through certificates issued
by a trust established by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust
Fund (as defined below), and does not represent an obligation of or interest in
Residential Accredit Loans, Inc., the Certificate Administrator, the Trustee
referred to below or GMAC Mortgage Group, Inc. or any of their affiliates.
Neither this Certificate nor the Underlying Certificate (as defined below) are
guaranteed or insured by any governmental agency or instrumentality or by
Residential Accredit Loans, Inc. (hereinafter called the "Company," which term
includes any successor entity under the Agreement referred to below), the
Certificate Administrator, the Trustee or GMAC Mortgage Group, Inc. or any of
their affiliates. Neither the Company, the Certificate Administrator, GMAC
Mortgage Group, Inc. nor any of their affiliates will have any obligation with
respect to any certificate or other obligation secured by or payable from
payments on this Certificate.
This certifies that [_________________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the Initial Certificate Principal Balance of this Certificate by the
aggregate Initial Certificate Principal Balance of all Class R-[___]
B-2
Certificates, both as specified above) in certain distributions with respect to
the Trust Fund consisting primarily of the Residential Accredit Loans, Inc.
Mortgage Asset-Backed Pass-Through Certificates, Class A-10 (the "Underlying
Certificate"). The Trust Fund was created pursuant to the Trust Agreement dated
as specified above (the "Agreement") among the Company, the Certificate
Administrator and Deutsche Bank Trust Company Americas, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), from
the Available Funds in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to Holders of Class R-[___] Certificates on such
Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to
be bound by the restrictions set forth in the Agreement to the effect that (i)
each person holding or acquiring any Ownership Interest in this Certificate must
be a United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Company will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Company, or any affiliate of the Company, on such terms and conditions as
the Company may choose.
Notwithstanding the above, the final distribution on this
Certificate will be made after due notice of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose in the City and State of New
York. The Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
Notwithstanding the reduction of the Certificate Principal Balance hereof to
zero, this Certificate will remain outstanding under the Agreement and the
Holder hereof may have additional obligations with respect to this Certificate,
including tax liabilities, and may be entitled to certain additional
distributions hereon, in accordance with the terms and provisions of the
Agreement.
No transfer of this Class R-[___] Certificate will be made unless
the Trustee has received either (i) an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee, the Company and the Certificate
Administrator with respect to the permissibility of such transfer under the
B-3
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
Section 4975 of the Internal Revenue Code (the "Code") and stating, among other
things, that the transferee's acquisition of a Class R-[___] Certificate will
not constitute or result in a non-exempt prohibited transaction under Section
406 of ERISA or Section 4975 of the Code or (ii) a representation letter, in the
form as described by the Agreement, stating that the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan.
This Certificate is one of a duly authorized issue of the
certificates issued in several Classes designated as Mortgage Trust Certificates
of the Series specified hereon.
The Trust Certificates are limited in right of payment to certain
distributions made to the Underlying Certificate.
As provided in the Agreement, withdrawals from the Trust
Certificate Account created for the benefit of Certificateholders may be made by
the Certificate Administrator from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement of certain expenses incurred by the Certificate Administrator, the
Company or the Trustee.
The Agreement permits, with certain exceptions therein provided,
the amendment of the Agreement and the modification of the rights and
obligations of the Company, the Certificate Administrator and the Trustee and
the rights of the Certificateholders under the Agreement at any time by the
Company, the Certificate Administrator and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66% of the
Percentage Interests of each Class of Trust Certificates affected thereby. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof in certain circumstances
without the consent of the Holders of any of the Certificates and, in certain
additional circumstances, without the consent of the Holders of certain Classes
of Trust Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee in the City and
State of New York, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Trust Certificates of authorized denominations evidencing the same Class and
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Trust Certificates are issuable only as registered
Certificates without coupons in Classes and in denominations specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Trust Certificates are exchangeable for new Trust
B-4
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Certificate Administrator, the Trustee and the
Certificate Registrar and any agent of the Company, the Certificate
Administrator, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Company, the Certificate Administrator, the Trustee nor any such
agent shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject to the
Underlying Certificate or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (ii) the
purchase by the Master Servicer from the trust fund relating to the Underlying
Certificate of all remaining Mortgage Loans and all property acquired in respect
of such Mortgage Loans, thereby effecting early retirement of the Underlying
Certificate. The Pooling and Servicing Agreement permits, but does not require,
the Master Servicer to (i) purchase at a price determined as provided in the
Agreement all remaining Mortgage Loans and all property acquired in respect of
any Mortgage Loan or (ii) purchase in whole, but not in part, all of the
2003-QS13 Certificates from the holders thereof; provided, that any such option
may only be exercised if the Pool Stated Principal Balance (as defined in the
Pooling and Servicing Agreement) of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than
ten percent of the Cut-off Date Principal Balance (as defined in the Pooling and
Servicing Agreement) of the Mortgage Loans.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purpose have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
B-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: October 10, 2003 DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By:
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-[___] Certificates referred to in the
within-mentioned Agreement.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Certificate Registrar
By:
Authorized Signatory
B-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) a Percentage Interest evidenced by the within Mortgage Asset-Backed
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
______________________________________________________________________________
___________________________________________
Signature by or on behalf of assignor
___________________________________________
Signature Guaranteed
Dated:____________
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to for the account of ______________ account number
______________, or, if mailed by check, to ______________________.
Applicable statements should be mailed to ____________________________.
This information is provided by ____________________, the assignee named
above, or _____________________ as its agent.
B-7
EXHIBIT C-1
TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
)ss.
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or beneficial owner
of the Mortgage Trust Certificates, Series ____-___, Class R (the "Owner")), a
[savings institution] [corporation] duly organized and existing under the laws
of [the State of ] [the United States], on behalf of which he makes this
affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified organization" or an
electing large partnership as of [date of transfer] within the meaning of
Sections 860E(e)(5) and 775, respectively, of the Internal Revenue Code of 1986,
as amended (the "Code") or an electing large partnership under Section 775(a) of
the Code, (ii) will endeavor to remain other than a disqualified organization
for so long as it retains its ownership interest in the Class R Certificates,
and (iii) is acquiring the Class R Certificates for its own account or for the
account of another Owner from which it has received an affidavit and agreement
in substantially the same form as this affidavit and agreement. (For this
purpose, a "disqualified organization" means an electing large partnership under
Section 775 of the Code, the United States, any state or political subdivision
thereof, any agency or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to tax and, except
for the Federal Home Loan Mortgage Corporation, a majority of whose board of
directors is not selected by any such governmental entity) or any foreign
government, international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on transfers of
Class R Certificates to disqualified organizations or electing large
partnerships, under the Code, that applies to all transfers of Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
(or, with respect to transfers to electing large partnerships, on each such
partnership), or, if such transfer is through an agent (which person includes a
broker, nominee or middleman) for a disqualified organization, on the agent;
(iii) that the person (other than with respect to transfers to electing large
partnerships) otherwise liable for the tax shall be relieved of liability for
the tax if the transferee furnishes to such person an affidavit that the
transferee is not a disqualified organization and, at the time of transfer, such
person does not have actual knowledge that the affidavit is false; and (iv) that
the Class R Certificates may be "noneconomic residual interests" within the
meaning of Treasury regulations promulgated pursuant to the Code and that the
transferor of a noneconomic residual interest will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer was to impede the assessment or collection of tax.
C-1-1
4. That the Owner is aware of the tax imposed on a "pass-through entity" holding
Class R Certificates if either the pass-through entity is an electing large
partnership under Section 775 of the Code or if at any time during the taxable
year of the pass-through entity a disqualified organization is the record holder
of an interest in such entity. (For this purpose, a "pass through entity"
includes a regulated investment company, a real estate investment trust or
common trust fund, a partnership, trust or estate, and certain cooperatives.)
5. The Owner is either (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity treated as a corporation or a
partnership for U.S. federal income tax purposes and created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia (other than a partnership that is not treated as a United States person
under any applicable Treasury regulations), (iii) an estate that is described in
Section 7701(a)(30)(D) of the Code, or (iv) a trust that is described in Section
7701(a)(30)(E) of the Code.
6. The Owner hereby agrees that it will not cause income from the Class R
Certificates to be attributable to a foreign permanent establishment or fixed
base (within the meaning of an applicable income tax treaty) of the Owner or
another United States taxpayer.
7. That the Owner is aware that the Trustee will not register the transfer of
any Class R Certificates unless the transferee, or the transferee's agent,
delivers to it an affidavit and agreement, among other things, in substantially
the same form as this affidavit and agreement. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
8. That the Owner has reviewed the restrictions set forth on the face of the
Class R Certificates and the provisions of Section 4.02(c) of the Trust
Agreement under which the Class R Certificates were issued. The Owner expressly
agrees to be bound by and to comply with such restrictions and provisions.
9. That the Owner consents to any additional restrictions or arrangements that
shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is not a disqualified organization.
10. The Owner's Taxpayer Identification Number is .
11. This affidavit and agreement relates only to the Class R Certificates held
by the Owner and not to any other holder of the Class R Certificates. The Owner
understands that the liabilities described herein relate only to the Class R
Certificates.
12. That no purpose of the Owner relating to the transfer of any of the Class R
Certificates by the Owner is or will be to impede the assessment or collection
of any tax; in making this representation, the Owner warrants that the Owner is
familiar with (i) Treasury Regulation Section 1.860E-1(c) and recent amendments
thereto, effective as of July 19, 2002, and (ii) the preamble describing the
adoption of the amendments to such regulation, which is attached hereto as Annex
1.
13. That the Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
C-1-2
and for the benefit of the person from whom it acquired the Class R Certificate
that the Owner intends to pay taxes associated with holding such Class R
Certificate as they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class R Certificate.
14. That the Owner has no present knowledge or expectation that it will become
insolvent or subject to a bankruptcy proceeding for so long as any of the Class
R Certificates remain outstanding.
15. The Purchaser is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or Section 4975 of the Code, or an investment
manager, named fiduciary or a trustee of any such plan, or any other Person
acting, directly or indirectly, on behalf of or purchasing any Certificate with
"plan assets" of any such plan.
C-1-3
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Title of Officer] and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this day of , 200 .
[NAME OF OWNER]
By:
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer],
known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Owner, and acknowledged to me
that he executed the same as his free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ___ day of ____, 200__.
_________________________________
NOTARY PUBLIC
COUNTY OF ___________________
STATE OF ___________________
My Commission expires the ___day of ___,20 .
C-1-4
ANNEX 1 TO EXHIBIT C-1
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9004]
RIN 1545-AW98
Real Estate Mortgage Investment Conduits
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations relating to safe harbor
transfers of noneconomic residual interests in real estate mortgage investment
conduits (REMICs). The final regulations provide additional limitations on the
circumstances under which transferors may claim safe harbor treatment.
DATES: Effective Date: These regulations are effective July 19, 2002.
Applicability Date: For dates of applicability, see Sec. 1.860E-
(1)(c)(10).
FOR FURTHER INFORMATION CONTACT: Xxxxxxxx Xxxxxxxxxx at (000) 000-0000
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information in this final rule has been reviewed and,
pending receipt and evaluation of public comments, approved by the Office of
Management and Budget (OMB) under 44 U.S.C. 3507 and assigned control number
1545-1675.
The collection of information in this regulation is in Sec. 1.860E-
1(c)(5)(ii). This information is required to enable the IRS to verify that a
taxpayer is complying with the conditions of this regulation. The collection of
information is mandatory and is required. Otherwise, the taxpayer will not
receive the benefit of safe harbor treatment as provided in the regulation. The
likely respondents are businesses and other for-profit institutions.
Comments on the collection of information should be sent to the Office of
Management and Budget, Attn: Desk Officer for the Department of the Treasury,
Office of Information and Regulatory Affairs, Xxxxxxxxxx, XX, 00000, with copies
to the Internal Revenue Service, Attn: IRS Reports Clearance Officer,
W:CAR:MP:FP:S, Xxxxxxxxxx, XX 00000. Comments on the collection of information
should be received by September 17, 2002. Comments are specifically requested
concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including whether
the information will have practical utility;
C-1-5
The accuracy of the estimated burden associated with the collection of
information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced;
How the burden of complying with the collection of information may be
minimized, including through the application of automated collection techniques
or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation, maintenance,
and purchase of service to provide information.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid control
number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on an
estimated number of respondents of 470 and an estimated average annual burden
hours per respondent of one hour.
Books or records relating to a collection of information must be retained as
long as their contents may become material in the administration of any internal
revenue law. Generally, tax returns and tax return information are confidential,
as required by 26 U.S.C. 6103.
Background
This document contains final regulations regarding the proposed amendments
to 26 CFR part 1 under section 860E of the Internal Revenue Code (Code). The
regulations provide the circumstances under which a transferor of a noneconomic
REMIC residual interest meeting the investigation and representation
requirements may avail itself of the safe harbor by satisfying either the
formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules governing
the transfer of noneconomic REMIC residual interests. In general, a transfer of
a noneconomic residual interest is disregarded for all tax purposes if a
significant purpose of the transfer is to
[[Page 47452]]
enable the transferor to impede the assessment or collection of tax. A purpose
to impede the assessment or collection of tax (a wrongful purpose) exists if the
transferor, at the time of the transfer, either knew or should have known that
the transferee would be unwilling or unable to pay taxes due on its share of the
REMIC's taxable income.
Under a safe harbor, the transferor of a REMIC noneconomic residual interest
is presumed not to have a wrongful purpose if two requirements are satisfied:
(1) the transferor conducts a reasonable investigation of the transferee's
financial condition (the investigation requirement); and (2) the transferor
secures a representation from the transferee to the effect that the transferee
understands the tax obligations associated with holding a residual interest and
intends to pay those taxes (the representation requirement).
The IRS and Treasury have been concerned that some transferors of
noneconomic residual interests claim they satisfy the safe harbor even in
situations where the economics of the transfer clearly indicate the transferee
is unwilling or unable to pay the tax associated with holding the interest. For
this reason, on February 7, 2000, the IRS published in the Federal Register (65
FR 5807) a notice of proposed rulemaking (REG-100276-97; REG-122450-98) designed
to clarify the safe harbor by adding the "formula test," an economic test. The
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proposed regulation provides that the safe harbor is unavailable unless the
present value of the anticipated tax liabilities associated with holding the
residual interest does not exceed the sum of: (1) The present value of any
consideration given to the transferee to acquire the interest; (2) the present
value of the expected future distributions on the interest; and (3) the present
value of the anticipated tax savings associated with holding the interest as the
REMIC generates losses.
The notice of proposed rulemaking also contained rules for FASITs. Section
1.860H-6(g) of the proposed regulations provides requirements for transfers of
FASIT ownership interests and adopts a safe harbor by reference to the safe
harbor provisions of the REMIC regulations.
In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3 I.R.B. 335) to
set forth an alternative safe harbor that taxpayers could use while the IRS and
the Treasury considered comments on the proposed regulations. Under the
alternative safe harbor, if a transferor meets the investigation requirement and
the representation requirement but the transfer fails to meet the formula test,
the transferor may invoke the safe harbor if the transferee meets a two- prong
test (the asset test). A transferee generally meets the first prong of this test
if, at the time of the transfer, and in each of the two years preceding the year
of transfer, the transferee's gross assets exceed $100 million and its net
assets exceed $10 million. A transferee generally meets the second prong of this
test if it is a domestic, taxable corporation and agrees in writing not to
transfer the interest to any person other than another domestic, taxable
corporation that also satisfies the requirements of the asset test. A transferor
cannot rely on the asset test if the transferor knows, or has reason to know,
that the transferee will not comply with its written agreement to limit the
restrictions on subsequent transfers of the residual interest.
Rev. Proc. 2001-12 provides that the asset test fails to be satisfied in the
case of a transfer or assignment of a noneconomic residual interest to a foreign
branch of an otherwise eligible transferee. If such a transfer or assignment
were permitted, a corporate taxpayer might seek to claim that the provisions of
an applicable income tax treaty would resource excess inclusion income as
foreign source income, and that, as a consequence, any U.S. tax liability
attributable to the excess inclusion income could be offset by foreign tax
credits. Such a claim would impede the assessment or collection of U.S. tax on
excess inclusion income, contrary to the congressional purpose of assuring that
such income will be taxable in all events. See, e.g., sections 860E(a)(1), (b),
(e) and 860G(b) of the Code.
The Treasury and the IRS have learned that certain taxpayers transferring
noneconomic residual interests to foreign branches have attempted to rely on the
formula test to obtain safe harbor treatment in an effort to impede the
assessment or collection of U.S. tax on excess inclusion income. Accordingly,
the final regulations provide that if a noneconomic residual interest is
transferred to a foreign permanent establishment or fixed base of a U.S.
taxpayer, the transfer is not eligible for safe harbor treatment under either
the asset test or the formula test. The final regulations also require a
transferee to represent that it will not cause income from the noneconomic
residual interest to be attributable to a foreign permanent establishment or
fixed base.
Section 1.860E-1(c)(8) provides computational rules that a taxpayer may use
to qualify for safe harbor status under the formula test. Section
1.860E-1(c)(8)(i) provides that the transferee is presumed to pay tax at a rate
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equal to the highest rate of tax specified in section 11(b). Some commentators
were concerned that this presumed rate of taxation was too high because it does
not take into consideration taxpayers subject to the alternative minimum tax
rate. In light of the comments received, this provision has been amended in the
final regulations to allow certain transferees that compute their taxable income
using the alternative minimum tax rate to use the alternative minimum tax rate
applicable to corporations.
Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present values in
the formula test are to be computed using a discount rate equal to the
applicable Federal short-term rate prescribed by section 1274(d). This is a
change from the proposed regulation and Rev. Proc. 2001-12. In those
publications the provision stated that "present values are computed using a
discount rate equal to the applicable Federal rate prescribed in section 1274(d)
compounded semiannually" and that "[a] lower discount rate may be used if the
transferee can demonstrate that it regularly borrows, in the course of its trade
or business, substantial funds at such lower rate from an unrelated third
party." The IRS and the Treasury Department have learned that, based on this
provision, certain taxpayers have been attempting to use unrealistically low or
zero interest rates to satisfy the formula test, frustrating the intent of the
test. Furthermore, the Treasury Department and the IRS believe that a rule
allowing for a rate other than a rate based on an objective index would add
unnecessary complexity to the safe harbor. As a result, the rule in the proposed
regulations that permits a transferee to use a lower discount rate, if the
transferee can demonstrate that it regularly borrows substantial funds at such
lower rate, is not included in the final regulations; and the Federal short-term
rate has been substituted for the applicable Federal rate. To simplify
taxpayers' computations, the final regulations allow use of any of the published
short-term rates, provided that the present values are computed with a
corresponding period of compounding. With the exception of the provisions
relating to transfers to foreign branches, these changes generally have the
proposed applicability date of February 4, 2000, but taxpayers may choose to
apply the interest rate formula set forth in the proposed regulation and Rev.
Proc. 2001-12 for transfers occurring before August 19, 2002.
It is anticipated that when final regulations are adopted with respect to
[[Page 47453]]
FASITs, Sec. 1.860H-6(g) of the proposed regulations will be adopted in
substantially its present form, with the result that the final regulations
contained in this document will also govern transfers of FASIT ownership
interests with substantially the same applicability date as is contained in this
document.
Effect on Other Documents
Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is obsolete for transfers of
noneconomic residual interests in REMICs occurring on or after August 19, 2002.
Special Analyses
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It is hereby certified that these regulations will not have a significant
economic impact on a substantial number of small entities. This certification is
based on the fact that it is unlikely that a substantial number of small
entities will hold REMIC residual interests. Therefore, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not
required. It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It also has been determined that sections
553(b) and 553(d) of the Administrative Procedure Act (5 U.S.C. chapter 5) do
not apply to these regulations.
Drafting Information
The principal author of these regulations is Xxxxxxxx Xxxxxxxxxx. However,
other personnel from the IRS and Treasury Department participated in their
development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record keeping requirements.
26 CFR Part 602
Reporting and record keeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602 are amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in part as
follows:
Authority: 26 U.S.C. 7805 * * *
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EXHIBIT C-2
Form of Transferor Certificate
_____ , 2_____
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Residential Funding Corporation
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Deutsche Bank Trust Company Americas
Corporate Trust Xxxxxx
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: Residential Accredit Loans, Inc., Mortgage Trust
Certificates, Series 2003-QR13 , Class R-[I][II]
Certificates
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer
by ________ (the "Seller") to (the "Purchaser") of a % Percentage Interest in
Residential Accredit Loans, Inc., Mortgage Trust Certificates, Series 2003-QR13
, Class R-[I][II] (the "Certificates"), pursuant to Section 4.02 of the Trust
Agreement (the "Trust Agreement"), dated as of October 10, 2003 among
Residential Accredit Loans, Inc., as depositor (the "Company"), Residential
Funding Corporation, as certificate administrator (the "Certificate
Administrator") and Deutsche Bank Trust Company Americas, as trustee (the
"Trustee"). All terms used herein and not otherwise defined shall have the
meanings set forth in the Trust Agreement. The Seller hereby certifies,
represents and warrants to, and covenants with, the Company and the Trustee
that:
1. No purpose of the Seller relating to transfer of the
Certificate by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee a transfer affidavit and agreement in the form attached to the Trust
Agreement as Exhibit C-1. The Seller does not know or believe that any
representation contained therein is false.
3. The Seller has no actual knowledge that the proposed
Transferee is not both a United States Person and a Permitted Transferee.
4. The Seller has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Seller has determined that the Purchaser has
historically paid its debts as they become due and has found no significant
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evidence to indicate the Purchaser will not continue to pay its debts as they
become due in the future. The Seller understands that the transfer of the
Certificate may not be respected for United States income tax purposes (and the
Seller may continue to be liable for United States income taxes associated
therewith) unless the Seller has conducted such an investigation.
5. 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 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,
By:______________________
Name:
Title:
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EXHIBIT D
Pooling and Servicing Agreement
D-1-1
EXHIBIT E
Form of Form 10K Certification
I, [identify the certifying individual], certify that:
1. I have reviewed the annual report on Form 10-K for the fiscal year
[____], and all reports on Form 8-K containing distribution or servicing reports
filed in respect of periods included in the year covered by that annual report,
of the trust (the "Trust") created pursuant to the Trust Agreement (the "Trust
Agreement") among Residential Accredit Loans, Inc. (the "Company"), Residential
Funding Corporation (the "Certificate Administrator") and [Name of Trustee] (the
"Trustee");
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required to be
provided to the Trustee by the Certificate Administrator under the Trust
Agreement for inclusion in these reports is included in these reports;
4. I am responsible for reviewing the activities performed by the
Certificate Administrator under the Trust Agreement and based upon my knowledge
and the annual compliance review required under the Trust Agreement, and, except
as disclosed in the reports, the Certificate Administrator has fulfilled its
obligations under the Trust Agreement; and
5. The reports disclose all significant deficiencies relating to the
Certificate Administrator's compliance with the minimum servicing standards
based upon the report provided by an independent public accountant, after
conducting a review in compliance with the Uniform Single Attestation Program
for Mortgage Bankers as set forth in the Trust Agreement, that is included in
these reports.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: [the Trustee].
Date:_______________________
____________________________*
Name:
Title:
* to be signed by the senior officer in charge of the servicing functions of
the Certificate Administrator
E-1
EXHIBIT F
Form of Back-up Certification to Form 10K Certification
The undersigned, a Responsible Officer of [_________] (the "Trustee")
certifies that:
(a) The Trustee has performed all of the duties specifically required to
be performed by it pursuant to the provisions of the Trust Agreement dated as of
[_________], 20[__] (the "Agreement") by and among [__________], as depositor,
Residential Funding Corporation, as certificate administrator, and the Trustee
in accordance with the standards set forth therein.
(b) Based on my knowledge, the list of Certificateholders as shown on
the Certificate Register as of the end of each calendar year that is provided by
the Trustee pursuant to the Agreement is accurate as of the last day of the
20[__] calendar year.
Capitalized terms used and not defined herein shall have the meanings given such
terms in the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of _________,
20__.]
Name:______________________
Title:
F-1
