RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.,
Company,
GMAC MORTGAGE CORPORATION,
Servicer
and
BANK ONE, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of November 17, 2003
GMACM Mortgage Loan Trust 2003-AR2
Residential Asset Mortgage Products, Inc.
GMACM Mortgage Pass-Through Certificates, Series 2003-AR2
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................................5
Section 1.01. Definitions.......................................................5
Section 1.02. Use of Words and Phrases.........................................53
Section 1.03. Determination of LIBOR...........................................53
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..........54
Section 2.01. Conveyance of Mortgage Loans.....................................54
Section 2.02. Acceptance by Trustee............................................57
Section 2.03. Representations, Warranties and Covenants of the Servicer........58
Section 2.04. Representations and Warranties of the Seller.....................59
Section 2.05. Execution and Authentication of Certificates.....................60
Section 2.06. Purposes and Powers of the Trust Fund............................60
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...........................61
Section 3.01. Servicer to Act as Servicer......................................61
Section 3.02. Subservicing Agreements Between Servicer and Subservicers;
Enforcement of Subservicers' and Seller's Obligations............62
Section 3.03. Successor Subservicers...........................................62
Section 3.04. Liability of the Servicer........................................62
Section 3.05. No Contractual Relationship Between Subservicer and Trustee
or Certificateholders............................................63
Section 3.06. Assumption or Termination of Subservicing Agreements by
Trustee..........................................................63
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to
Custodial Account................................................63
Section 3.08. Subservicing Accounts; Servicing Accounts........................65
Section 3.09. Access to Certain Documentation and Information Regarding
the Mortgage Loans...............................................66
Section 3.10. Permitted Withdrawals from the Custodial Account.................66
Section 3.11. Maintenance of the Primary Insurance Policies; Collections
Thereunder.......................................................68
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity
Coverage.........................................................69
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.....................70
I
Section 3.14. Realization Upon Defaulted Mortgage Loans........................71
Section 3.15. Trustee to Cooperate; Release of Mortgage Notes..................74
Section 3.16. Servicing and Other Compensation; Compensating Interest..........75
Section 3.17. Periodic Filings with the Securities and Exchange
Commission; Additional Information...............................76
Section 3.18. Annual Statement as to Compliance................................76
Section 3.19. Annual Independent Public Accountants' Servicing Report..........77
Section 3.20. Rights of the Company in Respect of the Servicer.................77
Section 3.21. Administration of Buydown Funds..................................77
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...........................................78
Section 4.01. Payment Account..................................................78
Section 4.02. Distributions....................................................79
Section 4.03. Statements to Certificateholders.................................86
Section 4.04. Distribution of Reports to the Trustee and the Company;
Advances by the Servicer.........................................87
Section 4.05. Allocation of Realized Losses....................................88
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property....89
Section 4.07. Optional Purchase of Defaulted Mortgage Loans....................89
Section 4.08. Hedge Agreements.................................................90
Section 4.09. Auction Administration Agreement; Swap Agreement.................90
ARTICLE V THE CERTIFICATES.........................................................90
Section 5.01. The Certificates.................................................90
Section 5.02. Registration of Transfer and Exchange of Certificates............92
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates................96
Section 5.04. Persons Deemed Owners............................................97
Section 5.05. Appointment of Paying Agent......................................97
Section 5.06. Optional Purchase of Certificates................................97
ARTICLE VI THE COMPANY AND THE SERVICER.............................................98
Section 6.01. Respective Liabilities of the Company and the Servicer...........98
Section 6.02. Merger or Consolidation of the Company or the Servicer;
Assignment of Rights and Delegation of Duties by Servicer........99
II
Section 6.03. Limitation on Liability of the Company, the Servicer and
Others...........................................................99
Section 6.04. Company and Servicer Not to Resign..............................100
ARTICLE VII DEFAULT.................................................................100
Section 7.01. Events of Default...............................................100
Section 7.02. Trustee to Act; Appointment of Successor........................102
Section 7.03. Notification to Certificateholders..............................103
Section 7.04. Waiver of Events of Default.....................................104
ARTICLE VIII CONCERNING THE TRUSTEE..................................................104
Section 8.01. Duties of Trustee...............................................104
Section 8.02. Certain Matters Affecting the Trustee...........................105
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans...........107
Section 8.04. Trustee May Own Certificates....................................107
Section 8.05. Servicer to Pay Trustee's Fees and Expenses; Indemnification....107
Section 8.06. Eligibility Requirements for Trustee............................108
Section 8.07. Resignation and Removal of the Trustee..........................108
Section 8.08. Successor Trustee...............................................109
Section 8.09. Merger or Consolidation of Trustee..............................109
Section 8.10. Appointment of Co-Trustee or Separate Trustee...................110
Section 8.11. Appointment of Custodians.......................................110
Section 8.12. Appointment of Office or Agency.................................111
ARTICLE IX TERMINATION.............................................................111
Section 9.01. Termination Upon Purchase by the Servicer or Liquidation of
All Mortgage Loans..............................................111
Section 9.02. Additional Termination Requirements.............................113
ARTICLE X REMIC PROVISIONS........................................................114
Section 10.01. REMIC Administration............................................114
Section 10.02. Servicer, REMIC Administrator and Trustee Indemnification.......117
Section 10.03. Designation of REMIC(s).........................................117
Section 10.04. Distributions on REMIC I Regular Interests, REMIC II Regular
Interests and REMIC III Regular Interests.......................118
Section 10.05. Compliance with Withholding Requirements........................118
III
ARTICLE XI MISCELLANEOUS PROVISIONS................................................119
Section 11.01. Amendment.......................................................119
Section 11.02. Recordation of Agreement; Counterparts..........................120
Section 11.03. Limitation on Rights of Certificateholders......................121
Section 11.04. Governing Law...................................................121
Section 11.05. Notices.........................................................122
Section 11.06. Required Notices to Rating Agency and Subservicer...............122
Section 11.07. Severability of Provisions......................................123
Section 11.08. Supplemental Provisions for Resecuritization....................123
Section 11.09. Allocation of Voting Rights.....................................124
Section 11.10. Non-Petition....................................................124
IV
TABLE OF CONTENTS
(CONTINUED)
EXHIBITS
Exhibit A-1: Form of Class A Certificate
Exhibit A-2: Form of Class X Certificate
Exhibit B: Form of Class M Certificate
Exhibit C: Form of Class B Certificate
Exhibit D: Form of Class R Certificate
Exhibit E-1: Mortgage Loan Schedule for Loan Group 1
Exhibit E-2: Mortgage Loan Schedule for Loan Group 2
Exhibit E-3: Mortgage Loan Schedule for Loan Group 3
Exhibit E-4: Mortgage Loan Schedule for Loan Group 4
Exhibit F: Form of Request for Release
Exhibit G-1: Form of Transfer Affidavit and Agreement
Exhibit G-2: Form of Transferor Certificate
Exhibit H: Form of Investor Representation Letter
Exhibit I: Form of Transferor Representation Letter
Exhibit J: Form of Rule 144A Investment Representation Letter
Exhibit K: Form of Lender Certification for Assignment of Mortgage Loan
Exhibit L: Information to be Included in Monthly Distribution Date Statement
Exhibit M: Form of Custodian Certification
Exhibit N-1 Form of Form 10-K Certification
Exhibit N-2 Form of Back-Up Certification to Form 10-K Certificate
Exhibit O Auction Administration Agreement
Exhibit P Swap Agreement
V
This is the Pooling and Servicing Agreement, dated as of November 17,
2003 (the "Pooling and Servicing Agreement" or "Agreement"), among RESIDENTIAL
ASSET MORTGAGE PRODUCTS, INC., as the company (together with its permitted
successors and assigns, the "Company"), GMAC MORTGAGE CORPORATION, as servicer
(together with its permitted successors and assigns, the "Servicer"), and BANK
ONE, NATIONAL ASSOCIATION, a national banking association, as Trustee (together
with its permitted successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell mortgage-backed pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in sixteen Classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Mortgage Loans (as defined herein) and certain other related assets.
REMIC I
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Mortgage Loans and certain
other related assets subject to this Agreement as a real estate mortgage
investment conduit (a "REMIC") for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC I." Component I of the
Class R 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 following table irrevocably sets forth the designation,
remittance rate (the "Uncertificated REMIC I Pass-Through Rate") and initial
Uncertificated Principal Balance for each of the "regular interests" in REMIC I
(the "REMIC I Regular Interests"). The "latest possible maturity date"
(determined solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for each REMIC I Regular Interest shall be the Maturity
Date. None of the REMIC I Regular Interests will be certificated.
CLASS
DESIGNATION FOR
EACH REMIC I
REGULAR INTEREST
AND COMPONENT I INITIAL CLASS
OF THE CLASS R TYPE OF CERTIFICATE PRINCIPAL FINAL MATURITY
CERTIFICATES INTEREST INTEREST RATE BALANCE DATE*
------------------ --------- ---------------- ---------------- --------------------
Class Y-1 Regular Variable(1) $ 35,926.76 December 2033
Class Y-2 Regular Variable(2) $ 95,453.75 December 2033
Class Y-3 Regular Variable(3) $ 82,253.31 December 2033
Class Y-4 Regular Variable(4) $ 86,341.61 December 2033
Class Z-1 Regular Variable(1) $ 71,817,589.87 December 2033
Class Z-2 Regular Variable(2) $190,812,043.58 December 2033
Class Z-3 Regular Variable(3) $164,448,967.77 December 2033
Class Z-4 Regular Variable(4) $172,622,695.04 December 2033
Component I of
the Class R+ Residual Variable(1) $ 100.00 December 2033
* The Distribution Date in the specified month, which is the month following
the month the latest maturing Mortgage Loan in the related Group matures.
For federal income tax purposes, for each Class of REMIC I Regular and
Residual Interests, the "latest possible maturity date" shall be the Final
Maturity Date.
+ Component I of the Class R Certificates is entitled to receive the
applicable Residual Distribution Amount and any Excess Liquidation Proceeds.
(1) Interest distributed to the REMIC I Regular Interests Y-1 and Z-1 and the
Component I of the Class R Certificates on each Distribution Date will have
accrued at the weighted average of the Net Pass-Through Rates for the Group
1 Loans on the applicable Class Principal Balance outstanding immediately
before such Distribution Date.
(2) Interest distributed to the REMIC I Regular Interests Y-2 and Z-2 on each
Distribution Date will have accrued at the weighted average of the Net
Pass-Through Rates for the Group 2 Loans on the applicable Class Principal
Balance outstanding immediately before such Distribution Date.
(3) Interest distributed to the REMIC I Regular Interests Y-3 and Z-3 on each
Distribution Date will have accrued at the weighted average of the Net
Pass-Through Rates for the Group 3 Loans on the applicable Class Principal
Balance outstanding immediately before such Distribution Date.
(4) Interest distributed to the REMIC I Regular Interests Y-4 and Z-4 on each
Distribution Date will have accrued at the weighted average of the Net
Pass-Through Rates for the Group 4 Loans on the applicable Class Principal
Balance outstanding immediately before such Distribution Date.
1
REMIC II
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC I Regular I
Interests as a real estate mortgage investment conduit (a "REMIC") for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC II." Component II of the Class R Certificates will represent the sole
Class of "residual interests" in REMIC II for purposes of the REMIC Provisions
(as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, remittance rate (the "Uncertificated
REMIC II Pass-Through Rate") and initial Uncertificated Principal Balance for
each of the "regular interests" in REMIC II (the "REMIC II Regular Interests").
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 Maturity Date. None of the REMIC II Regular
Interests will be certificated.
Class Designation for
each REMIC II Regular
Interest and -----------
Component II of the Type of Certificate Initial Class
Class R Certificates Interest Interest Rate Principal Balance Final Maturity Date*
Class A-I-1-M Regular Variable(1) $ 69,769,000.00 December 2033
Class A-II-1-M Regular Variable(2) $ 83,880,000.00 December 2033
Class A-II-2-M Regular Variable(2) $ 22,155,000.00 December 2033
Class A-II-3-M Regular Variable(2) $ 19,380,000.00 December 2033
Class A-II-4-M Regular Variable(2) $ 59,956,000.00 December 2033
Class A-III-1-M Regular Variable(3) $ 73,970,000.00 December 2033
Class A-III-2-M Regular Variable(3) $ 18,215,000.00 December 2033
Class A-III-3-M Regular Variable(3) $ 15,197,000.00 December 2033
Class A-III-4-M Regular Variable(3) $ 22,014,000.00 December 2033
Class A-III-5-M Regular Variable(3) $ 30,363,000.00 December 2033
Class A-IV-1-M Regular Variable(4) $167,700,000.00 December 2033
Class M-1-M Regular Variable(5) $ 6,298,000.00 December 2033
Class M-2-M Regular Variable(5) $ 4,798,000.00 December 2033
Class M-3-M Regular Variable(5) $ 2,699,000.00 December 2033
Class B-1-M Regular Variable(5) $ 1,198,000.00 December 2033
Class B-2-M Regular Variable(5) $ 898,000.00 December 2033
Class B-3-M Regular Variable(5) $ 1,511,217.69 December 2033
Component II of the
Class R (6) Residual ----- ----- December 2033
* The Distribution Date in the specified month, which is the month following
the month the latest maturing Mortgage Loan in the related Group matures.
For federal income tax purposes, for each Class of REMIC II Regular and
Residual Interests, the "latest possible maturity date" shall be the Final
Maturity Date.
(1)Interest distributed to the REMIC II Regular Interest A-I-1-M on each
Distribution Date will have accrued at the weighted average of the Net
Pass-Through Rates for the Group 1 Loans on the applicable Class Principal
Balance outstanding immediately before such Distribution Date.
(2)Interest distributed to the REMIC II Regular Interests A-II-1-M, A-II-2-M,
A-II-3-M and A-II-4-M on each Distribution Date will have accrued at the
weighted average of the Net Pass-Through Rates for the Group 2 Loans on the
applicable Class Principal Balance outstanding immediately before such
Distribution Date.
(3)Interest distributed to the REMIC II Regular Interests A-III-1-M,
A-III-2-M, A-III-3-M, A-III-4-M and A-III-5-M on each Distribution Date
will have accrued at the weighted average of the Net Pass-Through Rates for
the Group 3 Loans on the applicable Class Principal Balance outstanding
immediately before such Distribution Date.
(4)Interest distributed to the REMIC II Regular Interest A-IV-1-M on each
Distribution Date will have accrued at the weighted average of the Net
Pass-Through Rates for the Group 4 Loans on the applicable Class Principal
Balance outstanding immediately before such Distribution Date.
(5)The Certificate Interest Rate for each Class of the Class B and Class M
Certificates shall equal, on any Distribution Date, the weighted average of
the Certificate Interest Rates for the Class Y-1, Class Y-2, Class Y-3 and
Class Y-4 Regular Interests.
(6)Component II of the Class R Certificates shall be entitled to receive the
applicable Residual Distribution Amount. Component II of the Class R
Certificates shall not be entitled to receive any distributions of interest
or principal.
2
REMIC III
As provided herein, the REMIC Administrator will elect to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as REMIC III. Component III of the Class R Certificates will
represent the sole Class of "residual interests" in REMIC III for purposes of
the REMIC Provisions under federal income tax law. The following table
irrevocably sets forth the designation, Pass-Through Rate, aggregate Initial
Certificate Principal Balance, certain features and Month of Final Scheduled
Distribution Date for each Class of Certificates comprising the interests
representing "regular interests" in REMIC III. The "latest possible maturity
date" (determined solely for purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii)) for each Class of REMIC III Regular Certificates shall be
the Maturity Date.
CLASS DESIGNATION
FOR EACH AGGREGATE
REMIC III REGULAR INITIAL
INTEREST AND CERTIFICATE FINAL
COMPONENT III OF PRINCIPAL SCHEDULED
THE CLASS R TYPE OF PASS-THROUGH BALANCE/NOTIONAL DISTRIBUTION
CERTIFICATES INTEREST RATE AMOUNT FEATURES DATE
Class A-I-1 Regular Adjustable(1) $ 69,769,000.00 Senior/Adjustable December 2033
Rate
Class A-II-1(2) Regular Adjustable(3) $ 83,880,000.00 Senior/Adjustable December 2033
Rate
Class A-II-2 Regular 3.765%(4) $ 22,155,000.00 Senior/Adjustable December 2033
Rate
Class A-II-3 Regular 4.175%(4) $ 19,380,000.00 Senior/Adjustable December 2033
Rate
Class A-II-4 Regular 4.115%(4) $ 59,956,000.00 Senior/Adjustable December 2033
Rate
Class A-III-1(5) Regular Adjustable(6) $ 73,970,000.00 Senior/Adjustable December 2033
Rate
Class A-III-2 Regular 3.865%(7) $ 18,215,000.00 Senior/Adjustable December 2033
Rate
Class A-III-3 Regular 4.240%(7) $ 15,197,000.00 Senior/Adjustable December 2033
Rate
Class A-III-4 Regular 4.397%(7) $ 22,014,000.00 Senior/Adjustable December 2033
Rate
Class A-III-5 Regular 4.397%(7) $ 30,363,000.00 Senior/Adjustable December 2033
Rate
Class A-IV-1 Regular Adjustable(8) $167,700,000.00 Senior/Adjustable December 2033
Rate
Class X-II Regular Adjustable(9) $185,371,000.00 Senior/Adjustable August 2008
Rate/Interest
Only
Class X-III Regular Adjustable(10) $159,759,000.00 Senior/Adjustable August 2010
Rate/Interest
Only
Class M-1 Regular Adjustable(11) $ 6,298,000.00 Mezzanine/AdjustabDecember 2033
Rate
Class M-2 Regular Adjustable(11) $ 4,798,000.00 Mezzanine/AdjustabDecember 2033
Rate
Class M-3 Regular Adjustable(11) $ 2,699,000.00 Mezzanine/AdjustabDecember 2033
Rate
Class B-1 Regular Adjustable(11) $ 1,198,000.00 Subordinate/AdjustDecember 2033
Rate
Class B-2 Regular Adjustable(11) $ 898,000.00 Subordinate/AdjustDecember 2033
Rate
Class B-3 Regular Adjustable(11) $ 1,511,217.69 Subordinate/AdjustDecember 2033
Rate
Class SB Not an (12) Yield February
Interest Maintenance 2008
Excess
Component III of
the Class R(13) Residual ----- ----- Senior/Residual December 2033
_______________
(1) The Class A-I-1 Certificates will accrue interest at a per annum rate equal
the Group 1 Net WAC Cap Rate.
(2) The Class A-II-1 Certificates will represent ownership of a REMIC III
Regular Interest, together with certain rights to payments to be made from
amounts received under the Class A-II-1 Hedge Agreement and the payments of
Class A-II-1 Carryover Shortfall Amounts, which will be deemed made for
federal income tax purposes outside of REMIC III by the holder of the Class
SB Certificates as the owner of the Hedge Agreements.
(3) With respect to any Distribution Date on or prior to the related Auction
Distribution Date, the Class A-II-1 Certificates will accrue interest at a
per annum rate equal to LIBOR plus 0.19%, subject to payment caps as
described in the definition of "Pass-Through Rate" herein and the provisions
for the payment of Class A-II-1 Carryover Shortfall Amount herein. With
respect to any Distribution Date after the related Auction Distribution
Date, the Class A-II-1 Certificates will accrue interest at a per annum rate
equal to the related Group 2 Net WAC Cap Rate. For purposes of REMIC III,
the interest will accrue on the portion of the Class A-II-1 Certificates
that represent ownership of a regular interest in REMIC III at the rate
described in the definition of "Pass-Through Rate."
(4) With respect to any Distribution Date on or prior to the related Auction
Distribution Date, the Class A-II-2 Certificates, Class A-II-3 Certificates
and Class A-II-4 Certificates are subject to a payment cap as described in
the definition of "Pass-Through Rate" herein. With respect to any
Distribution Date after the related Auction Distribution Date, the Class
A-II-2 Certificates, Class A-II-3 Certificates and Class A-II-4 Certificates
will accrue interest at a per annum rate equal to the related Group 2 Net
WAC Cap Rate.
3
(5) The Class A-III-1 Certificates will represent ownership of a REMIC III
Regular Interest, together with certain rights to payments to be made from
amounts received under the Class A-III-1 Hedge Agreement and the payments of
Class A-III-1 Carryover Shortfall Amounts, which will be deemed made for
federal income tax purposes outside of REMIC III by the holder of the Class
SB Certificates as the owner of the Hedge Agreements.
(6) With respect to any Distribution Date on or prior to the related Auction
Distribution Date, the Class A-III-1 Certificates will accrue interest at a
per annum rate equal to LIBOR plus 0.20%, subject to payment caps as
described in the definition of "Pass-Through Rate" herein and the provisions
for the payment of Class A-III-1 Carryover Shortfall Amount herein. With
respect to any Distribution Date after the related Auction Distribution
Date, the Class A-III-1 Certificates will accrue interest at a per annum
rate equal to the related Group 3 Net WAC Cap Rate. For purposes of REMIC
III, the interest will accrue on the portion of the Class A-III-1
Certificates that represent ownership of a regular interest in REMIC III at
the rate described in the definition of "Pass-Through Rate."
(7) With respect to any Distribution Date on or prior to the related Auction
Distribution Date, the Class A-III-2 Certificates, Class A-III-3
Certificates, Class A-III-4 Certificates and Class A-III-5 Certificates are
subject to a payment cap as described in the definition of "Pass-Through
Rate" herein. With respect to any Distribution Date after the related
Auction Distribution Date, the Class A-III-2 Certificates, Class A-III-3
Certificates and Class A-III-4 Certificates will accrue interest at a per
annum rate equal to the related Group 3 Net WAC Cap Rate.
(8) The Class A-IV-1 Certificates will accrue interest at a per annum rate equal
the Group 4 Net WAC Cap Rate.
(9) With respect to any Distribution Date on or prior to the related Auction
Distribution Date, the Class X-II Certificates will accrue interest at a per
annum rate equal to the excess, if any, of (i) the related Group 2 Net WAC
Cap Rate over (ii) the weighted average of the Pass-Through Rates for the
Class A-II-1 Certificates (adjusted to reflect an accrual method on a
30/360-day basis), Class A-II-2 Certificates, Class A-II-3 Certificates and
Class A-II-4 Certificates. The Class X-II Certificates will not be entitled
to any distributions after the related Auction Distribution Date.
(10)With respect to any Distribution Date on or prior to the related Auction
Distribution Date, the Class X-III Certificates will accrue interest at a
per annum rate equal to the excess, if any, of (i) the related Group 3 Net
WAC Cap Rate over (ii) the weighted average of the Pass-Through Rates for
the Class A-III-1 Certificates (adjusted to reflect an accrual method on a
30/360-day basis), Class A-III-2 Certificates, Class A-III-3 Certificates,
Class A-III-4 Certificates and Class A-III-5 Certificates. The Class X-III
Certificates will not be entitled to any distributions after the related
Auction Distribution Date.
(11)The Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class B-1 Certificates, Class B-2 Certificates and Class B-3 Certificates
will accrue interest at a per annum rate equal to the weighted average of
(i) the Group 1 Net WAC Cap Rate, (ii) the related Group 2 Net WAC Cap Rate,
(iii) the related Group 3 Net WAC Cap Rate and (iv) the Group 4 Net WAC Cap
Rate, in each case, weighted on the basis of the related Subordinate
Component.
(12)The Holder of the Class SB Certificates is entitled to certain payments
from the Hedge Agreements. The Class SB Certificates do not represent an
interest in REMIC III.
(13)Component III of the Class R Certificates shall be entitled to receive the
applicable Residual Distribution Amount. Component III of the Class R
Certificates shall not be entitled to receive any distributions of interest
or principal.
4
In consideration of the mutual agreements herein contained, the Company,
the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
Accrued Certificate Interest: With respect to each Distribution Date,
(a) as to any Class of Certificates (other than the Class X Certificates),
interest accrued during the related Interest Accrual Period at the related
Pass-Through Rate on the Certificate Principal Balance thereof immediately prior
to such Distribution Date and (b) in the case of each Class of Class X
Certificates, interest accrued during the related Interest Accrual Period at the
related Pass-Through Rate on the Notional Amount thereof immediately prior to
such Distribution Date. Accrued Certificate Interest on each Class of
Certificates (other than the Class A-II-1 Certificates and Class A-III-1
Certificates) will be calculated on the basis of a 360-day year, consisting of
twelve 30-day months. Accrued Certificate Interest on the Class A-II-1
Certificates and Class A-III-1 Certificates will be calculated on the basis of
the actual number of days in the related Interest Accrual Period and a 360-day
year.
With respect to each Distribution Date, Accrued Certificate Interest on
any Class of Certificates will be reduced by the amount of:
(i) Prepayment Interest Shortfalls on the Mortgage Loans in the
related Loan Group prepaid during the prior calendar month and,
in the case of a Principal Prepayment in Full, during the related
Prepayment Period (to the extent not offset by the Servicer with
a payment of Compensating Interest),
(ii) the interest portion (adjusted to the Net Mortgage Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan)) of Realized Losses on the Mortgage Loans in the related
Loan Group (including Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses and Extraordinary Losses) not
allocated solely to one or more specific Classes of Certificates
pursuant to Section 4.05,
(iii) the interest portion of Advances that were made with respect to
delinquencies related to Mortgage Loans or REO Property in the
related Loan Group that were ultimately determined to be Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
Losses or Extraordinary Losses, and
(iv) any other interest shortfalls on the Mortgage Loans in the
related Loan Group not covered by the subordination provided by
the Class M Certificates and Class B Certificates, including
interest that is not collectible from the Mortgagor pursuant to
the Relief Act,
with the Senior Percentage of all such reductions with respect to the Mortgage
Loans in a Loan Group being allocated among the related Senior Certificates in
proportion to the amounts of Accrued Certificate Interest payable from the
related Loan Group on such Distribution Date absent such reductions, with the
remainder of such reductions allocated among the holders of the Class M
Certificates and Class B Certificates on the basis of Accrued Certificate
5
Interest payable on their Apportioned Principal Balances on such Distribution
Date absent such reductions. In addition to that portion of the reductions
described in the preceding sentence that are allocated to any Class of Class B
Certificates or any Class of Class M Certificates, Accrued Certificate Interest
on such Class of Class B Certificates or such Class of Class M Certificates will
be reduced by the interest portion (adjusted to the Net Mortgage Rate) of
Realized Losses that are allocated solely to such Class of Class B Certificates
or such Class of Class M Certificates pursuant to Section 4.05.
In addition, Accrued Certificate Interest on the Class X-II Certificates
on any Distribution Date shall be further reduced to the extent necessary to pay
the Class A-II-1 Carryover Shortfall Amount to the Class A-II-1 Certificates on
such Distribution Date, after application of the Class A-II-1 Yield Maintenance
Amount, if any, for such Distribution Date. Such reduction and payment shall be
treated for federal income tax purposes as a payment outside of any REMIC by the
Class X-II Certificateholders pursuant to a contract between the Class X-II
Certificateholders and the Class A-II-1 Certificateholders. For such purposes,
the Class X-II Certificateholders shall be deemed to have received from REMIC
III Accrued Certificate Interest unreduced by the provisions of this paragraph.
Accrued Certificate Interest on the Class X-III Certificates on any Distribution
Date shall be further reduced to the extent necessary to pay the Class A-III-1
Carryover Shortfall Amount to the Class A-III-1 Certificates on such
Distribution Date, after application of the Class A-III-1 Yield Maintenance
Amount, if any, for such Distribution Date. Such reduction and payment shall be
treated for federal income tax purposes as a payment outside of any REMIC by the
Class X-III Certificateholders pursuant to a contract between the Class X-III
Certificateholders and the Class A-III-1 Certificateholders. For such purposes,
the Class X-III Certificateholders shall be deemed to have received from REMIC
III Accrued Certificate Interest unreduced by the provisions of this paragraph.
Adjustment Date: With respect to each Mortgage Loan, each date set forth
in the related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.
Advance: As to any Mortgage Loan, any advance made by the Servicer,
pursuant to Section 4.04.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Subordinate Percentage: With respect to any Distribution Date,
the percent equivalent of a fraction, the numerator of which is the aggregate
Certificate Principal Balance of the Subordinate Certificates immediately prior
to such Distribution Date and the denominator of which is the Pool Stated
Principal Balance as of such Distribution Date.
Amount Held for Future Distribution: As to any Distribution Date and
with respect to each Loan Group, the total of the amounts held in the Custodial
Account at the close of business on the related Determination Date on account of
(i) Liquidation Proceeds, Insurance Proceeds, Curtailments, Mortgage Loan
purchases made pursuant to Section 2.02, 2.04 or 4.07 and Mortgage Loan
substitutions made pursuant to Section 2.04 received or made in the month of
such Distribution Date (other than such Liquidation Proceeds, Insurance Proceeds
and purchases of Mortgage Loans that the Servicer has deemed to have been
received in the preceding month in accordance with Section 3.07(b)), and
Principal Prepayments in Full received or made after the related Prepayment
Period, and (ii) payments which represent early receipt of scheduled payments of
principal and interest due on a date or dates subsequent to the related Due
Date.
6
Apportioned Principal Balance: For any Distribution Date, any Loan Group
and any Class of Subordinate Certificates, an amount equal to the Certificate
Principal Balance of that Class immediately prior to such Distribution Date
multiplied by a fraction, the numerator of which is the related Subordinate
Component for such Distribution Date and the denominator of which is the sum of
the aggregate of the Subordinate Components for such Distribution Date.
Appraised Value: As to any Mortgaged Property, the lesser of (i) the
appraised value of such Mortgaged Property based upon the appraisal made at the
time of the origination of the related Mortgage Loan, and (ii) the sales price
of the Mortgaged Property at such time of origination, except in the case of a
Mortgaged Property securing a refinanced or modified Mortgage Loan as to which
it is either the appraised value determined above or the appraised value
determined in an appraisal at the time of refinancing or modification, as the
case may be, provided that if permitted by the applicable underwriting standards
of GMACM, the Appraised Value shall be the value of the Mortgaged Property as
stated by the Mortgagor.
Assignment: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage Loan to the Trustee for the benefit of
Certificateholders, which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering
Mortgages secured by Mortgaged Properties located in the same county, if
permitted by law and accompanied by an Opinion of Counsel to that effect.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, the
assignment of the related Cooperative Lease from the Mortgagor to the originator
of the Cooperative Loan.
Auction Administrator: The Trustee, acting solely as an intermediary
agent for GCD and the Holders of the Auction Certificates and not as Trustee or
on behalf of the Trust Fund.
Auction Administration Agreement: The Auction Administration Agreement,
dated as of November 17, 2003, between GCD and the Auction Administrator.
Auction Certificates: Collectively, the Class A-II Auction Certificates and
the Class A-III Auction Certificates.
Auction Distribution Date: With respect to the Class A-II Certificates
and Class X-II Certificates, the Distribution Date occurring in August 2008 and
with respect to the Class A-III Certificates and Class X-III Certificates, the
Distribution Date occurring in August 2010.
Available Distribution Amount: As to any Distribution Date and each Loan
Group, an amount equal to (a) the sum of (i) the amount relating to the Mortgage
Loans on deposit in the Custodial Account as of the close of business on the
immediately preceding Determination Date and amounts deposited in the Custodial
Account in connection with the substitution of Qualified Substitute Mortgage
Loans, (ii) the amount of any Advance made on the immediately preceding Payment
Account Deposit Date, (iii) any amount deposited in the Payment Account on the
related Payment Account Deposit Date pursuant to the second paragraph of Section
3.12(a), (iv) any amount deposited in the Payment Account pursuant to Section
4.07, and (v) any amount that the Servicer is not permitted to withdraw from the
Custodial Account pursuant to Section 3.16(e), reduced by (b) the sum as of the
close of business on the immediately preceding Determination Date of (w)
aggregate Foreclosure Profits, (x) the Amount Held for Future Distribution and
(y) amounts permitted to be withdrawn by the Servicer from the Custodial Account
in respect of the Mortgage Loans pursuant to clauses (ii)-(x), inclusive, of
Section 3.10(a). Such amount shall be determined separately for each Loan Group.
Additionally, if on any Distribution Date Compensating Interest provided
7
pursuant to Section 3.16(e) is less than Prepayment Interest Shortfalls incurred
on the Mortgage Loans in connection with Principal Prepayments in Full received
during the related Prepayment Period and Curtailments made in the prior calendar
month, such Compensating Interest shall be allocated on such Distribution Date
to the Available Distribution Amount for each Loan Group on a pro rata basis in
accordance with the respective amounts of such Prepayment Interest Shortfalls
incurred on the Mortgage Loans in such Loan Group in respect of such
Distribution Date.
Bankruptcy Amount: As of any date of determination prior to the first
anniversary of the Cut-off Date, an amount equal to the excess, if any, of (A)
$125,082.54 over (B) the aggregate amount of Bankruptcy Losses allocated solely
to one or more specific Classes of Certificates in accordance with Section 4.05.
As of any date of determination on or after the first anniversary of the Cut-off
Date, an amount equal to the excess, if any, of
(1) the lesser of (a) the Bankruptcy Amount calculated as of the
close of business on the Business Day immediately preceding the most
recent anniversary of the Cut-off Date coinciding with or preceding such
date of determination (or, if such date of determination is an
anniversary of the Cut-off Date, the Business Day immediately preceding
such date of determination) (for purposes of this definition, the
"Relevant Anniversary") and (b) the greater of
(A) the greater of (i) 0.0006 times the aggregate
principal balance of all the Mortgage Loans in the
Mortgage Pool as of the Relevant Anniversary having a
Loan-to-Value Ratio at origination which exceeds 75% and
(ii) $100,000; and
(B) (i) if the aggregate principal balance of the
Non-Primary Residence Loans as of the Relevant Anniversary
is less than 10% of the Stated Principal Balance of the
Mortgage Loans as of the Relevant Anniversary, $0.00, or
(ii) if the aggregate principal balance of the Non-Primary
Residence Loans as of the Relevant Anniversary is equal to
or greater than 10% of the Stated Principal Balance of the
Mortgage Loans as of the Relevant Anniversary, the sum of
(I) the aggregate principal balance of the Non-Primary
Residence Loans with a Loan-to-Value Ratio of greater than
80.00% but less than or equal to 90.00% (other than
Additional Collateral Loans), times 0.25%, (II) the
aggregate principal balance of the Non-Primary Residence
Loans with a Loan-to-Value Ratio of greater than 90.00%
but less than or equal to 95.00% (other than Additional
Collateral Loans), times 0.50%, and (III) the aggregate
principal balance of the Non-Primary Residence Loans with
a Loan-to-Value Ratio of greater than 95.00% (other than
Additional Collateral Loans) times 0.75%, in each case as
of the Relevant Anniversary, over
(2) the aggregate amount of Bankruptcy Losses allocated solely to
one or more specific Classes of Certificates in accordance with Section
4.05 since the Relevant Anniversary.
The Bankruptcy Amount may be further reduced by the Servicer (including
accelerating the manner in which such coverage is reduced) provided that prior
to any such reduction, the Servicer shall (i) obtain written confirmation from
each Rating Agency that such reduction shall not reduce the rating assigned to
any Class of Certificates by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency and (ii) provide a copy of such written
confirmation to the Trustee.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
8
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction; provided, however, that neither a Deficient
Valuation nor a Debt Service Reduction shall be deemed a Bankruptcy Loss
hereunder so long as the Servicer has notified the Trustee in writing that the
Servicer is diligently pursuing any remedies that may exist in connection with
the representations and warranties made regarding the related Mortgage Loan and
either (A) the related Mortgage Loan is not in default with regard to payments
due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any premiums on any applicable primary hazard
insurance policy and any related escrow payments in respect of such Mortgage
Loan are being advanced on a current basis by the Servicer or a Subservicer, in
either case without giving effect to any Debt Service Reduction.
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee.
Business Day: Any day other than (i) a Saturday or a Sunday, (ii) a day
on which banking institutions in the State of New York or the Commonwealth of
Pennsylvania (and such other state or states in which the Custodial Account or
the Payment Account are at the time located) are required or authorized by law
or executive order to be closed or (iii) as used (a) for purposes of determining
the Distribution Dates (pursuant to the definition thereof) in August 2008 or
August 2010 or (b) in the Swap Agreement and the Auction Administration
Agreement, also a day on which banking institutions in London are authorized or
obligated by law or executive order to be closed.
Buydown Account: As defined in Section 3.21(a).
Buydown Funds: Any amount contributed by the seller of a Mortgaged
Property, the Company or other source in order to enable the Mortgagor to reduce
the payments required to be made from the Mortgagor's funds in the early years
of a Mortgage Loan. Buydown Funds are not part of the Trust Fund prior to
deposit into the Custodial or Payment Account.
Buydown Mortgage Loan: Any Mortgage Loan as to which a specified amount
of interest is paid out of related Buydown Funds in accordance with a related
buydown agreement.
Buydown Period: As defined in Section 3.21(b).
Cash Liquidation: As to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and
other payments or cash recoveries which the Servicer reasonably and in good
faith expects to be finally recoverable with respect to such Mortgage Loan.
Certificate: Any Class A, Class X, Class M, Class B, Class SB or Class R
Certificate.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such 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.
Certificate Principal Balance: With respect to each Certificate (other
than any Interest Only Certificate), on any date of determination, an amount
equal to:
(i) the Initial Certificate Principal Balance of such Certificate as
specified on the face thereof, minus
9
(ii) the sum of (x) the aggregate of all amounts previously
distributed with respect to such Certificate (or any predecessor
Certificate) and applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.02 and (y) the aggregate of
all reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses which were previously
allocated to such Certificate (or any predecessor Certificate)
pursuant to Section 4.05;
provided, however, that the Certificate Principal Balance of the Class of
Subordinate Certificates with the Lowest Priority at any given time shall be
calculated to equal the Percentage Interest evidenced by such Certificate times
the excess, if any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans over (B) the then aggregate Certificate Principal Balance of all
other Classes of Certificates then outstanding.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 5.02.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that neither a Disqualified
Organization nor a Non-United States Person shall be a holder of a Class R
Certificate for purposes hereof and, solely for the purpose of giving any
consent or direction pursuant to this Agreement, any Certificate, other than a
Class R Certificate, registered in the name of the Company, the Servicer or any
Subservicer or any Affiliate thereof shall be deemed not to be outstanding and
the Percentage Interest or Voting Rights evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
or Voting Rights necessary to effect any such consent or direction has been
obtained. All references herein to "Holders" or "Certificateholders" 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 Certificate is registered in the Certificate Register.
Class: Collectively, all of the Certificates bearing the same designation.
Class A Certificates: Collectively, the Class A-I-1, Class A-II-1
Certificates, Class A-II-2 Certificates, Class A-II-3 Certificates, Class A-II-4
Certificates, Class A-III-1 Certificates, Class A-III-2 Certificates, Class
A-III-3 Certificates, Class A-III-4 Certificates, Class A-III-5 Certificates and
Class A-IV-1 Certificates.
Class A-I-1 Certificate: Any one of the Class A-I-1 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, representing an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions.
Class A-II Auction Certificates: Collectively, the Class A-II-1
Certificates, Class A-II-2 Certificates, Class A-II-3 Certificates and Class
A-II-4 Certificates.
Class A-II-1 Carryover Shortfall Amount: With respect to the Class
A-II-1 Certificates and any Distribution Date, the sum of (a) with respect to
any Distribution Date on which the related Group 2 Net WAC Cap Rate is used to
determine the Pass-Through Rate of the Class A-II-1 Certificates, an amount
equal to the excess, if any, of (1) the amount of Accrued Certificate Interest
for such Class that would have been produced had the Pass-Through Rate for such
Class been calculated at a per annum rate equal to the related Formula Rate,
over (2) Accrued Certificate Interest for such class calculated using the
related Group 2 Net WAC Cap Rate, (b) any shortfalls calculated pursuant to
10
clause (a) above remaining unpaid from prior Distribution Dates, and (c)
one-month's interest on the amount in clause (b) (based on the number of days in
the related Interest Accrual Period) at a per annum rate equal to the related
Formula Rate.
Class A-II-1 Certificate: Any one of the Class A-II-1 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, representing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Class A-II-1 Hedge
Agreement.
Class A-II-1 Hedge Agreement: The confirmation, dated as of the Closing
Date, between the Trustee and the Hedge Counterparty, relating to the Class
A-II-1 Certificates, or any replacement, substitute, collateral or other
arrangement in lieu thereof.
Class A-II-1 Hedge Payment: For any Distribution Date, the payment, if
any, due from the Hedge Counterparty under the Class A-II-1 Hedge Agreement in
respect of such Distribution Date.
Class A-II-1 Monthly Strike Rate: With respect to each Distribution Date
specified below, the rate set forth next to such date in the table below:
MONTHLY STRIKE MONTHLY STRIKE
DISTRIBUTION DATE RATE DISTRIBUTION DATE RATE
December 2003 3.75156% February 2006 3.87960%
January 2004 3.87874% March 2006 4.31566%
February 2004 3.87877% April 2006 3.87967%
March 2004 4.15941% May 2006 4.01536%
April 2004 3.87884% June 2006 3.87974%
May 2004 4.01450% July 2006 4.01544%
June 2004 3.87890% August 2006 3.87982%
July 2004 4.01456% September 2006 3.87986%
August 2004 3.87897% October 2006 4.01556%
September 2004 3.87900% November 2006 3.87993%
October 2004 4.01467% December 2006 4.01564%
November 2004 3.87907% January 2007 3.88001%
December 2004 4.01474% February 2007 3.88005%
January 2005 3.87913% March 2007 4.31617%
February 2005 3.87917% April 2007 3.88013%
March 2005 4.31519% May 2007 4.01584%
April 2005 3.87924% June 2007 3.88021%
May 2005 4.01492% July 2007 4.01593%
June 2005 3.87931% August 2007 3.88029%
July 2005 4.01499% September 2007 3.88033%
August 2005 3.87938% October 2007 4.01605%
September 2005 3.87941% November 2007 3.88042%
October 2005 4.01510% December 2007 4.01614%
November 2005 3.87949% January 2008 3.88050%
December 2005 4.01517% February 2008 3.88054%
January 2006 3.87956% March 2008 and
thereafter 0.00000%
11
Class A-II-1 Yield Maintenance Agreement Notional Balance: With respect
to each Distribution Date specified below, the lesser of (a) the Certificate
Principal Balance of the Class A-II-1 Certificates immediately prior to such
Distribution Date and (b) the amount set forth next to such Distribution Date in
the table below:
DISTRIBUTION DATE NOTIONAL BALANCE DISTRIBUTION DATE NOTIONAL BALANCE
December 2003 $83,880,000 February 2006 $34,461,822
January 2004 $81,700,440 March 2006 $32,835,018
February 2004 $79,545,184 April 2006 $31,226,480
March 2004 $77,413,967 May 2006 $29,636,011
April 2004 $75,306,526 June 2006 $28,063,411
May 2004 $73,222,602 July 2006 $26,508,485
June 2004 $71,161,938 August 2006 $24,971,041
July 2004 $69,124,281 September 2006 $23,450,886
August 2004 $67,109,380 October 2006 $21,947,833
September 2004 $65,116,986 November 2006 $20,461,692
October 2004 $63,146,853 December 2006 $18,992,280
November 2004 $61,198,739 January 2007 $17,539,413
December 2004 $59,272,403 February 2007 $16,102,910
January 2005 $57,367,608 March 2007 $14,682,591
February 2005 $55,484,118 April 2007 $13,278,281
March 2005 $53,621,700 May 2007 $11,889,802
April 2005 $51,780,125 June 2007 $10,516,983
May 2005 $49,959,165 July 2007 $ 9,159,651
June 2005 $48,158,594 August 2007 $ 7,817,636
July 2005 $46,378,190 September 2007 $ 6,490,771
August 2005 $44,617,733 October 2007 $ 5,178,890
September 2005 $42,877,004 November 2007 $ 3,881,829
October 2005 $41,155,788 December 2007 $ 2,599,424
November 2005 $39,453,872 January 2008 $ 1,331,516
December 2005 $37,771,044 February 2008 $ 77,946
January 2006 $36,107,097 March 2008 and $
thereafter 0
Class A-II-1 Yield Maintenance Amount: With respect to the Class A-II-1
Certificates and any Distribution Date on or before the Distribution Date in
February 2008, an amount equal to the product of (a) the Class A-II-1 Yield
Maintenance Agreement Notional Balance for such Distribution Date, (b) the
positive excess, if any, of (i) the lesser of (A) LIBOR and (B) 9.81%, over (ii)
the Class A-II-1 Monthly Strike Rate and (c) a fraction, the numerator of which
is the actual number of days in the related Interest Accrual Period and the
denominator of which is 360.
Class A-II-2 Certificate: Any one of the Class A-II-2 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, each such Certificate
representing an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
Class A-II-3 Certificate: Any one of the Class A-II-3 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, each such Certificate
representing an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
Class A-II-4 Certificate: Any one of the Class A-II-4 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, each such Certificate
representing an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
12
Class A-III Auction Certificates: Collectively, the Class A-III-1
Certificates, Class A-III-2 Certificates, Class A-III-3 Certificates, Class
A-III-4 Certificates and Class A-III-5 Certificates.
Class A-III-1 Carryover Shortfall Amount: With respect to the Class
A-III-1 Certificates and any Distribution Date, the sum of (a) with respect to
any Distribution Date on which the related Group 3 Net WAC Cap Rate is used to
determine the Pass-Through Rate of the Class A-III-1 Certificates, an amount
equal to the excess, if any, of (1) the amount of Accrued Certificate Interest
for such Class that would have been produced had the Pass-Through Rate for such
Class been calculated at a per annum rate equal to the related Formula Rate,
over (2) Accrued Certificate Interest for such class calculated using the
related Group 3 Net WAC Cap Rate, (b) any shortfalls calculated pursuant to
clause (a) above remaining unpaid from prior Distribution Dates, and (c)
one-month's interest on the amount in clause (b) (based on the number of days in
the related Interest Accrual Period) at a per annum rate equal to the related
Formula Rate.
Class A-III-1 Certificate: Any one of the Class A-III-1 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, representing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Class A-III-1 Hedge
Agreement.
Class A-III-1 Hedge Agreement: The confirmation, dated as of the Closing
Date, between the Trustee and the Hedge Counterparty, relating to the Class
A-III-1 Certificates, or any replacement, substitute, collateral or other
arrangement in lieu thereof.
Class A-III-1 Hedge Payment: For any Distribution Date, the payment, if
any, due from the Hedge Counterparty under the Class A-III-1 Hedge Agreement in
respect of such Distribution Date.
13
Class A-III-1 Monthly Strike Rate: With respect to each Distribution
Date specified below, the rate set forth next to such date in the table below:
MONTHLY STRIKE MONTHLY STRIKE
DISTRIBUTION DATE RATE DISTRIBUTION DATE RATE
December 2003 3.92352% February 2006 4.05654%
January 2004 4.05654% March 2006 4.51259%
February 2004 4.05654% April 2006 4.05654%
March 2004 4.35009% May 2006 4.19842%
April 2004 4.05654% June 2006 4.05654%
May 2004 4.19842% July 2006 4.19842%
June 2004 4.05654% August 2006 4.05654%
July 2004 4.19842% September 2006 4.05654%
August 2004 4.05654% October 2006 4.19842%
September 2004 4.05654% November 2006 4.05654%
October 2004 4.19842% December 2006 4.19842%
November 2004 4.05654% January 2007 4.05654%
December 2004 4.19842% February 2007 4.05654%
January 2005 4.05654% March 2007 4.51259%
February 2005 4.05654% April 2007 4.05654%
March 2005 4.51259% May 2007 4.19842%
April 2005 4.05654% June 2007 4.05654%
May 2005 4.19842% July 2007 4.19842%
June 2005 4.05654% August 2007 4.05654%
July 2005 4.19842% September 2007 4.05654%
August 2005 4.05654% October 2007 4.19842%
September 2005 4.05654% November 2007 4.05654%
October 2005 4.19842% December 2007 4.19842%
November 2005 4.05654% January 2008 4.05654%
December 2005 4.19842% February 2008
and
January 2006 4.05654% thereafter 0.00000%
14
Class A-III-1 Yield Maintenance Agreement Notional Balance: With respect
to each Distribution Date specified below, the lesser of (a) the Certificate
Principal Balance of the Class A-III-1 Certificates immediately prior to such
Distribution Date and (b) the amount set forth next to such Distribution Date in
the table below:
DISTRIBUTION DATE NOTIONAL BALANCE DISTRIBUTION DATE NOTIONAL BALANCE
December 2003 $73,970,000 February 2006 $29,805,218
January 2004 $72,017,104 March 2006 $28,356,083
February 2004 $70,086,383 April 2006 $26,923,573
March 2004 $68,177,592 May 2006 $25,507,504
April 2004 $66,290,492 June 2006 $24,107,695
May 2004 $64,424,843 July 2006 $22,723,965
June 2004 $62,580,409 August 2006 $21,356,138
July 2004 $60,756,956 September 2006 $20,004,038
August 2004 $58,954,255 October 2006 $18,667,490
September 2004 $57,172,076 November 2006 $17,346,323
October 2004 $55,410,193 December 2006 $16,040,367
November 2004 $53,668,383 January 2007 $14,749,454
December 2004 $51,946,424 February 2007 $13,473,417
January 2005 $50,244,099 March 2007 $12,212,092
February 2005 $48,561,191 April 2007 $10,965,316
March 2005 $46,897,486 May 2007 $ 9,732,928
April 2005 $45,252,772 June 2007 $ 8,514,770
May 2005 $43,626,840 July 2007 $ 7,310,683
June 2005 $42,019,484 August 2007 $ 6,120,512
July 2005 $40,430,497 September 2007 $ 4,944,103
August 2005 $38,859,678 October 2007 $ 3,781,303
September 2005 $37,306,827 November 2007 $ 2,631,962
October 2005 $35,771,744 December 2007 $ 1,495,930
November 2005 $34,254,235 January 2008 $ 373,061
December 2005 $32,754,105 February 2008 and
January 2006 $31,271,162 thereafter $ 0
Class A-III-1 Yield Maintenance Amount: With respect to the Class
A-III-1 Certificates and any Distribution Date on or before the Distribution
Date in January 2008, an amount equal to the product of (a) the Class A-III-1
Yield Maintenance Agreement Notional Balance for such Distribution Date, (b) the
positive excess, if any, of (i) the lesser of (A) LIBOR and (B) 9.80%, over (ii)
the Class A-III-1 Monthly Strike Rate and (c) a fraction, the numerator of which
is the actual number of days in the related Interest Accrual Period and the
denominator of which is 360.
Class A-III-2 Certificate: Any one of the Class A-III-2 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, each such Certificate
representing an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
Class A-III-3 Certificate: Any one of the Class A-III-3 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, each such Certificate
representing an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
Class A-III-4 Certificate: Any one of the Class A-III-4 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, each such Certificate
representing an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
15
Class A-III-5 Certificate: Any one of the Class A-III-5 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, each such Certificate
representing an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
Class A-IV-1 Certificate: Any one of the Class A-IV-1 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-1, each such Certificate
representing an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
Class B Certificate: Any one of the Certificates designated as a Class
B-1 Certificate, Class B-2 Certificate or Class B-3 Certificate, executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed hereto as Exhibit C.
Class M Certificate: Any one of the Certificates designated as a Class
M-1 Certificate, Class M-2 Certificate or Class M-3 Certificate, executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed hereto as Exhibit B.
Class Principal Balance: For any Class of REMIC I Regular Interests or
REMIC II Regular Interests, the applicable initial Class Principal Balance
therefor set forth in the Preliminary Statement hereto, corresponding to the
rights of such Class in payments of principal due to be passed through to such
Class from principal payments on the Mortgage Loans or the REMIC I Regular
Interests, as applicable, as reduced from time to time by (x) distributions of
principal to such Class and (y) the portion of Realized Losses allocated to the
Class Principal Balance of such Class pursuant to the definition of "Realized
Loss" with respect to a given Distribution Date. For any Distribution Date, the
reduction of the Class Principal Balance of any REMIC I Regular Interests
pursuant to the definition of "Realized Loss" shall be deemed effective before
the determination and distribution of principal on such Class pursuant to the
definition of "REMIC I Distribution Amount" and the reduction of the Class
Principal Balance of any REMIC II Regular Interests pursuant to the definition
of "Realized Loss" shall be deemed effective after the determination and
distribution of principal on such Class pursuant to the definition of "REMIC II
Distribution Amount."
Notwithstanding the foregoing, any amounts distributed in respect of
principal losses pursuant to paragraph (e)(i) of the definition of "REMIC I
Distribution Amount" shall not cause a reduction in the Class Principal Balances
of the REMIC I or REMIC II Regular Interests.
Class R Certificate: Any one of the Class R Certificates executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed hereto as Exhibit D and evidencing ownership of interests designated as
"residual interests" in REMIC I, REMIC II and REMIC III for purposes of the
REMIC Provisions. Component I of the Class R Certificate is designated as the
sole class of "residual interest" in REMIC I, Component II of the Class R
Certificate is designated as the sole class of "residual interest" in REMIC II
and Component III of the Class R Certificate is designated as the sole class of
"residual interest" in REMIC III.
Class SB Certificate: Any one of the Class SB Certificates, executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form hereto as Exhibit A-3, each such Certificate representing the right to
receive payments under the Hedge Agreements.
16
Class X Certificates: Collectively, the Class X-II Certificates and the
Class X-III Certificates.
Class X-II Certificate: Any one of the Class X-II Certificates, executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form hereto as Exhibit A-2, each such Certificate representing an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions.
Class X-III Certificate: Any one of the Class X-III Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form hereto as Exhibit A-2, each such Certificate
representing an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions.
Class Y Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Class Principal Balances of the Class Y Regular Interests
will be reduced on such Distribution Date by the allocation of Realized Losses
and the distribution of principal, determined as described in Appendix 1.
Class Y Regular Interests: The Class Y-1, Class Y-2, Class Y-3 and Class
Y-4 Regular Interests.
Class Y-1 Principal Distribution Amount: For any Distribution Date, the
sum of (A) the excess, if any, of the Class Y-1 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses allocated
to the Class Y-1 Regular Interest on such Distribution Date and (B) an amount
equal to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
Group 1 Loans for such Distribution Date not included in the Class Z-1 Principal
Distribution Amount pursuant to clause (B) of the definition thereof and (ii)
the amount of Realized Losses allocated to the Class Y-1 Regular Interest on
previous Distribution Dates (the amount in this clause (B)(ii) reduced by the
amount, if any, calculated pursuant to this clause (B) for prior Distribution
Dates).
Class Y-1 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Y-2 Principal Distribution Amount: For any Distribution Date, the
sum of (A) the excess, if any, of the Class Y-2 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses allocated
to the Class Y-2 Regular Interest on such Distribution Date and (B) an amount
equal to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
the Group 2 Loans for such Distribution Date not included in the Class Z-2
Principal Distribution Amount pursuant to clause (B) of the definition thereof
and (ii) the amount of Realized Losses allocated to the Class Y-2 Regular
Interest on previous Distribution Dates (the amount in this clause (B)(ii)
reduced by the amount, if any, calculated pursuant to this clause (B) for prior
Distribution Dates).
Class Y-2 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Y-3 Principal Distribution Amount: For any Distribution Date, the
sum of (A) the excess, if any, of the Class Y-3 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses allocated
to the Class Y-3 Regular Interest on such Distribution Date and (B) an amount
equal to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
Group 3 Loans for such Distribution Date not included in the Class Z-3 Principal
Distribution Amount pursuant to clause (B) of the definition thereof and (ii)
the amount of Realized Losses allocated to the Class Y-3 Regular Interest on
previous Distribution Dates (the amount in this clause (B)(ii) reduced by the
amount, if any, calculated pursuant to this clause (B) for prior Distribution
Dates).
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Class Y-3 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Y-4 Principal Distribution Amount: For any Distribution Date, the
sum of (A) the excess, if any, of the Class Y-4 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses allocated
to the Class Y-4 Regular Interest on such Distribution Date and (B) an amount
equal to the lesser of (i) the portion, if any, of the Subsequent Recoveries for
Group 4 Loans for such Distribution Date not included in the Class Z-4 Principal
Distribution Amount pursuant to clause (B) of the definition thereof and (ii)
the amount of Realized Losses allocated to the Class Y-4 Regular Interest on
previous Distribution Dates (the amount in this clause (B)(ii) reduced by the
amount, if any, calculated pursuant to this clause (B) for prior Distribution
Dates).
Class Y-4 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Z Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Class Principal Balances of the Class Z Regular Interests
will be reduced on such Distribution Date by the allocation of Realized Losses
and the distribution of principal, which shall be in each case the excess of (A)
the sum of (x) the excess of the REMIC I Available Distribution Amount for the
related Group (i.e. the "related Group" for the Class Z-1 Regular Interest is
the Group 1 Loans, the "related Group" for the Class Z-2 Regular Interest is the
Group 2 Loans, the "related Group" for the Class Z-3 Regular Interest is the
Group 3 Loans and the "related Group" for the Class Z-4 Regular Interest is the
Group 4 Loans) over the sum of the amounts thereof distributable (i) in respect
of interest on such Class Z Regular Interest and the related Class Y Regular
Interest, (ii) to such Class Z Regular Interest and the related Class Y Regular
Interest pursuant to clause (c)(ii) of the definition of "REMIC I Distribution
Amount" and (iii) in the case of the Group 1 Loans, to the Class R-1 Residual
Interest and (y) the amount of Realized Losses allocable to principal for the
related Group over (B) the Class Y Principal Reduction Amount for the related
Group.
Class Z Regular Interests: The Class Z-1, Class Z-2, Class Z-3 and Class
Z-4 Regular Interests.
Class Z-1 Principal Distribution Amount: For any Distribution Date, the
sum of (A) the excess, if any, of the Class Z-1 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses allocated
to the Class Z-1 Regular Interest on such Distribution Date and (B) an amount
equal to the lesser of (i) the Subsequent Recoveries for the Group 1 Loans for
such Distribution Date and (ii) the amount of Realized Losses allocated to the
Class Z-1 Regular Interest on previous Distribution Dates (the amount in this
clause (B)(ii) reduced by the amount, if any, calculated pursuant to this clause
(B) for prior Distribution Dates).
Class Z-1 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Z-2 Principal Distribution Amount: For any Distribution Date, the
sum of (A) the excess, if any, of the Class Z-2 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses allocated
to the Class Z-2 Regular Interest on such Distribution Date and (B) an amount
equal to the lesser of (i) the Subsequent Recoveries for the Group 2 Loans for
such Distribution Date and (ii) the amount of Realized Losses allocated to the
Class Z-2 Regular Interest on previous Distribution Dates (the amount in this
clause (B)(ii) reduced by the amount, if any, calculated pursuant to this clause
(B) for prior Distribution Dates).
Class Z-2 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
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Class Z-3 Principal Distribution Amount: For any Distribution Date, the
sum of (A) the excess, if any, of the Class Z-3 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses allocated
to the Class Z-3 Regular Interest on such Distribution Date and (B) an amount
equal to the lesser of (i) the Subsequent Recoveries for the Group 3 Loans for
such Distribution Date and (ii) the amount of Realized Losses allocated to the
Class Z-3 Regular Interest on previous Distribution Dates (the amount in this
clause (B)(ii) reduced by the amount, if any, calculated pursuant to this clause
(B) for prior Distribution Dates).
Class Z-3 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Z-4 Principal Distribution Amount: For any Distribution Date, the
sum of (A) the excess, if any, of the Class Z-4 Principal Reduction Amount for
such Distribution Date over the principal portion of Realized Losses allocated
to the Class Z-4 Regular Interest on such Distribution Date and (B) an amount
equal to the lesser of (i) the Subsequent Recoveries for the Group 4 Loans for
such Distribution Date and (ii) the amount of Realized Losses allocated to the
Class Z-4 Regular Interest on previous Distribution Dates (the amount in this
clause (B)(ii) reduced by the amount, if any, calculated pursuant to this clause
(B) for prior Distribution Dates).
Class Z-4 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Closing Date: November 17, 2003.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest: With respect to any Distribution Date, an amount
(but not in excess of the Servicing Fee for such Distribution Date) equal to
Prepayment Interest Shortfalls resulting from Principal Prepayments in Full
during the period from the 16th day through the last day of the prior calendar
month and resulting from Curtailments during the prior calendar month.
Cooperative: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an exclusive
right to occupy pursuant to the terms of a proprietary lease or occupancy
agreement.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements and (v) a stock
power (or other similar instrument), and ancillary thereto, a recognition
agreement between the Cooperative and the originator of the Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.
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Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.
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 1 Bank Xxx Xxxxx, Xxxxx XX0-0000, Xxxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Trust, GMACM Mortgage Pass-Through
Certificates, Series 2003-AR2.
Credit Support Depletion Date: The first Distribution Date on which the
Certificate Principal Balances of the Subordinate Certificates have been reduced
to zero.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and
maintained pursuant to Section 3.07, into which the amounts set forth in Section
3.07 shall be deposited directly.
Custodial Agreement: An agreement that may be entered into among the
Servicer, the Trustee and a Custodian pursuant to which the Custodian will hold
certain documents relating to the Mortgage Loans on behalf of the Trustee.
Custodian: A custodian appointed pursuant to a Custodial Agreement.
Cut-off Date: November 1, 2003.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof at the Cut-off Date after giving effect to all
installments of principal due on or prior thereto, whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificate: Any Certificate other than a Book-Entry
Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to
59 days" or "30 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the last business day
immediately prior to the next following monthly scheduled due date; "60 to 89
days" or "60 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the last business day
20
immediately prior to the second following monthly scheduled due date; and so on.
The determination as to whether a Mortgage Loan falls into these categories is
made as of the close of business on the last business day of each month. For
example, a Mortgage Loan with a payment due on July 1 that remained unpaid as of
the close of business on July 31 would then be considered to be 30 to 59 days
delinquent. Delinquency information as of the Cut-off Date is determined and
prepared as of the close of business on the last business day immediately prior
to the Cut-off Date.
Depository: The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those 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.
Determination Date: With respect to any Distribution Date, the 15th day
(or if such 15th day is not a Business Day, the Business Day immediately
following such 15th day) of the month of the related Distribution Date.
Disqualified Organization: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, and if not otherwise
included, any of the following: (i) the United States, any State or political
subdivision thereof, any possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which is
a corporation if all of its activities are subject to tax and, except for
Xxxxxxx Mac, a majority of its board of directors is not selected by such
governmental unit), (ii) a foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code, (v) any "electing large partnership," as defined in Section 775(a) 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 Certificates (other than such Person) to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of an Ownership Interest in a Class 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.
Distribution Date: The 19th day of any month beginning in the month
immediately following the month of the initial issuance of the Certificates or,
if such 19th day is not a Business Day, the Business Day immediately following
such 19th day.
Due Date: With respect to any Distribution Date and any Mortgage Loan,
the day during the related Due Period on which the Monthly Payment is due.
Due Period: With respect to each Distribution Date and any Mortgage
Loan, the period commencing on the second day of the month prior to the month in
which such Distribution Date occurs and ending on the first day of the month in
which such Distribution Date occurs.
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Eligible Account: An account that is any of the following: (i)
maintained with a federal or state chartered depository institution the accounts
of which are insured by the FDIC (to the limits established by the FDIC) and the
short-term debt ratings and the long-term deposit ratings of which are rated in
one of the two highest rating categories by the Rating Agencies, or (ii) a trust
account or accounts maintained with a federal or state chartered depository
institution or trust company with trust powers acting in its fiduciary capacity
subject to regulations regarding fiduciary funds on deposit similar to Title 12
of the Code of Federal Regulation Section 9.10(b), or (iii) in the case of the
Payment Account, a trust account or accounts maintained in the corporate trust
division of the Trustee, or (iv) 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
Payment Account will not reduce the rating assigned to any Class of Certificates
by such Rating Agency below the lower of the then-current rating or the rating
assigned to such Certificates as of the Closing Date by such Rating Agency).
Eligible Funds: On any Distribution Date and with respect to each Loan
Group, the portion, if any, of the Available Distribution Amount for such Loan
Group remaining after reduction by the sum of (i) the aggregate amount of
Accrued Certificate Interest on the related Senior Certificates, (ii) the
related Senior Principal Distribution Amount (determined without regard to
Section 4.02(a)(ii)(D) hereof), (iii) the aggregate amount of Accrued
Certificate Interest on the Class M, Class B-1 Class B-2 Certificates to the
extent such Accrued Certificate Interest is derived from such Loan Group, and
(iv) the portion of the payment to the Trustee for any servicing transfer
expenses reimbursable to the Trustees pursuant to Section 7.02(a) allocated to
such Loan Group, with such allocation being made to each Loan Group pro rata
based on the Stated Principal Balance of the Mortgage Loans in each Loan Group.
Event of Default: As defined in Section 7.01.
Excess Bankruptcy Loss: Any Bankruptcy Loss, or portion thereof, which
exceeds the then applicable Bankruptcy Amount.
Excess Fraud Loss: Any Fraud Loss, or portion thereof, which exceeds the
then applicable Fraud Loss Amount.
Excess Special Hazard Loss: Any Special Hazard Loss, or portion thereof,
that exceeds the then applicable Special Hazard Amount.
Excess Subordinate Principal Amount: With respect to any Distribution
Date on which the aggregate Certificate Principal Balance of the Class of
Subordinate Certificates then outstanding with the Lowest Priority is to be
reduced to zero and on which Realized Losses are to be allocated to such class
or classes, the excess, if any, of (i) the amount that would otherwise be
distributable in respect of principal on such class or classes of Certificates
on such Distribution Date over (ii) the excess, if any, of the aggregate
Certificate Principal Balance of such class or classes of Certificates
immediately prior to such Distribution Date over the aggregate amount of
Realized Losses to be allocated to such classes of Certificates on such
Distribution Date. The Excess Subordinate Principal Amount will be allocated
between each Loan Group on a pro rata basis in accordance with the amount of
Realized Losses attributable to each Loan Group and the amount allocated to the
Certificates on such Distribution Date.
Extraordinary Events: Any of the following conditions with respect to a
Mortgaged Property (or, with respect to a Cooperative Loan, the Cooperative
Apartment) or Mortgage Loan causing or resulting in a loss which causes the
liquidation of such Mortgage Loan:
22
(a) losses that are of the type that would be covered by the
fidelity bond and the errors and omissions insurance policy required to
be maintained pursuant to Section 3.12(b) but are in excess of the
coverage maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
contamination, all whether controlled or uncontrolled, and whether such
loss be direct or indirect, proximate or remote or be in whole or in
part caused by, contributed to or aggravated by a peril covered by the
definition of the term "Special Hazard Loss";
(c) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual, impending
or expected attack:
1. by any government or sovereign power, de jure or de
facto, or by any authority maintaining or using
military, naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(d) any weapon of war employing atomic fission or radioactive
force whether in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped power
or action taken by governmental authority in hindering, combating or
defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority; or risks of contraband or illegal
transportation or trade.
Extraordinary Losses: Any loss incurred on a Mortgage Loan caused by or
resulting from an Extraordinary Event.
Xxxxxx Xxx: Federal National Mortgage Association, or Xxxxxx Mae, a
federally chartered and privately owned corporation organized and existing under
the Federal National Mortgage Association Charter Act, or any successor thereto.
FASIT: A "financial asset securitization investment trust" within the
meaning of Section 860L of the Code.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
9.01, which Final Distribution Date shall in no event be later than the end of
the 90-day liquidation period described in Section 9.02.
Fitch: Fitch Ratings or its successor in interest.
Foreclosure Profits: As to any Distribution Date or related
Determination Date and any Mortgage Loan, the excess, if any, of Liquidation
Proceeds, Insurance Proceeds and REO Proceeds (net of all amounts reimbursable
therefrom pursuant to Section 3.10(a)(ii)) in respect of each Mortgage Loan or
REO Property for which a Cash Liquidation or REO Disposition occurred in the
related Prepayment Period over the sum of the unpaid principal balance of such
Mortgage Loan or REO Property (determined, in the case of an REO Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest at the Mortgage
23
Rate on such unpaid principal balance from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month in
which such Cash Liquidation or REO Disposition occurred.
Formula Rate: A per annum rate equal to:
o with respect to the Class A-II-1 Certificates, the lesser of (i) LIBOR plus
0.19% and (ii) 10.00%;
o with respect to the Class A-II-2 Certificates, 3.765%;
o with respect to the Class A-II-3 Certificates, 4.175%;
o with respect to the Class A-II-4 Certificates, 4.115%;
o with respect to the Class A-III-1 Certificates, the lesser of (i) LIBOR
plus 0.20% and (ii) 10.00%;
o with respect to the Class A-III-2 Certificates, 3.865%;
o with respect to the Class A-III-3 Certificates, 4.240%;
o with respect to the Class A-III-4 Certificates, 4.397%; and
o with respect to the Class A-III-5 Certificates, 4.397%.
Fraud Loss Amount: As of any date of determination after the Cut-off
Date, an amount equal to: (X) prior to the second anniversary of the Cut-off
Date an amount equal to 1.00% of the aggregate outstanding principal balance of
all of the Mortgage Loans as of the Cut-off Date minus the aggregate amount of
Fraud Losses allocated solely to one or more specific Classes of Certificates in
accordance with Section 4.05 since the Cut-off Date up to such date of
determination and (Y) from the second to the fifth anniversary of the Cut-off
Date, an amount equal to (1) the lesser of (a) the Fraud Loss Amount as of the
most recent anniversary of the Cut-off Date and (b) 0.50% of the aggregate
outstanding principal balance of all of the Mortgage Loans as of the most recent
anniversary of the Cut-off Date minus (2) the aggregate amount of Fraud Losses
allocated solely to one or more specific Classes of Certificates in accordance
with Section 4.05 since the most recent anniversary of the Cut-off Date up to
such date of determination. On and after the fifth anniversary of the Cut-off
Date, the Fraud Loss Amount shall be zero.
The Fraud Loss Amount may be further reduced by the Servicer (including
accelerating the manner in which such coverage is reduced) provided that prior
to any such reduction, the Servicer shall (i) obtain written confirmation from
each Rating Agency that such reduction shall not reduce the rating assigned to
any Class of Certificates by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency and (ii) provide a copy of such written
confirmation to the Trustee.
Fraud Losses: Losses on Mortgage Loans as to which there was fraud in
the origination of such Mortgage Loan.
Xxxxxxx Mac: Federal Home Loan Mortgage Corporation, or Xxxxxxx Mac, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
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GCD: Greenwich Capital Derivatives, Inc.
GMACM: GMAC Mortgage Corporation, a Pennsylvania corporation, in its
capacity as seller of the Mortgage Loans to the Company, and any successor
thereto.
Group 1 Loans: The Mortgage Loans designated in Exhibit E-1.
Group 1 Net WAC Cap Rate: With respect to any Distribution Date, a per
annum rate equal to the weighted average of the Net Mortgage Rates (or, if
applicable, the Modified Net Mortgage Rates) on the Group 1 Loans using the Net
Mortgage Rates in effect for the Monthly Payments due on such Mortgage Loans
during the related Due Period, weighted on the basis of the respective Stated
Principal Balances immediately prior to such Distribution Date.
Group 1 Senior Percentage: As of any Distribution Date, the lesser of
(x) 100% and (y) a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class A-I-1 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Group 1 Loans (or related REO
Properties) immediately prior to such Distribution Date; provided, however, that
on any Distribution Date on which the aggregate Certificate Principal Balance of
the Class A-IV-1 Certificates, the Group 2 Certificates and the Group 3
Certificates has been reduced to zero, the Group 1 Senior Percentage will equal
the lesser of (x) the Certificate Principal Balance of the Class A-I-1
Certificates immediately prior to that Distribution Date divided by the
aggregate Stated Principal Balance of all of the Mortgage Loans in all four Loan
Groups immediately prior to that Distribution Date and (y) 100%.
Group 1 Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the Available Distribution Amount for
Loan Group 1 remaining after the distribution of all amounts required to be
distributed therefrom pursuant to Section 4.02(a)(i)(I), and (b) the sum of the
amounts required to be distributed therefrom to the holders of the Group 1
Certificates on such Distribution Date pursuant to Section 4.02(a)(ii) hereof.
Group 2 Certificates: Collectively, the Class A-II Auction Certificates and
the Class X-II Certificates.
Group 2 Loans: The Mortgage Loans designated in Exhibit E-2.
Group 2 Net WAC Cap Rate: With respect to any Distribution Date, a per
annum rate equal to the weighted average of the Net Mortgage Rates (or, if
applicable, the Modified Net Mortgage Rates) on the Group 2 Loans using the Net
Mortgage Rates in effect for the Monthly Payments due on such Mortgage Loans
during the related Due Period, weighted on the basis of the respective Stated
Principal Balances thereof immediately prior to such Distribution Date (and in
the case of the Class A-II-1 Certificates, multiplied by a fraction, the
numerator of which is equal to 30 and the denominator of which is equal to the
actual number of days in the related Interest Accrual Period).
Group 2 Senior Percentage: As of any Distribution Date, the lesser of
(x) 100% and (y) a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class A-II Auction
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Group 2 Loans (or
related REO Properties) immediately prior to such Distribution Date; provided,
however, that on any Distribution Date on which the aggregate Certificate
Principal Balance of the Class A-I-1 Certificates, the Group 3 Certificates and
the Class A-IV-1 Certificates has been reduced to zero, the Group 2 Senior
Percentage will equal the lesser of (x) the aggregate Certificate Principal
25
Balance of the Class A-II Auction Certificates immediately prior to that
Distribution Date divided by the aggregate Stated Principal Balance of all of
the Mortgage Loans in all four Loan Groups immediately prior to that
Distribution Date and (y) 100%.
Group 2 Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the Available Distribution Amount for
Loan Group 2 remaining after the distribution of all amounts required to be
distributed therefrom pursuant to Section 4.02(a)(i)(II), and (b) the sum of the
amounts required to be distributed therefrom to the holders of the Group 2
Certificates on such Distribution Date pursuant to Section 4.02(a)(ii) hereof.
Group 3 Certificates: Collectively, the Class A-III Auction Certificates
and the Class X-III Certificates.
Group 3 Loans: The Mortgage Loans designated in Exhibit E-3.
Group 3 Net WAC Cap Rate: With respect to any Distribution Date, a per
annum rate equal to the weighted average of the Net Mortgage Rates (or, if
applicable, the Modified Net Mortgage Rates) on the Group 3 Loans using the Net
Mortgage Rates in effect for the Monthly Payments due on such Mortgage Loans
during the related Due Period, weighted on the basis of the respective Stated
Principal Balances thereof immediately prior to such Distribution Date (and in
the case of the Class A-III-1 Certificates, multiplied by a fraction, the
numerator of which is equal to 30 and the denominator of which is equal to the
actual number of days in the related Interest Accrual Period).
Group 3 Senior Percentage: As of any Distribution Date, the lesser of
(x) 100% and (y) a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class A-III Auction
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Group 3 Loans (or
related REO Properties) immediately prior to such Distribution Date; provided,
however, that on any Distribution Date on which the aggregate Certificate
Principal Balance of the Class A-I-1 Certificates, the Group 2 Certificates and
the Class A-IV-1 Certificates has been reduced to zero, the Group 3 Senior
Percentage will equal the lesser of (x) the aggregate Certificate Principal
Balance of the Class A-III Auction Certificates immediately prior to that
Distribution Date divided by the aggregate Stated Principal Balance of all of
the Mortgage Loans in all four Loan Groups immediately prior to that
Distribution Date and (y) 100%.
Group 3 Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the Available Distribution Amount for
Loan Group 3 remaining after the distribution of all amounts required to be
distributed therefrom pursuant to Section 4.02(a)(i)(III), and (b) the sum of
the amounts required to be distributed therefrom to the holders of the Group 3
Certificates on such Distribution Date pursuant to Section 4.02(a)(ii) hereof.
Group 4 Loans: The Mortgage Loans designated in Exhibit E-4.
Group 4 Net WAC Cap Rate: With respect to any Distribution Date, a per
annum rate equal to the weighted average of the Net Mortgage Rates (or, if
applicable, the Modified Net Mortgage Rates) on the Group 4 Loans using the Net
Mortgage Rates in effect for the Monthly Payments due on such Mortgage Loans
during the related Due Period, weighted on the basis of the respective Stated
Principal Balances immediately prior to such Distribution Date.
Group 4 Senior Percentage: As of any Distribution Date, the lesser of
(x) 100% and (y) a fraction, expressed as a percentage, the numerator of which
is the aggregate Certificate Principal Balance of the Class A-IV-1 Certificates
immediately prior to such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of all of the Group 4 Loans (or related REO
Properties) immediately prior to such Distribution Date; provided, however, that
26
on any Distribution Date on which the aggregate Certificate Principal Balance of
the Class A-I-1 Certificates, the Group 2 Certificates and the Group 3
Certificates has been reduced to zero, the Group 4 Senior Percentage will equal
the lesser of (x) the Certificate Principal Balance of the Class A-IV-1
Certificates immediately prior to that Distribution Date divided by the
aggregate Stated Principal Balance of all of the Mortgage Loans in all four Loan
Groups immediately prior to that Distribution Date and (y) 100%.
Group 4 Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the Available Distribution Amount for
Loan Group 4 remaining after the distribution of all amounts required to be
distributed therefrom pursuant to Section 4.02(a)(i)(IV), and (b) the sum of the
amounts required to be distributed therefrom to the holders of the Group 4
Certificates on such Distribution Date pursuant to Section 4.02(a)(ii) hereof.
Hedge Agreements: Collectively, the Class A-II-1 Hedge Agreement and the
Class A-III-1 Hedge Agreement.
Hedge Counterparty: Bear Xxxxxxx Financial Products Inc., and its
successors and assigns or any party to any replacement, substitute, collateral
or other arrangement in lieu thereof.
Hedge Shortfall Amount: For any Distribution Date, the amount, if any,
by which the payment on the Class A-II-1 Certificates and Class A-III-1
Certificates pursuant to Section 4.02(a)(iii) is paid from the Class A-II-1
Hedge Payment or Class A-III-1 Hedge Payment, respectively, for such
Distribution Date pursuant to the provisions thereof or would have been so paid
but for the failure of the Hedge Counterparty to make a payment required under
the Hedge Agreements.
Hedge Shortfall Carry-Forward Amount: For any Distribution Date, the
aggregate Hedge Shortfall Amounts for prior Distribution Dates to the extent not
reimbursed to the Class SB Certificates pursuant to Section 4.02(a)(xix).
Highest Priority: As of any date of determination, the Class of
Subordinate Certificates then outstanding with the earliest priority for
payments pursuant to Section 4.02(a), in the following order: Class M-1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates.
Independent: When used with respect to any specified Person, means such
a Person who (i) is in fact independent of the Company, the Servicer and the
Trustee, or any Affiliate thereof, (ii) does not have any direct financial
interest or any material indirect financial interest in the Company, the
Servicer or the Trustee or in an Affiliate thereof, and (iii) is not connected
with the Company, the Servicer or the Trustee as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Index: With respect to any Mortgage Loan and as to any Adjustment Date
therefor, the related index as stated in the related Mortgage Note.
Indirect Depository Participant: An institution that is not a Depository
Participant but clears through or maintains a custodial relationship with
Participants and has access to the Depository's clearing system.
Initial Certificate Principal Balance: With respect to each Class of
Certificates, the Certificate Principal Balance of such Class of Certificates as
of the Cut-off Date, as set forth in the Preliminary Statement hereto.
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Initial Subordinate Class Percentage: With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Certificate Principal Balance of such Class of Subordinate Certificates divided
by the aggregate Stated Principal Balance of all the Mortgage Loans as of the
Cut-off Date as follows:
Class M-1: 1.05% Class B-1: 0.20%
Class M-2: 0.80% Class B-2: 0.15%
Class M-3: 0.45% Class B-3: 0.25%
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Insurance Policy or any other related insurance policy
covering a Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under the Mortgage, any Subservicer, the Servicer or the Trustee and
are not applied to the restoration of the related Mortgaged Property (or, with
respect to a Cooperative Loan, the related Cooperative Apartment) or released to
the Mortgagor in accordance with the procedures that the Servicer would follow
in servicing mortgage loans held for its own account.
Insurer: Any named insurer under any Primary Insurance Policy or any
successor thereto or the named insurer in any replacement policy.
Interest Accrual Period: With respect to any Class of Certificates
(other than the Class A-II-1 Certificates and Class A-III-1 Certificates) and
any Distribution Date, the calendar month preceding the month in which such
Distribution Date occurs. With respect to the Class A-II-1 Certificates and
Class A-III-1 Certificates and the Distribution Date in December 2003, the
period commencing on the Closing Date and ending on December 18, 2003, and with
respect to any subsequent Distribution Date, the period commencing on the 19th
day of the calendar month immediately preceding the month in which such
Distribution Date occurs and ending on the 18th day of the month in which such
Distribution Date occurs.
Issuer Exemption: As defined in Section 5.02(e)(ii).
Junior Certificateholder: The Holder of not less than 95% of the Percentage
Interests of the Junior Class of Certificates.
Junior Class of Certificates: The Class of Subordinate Certificates
outstanding as of the date of the repurchase of a Mortgage Loan pursuant to
Section 4.07 herein that has the Lowest Priority.
Late Collections: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
LIBOR: With respect to any Distribution Date, the arithmetic mean of the
London interbank offered rate quotations for one-month U.S. Dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.03.
LIBOR Business Day: Any day other than (i) a Saturday or Sunday or (ii)
a day on which banking institutions in London, England are required or
authorized by law to be closed.
LIBOR Rate Adjustment Date: With respect to each Distribution Date, the
second LIBOR Business Day immediately preceding the commencement of the related
Interest Accrual Period.
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Liquidation Proceeds: Amounts (other than Insurance Proceeds) received
by the Servicer in connection with the taking of an entire Mortgaged Property by
exercise of the power of eminent domain or condemnation or in connection with
the liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure
sale or otherwise, other than REO Proceeds.
Loan Group: Loan Group 1, Loan Group 2, Loan Group 3 or Loan Group 4.
Loan Group 1: The group of Mortgage Loans comprised of the Group 1 Loans.
Loan Group 2: The group of Mortgage Loans comprised of the Group 2 Loans.
Loan Group 3: The group of Mortgage Loans comprised of the Group 3 Loans.
Loan Group 4: The group of Mortgage Loans comprised of the Group 4 Loans.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Appraised Value of the related Mortgaged Property.
Lower Priority: As of any date of determination and any Class of
Subordinate Certificates, any other Class of Subordinate Certificates then
outstanding with a later priority for payments pursuant to Section 4.02(a).
Lowest Priority: As of any date of determination, the Class of
Subordinate Certificates then outstanding with the latest priority for payments
pursuant to Section 4.02(a), in the following order: Class B-3, Class B-2, Class
B-1, Class M-3, Class M-2 and Class M-1 Certificates.
Maturity Date: With respect to each Class of Certificates, the
Distribution Date occurring in December 2033.
Maximum Mortgage Rate: With respect to each Mortgage Loan, the per annum
rate indicated on the Mortgage Loan Schedule as the maximum mortgage rate, which
rate is the maximum interest rate that may be applicable to such Mortgage Loan
at any time during the life of such Mortgage Loan.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
Minimum Mortgage Rate: With respect to each Mortgage Loan, a per annum
rate equal to the greater of (i) the Note Margin and (ii) the rate indicated on
the Mortgage Loan Schedule as the minimum mortgage rate, which rate may be
applicable to such Mortgage Loan at any time during the life of such Mortgage
Loan.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject of a
Servicing Modification.
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Modified Net Mortgage Rate: As to any Mortgage Loan that is the subject
of a Servicing Modification, the Net Mortgage Rate minus the rate per annum by
which the Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO
Property) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization schedule at the time applicable thereto (after
adjustment, if any, for Curtailments and for Deficient Valuations occurring
prior to such Due Date but before any adjustment to such amortization schedule
by reason of any bankruptcy, other than a Deficient Valuation, or similar
proceeding or any moratorium or similar waiver or grace period and before any
Servicing Modification that constitutes a reduction of the interest rate on such
Mortgage Loan).
Moody's: Xxxxx'x Investors Service, Inc., or its successor in interest.
Mortgage: With respect to each Mortgage Note related to a Mortgage Loan
which is not a Cooperative Loan, the mortgage, deed of trust or other comparable
instrument creating a first lien on an estate in fee simple or leasehold
interest in real property securing a Mortgage Note.
Mortgage File: (I) with respect to each Mortgage Loan (other than a
Cooperative Loan):
(i) The original Mortgage Note, endorsed without recourse in blank, or in the
name of the Trustee as trustee, and signed by an authorized officer (which
endorsement shall contain either an original signature or a facsimile
signature of an authorized officer of GMACM, and if in the form of an
allonge, the allonge shall be stapled to the Mortgage Note), with all
intervening endorsements showing a complete chain of title from the
originator to GMACM. If the Mortgage Loan was acquired by the endorser in a
merger, the endorsement must be by "____________, successor by merger to
[name of predecessor]". If the Mortgage Loan was acquired or originated by
the endorser while doing business under another name, the endorsement must
be by "____________ formerly known as [previous name]";
(ii) The original Mortgage, noting the presence of the MIN of the Mortgage Loan,
if the Mortgage is registered on the MERS(R) System, and language
indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a
MOM Loan, with evidence of recording indicated thereon or a copy of the
Mortgage certified by the public recording office in which such Mortgage
has been recorded;
(iii)The original of any guarantee executed in connection with the Mortgage
Note, if applicable;
(iv) Any rider or the original of any modification agreement executed in
connection with the related Mortgage Note or Mortgage, with evidence of
recording if required by applicable law;
(v) Unless the Mortgage Loan is registered on the MERS(R)System, an original
Assignment or Assignments of the Mortgage (which may be included in a
blanket assignment or assignments) from GMACM to "Bank One, National
Association, as Trustee under that certain Pooling and Servicing Agreement
dated as of November 17, 2003, for GMACM Mortgage Pass-Through
Certificates, Series 2003-AR2" c/o the Servicer at an address specified by
the Servicer, and signed by an authorized officer, which assignment shall
30
be in form and substance acceptable for recording. If the Mortgage Loan was
acquired by the assignor in a merger, the assignment must be by " ,
successor by merger to [name of predecessor]". If the Mortgage Loan was
acquired or originated by the assignor while doing business under another
name, the assignment must be by "_________ formerly known as [previous
name]";
(vi) Originals of all intervening assignments of mortgage, which together with
the Mortgage shows a complete chain of title from the originator to GMACM
(or to MERS, if the Mortgage Loan is registered on the MERS(R) System, and
which notes the presence of a MIN), with evidence of recording thereon, or
a copy of the assignment certified by the applicable recording office in
which such assignment has been recorded;
(vii)The original mortgagee policy of title insurance, including riders and
endorsements thereto, or if the policy has not yet been issued, (i) a
written commitment or interim binder for title issued by the title
insurance or escrow company dated as of the date the Mortgage Loan was
funded, with a statement by the title insurance company or closing attorney
that the priority of the lien of the related Mortgage during the period
between the date of the funding of the related Mortgage Loan and the date
of the related title policy (which title policy shall be dated the date of
recording of the related Mortgage) is insured, or (ii) a preliminary title
report issued by a title insurer in anticipation of issuing a title
insurance policy which evidences existing liens and gives a preliminary
opinion as to the absence of any encumbrance on title to the Mortgaged
Property, except liens to be removed on or before purchase by the Mortgagor
or which constitute customary exceptions acceptable to lenders generally;
or other evidence of title insurance acceptable to Xxxxxx Mae or Xxxxxxx
Mac, in accordance with the Xxxxxx Mae Seller/Servicer Guide or Xxxxxxx Mac
Seller/Servicer Guide, respectively;
(viii) A certified true copy of any power of attorney, if applicable; and
(ix) Originals of any security agreement, chattel mortgage or the equivalent
executed in connection with the Mortgage, if any.
and (II) with respect to each Cooperative Loan:
(i) The original Mortgage Note, endorsed without recourse to the
order of the Trustee and showing an unbroken chain of
endorsements from the originator thereof to GMACM;
(ii) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from
such originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such
Cooperative Loan, together with an undated stock power (or other
similar instrument) executed in blank;
(iv) The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related
Cooperative Loan;
31
(v) The Security Agreement;
(vi) Copies of the original UCC financing statement, and any
continuation statements, filed by the originator of such
Cooperative Loan as secured party, each with evidence of
recording thereof, evidencing the interest of the originator
under the Security Agreement and the Assignment of Proprietary
Lease;
(vii) Copies of the filed UCC assignments or amendments of the security
interest referenced in clause (vi) above showing an unbroken
chain of title from the originator to the Trustee, each with
evidence of recording thereof, evidencing the interest of the
originator under the Security Agreement and the Assignment of
Proprietary Lease;
(viii) An executed assignment of the interest of the originator in the
Security Agreement, Assignment of Proprietary Lease and the
recognition agreement referenced in clause (iv) above, showing an
unbroken chain of title from the originator to the Trustee;
(ix) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Cooperative
Loan; and
(x) A duly completed UCC financing statement showing GMACM as debtor,
the Company as secured party and the Trustee as assignee and a
duly completed UCC financing statement showing the Company as
debtor and the Trustee as secured party, each in a form
sufficient for filing, evidencing the interest of such debtors in
the Cooperative Loans.
It is understood that the Mortgage File (other than the Mortgage Note) may be
retained in microfilm, microfiche, optical storage or magnetic media in lieu of
hard copy; provided, that with respect to any Mortgage Loan not registered on
the MERS(R) System, the original Assignments required by (I)(v) above shall be
retained in the Mortgage File.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans attached
hereto as Exhibit E-1 (with respect to the Group 1 Loans), Exhibit E-2 (with
respect to the Group 2 Loans), Exhibit E-3 (with respect to the Group 3 Loans)
and Exhibit E-4 (with respect to the Group 4 Loans), each as amended from time
to time to reflect the addition of Qualified Substitute Mortgage Loans, which
list or lists shall set forth the following information as to each Mortgage Loan
in the related Loan Group:
(a) loan number;
(b) state code;
(c) zip code;
(d) the Loan-to-Value Ratio;
(e) the original principal balance and date of the Mortgage Note;
(f) the first Due Date;
(g) the type of Mortgaged Property;
(h) the scheduled monthly payment in effect as of the Cut-off Date;
32
(i) the principal balance as of the Cut-off Date;
(j) the Mortgage Rate as of the Cut-off Date;
(k) the occupancy status;
(l) the purpose of the Mortgage Loan;
(m) the paid-through date of the Mortgage Loan;
(n) the documentation type;
(o) the code "Y" under the column "BUYDOWN", indicating that the Mortgage Loan
is a Buydown Mortgage Loan, if applicable; and
(p) whether such Mortgage Loan constitutes a Group 1 Loan or Group 2 Loan.
Such schedule may consist of multiple reports that collectively set
forth all of the information required.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to Section 2.01 as from time to time are held or deemed to
be held as a part of the Trust Fund, the Mortgage Loans originally so held being
identified in the initial Mortgage Loan Schedule, and Qualified Substitute
Mortgage Loans held or deemed held as part of the Trust Fund including, without
limitation, (i) with respect to each Cooperative Loan, the related Mortgage
Note, Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate, Cooperative Lease and Mortgage File and all rights appertaining
thereto, and (ii) with respect to each Mortgage Loan other than a Cooperative
Loan, each related Mortgage Note, Mortgage and Mortgage File and all rights
appertaining thereto.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
together with any modification thereto.
Mortgage Pool: The pool of mortgage loans including both Loan Groups
consisting of the Mortgage Loans.
Mortgage Rate: As to any Mortgage Loan, the interest rate borne by the
related Mortgage Note, or any modification thereto other than a Servicing
Modification.
Mortgaged Property: The underlying real property securing a Mortgage
Loan or, with respect to a Cooperative Loan, the related Cooperative Lease and
Cooperative Stock.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, the related Mortgage Rate
minus the Servicing Fee Rate.
Non-Primary Residence Loans: The Mortgage Loans designated as secured by
second or vacation residences, or by non-owner occupied residences, on the
Mortgage Loan Schedule.
Non-United States Person: Any Person other than a United States Person.
33
Nonrecoverable Advance: Any Advance previously made or proposed to be
made by the Servicer in respect of a Mortgage Loan (other than a Deleted
Mortgage Loan) which, in the good faith judgment of the Servicer, will not, or,
in the case of a proposed Advance, would not, be ultimately recoverable by the
Servicer from related Late Collections, Insurance Proceeds, Liquidation
Proceeds, REO Proceeds or amounts reimbursable to the Servicer pursuant to
Section 4.02(a) hereof. The determination by the Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance would constitute a
Nonrecoverable Advance, shall be evidenced by an Officer's Certificate delivered
to the Company and the Trustee promptly following such determination.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is not subject to a Subservicing Agreement.
Note Margin: With respect to each Mortgage Loan, the fixed percentage
set forth in the related Mortgage Note and indicated on the Mortgage Loan
Schedule as the note margin, which percentage is added to the Index on each
Adjustment Date to determine (subject to rounding in accordance with the related
Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and the Minimum
Mortgage Rate) the interest rate to be borne by such Mortgage Loan until the
next Adjustment Date.
Notional Amount: With respect to the Class X-II Certificates and any
Distribution Date on or prior to the related Auction Distribution Date, an
amount equal to the aggregate Certificate Principal Balance of the Class A-II
Auction Certificates immediately prior to such Distribution Date. With respect
to the Class X-III Certificates and any Distribution Date on or prior to the
related Auction Distribution Date, an amount equal to the aggregate Certificate
Principal Balance of the Class A-III Auction Certificates immediately prior to
such Distribution Date. With respect to each Class of Class X Certificates and
any Distribution Date after the related Auction Distribution Date, zero.
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, if necessary, by the Treasurer, the
Secretary, or one of the Assistant Treasurer or Assistant Secretaries of the
Company or the Servicer, 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 Servicer, who may be counsel for the Company or the Servicer,
provided that any opinion of counsel (i) referred to in the definition of
"Disqualified Organization" or (ii) relating to the qualification of any REMIC
or compliance with the REMIC Provisions must, unless otherwise specified, be an
opinion of Independent counsel.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Principal Prepayment
in Full, Cash Liquidation or REO Disposition and which was not purchased,
deleted or substituted for prior to such Due Date pursuant to Section 2.02, 2.04
or 4.07.
Overcollateralized Group: Any of the Group 1 Loans, the Group 2 Loans,
Group 3 Loans or Group 4 Loans, if on any Distribution Date such Group is not an
Undercollateralized Group.
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: With respect to the Class A-I-1 Certificates and any
Distribution Date, the Group 1 Net WAC Cap Rate. With respect to each Class of
the Class A-II Auction Certificates and any Distribution Date on or prior to the
34
related Auction Distribution Date, a per annum rate equal to the lesser of (i)
the related Formula Rate and (ii) the Group 2 Net WAC Cap Rate, and with respect
to any Distribution Date after the related Auction Distribution Date, a per
annum rate equal to the related Group 2 Net WAC Cap Rate. With respect to each
Class of the Class A-III Auction Certificates and any Distribution Date on or
prior to the related Auction Distribution Date, a per annum rate equal to the
lesser of (i) the related Formula Rate and (ii) the Group 3 Net WAC Cap Rate,
and with respect to any Distribution Date after the related Auction Distribution
Date, a per annum rate equal to the related Group 3 Net WAC Cap Rate. With
respect to the Class A-IV-1 Certificates and any Distribution Date, the Group 4
Net WAC Cap Rate. With respect to the Class X-II Certificates and any
Distribution Date on or prior to the related Auction Distribution Date, a per
annum rate equal to the excess, if any, of (1) the related Group 2 Net WAC Cap
Rate over (2) the weighted average of the Pass-Through Rates on the Class A-II
Auction Certificates (adjusted to reflect an accrual method on a 30/360-day
basis with respect to the Class A-II-1 Pass-Through Rate) and with respect to
any Distribution Date after the related Auction Distribution Date, 0.00%. With
respect to the Class X-III Certificates and any Distribution Date on or prior to
the related Auction Distribution Date, a per annum rate equal to the excess, if
any, of (1) the related Group 3 Net WAC Cap Rate over (2) the weighted average
of the Pass-Through Rates on the Class A-III Auction Certificates (adjusted to
reflect an accrual method on a 30/360-day basis with respect to the Class
A-III-1 Pass-Through Rate) and with respect to any Distribution Date after the
related Auction Distribution Date, 0.00%. With respect to each class of
Subordinate Certificates and any Distribution Date, the weighted average of the
Group 1 Net WAC Cap Rate, Group 2 Net WAC Cap Rate, Group 3 Net WAC Cap Rate and
Group 4 Net WAC Cap Rate, weighted on the basis of the related Subordinate
Component.
Paying Agent: The Trustee or any successor Paying Agent appointed by the
Trustee.
Payment Account: The separate and segregated account or accounts created
and maintained pursuant to Section 4.01, which shall be entitled "Bank One,
National Association, as trustee, in trust for the registered holders of
Residential Asset Mortgage Products, Inc., GMACM Mortgage Pass-Through
Certificates, Series 2003-AR2" and which must be an Eligible Account.
Payment Account Deposit Date: As to any Distribution Date, the Business
Day prior thereto.
Percentage Interest: With respect to any Certificate (other than a Class
X Certificate or Class R Certificate), the undivided percentage ownership
interest in the related Class evidenced by such Certificate, which percentage
ownership interest shall be equal to the Initial Certificate Principal Balance
or initial Notional Amount thereof divided by the aggregate Initial Certificate
Principal Balance or initial Notional Amount of all the Certificates of the same
Class. With respect to a Class X 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
Certificate.
Periodic Cap: With respect to each Mortgage Loan, the periodic rate cap
that limits the increase or the decrease of the related Mortgage Rate on any
Adjustment Date pursuant to the terms of the related Mortgage Note.
35
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to timely payment of
principal and interest by the United States or any agency or
instrumentality thereof when such obligations are backed by the full
faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof,
provided that the unsecured short-term debt obligations of the party
agreeing to repurchase such obligations are at the time rated by each
Rating Agency in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution or
trust company; provided, that the short-term debt obligations of such
depository institution or trust company (or, if the only Rating Agency
is Standard & Poor's, in the case of the principal depository
institution in a depository institution holding company, debt
obligations of the depository institution holding company) at the date
of acquisition thereof have been rated by each Rating Agency in its
highest short-term rating available; and provided further that, if the
only Rating Agency is Standard & Poor's and if the depository or trust
company is a principal subsidiary of a bank holding company and the debt
obligations of such subsidiary are not separately rated, the applicable
rating shall be that of the bank holding company; and, provided further
that, if the original maturity of such short-term debt obligations of a
domestic branch of a foreign depository institution or trust company
shall exceed 30 days, the short-term rating of such institution shall be
A-1+ in the case of Standard & Poor's if Standard & Poor's is the Rating
Agency;
(iv) commercial paper and demand notes (having original
maturities of not more than 365 days) of any corporation incorporated
under the laws of the United States or any state thereof which on the
date of acquisition has been rated by each Rating Agency in its highest
short-term rating available; provided that such commercial paper shall
have a remaining maturity of not more than 30 days;
(v) any mutual fund, money market fund, common trust fund or
other pooled investment vehicle, the assets of which are limited to
instruments that otherwise would constitute Permitted Investments
hereunder and have been rated by each Rating Agency in its highest
short-term rating available, including any such fund that is managed by
the Trustee or any affiliate of the Trustee or for which the Trustee or
any of its affiliates acts as an adviser; and
(vi) other obligations or securities that are acceptable to each
Rating Agency as a Permitted Investment hereunder and will not reduce
the rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to
such Certificates as of the Closing Date by such Rating Agency, as
evidenced in writing;
provided, however, no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
36
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations. References herein to the highest rating available on unsecured
long-term rating category available shall mean Aaa in the case of Moody's and
AAA in the case of Standard & Poor's, and references herein to the highest
short-term rating category available shall mean P-1 in the case of Moody's and
A-1+ in the case of Standard & Poor's.
Permitted Transferee: Any Transferee of a Class R Certificate, other
than a Disqualified Organization or Non-United States Person.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of each Mortgage Loan.
Prepayment Assumption: The prepayment assumption of 20% of the
prepayment speed assumption, used for determining the accrual of original issue
discount and market discount and premium on the Certificates for federal income
tax purposes.
Prepayment Distribution Percentage: With respect to any Distribution
Date, each Loan Group and each Class of Subordinate Certificates, under the
applicable circumstances set forth below, the respective percentages set forth
below:
(i) For any Distribution Date on which any Class of Subordinate
Certificates are outstanding:
(a) in the case of the Class of Subordinate Certificates
then outstanding with the Highest Priority and each other Class of
Subordinate Certificates for which the related Prepayment Distribution
Trigger has been satisfied, a fraction, expressed as a percentage, the
numerator of which is the Certificate Principal Balance of such Class
immediately prior to such date and the denominator of which is the sum
of the Certificate Principal Balances immediately prior to such date of
(1) the Class of Subordinate Certificates then outstanding with the
Highest Priority and (2) all other Classes of Subordinate Certificates
for which the respective Prepayment Distribution Triggers have been
satisfied; and
(b) in the case of each other Class of Subordinate
Certificates for which the Prepayment Distribution Triggers have not
been satisfied, 0%; and
(ii) Notwithstanding the foregoing, if the application of the
foregoing percentages on any Distribution Date as provided in Section
4.02 (determined without regard to the proviso to the definition of
"Subordinate Principal Distribution Amount") would result in a
distribution in respect of principal of any Class or Classes of
Subordinate Certificates in an amount greater than the remaining
Certificate Principal Balance thereof (any such class, a "Maturing
Class"), then: (a) the Prepayment Distribution Percentage of each
Maturing Class shall be reduced to a level that, when applied as
described above, would exactly reduce the Certificate Principal Balance
of such Class to zero; (b) the Prepayment Distribution Percentage of
each other Class of Subordinate Certificates (any such Class, a
"Non-Maturing Class") shall be recalculated in accordance with the
provisions in paragraph (ii) above, as if the Certificate Principal
Balance of each Maturing Class had been reduced to zero (such percentage
as recalculated, the "Recalculated Percentage"); (c) the total amount of
37
the reductions in the Prepayment Distribution Percentages of the
Maturing Class or Classes pursuant to clause (a) of this sentence,
expressed as an aggregate percentage, shall be allocated among the
Non-Maturing Classes in proportion to their respective Recalculated
Percentages (the portion of such aggregate reduction so allocated to any
Non-Maturing Class, the "Adjustment Percentage"); and (d) for purposes
of such Distribution Date, the Prepayment Distribution Percentage of
each Non-Maturing Class shall be equal to the sum of (1) the Prepayment
Distribution Percentage thereof, calculated in accordance with the
provisions in paragraph (ii) above as if the Certificate Principal
Balance of each Maturing Class had not been reduced to zero, plus (2)
the related Adjustment Percentage.
Prepayment Distribution Trigger: With respect to any Distribution Date
and any Class of Subordinate Certificates (other than the Class M-1
Certificates), a test that shall be satisfied if the fraction (expressed as a
percentage) equal to the sum of the Certificate Principal Balances of such Class
and each Class of Subordinate Certificates with a Lower Priority than such Class
immediately prior to such Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date is greater than or equal to the sum
of the related Initial Subordinate Class Percentages of such Classes of
Subordinate Certificates.
Prepayment Interest Shortfall: As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan) on the Stated Principal Balance of such Mortgage Loan over the amount of
interest (adjusted to the Net Mortgage Rate (or Modified Net Mortgage Rate in
the case of a Modified Mortgage Loan)) paid by the Mortgagor during such
Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the preceding calendar month, an amount equal to one month's
interest at the Net Mortgage Rate (or Modified Net Mortgage Rate in the case of
a Modified Mortgage Loan) on the amount of such Curtailment.
Prepayment Period: As to any Distribution Date and Principal Prepayment
in Full, the period commencing of the 16th day of the month prior to that
Distribution Date and ending on the 15th day of the month in which the
Distribution Date occurs.
Primary Insurance Policy: The policy, if any, of primary mortgage
guaranty insurance related to a Mortgage Loan.
Principal Prepayment: Any payment of principal or other recovery on a
Mortgage Loan, including a recovery that takes the form of Liquidation Proceeds
or Insurance Proceeds, which is received in advance of its scheduled Due Date
and is not accompanied by an amount as to interest representing scheduled
interest on such payment due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Purchase Agreement: The Mortgage Loan Purchase Agreement, dated as of
the Closing Date, between the Seller and the Company, as purchaser, and all
amendments thereof and supplements thereto.
Purchase Price: With respect to any Mortgage Loan (or REO Property)
required to be or otherwise purchased on any date pursuant to Section 2.02, 2.04
or 4.07, an amount equal to the sum of (i) 100% of the Stated Principal Balance
thereof as of such date, plus the principal portion of any related unreimbursed
Advances and (ii) unpaid accrued interest at the Mortgage Rate (or Modified Net
Mortgage Rate plus the rate per annum at which the Servicing Fee is calculated
38
in the case of a Modified Mortgage Loan) (or at the Net Mortgage Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) in the case
of a purchase made by the Servicer) on the Stated Principal Balance thereof to
the Due Date in the Due Period related to the Distribution Date occurring in the
month following the month of purchase from the Due Date to which interest was
last paid by the Mortgagor and (iii) in connection with any Mortgage Loan
required to be repurchased pursuant to Section 7.03 of the Purchase Agreement,
any costs and damages incurred by the Trust Fund with respect to such Mortgage
Loan in connection with a breach of Section 7.02 (ff) of the Purchase Agreement.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan which must, on the date of such substitution,
as confirmed in an Officer's Certificate delivered to the Trustee, with a copy
to the Custodian,
(i) have an outstanding principal balance, after deduction of the
principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than one
Mortgage Loan for a Deleted Mortgage Loan, an aggregate
outstanding principal balance, after such deduction), not in
excess of the Stated Principal Balance of the Deleted Mortgage
Loan (the amount of any shortfall to be deposited by the Seller
in the Custodial Account in the month of substitution);
(ii) have a Mortgage Rate and a Net Mortgage Rate no lower than and
not more than 1% per annum higher than the Mortgage Rate and Net
Mortgage Rate, respectively, of the Deleted Mortgage Loan as of
the date of substitution;
(iii) have a Loan-to-Value Ratio at the time of substitution no higher
than that of the Deleted Mortgage Loan at the time of
substitution;
(iv) have a remaining term to stated maturity not greater than (and
not more than one year less than) that of the Deleted Mortgage
Loan;
(v) have a Mortgage Rate that adjusts with the same frequency and
based upon the same Index as that of the Deleted Mortgage Loan;
(vi) have a Note Margin not less than that of the Deleted Mortgage
Loan;
(vii) have a Periodic Rate Cap that is equal to that of the Deleted
Mortgage Loan;
(viii) have a next Adjustment Date no later than that of the Deleted
Mortgage Loan; and
(ix) comply with each representation and warranty made by the Seller
set forth in Section 7.02 of the Purchase Agreement.
Rating Agency: Moody's and Standard & Poor's. If any agency or a
successor is no longer in existence, "Rating Agency" shall be such statistical
credit rating agency, or other comparable Person, designated by the Company,
notice of which designation shall be given to the Trustee and the Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO Property):
(a) as to which a Cash Liquidation or REO Disposition has occurred, an amount
(not less than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan (or REO Property) as of the date of Cash Liquidation or REO
Disposition, plus (ii) interest (and REO Imputed Interest, if any) at the
Net Mortgage Rate from the Due Date as to which interest was last paid or
39
advanced to Certificateholders up to the Due Date in the Due Period related
to the Distribution Date on which such Realized Loss will be allocated
pursuant to Section 4.05 on the Stated Principal Balance of such Mortgage
Loan (or REO Property) outstanding during each Due Period that such
interest was not paid or advanced, minus (iii) the proceeds, if any,
received during the month in which such Cash Liquidation (or REO
Disposition) occurred, to the extent applied as recoveries of interest at
the Net Mortgage Rate and to principal of the Mortgage Loan, net of the
portion thereof reimbursable to the Servicer or any Subservicer with
respect to related Advances or expenses as to which the Servicer or
Subservicer is entitled to reimbursement thereunder but which have not been
previously reimbursed,
(b) which is the subject of a Servicing Modification, (i) the amount by which
the interest portion of a Monthly Payment or the principal balance of such
Mortgage Loan was reduced, and (ii) any such amount with respect to a
Monthly Payment that was or would have been due in the month immediately
following the month in which a Principal Prepayment or the Purchase Price
of such Mortgage Loan is received or is deemed to have been received,
(c) which has become the subject of a Deficient Valuation, the difference
between the principal balance of the Mortgage Loan outstanding immediately
prior to such Deficient Valuation and the principal balance of the Mortgage
Loan as reduced by the Deficient Valuation, or
(d) which has become the object of a Debt Service Reduction, the amount of such
Debt Service Reduction.
Notwithstanding the above, neither a Deficient Valuation nor a Debt Service
Reduction shall be deemed a Realized Loss hereunder so long as the Servicer has
notified the Trustee in writing that the Servicer is diligently pursuing any
remedies that may exist in connection with the representations and warranties
made regarding the related Mortgage Loan and either (A) the related Mortgage
Loan is not in default with regard to payments due thereunder or (B) delinquent
payments of principal and interest under the related Mortgage Loan and any
premiums on any applicable primary hazard insurance policy and any related
escrow payments in respect of such Mortgage Loan are being advanced on a current
basis by the Servicer or a Subservicer, in either case without giving effect to
any Debt Service Reduction.
Realized Losses on the Mortgage Loans shall be allocated to the REMIC I
Regular Interests as follows: (1) The interest portion of Realized Losses on the
Group 1 Loans, if any, shall be allocated between the Class Y-1 and Class Z-1
Regular Interests pro rata according to the amount of interest accrued but
unpaid thereon, in reduction thereof; (2) the interest portion of Realized
Losses on the Group 2 Loans, if any, shall be allocated between the Class Y-2
and Class Z-2 Regular Interests pro rata according to the amount of interest
accrued but unpaid thereon, in reduction thereof; (3) the interest portion of
Realized Losses on the Group 3 Loans, if any, shall be allocated between the
Class Y-3 and Class Z-3 Regular Interests pro rata according to the amount of
interest accrued but unpaid thereon, in reduction thereof; and (4) the interest
portion of Realized Losses on the Group 4 Loans, if any, shall be allocated
between the Class Y-4 and Class Z-4 Regular Interests pro rata according to the
amount of interest accrued but unpaid thereon, in reduction thereof. Any
interest portion of such Realized Losses in excess of the amount allocated
pursuant to the preceding sentence shall be treated as a principal portion of
Realized Losses not attributable to any specific Mortgage Loan in such Group and
allocated pursuant to the succeeding sentences. The principal portion of
Realized Losses with respect to the Mortgage Loans shall be allocated to the
REMIC I Regular Interests as follows: (1) the principal portion of Realized
Losses on the Group 1 Loans shall be allocated, first, to the Class Y-1 Regular
Interest to the extent of the Class Y-1 Principal Reduction Amount in reduction
of the Class Principal Balance of such Regular Interest and, second, the
remainder, if any, of such principal portion of such Realized Losses shall be
allocated to the Class Z-1 Regular Interest in reduction of the Class Principal
Balance thereof; (2) the principal portion of Realized Losses on the Group 2
40
Loans shall be allocated, first, to the Class Y-2 Regular Interest to the extent
of the Class Y-2 Principal Reduction Amount in reduction of the Class Principal
Balance of such Regular Interest and, second, the remainder, if any, of such
principal portion of such Realized Losses shall be allocated to the Class Z-2
Regular Interest in reduction of the Class Principal Balance thereof; (3) the
principal portion of Realized Losses on the Group 3 Loans shall be allocated,
first, to the Class Y-3 Regular Interest to the extent of the Class Y-3
Principal Reduction Amount in reduction of the Class Principal Balance of such
Regular Interest and, second, the remainder, if any, of such principal portion
of such Realized Losses shall be allocated to the Class Z-3 Regular Interest in
reduction of the Class Principal Balance thereof; and (4) the principal portion
of Realized Losses on the Group 4 Loans shall be allocated, first, to the Class
Y-4 Regular Interest to the extent of the Class Y-4 Principal Reduction Amount
in reduction of the Class Principal Balance of such Regular Interest and,
second, the remainder, if any, of such principal portion of such Realized Losses
shall be allocated to the Class Z-4 Regular Interest in reduction of the Class
Principal Balance thereof. For any Distribution Date, reductions in the Class
Principal Balances of the Class Y and Class Z Regular Interest pursuant to this
definition of Realized Loss shall be determined, and shall be deemed to occur,
prior to any reductions of such Class Principal Balances by distributions on
such Distribution Date.
Record Date: With respect to each Class of Certificates and any
Distribution Date, the last day of the related Interest Accrual Period.
Regular Certificate: Any of the Certificates other than a Class R
Certificate.
Related Class of Certificates: The Classes of Certificates and Classes
of REMIC II Regular Interests shall be treated as "Related Classes" as set forth
in the following chart.
REMIC II
REGULAR RELATED
INTEREST CERTIFICATES
A-I-1-M A-I-1
A-II-1-M A-II-1, X-II
A-II-2-M A-II-2, X-II
A-II-3-M A-II-3, X-II
A-II-4-M A-II-4, X-II
A-III-1-M A-III-1, X-III
A-III-2-M A-III-2, X-III
A-III-3-M A-III-3, X-III
A-III-4-M A-III-4, X-III
A-III-5-M A-III-5, X-III
A-IV-1-M A-IV-1
M-1-M M-1
M-2-M M-2
M-3-M M-3
B-1-M B-1
B-2-M B-2
B-3-M X-0
00
Xxxxxx Xxx: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, or similar legislation or regulations as in effect from time to time.
Relief Act Shortfalls: Shortfalls in interest payable by a Mortgagor that
is not collectible from the Mortgagor pursuant to the Relief Act.
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: The Trustee; provided that if the REMIC
Administrator is found by a court of competent jurisdiction to no longer be able
to fulfill its obligations as REMIC Administrator under this Agreement the
Servicer or Trustee acting as Servicer shall appoint a successor REMIC
Administrator, subject to assumption of the REMIC Administrator obligations
under this Agreement.
REMIC I: The segregated pool of assets (exclusive of the Hedge Agreement
and the Swap Agreement), with respect to which a REMIC election is made pursuant
to this Agreement, consisting of:
(a) the Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(b) all payments on and collections in respect of the Mortgage Loans
due after the Cut-off Date as shall be on deposit in the
Custodial Account or in the Payment Account and identified as
belonging to the Trust Fund,
(c) property that secured a Mortgage Loan and that has been acquired
for the benefit of the Certificateholders by foreclosure or deed
in lieu of foreclosure,
(d) the hazard insurance policies and Primary Insurance Policies, if
any, and
(e) all proceeds of clauses (a) through (d) above.
REMIC I Available Distribution Amount: For each Group for any
Distribution Date, the sum of the following amounts with respect to the Mortgage
Loans in such Group:
(1) the total amount of all cash received by or on behalf of the Master
Servicer with respect to such Mortgage Loans by the Determination Date for such
Distribution Date and not previously distributed, including Monthly Advances
made by Servicers, Liquidation Proceeds and scheduled amounts of distributions
from Buydown Funds respecting Buydown Loans, if any, except:
(a) all scheduled payments of principal and interest collected
but due subsequent to such Distribution Date;
(b) all Curtailments received after the Due Period;
(c) all Principal Prepayments in Full received after the
Prepayment Period immediately preceding such Distribution Date (together
with any interest payment received with such Principal Prepayments in
Full to the extent that it represents the payment of interest accrued on
the Mortgage Loans for the period subsequent to the Prepayment Period);
42
(d) Insurance Proceeds, Liquidation Proceeds and Subsequent
Recoveries received on such Mortgage Loans after the Due Period;
(e) all amounts in the Certificate Account which are due and
reimbursable to a Servicer or the Master Servicer pursuant to the terms
of this Agreement;
(f) the Master Servicing Fee payable on such Distribution Date
with respect to such Mortgage Loan; and
(g) Foreclosure Profits;
(2) the sum, to the extent not previously distributed, of the following
amounts, to the extent advanced or received, as applicable, by the Master
Servicer:
(a) any Advance made by the Master Servicer to the Trustee with
respect to such Distribution Date relating to such Mortgage Loans; and
(b) Compensating Interest; and
(3) the total amount of any cash received during the Due Period by the
Trustee or the Master Servicer in respect of the Purchase Price under Section
2.02, Section 2.04 and Section 4.07.
REMIC I Distribution Amount: For any Distribution Date, the REMIC I
Available Distribution Amount shall be distributed to the REMIC I Regular
Interests and the Class R-1 Residual Interest in the following amounts and
priority:
(a) To the extent of the REMIC I Available Distribution Amount for Group
1:
(i) first, to Class Y-1 and Class Z-1 Regular Interests and
Component I of the Class R Certificates, concurrently, the Interest
Distribution Amounts for such Classes remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
(ii) second, to the Class Y-1 and Class Z-1 Regular Interests and
Component I of the Class R Certificates, concurrently, the Interest
Distribution Amounts for such Classes for the current Distribution Date,
pro rata according to their respective Interest Distribution Amounts;
43
(iii) third, to Component I of the Class R Certificates, until
the Class Principal Balance thereof has been reduced to zero; and
(iv) fourth, to the Class Y-1 and Class Z-1 Regular Interests,
the Class Y-1 Principal Distribution Amount and the Class Z-1 Principal
Distribution Amount, respectively.
(b) To the extent of the REMIC I Available Distribution Amount for Group
2:
(i) first, to the Class Y-2 and Class Z-2 Regular Interests,
concurrently, the Interest Distribution Amounts for such Classes
remaining unpaid from previous Distribution Dates, pro rata according to
their respective shares of such unpaid amounts;
(ii) second, to the Class Y-2 and Class Z-2 Regular Interests,
concurrently, the Interest Distribution Amounts for such Classes for the
current Distribution Date, pro rata according to their respective
Interest Distribution Amounts; and
(iii) third, to the Class Y-2 and Class Z-2 Regular Interests,
the Class Y-2 Principal Distribution Amount and the Class Z-2 Principal
Distribution Amount, respectively.
(c) To the extent of the REMIC I Available Distribution Amount for Group
3:
(i) first, to the Class Y-3 and Class Z-3 Regular Interests,
concurrently, the Interest Distribution Amounts for such Classes
remaining unpaid from previous Distribution Dates, pro rata according to
their respective shares of such unpaid amounts;
(ii) second, to the Class Y-3 and Class Z-3 Regular Interests,
concurrently, the Interest Distribution Amounts for such Classes for the
current Distribution Date, pro rata according to their respective
Interest Distribution Amounts; and
(iii) third, to the Class Y-3 and Class Z-3 Regular Interests,
the Class Y-3 Principal Distribution Amount and the Class Z-3 Principal
Distribution Amount, respectively.
(d) To the extent of the REMIC I Available Distribution Amount for Group
4:
(i) first, to the Class Y-4 and Class Z-4 Regular Interests,
concurrently, the Interest Distribution Amounts for such Classes
remaining unpaid from previous Distribution Dates, pro rata according to
their respective shares of such unpaid amounts;
(ii) second, to the Class Y-4 and Class Z-4 Regular Interests,
concurrently, the Interest Distribution Amounts for such Classes for the
current Distribution Date, pro rata according to their respective
Interest Distribution Amounts; and
(iii) third, to the Class Y-4 and Class Z-4 Regular Interests,
the Class Y-4 Principal Distribution Amount and the Class Z-4 Principal
Distribution Amount, respectively.
(e) To the extent of the REMIC I Available Distribution Amounts for
Group 1, Group 2, Group 3 and Group 4 for such Distribution Date remaining after
payment of the amounts pursuant to paragraphs (a), (b), (c) and (d) of this
definition of "REMIC I Distribution Amount":
(i) first, to each Class of Class Y and Class Z Regular
Interests, pro rata according to the amount of unreimbursed Realized
Losses allocable to principal previously allocated to each such Class;
provided, however, that any amounts distributed pursuant to this
paragraph (e)(i) of this definition of "REMIC I Distribution Amount"
shall not cause a reduction in the Class Principal Balances of any of
the Class Y and Class Z Regular Interests; and
(ii) second, to the Component I of the Class R Certificates, the
Residual Distribution Amount for Component I of the Class R Certificates
for such Distribution Date.
REMIC I Interest: The REMIC I Regular Interests and Component I of the
Class R Certificates.
REMIC I Regular Interest: Any of the eight separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest shall accrue
interest at rate specified for such REMIC I Interest in the Preliminary
Statement in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Balance as set forth in the Preliminary
Statement hereto. The designations for the respective REMIC I Regular Interests
are set forth in the Preliminary Statement hereto.
44
REMIC II: The segregated pool of assets consisting of all of the REMIC I
Regular Interests, with respect to which a separate REMIC election is to be
made.
REMIC II Interest: The REMIC II Regular Interests and Component II of
the Class R Certificates.
REMIC II Regular Interest: Any of the seventeen separate
non-certificated beneficial ownership interests in REMIC II issued hereunder and
designated as a "regular interest" in REMIC II. Each REMIC II Regular Interest
shall accrue interest at the rate specified for such REMIC II Interest in the
Preliminary Statement in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Balance as set forth in the
Preliminary Statement hereto. The designations for the respective REMIC II
Regular Interests are set forth in the Preliminary Statement hereto.
REMIC III: The segregated pool of assets consisting of all of the REMIC
II Regular Interests, with respect to which a separate REMIC election is to be
made.
REMIC III Certificate: Any Certificate, other than a Class R Certificate
or Class SB Certificate.
REMIC III Regular Interest: Any of the nineteen certificated beneficial
ownership interests in REMIC III issued hereunder, and, hereby, designated as a
"regular interest" in REMIC III, as follows: Class A-I-1, Class A-II-1
(exclusive of any rights to Class A-II-1 Carryover Shortfall Amounts), Class
A-II-2, Class A-II-3, Class A-II-4, Class A-III-1 (exclusive of any rights to
Class A-III-1 Carryover Shortfall Amounts), Class A-III-2, Class A-III-3, Class
A-III-4, Class A-III-5, Class A-IV-1, Class X-II, Class X-III, Class M-1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates.
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.
Remittance Report: A report that includes the information set forth in
Exhibit L hereto.
REO Acquisition: The acquisition by the Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.14.
REO Disposition: As to any REO Property, a determination by the Servicer
that it has received all Insurance Proceeds, Liquidation Proceeds, REO Proceeds
and other payments and recoveries (including proceeds of a final sale) which the
Servicer expects to be finally recoverable from the sale or other disposition of
the REO Property.
REO Imputed Interest: As to any REO Property, for any period, an amount
equivalent to interest (at the Net Mortgage Rate that would have been applicable
to the related Mortgage Loan had it been outstanding) on the unpaid principal
balance of the Mortgage Loan as of the date of acquisition thereof for such
period.
REO Proceeds: Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged Property or, with respect to a Cooperative Loan, the related
Cooperative Apartment) which proceeds are required to be deposited into the
Custodial Account only upon the related REO Disposition.
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REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed in lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Request for Release: A request for release, the forms of which are
attached as Exhibit F hereto, or an electronic request in a form acceptable to
the Custodian.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement or the related Subservicing Agreement in respect of such Mortgage
Loan.
Responsible Officer: When used with respect to the Trustee, any officer
of the Corporate Trust Office of the Trustee, including any Senior Vice
President, any Vice President, any Assistant Vice President, any Assistant
Secretary, any Trust Officer or Assistant Trust Officer, 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.
Scheduled Final Distribution Date: The Distribution Date occurring in
December 2033.
Security Agreement: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
Seller: GMACM.
Senior Accelerated Distribution Percentage: With respect to any
Distribution Date occurring on or prior to the 60th Distribution Date and any
Loan Group, 100%. With respect to any Distribution Date thereafter and any Loan
Group, as follows:
(i) for any Distribution Date after the 60th Distribution Date
but on or prior to the 72nd Distribution Date, the Senior Percentage for
such Loan Group for such Distribution Date plus 70% of the Subordinate
Percentage for such Loan Group for such Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date
but on or prior to the 84th Distribution Date, the Senior Percentage for
such Loan Group for such Distribution Date plus 60% of the Subordinate
Percentage for such Loan Group for such Distribution Date;
(iii) for any Distribution Date after the 84th Distribution Date
but on or prior to the 96th Distribution Date, the Senior Percentage for
such Loan Group for such Distribution Date plus 40% of the Subordinate
Percentage for such Loan Group for such Distribution Date;
(iv) for any Distribution Date after the 96th Distribution Date
but on or prior to the 108th Distribution Date, the Senior Percentage
for such Loan Group for such Distribution Date plus 20% of the
Subordinate Percentage for such Loan Group for such Distribution Date;
and
(v) for any Distribution Date thereafter, the Senior Percentage
for such Distribution Date;
provided, however,
(i) that any scheduled reduction to the Senior Accelerated Distribution
Percentage for any Loan Group described above shall occur as of any Distribution
Date only if:
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(a) the outstanding principal balance of the Mortgage Loans
delinquent 60 days or more (including Mortgage Loans which are in
foreclosure, have been foreclosed or otherwise liquidated, or with
respect to which the Mortgagor is in bankruptcy and any REO Property)
averaged over the last six months, as a percentage of the aggregate
outstanding Certificate Principal Balance of the Subordinate
Certificates, is less than or equal to 50%; and
(b) Realized Losses on the Mortgage Loans to date for such
Distribution Date if occurring during the sixth, seventh, eighth, ninth
or tenth year (or any year thereafter) after the Closing Date do not
exceed 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the
Initial Certificate Principal Balances of the Subordinate Certificates;
and
(ii) that for any Distribution Date occurring on or after the 60th
Distribution Date on which the Senior Percentage for a Loan Group exceeds the
initial Senior Percentage for such Loan Group, the Senior Accelerated
Distribution Percentage for such Loan Group and Distribution Date shall equal
100%.
Notwithstanding the foregoing, if on any Distribution Date the Two Times
Test is satisfied, the Senior Accelerated Distribution Percentage for each Loan
Group shall equal (a) on or prior to the 36th Distribution Date, the related
Senior Percentage for such Distribution Date plus 50% of the related Subordinate
Percentage for such Distribution Date and (b) after the 36th Distribution Date,
the related Senior Percentage for such Distribution Date.
Upon the reduction of the Certificate Principal Balances of the related
Senior Certificates to zero, the related Senior Accelerated Distribution
Percentage shall thereafter be 0%.
Senior Certificate: Any one of the Class A, Class X or Class R
Certificates, executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit X-0, Xxxxxxx X-0
and Exhibit D respectively.
Senior Percentage: The Group 1 Senior Percentage, Group 2 Senior
Percentage, Group 3 Senior Percentage or Group 4 Senior Percentage, as
applicable.
Series: All of the Certificates issued pursuant to a Pooling and Servicing
Agreement and bearing the same series designation.
Servicing Accounts: The account or accounts created and maintained pursuant
to Section 3.08.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other unanticipated event by the Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of a Mortgaged Property or, with respect to a
Cooperative Loan, the related Cooperative Apartment, (ii) any enforcement or
judicial proceedings, including foreclosures, including any expenses incurred in
relation to any such proceedings that result from the Mortgage Loan being
registered on the MERS System, (iii) the management and liquidation of any REO
Property and (iv) compliance with the obligations under Sections 3.01, 3.08,
3.12(a) and 3.14, including, if the Servicer or any Affiliate of the Servicer
provides services such as appraisals and brokerage services that are customarily
provided by Persons other than servicers of mortgage loans, reasonable
compensation for such services.
Servicing Fee: With respect to any Mortgage Loan and Distribution Date,
the fee payable monthly to the Servicer in respect of servicing compensation
that accrues at the Servicing Fee Rate.
Servicing Fee Rate: 0.375% per annum.
47
Servicing Modification: Any reduction of the interest rate on or the
outstanding principal balance of a Mortgage Loan that is in default, or for
which, in the judgment of the Servicer, default is reasonably foreseeable,
pursuant to a modification of such Mortgage Loan in accordance with Section
3.07(a).
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee by the Servicer, as such list may from time to time be amended.
Special Hazard Amount: As of any Distribution Date, an amount equal to
$6,000,013.72 minus the sum of (i) the aggregate amount of Special Hazard Losses
allocated solely to one or more specific Classes of Certificates in accordance
with Section 4.05 and (ii) the Adjustment Amount (as defined below) as most
recently calculated. For each anniversary of the Cut-off Date, the Adjustment
Amount shall be equal to the amount, if any, by which the amount calculated in
accordance with the preceding sentence (without giving effect to the deduction
of the Adjustment Amount for such anniversary) exceeds the greater of (A) the
greatest of (i) twice the outstanding principal balance of the Mortgage Loan in
the Trust Fund which has the largest outstanding principal balance on the
Distribution Date immediately preceding such anniversary, (ii) the product of
1.00% multiplied by the outstanding principal balance of all Mortgage Loans on
the Distribution Date immediately preceding such anniversary and (iii) the
aggregate outstanding principal balance (as of the immediately preceding
Distribution Date) of the Mortgage Loans in any single five-digit California zip
code area with the largest amount of Mortgage Loans by aggregate principal
balance as of such anniversary and (B) the greater of (A) the product of the
Special Hazard Percentage for such anniversary multiplied by the outstanding
principal balance of all the Mortgage Loans on the Distribution Date immediately
preceding such anniversary and (B) twice the outstanding principal balance of
the Mortgage Loan in the Trust Fund which has the largest outstanding principal
balance on the Distribution Date immediately preceding such anniversary.
The Special Hazard Amount may be further reduced by the Servicer
(including accelerating the manner in which coverage is reduced) provided that
prior to any such reduction, the Servicer shall (i) obtain written confirmation
from each Rating Agency that such reduction shall not reduce the rating assigned
to any Class of Certificates by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency and (ii) provide a copy of such written
confirmation to the Trustee.
Special Hazard Loss: Any Realized Loss not in excess of the cost of the
lesser of repair or replacement of a Mortgaged Property (or, with respect to a
Cooperative Loan, the related Cooperative Apartment) suffered by such Mortgaged
Property (or Cooperative Apartment) on account of direct physical loss,
exclusive of (i) any loss of a type covered by a hazard policy or a flood
insurance policy required to be maintained in respect of such Mortgaged Property
pursuant to Section 3.12(a), except to the extent of the portion of such loss
not covered as a result of any coinsurance provision and (ii) any Extraordinary
Loss.
Special Hazard Percentage: As of each anniversary of the Cut-off Date,
the greater of (i) 1.0% and (ii) the largest percentage obtained by dividing the
aggregate outstanding principal balance (as of immediately preceding
Distribution Date) of the Mortgage Loans secured by Mortgaged Properties located
in a single, five-digit zip code area in the State of California by the
outstanding principal balance of all the Mortgage Loans as of the immediately
preceding Distribution Date.
Standard & Poor's: Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc., or its successor in interest.
48
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property, at any given time, (i) the Cut-off Date Principal Balance of the
Mortgage Loan, minus (ii) the sum of (a) the principal portion of the Monthly
Payments due with respect to such Mortgage Loan or REO Property during each Due
Period ending prior to the most recent Distribution Date which were received or
with respect to which an Advance was made, and (b) all Principal Prepayments
with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds,
Liquidation Proceeds and REO Proceeds, to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.14 with respect to such
Mortgage Loan or REO Property, in each case which were distributed pursuant to
Section 4.02 on any previous Distribution Date, and (c) any Realized Loss
allocated to Certificateholders with respect thereto for any previous
Distribution Date.
Subordinate Certificate: Any one of the Class M Certificates or Class B
Certificates, executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B and Exhibit C,
respectively.
Subordinate Class Percentage: With respect to any Distribution Date and
any Class of Subordinate Certificates, a fraction, expressed as a percentage,
the numerator of which is the aggregate Certificate Principal Balance of such
Class of Subordinate Certificates immediately prior to such date and the
denominator of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans (or related REO Properties) immediately prior to such
Distribution Date.
Subordinate Component: With respect to each Loan Group and any
Distribution Date, the aggregate Stated Principal Balance of the Mortgage Loans
in that Loan Group, as of the first day of the related Due Period, minus the
aggregate Certificate Principal Balance of the related Senior Certificates
immediately prior to that Distribution Date.
Subordinate Percentage: As of any Distribution Date and any Loan Group,
100% minus the Senior Percentage for such Loan Group as of such Distribution
Date.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date, any Loan Group and each Class of Subordinate Certificates,
(a) the sum of (i) the product of (x) such Class's pro rata share, based on the
Certificate Principal Balance of each Class of Subordinate Certificates then
outstanding, and (y) the aggregate of the amounts calculated for such
Distribution Date under clauses (1), (2) and (3) of Section 4.02(a)(ii)(A)
(without giving effect to the related Senior Percentage) with respect to such
Loan Group to the extent not payable to the Senior Certificates; (ii) such
Class's pro rata share, based on the Certificate Principal Balance of each Class
of Subordinate Certificates then outstanding, of the principal collections
described in Section 4.02(a)(ii)(B)(b) (without giving effect to the related
Senior Accelerated Distribution Percentage) with respect to such Loan Group to
the extent such collections are not otherwise distributed to the Senior
Certificates; (iii) the product of (x) the related Prepayment Distribution
Percentage and (y) the aggregate of all Principal Prepayments in Full received
in the related Prepayment Period and Curtailments received in the preceding
calendar month with respect to such Loan Group to the extent not payable to the
related Senior Certificates; (iv) if such Class is the Class of Subordinate
49
Certificates with the Highest Priority, any Excess Subordinate Principal Amount
for such Loan Group for such Distribution Date to the extent not payable to the
related Senior Certificates; and (v) any amounts described in clauses (i), (ii)
and (iii) as determined for any previous Distribution Date, that remain
undistributed to the extent that such amounts are not attributable to Realized
Losses which have been allocated to a Class of Subordinate Certificates with a
Lower Priority minus (b) with respect to the Class of Subordinate Certificates
with the Lowest Priority, any Excess Subordinate Principal Amount for such Loan
Group for such Distribution Date; provided, however, that the Subordinate
Principal Distribution Amount for any Class of Subordinate Certificates on any
Distribution Date shall in no event exceed the outstanding Certificate Principal
Balance of such Class of Certificates immediately prior to such date.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Servicer has entered into a
Subservicing Agreement.
Subservicer Advance: Any delinquent installment of principal and
interest on a Mortgage Loan which is advanced by the related Subservicer (net of
its Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in accordance
with Section 3.08.
Subservicing Agreement: The written contract between the Servicer and any
Subservicer relating to servicing and administration of certain Mortgage Loans
as provided in Section 3.02.
Subservicing Fee: As to any Mortgage Loan, the fee payable monthly to the
related Subservicer, if any.
Swap Agreement: The transactions evidenced by the Swap Confirmation with
respect to the Auction Certificates, dated as of the Closing Date, between GCD
and the Auction Administrator.
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 either of the REMICs due to its classification as a REMIC 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.
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest
in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
Trust Fund: The segregated pool of assets consisting of:
(i) the Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(ii) all payments on and collections in respect of the Mortgage Loans
due after the Cut-off Date as shall be on deposit in the
Custodial Account or in the Payment Account and identified as
belonging to the Trust Fund,
(iii) property that secured a Mortgage Loan and that has been acquired
for the benefit of the Certificateholders by foreclosure or deed
in lieu of foreclosure,
(iv) the hazard insurance policies and Primary Insurance Policies, if
any,
50
(v) the Hedge Agreement,
(vi) the Auction Administration Agreement,
(vii) the Swap Agreement, and
(viii) all proceeds of clauses (i) through (vii) above.
A REMIC election with respect to the Trust Fund (other than the Hedge
Agreement and the Swap Agreement) is made pursuant to this Agreement.
Two Times Test: With respect to any Distribution Date, the satisfaction
of all of the following conditions: (i) the Aggregate Subordinate Percentage is
at least two times the Aggregate Subordinate Percentage as of the Closing Date;
(ii) the aggregate of the Stated Principal Balances of all Mortgage Loans
Delinquent 60 days or more (including Mortgage Loans in REO and foreclosure)
(averaged over the preceding six-month period), as a percentage of the aggregate
of the Certificate Principal Balances of the Subordinate Certificates, does not
exceed 50%; and (iii) on or after the 36th Distribution Date, cumulative
Realized Losses do not exceed 30% of the aggregate Certificate Principal Balance
of the Subordinate Certificates as of the Closing Date or prior to the 36th
Distribution Date, cumulative Realized Losses do not exceed 20% of the aggregate
Certificate Principal Balance of the Subordinate Certificates as of the Closing
Date.
Uncertificated Balance: The amount of any REMIC I Regular Interest or
REMIC II Regular Interest outstanding as of any date of determination. As of the
Closing Date, the Uncertificated Balance of each REMIC I Regular Interest shall
equal the amount set forth in the Preliminary Statement hereto as its Initial
Uncertificated Balance. On each Distribution Date, the Uncertificated Balance of
each REMIC I Regular Interest shall be reduced, as provided in the definition of
Realized Loss and by distributions of principal deemed made with respect to such
Interest pursuant to the definition of REMIC I Distribution Amount, Section 4.02
and Section 10.04. As of the Closing Date, the Uncertificated Balance of each
REMIC II Regular Interest shall equal the amount set forth in the Preliminary
Statement hereto as its Initial Uncertificated Balance. On each Distribution
Date, the Uncertificated Balance of each REMIC II Regular Interest shall be
reduced, first, by the portion of Realized Losses allocated in reduction of the
principal balances of the Related Classes of Certificates on such Distribution
Date and, second, by all distributions of principal deemed made on such REMIC II
Regular Interest, as applicable, on such Distribution Date pursuant to Section
10.04. The Uncertificated Balance of each REMIC II Regular Interest shall never
be less than zero.
Uncertificated Interest: With respect to any REMIC I Regular Interest
for any Distribution Date, one month's interest at the rate specified for such
Interest in the Preliminary Statement applicable to such REMIC I Regular
Interest for such Distribution Date, accrued on the Uncertificated Balance
thereof immediately prior to such Distribution Date. Uncertificated Interest in
respect of any REMIC I Regular Interest shall accrue on the basis of a 360-day
year consisting of twelve 30-day months. Uncertificated Interest with respect to
each Distribution Date, as to any REMIC I Regular Interest, shall be reduced by
any interest shortfalls for such Distribution Date for the related Group of
Mortgage Loans allocated between the related Class Y and Class Z Interests
pro-rata according to the amount of interest accrued with respect thereto prior
to reduction by the provisions of this definition. In addition, Uncertificated
Interest with respect to each Distribution Date, as to any REMIC I Regular
Interest shall be reduced by interest portion of Realized Losses (including
Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses and
Extraordinary Losses) for the related Group of Mortgage Loans allocated between
the related Class Y and Class Z Interests pro-rata according to the amount of
interest accrued with respect thereto prior to reduction by the provisions of
51
this definition. With respect to any REMIC II Regular Interest for any
Distribution Date, one month's interest at the rate specified for such Interest
in the Preliminary Statement applicable to such REMIC II Regular Interest for
such Distribution Date, accrued on the Uncertificated Balance thereof
immediately prior to such Distribution Date. Uncertificated Interest in respect
of any REMIC II Regular Interest shall accrue on the basis of a 360-day year
consisting of twelve 30-day months. Uncertificated Interest with respect to each
Distribution Date, as to any REMIC II Regular Interest, shall be reduced by any
interest shortfalls allocated to the Related Classes of Certificates (interest
losses allocated to the Class X Certificates shall be allocated among the
related REMIC II Regular Interests pro rata according to the excess of the Group
2 Net WAC Cap Rate or Group 3 Net WAC Cap Rate, as applicable, over the Formula
Rate for the related Class A Certificates) on such Distribution Date . In
addition, Uncertificated Interest with respect to each Distribution Date, as to
any REMIC II Regular Interest shall be reduced by interest portion of Realized
Losses (including Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses and Extraordinary Losses) allocated to the Related Classes of
Certificates on such Distribution Date (interest losses allocated to the Class X
Certificates shall be allocated among the related REMIC II Regular Interests pro
rata according to the excess of the Group 2 Net WAC Cap Rate or Group 3 Net WAC
Cap Rate, as applicable, over the Formula Rate for the related Class A
Certificates).
Undercollateralized Group: For any Distribution Date, Group 1, if
immediately prior to such Distribution Date the aggregate Certificate Principal
Balance of the Class A-I-1 Certificates and Class R Certificates is greater than
the aggregate Stated Principal Balance of the Group 1 Loans; for any
Distribution Date, Group 2, if immediately prior to such Distribution Date the
Certificate Principal Balance of the Class A-II Auction Certificates is greater
than the aggregate Stated Principal Balance of the Group 2 Loans; for any
Distribution Date, Group 3, if immediately prior to such Distribution Date the
Certificate Principal Balance of the Class A-III Auction Certificates is greater
than the aggregate Stated Principal Balance of the Group 3 Loans; and for any
Distribution Date, Group 4, if immediately prior to such Distribution Date the
Certificate Principal Balance of the Class A-IV-1 Certificates is greater than
the aggregate Stated Principal Balance of the Group 4 Loans.
Uniform Single Attestation Program for Mortgage Bankers: The Uniform
Single Attestation Program for Mortgage Bankers, as published by the Mortgage
Bankers Association of America and effective with respect to fiscal periods
ending on or after December 15, 1995.
Uninsured Cause: Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies.
United States Person: (i) A citizen or resident of the United States,
(ii) a corporation, partnership or other entity treated as a corporation or
partnership for United States federal income tax purposes organized in or under
the laws of the United States or any state thereof or the District of Columbia
(unless, in the case of a partnership, Treasury regulations provide otherwise),
provided that, for purposes solely of the restrictions on the transfer of
residual interests, no partnership or other entity treated as a partnership for
United States federal income tax purposes shall be treated as a United States
Person unless all persons that own an interest in such partnership either
directly or indirectly through any chain of entities no one of which is a
corporation for United States federal income tax purposes are required by the
applicable operating agreement to be United States Persons, (iii) an estate the
income of which is includible in gross income for United States tax purposes,
regardless of its source, or (iv) a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more United States persons have authority to control all substantial
decisions of the trust. Notwithstanding the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as United States persons prior to such date, that elect to
continue to be treated as United States persons will also be a United States
Person.
52
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate, as designated in Section
11.09.
Section 1.02. Use of Words and Phrases.
"Herein," "hereby," "hereunder," `hereof," "hereinbefore," "hereinafter"
and other equivalent words refer to the Pooling and Servicing Agreement as a
whole. All references herein to Articles, Sections or Subsections shall mean the
corresponding Articles, Sections and Subsections in the Pooling and Servicing
Agreement. The definition set forth herein include both the singular and the
plural.
Section 1.03. Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on the
Class A-II-1 Certificates and Class A-III-1 Certificates for any Interest
Accrual Period will be determined as of each LIBOR Rate Adjustment Date. On each
LIBOR Rate Adjustment Date, or if such LIBOR Rate Adjustment Date is not a
Business Day, then on the next succeeding Business Day, LIBOR shall be
established by the Trustee and, as to any Interest Accrual Period, will equal
the rate for one month United States dollar deposits that appears on the
Telerate Screen Page 3750 as of 11:00 a.m., London time, on such LIBOR Rate
Adjustment Date. "Telerate Screen Page 3750" means the display designated as
page 3750 on the Bridge Telerate Service (or such other page as may replace page
3750 on that service for the purpose of displaying London interbank offered
rates of major banks). If such rate does not appear on such page (or such other
page as may replace that page on that service, or if such service is no longer
offered, LIBOR shall be so established by use of such other service for
displaying LIBOR or comparable rates as may be selected by the Trustee after
consultation with the Master Servicer), the rate will be the Reference Bank
Rate. The "Reference Bank Rate" will be determined on the basis of the rates at
which deposits in U.S. Dollars are offered by the reference banks (which shall
be any three major banks that are engaged in transactions in the London
interbank market, selected by the Trustee after consultation with the Master
Servicer) as of 11:00 a.m., London time, on the LIBOR Rate Adjustment Date to
prime banks in the London interbank market for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of the Class
A-II-1 Certificates and Class A-III-1 Certificates then outstanding. The Trustee
will request the principal London office of each of the reference banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate will be the arithmetic mean of the quotations rounded up to the next
multiple of 1/16%. If on such date fewer than two quotations are provided as
requested, the rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Trustee after consultation
with the Master Servicer, as of 11:00 a.m., New York City time, on such date for
loans in U.S. Dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of
the Class A-II-1 Certificates and Class A-III-1 Certificates then outstanding.
If no such quotations can be obtained, the rate will be LIBOR for the prior
Distribution Date; provided however, if, under the priorities described above,
LIBOR for a Distribution Date would be based on LIBOR for the previous
Distribution Date for the third consecutive Distribution Date, the Trustee,
shall select an alternative comparable index (over which the Trustee has no
control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment Date and
the Trustee's subsequent calculation of the Pass Through Rate applicable to the
Class A-II-1 Certificates and Class A-III-1 Certificates for the relevant
Interest Accrual Period, in the absence of manifest error, will be final and
binding. Promptly following each LIBOR Rate Adjustment Date the Trustee shall
supply the Master Servicer with the results of its determination of LIBOR on
such date. Furthermore, the Trustee will supply to any Certificateholder so
requesting by calling the Bondholder Inquiry Line at 0-000-000-0000 the
Pass-Through Rate on the Class A-II-1 Certificates and Class A-III-1
Certificates for the current and the immediately preceding Interest Accrual
Period.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Company, concurrently with the execution and delivery hereof, does
hereby assign to the Trustee for the benefit of the Certificateholders without
recourse all the right, title and interest of the Company in and to the Mortgage
Loans, including all interest and principal received on or with respect to the
Mortgage Loans after the Cut-off Date (other than payments of principal and
interest due on the Mortgage Loans on or before the Cut-off Date).
(b) In connection with such assignment, and contemporaneously with the delivery
of this Agreement, the Company delivered or caused to be delivered hereunder to
the Trustee, the Hedge Agreement (the delivery of which shall evidence that the
fixed payment for the Hedge Agreement has been paid and the Trustee and the
Trust Fund shall have no further payment obligation thereunder and that such
fixed payment has been authorized hereby) and the Company does hereby deliver
to, and deposit with, the Trustee, or to and with one or more Custodians, as the
duly appointed agent or agents of the Trustee for such purpose, the original
Mortgage Note, with respect to each Mortgage Loan so assigned, endorsed without
recourse in blank, or in the name of the Trustee as trustee, and signed by an
authorized officer (which endorsement shall contain either an original signature
or a facsimile signature of an authorized officer of GMACM, and if in the form
of an allonge, the allonge shall be stapled to the Mortgage Note), with all
intervening endorsements showing a complete chain of title from the originator
to GMACM. If the Mortgage Loan was acquired by the endorser in a merger, the
endorsement must be by "____________, successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the endorser
while doing business under another name, the endorsement must be by
"____________ formerly known as [previous name]."
In lieu of delivering the Mortgage Note relating to any Mortgage Loan, the
Company may deliver or cause to be delivered a lost note affidavit from the
Seller stating that the original Mortgage Note was lost, misplaced or destroyed,
and, if available, a copy of each original Mortgage Note; provided, however,
that in the case of Mortgage Loans which have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Company, in lieu of delivering
the above documents, may deliver or cause to be delivered to the Custodian, if
any, or the Trustee, a certification to such effect and shall deposit all
amounts paid in respect of such Mortgage Loan in the Payment Account on the
Closing Date.
(c) All other documents contained in the Mortgage File and any original
documents relating to the Mortgage Loans not contained in the Mortgage File or
delivered to the Custodian, if any, or the Trustee are and shall be held by the
Servicer in trust as agent for the Trustee on behalf of the Certificateholders.
In the event that in connection with any Mortgage Loan: (a) the original
recorded Mortgage (or evidence of submission to the recording office), (b) all
interim recorded assignments, (c) the original recorded modification agreement,
if required, or (d) evidence of title insurance (together with all riders
thereto, if any) satisfying the requirements of clause (I)(ii), (iv), (vi) or
(vii) of the definition of Mortgage File, respectively, have not been delivered
to the Servicer concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public
recording office, or, in the case of each such interim assignment or
modification agreement, because the related Mortgage has not been returned by
the appropriate recording office, in the case of clause (I)(ii), (iv) or (vi) of
the definition of Mortgage File, or because the evidence of title insurance has
54
not been delivered to the Seller by the title insurer in the case of clause
(I)(vii) of the definition of Mortgage File, the Servicer shall use its
reasonable best efforts to obtain, (A) in the case of clause (I)(ii), (iv) or
(vi) of the definition of Mortgage File, such original Mortgage, such interim
assignment, or such modification agreement, with evidence of recording indicated
thereon upon receipt thereof from the public recording office, or a copy
thereof, certified, if appropriate, by the relevant recording office, or (B) in
the case of clause (I)(vii) of the definition of Mortgage File, evidence of
title insurance.
(d) If any of the documents held by the Servicer pursuant to clause (c) above
are missing or defective in any other respect and such missing document or
defect materially and adversely affects the interests of the Certificateholders
in the related Mortgage Loan, the Servicer shall request that GMACM either (i)
cure such defect in all material respects, (ii) substitute for such Mortgage
Loan a Qualified Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.04, or (iii) purchase such Mortgage Loan from the Trust Fund at the Purchase
Price within 90 days after the date on which GMACM was notified of such defect;
provided that if such defect would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such
cure, substitution or repurchase must occur within 90 days from the date such
breach was discovered. If GMACM fails to comply with such request by the
Servicer, the Servicer shall notify the Trustee of such missing document or
material defect and the Trustee shall cause GMACM to comply with clause (i),
(ii) or (iii) of the preceding sentence. It is understood and agreed that the
obligation of GMACM to cure a material defect in, or substitute for, or purchase
any Mortgage Loan as to which a material defect in or omission of a constituent
document exists, shall constitute the sole remedy respecting such material
defect or omission available to Certificateholders or the Trustee on behalf of
Certificateholders. The Purchase Price for the purchased Mortgage Loan shall be
deposited or caused to be deposited upon receipt by the Trustee in the Payment
Account, or upon receipt by the Servicer in the Custodial Account. Upon receipt
by the Trustee of written notification of such deposit signed by a Servicing
Officer, the Trustee shall (i) release or cause to be released to GMACM the
related Mortgage Note, (ii) cause the Servicer to release to GMACM any remaining
documents in the related Mortgage File which are held by the Servicer, and (iii)
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as GMACM shall require as necessary to vest in GMACM ownership
of any Mortgage Loan released pursuant hereto and at such time the Trustee shall
have no further responsibility with respect to the related Mortgage Note.
(e) The Servicer shall keep in its possession (a) from time to time additional
original documents evidencing an assumption or modification of a Mortgage Loan
and (b) any other documents required to be held by the Servicer.
Except as may otherwise expressly be provided herein, none of the
Seller, the Servicer or the Trustee shall assign, sell, dispose of or transfer
any interest in the Trust Fund or any portion thereof, or permit the Trust Fund
or any portion thereof to be subject to any lien, claim, mortgage, security
interest, pledge or other encumbrance of, any other Person.
The Servicer shall cause to be filed the UCC assignment and UCC
financing statement referred to in clause (II)(vii) and (x), respectively, of
the definition of Mortgage File. If any UCC assignment or amendment or UCC
financing statement, as applicable, is lost or returned unfiled to the Servicer
because of any defect therein, the Servicer shall prepare a substitute UCC
assignment or amendment or UCC financing statement, as applicable, or cure such
defect, and cause such UCC assignment or amendment or UCC financing statement,
as applicable, to be filed in accordance with this paragraph. In connection with
its servicing of Cooperative Loans, the Servicer will use its reasonable best
efforts to file timely continuation statements with regard to each financing
statement and assignment relating to Cooperative Loans as to which the related
Cooperative Apartment is located outside of the State of New York.
55
In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Servicer further agrees that it will cause, at the
Servicer's own expense, as soon as practicable after the Closing Date, the
MERS(R) System to indicate that such Mortgage Loans have been assigned to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE
FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Servicer agrees that it will not alter the codes referenced
in this paragraph with respect to any Mortgage Loan during the term of this
Agreement unless and until such Mortgage Loan is repurchased in accordance with
the terms of this Agreement, and there is filed any financing statement or
amendment thereof necessary to comply with the New York Uniform Commercial Code
or the Uniform Commercial Code of any applicable jurisdiction.
(f) It is intended that the conveyance by the Company to the Trustee of the
Mortgage Loans as provided for in this Section 2.01 be construed as a sale by
the Company to the Trustee of the Mortgage Loans for the benefit of the
Certificateholders. Further, it is not intended that such conveyance be deemed
to be a grant of a security interest in the Mortgage Loans by the Company to the
Trustee to secure a debt or other obligation of the Company. However, if the
Mortgage Loans are held to be property of the Company or of the Seller, or if
for any reason this Agreement is held or deemed to create a security interest in
the Mortgage Loans, then it is intended that, (a) this Agreement be and hereby
is a security agreement within the meaning of Article 9 of the Uniform
Commercial Code of any applicable jurisdiction; (b) the conveyance provided for
in Section 2.01 shall be deemed to be, and hereby is, (1) a grant by the Company
to the Trustee of a security interest in all of the Company's right, title and
interest, whether now owned or hereafter acquired, in and to the following: (A)
the Mortgage Loans, including (i) with respect to each Cooperative Loan, the
related Mortgage Note, Security Agreement, Assignment of Proprietary Lease,
Cooperative Stock Certificate and Cooperative Lease, (ii) with respect to each
Mortgage Loan other than a Cooperative Loan, the related Mortgage Note and
Mortgage, and (iii) any insurance policies and all other documents in the
related Mortgage File, (B) all amounts payable pursuant to the Mortgage Loans in
accordance with the terms thereof, (C) 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 Payment Account or the Custodial Account, whether in the form of
cash, instruments, securities or other property, (D) all accounts, general
intangibles, chattel paper, instruments, documents, money, deposit accounts,
goods, letters of credit, letter-of-credit rights, oil, gas, and other minerals,
and investment property consisting of, arising from or relating to any of the
foregoing, and (E) all proceeds of the foregoing, and (2) an assignment by the
Company to the Trustee of any security interest in any and all of the Seller's
right (including the power to convey title thereto), title and interest, whether
now owned or hereafter acquired, in and to the property described in the
foregoing clauses (1)(A), (B), (C), (D) and (E) granted by the Seller to the
Company pursuant to the Purchase Agreement; (c) the possession by the Trustee,
the Custodian or any other agent of the Trustee of any of the foregoing property
shall be deemed to be possession by the secured party, or possession by a
purchaser or a person holding for the benefit of such secured party, for
purposes of perfecting the security interest pursuant to the Pennsylvania
Uniform Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction (including, without limitation, Sections 9-313 and 9-314 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, the Trustee (as
applicable) for the purpose of perfecting such security interest under
applicable law.
The Company and, at the Company's direction, GMACM 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 Mortgage Loans and the other property
described above, such security interest would be determined to be a perfected
56
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 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 the Mortgage Loans, as evidenced by
an Officer's 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 Seller, 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 type or jurisdiction of
organization of the Seller or the Company and (3) any transfer of any interest
of the Seller or the Company in any Mortgage Loan. The Company shall file or
cause to be filed the original filing necessary under the Uniform Commercial
Code to perfect the Trustee's security interest in the Mortgage Loans.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges that the Custodian, acting on behalf of the
Trustee, has received (subject to any exceptions noted in the custodian
certification described below) the Mortgage Notes and the Trustee declares that
it holds or will hold the assets included in the definition of "Trust Fund," in
trust for the exclusive use and benefit of all present and future
Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to cause
the Custodian to review each Mortgage Note and to execute and deliver, or cause
to be executed and delivered, to GMACM, the Trustee and the Servicer a custodian
certification substantially in the form annexed hereto as Exhibit M on or prior
to the Closing Date. Pursuant to the Custodial Agreement, in conducting such
review, the Custodian is required to ascertain whether the Mortgage Notes have
been executed and received, and whether the Mortgage Notes relate, determined on
the basis of the Mortgagor name, original principal balance and loan number, to
the Mortgage Loans. Neither the Custodian nor the Trustee shall be under any
duty or obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine, enforceable
or appropriate for the represented purpose or that they have actually been
recorded, or are in recordable form or that they are other than what they
purport to be on their face.
If, in the process of reviewing the Mortgage Notes and preparing the
certifications referred to above, the Custodian finds any Mortgage Note to be
missing or contains any defect which materially and adversely affects the
interests of the Certificateholders in the related Mortgage Loan, the Custodian
is required pursuant to the Custodial Agreement, to notify the Trustee, the
Company and the Seller, and the Trustee shall request that GMACM cure any such
defect in all material respects within 90 days from the date on which GMACM was
notified of such defect, and if GMACM does not cure such defect in all material
respects during such period, the Trustee shall request on behalf of the
Certificateholders that GMACM either (i) substitute for such Mortgage Loan a
Qualified Substitute Mortgage Loan, which substitution shall be accomplished in
the manner and subject to the conditions set forth in Section 2.04, or (ii)
purchase such Mortgage Loan from the Trust Fund at the Purchase Price within 90
days after the date on which GMACM was notified of such defect; provided that if
such defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure,
substitution or repurchase must occur within 90 days from the date such breach
was discovered. It is understood and agreed that the obligation of GMACM to cure
a material defect in, or substitute for, or purchase any Mortgage Loan as to
which a material defect in, or omission of, a Mortgage Note exists shall
57
constitute the sole remedy respecting such material defect or omission available
to Certificateholders or the Trustee on behalf of Certificateholders. The
Purchase Price for the purchased Mortgage Loan shall be deposited or caused to
be deposited upon receipt by the Trustee in the Payment Account, or upon receipt
by the Servicer in the Custodial Account. Upon receipt by the Trustee of written
notification of such deposit signed by a Servicing Officer, the Trustee shall
(i) release or cause to be released to GMACM the related Mortgage Note, (ii)
cause the Servicer to release to GMACM any remaining documents in the related
Mortgage File which are held by the Servicer, and (iii) execute and deliver such
instruments of transfer or assignment, in each case without recourse, as GMACM
shall require as necessary to vest in GMACM ownership of any Mortgage Loan
released pursuant hereto and at such time the Trustee shall have no further
responsibility with respect to the related Mortgage Note.
Section 2.03. Representations, Warranties and Covenants of the Servicer.
The Servicer hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that:
(i) The Servicer is a corporation duly organized, validly existing
and in good standing under the laws governing its creation and
existence and is or will be in compliance with the laws of each
state in which any Mortgaged Property is located to the extent
necessary to ensure the enforceability of each Mortgage Loan in
accordance with the terms of this Agreement;
(ii) The execution and delivery of this Agreement by the Servicer and
its performance and compliance with the terms of this Agreement
will not violate the Servicer's Certificate of Incorporation or
Bylaws or constitute a material default (or an event which, with
notice or lapse of time, would constitute a material default)
under, or result in the material breach of, any material
contract, agreement or other instrument to which the Servicer is
a party or which may be applicable to the Servicer or any of its
assets;
(iii)This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Company, constitutes a valid,
legal and binding obligation of the Servicer, enforceable against
it in accordance with the terms hereof subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally and to
general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law and
to public policy as it relates to indemnification and
contribution under applicable securities laws;
(iv) The Servicer is not in default with respect to any order or
decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default
might have consequences that would materially and adversely
affect the condition (financial or other) or operations of the
Servicer or its properties or might have consequences that would
materially adversely affect its performance hereunder;
(v) No litigation is pending or, to the best of the Servicer's
knowledge, threatened against the Servicer which would prohibit
its entering into this Agreement or performing its obligations
under this Agreement;
(vi) The Servicer will comply in all material respects in the
performance of this Agreement with all reasonable rules and
requirements of each insurer under each Required Insurance
Policy;
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(vii) No information, certificate of an officer, statement furnished in
writing or report delivered to the Company, any Affiliate of the
Company or the Trustee by the Servicer will, to the knowledge of
the Servicer, contain any untrue statement of a material fact or
omit a material fact necessary to make the information,
certificate, statement or report not misleading; and
(viii) The Servicer is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans that
are registered with MERS.
It is understood and agreed that the representations and warranties set forth in
this Section 2.03 shall survive delivery of the respective Mortgage Notes to the
Custodian, if any, or the Trustee.
Section 2.04. Representations and Warranties of the Seller.
The Company hereby assigns to the Trustee for the benefit of
Certificateholders all of its right, title and interest in respect of the
Purchase Agreement insofar as the Purchase Agreement relates to the
representations and warranties made by the Seller in respect of the Mortgage
Loans and any remedies provided thereunder for any breach of such
representations and warranties, such right, title and interest may be enforced
by the Servicer on behalf of the Trustee and the Certificateholders. Upon the
discovery by the Company, the Servicer, the Trustee or any Custodian of a breach
of any of the representations and warranties made by the Seller in the Purchase
Agreement (which, for purposes hereof, will be deemed to include any other cause
giving rise to a repurchase obligation under the Purchase Agreement) in respect
of any Mortgage Loan which materially and adversely affects the interests of the
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties (any Custodian being so
obligated under a Custodial Agreement). The Servicer shall promptly notify the
Seller of such breach and request that the Seller either (i) cure such breach in
all material respects within 90 days from the date the Seller was notified of
such breach or (ii) purchase such Mortgage Loan from the Trust Fund at the
Purchase Price and in the manner set forth in Section 2.02; provided that in the
case of a breach under the Purchase Agreement, the Seller, shall have the option
to substitute a Qualified Substitute Mortgage Loan or Loans for such Mortgage
Loan if such substitution occurs within two years following the Closing Date;
provided that if the breach would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such
cure, repurchase or substitution must occur within 90 days from the date the
breach was discovered. In the event that the Seller elects to substitute a
Qualified Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant
to this Section 2.04, the Trustee shall cause the Seller to deliver to the
Custodian with respect to such Qualified Substitute Mortgage Loan or Loans, the
original Mortgage Note endorsed as required by Section 2.01, and the Trustee
shall cause the Seller to deliver to the Servicer with respect to such Qualified
Substitute Mortgage Loan, the Mortgage, an Assignment of the Mortgage in
recordable form if required pursuant to Section 2.01, and such other documents
and agreements as are required to be held by the Servicer pursuant to Section
2.01. No substitution will be made in any calendar month after the Determination
Date for such month. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall not be part of the Trust Fund
and will be retained by the Servicer and remitted by the Servicer to the Seller
on the next succeeding Distribution Date. For the month of substitution,
distributions to the Certificateholders will include the Monthly Payment due on
59
a Deleted Mortgage Loan for such month and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Servicer shall amend or cause to be amended the Mortgage Loan Schedule
for the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Qualified Substitute Mortgage Loan or
Loans and the Servicer shall deliver the amended Mortgage Loan Schedule to the
Trustee. Upon such substitution, the Qualified Substitute Mortgage Loan or Loans
shall be subject to the terms of this Agreement and the related Subservicing
Agreement in all respects, and the Seller shall be deemed to have made the
representations and warranties with respect to the Qualified Substitute Mortgage
Loan contained in the Purchase Agreement as of the date of substitution.
In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Qualified Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans
(in each case after application of the principal portion of the Monthly Payments
due in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). The Servicer shall deposit the
amount of such shortfall received from the Seller into the Custodial Account on
the day of substitution. The Servicer shall give notice in writing to the
Trustee of such event, which notice shall be accompanied by an Officer's
Certificate as to the calculation of such shortfall and (subject to Section
10.01(f)) by an Opinion of Counsel to the effect that such substitution will not
cause (a) any federal tax to be imposed on the Trust Fund, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code or (b) any portion of either of the REMICs to
fail to qualify as such at any time that any Certificate is outstanding.
It is understood and agreed that the obligation of the Seller to cure
such breach or purchase (or to substitute for) such Mortgage Loan as to which a
breach of its representations and warranties has occurred and is continuing
shall constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf of Certificateholders. In connection
with the purchase of or substitution for any such Mortgage Loan by the Seller,
the Trustee shall assign to such Person all of the right, title and interest in
respect of the Purchase Agreement applicable to such Mortgage Loan.
Section 2.05. Execution and Authentication of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery of the Mortgage Notes to the Custodian on its behalf, subject to
any exceptions noted, together with the assignment to it of all other assets
included in the Trust Fund and/or the applicable REMIC, receipt of which is
hereby acknowledged. Concurrently with such delivery and in exchange therefor,
the Trustee, pursuant to the written request of the Company executed by an
officer of the Company has executed and caused to be authenticated and delivered
to or upon the order of the Company the Certificates in authorized denominations
which evidence ownership of the entire Trust Fund.
Section 2.06. 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 Certificates to the Company in exchange for the Mortgage Loans;
(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.
60
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 Certificate is outstanding without the consent of the
Certificateholders evidencing a majority of the aggregate Voting Rights of the
Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Servicer to Act as Servicer.
(a) The Servicer shall service and administer the Mortgage Loans in accordance
with the terms of this Agreement and the respective Mortgage Loans, shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities, and
shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do any and all things which it may deem necessary
or desirable in connection with such servicing and administration. Without
limiting the generality of the foregoing, the Servicer in its own name or in the
name of a Subservicer is hereby authorized and empowered by the Trustee when the
Servicer or the Subservicer, as the case may be, believes it appropriate in its
best judgment, to execute and deliver, on behalf of the Certificateholders and
the Trustee or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, or of consent to
assumption or modification in connection with a proposed conveyance, or of
assignment of any Mortgage and Mortgage Note in connection with the repurchase
of a Mortgage Loan and all other comparable instruments, or with respect to the
modification or re-recording of a Mortgage for the purpose of correcting the
Mortgage, the subordination of the lien of the Mortgage in favor of a public
utility company or government agency or unit with powers of eminent domain, the
taking of a deed in lieu of foreclosure, the commencement, prosecution or
completion of judicial or non-judicial foreclosure, the conveyance of a
Mortgaged Property to the related Insurer, the acquisition of any property
acquired by foreclosure or deed in lieu of foreclosure, or the management,
marketing and conveyance of any property acquired by foreclosure or deed in lieu
of foreclosure with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. The Servicer further is authorized and empowered by the
Trustee, on behalf of the Certificateholders and the Trustee, in its own name or
in the name of the Subservicer, when the Servicer or the Subservicer, as the
case may be, believes it appropriate in its best judgment to register any
Mortgage Loan on the MERS(R) System, or cause the removal from the registration
of any Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of
the Trustee and the Certificateholders or any of them, any and all instruments
of assignment and other comparable instruments with respect to such assignment
or re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns. Any expenses incurred in connection with
the actions described in the preceding sentence shall be borne by the Servicer
in accordance with Section 3.16(c), with no right of reimbursement; provided,
that if, as a result of MERS discontinuing or becoming unable to continue
operations in connection with the MERS System, it becomes necessary to remove
any Mortgage Loan from registration on the MERS System and to arrange for the
assignment of the related Mortgages to the Trustee, then any related expenses
shall be reimbursable to the Servicer. Notwithstanding the foregoing, subject to
Section 3.07(a), the Servicer shall not permit any modification with respect to
any Mortgage Loan that would both constitute a sale or exchange of such Mortgage
Loan within the meaning of Section 1001 of the Code and any proposed, temporary
or final regulations promulgated thereunder (other than in connection with a
proposed conveyance or assumption of such Mortgage Loan that is treated as a
Principal Prepayment in Full pursuant to Section 3.13(d) hereof) and cause any
REMIC formed under this Agreement to fail to qualify as a REMIC under the Code.
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Upon request, the Trustee shall furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to service
and administer the Mortgage Loans. The Trustee shall not be liable for any
action taken by the Servicer or any Subservicer pursuant to such powers of
attorney. In connection with servicing and administering the Mortgage Loans, the
Servicer and any Affiliate of the Servicer (i) may perform services such as
appraisals and brokerage services that are not customarily provided by servicers
of mortgage loans, and shall be entitled to reasonable compensation therefor in
accordance with Section 3.10 and (ii) may, at its own discretion and on behalf
of the Trustee, obtain credit information in the form of a "credit score" from a
credit repository.
(b) All costs incurred by the Servicer or by Subservicers in effecting the
timely payment of taxes and assessments on the properties subject to the
Mortgage Loans shall not, for the purpose of calculating monthly distributions
to the Certificateholders, be added to the amount owing under the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loan so permit,
and such costs shall be recoverable to the extent permitted by Section
3.10(a)(ii).
(c) The Servicer may enter into one or more agreements in connection with the
offering of pass-through certificates evidencing interests in one or more of the
Certificates providing for the payment by the Servicer of amounts received by
the Servicer as servicing compensation hereunder and required to cover certain
Prepayment Interest Shortfalls on the Mortgage Loans, which payment obligation
will thereafter be an obligation of the Servicer hereunder.
Section 3.02. Subservicing Agreements Between Servicer and
Subservicers; Enforcement of Subservicers' and Seller's
Obligations.
The Servicer may enter into Subservicing Agreements with Subservicers,
for the servicing and administration of all or some of the Mortgage Loans. Each
Subservicer of a Mortgage Loan shall be entitled to receive and retain, as
provided in the related Subservicing Agreement and in Section 3.07, the related
Subservicing Fee from payments of interest received on such Mortgage Loan after
payment of all amounts required to be remitted to the Servicer in respect of
such Mortgage Loan. Any Subservicing Fee shall be paid by the Servicer out of
the Servicing Fee for the related Mortgage Loans. Unless the context otherwise
requires, references in this Agreement to actions taken or to be taken by the
Servicer in servicing the Mortgage Loans include actions taken or to be taken by
a Subservicer on behalf of the Servicer.
Section 3.03. Successor Subservicers.
The Servicer shall be entitled to terminate any Subservicing Agreement
that may exist in accordance with the terms and conditions of such Subservicing
Agreement and without any limitation by virtue of this Agreement; provided,
however, that in the event of termination of any Subservicing Agreement by the
Servicer or the Subservicer, the Servicer shall either act as servicer of the
related Mortgage Loan or enter into a Subservicing Agreement with a successor
Subservicer which will be bound by the terms of the related Subservicing
Agreement.
Section 3.04. Liability of the Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer or a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Servicer shall remain obligated and liable to the Trustee and the
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer or the Company
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and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Mortgage Loans. The Servicer
shall be entitled to enter into any agreement with a Subservicer or the Seller
for indemnification of the Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
Section 3.05. No Contractual Relationship Between Subservicer and Trustee or
Certificateholders.
Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Servicer alone and the Trustee and the
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Subservicer in
its capacity as such except as set forth in Section 3.06.
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee.
(a) If the Servicer shall for any reason no longer be the servicer (including by
reason of an Event of Default), the Trustee, its designee or its successor shall
thereupon assume all of the rights and obligations of the Servicer under each
Subservicing Agreement that may have been entered into. The Trustee, its
designee or the successor servicer for the Trustee shall be deemed to have
assumed all of the Servicer's interest therein and to have replaced the Servicer
as a party to the Subservicing Agreement to the same extent as if the
Subservicing Agreement had been assigned to the assuming party except that the
Servicer shall not thereby be relieved of any liability or obligations under the
Subservicing Agreement.
(b) The Servicer shall, upon request of the Trustee but at the expense of the
Servicer, deliver to the assuming party all documents and records relating to
each Subservicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by it and otherwise use its reasonable
efforts to effect the orderly and efficient transfer of each Subservicing
Agreement to the assuming party.
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to
Custodial Account.
(a) The Servicer shall make reasonable efforts to collect all payments called
for under the terms and provisions of the Mortgage Loans, and shall, to the
extent such procedures shall be consistent with this Agreement and the terms and
provisions of any related Primary Insurance Policy, follow such collection
procedures as it would employ in its good faith business judgment and which are
normal and usual in its general mortgage servicing activities. Consistent with
the foregoing, the Servicer may in its discretion (i) waive any late payment
charge or any prepayment charge or penalty interest in connection with the
prepayment of a Mortgage Loan and (ii) extend the Due Date for payments due on a
Mortgage Note for a period not greater than 180 days; provided, however, that
the Servicer shall first determine that any such waiver or extension will not
impair the coverage of any related Primary Insurance Policy or materially
adversely affect the lien of the related Mortgage. In the event of any such
arrangement, the Servicer shall make timely advances on the related Mortgage
Loan during the scheduled period in accordance with the amortization schedule of
such Mortgage Loan without modification thereof by reason of such arrangements
unless otherwise agreed to by the Holders of the Classes of Certificates
affected thereby; provided, however, that no such extension shall be made if any
such advance would be a Nonrecoverable Advance. Consistent with the terms of
this Agreement, the Servicer may also waive, modify or vary any term of any
Mortgage Loan or consent to the postponement of strict compliance with any such
term or in any manner grant indulgence to any Mortgagor if in the Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action);
provided, however, that the Servicer may not modify materially or permit any
Subservicer to modify any Mortgage Loan, including without limitation any
modification that would change the Mortgage Rate, forgive the payment of any
principal or interest (unless in connection with the liquidation of the related
Mortgage Loan or except in connection with prepayments to the extent that such
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reamortization is not inconsistent with the terms of the Mortgage Loan), or
extend the final maturity date of such Mortgage Loan, unless such Mortgage Loan
is in default or, in the judgment of the Servicer, such default is reasonably
foreseeable; and provided, further, that no such modification shall reduce the
interest rate on a Mortgage Loan below the Servicing Fee Rate. In connection
with any Curtailment of a Mortgage Loan, the Servicer, to the extent not
inconsistent with the terms of the Mortgage Note and local law and practice, may
permit the Mortgage Loan to be reamortized such that the Monthly Payment is
recalculated as an amount that will fully amortize the remaining Stated
Principal Balance thereof by the original Maturity Date based on the original
Mortgage Rate; provided, that such re-amortization shall not be permitted if it
would constitute a reissuance of the Mortgage Loan for federal income tax
purposes, except if such reissuance is described in Treasury Regulation Section
1.860G-2(b)(3). The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(b) The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts
held in trust, entitled "GMAC Mortgage Corporation Custodial Account in trust
for the benefit of the Holders of GMACM Mortgage Pass-Through Certificates,
Series 2003-AR2." Each Custodial Account shall be an Eligible Account. The
Custodial Account shall be maintained as a segregated account, separate and
apart from trust funds created for mortgage pass-through certificates of other
series, and the other accounts of the Servicer.
Within two Business Days of receipt, except as otherwise specifically
provided herein, the Servicer shall deposit or cause to be deposited the
following payments and collections remitted by subservicers or received by it in
respect of the Mortgage Loans subsequent to the Cut-off Date (other than in
respect of principal and interest due on such Mortgage Loans on or before the
Cut-off Date) and the following amounts required to be deposited hereunder:
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans and the
principal component of any Subservicer Advance or of any REO
Proceeds received in connection with an REO Property for which an
REO Disposition has occurred;
(ii) All payments on account of interest at the Net Mortgage Rate on
the Mortgage Loans, and the interest component of any Subservicer
Advance or of any REO Proceeds received in connection with an REO
Property for which an REO Disposition has occurred, minus the
amount of any interest paid by a Mortgagor in connection with a
Principal Prepayment in Full for the calendar month in which such
Principal Prepayment is to be distributed pursuant to Section
4.02;
(iii) Insurance Proceeds and Liquidation Proceeds (net of any related
expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to Section
2.02, 2.04 or 4.07 and all amounts required to be deposited in
connection with the substitution of a Qualified Substitute
Mortgage Loan pursuant to Section 2.04;
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(v) Any amounts required to be deposited pursuant to Section 3.07(c);
and
(vi) All amounts transferred from the Payment Account to the Custodial
Account in accordance with Section 4.02(a).
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments on the Mortgage Loans which are not part of the Trust
Fund (consisting of payments in respect of principal and interest on the
Mortgage Loans due on or before the Cut-off Date) and payments or collections in
the nature of prepayment charges or late payment charges or assumption fees may
but need not be deposited by the Servicer in the Custodial Account. In the event
any amount not required to be deposited in the Custodial Account is so
deposited, the Servicer may at any time withdraw such amount from the Custodial
Account, any provision herein to the contrary notwithstanding. The Servicer
shall maintain records with respect to all deposits made pursuant to this
Section. All funds deposited in the Custodial Account shall be held in trust for
the Certificateholders until withdrawn in accordance with Section 3.10.
With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds
and the proceeds of the purchase of any Mortgage Loan pursuant to Sections 2.02,
2.04 and 4.07 received in any calendar month, the Servicer may elect to treat
such amounts as included in the Available Distribution Amount for the
Distribution Date in the month of receipt, but is not obligated to do so. If the
Servicer so elects, such amounts will be deemed to have been received (and any
related Realized Loss shall be deemed to have occurred) on the last day of the
month prior to the receipt thereof.
(c) The Servicer shall use commercially reasonable efforts to cause the
institution maintaining the Custodial Account to invest the funds in the
Custodial Account attributable to the Mortgage Loans in Permitted Investments
which shall mature not later than the Payment Account Deposit Date next
following the date of such investment (with the exception of the Amount Held for
Future Distribution) and which shall not be sold or disposed of prior to their
maturities. All income and gain realized from any such investment shall be for
the benefit of the Servicer as additional servicing compensation and shall be
subject to its withdrawal or order from time to time. The amount of any losses
incurred in respect of any such investments attributable to the investment of
amounts in respect of the Mortgage Loans shall be deposited in the Custodial
Account by the Servicer out of its own funds immediately as realized without any
right of reimbursement.
Section 3.08. Subservicing Accounts; Servicing Accounts.
(a) In those cases where a Subservicer is servicing a Mortgage Loan pursuant to
a Subservicing Agreement, the Servicer shall cause the Subservicer, pursuant to
the Subservicing Agreement, to establish and maintain one or more Subservicing
Accounts which shall be an Eligible Account or, if such account is not an
Eligible Account, shall be acceptable to the Servicer and each Rating Agency.
The Subservicer will be required thereby to deposit into the Subservicing
Account on a daily basis all proceeds of Mortgage Loans received by the
Subservicer, less its Subservicing Fees and unreimbursed advances and expenses,
to the extent permitted by the Subservicing Agreement. If the Subservicing
Account is not an Eligible Account, the Servicer shall be deemed to have
received such monies upon receipt thereof by the Subservicer. The Subservicer
shall not be required to deposit in the Subservicing Account payments or
collections in the nature of prepayment charges or late charges or assumption
fees. On or before each Determination Date, the Servicer shall cause the
Subservicer, pursuant to the Subservicing Agreement, to remit to the Servicer
for deposit in the Custodial Account all funds held in the Subservicing Account
with respect to each Mortgage Loan serviced by such Subservicer that are
required to be remitted to the Servicer.
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(b) In addition to the Custodial Account and the Payment Account, the Servicer
shall for any Nonsubserviced Mortgage Loan, and shall cause the Subservicers for
Subserviced Mortgage Loans to, establish and maintain one or more Servicing
Accounts and deposit and retain therein all collections from the Mortgagors (or
advances from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums, Primary Insurance Policy premiums, if applicable, or
comparable items for the account of the Mortgagors. Each Servicing Account shall
be hold in trust, entitled "GMAC Mortgage Corporation Servicing Account in trust
for the benefit of the of the Holders of GMACM Mortgage Pass-Through
Certificates, Series 2003-AR2." Withdrawals of amounts related to the Mortgage
Loans from the Servicing Accounts may be made only to effect timely payment of
taxes, assessments, hazard insurance premiums, Primary Insurance Policy
premiums, if applicable, or comparable items, to reimburse the Servicer or
Subservicer out of related collections for any payments made pursuant to
Sections 3.11 (with respect to the Primary Insurance Policy) and 3.12(a) (with
respect to hazard insurance), to refund to any Mortgagors any sums as may be
determined to be overages, to pay interest, if required, to Mortgagors on
balances in the Servicing Account or to clear and terminate the Servicing
Account at the termination of this Agreement in accordance with Section 9.01. As
part of its servicing duties, the Servicer shall, and the Subservicers will,
pursuant to the Subservicing Agreements, be required to pay to the Mortgagors
interest on funds in this account to the extent required by law.
(c) The Servicer shall advance the payments referred to in the preceding
subsection that are not timely paid by the Mortgagors or advanced by the
Subservicers on the date when the tax, premium or other cost for which such
payment is intended is due, but the Servicer shall be required so to advance
only to the extent that such advances, in the good faith judgment of the
Servicer, will be recoverable by the Servicer out of Insurance Proceeds,
Liquidation Proceeds or otherwise.
Section 3.09. Access to Certain Documentation and Information Regarding the
Mortgage Loans.
If compliance with this Section 3.09 shall make any Class of
Certificates legal for investment by federally insured savings and loan
associations, the Servicer shall provide, or cause the Subservicers to provide,
to the Trustee, the Office of Thrift Supervision or the FDIC and the supervisory
agents and examiners thereof access to the documentation regarding the Mortgage
Loans required by applicable regulations of the Office of Thrift Supervision,
such access being afforded without charge but only upon reasonable request and
during normal business hours at the offices designated by the Servicer. The
Servicer shall permit such representatives to photocopy any such documentation
and shall provide equipment for that purpose at a charge reasonably
approximating the cost of such photocopying to the Servicer.
Section 3.10. Permitted Withdrawals from the Custodial Account.
(a) The Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit
therein pursuant to Section 3.07 that are attributable to the
Mortgage Loans for the following purposes:
(i) to make deposits into the Payment Account in the amounts and in
the manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for previously
unreimbursed advances or expenses made pursuant to Sections 3.01,
3.07(a), 3.08, 3.11, 3.12(a), 3.14 and 4.04 or otherwise
reimbursable pursuant to the terms of this Agreement, such
withdrawal right being limited to amounts received on particular
Mortgage Loans (including, for this purpose, REO Proceeds,
Insurance Proceeds, Liquidation Proceeds and proceeds from the
purchase of a Mortgage Loan pursuant to Section 2.02, 2.04 or
4.07) which represent (A) Late Collections of Monthly Payments
for which any such advance was made in the case of Subservicer
Advances or Advances pursuant to Section 4.04 and (B) recoveries
of amounts in respect of which such advances were made in the
case of Servicing Advances;
(iii)to pay to itself or the related Subservicer (if not previously
retained by such Subservicer) out of each payment received by the
Servicer on account of interest on a Mortgage Loan as
contemplated by Sections 3.14 and 3.16, an amount equal to that
remaining portion of any such payment as to interest (but not in
excess of the Servicing Fee and the Subservicing Fee, if not
previously retained) which, when deducted, will result in the
remaining amount of such interest being interest at the Net
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Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan) on the amount specified in the
amortization schedule of the related Mortgage Loan as the
principal balance thereof at the beginning of the period
respecting which such interest was paid after giving effect to
any previous Curtailments;
(iv) to pay to itself as additional servicing compensation any
interest or investment income earned on funds and other property
deposited in or credited to the Custodial Account that it is
entitled to withdraw pursuant to Section 3.07(c);
(v) to pay to itself as additional servicing compensation any
Foreclosure Profits, and any amounts remitted by Subservicers or
received from Mortgagors as interest in respect of Curtailments;
(vi) to pay the Seller, with respect to each Mortgage Loan or property
acquired in respect thereof that has been purchased or otherwise
transferred pursuant to Section 2.02, 2.04, 4.07 or 9.01, all
amounts received thereon and not required to be distributed to
the Certificateholders as of the date on which the related Stated
Principal Balance or Purchase Price is determined;
(vii)to reimburse itself or the related Subservicer for any
Nonrecoverable Advance or any Advance that was ultimately
determined to be Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary Losses in the
manner and to the extent provided in subsection (c) below, any
Advance made in connection with a modification of a Mortgage Loan
that is in default or, in the judgment of the Servicer, default
is reasonably foreseeable pursuant to Section 3.07(a), to the
extent the amount of the Advance has been added to the
outstanding principal balance of the Mortgage Loan, or any
Advance reimbursable to the Servicer pursuant to Section 4.02(a);
(viii) to reimburse itself or the Company for expenses incurred by and
reimbursable to it or the Company pursuant to Sections 3.01(a),
3.11, 3.13, 3.14(c), 6.03, 10.01 or otherwise;
(ix) to reimburse itself for Servicing Advances expended by it (a)
pursuant to Section 3.14 in good faith in connection with the
restoration of property damaged by an Uninsured Cause, and (b) in
connection with the liquidation of a Mortgage Loan or disposition
of an REO Property to the extent not otherwise reimbursed
pursuant to clause (ii) or (viii) above; and
(x) to withdraw any amount deposited in the Custodial Account that
was not required to be deposited therein pursuant to Section
3.07.
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(b) Since, in connection with withdrawals pursuant to clauses (ii),
(iii), (v) and (vi), the Servicer's entitlement thereto is
limited to collections or other recoveries on the related
Mortgage Loan, the Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the
purpose of justifying any withdrawal from the Custodial Account
pursuant to such clauses. All permitted withdrawals pursuant to
clauses (iv), (vii), (viii) and (ix) shall be reimbursed from
collections on the Mortgage Loans in the related Loan Group or,
if such reimbursement is not attributable to a specific Mortgage
Loan, shall be reimbursed from collections received on the
Mortgage Loans in each Loan Group, pro rata, based on the Stated
Principal Balance of each such Loan Group.
(c) The Servicer shall be entitled to reimburse itself or the related
Subservicer for any Advance made in respect of a Mortgage Loan
that the Servicer determines to be a Nonrecoverable Advance or an
Advance that was ultimately determined to be Excess Special
Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses by withdrawal from the Custodial Account of
amounts on deposit therein attributable to the Mortgage Loans on
any Payment Account Deposit Date succeeding the date of such
determination. Such right of reimbursement in respect of a
Nonrecoverable Advance on any such Payment Account Deposit Date
shall be limited to an amount not exceeding the portion of such
Advance previously paid to Certificateholders (and not
theretofore reimbursed to the Servicer or the related
Subservicer).
Section 3.11. Maintenance of the Primary Insurance Policies; Collections
Thereunder.
(a) The Servicer shall not take, or permit any Subservicer to take, any action
which would result in non-coverage under any applicable Primary Insurance Policy
of any loss which, but for the actions of the Servicer or Subservicer, would
have been covered thereunder. To the extent coverage is available, the Servicer
shall keep or cause to be kept in full force and effect a Primary Insurance
Policy in the case of each Mortgage Loan having a Loan-to-Value Ratio at
origination in excess of 80%, until the principal balance of the related
Mortgage Loan secured by a Mortgaged Property is reduced to 80% or less of the
appraised value based on the most recent appraisal of the Mortgaged Property
performed by a qualified appraiser, such appraisal to be included in the related
servicing file. The Servicer shall not cancel or refuse to renew any such
Primary Insurance Policy applicable to a Nonsubserviced Mortgage Loan, or
consent to any Subservicer canceling or refusing to renew any such Primary
Insurance Policy applicable to a Mortgage Loan subserviced by it, that is in
effect at the date of the initial issuance of the Certificates and is required
to be kept in force hereunder unless the replacement Primary Insurance Policy
for such canceled or non-renewed policy is maintained with an insurer whose
claims-paying ability is acceptable to each Rating Agency for mortgage
pass-through certificates having a rating equal to or better than the lower of
the then-current rating or the rating assigned to the Certificates as of the
Closing Date by such Rating Agency. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Section
3.13, the Servicer shall promptly notify the insurer under the related Primary
Insurance Policy, if any, of such assumption or substitution of liability in
accordance with the terms of such policy and shall take all actions which may be
required by such insurer as a condition to the continuation of coverage under
the Primary Insurance Policy. If such Primary Insurance Policy is terminated as
a result of such assumption or substitution of liability, the Servicer shall
obtain a replacement Primary Insurance Policy as provided above.
(b) In connection with its activities as administrator and servicer of the
Mortgage Loans, the Servicer agrees to present or to cause the related
Subservicer to present, on behalf of the Servicer, the Subservicer, if any, the
Trustee and Certificateholders, claims to the related Insurer under any Primary
Insurance Policies, in a timely manner in accordance with such policies, and, in
this regard, to take or cause to be taken such reasonable action as shall be
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necessary to permit recovery under any Primary Insurance Policies respecting
defaulted Mortgage Loans. Pursuant to Section 3.07, any Insurance Proceeds
collected by or remitted to the Servicer under any Primary Insurance Policies
shall be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 3.10.
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage.
(a) The Servicer shall cause to be maintained for each Mortgage Loan (other than
a Cooperative Loan) fire insurance with extended coverage in an amount which is
equal to the lesser of (i) the greater of (A) the principal balance owing on
such Mortgage Loan and (B) the percentage such that the proceeds thereof shall
be sufficient to prevent the application of a co-insurance clause; or (ii) 100
percent of the insurable value of the improvements. If the Mortgaged Property is
in an area identified in the Federal Register by the Federal Emergency
Management Agency as being a special flood hazard area that has
federally-mandated flood insurance requirements, the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding principal balance of the Mortgage Loan, (ii) the maximum
insurable value of the improvements securing such Mortgage Loan or (iii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. The Servicer shall also cause to be
maintained on property acquired upon foreclosure, or deed in lieu of
foreclosure, of any Mortgage Loan (other than a Cooperative Loan), fire
insurance with extended coverage in an amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in an amount as
provided above. Pursuant to Section 3.07, any amounts collected by the Servicer
under any such policies (other than amounts to be applied to the restoration or
repair of the related Mortgaged Property or property thus acquired or amounts
released to the Mortgagor in accordance with the Servicer's normal servicing
procedures) shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 3.10. Any cost incurred by the Servicer in maintaining any
such insurance shall not, for the purpose of calculating monthly distributions
to the Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Servicer out of related late payments by the Mortgagor or
out of Insurance Proceeds and Liquidation Proceeds to the extent permitted by
Section 3.10. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage Loan other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and its successors and/or
assigns and shall provide for at least thirty days prior written notice of any
cancellation, reduction in the amount or material change in coverage to the
Servicer. The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a General Policy Rating in
Best's Key Rating Guide currently acceptable to Xxxxxx Xxx and are licensed to
do business in the state wherein the property subject to the policy is located.
If the Servicer shall obtain and maintain a blanket fire insurance
policy with extended coverage insuring against hazard losses on all of the
Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.12(a), it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property a policy complying with the first sentence of
this Section 3.12(a) and there shall have been a loss which would have been
covered by such policy, deposit in the Payment Account the amount not otherwise
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payable under the blanket policy because of such deductible clause. Any such
deposit by the Servicer shall be made on the Payment Account Deposit Date next
preceding the Distribution Date which occurs in the month following the month in
which payments under any such policy would have been deposited in the Custodial
Account. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Servicer agrees to present, on behalf of itself, the Trustee
and the Certificateholders, claims under any such blanket policy.
(b) The Servicer shall obtain and maintain at its own expense and keep in full
force and effect throughout the term of this Agreement a blanket fidelity bond
and an errors and omissions insurance policy covering the Servicer's officers
and employees and other persons acting on behalf of the Servicer in connection
with its activities under this Agreement. The amount of coverage, taken
together, shall be at least equal to the coverage that would be required by
Xxxxxx Mae or Xxxxxxx Mac, with respect to the Servicer if the Servicer were
servicing and administering the Mortgage Loans for Xxxxxx Mae or Xxxxxxx Mac. In
the event that any such bond or policy ceases to be in effect, the Servicer
shall obtain a comparable replacement bond or policy from an issuer or insurer,
as the case may be, meeting the requirements set forth above.
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Servicer or
Subservicer, to the extent it has knowledge of such conveyance, shall enforce
any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, the Servicer
is not required to exercise such rights with respect to a Mortgage Loan if the
Person to whom the related Mortgaged Property has been conveyed or is proposed
to be conveyed satisfies the terms and conditions contained in the Mortgage Note
and Mortgage related thereto and the consent of the mortgagee under such
Mortgage Note or Mortgage is not otherwise so required under such Mortgage Note
or Mortgage as a condition to such transfer. In the event that the Servicer is
prohibited by law from enforcing any such due-on-sale clause, or if coverage
under any Required Insurance Policy would be adversely affected, or if
nonenforcement is otherwise permitted hereunder, the Servicer is authorized,
subject to Section 3.13(b), to take or enter into an assumption and modification
agreement from or with the person to whom such property has been or is about to
be conveyed, pursuant to which such person becomes liable under the Mortgage
Note and, unless prohibited by applicable state law, the Mortgagor remains
liable thereon, provided that the Mortgage Loan shall continue to be covered (if
so covered before the Servicer enters such agreement) by the applicable Required
Insurance Policies. The Servicer, subject to Section 3.13(b), is also authorized
with the prior approval of the insurers under any Required Insurance Policies to
enter into a substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Servicer shall not be deemed to be in default
under this Section by reason of any transfer or assumption which the Servicer
reasonably believes it is restricted by law from preventing, for any reason
whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause to the
extent set forth in Section 3.13(a), in any case in which a Mortgaged Property
is to be conveyed to a Person by a Mortgagor, and such Person is to enter into
an assumption or modification agreement or supplement to the Mortgage Note or
Mortgage which requires the signature of the Trustee, or if an instrument of
release signed by the Trustee is required releasing the Mortgagor from liability
on the Mortgage Loan, the Servicer is authorized, subject to the requirements of
the sentence next following, to execute and deliver, on behalf of the Trustee,
the assumption agreement with the Person to whom the Mortgaged Property is to be
conveyed and such modification agreement or supplement to the Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property
to such Person; provided, however, that in connection with any such assumption,
no material term of the Mortgage Note may be changed. Upon receipt of
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appropriate instructions from the Servicer in accordance with the foregoing, the
Trustee shall execute any necessary instruments for such assumption or
substitution of liability as directed in writing by the Servicer. Upon the
closing of the transactions contemplated by such documents, the Servicer shall
cause the originals or true and correct copies of the assumption agreement, the
release (if any), or the modification or supplement to the Mortgage Note or
Mortgage to be delivered to the Trustee or the Custodian and deposited with the
Mortgage File for such Mortgage Loan. Any fee collected by the Servicer or such
related Subservicer for entering into an assumption or substitution of liability
agreement will be retained by the Servicer or such Subservicer as additional
servicing compensation.
(c) The Servicer or the related Subservicer, as the case may be, shall be
entitled to approve a request from a Mortgagor for a partial release of the
related Mortgaged Property, the granting of an easement thereon in favor of
another Person, any alteration or demolition of the related Mortgaged Property
(or, with respect to a Cooperative Loan, the related Cooperative Apartment)
without any right of reimbursement or other similar matters if it has
determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the security for,
and the timely and full collectability of, such Mortgage Loan would not be
adversely affected thereby and if it has also determined that any portion of the
applicable REMIC would not fail to continue to qualify as a REMIC under the Code
as a result thereof and (subject to Section 10.01(f)) that no tax on "prohibited
transactions" or "contributions" after the startup day would be imposed on such
REMIC as a result thereof. Any fee collected by the Servicer or the related
Subservicer for processing such a request will be retained by the Servicer or
such Subservicer as additional servicing compensation.
(d) Subject to any other applicable terms and conditions of this Agreement, the
Trustee and Servicer shall be entitled to approve an assignment in lieu of
satisfaction with respect to any Mortgage Loan, provided the obligee with
respect to such Mortgage Loan following such proposed assignment provides the
Trustee and Servicer with a "Lender Certification for Assignment of Mortgage
Loan" in the form attached hereto as Exhibit K, in form and substance
satisfactory to the Trustee and Servicer, providing the following: (i) that the
substance of the assignment is, and is intended to be, a refinancing of such
Mortgage; (ii) that the Mortgage Loan following the proposed assignment will
have a rate of interest at least 0.25 percent below or above the rate of
interest on such Mortgage Loan prior to such proposed assignment; and (iii) that
such assignment is at the request of the borrower under the related Mortgage
Loan. Upon approval of an assignment in lieu of satisfaction with respect to any
Mortgage Loan, the Servicer shall receive cash in an amount equal to the unpaid
principal balance of and accrued interest on such Mortgage Loan and the Servicer
shall treat such amount as a Principal Prepayment in Full with respect to such
Mortgage Loan for all purposes hereof.
Section 3.14. Realization Upon Defaulted Mortgage Loans.
(a) The Servicer shall foreclose upon or otherwise comparably convert (which may
include an REO Acquisition) the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. In connection with such foreclosure or other
conversion, the Servicer shall, consistent with Section 3.11, follow such
practices and procedures as it shall deem necessary or advisable, as shall be
normal and usual in its general mortgage servicing activities, as shall meet the
requirements of the Insurer under any Required Insurance Policy, and as shall be
consistent with the provisions of this Agreement. With respect to any REO
Property, the deed or certificate of sale shall be taken in the name of the
Trustee for the benefit of the Certificateholders, or its nominee, on behalf of
the Certificateholders. The Trustee's name shall be placed on the title to such
REO Property solely as the Trustee hereunder and not in its individual capacity.
The Servicer shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity thereunder. The Servicer, however, shall
not be required to expend its own funds or incur other reimbursable charges in
connection with any foreclosure, or attempted foreclosure which is not
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completed, or towards the restoration of any property unless it shall determine
(i) that such restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Holders of Certificates of one or more
Classes after reimbursement to itself for such expenses or charges and (ii) that
such expenses or charges will be recoverable to it through Liquidation Proceeds,
Insurance Proceeds, or REO Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 3.10,
whether or not such expenses and charges are actually recoverable from related
Liquidation Proceeds, Insurance Proceeds or REO Proceeds). In the event of such
a determination by the Servicer pursuant to this Section 3.14(a), the Servicer
shall be entitled to reimbursement of such amounts pursuant to Section 3.10. If
the Servicer has knowledge that a Mortgaged Property which the Servicer is
contemplating acquiring in foreclosure or by deed in lieu of foreclosure is
located within a one (1) mile radius of any site listed in the Expenditure Plan
for the Hazardous Substance Clean Up Bond Act of 1984 or other site with
environmental or hazardous waste risks known to the Servicer, the Servicer will,
prior to acquiring the Mortgaged Property, consider such risks and only take
action in accordance with its established environmental review procedures.
The Servicer shall, either itself or through an agent selected by the
Servicer, and in accordance with the Xxxxxx Xxx guidelines, manage, conserve,
protect and operate each REO Property in the same manner that it manages,
conserves, protects and operates other foreclosed property for its own account,
and in the same manner that similar property in the same locality as the REO
Property is managed. Each disposition of REO Property shall be carried out by
the Servicer at such price and upon such terms and conditions as the Servicer
deems to be in the best interest of the Certificateholders.
Upon the occurrence of a Cash Liquidation or REO Disposition, following
the deposit in the Custodial Account of all Insurance Proceeds, Liquidation
Proceeds and other payments and recoveries referred to in the definition of
"Cash Liquidation" or "REO Disposition," as applicable, upon receipt by the
Trustee of written notification of such deposit signed by a Servicing Officer,
the Trustee or any Custodian, as the case may be, shall release to the Servicer
the related Mortgage File and the Trustee shall execute and deliver such
instruments of transfer or assignment prepared by the Servicer, in each case
without recourse, as shall be necessary to vest in the Servicer or its designee,
as the case may be, the related Mortgage Loan, and thereafter such Mortgage Loan
shall not be part of the Trust Fund. Notwithstanding the foregoing or any other
provision of this Agreement, in the Servicer's sole discretion with respect to
any defaulted Mortgage Loan or REO Property as to either of the following
provisions, (i) a Cash Liquidation or REO Disposition may be deemed to have
occurred if substantially all amounts expected by the Servicer to be received in
connection with the related defaulted Mortgage Loan or REO Property have been
received, and (ii) for purposes of determining the amount of any Liquidation
Proceeds, Insurance Proceeds, REO Proceeds or any other unscheduled collections
or the amount of any Realized Loss, the Servicer may take into account minimal
amounts of additional receipts expected to be received or any estimated
additional liquidation expenses expected to be incurred in connection with the
related defaulted Mortgage Loan or REO Property.
(b) If title to any Mortgaged Property is acquired by the Trust Fund as an REO
Property by foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be issued to the Trustee or to its nominee on behalf
of Certificateholders. Notwithstanding any such acquisition of title and
cancellation of the related Mortgage Loan, such REO Property shall (except as
otherwise expressly provided herein) be considered to be an Outstanding Mortgage
Loan held in the Trust Fund until such time as the REO Property shall be sold.
Consistent with the foregoing for purposes of all calculations hereunder so long
as such REO Property shall be considered to be an Outstanding Mortgage Loan it
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shall be assumed that, notwithstanding that the indebtedness evidenced by the
related Mortgage Note shall have been discharged, such Mortgage Note and the
related amortization schedule in effect at the time of any such acquisition of
title (after giving effect to any previous Curtailments and before any
adjustment thereto by reason of any bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period) remain in effect. To the extent
the net income received during any calendar month is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan for such calendar month, such excess
shall be considered to be a Curtailment of the related Mortgage Loan.
(c) If the Trust Fund acquires any REO Property as aforesaid or otherwise in
connection with a default or imminent default on a Mortgage Loan, the Servicer
on behalf of the Trust Fund shall dispose of such REO Property within three full
years after the taxable year of its acquisition by the Trust Fund for purposes
of Section 860G(a)(8) of the Code (or such shorter period as may be necessary
under applicable state (including any state in which such property is located)
law to maintain the status of any portion of the applicable REMIC as a REMIC
under applicable state law and avoid taxes resulting from such property failing
to be foreclosure property under applicable state law) or, at the expense of the
Trust Fund, request, more than 60 days before the day on which such grace period
would otherwise expire, an extension of such grace period unless the Servicer
(subject to Section 10.01(f)) obtains for the Trustee an Opinion of Counsel,
addressed to the Trustee and the Servicer, to the effect that the holding by the
Trust Fund of such REO Property subsequent to such period will not result in the
imposition of taxes on "prohibited transactions" as defined in Section 860F of
the Code or cause the applicable REMIC to fail to qualify as a REMIC (for
federal (or any applicable State or local) income tax purposes) at any time that
any Certificates are outstanding, in which case the Trust Fund may continue to
hold such REO Property (subject to any conditions contained in such Opinion of
Counsel). The Servicer shall be entitled to be reimbursed from the Custodial
Account for any costs incurred in obtaining such Opinion of Counsel, as provided
in Section 3.10. Notwithstanding any other provision of this Agreement, no REO
Property acquired by the Trust Fund shall be rented (or allowed to continue to
be rented) or otherwise used by or on behalf of the Trust Fund in such a manner
or pursuant to any terms that would (i) cause such REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or (ii) subject the Trust Fund to the imposition of any federal income
taxes on the income earned from such REO Property, including any taxes imposed
by reason of Section 860G(c) of the Code, unless the Servicer has agreed to
indemnify and hold harmless the Trust Fund with respect to the imposition of any
such taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or purchase or
repurchase of any Mortgage Loan pursuant to the terms of this Agreement, as well
as any recovery resulting from a collection of Liquidation Proceeds, Insurance
Proceeds or REO Proceeds, will be applied in the following order of priority:
first, to reimburse the Servicer or the related Subservicer in accordance with
Section 3.10(a)(ii); second, to all Servicing Fees and Subservicing Fees payable
therefrom (and the Servicer and the Subservicer shall have no claims for any
deficiencies with respect to such fees which result from the foregoing
allocation); third, to the Certificateholders to the extent of accrued and
unpaid interest on the Mortgage Loan, and any related REO Imputed Interest, at
the Net Mortgage Rate (or the Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan) to the Due Date prior to the Distribution Date on which
such amounts are to be distributed; fourth, to the Certificateholders as a
recovery of principal on the Mortgage Loan (or REO Property)(provided that, if
such recovery is of an amount previously allocated to one or more Classes of
Certificates as a Realized Loss, such recovery shall be allocated among such
Classes in the same proportions as the allocation of such Realized Losses and,
if any such Class of Certificates to which such Realized Loss was allocated is
no longer outstanding, such subsequent recovery shall be distributed to the
persons who were the Holders of such Class of Certificates when it was retired);
and fifth, to Foreclosure Profits.
(e) In the event of a default on a Mortgage Loan one or more of whose obligors
is not a United States Person, in connection with any foreclosure or acquisition
of a deed in lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan, the Servicer will cause compliance with the provisions of
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Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the proceeds
of such foreclosure except to the extent, if any, that proceeds of such
foreclosure are required to be remitted to the obligors on such Mortgage Loan.
Section 3.15. Trustee to Cooperate; Release of Mortgage Notes.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or upon the
receipt by the Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Servicer will immediately notify
the Custodian, if any, or the Trustee (if it holds the related Mortgage Note) by
delivery of a Request for Release substantially in the form attached hereto as
Exhibit F requesting delivery to it of the Mortgage Note. The Servicer is
authorized to execute and deliver to the Mortgagor the request for reconveyance,
deed of reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage, together with the Mortgage Note with, as
appropriate, written evidence of cancellation thereon and to cause the removal
from the registration on the MERS(R) System of such Mortgage and to execute and
deliver, on behalf of the Trustee and the Certificateholders or any of them, any
and all instruments of satisfaction or cancellation or of partial or full
release. No expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the Custodial Account or the
Payment Account.
(b) From time to time as is appropriate for the servicing or foreclosure of any
Mortgage Loan, the Servicer shall deliver a Request for Release to the
Custodian, if any, or the Trustee (if it holds the related Mortgage Note)
requesting that possession of the Mortgage Note be released to the Servicer and
certifying as to the reason for such release and that such release will not
invalidate any insurance coverage provided in respect of the Mortgage Loan under
any Required Insurance Policy. Upon receipt of the foregoing, the Trustee (if it
holds the related Mortgage Note) or the Custodian shall deliver the Mortgage
Note to the Servicer. The Servicer shall cause each Mortgage Note so released to
be returned to the Trustee, or the Custodian as agent for the Trustee when the
need therefor by the Servicer no longer exists, unless (i) the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Custodial Account or (ii) the Mortgage Note has been
delivered directly or through a Subservicer to an attorney, or to a public
trustee or other public official as required by law, for purposes of initiating
or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non-judicially, and the Servicer has
delivered directly or through a Subservicer to the Trustee and the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such Mortgage Note was delivered and the purpose or purposes of
such delivery. In the event of the liquidation of any such Mortgage Loan, the
Custodian, if any, or the Trustee shall deliver the Request for Release with
respect thereto to the Servicer upon deposit of the related Liquidation Proceeds
in the Custodial Account.
(c) The Servicer on the Trustee's behalf shall execute and deliver to the
Servicer, if necessary, any court pleadings, requests for trustee's sale or
other documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Together with such
documents or pleadings (if signed by the Trustee), the Servicer shall deliver to
the Trustee a certificate of a Servicing Officer requesting that such pleadings
or documents be executed by the Trustee and certifying as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate any insurance coverage under any Required
Insurance Policy or invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
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(d) Notwithstanding any other provisions of this Agreement, the Servicer shall
account fully to the Trustee for any funds received by the Servicer or which
otherwise are collected by the Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any related Mortgage Loan. All Mortgage Files and funds
collected or held by, or under the control of, the Servicer in respect of any
Mortgage Loans, whether from the collection of principal and interest payments
or from Liquidation Proceeds, including but not limited to, any funds on deposit
in the Custodial Account(s), shall be held by the Servicer for and on behalf of
the Trustee and shall be and remain the sole and exclusive property of the
Trustee, subject to the applicable provisions of this Agreement. The Servicer
also agrees that it shall not create, incur or subject any Mortgage File or any
funds that are deposited in the Custodial Account, Payment Account or any
related Servicing Account, or any funds that otherwise are or may become due or
payable to the Trustee for the benefit of the Certificateholders, to any claim,
lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds collected on, or in connection with, a
Mortgage Loan, except, however, that the Servicer shall be entitled to set off
against and deduct from any such funds any amounts that are properly due and
payable to the Servicer under this Agreement.
Section 3.16. Servicing and Other Compensation; Compensating Interest.
(a) The Servicer, as compensation for its activities hereunder, shall be
entitled to receive on each Distribution Date the amounts provided for by
clauses (iii), (iv) and (v) of Section 3.10(a), subject to clause (e) below. The
amount of servicing compensation provided for in such clauses shall be accounted
for on a Mortgage Loan-by-Mortgage Loan basis. In the event that Liquidation
Proceeds, Insurance Proceeds and REO Proceeds (net of amounts reimbursable
therefrom pursuant to Section 3.10(a)(ii)) in respect of a Cash Liquidation or
REO Disposition exceed the unpaid principal balance of such Mortgage Loan plus
unpaid interest accrued thereon (including REO Imputed Interest) at a per annum
rate equal to the related Net Mortgage Rate (or the Modified Net Mortgage Rate
in the case of a Modified Mortgage Loan), the Servicer shall be entitled to
retain therefrom and to pay to itself and/or the related Subservicer, any
Foreclosure Profits and any Servicing Fee or Subservicing Fee considered to be
accrued but unpaid.
(b) Additional servicing compensation in the form of prepayment charges,
assumption fees, late payment charges, investment income on amounts in the
Custodial Account or otherwise shall be retained by the Servicer or the
Subservicer to the extent provided herein, subject to clause (e) below.
(c) The Servicer shall be required to pay, or cause to be paid, all expenses
incurred by it in connection with its servicing activities hereunder (including
payment of premiums for the Primary Insurance Policies, if any, to the extent
such premiums are not required to be paid by the related Mortgagors, certain
expenses of the Trustee as provided in Section 8.05, and the fees and expenses
of any Custodian) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.01, 3.10 and 3.14.
(d) The Servicer's right to receive servicing compensation may not be
transferred in whole or in part except in connection with the transfer of all of
its responsibilities and obligations of the Servicer under this Agreement.
(e) Notwithstanding any other provision herein, the amount of the Servicing Fee
that the Servicer shall be entitled to receive for its activities hereunder for
the period ending on each Distribution Date shall be reduced (but not below
zero) by an amount equal to Compensating Interest (if any) for such Distribution
Date. In making such reduction, the Servicer will not withdraw from the
Custodial Account any such amount representing all or a portion of the Servicing
Fee to which it is entitled pursuant to Section 3.10(a)(iii).
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Section 3.17. Periodic Filings with the Securities and Exchange
Commission; Additional Information.
(a) Within 15 days after each Distribution Date, the Trustee shall prepare and
file in accordance with industry standards with the Securities and Exchange
Commission (the "Commission") via the Electronic Data Gathering and Retrieval
System ("XXXXX"), and the Servicer shall execute, a Form 8-K with a copy of the
statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Prior to January 31, 2004, the Trustee shall prepare and file in
accordance with industry standards, and the Servicer shall execute, a Form 15
Suspension Notification with respect to the Trust Fund, if applicable, with the
Commission via XXXXX. Prior to April 30, 2004 and prior to April 30th of each
succeeding year until the earlier of (i) a Form 15 Suspension Notification has
been filed with respect to the Trust Fund or (ii) the year following the
termination of the Trust Fund pursuant to the terms hereof, the Trustee shall
prepare and file, and the Servicer shall execute, a Form 10-K, in substance
conforming to industry standards with respect to the Trust Fund with the
Commission via XXXXX. The Company hereby grants a limited power of attorney to
execute and file each such document on behalf of the Company to the Servicer and
the Trustee, respectively. Each such power of attorney shall continue until
either the earlier of (i) receipt by the Trustee or the Servicer, as applicable,
from the Company of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Company agrees to promptly furnish to each of
the Trustee and the Servicer, from time to time upon request, such further
information, reports, and financial statements within its control related to
this Agreement and the Mortgage Loans as the Trustee or the Servicer, as
applicable, reasonably deems appropriate to prepare and file all necessary
reports with the Commission. The Servicer shall have no responsibility to file
any items other than those specified in this section.
(b) Any Form 10-K filed with the Commission in connection with this Section
shall include a certification, signed by the senior officer in charge of the
servicing functions of the Servicer, in the form attached as Exhibit N-1 hereto
or such other form as may be required or permitted by the Commission (the "Form
10-K Certification"), in compliance with Rule 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 Servicer with (x) a
back-up certification substantially in the form attached hereto as Exhibit N-2;
and (y) (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, 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 Servicer, and
(IV) notice of any failure of the Trustee to make any distribution to the
Certificateholders as required pursuant to this Agreement. Neither the Servicer
nor the Trustee shall have any liability with respect to the Trustee's failure
to properly prepare or file, or the Servicer's failure to execute, such periodic
reports resulting from or relating to the Servicer's or the Trustee's, as the
case may be, inability or failure to obtain any information not resulting from
the negligence or willful misconduct of such party.
Section 3.18. Annual Statement as to Compliance.
The Servicer shall deliver to the Company, the Trustee and each Rating
Agency on or before 90 days after the end of the Servicer's fiscal year,
commencing with its fiscal year ending December 31, 2003, an Officer's
Certificate stating, as to the signer thereof, that (i) a review of the
activities of the Servicer during the preceding calendar year and of the
performance of the Servicer under this Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based on
such review, the Servicer has fulfilled all its obligations under this Agreement
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throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof except for such defaults as such officer in his or her
good faith judgment believes to be immaterial.
Section 3.19. Annual Independent Public Accountants' Servicing Report.
On or before 90 days after the end of the Servicer's fiscal year,
commencing with its 2003 fiscal year, the Servicer at its expense shall cause a
firm of independent public accountants (who may also render other services to
the Servicer, the Company or any affiliate thereof) which is a member of the
American Institute of Certified Public Accountants to furnish a statement to the
Trustee and the Company to the effect that such firm has examined certain
documents and records relating to the Servicer's servicing of mortgage loans of
the same type as the Mortgage Loans pursuant to servicing agreements
substantially similar to this Agreement, which agreements may include this
Agreement, and that, on the basis of such an examination, conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Servicer's servicing has
been conducted in compliance with the agreements examined pursuant to this
Section, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided such
statement is delivered to the Trustee.
Section 3.20. Rights of the Company in Respect of the Servicer.
The Servicer shall afford the Company and the Trustee reasonable access
to all records and documentation regarding the Mortgage Loans and all accounts,
insurance information and other matters relating to this Agreement, such access
being afforded without charge, but only upon reasonable request and during
normal business hours at the office designated by the Servicer.
Section 3.21. Administration of Buydown Funds.
(a) With respect to any Buydown Mortgage Loan, the Servicer will withdraw from
the account that satisfies the requirements for a Subservicing Account (the
"Buydown Account") the predetermined amount that, when added to the amount due
on such date from the Mortgagor, equals the full Monthly Payment and deposit
that amount in the Custodial Account together with the related payment made by
the Mortgagor or advanced by the Subservicer.
(b) If the Mortgagor on a Buydown Mortgage Loan prepays such loan in its
entirety during the period (the "Buydown Period") when Buydown Funds are
required to be applied to such Buydown Mortgage Loan, the Servicer shall
withdraw from the Buydown Account and remit any Buydown Funds remaining in the
Buydown Account in accordance with the related buydown agreement. The amount of
Buydown Funds which may be remitted in accordance with the related buydown
agreement may reduce the amount required to be paid by the Mortgagor to fully
prepay the related Mortgage Loan. If the Mortgagor on a Buydown Mortgage Loan
defaults on such Mortgage Loan during the Buydown Period and the property
securing such Buydown Mortgage Loan is sold in the liquidation thereof (either
by the Servicer or the insurer under any related Primary Insurance Policy), the
Servicer shall withdraw from the Buydown Account the Buydown Funds for such
Buydown Mortgage Loan still held in the Buydown Account and deposit the same in
the Custodial Account or, pay to the insurer under any related Primary Insurance
Policy if the Mortgaged Property is transferred to such insurer and such insurer
pays all of the loss incurred in respect of such default. Any amount so remitted
pursuant to the preceding sentence will be deemed to reduce the amount owed on
the Mortgage Loan.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Payment Account.
(a) The Trustee shall establish and maintain a Payment Account for the benefit
of the Certificateholders in which the Servicer shall cause to be deposited on
behalf of the Trustee on or before 2:00 P.M. New York time on each Payment
Account Deposit Date by wire transfer of immediately available funds an amount
equal to the sum of (i) any Advance for the immediately succeeding Distribution
Date, (ii) any amount required to be deposited in the Payment Account pursuant
to Section 3.12(a), (iii) any amount required to be deposited in the Payment
Account pursuant to Section 4.07, (iv) any amount required to be paid pursuant
to Section 9.01 and (v) all other amounts constituting the Available
Distribution Amount for the immediately succeeding Distribution Date.
(b) The Trustee may invest, or cause the institution maintaining the Payment
Account to invest, or hold uninvested, the funds in the Payment Account in
Permitted Investments designated in the name of the Trustee for the benefit of
the Certificateholders, which shall mature or be payable on demand not later
than the Business Day next preceding the Distribution Date next following the
date of such investment (except that (i) any investment in the institution with
which the Payment Account is maintained may mature or be payable on demand on
such Distribution Date and (ii) any other investment may mature or be payable on
demand on such Distribution Date if the Trustee shall advance funds on such
Distribution Date to the Payment Account in the amount payable on such
investment on such Distribution Date, pending receipt thereof to the extent
necessary to make distributions on the Certificates) and shall not be sold or
disposed of prior to maturity. All income and gain realized from any such
investment or from uninvested balances in the Payment Account shall be for the
benefit of the Trustee and shall be subject to its withdrawal or order from time
to time. The amount of any losses incurred in respect of any such investments
shall be deposited in the Payment Account by the Trustee out of its own funds
immediately as realized without any right of reimbursement.
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Section 4.02. Distributions.
(a) On each Distribution Date, the REMIC I Distribution Amount shall
be deemed distributed from REMIC I to REMIC II as the holder of
the REMIC I Regular Interests and to the Holder of Component I of
the Class R Certificates in accordance with the priorities set
forth in the definition of REMIC I Distribution Amount. On each
Distribution Date, the amount received by REMIC II pursuant to
the preceding sentence and Section 10.04(a) shall be deemed
distributed from REMIC II to REMIC III as the holder of the REMIC
II Regular interests in the amounts and in accordance with the
priorities set forth in Section 10.02(b) through (c). On each
Distribution Date, the Trustee or the Paying Agent appointed by
the Trustee shall distribute first, to the Trustee, payment for
any servicing transfer expenses reimbursable to the Trustee
pursuant to Section 7.02(a) and that have not been paid or
reimbursed to the Trustee by the Servicer, allocated in reduction
of the Available Distribution Amounts pro rata, based upon the
aggregate Stated Principal Balances of each Loan Group, second,
to the Servicer, in the case of a distribution pursuant to
Section 4.02(a)(iv) below, the amount required to be distributed
to the Servicer or a Subservicer pursuant to Section 4.02(a)(iv)
below, and third, to each Certificateholder of record on the next
preceding Record Date (other than as provided in Section 9.01
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 the Paying Agent, as the case may be, or,
if such Certificateholder has not so notified the Trustee or the
Paying Agent 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 share
with respect to each Class of Certificates, shall be based on the
aggregate of the Percentage Interests represented by 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 4.02(b) below), in each case to the extent
of the related Available Distribution Amount (net of the amounts
payable above)(except, with respect to clauses (iii) and (xix)
below and Loan Group 2 and Loan Group 3, to the extent of the
remaining related Available Distribution Amount plus the Class
A-II-1 Hedge Payment or Class A-III-1 Hedge Payment, as
applicable):
(i) (I) from the Available Distribution Amount related to the Group 1 Loans, to
the Holders of the Class A-I-1 Certificates, Accrued Certificate Interest
on such Certificates for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date except as provided in the last paragraph of this Section
4.02(a), in each case in respect of interest on such Classes;
(II) from the Available Distribution Amount related to the Group 2 Loans, to the
Holders of the Group 2 Certificates, on a pro rata basis based on Accrued
Certificate Interest payable on such Classes of Certificates with respect
to such Distribution Date, Accrued Certificate Interest on such Classes of
Certificates for such Distribution Date, plus any Accrued Certificate
Interest thereon remaining unpaid from any previous Distribution Date
except as provided in the last paragraph of this Section 4.02(a), in each
case in respect of interest on such Classes;
(III)from the Available Distribution Amount related to the Group 3 Loans, to
the Holders of the Group 3 Certificates, on a pro rata basis based on
Accrued Certificate Interest payable on such Classes of Certificates with
respect to such Distribution Date, Accrued Certificate Interest on such
Classes of Certificates for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date except as provided in the last paragraph of this Section
4.02(a), in each case in respect of interest on such Classes; and
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(IV) from the Available Distribution Amount related to the Group 4
Loans, to the Holders of the Class A-IV-1 Certificates, Accrued
Certificate Interest on such Certificates for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date except as provided in
the last paragraph of this Section 4.02(a), in each case in
respect of interest on such Classes; and
(ii) from the related Available Distribution Amount remaining after
the distributions pursuant to Section 4.02(a)(i) above, to the
Holders of the Senior Certificates (other than the Class X
Certificates) related to a Loan Group, in the priorities and
amounts set forth in Section 4.02(b) through (e), the sum of the
following (applied to reduce the Certificate Principal Balances
of such Senior Certificates, as applicable):
(A) the Senior Percentage for such Loan Group for such Distribution
Date times the sum of the following:
(1) the principal portion of each Monthly Payment due during the related Due
Period on each Outstanding Mortgage Loan in the related Loan Group, whether
or not received on or prior to the related Determination Date, minus the
principal portion of any Debt Service Reduction in the related Loan Group
which together with other Bankruptcy Losses exceeds the Bankruptcy Amount;
(2) the Stated Principal Balance of any Mortgage Loan in the related Loan Group
repurchased during the preceding calendar month (or deemed to have been so
repurchased in accordance with Section 3.07(b)) pursuant to Sections 2.02,
2.04 or 4.07, and the amount of any shortfall deposited in the Custodial
Account in connection with the substitution of a Deleted Mortgage Loan from
the related Loan Group pursuant to Section 2.02 or Section 2.04, during the
preceding calendar month; and
(3) the principal portion of all other unscheduled collections with respect to
the related Loan Group (other than Principal Prepayments in Full and
Curtailments and amounts received in connection with a Cash Liquidation or
REO Disposition of a Mortgage Loan in such Loan Group described in Section
4.02(a)(ii)(B) below, including without limitation Insurance Proceeds,
Liquidation Proceeds and REO Proceeds) received during the preceding
calendar month or, in the case of Principal Prepayment in Full, during the
related Prepayment Period (or deemed to have been so received in accordance
with Section 3.07(b)) to the extent applied by the Servicer as recoveries
of principal of the related Mortgage Loan pursuant to Section 3.14;
(B) with respect to each Mortgage Loan from the related Loan Group for which a
Cash Liquidation or a REO Disposition occurred during the preceding
calendar month (or was deemed to have occurred during such period in
accordance with Section 3.07(b)) and did not result in any Excess Special
Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses, an amount equal to the lesser of (a) the Senior
Percentage for such Loan Group for such Distribution Date times the Stated
Principal Balance of such Mortgage Loan and (b) the Senior Accelerated
Distribution Percentage for such Loan Group for such Distribution Date
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times the related unscheduled collections (including without limitation
Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent
applied by the Servicer as recoveries of principal of the related Mortgage
Loan pursuant to Section 3.14);
(C) the Senior Accelerated Distribution Percentage for such Loan Group for such
Distribution Date times the aggregate of all Principal Prepayments in Full
received with respect to Mortgage Loans in the related Loan Group in the
related Prepayment Period and Curtailments received with respect to
Mortgage Loans in the related Loan Group in the preceding calendar month;
(D) any Excess Subordinate Principal Amount allocated to the related Loan Group
for such Distribution Date but only to the extent of Eligible Funds for the
related Loan Group on such Distribution Date; and
(E) any amounts described in subsection (ii), clauses (A), (B) and (C) of this
Section 4.02(a), as determined for any previous Distribution Date with
respect to such Loan Group, which remain unpaid after application of
amounts previously distributed pursuant to this clause (E) to the extent
that such amounts are not attributable to Realized Losses which have been
allocated to the Subordinate Certificates;
(iii)(A) to the Holders of the Class A-II-1 Certificates, the Class A-II-1
Carryover Shortfall Amount, if any, for such Distribution Date, paid first,
from the Class A-II-1 Hedge Payment for such Distribution Date (but not in
excess of the Class A-II-1 Yield Maintenance Amount) and second, from the
related Available Distribution Amount remaining after distributions
pursuant to the preceding paragraphs of this Section 4.02(a), but not in
excess of the amount of Accrued Certificate Interest on the Class X-II
Certificates for such Distribution Date determined without reduction by the
provisions of the last paragraph of the definition of Accrued Certificate
Interest and (B) to the Holders of the Class A-III-1 Certificates, the
Class A-III-1 Carryover Shortfall Amount, if any, for such Distribution
Date, paid first, from the Class A-III-1 Hedge Payment for such
Distribution Date (but not in excess of the Class A-III-1 Yield Maintenance
Amount) and second, from the related Available Distribution Amount
remaining after distributions pursuant to the preceding paragraphs of this
Section 4.02(a), but not in excess of the amount of Accrued Certificate
Interest on the Class X-III Certificates for such Distribution Date
determined without reduction by the provisions of the last paragraph of the
definition of Accrued Certificate Interest;
(iv) from the Available Distribution Amount remaining, if any, if the
Certificate Principal Balances of the Subordinate Certificates have not
been reduced to zero, to the Servicer or a Subservicer, by remitting for
deposit to the Custodial Account, to the extent of and in reimbursement for
any Advances or Subservicer Advances previously made with respect to any
Mortgage Loan or REO Property which remain unreimbursed in whole or in part
following the Cash Liquidation or REO Disposition of such Mortgage Loan or
REO Property, minus any such Advances that were made with respect to
delinquencies that ultimately constituted Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses;
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(v) from the Available Distribution Amount remaining, if any, to the
Holders of the Class M-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(vi) from the Available Distribution Amount remaining, if any, to the
Holders of the Class M-1 Certificates, an amount equal to the
Subordinate Principal Distribution Amount derived from each Loan
Group for such Class of Certificates for such Distribution Date,
applied in reduction of the Certificate Principal Balance of the
Class M-1 Certificates;
(vii) from the Available Distribution Amount remaining, if any, to the
Holders of the Class M-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(viii) from the Available Distribution Amount remaining, if any, to the
Holders of the Class M-2 Certificates, an amount equal to the
Subordinate Principal Distribution Amount derived from each Loan
Group for such Class of Certificates for such Distribution Date,
applied in reduction of the Certificate Principal Balance of the
Class M-2 Certificates;
(ix) from the Available Distribution Amount remaining, if any, to the
Holders of the Class M-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(x) from the Available Distribution Amount remaining, if any, to the
Holders of the Class M-3 Certificates, an amount equal to the
Subordinate Principal Distribution Amount derived from each Loan
Group for such Class of Certificates for such Distribution Date,
applied in reduction of the Certificate Principal Balance of the
Class M-3 Certificates;
(xi) from the Available Distribution Amount remaining, if any, to the
Holders of the Class B-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xii) from the Available Distribution Amount remaining, if any, to the
Holders of the Class B-1 Certificates, an amount equal to the
Subordinate Principal Distribution Amount derived from each Loan
Group for such Class of Certificates for such Distribution Date,
applied in reduction of the Certificate Principal Balance of the
Class B-1 Certificates;
(xiii) from the Available Distribution Amount remaining, if any, to the
Holders of the Class B-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xiv) from the Available Distribution Amount remaining, if any, to the
Holders of the Class B-2 Certificates, an amount equal to the
Subordinate Principal Distribution Amount derived from each Loan
Group for such Class of Certificates for such Distribution Date,
applied in reduction of the Certificate Principal Balance of the
Class B-2 Certificates;
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(xv) from the Available Distribution Amount remaining, if any, to the
Holders of the Class B-3 Certificates, an amount equal to the
Accrued Certificate Interest thereon for such Distribution Date,
plus any Accrued Certificate Interest thereon remaining unpaid
from any previous Distribution Date, except as provided below;
(xvi) from the Available Distribution Amount remaining, if any, to the
Holders of the Class B-3 Certificates, an amount equal to the
Subordinate Principal Distribution Amount derived from each Loan
Group for such Class of Certificates for such Distribution Date
applied in reduction of the Certificate Principal Balance of the
Class B-3 Certificates;
(xvii) from the Available Distribution Amount remaining, if any, to the
Holders of the Senior Certificates related to any Loan Group, in
the priority set forth in Section 4.02(b), the portion, if any,
of the Available Distribution Amount for such Loan Group
remaining after the foregoing distributions, applied to reduce
the Certificate Principal Balances of such Senior Certificates,
but in no event more than the aggregate of the outstanding
Certificate Principal Balances of each such Class of Senior
Certificates; and thereafter, to each Class of Subordinate
Certificates then outstanding beginning with such Class with the
Highest Priority, any portion of the Available Distribution
Amount for each Loan Group remaining after the related Senior
Certificates have been retired, applied to reduce the Certificate
Principal Balance of each such Class of Subordinate Certificates,
but in no event more than the outstanding Certificate Principal
Balance of each such Class of Subordinate Certificates;
(xviii) from the Available Distribution Amount remaining, if any, to the
Trustee, any fees and/or expenses payable or reimbursable by the
Servicer pursuant to Section 8.05 hereof, to the extent not paid
by the Servicer;
(xix) to the Holders of the Class SB Certificates, from the Class
A-II-1 Hedge Payment, if any, or Class A-III-1 Hedge Payment, if
any, the amount of such payments remaining after distribution
pursuant to Section 4.02(a)(iii) above; and
(xx) to the Class R Certificates, the balance, if any, of the
Available Distribution Amount.
Notwithstanding the foregoing, on any Distribution Date, with respect to
the Class of Subordinate Certificates outstanding on such Distribution Date with
the Lowest Priority, or in the event the Subordinate Certificates are no longer
outstanding, the Senior Certificates related to the Loan Group in which Mortgage
Loan described below is in, Accrued Certificate Interest thereon remaining
unpaid from any previous Distribution Date shall be distributable only to the
extent that such unpaid Accrued Certificate Interest was attributable to
interest shortfalls relating to the failure of the Servicer to make any required
Advance, or the determination by the Servicer that any proposed Advance would be
a Nonrecoverable Advance, with respect to the related Mortgage Loan where such
Mortgage Loan has not yet been the subject of a Cash Liquidation or REO
Disposition.
(b) Distributions of principal on the Senior Certificates on
each Distribution Date occurring prior to the Credit
Support Depletion Date shall be made as follows:
(i) Group 1. An amount equal to the Group 1 Senior Principal
Distribution Amount shall be distributed sequentially, to
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the Class R Certificates and Class A-I-1 Certificates, in
that order, in each case in reduction of the Certificate
Principal Balance thereof, until the Certificate Principal
Balance thereof has been reduced to zero;
(ii) Group 2. An amount equal to the Group 2 Senior Principal
Distribution Amount shall be distributed sequentially, to
the Class A-II-1 Certificates, Class A-II-2 Certificates,
Class A-II-3 Certificates and Class A-II-4 Certificates,
in that order, in each case in reduction of the
Certificate Principal Balance thereof, until the
Certificate Principal Balance thereof has been reduced to
zero;
(iii) Group 3. An amount equal to the Group 3 Senior Principal
Distribution Amount shall be distributed sequentially, to
the Class A-III-1 Certificates, Class A-III-2
Certificates, Class A-III-3 Certificates, Class A-III-4
Certificates and Class A-III-5 Certificates, in that
order, in each case in reduction of the Certificate
Principal Balance thereof, until the Certificate Principal
Balance thereof has been reduced to zero; and
(iv) Group 4. An amount equal to the Group 4 Senior Principal
Distribution Amount shall be distributed, to the Class
A-IV-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero.
(c) Prior to the occurrence of the Credit Support Depletion Date but after
the reduction of the Certificate Principal Balances of any of the Class A-I-1
Certificates, the Group 2 Certificates in the aggregate, the Group 3
Certificates in the aggregate or the Class A-IV-1 Certificates, to zero, the
remaining Senior Certificates shall be entitled to receive, pro rata, based upon
their respective aggregate Certificate Principal Balances, in addition to any
Principal Prepayments in Full and Curtailments related to such Certificates'
respective Loan Group, 100% of the Principal Prepayments in Full and
Curtailments on the Mortgage Loans in the Loan Group or Loan Groups with respect
to which the aggregate Certificate Principal Balance of the related Senior
Certificates has been reduced to zero, in accordance with the priorities set
forth in clause 4.02(b) above, in reduction of the Certificate Principal
Balances thereof, on any Distribution Date if (i) the Aggregate Subordinate
Percentage is less than 200% of the Aggregate Subordinate Percentage as of the
Closing Date or (ii) the aggregate of the Stated Principal Balances of all
Mortgage Loans Delinquent 60 days or more (including Mortgage Loans in REO and
foreclosure) (averaged over the preceding six month period), as a percentage of
the aggregate of the Certificate Principal Balances of the Subordinate
Certificates, is greater than or equal to 50%.
In addition, on any Distribution Date prior to the Credit Support
Depletion Date on which the aggregate Certificate Principal Balance of any of
the Class A-I-1 Certificates, the Group 2 Certificates in the aggregate, the
Group 3 Certificates in the aggregate or the Class A-IV-1 Certificates, is
greater than the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group, in each case after giving effect to distributions to be made
on such Distribution Date (each such Loan Group, an "Undercollateralized
Group"), the Available Distribution Amount for the Overcollateralized Groups
otherwise allocable to the Subordinate Certificates shall instead be distributed
to such Undercollateralized Group(s), as applicable, pro rata, based upon their
respective amounts of undercollateralization, in accordance with the priorities
set forth in clause 4.02(b) above, (1) in reduction of the Certificate Principal
Balances thereof, until the aggregate Certificate Principal Balance of such
Undercollateralized Group(s), as applicable, equals the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group(s), and (2) an
amount equal to one month's interest at the applicable Pass-Through Rate for
such Undercollateralized Group(s), as applicable, on the amount of such
difference, first, to pay any unpaid interest on such Class or Classes of
Certificates and second, to pay principal on such Classes in the manner
described in (1) above.
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(d) On or after the Credit Support Depletion Date, all priorities relating to
distributions as described in Section 4.02(b) above in respect of principal
among the Class A-II Auction Certificates shall be disregarded, and the Group 2
Senior Principal Distribution Amount shall be distributed to the remaining
Classes of Class A-II Auction Certificates, pro rata, in accordance with their
respective outstanding Certificate Principal Balances and all priorities
relating to distributions as described in Section 4.02(b) above in respect of
principal among the Class A-III Auction Certificates shall be disregarded, and
the Group 3 Senior Principal Distribution Amount shall be distributed to the
remaining Classes of Class A-III Auction Certificates, pro rata, in accordance
with their respective outstanding Certificate Principal Balances.
(e) After the reduction of the Certificate Principal Balances of the Senior
Certificates relating to a Loan Group to zero but prior to the Credit Support
Depletion Date, such Senior Certificates shall be entitled to no further
distributions of principal thereon and the related Available Distribution Amount
shall be distributed solely to the holders of the related Class X Certificates
and Subordinate Certificates, in each case as described herein, except as is
otherwise set forth in Section 4.02(c) above.
(f) In addition to the foregoing distributions, with respect to any Mortgage
Loan that was previously the subject of a Cash Liquidation or an REO Disposition
that resulted in a Realized Loss, in the event that within two years of the date
on which such Realized Loss was determined to have occurred the Servicer
receives amounts, which the Servicer reasonably believes to represent subsequent
recoveries (net of any related liquidation expenses), or determines that it
holds surplus amounts previously reserved to cover estimated expenses,
specifically related to such Mortgage Loan (including, but not limited to,
recoveries in respect of the representations and warranties made by the Seller
pursuant to the Purchase Agreement), the Servicer shall distribute such amounts
to the applicable Certificateholders of the Class or Classes to which such
Realized Loss was allocated, if applicable (with the amounts to be distributed
allocated among such Classes in the same proportions as such Realized Loss was
allocated), and within each such Class to the Certificateholders of record as of
the Record Date immediately preceding the date of such distribution (or if such
Class of Certificates is no longer outstanding, to the Certificateholders of
record at the time that such Realized Loss was allocated); provided that no such
distribution to any Class of Certificates of subsequent recoveries related to a
Mortgage Loan shall exceed, either individually or in the aggregate and together
with any other amounts distributed in reimbursement therefor, the amount of the
related Realized Loss that was allocated to such Class of Certificates.
Notwithstanding the foregoing, no such distribution shall be made with respect
to the Certificates of any Class to the extent that either (i) such Class was
protected against the related Realized Loss or (ii) such Class of Certificates
has been deposited into a separate trust fund or other structuring vehicle and
separate certificates or other instruments representing interests therein have
been issued in one or more classes, and any of such separate certificates or
other instruments were protected against the related Realized Loss pursuant to
any limited guaranty, payment obligation, irrevocable letter of credit, surety
bond, insurance policy or similar instrument or a reserve fund, or a combination
thereof. Any amount to be so distributed with respect to the Certificates of any
Class shall be distributed by the Servicer to the Certificateholders of record
as of the Record Date immediately preceding the date of such distribution (i)
with respect to the Certificates of any Class (other than the Class X
Certificates), on a pro rata basis based on the Percentage Interest represented
by each Certificate of such Class as of such Record Date and (ii) with respect
to each Class of Class X Certificates, to such Class X Certificates in the same
proportion as the related Realized Loss was allocated. Any amounts to be so
distributed shall not be remitted to or distributed from the Trust Fund, and
shall constitute subsequent recoveries with respect to Mortgage Loans that are
no longer assets of the Trust Fund.
(g) 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
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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
Servicer shall have any responsibility for the allocation of such distributions
among Depository Participants, brokerage firms and Certificate Owners.
(h) Except as otherwise provided in Section 9.01, if the Servicer anticipates
that a final distribution with respect to any Class of Certificates shall be
made on the next Distribution Date, the Servicer shall, no later than the
Determination Date in the month of such final distribution, notify the Trustee
and the Trustee shall, no later than two (2) Business Days after receipt of such
notices or such Determination Date, mail on such date to each Holder of such
Class of Certificates a notice to the effect that: (i) the Trustee anticipates
that the final distribution with respect to such Class of Certificates shall be
made on such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee or as otherwise specified therein, and
(ii) no interest shall accrue on such Certificates from and after the end of the
related Interest Accrual Period. In the event that Certificateholders required
to surrender their Certificates pursuant to Section 9.01(c) do not surrender
their Certificates for final cancellation, the Trustee shall cause funds
distributable with respect to such Certificates to be withdrawn from the Payment
Account and credited to a separate escrow account for the benefit of such
Certificateholders as provided in Section 9.01(d).
Section 4.03. Statements to Certificateholders.
(a) Concurrently with each distribution charged to the Payment Account and with
respect to each Distribution Date, the Trustee shall make available to
Certificateholders and other parties to this Agreement via the Trustee's
internet website a statement as to each Class of Certificates and the Mortgage
Pool and each Loan Group that includes the information set forth in Exhibit L
attached hereto.
The Trustee's internet website shall initially be located at
"xxx.xxx.xxxxxxx.xxx." Assistance in using the website can be obtained by
calling the Trustee's customer service desk at (000) 000-0000. Parties that are
unable to use the website are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Trustee shall have the right to change the way Distribution Date statements are
distributed in order to make such distribution more convenient and/or more
accessible to the above parties, provided that such procedures are no less
convenient for the Certificateholders and the Trustee shall provide timely and
adequate notification to all above parties regarding any such changes.
(b) Within a reasonable period of time after the end of each calendar year, the
Trustee 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 Certificate, other than a Class R Certificate, a statement
containing the information set forth in clauses (i) and (ii) of subsection (a)
above aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code.
(c) Within a reasonable period of time after the end of each calendar year, the
Trustee 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 4.03 aggregated for
such calendar year or applicable portion thereof during which such Person was
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the Holder of a Class R Certificate. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Servicer pursuant to any requirements of
the Code.
(d) Upon the written request of any Certificateholder, the Trustee, as soon as
reasonably practicable, shall provide the requesting Certificateholder with such
information as is necessary and appropriate, in the Trustee's sole discretion,
for purposes of satisfying applicable reporting requirements under Rule 144A.
The Company and the Servicer shall cooperate with the Trustee as is reasonably
necessary to respond to any such request.
Section 4.04. Distribution of Reports to the Trustee and the
Company; Advances by the Servicer.
(a) Prior to the close of business on the Business Day next succeeding each
Determination Date, the Servicer shall furnish the Remittance Report to the
Trustee in a mutually agreed upon form of an electromagnetic tape or disk and
hard copy, or other automated transmission. The Remittance Report and any
information supplemental thereto shall include such information with respect to
the Mortgage Loans that is required by the Trustee for purposes of making the
calculations described in Section 4.02, as set forth in written specifications
or guidelines issued by the Servicer or the Trustee from time to time. The
Trustee shall be protected in relying upon the information set forth in the
Remittance Report without any independent check or verification.
(b) On or before 2:00 P.M. New York time on each Payment Account Deposit Date,
the Servicer shall either (i) deposit in the Payment Account from its own funds,
or funds received therefor from the Subservicers, an amount equal to the
Advances to be made by the Servicer in respect of the related Distribution Date,
which shall be in an aggregate amount equal to the aggregate amount of Monthly
Payments (with each interest portion thereof adjusted to the Net Mortgage Rate),
less the amount of any related Servicing Modifications, Debt Service Reductions
or reductions in the amount of interest collectable from the Mortgagor pursuant
to the Relief Act, on the Outstanding Mortgage Loans as of the related Due Date,
which Monthly Payments were delinquent as of the close of business as of the
related Determination Date; provided that no Advance shall be made if it would
be a Nonrecoverable Advance, (ii) withdraw from amounts on deposit in the
Custodial Account and deposit in the Payment Account all or a portion of the
Amount Held for Future Distribution in discharge of any such Advance, or (iii)
make advances in the form of any combination of (i) and (ii) aggregating the
amount of such Advance. Any portion of the Amount Held for Future Distribution
so used shall be replaced by the Servicer by deposit in the Payment Account on
or before 11:00 A.M. New York time on any future Payment Account Deposit Date to
the extent that funds attributable to the Mortgage Loans that are available in
the Custodial Account for deposit in the Payment Account on such Payment Account
Deposit Date shall be less than payments to Certificateholders required to be
made on the following Distribution Date. The Servicer shall be entitled to use
any Advance made by a Subservicer as described in Section 3.07(b) that has been
deposited in the Custodial Account on or before such Distribution Date as part
of the Advance made by the Servicer pursuant to this Section 4.04. The amount of
any reimbursement pursuant to Section 4.02(a) in respect of outstanding Advances
on any Distribution Date shall be allocated to specific Monthly Payments due but
delinquent for previous Due Periods, which allocation shall be made, to the
extent practicable, to Monthly Payments which have been delinquent for the
longest period of time. Such allocations shall be conclusive for purposes of
reimbursement to the Servicer from recoveries on related Mortgage Loans pursuant
to Section 3.10.
The determination by the Servicer that it has made a Nonrecoverable
Advance or that any proposed Advance, if made, would constitute a Nonrecoverable
Advance, shall be evidenced by an Officer's Certificate of the Servicer
delivered to the Company and the Trustee.
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If the Servicer determines as of the Business Day preceding any Payment
Account Deposit Date that it will be unable to deposit in the Payment Account an
amount equal to the Advance required to be made for the immediately succeeding
Distribution Date, it shall give notice to the Trustee of its inability to
advance (such notice may be given by telecopy), not later than 3:00 P.M., New
York time, on such Business Day, specifying the portion of such amount that it
will be unable to deposit. Not later than 3:00 P.M., New York time, on the
Payment Account Deposit Date the Trustee shall, unless by 12:00 Noon, New York
time, on such day the Trustee shall have been notified in writing (by telecopy)
that the Servicer shall have directly or indirectly deposited in the Payment
Account such portion of the amount of the Advance as to which the Servicer shall
have given notice pursuant to the preceding sentence, pursuant to Section 7.01,
(a) terminate all of the rights and obligations of the Servicer under this
Agreement in accordance with Section 7.01 and (b) assume the rights and
obligations of the Servicer hereunder, including the obligation to deposit in
the Payment Account an amount equal to the Advance for the immediately
succeeding Distribution Date.
The Trustee shall deposit all funds it receives pursuant to this Section
4.04 into the Payment Account.
Section 4.05. Allocation of Realized Losses.
Prior to each Distribution Date, the Servicer shall determine the total
amount of Realized Losses, if any, that resulted from any Cash Liquidation,
Servicing Modification, Debt Service Reduction, Deficient Valuation or REO
Disposition that occurred during the calendar month preceding the month of
distribution or, in the case of a Servicing Modification that constitutes a
reduction of the interest rate on a Mortgage Loan, the amount of the reduction
in the interest portion of the Monthly Payment due during the related Due
Period. The amount of each Realized Loss shall be evidenced by an Officer's
Certificate. All Realized Losses, other than Excess Special Hazard Losses,
Extraordinary Losses, Excess Bankruptcy Losses or Excess Fraud Losses, shall be
allocated as follows: first, to the Class B-3 Certificates until the Certificate
Principal Balance thereof has been reduced to zero; second, to the Class B-2
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; third, to the Class B-1 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-3 Certificates
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-2 Certificates until the Certificate Principal Balance thereof
has been reduced to zero; sixth, to the Class M-1 Certificates until the
Certificate Principal Balance thereof has been reduced to zero; and, thereafter,
the remainder of the Realized Losses on the Mortgage Loans shall be allocated
(A) in the case of a Group 1 Loan, to the Class A-I-1 Certificates; (B) in the
case of a Group 2 Loan, among the Class A-II Auction Certificates, in the case
of the principal portion of such loss, on a pro rata basis, and among the Group
2 Certificates, in the case of the interest portion of such loss, on a pro rata
basis; (C) in the case of a Group 3 Loan, among the Class A-III Auction
Certificates, in the case of the principal portion of such loss, on a pro rata
basis, and among the Group 3 Certificates, in the case of the interest portion
of such loss, on a pro rata basis; and (D) in the case of a Group 4 Loan, to the
Class A-IV-1 Certificates. The Group 1 Senior Percentage, Group 2 Senior
Percentage, Group 3 Senior Percentage or Group 4 Senior Percentage, as
applicable, of any Excess Special Hazard Losses, Excess Bankruptcy Losses,
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Excess Fraud Losses, or Extraordinary Losses shall be allocated (A) in the case
of a Group 1 Loan, to the Class A-I-1 Certificates; (B) in the case of a Group 2
Loan, among the Class A-II Auction Certificates, in the case of the principal
portion of such loss, on a pro rata basis, and among the Group 2 Certificates,
in the case of the interest portion of such loss, on a pro rata basis; (C) in
the case of a Group 3 Loan, among the Class A-III Auction Certificates, in the
case of the principal portion of such loss, on a pro rata basis, and among the
Group 3 Certificates, in the case of the interest portion of such loss, on a pro
rata basis; and (D) in the case of a Group 4 Loan, to the Class A-IV-1
Certificates; and the remainder of any Excess Special Hazard Losses, Excess
Bankruptcy Losses, Excess Fraud Losses, or Extraordinary Losses on the Mortgage
Loans in any Loan Group shall be allocated among the Class M and Class B
Certificates, on a pro rata basis, as described below.
As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances, or, in the case of the Subordinate Certificates, on the basis of the
Apportioned Principal Balances thereof, prior to giving effect to distributions
to be made on such Distribution Date in the case of the principal portion of a
Realized Loss or based on the Accrued Certificate Interest thereon payable on
such Distribution Date (without regard to any Compensating Interest for such
Distribution Date) in the case of an interest portion of a Realized Loss. Except
as provided in the following sentence, any allocation of the principal portion
of Realized Losses (other than Debt Service Reductions) to a Class of
Certificates shall be made by reducing the Certificate Principal Balance thereof
by the amount so allocated, which allocation shall be deemed to have occurred on
such Distribution Date. Any allocation of the principal portion of Realized
Losses (other than Debt Service Reductions) to the Subordinate Certificates then
outstanding with the Lowest Priority shall be made by operation of the
definition of "Certificate Principal Balance" and by operation of the provisions
of Section 4.02(a). Allocations of the interest portions of Realized Losses
shall be made in proportion to the amount of Accrued Certificate Interest and by
operation of the definition of "Accrued Certificate Interest" and by operation
of the provisions of Section 4.02(a). Allocations of the principal portion of
Debt Service Reductions shall be made by operation of the provisions of Section
4.02(a). All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property.
The Servicer or the Subservicers shall file information returns with
respect to the receipt of mortgage interests received in a trade or business,
the reports of foreclosures and abandonments of any Mortgaged Property and the
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property required by Sections 6050H, 6050J and 6050P,
respectively, of the Code. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by Sections 6050H, 6050J
and 6050P of the Code.
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.
As to any Mortgage Loan which is delinquent in payment by 90 days or
more, the Servicer may, upon the written request of and with funds provided by
the Junior Certificateholder, purchase such Mortgage Loan from the Trustee at
the Purchase Price therefor. If at any time the Servicer makes a payment to the
Payment Account covering the amount of the Purchase Price for such a Mortgage
Loan, and the Servicer provides to the Trustee a certification signed by a
Servicing Officer stating that the amount of such payment has been deposited in
the Payment Account, then the Trustee shall execute the assignment of such
Mortgage Loan at the request of the Servicer without recourse to the Junior
Certificateholder, which shall succeed to all the Trustee's right, title and
interest in and to such Mortgage Loan, and all security and documents relative
thereto. Such assignment shall be an assignment outright and not for security.
The Junior Certificateholder shall thereupon own such Mortgage, and all such
security and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
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Section 4.08. Hedge Agreements.
(a) In the event that the Trustee does not receive by the Business Day
preceding a Distribution Date the amount as specified by the Servicer in the
Remittance Report pursuant to Section 4.04(a) hereof as the amount to be paid
with respect to such Distribution Date by the Hedge Counterparty under the Hedge
Agreements, the Trustee shall enforce the obligation of the Hedge Counterparty
thereunder. The parties hereto acknowledge that the Hedge Counterparty shall be
making all calculations, and determine the amounts to be paid, under the Hedge
Agreements. Absent manifest error, the Trustee may conclusively rely on such
calculations and determination and any notice received by it from the Servicer
pursuant to Section 4.04(a) hereof.
(b) The Trustee shall deposit or cause to be deposited any amount
received under the Hedge Agreements into the Certificate Account on the date
such amount is received from the Hedge Counterparty under the related Hedge
Agreement (including termination payments, if any). All payments received under
the Hedge Agreements shall be distributed in accordance with the priorities set
forth in Section 4.02(a) hereof.
(c) In the event that the Class A-II-1 Hedge Agreement, or any
replacement thereof, terminates prior to the Payment Date in February 2008 or
the Class A-III-1 Hedge Agreement, or any replacement thereof, terminates prior
to the Payment Date in January 2008, the Servicer, but at no expense to the
Servicer, on behalf of the Trustee, to the extent that the termination value
under such Hedge Agreement is sufficient therefor and only to the extent of the
related termination payment received from the Hedge Counterparty, shall (i)
cause a new hedge counterparty to assume the obligations of such terminated
hedge counterparty or (ii) cause a new hedge counterparty to enter into a new
interest rate hedge agreement with the Trust Fund having substantially similar
terms as those set forth in the terminated hedge agreement.
Section 4.09. Auction Administration Agreement; Swap Agreement.
(a) Concurrently with the execution and delivery hereof, at the
direction of the Company, the Auction Administrator shall execute and deliver an
Auction Administration Agreement substantially in the form of Exhibit O hereto
and a Swap Agreement substantially in the form of Exhibit P hereto. The Trustee
shall have no duty to review or otherwise determine the adequacy of the Auction
Administration Agreement or the Swap Agreement.
(b) Each Holder of an Auction Certificate is deemed, by acceptance of
such Certificate, to acknowledge and accept and agree to be bound by the
provisions of the Auction Administration Agreement and the Swap Agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Senior, Class M, Class B and Class R Certificates shall be substantially
in the forms set forth in Exhibits A, B, C and D, 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 or one or more Custodians of the documents specified
in Section 2.01. The Certificates shall be issuable in the minimum denominations
designated in the Preliminary Statement.
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The Certificates shall be executed by manual or facsimile signature on
behalf of an authorized signatory of the Trustee. Certificates bearing the
manual or facsimile signatures of individuals who were at any time the proper
authorized signatories 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 Certificate or did not hold such offices
at the date of such Certificates. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless there appears
on such Certificate a certificate of authentication substantially in the form
provided for herein executed by the Certificate Registrar by manual signature,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) 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
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 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 Servicer 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 Servicer 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 be performed by the Company in connection with
the issuance of the Definitive Certificates pursuant to this Section 5.01 shall
be deemed to be imposed upon and performed by the Trustee, and the Trustee and
the Servicer shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
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Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices
or agencies to be appointed by the Trustee in accordance
with the provisions of Section 8.12, a Certificate
Register in which, subject to such reasonable regulations
as it may prescribe, the Trustee shall provide for the
registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee
is initially appointed Certificate Registrar for the
purpose of registering Certificates and transfers and
exchanges of Certificates as herein provided.
(b) Upon surrender for registration of transfer of any
Certificate at any office or agency of the Trustee
maintained for such purpose pursuant to Section 8.12 and,
in the case of any Class M, Class B or Class R
Certificate, upon satisfaction of the conditions set forth
below, the Trustee shall execute and the Certificate
Registrar shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new
Certificates of a like Class and aggregate Percentage
Interest.
(c) At the option of the Certificateholders, Certificates may
be exchanged for other Certificates of authorized
denominations of a like Class and aggregate Percentage
Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange the Trustee
shall execute and the Certificate Registrar shall
authenticate and deliver the Certificates of such Class
which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall (if so required
by the Trustee or the Certificate Registrar) be duly
endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder thereof
or his attorney duly authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class
B Certificate shall be made unless such transfer, sale,
pledge or other disposition is exempt from the
registration requirements of the Securities Act of 1933,
as amended, and any applicable state securities laws or is
made in accordance with said Act and laws. In the event
that a transfer of a Class B Certificate is to be made
either (i)(A) the Trustee shall require a written Opinion
of Counsel acceptable to and in form and substance
satisfactory to the Trustee and the Company that such
transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from said
Act and laws or is being made pursuant to said Act and
laws, which Opinion of Counsel shall not be an expense of
the Trustee, the Company or the Servicer (except that, if
such transfer is made by the Company or the Servicer or
any Affiliate thereof, the Company or the Servicer shall
provide such Opinion of Counsel at their own expense);
provided that such Opinion of Counsel shall not be
required in connection with the initial transfer of any
such Certificate by the Company or any Affiliate thereof
to the Company or an Affiliate of the Company and (B) the
Trustee shall require the transferee to execute a
representation letter, substantially in the form of
Exhibit H hereto, and the Trustee shall require the
transferor to execute a representation letter,
substantially in the form of Exhibit I hereto, each
acceptable to and in form and substance satisfactory to
the Company and the Trustee certifying to the Company and
the Trustee the facts surrounding such transfer, which
representation letters shall not be an expense of the
Trustee, the Company or the Servicer; provided, however,
that such representation letters shall not be required in
connection with any transfer of any such Certificate by
the Company or any Affiliate thereof to the Company or an
Affiliate of the Company, and the Trustee shall be
entitled to conclusively rely upon a representation
(which, upon the request of the Trustee, shall be a
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written representation) from the Company, of the status of
such transferee as an Affiliate of the Company or (ii) the
prospective transferee of such a Certificate shall be
required to provide the Trustee, the Company and the
Servicer with an investment letter substantially in the
form of Exhibit J attached hereto (or such other form as
the Company in its sole discretion deems acceptable),
which investment letter shall not be an expense of the
Trustee, the Company or the Servicer, and which investment
letter states that, among other things, such transferee
(A) is a "qualified institutional buyer" as defined under
Rule 144A, acting for its own account or the accounts of
other "qualified institutional buyers" as defined under
Rule 144A, and (B) is aware that the proposed transferor
intends to rely on the exemption from registration
requirements under the Securities Act of 1933, as amended,
provided by Rule 144A. The Holder of any such Certificate
desiring to effect any such transfer, sale, pledge or
other disposition shall, and does hereby agree to,
indemnify the Trustee, the Company, the Servicer and the
Certificate Registrar against any liability that may
result if the transfer, sale, pledge or other disposition
is not so exempt or is not made in accordance with such
federal and state laws.
(e) (i) In the case of any Class B or 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 Servicer to the effect
that the purchase or holding of such Class B or 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 Servicer to any obligation or liability
(including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken
in this Agreement, which Opinion of Counsel shall not be
an expense of the Trustee, the Company or the Servicer or
(B) the prospective Transferee shall be required to
provide the Trustee, the Company and the Servicer with a
certification to the effect set forth in paragraph six of
Exhibit H or paragraph three of Exhibit J (with respect to
any Class B Certificate) or paragraph sixteen of Exhibit
G-1 (with respect to any Class R Certificate), 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 either (a) 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") or (b) in the case
of any Class B Certificate, the following conditions are
satisfied: (i) such Transferee is an insurance company,
(ii) the source of funds used to purchase and hold such
Certificate (or interest therein) is an "insurance company
general account" (as defined in U.S. Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60, and
(iii) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied (each entity that satisfies
these subsections (i) through (iii) of this clause (b), a
"Complying Insurance Company").
(ii) Any Transferee of a Senior Certificate (other than a Class R Certificate)
or a Class M Certificate shall be deemed to have represented by virtue of
its purchase or holding of such Certificate (or interest therein) that
either (a) such Transferee is not a Plan Investor, (b) it has acquired and
is holding such Certificate in reliance on Prohibited Transaction Exemption
("PTE") 94-29, 59 Fed. Reg. 14674 (March 29, 1994), as amended by PTE
97-34, 62 Fed. Reg. 39021 (July 21, 1997), PTE 2000-58, 65 Fed. Reg. 67765
(November 13, 2000) and PTE 2002-41, 67 Fed. Reg. 54487 (August 22, 2002)
(the "Issuer Exemption"), and that (i) it understands that there are
certain conditions to the availability of the Issuer Exemption including
that such Certificate must be rated, at the time of purchase, not lower
that "BBB-" (or its equivalent) by Standard & Poor's, Fitch or Moody's and
(ii) it is an "accredited investor" as defined in Rule 501(a)(1) of
Regulation D of the Securities Act of 1933, as amended, or (c) such
Transferee is a Complying Insurance Company.
(iii)(A) If any Senior Certificate (other than a Class R Certificate) or any
Class M Certificate (or any interest therein) is acquired or held by any
Person that does not satisfy the conditions described in paragraph (ii)
above, then the last preceding Transferee that either (i) is not a Plan
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Investor, (ii) acquired such Certificate in compliance with the Issuer
Exemption, or (iii) is a Complying Insurance Company shall be restored, to
the extent permitted by law, to all rights and obligations as Certificate
Owner thereof retroactive to the date of such Transfer of such Certificate.
The Trustee shall be under no liability to any Person for making any
payments due on such Certificate to such preceding Transferee.
(B) Any purported Certificate Owner whose acquisition or
holding of any Senior Certificate or any Class M
Certificate (or interest therein) was effected in
violation of the restrictions in this Section 5.02(e)
shall indemnify and hold harmless the Company, the
Trustee, the Servicer, any Subservicer, and the Trust Fund
from and against any and all liabilities, claims, costs or
expenses incurred by such parties as a result of such
acquisition or holding.
(f) (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 and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class 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 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, 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," in
the form attached hereto as Exhibit G-1) from the proposed Transferee, in
form and substance satisfactory to the Servicer, representing and
warranting, among other things, that it 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 shall endeavor to
remain a Permitted Transferee, and that it has reviewed the provisions of
this Section 5.02(f) and agrees to be bound by them, and (II) a
certificate, in the form attached hereto as Exhibit G-2, from the Holder
wishing to transfer the Class R Certificate, in form and substance
satisfactory to the Servicer, representing and warranting, among 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 a Responsible Officer of the
Trustee who is assigned to this Agreement 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
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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 G-2.
(E) Each Person holding or acquiring an Ownership Interest in a Class R
Certificate, by purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is a "pass-through
interest holder" within the meaning of Temporary Treasury Regulations
Section 1.67-3T(a)(2)(i)(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 shall 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 G-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 Certificates to Non-United States Persons and Disqualified
Organizations (as defined in Section 860E(e)(5) of the Code) are
prohibited.
(iii)(A) If any Disqualified Organization shall become a holder of a Class R
Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a
holder of a Class R Certificate, then the last preceding United States
Person shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of
such Transfer of such Class R Certificate. If a transfer of a Class R
Certificate is disregarded pursuant to the provisions of Treasury
Regulations Section 1.860E-1 or Section 1.860G-3, then the last preceding
Permitted Transferee shall be restored, to the extent permitted by law, to
all rights and obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Class R Certificate. 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
5.02(f) or for making any payments due on such Certificate to the holder
thereof or for taking any other action with respect to such holder under
the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Class R Certificate
in violation of the restrictions in this Section 5.02(f) and to the extent
that the retroactive restoration of the rights of the Holder of such Class
R Certificate as described in clause (iii)(A) above shall be invalid,
illegal or unenforceable, then the Servicer shall have the right, without
notice to the holder or any prior holder of such Class R Certificate, to
sell such Class R Certificate to a purchaser selected by the Servicer on
such terms as the Servicer may choose. Such purported Transferee shall
promptly endorse and deliver the Class R Certificates in accordance with
the instructions of the Servicer. Such purchaser may be the Servicer itself
or any Affiliate of the Servicer. The proceeds of such sale, net of the
commissions (which may include commissions payable to the Servicer or its
Affiliates), expenses and taxes due, if any, shall be remitted by the
Servicer to such purported Transferee. The terms and conditions of any sale
under this clause (iii)(B) shall be determined in the sole discretion of
the Servicer, and the Servicer shall not be liable to any Person having an
Ownership Interest in a Class R Certificate as a result of its exercise of
such discretion.
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(iv) The Trustee shall make available, upon written request from the Internal
Revenue Service or any potentially affected Person, all information
necessary to compute any tax imposed (A) as a result of the Transfer of an
Ownership Interest in a Class R Certificate to any Person who is a
Disqualified Organization, including the information regarding "excess
inclusions" of such Class R Certificates required to be provided to the
Internal Revenue Service and certain Persons as described in Treasury
Regulations 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 organization described in Section
1381 of the Code that holds an Ownership Interest in a Class R Certificate
having as among its record holders at any time any Person who is a
Disqualified Organization. Reasonable compensation for providing such
information may be required by the Trustee before it will provide such
information to any such potentially affected Person.
(v) The provisions of this Section 5.02(f) set forth prior to this clause (v)
may be modified, added to or eliminated, provided that there shall have
been delivered to the Trustee the following:
(A) written notification from each Rating Agency to the effect that the
modification, addition to or elimination of such provisions will not cause
such Rating Agency to downgrade its then-current ratings, if any, of any
Class of the Senior, Class M or Class B Certificates below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency; and
(B) subject to Section 10.01(f), an Officer's Certificate of the Servicer
stating that the Servicer has received an Opinion of Counsel, in form and
substance satisfactory to the Servicer, to the effect that such
modification, addition to or absence of such provisions will not cause any
portion of the applicable REMIC to cease to qualify as a REMIC and will not
cause (x) any portion of the applicable REMIC to be subject to an
entity-level tax caused by the Transfer of any Class R Certificate to a
Person that is a Disqualified Organization 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 Person that is not a Permitted Transferee.
(g) No service charge shall be made for any transfer or exchange of
Certificates of any Class, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) there is delivered to the Trustee and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor, Class and Percentage Interest but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
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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
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 5.04. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of transfer,
the Company, the Servicer, the Trustee, the Certificate Registrar and any agent
of the Company, the Servicer, the Trustee, or the Certificate Registrar may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
4.02 and for all other purposes whatsoever, except as and to the extent provided
in the definition of "Certificateholder," and neither the Company, the Servicer,
the Trustee, the Certificate Registrar nor any agent of the Company, the
Servicer, the Trustee, or the Certificate Registrar shall be affected by notice
to the contrary except as provided in Section 5.02(f).
Section 5.05. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making
distributions to the Certificateholders pursuant to Section 4.02. In the event
of any such appointment, on or prior to each Distribution Date the Trustee shall
deposit or cause to be deposited with the Paying Agent a sum sufficient to make
the payments to the Certificateholders in the amounts and in the manner provided
for in Section 4.02, such sum to be held in trust for the benefit of the
Certificateholders.
The Trustee shall cause each Paying Agent to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee
that such Paying Agent shall hold all sums held by it for the payment to the
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be distributed to such Certificateholders. Any
sums so held by such Paying Agent shall be held only in Eligible Accounts to the
extent such sums are not distributed to the Certificateholders on the date of
receipt by such Paying Agent.
Section 5.06. Optional Purchase of Certificates.
(a) On any Distribution Date on which the Pool Stated
Principal Balance, prior to giving effect to distributions
to be made on such Distribution Date, is less than ten
percent of the Cut-off Date Principal Balance of the
Mortgage Loans, the Servicer shall have the right, at its
option, to purchase the Certificates in whole, but not in
part, at a price equal to the outstanding Certificate
Principal Balance of such Certificates plus the sum of
Accrued Certificate Interest thereon for the related
Interest Accrual Period and any previously unpaid Accrued
Certificate Interest.
(b) The Servicer shall give the Trustee not less than 60 days'
prior notice of the Distribution Date on which the
Servicer anticipates that it shall purchase the
Certificates pursuant to Section 5.06(a). Notice of any
such purchase, specifying the Distribution Date upon which
the Holders may surrender their Certificates to the
Trustee for payment in accordance with this Section 5.06,
shall be given promptly by the Servicer by letter to
Certificateholders (with a copy to the Certificate
Registrar and each Rating Agency) mailed not earlier than
the 9th day and not later than the 19th day of the month
next preceding the month of such final distribution,
specifying:
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(i) the Distribution Date upon which purchase of the
Certificates is anticipated to be made upon presentation
and surrender of such Certificates at the office or agency
of the Trustee therein designated,
(ii) the purchase price therefor, if known, and
(iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made
only upon presentation and surrender of the Certificates
at the office or agency of the Trustee therein specified.
If the Servicer gives the notice specified above, the Servicer shall deposit in
the Payment Account before the Distribution Date on which the purchase pursuant
to Section 5.06(a) is to be made, in immediately available funds, an amount
equal to the purchase price for the Certificates computed as provided above.
(c) Upon presentation and surrender of the Certificates to be purchased pursuant
to Section 5.06(a) by the Holders thereof, the Trustee shall distribute to such
Holders an amount equal to the outstanding Certificate Principal Balance thereof
plus the sum of Accrued Certificate Interest thereon for the related Interest
Accrual Period and any previously unpaid Accrued Certificate Interest with
respect thereto.
(d) If any Certificateholders do not surrender their Certificates on or before
the Distribution Date on which a purchase pursuant to this Section 5.06 is to be
made, the Trustee shall on such date cause all funds in the Payment Account
deposited therein by the Servicer pursuant to Section 5.06(b) to be withdrawn
therefrom and deposited in a separate escrow account for the benefit of such
Certificateholders, and the Servicer shall give a second written notice to such
Certificateholders to surrender their Certificates for payment of the purchase
price therefor. If within six months after the second notice any Certificate
shall not have been surrendered for cancellation, the Trustee shall take
appropriate steps as directed by the Servicer to contact the Holders of such
Certificates concerning surrender of their Certificates. The costs and expenses
of maintaining the escrow account and of contacting Certificateholders shall be
paid out of the assets which remain in the escrow account. If within nine months
after the second notice any Certificates shall not have been surrendered for
cancellation in accordance with this Section 5.06, the Trustee shall pay to the
Servicer all amounts distributable to the Holders thereof and the Servicer shall
thereafter hold such amounts until distributed to such Holders. No interest
shall accrue or be payable to any Certificateholder on any amount held in the
escrow account or by the Servicer as a result of such Certificateholder's
failure to surrender its Certificate(s) for payment in accordance with this
Section 5.06. Any Certificate that is not surrendered on the Distribution Date
on which a purchase pursuant to this Section 5.06 occurs as provided above shall
be deemed to have been purchased and the Holder as of such date shall have no
rights with respect thereto except to receive the purchase price therefor minus
any costs and expenses associated with such escrow account and notices allocated
thereto. Any Certificates so purchased or deemed to have been purchased on such
Distribution Date shall remain outstanding hereunder. The Servicer shall be for
all purposes the Holder thereof as of such date.
ARTICLE VI
THE COMPANY AND THE SERVICER
Section 6.01. Respective Liabilities of the Company and the Servicer.
The Company and the Servicer 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 Servicer herein. By way of illustration
and not limitation, the Company is not liable for the servicing and
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administration of the Mortgage Loans, nor is it obligated by Section 7.01 or
Section 10.01 to assume any obligations of the Servicer or to appoint a designee
to assume such obligations, nor is it liable for any other obligation hereunder
that it may, but is not obligated to, assume unless it elects to assume such
obligation in accordance herewith.
Section 6.02. Merger or Consolidation of the Company or the
Servicer; Assignment of Rights and Delegation of Duties by
Servicer.
(a) The Company and the Servicer shall each keep in full effect its existence,
rights and franchises as a corporation under the laws of the state of its
incorporation, and shall 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 Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
(b) Any Person into which the Company or the Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Company or the Servicer shall be a party, or any Person succeeding to
the business of the Company or the Servicer, shall be the successor of the
Company or the Servicer, 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 the
successor or surviving Person to the Servicer shall be qualified to service
mortgage loans on behalf of Xxxxxx Xxx or Xxxxxxx Mac; and provided further that
each Rating Agency's ratings, if any, of the Senior Class M or Class B
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 6.02 and Section 6.04 to the
contrary, the Servicer may assign its rights and delegate its duties and
obligations under this Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of Xxxxxx Mae or Xxxxxxx Mac, is reasonably
satisfactory to the Trustee and the Company, is willing to service the Mortgage
Loans and executes and delivers 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
Servicer under this Agreement; provided further that each Rating Agency's rating
of the Classes of 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 Servicer shall be released from its obligations under this
Agreement, except that the Servicer shall remain liable for all liabilities and
obligations incurred by it as Servicer hereunder prior to the satisfaction of
the conditions to such assignment and delegation set forth in the next preceding
sentence.
Section 6.03. Limitation on Liability of the Company, the Servicer and Others.
Neither the Company, the Servicer nor any of the directors, officers,
employees or agents of the Company or the Servicer 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 Servicer 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 Servicer and any director,
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officer, employee or agent of the Company or the Servicer 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 Servicer and
any director, officer, employee or agent of the Company or the Servicer 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 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.
Neither the Company nor the Servicer 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 Servicer 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
Servicer shall be entitled to be reimbursed therefor out of amounts attributable
to the Mortgage Loans on deposit in the Custodial Account as provided by Section
3.10 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 6.04. Company and Servicer Not to Resign.
Subject to the provisions of Section 6.02, neither the Company nor the
Servicer 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 Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee. No such resignation by the
Servicer shall become effective until the Trustee or a successor servicer shall
have assumed the Servicer's responsibilities and obligations in accordance with
Section 7.02.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
Event of Default, wherever used herein, means any one of the following
events (whatever reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Servicer shall fail to deposit or cause to be deposited into the
Payment Account any amounts required to be so deposited therein at the time
required pursuant to Section 4.01 or otherwise, and in either case, such
failure shall continue unremedied for a period of 5 days after the date
upon which written notice of such failure, requiring such failure to be
remedied, shall have been given to the Servicer by the Trustee or the
Company or to the Servicer, the Company and the Trustee by the Holders of
Certificates of such Class evidencing Percentage Interests aggregating not
less than 25%; or
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(ii) the Servicer shall fail to observe or perform in any material respect any
other of the covenants or agreements on the part of the Servicer contained
in the Certificates of any Class or in this Agreement and such failure
shall continue unremedied for a period of 30 days (except that such number
of days shall be 15 in the case of a failure to pay the premium for any
Required Insurance Policy) after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or the Company, or to the Servicer, the Company and
the Trustee by the Holders of Certificates of any Class evidencing, in the
case of any such Class, Percentage Interests aggregating not less than 25%;
or
(iii)a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or appointing
a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(iv) the Servicer shall consent to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities, or similar proceedings of, or relating to, the
Servicer or of, or relating to, all or substantially all of the property of
the Servicer; or
(v) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of, or
commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) the Servicer shall notify the Trustee pursuant to Section 4.04(b) that it
is unable to deposit in the Payment Account an amount equal to the Advance.
If an Event of Default described in clauses (i)-(v) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, the Company may, and at the direction of
Holders of Certificates entitled to at least 51% of the Voting Rights, the
Trustee shall, by notice in writing to the Servicer (and to the Company if given
by the Trustee or to the Trustee if given by the Company), terminate all of the
rights and obligations of the Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. If an Event of Default described in clause (vi)
hereof shall occur, the Trustee shall, by notice to the Servicer and the
Company, immediately terminate all of the rights and obligations of the Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder as provided in Section
4.04(b). On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Certificates (other than as a Holder thereof) or the Mortgage Loans or
otherwise, shall subject to Section 7.02 pass to and be vested in the Trustee or
the Trustee's designee appointed pursuant to Section 7.02; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Servicer agrees to
cooperate with the Trustee in effecting the termination of the Servicer's
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responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee or its designee for administration by it of all cash
amounts which shall at the time be credited to the Custodial Account or the
Payment Account or thereafter be received with respect to the Mortgage Loans,
and the delivery to the Trustee of the Mortgage Files, and the recordation of
Assignments of Mortgages to the Trustee if MERS is not the mortgagee of a
Mortgage Loan or otherwise in accordance with Section 7.02(b). No such
termination shall release the Servicer for any liability that it would otherwise
have hereunder for any act or omission prior to the effective time of such
termination.
Notwithstanding any termination of the activities of GMACM in its
capacity as Servicer hereunder, GMACM shall be entitled to receive, out of any
late collection of a Monthly Payment on a Mortgage Loan which was due prior to
the notice terminating GMACM's rights and obligations as Servicer hereunder and
received after such notice, that portion to which GMACM would have been entitled
pursuant to Sections 3.10(a)(ii), (vi) and (vii) as well as its Servicing Fee in
respect thereof, and any other amounts payable to GMACM hereunder the
entitlement to which arose prior to the termination of its activities hereunder.
Section 7.02. Trustee to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer resigns pursuant to Section 6.04 or
receives a notice of termination pursuant to Section 7.01, the Trustee or a
successor Servicer appointed by the Trustee hereunder shall be the successor in
all respects to the Servicer in its capacity as Servicer under this Agreement
and the transactions set forth or provided for herein and shall be subject
thereafter to all the responsibilities, duties, liabilities and limitations on
liabilities relating thereto placed on the Servicer, including the obligation to
make Advances which have been or will be required to be made, but excluding the
representations of the Servicer contained in Section 2.03, by the terms and
provisions hereof; provided that any failure to perform such duties or
responsibilities caused by the predecessor Servicer's failure to provide
information required by Section 4.02 or 4.03 shall not be considered a default
by the Trustee as successor Servicer hereunder; and provided further that the
Trustee shall have no obligation whatsoever with respect to any liability (other
than Advances deemed recoverable and not previously made) incurred by the
predecessor Servicer at or prior to the time of receipt by such Servicer of the
notice of termination pursuant to Section 7.01 or receipt by the Trustee of the
Opinion of Counsel referred to in Section 6.04. As compensation therefor, the
Trustee shall be entitled to the Servicing Fee and all funds relating to the
Mortgage Loans which the Servicer would have been entitled to charge to the
Custodial Account if the Servicer had continued to act hereunder, except for
amounts that the Servicer shall be entitled to receive pursuant to Section 7.01.
If the Trustee has become the successor to the Servicer in accordance with
Section 6.04 or this Section 7.02, then notwithstanding the above, if the
Trustee shall be unwilling to so act, or shall be unable to so act, the Trustee
may appoint, or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, which is also a Xxxxxx Xxx or
Xxxxxxx Mac-approved mortgage servicing institution, having a net worth of not
less than $10,000,000 as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder. Pending appointment of a successor to the Servicer
hereunder, the Trustee shall act in such capacity as herein above provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer hereunder. Each
of the Seller, the Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
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If the Trustee becomes the successor to the Servicer hereunder, the
Trustee shall be entitled to be reimbursed by the Servicer for all costs
associated with the transfer of the servicing of the Mortgage Loans to the
Trustee, including any costs or expenses associated with the complete transfer
of all servicing data and the completion, correction or manipulation of such
servicing data as may be required by the Trustee to correct any errors or
insufficiencies in the servicing data or otherwise to enable the Trustee to
service the Mortgage Loans in accordance with this Agreement. To the extent that
any such costs and expenses of the Trustee resulting from the termination of the
Servicer pursuant to this Section 7.02 are not reimbursed by the terminated
Servicer, the Trustee shall be entitled to reimbursement of such costs and
expenses from the Payment Account.
Any successor, including the Trustee, to the Servicer shall maintain in
force during its term as Servicer hereunder insurance policies and fidelity
bonds as may be required to be maintained by the Servicer pursuant to Section
3.12.
If the Trustee shall succeed to any duties of the Servicer with respect
to the Mortgage Loans as provided herein, it shall do so in a separate capacity
and not in its capacity as Trustee and, accordingly, the provisions of Article
VIII shall be inapplicable to the Trustee in its duties as successor Servicer in
the servicing of the Mortgage Loans (although such provisions shall continue to
apply to the Trustee in its capacity as trustee); the provisions of Article III,
however, shall apply to the Trustee in its capacity as successor Servicer.
(b) In connection with the termination or resignation of the Servicer hereunder,
either (i) the successor Servicer, including the Trustee if the Trustee is
acting as successor Servicer, shall represent and warrant that it is a member of
MERS in good standing and shall agree to comply in all material respects with
the rules and procedures of MERS in connection with the servicing of the
Mortgage Loans that are registered with MERS, in which case the predecessor
Servicer shall cooperate with the successor Servicer in causing MERS to revise
its records to reflect the transfer of servicing to the successor Servicer as
necessary under MERS' rules and regulations, or (ii) the predecessor Servicer
shall cooperate with the successor Servicer in causing MERS to execute and
deliver an assignment of Mortgage in recordable form to transfer the Mortgage
from MERS to the Trustee and to execute and deliver such other notices,
documents and other instruments as may be necessary or desirable to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS(R)
System to the successor Servicer. The predecessor Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Servicer shall bear any and all fees of MERS, costs of preparing any
assignments of Mortgage, and fees and costs of filing any assignments of
Mortgage that may be required under this subsection (b). The successor Servicer
shall cause such assignment to be delivered to the Trustee or the Custodian
promptly upon receipt of the original with evidence of recording thereon or a
copy certified by the public recording office in which such assignment was
recorded.
Section 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to the Servicer, the
Trustee shall give prompt written notice thereof to the Certificateholders at
their respective addresses appearing in the Certificate Register.
(b) Within 60 days after the occurrence of any Event of Default, the Trustee
shall transmit by mail to all Holders of Certificates notice of each such Event
of Default hereunder known to the Trustee, unless such Event of Default shall
have been cured or waived.
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Section 7.04. Waiver of Events of Default.
The Holders representing at least 66% of the Voting Rights affected by a
default or Event of Default hereunder may waive such default or Event of
Default; provided, however, that (a) a default or Event of Default under clause
(i) of Section 7.01 may be waived only by all of the Holders of Certificates
affected by such default or Event of Default and (b) no waiver pursuant to this
Section 7.04 shall affect the Holders of Certificates in the manner set forth in
Section 11.01(b)(i) or (ii). Upon any such waiver of a default or Event of
Default by the Holders representing the requisite percentage of Voting Rights
affected by such default or Event of Default, such default or Event of Default
shall cease to exist and shall be deemed to have been remedied for every purpose
hereunder. No such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent investor would exercise or use under the circumstances in the
conduct of such investor's own affairs.
(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. The Trustee shall notify the
Certificateholders of any such documents which do not materially conform to the
requirements of this Agreement in the event that the Trustee, after so
requesting, does not receive satisfactorily corrected documents.
The Trustee shall forward or cause to be forwarded in a timely fashion
the notices, reports and statements required to be forwarded by the Trustee
pursuant to Sections 4.03, 7.03 and 10.01. The Trustee shall furnish in a timely
fashion to the Servicer such information as the Servicer may reasonably request
from time to time for the Servicer 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
the applicable REMIC as a REMIC under the REMIC Provisions and (subject to
Section 10.01(f)) 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
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) Prior to the occurrence of an Event of Default, and after the curing
or waiver of all such Events of Default which may have occurred, 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
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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 to the Trustee by the Company or the Servicer
and which on their face, do not contradict the requirements of this
Agreement;
(ii) The Trustee shall not be personally liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of Certificateholders of any
Class holding Certificates which evidence, as to such Class,
Percentage Interests aggregating not less than 25% as to the
time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement;
(iv) The Trustee shall not be charged with knowledge of any default
(other than a default in payment to the Trustee) specified in
clauses (i) and (ii) of Section 7.01 or an Event of Default under
clauses (iii), (iv) and (v) of Section 7.01 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 Servicer, the Company or any
Certificateholder; and
(v) Except to the extent provided in Section 7.02, no provision in this
Agreement shall require the Trustee to expend or risk its own funds
(including, without limitation, the making of any Advance) 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.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's
Certificate, certificate of Servicing Officer, certificate of
auditors or any other certificate, statement, instrument,
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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 the written advice of
such counsel and any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such 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; nothing
contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default (which has
not been cured or waived), to exercise such of the rights and
powers vested in it by this Agreement, and to use the same degree
of care and skill in their exercise as a prudent investor would
exercise or use under the circumstances in the conduct of such
investor's own affairs;
(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) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may
have occurred, 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
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 Servicer, if an
Event of Default shall have occurred and is continuing, and
otherwise by the Certificateholder requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through
Affiliates, agents or attorneys; and
(vii)To the extent authorized under the Code and the regulations
promulgated thereunder, each Holder of a Class R Certificate
hereby irrevocably appoints and authorizes the Trustee to be its
attorney-in-fact for purposes of signing any Tax Returns required
to be filed on behalf of the Trust Fund. The Trustee shall sign
on behalf of the Trust Fund and deliver to the Servicer in a
timely manner any Tax Returns prepared by or on behalf of the
Servicer that the Trustee is required to sign as determined by
the Servicer pursuant to applicable federal, state or local tax
laws, provided that the Servicer shall indemnify the Trustee for
signing any such Tax Returns that contain errors or omissions.
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(b) Following the issuance of the Certificates, the Trustee shall not
accept any contribution of assets to the Trust Fund unless
(subject to Section 10.01(f)) it shall have obtained or been
furnished with an Opinion of Counsel, which shall not be a cost
of the Trustee or the Trust Fund, to the effect that such
contribution will not (i) cause any portion of the applicable
REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or (ii) cause the Trust Fund to be
subject to any federal tax as a result of such contribution
(including the imposition of any federal tax on "prohibited
transactions" imposed under Section 860F(a) of the Code).
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
execution of the Certificates and relating to the acceptance and receipt of the
Mortgage Loans) shall be taken as the statements of the Company or the Servicer
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 Certificates (except that the
Certificates shall be duly and validly executed and authenticated by it as
Certificate Registrar) or of any Mortgage Loan, Mortgage File or related
document, or of MERS or the MERS(R) System. Except as otherwise provided herein,
the Trustee shall not be accountable for the use or application by the Company
or the Servicer of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Company or
the Servicer in respect of the Mortgage Loans or deposited in or withdrawn from
the Custodial Account or the Payment Account by the Company or the Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights it would have if it were not
Trustee. The Trustee may transact business with the Company, the Servicer, and
their Affiliates, with the same rights it would have if it were not Trustee.
Section 8.05. Servicer to Pay Trustee's Fees and Expenses; Indemnification.
(a) The Servicer shall pay the Trustee's fees and reimburse its
expenses hereunder pursuant to a separate agreement to be entered
into between the Servicer and the Trustee.
(b) The Servicer 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 and the Custodial Agreement, provided that:
(i) with respect to any such claim, the Trustee shall have given the
Servicer written notice thereof promptly after the Trustee shall
have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee shall
cooperate and consult fully with the Servicer in preparing such
defense; and
(iii) notwithstanding anything in this Agreement to the contrary, the
Servicer shall not be liable for settlement of any claim by the
Trustee entered into without the prior consent of the Servicer
which consent shall not be unreasonably withheld.
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No termination of this Agreement, or the resignation or removal of the Trustee,
shall affect the obligations created by this Section 8.05(b) of the Servicer to
indemnify the Trustee under the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the
Servicer in this Section 8.05(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 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a national
banking association having its principal office in 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 8.07.
Section 8.07. 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 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 8.06 and shall fail to resign after written request
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 or its Paying Agent (other than
the Servicer or the Company) 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
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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 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
8.08.
Section 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 8.07 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 all Mortgage Files and related documents and statements held
by it hereunder (other than any Mortgage Files at the time held by a Custodian,
which shall become the agent of any successor trustee hereunder), and the
Company, the Servicer 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 8.06.
(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 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 8.09. Merger or Consolidation of Trustee.
Any corporation or national banking association into which the Trustee
may be merged or converted or with which it may be consolidated or any
corporation or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or national banking association succeeding to the 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 8.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee shall mail notice of any such merger or
consolidation to the Certificateholders at their address as shown in the
Certificate Register.
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Section 8.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the
Servicer 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
8.10, such powers, duties, obligations, rights and trusts as the Servicer and
the Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in case an Event of Default shall have occurred and be continuing,
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 8.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 8.10 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee, and such separate trustee or co-trustee jointly,
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be deemed to
have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. 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 8.11. Appointment of Custodians.
The Trustee may, with the consent of the Servicer and the Company,
appoint one or more Custodians who, except for Escrow Bank USA, an industrial
loan corporation organized under the laws of the State of Utah, are not
Affiliates of the Company, the Servicer or the Seller to hold all or a portion
of the Mortgage Notes as agent for the Trustee, by entering into a Custodial
Agreement; provided, however, that the Trustee may appoint a Custodian that is
an Affiliate of the Company, the Servicer or the Seller if the Trustee receives
written confirmation from each Rating Agency that such appointment will not
reduce the rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to such
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Certificates as of the Closing Date by such Rating Agency. Subject to Article
VIII, the Trustee agrees to comply with the terms of each Custodial Agreement
and to enforce the terms and provisions thereof against the Custodian for the
benefit of the Certificateholders. Each Custodian shall be a depository
institution subject to supervision by federal or state authority and shall be
qualified to do business in the jurisdiction in which it holds any Mortgage
File. Each Custodian (other than the Custodian appointed as of the Closing Date)
shall have a combined capital and surplus of at least $10,000,000. Each
Custodial Agreement may be amended only as provided in Section 11.01. The
Trustee shall notify the Certificateholders of the appointment of any Custodian
(other than the Custodian appointed as of the Closing Date) pursuant to this
Section 8.11.
Section 8.12. Appointment of Office or Agency.
The Trustee shall maintain an office or agency in the City of New York
where Certificates may be surrendered for registration of transfer or exchange.
The Trustee initially designates its offices located at 00 Xxxxx Xxxxxx, Xxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 for the purposes of keeping the Certificate
Register. The Trustee shall maintain an office at each of the addresses stated
in Section 11.05 hereof where notices and demands to or upon the Trustee in
respect of this Agreement may be served.
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase by the Servicer or Liquidation
of All Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities of the Company, the Servicer and the Trustee
created hereby in respect of the Certificates (other than the
obligation of the Trustee to make certain payments after the
Final Distribution Date to Certificateholders and the obligation
of the Company to send certain notices as hereinafter set forth)
shall terminate upon the last action required to be taken by the
Trustee on the Final Distribution Date pursuant to this Article
IX following the earlier of:
(i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining
in the Trust Fund or the disposition of all property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage
Loan, or
(ii) the purchase by the Servicer of all Mortgage Loans and all
property acquired in respect of any Mortgage Loan remaining in
the Trust Fund at a price equal to 100% of the unpaid principal
balance of each Mortgage Loan or, the fair market value of the
related underlying property of such Mortgage Loan with respect to
Mortgage Loans as to which title has been acquired if such fair
market value is less than such unpaid principal balance (net of
any unreimbursed Advances attributable to principal) on the day
of repurchase plus accrued interest thereon at the Net Mortgage
Rate (or Modified Net Mortgage Rate in the case of any Modified
Mortgage Loan) to, but not including, the first day of the month
in which such repurchase price is distributed, provided, however,
that in no event shall the trust created hereby continue beyond
the expiration of 21 years from the death of the last survivor of
the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the
United States to the Court of St. Xxxxx, living on the date
hereof and provided further that the purchase price set forth
above shall be increased as is necessary, as determined by the
Servicer, to avoid disqualification of any portion of any REMIC
as a REMIC.
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The right of the Servicer to purchase all the assets of the Trust Fund
pursuant to clause (ii) above is conditioned upon the Pool Stated Principal
Balance as of the Final Distribution Date, prior to giving effect to
distributions to be made on such Distribution Date, being less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans. If such right is
exercised by the Servicer, the Servicer shall be deemed to have been reimbursed
for the full amount of any unreimbursed Advances theretofore made by it with
respect to the Mortgage Loans. In addition, the Servicer, shall provide to the
Trustee and the Custodian a Request for Release substantially in the form
attached hereto as Exhibit F and the Trustee and any Custodian shall, promptly
following payment of the purchase price, release to the Servicer, as applicable,
the Mortgage Files pertaining to the Mortgage Loans being purchased.
(b) The Servicer shall give the Trustee not less than 60 days' prior notice
of the Distribution Date on which the Servicer anticipates that the final
distribution will be made to Certificateholders (whether as a result of the
exercise by the Servicer of its right to purchase the assets of the Trust Fund
or otherwise). Notice of any termination, specifying the anticipated Final
Distribution Date (which shall be a date that would otherwise be a Distribution
Date) upon which the Certificateholders may surrender their Certificates to the
Trustee (if so required by the terms hereof) for payment of the final
distribution and cancellation, shall be given promptly by the Servicer (if it is
exercising its right to purchase the assets of the Trust Fund), or by the
Trustee (in any other case) by letter to the Certificateholders mailed not
earlier than the 9th day and not later than the 19th day of the month next
preceding the month of such final distribution specifying:
(i) the anticipated Final Distribution Date upon which final payment
of the Certificates is anticipated to be made upon presentation
and surrender of Certificates at the office or agency of the
Trustee therein designated,
(ii) the amount of any such final payment, if known, and
(iii) that the Record Date otherwise applicable to such Distribution
Date is not applicable, and in the case of the Senior
Certificates and Class M Certificates, that payment shall be made
only upon presentation and surrender of the Certificates at the
office or agency of the Trustee therein specified.
If the Servicer is obligated to give notice to Certificateholders as aforesaid,
it shall give such notice to the Certificate Registrar at the time such notice
is given to Certificateholders. In the event such notice is given by the
Servicer, the Servicer shall deposit in the Payment Account before the Final
Distribution Date in immediately available funds an amount equal to the purchase
price for the assets of the Trust Fund computed as above provided.
(c) In the case of the Senior, Class M or Class B Certificates, upon
presentation and surrender of the Certificates by the Certificateholders
thereof, the Trustee shall distribute to the Certificateholders (i) the amount
otherwise distributable on such Distribution Date, if not in connection with the
Servicer's election to repurchase, or (ii) if the Servicer elected to so
repurchase, an amount determined as follows: (A) with respect to each
Certificate the outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest for the related Interest Accrual Period thereon and any
previously unpaid Accrued Certificate Interest, subject to the priority set
forth in Section 4.02(a), and (B) with respect to the Class R Certificates, any
excess of the amounts available for distribution (including the repurchase price
specified in clause (ii) of subsection (a) of this Section) over the total
amount distributed under the immediately preceding clause (A).
(d) If any Certificateholders shall not surrender their Certificates for final
payment and cancellation on or before the Final Distribution Date (if so
required by the terms hereof), the Trustee shall on such date cause all funds in
the Payment Account not distributed in final distribution to Certificateholders
to be withdrawn therefrom and credited to the remaining Certificateholders by
depositing such funds in a separate escrow account for the benefit of such
Certificateholders, and the Servicer (if it exercised its right to purchase the
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assets of the Trust Fund), or the Trustee (in any other case) shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee shall take appropriate steps
as directed by the Servicer to contact the remaining Certificateholders
concerning surrender of their Certificates. The costs and expenses of
maintaining the escrow account and of contacting Certificateholders shall be
paid out of the assets which remain in the escrow account. If within nine months
after the second notice any Certificates shall not have been surrendered for
cancellation, the Trustee shall pay to the Servicer all amounts distributable to
the holders thereof and the Servicer shall thereafter hold such amounts until
distributed to such holders. No interest shall accrue or be payable to any
Certificateholder on any amount held in the escrow account or by the Servicer as
a result of such Certificateholder's failure to surrender its Certificate(s) for
final payment thereof in accordance with this Section 9.01.
Section 9.02. Additional Termination Requirements.
(a) Each REMIC that comprises the Trust Fund shall be terminated in
accordance with the following additional requirements, unless (subject to
Section 10.01(f)) the Trustee and the Servicer have received an Opinion of
Counsel (which Opinion of Counsel shall not be an expense of the Trustee) to the
effect that the failure of any REMIC to comply with the requirements of this
Section 9.02 will not (i) result in the imposition on the Trust Fund of taxes on
"prohibited transactions," as described in Section 860F of the Code, or (ii)
cause any REMIC to fail to qualify as a REMIC at any time that any Certificate
is outstanding:
(i) The Servicer shall establish a 90-day liquidation period for such
REMIC and specify the first day of such period in a statement
attached to the Trust Fund's final Tax Return pursuant to
Treasury regulations Section 1.860F-1. The Servicer also shall
satisfy all of the requirements of a qualified liquidation for a
REMIC under Section 860F of the Code and regulations thereunder;
(ii) The Servicer shall notify the Trustee at the commencement of such
90-day liquidation period and, at or prior to the time of making
of the final payment on the Certificates, the Trustee shall sell
or otherwise dispose of all of the remaining assets of the Trust
Fund in accordance with the terms hereof; and
(iii) If the Servicer is exercising its right to purchase the assets of
the Trust Fund, the Servicer shall, during the 90-day liquidation
period and at or prior to the Final Distribution Date, purchase
all of the assets of the Trust Fund for cash.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints the Servicer as its attorney-in-fact to adopt a plan of
complete liquidation for such REMIC at the expense of the Trust Fund in
accordance with the terms and conditions of this Agreement.
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ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The REMIC Administrator shall make an election to treat the Trust Fund
(other than the portion thereof consisting of the Hedge Agreement and the Swap
Agreement) as three REMICs under the Code and, if necessary, under applicable
state law. The assets of each REMIC are set forth in this Agreement. Such
election shall 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
Certificates are issued. For the purposes of the REMIC elections in respect of
the Trust Fund, Certificates and interests to be designated as the "regular
interests" and the sole class of "residual interests" in each REMIC shall be set
forth in Section 10.03. The REMIC Administrator and the Trustee shall not permit
the creation of any "interests" (within the meaning of Section 860G of the Code)
in each REMIC elected in respect of the Trust Fund other than the "regular
interests" and "residual interests" so designated.
(b) The Closing Date is hereby designated as the "startup day" of each REMIC
comprising the Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) GMACM 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 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 Mortgage Loans on deposit in the Custodial Account as
provided by Section 3.10 unless such legal expenses and costs are incurred by
reason of the REMIC Administrator's willful misfeasance, bad faith or gross
negligence.
(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 Servicer 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.
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(f) The Servicer and the REMIC Administrator shall take such actions and shall
cause each REMIC created hereunder to take such actions as are reasonably within
the Servicer'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 Servicer and the REMIC Administrator, to the extent
reasonably requested by the Servicer and the REMIC Administrator to do so). The
Servicer 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 as a REMIC or (ii) result in the
imposition of a tax upon any REMIC (including but not limited to the tax on
prohibited transactions as 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 Servicer 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 Servicer 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 Servicer, 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 Servicer, 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 Servicer 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 REMIC to take any action, which is
not expressly permitted under the terms of this Agreement, the Trustee shall
consult with the Servicer 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 REMIC, and the Trustee shall not take
any such action or cause any REMIC to take any such action as to which the
Servicer or the REMIC Administrator, as applicable, has advised it in writing
that an Adverse REMIC Event could occur. The Servicer 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 Servicer or the REMIC Administrator. At all times as may be required by
the Code, the Servicer shall to the extent within its control and the 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 in 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 REMIC as defined in Section 860G(c) of
the Code, on any contributions to any 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 Servicer, if such tax arises out of or results from a breach
by the Servicer of any of its obligations under this Agreement or the Servicer
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
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the Trustee of any of its obligations under this Article X, or (iii) otherwise
against amounts on deposit in the Custodial Account as provided by Section 3.10
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 Servicer 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, neither the Servicer nor the Trustee shall accept
any contributions of assets to any REMIC created hereunder unless (subject to
Section 10.01(f)) the Servicer 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 any REMIC
to fail to qualify as a REMIC at any time that any Certificates are outstanding
or subject any REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(j) Neither the Servicer nor the Trustee shall (subject to Section 10.01(f))
enter into any arrangement by which any REMIC created hereunder will receive a
fee or other compensation for services nor permit any 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" for each REMIC I Regular
Interest, REMIC II Regular Interest and REMIC III Regular Interest shall be the
Maturity Date.
(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 Trustee nor the Servicer shall sell, dispose of or substitute
for any of the Mortgage Loans (except in connection with (i) the default,
imminent default or foreclosure of a Mortgage Loan, including but not limited
to, the acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of any REMIC created hereunder, (iii) the
termination of the applicable REMIC pursuant to Article IX of this Agreement or
(iv) a purchase of Mortgage Loans pursuant to Article II or III of this
Agreement) nor acquire any assets for any REMIC, nor sell or dispose of any
investments in the Custodial Account or the Payment Account for gain nor accept
any contributions to any 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 any REMIC as a REMIC or (b) unless the
Servicer has determined in its sole discretion to indemnify the Trust Fund
against such tax, cause any REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
(n) The Trustee shall apply for an employer identification number from the
Internal Revenue Service on a Form SS-4 or any other acceptable method for all
tax entities.
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Section 10.02. Servicer, REMIC Administrator and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Company, the REMIC
Administrator and the Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Company or the Servicer, as a result of a breach of the Trustee's
covenants set forth in Article VIII or this Article X.
(b) The REMIC Administrator agrees to indemnify the Trust Fund, the Company, the
Servicer 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 Servicer or the Trustee, as a result of a breach of the REMIC
Administrator's covenants set forth in this Article X 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 shall
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 Servicer in which case
Section 10.02(c) shall apply.
(c) The Servicer 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 Servicer's covenants set forth in this Article X or in 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 Servicer that contain errors or omissions.
Section 10.03. Designation of REMIC(s).
The REMIC Administrator shall make an election to treat the entire
segregated pool of assets described in the definition of Trust Fund (exclusive
of the Hedge Agreement and the Swap Agreement), and subject to this Agreement
(including the Mortgage Loans) as a REMIC ("REMIC I") and shall make an election
to treat the pool of assets comprised of the uncertificated REMIC I Regular
Interests as a REMIC ("REMIC II") and shall make an election to treat the pool
of assets comprised of the underlying REMIC II Regular Interests as a REMIC
("REMIC III") for federal income tax purposes.
The REMIC I Regular Interests will be "regular interests" in REMIC I and
Component I of the Class R 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 REMIC II Regular Interests will be
"regular interests" in REMIC II and Component II of the Class R Certificates
will be the sole class of "residual interests" in REMIC II for purposes of the
REMIC Provisions (as defined herein) under the federal income tax law.
The Class A-I-1, Class A-II-1, Class A-II-2, Class A-II-3, Class A-II-4,
Class A-III-1, Class A-III-2, Class A-III-3, Class A-III-4, Class A-III-5, Class
A-IV-1, Class X-II, Class X-III, Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates, will be "regular interests" in REMIC III,
and Component III of the Class R Certificates will be the sole class of
"residual interests" therein for purposes of the REMIC Provisions (as defined
herein) under federal income tax law.
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Section 10.04. Distributions on REMIC I Regular Interests, REMIC II Regular
Interests and REMIC III Regular Interests.
(a) On each Distribution Date, the trustee shall be deemed to distribute to
itself as the holder of the REMIC I Regular Interests, the following to
the extent of the Available Distribution Amount reduced by distributions
made to the Class R Certificateholders pursuant to Section 4.02(a):
those portions of the REMIC I Distribution Amount not designated to
Component I of the Class R Certificate, in the amounts and in accordance
with the priorities set forth in the definition of REMIC I Distribution
Amount.
(b) On each Distribution Date the Trustee shall be deemed to distribute to
itself, as the holder of the REMIC II 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 Certificates pursuant to Section 4.02(a):
(i) Uncertificated Interest on the REMIC II Regular Interests for such
Distribution Date, plus any Uncertificated Interest thereon remaining
unpaid from any previous Distribution Date; and
(ii) In accordance with the priority set forth in Section 10.04(c), an amount
equal to the sum of the amounts in respect of principal distributable on
each Class of Certificates (other than the Class R Certificates) under
Section 4.02(a), as allocated thereto pursuant to Section 4.02(b).
(c) The amount described in Section 10.04(b)(ii) shall be deemed distributed
with respect to REMIC II Regular Interests in accordance with the
priority assigned to each Related Class of Certificates (other than the
Class R Certificates), respectively, under Section 4.02(b) until the
Uncertificated Balance of each such interest is reduced to zero.
(d) The portion of the Uncertificated Interest amounts described in Section
10.04(b)(i) shall be deemed distributed by REMIC II to REMIC III in
accordance with the priority assigned to the REMIC III Certificates
relative to that assigned to the Class R Certificates under Section
4.02(a).
(e) In determining from time to time the amounts distributable on the REMIC
II Regular Interests Realized Losses allocated to the REMIC III Regular
Interests shall be deemed allocated to the REMIC II Regular Interests in
accordance with the priority assigned to each Related Class of
Certificates (other than the Class R Certificates) respectively under
Section 4.05.
(f) On each Distribution Date the Trustee shall be deemed to distribute from
REMIC III, in the priority set forth in Sections 4.02(a) and (b), to the
Holders of each Class of Certificates (other than the Class R
Certificates) the amounts distributable thereon with respect to their
interests in REMIC III from the amounts deemed to have been received by
REMIC II from REMIC I under this Section 10.04.
(g) Notwithstanding the deemed distributions on the Uncertificated REMIC I
Regular Interests described in this Section 10.04, distributions of
funds from the Certificate Account shall be made only in accordance with
Section 4.02.
Section 10.05. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee or
any Paying Agent, as applicable, shall comply with all federal withholding
requirements respecting payments to Certificateholders, including interest or
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original issue discount payments or advances thereof that the Trustee or any
Paying Agent, as applicable, reasonably believes are applicable under the Code.
The consent of Certificateholders shall not be required for such withholding. In
the event the Trustee or any Paying Agent, as applicable, does withhold any
amount from interest or original issue discount payments or advances thereof to
any Certificateholder pursuant to federal withholding requirements, the Trustee
or any Paying Agent, as applicable, shall indicate the amount withheld to such
Certificateholder pursuant to the terms of such requirements.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
(a) This Agreement or any Custodial Agreement may be amended from
time to time by the Company, the Servicer 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 any REMIC created hereunder as a REMIC at all
times that any 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 Custodial
Account or the Payment Account or to change the name in which the
Custodial Account is maintained, provided that (A) the Payment
Account Deposit Date shall in no event be later than the related
Distribution Date, (B) such change shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder and (C) such change shall not
result in a reduction of the rating assigned to any Class of
Certificates below the lower of the then-current rating or the
rating assigned to such Certificates as of the Closing Date, as
evidenced by a letter from each Rating Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section 5.02(f)
or any other provision hereof restricting transfer of the Class R
Certificates, by virtue of their being the "residual interests"
in a REMIC, provided that (A) such change shall not result in
reduction of the rating assigned to any such Class of
Certificates below the lower of the then-current rating or the
rating assigned to such Certificates as of the Closing Date, as
evidenced by a letter from each Rating Agency to such effect, and
(B) such change shall not (subject to Section 10.01(f)), as
evidenced by an Opinion of Counsel (at the expense of the party
seeking so to modify, eliminate or add such provisions), cause
any REMIC created hereunder or any of the Certificateholders
(other than the transferor) to be subject to a federal tax caused
by a transfer to a Person that is not a Permitted Transferee,
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(vi) to make any other provisions with respect to matters or questions
arising under this Agreement or such Custodial 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, or
(vii) to amend any provision herein or therein that is not material to
any of the Certificateholders.
(b) This Agreement or any Custodial Agreement may also be amended
from time to time by the Company, the Servicer and the Trustee
with the consent of the Holders of Certificates evidencing in the
aggregate not less than 66% of the Percentage Interests of each
Class of Certificates affected thereby for the purpose of adding
any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement or such Custodial Agreement or
of modifying in any manner the rights of the Holders of
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 Certificate
without the consent of the Holder of such Certificate,
(ii) reduce the aforesaid percentage of Certificates of any Class the
Holders of which are required to consent to any such amendment,
in any such case without the consent of the Holders of all
Certificates of such Class then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (subject to Section 10.01(f) and at the expense
of the party seeking such amendment) to the effect that such amendment or the
exercise of any power granted to the Servicer, the Company or the Trustee in
accordance with such amendment will not result in the imposition of a federal
tax on the Trust Fund or cause any REMIC to fail to qualify as a REMIC at any
time that any 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 the Custodian
and each Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 11.01 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 11.02. Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer and at its expense on direction by the Trustee (pursuant to the request
of Holders of Certificates entitled to at least 25% of the Voting Rights), but
only upon direction accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
(b) 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.
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Section 11.03. 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 any of the parties
hereto.
(b) No Certificateholder shall have any right to vote (except as expressly
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third person 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 written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of Certificates
of any Class evidencing in the aggregate not less than 25% of the related
Percentage Interests of such Class, shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
of any Class shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates of such Class or any other Class, or
to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the common benefit of Certificateholders of such Class
or all Classes, as the case may be. For the protection and enforcement of the
provisions of this Section 11.03, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04. Governing Law.
This agreement and the Certificates shall be governed by and 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.
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Section 11.05. Notices.
All demands and notices hereunder shall be in writing and shall be
deemed to have been duly given if sent by facsimile or 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
the appropriate address for each recipient listed in the table below or, in each
case, such other address as may hereafter be furnished in writing to the
Servicer, the Trustee and the Company, as applicable:
Recipient Address
Company 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: President
Servicer 000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000,
Attention: President
Trustee 0 Xxxx Xxx Xxxxx
Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000-0000
Standard & Poor's 00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx'x 00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Hedge Counterparty 000 Xxxxxxx Xxxxxx
Xxxxx 0000
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 11.06. Required Notices to Rating Agency and Subservicer.
The Company, the Servicer or the Trustee, as applicable, shall notify
each Rating Agency and the Subservicer 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 clause (a), (b), (c), (d), (g) or (h) below or provide a
copy to each Rating Agency at such time as otherwise required to be delivered
pursuant to this Agreement of any of the statements described in clauses (e) and
(f) below:
(a) a material change or amendment to this Agreement,
(b) the occurrence of an Event of Default,
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(c) the termination or appointment of a successor Servicer or Trustee or a
change in the majority ownership of the Trustee,
(d) the filing of any claim under the Servicer's blanket fidelity bond and the
errors and omissions insurance policy required by Section 3.12 or the
cancellation or modification of coverage under any such instrument,
(e) the statement required to be delivered to the Holders of each Class of
Certificates pursuant to Section 4.03, which statements shall be mailed to each
Rating Agency via first class mail,
(f) the statements required to be delivered pursuant to Sections 3.18 and 3.19,
(g) the occurrence of any monthly cash flow shortfall to the Holders of any
Class of Certificates resulting from the failure by the Servicer to make an
Advance pursuant to Section 4.04, and
(h) the occurrence of the Final Distribution Date.
provided, however, that with respect to notice of the occurrence of the events
described in clauses (d) or (g) above, the Servicer shall provide prompt written
notice to each Rating Agency and the Subservicer of any such event known to the
Servicer.
Section 11.07. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.08. Supplemental Provisions for Resecuritization.
This Agreement may be supplemented by means of the addition of a
separate Article hereto (a "Supplemental Article") for the purpose of
resecuritizing any of the Certificates issued hereunder, under the following
circumstances. With respect to any Class or Classes of Certificates issued
hereunder, or any portion of any such Class, as to which the Company or any of
its Affiliates (or any designee thereof) is the registered Holder (the
"Resecuritized Certificates"), the Company may deposit such Resecuritized
Certificates into a new REMIC, grantor trust, FASIT or custodial arrangement (a
"Restructuring Vehicle") to be held by the Trustee pursuant to a Supplemental
Article. The instrument adopting such Supplemental Article shall be executed by
the Company, the Servicer and the Trustee; provided, that neither the Servicer
nor the Trustee shall withhold their consent thereto if their respective
interests would not be materially adversely affected thereby. To the extent that
the terms of the Supplemental Article do not in any way affect any provisions of
this Agreement as to any of the Certificates initially issued hereunder, the
adoption of the Supplemental Article shall not constitute an "amendment" of this
Agreement.
Each Supplemental Article shall set forth all necessary provisions
relating to the holding of the Resecuritized Certificates by the Trustee, the
establishment of the Restructuring Vehicle, the issuing of various classes of
new certificates by the Restructuring Vehicle and the distributions to be made
thereon, and any other provisions necessary for the purposes thereof. In
connection with each Supplemental Article, the Company shall deliver to the
Trustee an Opinion of Counsel to the effect that (i) the Restructuring Vehicle
will qualify as a REMIC, grantor trust, FASIT or other entity not subject to
123
taxation for federal income tax purposes and (ii) the adoption of the
Supplemental Article will not endanger the status of any REMIC created hereunder
as a REMIC or (subject to Section 10.01(f)) result in the imposition of a tax
upon the Trust Fund or any REMIC created hereunder (including but not limited to
the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code
and the tax on contributions to a REMIC as set forth in Section 860G(d) of the
Code).
Section 11.09. Allocation of Voting Rights.
98% of all of the Voting Rights shall be allocated among Holders of
Certificates, other than the Class X and Class R Certificates, in proportion to
the outstanding Certificate Principal Balances of their respective Certificates;
0.5% of all Voting Rights shall be allocated among the Holders of the Class X-II
Certificates, in accordance with their respective Percentage Interests, 0.5% of
all Voting Rights shall be allocated among the Holders of the Class X-III
Certificates, in accordance with their respective Percentage Interests and 1% of
all Voting Rights shall be allocated among the Holders of the Class R
Certificates, in accordance with their respective Percentage Interests.
Section 11.10. Non-Petition.
The Company, the Seller, the Servicer and the Trustee, by entering into
this Agreement, and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against the Trust
Fund or join in any institution against the Trust Fund of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligation with respect to the Certificates or this
Agreement.
124
IN WITNESS WHEREOF, the Company, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized, as of the day and year first above written.
RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
By:
Name:
Title:
GMAC MORTGAGE CORPORATION
By:
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By:
Name:
Title:
125
STATE OF )
) ss.:
COUNTY OF )
On the _____ day of __________, 200__ before me, a notary public in and
for said State, personally appeared __________, known to me to be
_______________ of Residential Asset Mortgage Products, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On the ___ day of __________, 200__ before me, a notary public in and
for said State, personally appeared _______________, known to me to be
________________ of GMAC Mortgage Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF ILLINOIS )
) ss.:
COUNTY OF XXXX )
On the ___ day of __________, 200__ before me, a notary public in and
for said State, personally appeared ______________, known to me to be a[n]
______________ of Bank One, National Association, a national banking
association, that executed the within instrument, and also known to me to be the
person who executed it on behalf of said banking corporation, and acknowledged
to me that such banking corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
APPENDIX I
Class Y Principal Reduction Amounts: For any Distribution Date the
amounts by which the principal balances of the Class Y-1, Class Y-2, Class Y-3
and Class Y-4 Certificates respectively will be reduced on such distribution
date by the allocation of Realized Losses and the distribution of principal,
determined as follows:
First for each of Group I, Group II, Group III and Group IV determine
the weighted average pass-through rate for that Group for distributions of
interest that will be made on the next succeeding Distribution Date (the "Group
Interest Rate"). The Principal Reduction Amount for each of the Class Y
Certificates will be determined pursuant to the "Generic solution for the Class
Y Principal Reduction Amounts" set forth below (the "Generic Solution") by
making identifications among the actual Groups and their related Class Y and
Class Z Certificates and weighted average pass-through rates and the Groups
named in the Generic Solution and their related Class Y and Class Z Certificates
as follows:
A. Determine which Group has the lowest Group Interest Rate. That
Group will be identified with Group AA and the Class Y and Class Z Certificates
related to that Group will be respectively identified with the Class Y-aa and
Class Z-aa Certificates. The Group Interest Rate for that Group will be
identified with J%. If two or more Groups have the lowest Group Interest Rate
pick one for this purpose, subject to the restriction that each Group may be
picked only once in the course of any such selections pursuant to paragraphs A
through D or this definition.
B. Determine which Group has the second lowest Group Interest
Rate. That Group will be identified with Group BB and the Class Y and Class Z
Certificates related to that Group will be respectively identified with the
Class Y-bb and Class Z-bb Certificates. The Group Interest Rate for that Group
will be identified with K%. If two or more Groups have the second lowest Group
Interest Rate pick one for this purpose, subject to the restriction that each
Group may be picked only once in the course of any such selections pursuant to
paragraphs A through D or this definition.
C. Determine which Group has the third lowest Group Interest
Rate. That Group will be identified with Group CC and the Class Y and Class Z
Certificates related to that Group will be respectively identified with the
Class Y-cc and Class Z-cc Certificates. The Group Interest Rate for that Group
will be identified with L%. If two or more Groups have the third lowest Group
Interest Rate pick one for this purpose, subject to the restriction that each
Group may be picked only once in the course of any such selections pursuant to
paragraphs A through D or this definition.
D. Determine which Group has the fourth lowest Group Interest
Rate. That Group will be identified with Group DD and the Class Y and Class Z
Certificates related to that Group will be respectively identified with the
Class Y-dd and Class Z-dd Certificates. The Group Interest Rate for that Group
will be identified with M%. If two or more Groups have the fourth lowest Group
Interest Rate pick one for this purpose, subject to the restriction that each
Group may be picked only once in the course of any such selections pursuant to
paragraphs A through D or this definition.
Second, apply the Generic Solution set forth below to determine the
Class Y Principal Reduction Amounts for the Distribution Date using the
identifications made above.
Class Y Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Class Principal Balances of the Class Y-aa, Class Y-bb,
Class Y-cc and Class Y-dd Regular Interests, respectively, will be reduced on
such Distribution Date by the allocation of Realized Losses and the distribution
of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall have
the meanings set forth below:
PAAB = the Subordinate Component Balance for Group AA after the allocation of
Realized Losses and distributions of principal on such Distribution
Date.
PBBB = the Subordinate Component Balance for Group BB after the allocation of
Realized Losses and distributions of principal on such Distribution
Date.
PCCB = the Subordinate Component Balance for Group CC after the allocation of
Realized Losses and distributions of principal on such Distribution
Date.
PDDB = the Subordinate Component Balance for Group DD after the allocation of
Realized Losses and distributions of principal on such Distribution
Date.
R = the Remittance Rate on the Subordinate Certificates = (J%PAAB + K%PBBB +
L%PCCB + M%PDDB)/( PAAB + PBBB + PCCB + PDDB)
R1 = the weighted average of the Remittance Rates on the Group AA-L, Group
BB-L and Group CC-L Regular Interests (other than any Class P-L or Class
X-L Regular Interests or portions thereof related to such Groups) = (J%(Pjj
- (DELTA)Pjj) + K%(Pkk - (DELTA)Pkk) + X%(Xxx - (XXXXX)Xxx))/(Xxx -
(XXXXX)Xxx x Xxx - (XXXXX)Xxx + Pll - (DELTA)Pll)
R2 = the weighted average of the Remittance Rates on the Group BB-L, Group
CC-L and Group DD-L Regular Interests (other than any Class X-L or Class
P-L Regular Interests or portions thereof related to such Groups) = (K%(Pkk
- (DELTA)Pkk) + L%(Pll - (DELTA)Pll) + X%(Xxx - (XXXXX)Xxx))/(Xxx -
(XXXXX)Xxx x Xxx - (XXXXX)Xxx + Pmm - (DELTA)Pmm)
R3 = the weighted average of the Remittance Rates on the Group AA-L and Group
BB-L Regular Interests (other than any Class P-L or Class X-L Regular
Interests or portions thereof related to such Groups) = (J%(Pjj -
(DELTA)Pjj) + K%(Pkk - (DELTA)Pkk))/(Pjj - (DELTA)Pjj + Pkk - (DELTA)Pkk)
R4 = the weighted average of the Remittance Rates on the Group CC-L and Group
DD-L Regular Interests (other than any Class X-L or Class P-L Regular
Interests or portions thereof related to such Groups) = (L%(Pll -
(DELTA)Pll) + M%(Pmm - (DELTA)Pmm))/(Pll - (DELTA)Pll + Pmm - (DELTA)Pmm)
r1 = the weighted average of the Class Y-aa, Class Y-bb and Class Y-cc
Remittance Rates = (J% Yjj + K% Ykk + L% Yll)/(Yjj + Ykk + Yll)
r2 = the weighted average of the Class Y-bb, Class Y-cc and Class Y-dd
Remittance Rates = (K% Ykk + L% Yll + M% Ymm)/(Ykk + Yll + Ymm)
r3 = the weighted average of the Class Y-aa and Class Y-bb Remittance Rates
= (J% Yjj + K% Ykk)/(Yjj + Ykk)
r4 = the weighted average of the Class Y-cc and Class Y-dd Remittance Rates
= (L% Yll + M% Ymm)/(Yll + Ymm)
Yjj = the principal balance of the Class Y-aa Regular Interests after
distributions on the prior Distribution Date.
Ykk = the principal balance of the Class Y-bb Regular Interests after
distributions on the prior Distribution Date.
Yll = the principal balance of the Class Y-cc Regular Interests after
distributions on the prior Distribution Date.
Ymm = the principal balance of the Class Y-dd Regular Interests after
distributions on the prior Distribution Date.
(DELTA)Yjj = the Class Y-aa Principal Reduction Amount.
(DELTA)Ykk = the Class Y-bb Principal Reduction Amount.
(DELTA)Yll = the Class Y-cc Principal Reduction Amount.
(DELTA)Ymm = the Class Y-dd Principal Reduction Amount.
Pjj = the aggregate principal balance of the Class Y-aa and Class Z-aa
Regular Interests after distributions on the prior Distribution Date,
which is equal to the aggregate principal balance of the Group AA Loans
reduced by the portion, if any, of the Principal Balance derived from
Group AA Loans of any Class P-M Regular Interest or Class R-I
Certificate.
Pkk = the aggregate principal balance of the Class Y-bb and Class Z-bb
Regular Interests after distributions on the prior Distribution Date,
which is equal to the aggregate principal balance of the Group BB Loans
reduced by the portion, if any, of the Principal Balance derived from
Group BB Loans of any Class P-M Regular Interest or Class R-I
Certificate.
Pll = the aggregate principal balance of the Class Y-cc and Class Z-cc
Regular Interests after distributions on the prior Distribution Date,
which is equal to the aggregate principal balance of the Group CC Loans
reduced by the portion, if any, of the Principal Balance derived from
Group CC Loans of any Class P-M Regular Interest or Class R-I
Certificate.
Pmm = the aggregate principal balance of the Class Y-dd and Class Z-dd
Regular Interests after distributions on the prior Distribution Date,
which is equal to the aggregate principal balance of the Group DD Loans
reduced by the portion, if any, of the Principal Balance derived from
Group DD Loans of any Class P-M Regular Interest or Class R-I
Certificate.
(DELTA)Pjj = the aggregate principal reduction resulting on such Distribution
Date on the Group AA Loans as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (d)(i) or
(d)(ii) of the definition of REMIC I Distribution Amount) to be made and
realized losses to be allocated on such Distribution Date, reduced by
the portion, if any, of such reduction allocable to any Class P-M
Regular Interest or Class R-I Certificate, which is equal to the
aggregate of the Class Y-aa and Class Z-aa Principal Reduction Amounts.
(DELTA)Pkk= the aggregate principal reduction resulting on such Distribution
Date on the Group BB Loans as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (d)(i) or
(d)(ii) of the definition of REMIC I Distribution Amount) to be made and
realized losses to be allocated on such Distribution Date, reduced by
the portion, if any, of such reduction allocable to any Class P-M
Regular Interest or Class R-I Certificate, which is equal to the
aggregate of the Class Y-bb and Class Z-bb Principal Reduction Amounts.
(DELTA)Pll = the aggregate principal reduction resulting on such Distribution
Date on the Group CC Loans as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (d)(i) or
(d)(ii) of the definition of REMIC I Distribution Amount) to be made and
realized losses to be allocated on such Distribution Date, reduced by
the portion, if any, of such reduction allocable to any Class P-M
Regular Interest or Class R-I Certificate, which is equal to the
aggregate of the Class Y-cc and Class Z-cc Principal Reduction Amounts.
(DELTA)Pmm = the aggregate principal reduction resulting on such Distribution
Date on the Group DD Loans as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (d)(i) or
(d)(ii) of the definition of REMIC I Distribution Amount) to be made and
realized losses to be allocated on such Distribution Date, reduced by
the portion, if any, of such reduction allocable to any Class P-M
Regular Interest or Class R-I Certificate, which is equal to the
aggregate of the Class Y-dd and Class Z-dd Principal Reduction Amounts.
(alpha) = .0005
(gamma)1= (R - R1)/(M% - R). If R=>L%, (gamma)1 is a non-negative number unless
its denominator is zero, in which event it is undefined.
(gamma)2 = (R - J%)/(R2 - R). If R
greater than K%, (gamma)2 is a non-negative number.
(gamma)3= (R - R3)/(R4 - R). If K%<=R<=L%, (gamma)3 is a non-negative number
unless its denominator is zero, in which case it is undefined.
If (gamma)1 is undefined, (DELTA)Yjj = Yjj, (DELTA)Ykk = Ykk, (DELTA)Yll =
Yll, and (DELTA)Ymm = (Ymm/Pmm)(DELTA)Pmm.
If (gamma)2 is zero, (DELTA)Yjj = (Yjj/Pjj)(DELTA)Pjj, (DELTA)Ykk = Ykk,
(DELTA)Yll = Yll and (DELTA)Ymm = Ymm.
If K%<=R<=L% and (gamma)3 is undefined, (DELTA)Yjj = Yjj, (DELTA)Ykk = Ykk,
(DELTA)Ymm = Ymm, and (DELTA)Yll = (Yll/Pll)(DELTA)Pll.
If K%<=R<=L% and (gamma)3 is zero, (DELTA)Ykk = (Ykk/Pkk)(DELTA)Pkk,
(DELTA)Yjj = Yjj, (DELTA)Yll = Yll and (DELTA)Ymm = Ymm.
In the remaining situations, (DELTA)Yjj, (DELTA)Ykk, (DELTA)Yll and
(DELTA)Ymm shall be defined as follows:
I. If R=>L%, make the following additional definitions:
(delta)Yjj = 0, if R1 less than r1; (R1- r1)( Yjj + Ykk + Yll)Yjj/((R1 - J%)Yjj
+ (R1 - K%)Ykk), if R1= greater than r1 and R1= greater than K %; and (R1-
r1)( Yjj + Ykk + Yll)/(R1 - J%), if R1= greater than r1 and R1 greater than
K%;
(delta)Ykk = 0, if R1 less than r1 and R1=greater than K%; (R1- r1)( Yjj + Ykk +
Yll)Ykk/((R1 - K%)Ykk + (R1 - L%)Yll), if R1 less than r1 and R1 greater
than K%; (R1- r1)( Yjj + Ykk + Yll)Ykk/((R1 - J%)Yjj + (R1 - K%)Ykk), if
R1=greater than r1 and R1= greater than K%; and 0, if R1=greater than r1
and R1 greater than K%; and
(delta)Yll = (R1- r1)( Yjj + Ykk + Yll)/(R1 - L%), if R1less than r1 and
R1=greater thanK%; (R1- r1)( Yjj + Ykk + Yll)Yll/((R1 - K%)Ykk + (R1 -
L%)Yll), if R less than r1 and R1 greater than K%; and 0, if R1= greater
than r1.
(delta)Y1, (delta)Ykk, and (delta)Yll are numbers between Yjj and 0, Ykk and 0,
and Yll and 0, respectively, such that (J%(Yjj - (delta)Yjj) + K%( Ykk.-
(delta)Ykk) + L%( Yll.- (delta)Yll))/(Yjj - (delta)Yjj + Ykk.-
(delta)Ykk + Yll.- (delta)Yll) = R1.
Y5 = Yjj - (delta)Yjj + Ykk.- (delta)Ykk + Yll.- (delta)Yll
P5 = Pjj + Pkk + Pll.
(DELTA)P5 = (DELTA)Pjj + (DELTA)Pkk + (DELTA)Pll.
AY5 = AYjj - (delta)Yjj + AYkk.- (delta)Ykk + AYll.- (delta)Yll
1. If Xxx - (xxxxx)(Xxx - (XXXXX)Xxx) xx 0, X0- (xxxxx)(X0 - (XXXXX)X0) => 0,
and (gamma)1(P5 - (DELTA)P5) < (Pmm - (DELTA)Pmm), (DELTA)Ymm = Xxx -
(xxxxx)(xxxxx)0(X0 - (XXXXX)X0) and (DELTA)Y5 = Y5 - (alpha)(P5 -
(DELTA)P5).
2. If Xxx - (xxxxx)(Xxx - (XXXXX)Xxx) xx 0, X0 - (xxxxx)(X0 - (DELTA)P5) => 0,
and (gamma)1(P5 - (DELTA)P5) => (Pmm - (DELTA)Pmm), (DELTA)Ymm = Ymm -
(alpha)(Pmm - (DELTA)Pmm) and (DELTA)Y5 = Y5 - ((alpha)/(gamma)1)(Pmm -
(DELTA)Pmm).
3. If Ymm - (alpha)(Pmm - (DELTA)Pmm) less than 0, Y5 - (alpha)(P5 -
(DELTA)P5) => 0, and Y5 - (alpha)(P5 - (DELTA)P5) => Y5 - (Ymm/(gamma)1),
(DELTA)Ymm = Xxx - (xxxxx)(xxxxx)0(X0 - (XXXXX)X0) and (DELTA)Y5 = Y5 -
(alpha)(P5 - (DELTA)P5).
4. If Xxx - (xxxxx)(Xxx - (XXXXX)Xxx) xxxx xxxx 0, X0 - (Xxx/(xxxxx)0) => 0,
and Y5 - (alpha)(P5 - (DELTA)P5) <= Y5 - (Ymm/(gamma)1), (DELTA)Ymm = 0 and
(DELTA)Y5 = Y5 - (Ymm/(gamma)1).
5. If Y5 - (alpha)(P5 - (DELTA)P5) < 0, Y5 - (Ymm/(gamma)1) < 0, and Ymm -
(alpha)(Pmm - (DELTA)Pmm) <= Xxx - ((xxxxx)0X0), (XXXXX)Xxx x Xxx -
((xxxxx)0X0) and (DELTA)Y5 = 0.
6. If Y5 - (alpha)(P5 - (DELTA)P5) less than 0, Ymm - (alpha)(Pmm -
(DELTA)Pmm) => 0, and Xxx - (xxxxx)(Xxx - (XXXXX)Xxx) xx Xxx -
((xxxxx)0X0), (DELTA)Ymm = Ymm - (alpha)(Pmm - (DELTA)Pmm) and (DELTA)Y5 =
Y5 - ((alpha)/(gamma)1)(Pmm - (DELTA)Pmm).
AYjj = (delta)Yjj + [(Yjj - (delta)Yjj)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk
+ Yll - (delta)Yll)] AY5
AYkk = (delta)Ykk + [(Ykk - (delta)Ykk)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk
+ Yll - (delta)Yll)]AY5
AYll = (delta)Yll + [(Yll - (delta)Yll)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk
+ Yll - (delta)Yll)]AY5
The purpose of the foregoing definitional provisions together with the
related provisions allocating Realized Losses and defining the Class Y and Class
Z Principal Distribution Amounts is to accomplish the following goals in the
following order of priority:
1. Making the ratio of Ymm to Y5 equal to (gamma)1 after taking account of the
allocation Realized Losses and the distributions that will be made through
end of the Distribution Date to which such provisions relate and assuring
that the Principal Reduction Amount for each of the Class Y-aa, Class Y-bb,
Class Y-cc, Class Y-dd, Class Z-aa, Class Z-bb, Class Z-cc and Class Z-dd
Regular Interests is greater than or equal to zero for such Distribution
Date;
2. Making the Class Y-aa Principal Balance less than or equal to 0.0005 of the
sum of the Class Y-aa and Class Z-aa Principal Balances, the Class Y-bb
Principal Balance less than or equal to 0.0005 of the sum of the Class Y-bb
and Class Z-bb Principal Balances, the Class Y-bb Principal Balance less
than or equal to 0.0005 of the sum of the Class Y-cc and Class Z-cc
Principal Balances and the Class Y-dd Principal Balance less than or equal
to 0.0005 of the sum of the Class Y-dd and Class Z-dd Principal Balances in
each case after giving effect to allocations of Realized Losses and
distributions to be made through the end of the Distribution Date to which
such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Ymm and whose
denominator is the sum of Ymm and Class Z-dd Principal Balance and (b) the
fraction whose numerator is Y5 and whose denominator is the sum of Y5, the
Class Z-aa Principal Balance, the Class Z-bb Principal Balance and the
Class Z-cc Principal Balance as large as possible while remaining less than
or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
Class Y Principal Reduction Amount to accomplish both of goals 1 and 2 above,
the amounts thereof should be adjusted to so as to accomplish such goals within
the requirement that each Class Y Principal Reduction Amount must be less than
or equal to the sum of (a) the principal portion of Realized Losses to be
allocated on the related Distribution Date for the related Group remaining after
the allocation of such Realized Losses to the related Class P-M Regular Interest
(if any) and (b) the remainder of the portion of the REMIC I Available
Distribution Amount derived from the related Group after reduction thereof by
the distributions to be made on such Distribution Date (i) to the related Class
P-M Regular Interest (if any), (ii) to the related Class X-M Regular Interests
and (iii) in respect of interest on the related Class Y and Class Z Regular
Interests, or, if both of such goals cannot be accomplished within such
requirement, such adjustment as is necessary shall be made to accomplish goal 1
within such requirement. In the event of any conflict among the provisions of
the definition of the Class Y Principal Reduction Amounts, such conflict shall
be resolved on the basis of the goals and their priorities set forth above
within the requirement set forth in the preceding sentence. If the formula
allocation of AY5 among AYjj, AYkk and AYll cannot be achieved because either
AYjj as so defined is greater than APjj, AYkk as so defined is greater than APkk
or AYll as so defined is greater than APll, such an allocation shall be made as
close as possible to the formula allocation within the requirement that AYjj <
APjj, AYkk < APkk and AYll < APll.
II. If R<=K%, make the following additional definitions:
(delta)Ykk = 0, if R2less than r2; (R2- r2)( Ykk + Yll + Ymm)Ykk/((R2 - K%)Ykk +
(R2 - L%)Yll), if R2=greater than r2 and R2= greater than L%; and (R2- r2)(
Ykk + Yll + Ymm)/(R2 - K%), if R2= greater than r2 and R2 less than L%;
(delta)Yll = 0, if R2 less than r2 and R2= greater than L%; (R2- r2)( Ykk + Yll
+ Ymm)Yll/((R2 - L%)Yll + (R2 - M%)Ymm), if R2less thanr2 and R2 less
thanL%; (R2- r2)( Ykk + Yll + Ymm)Yll/((R2 - K%)Ykk + (R2 - L%)Yll), if
R2=greater thab r2 and R2= greater thanL%; and 0, if R2=greater than r2 and
R2 less than L%; and
(delta)Ymm = (R2- r2)( Ykk + Yll + Ymm)/(R2 - M%), if R2 less than r2 and
R2=greater than L%; (R2- r2)( Ykk + Yll + Ymm)Ymm/((R2 - L%)Yll + (R2 -
M%)Ymm), if R2 less than r2 and R2 less than L%; and 0, if R2= greater than
r2.
(delta)Ykk, (delta)Yll, and (delta)Ymm are numbers between Ykk and 0, Yll and 0,
and Ymm and 0, respectively, such that (K%(Ykk - (delta)Ykk) + L%( Yll.-
(delta)Yll) + M%( Ymm.- (delta)Ymm))/(Ykk - (delta)Ykk + Yll.-
(delta)Yll + Ymm.- (delta)Ymm) = R2.
Y6 = Ykk - (delta)Ykk + Yll.- (delta)Yll + Ymm.- (delta)Ymm
P6 = Pkk + Pll + Pmm.
(DELTA)P6 = (DELTA)Pkk + (DELTA)Pll + (DELTA)Pmm.
AY6 = AYkk - (delta)Ykk + AYll.- (delta)Yll + AYmm.- (delta)Ymm
1. If Y6 - (alpha)(P6 - (DELTA)P6) => 0, Yjj- (alpha)(Pjj - (DELTA)Pjj) => 0,
and (gamma)2(Pjj - (DELTA)Pjj) < (P6 - (DELTA)P6), (DELTA)Y6 = Y6 -
(alpha)(gamma)2(Pjj - (DELTA)Pjj) and (DELTA)Yjj = Yjj - (alpha)(Pjj -
(DELTA)Pjj).
2. If Y6 - (alpha)(P6 - (DELTA)P6) => 0, Yjj - (alpha)(Pjj - (DELTA)Pjj) => 0,
and (gamma)2(Pjj - (DELTA)Pjj) => (P6 - (DELTA)P6), (DELTA)Y6 = Y6 -
(alpha)(P6 - (DELTA)P6) and (DELTA)Yjj = Yjj - ((alpha)/(gamma)2)(P6 -
(DELTA)P6).
3. If Y6 - (alpha)(P6 - (DELTA)P6) < 0, Yjj - (alpha)(Pjj - (DELTA)Pjj) => 0,
and Yjj - (alpha)(Pjj - (DELTA)Pjj) => Yjj - (Y6/(gamma)2), (DELTA)Y6 = Y6 -
(alpha)(gamma)2(Pjj - (DELTA)Pjj) and (DELTA)Yjj = Yjj - (alpha)(Pjj -
(DELTA)Pjj).
4. If Y6 - (alpha)(P6 - (DELTA)P6) < 0, Yjj - (Y6/(gamma)2) => 0, and Yjj -
(alpha)(Pjj - (DELTA)Pjj) <= Yjj - (Y6/(gamma)2), (DELTA)Y6 = 0 and
(DELTA)Yjj = Yjj - (Y6/(gamma)2).
5. If Yjj - (alpha)(Pjj - (DELTA)Pjj) < 0, Yjj - (Y6/(gamma)2) < 0, and Y6 -
(alpha)(P6 - (DELTA)P6) <= Y6 - ((gamma)2Yjj), (DELTA)Y6 = Y6 -
((gamma)2Yjj) and (DELTA)Yjj = 0.
6. If Yjj - (alpha)(Pjj - (DELTA)Pjj) < 0, Y6 - (alpha)(P6 - (DELTA)P6) => 0,
and Y6 - (alpha)(P6 - (DELTA)P6) => Y6 - ((gamma)2Yjj), (DELTA)Y6 = Y6 -
(alpha)(P6 - (DELTA)P6) and (DELTA)Yjj = Yjj - ((alpha)/(gamma)2)(P6 -
(DELTA)P6).
AYkk = (delta)Ykk + [(Ykk - (delta)Ykk)/(Ykk - (delta)Ykk + Yll - (delta)Yll
+ Ymm - (delta)Ymm)] AY6
AYll = (delta)Yll + [(Yll - (delta)Yll)/(Ykk - (delta)Ykk + Yll - (delta)Yll
+ Ymm - (delta)Ymm)] AY6
AYmm = (delta)Ymm + [(Ymm - (delta)Ymm)/(Ykk - (delta)Ykk + Yll - (delta)Yll
+ Ymm - (delta)Ymm)]A Y6
The purpose of the foregoing definitional provisions together with the
related provisions allocating Realized Losses and defining the Class Y and Class
Z Principal Distribution Amounts is to accomplish the following goals in the
following order of priority:
1. Making the ratio of Y6 to Yjj equal to (gamma)2 after taking account of the
allocation Realized Losses and the distributions that will be made through
end of the Distribution Date to which such provisions relate and assuring
that the Principal Reduction Amount for each of the Class Y-aa, Class Y-bb,
Class Y-cc, Class Y-dd, Class Z-aa, Class Z-bb, Class Z-cc and Class Z-dd
Regular Interests is greater than or equal to zero for such Distribution
Date;
2. Making the Class Y-aa Principal Balance less than or equal to 0.0005 of the
sum of the Class Y-aa and Class Z-aa Principal Balances, the Class Y-bb
Principal Balance less than or equal to 0.0005 of the sum of the Class Y-bb
and Class Z-bb Principal Balances, the Class Y-bb Principal Balance less
than or equal to 0.0005 of the sum of the Class Y-cc and Class Z-cc
Principal Balances and the Class Y-dd Principal Balance less than or equal
to 0.0005 of the sum of the Class Y-dd and Class Z-dd Principal Balances in
each case after giving effect to allocations of Realized Losses and
distributions to be made through the end of the Distribution Date to which
such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Yjj and whose
denominator is the sum of Yjj and Class Z-aa Principal Balance and (b) the
fraction whose numerator is Y6 and whose denominator is the sum of Y6, the
Class Z-bb Principal Balance, the Class Z-cc Principal Balance and the
Class Z-dd Principal Balance as large as possible while remaining less than
or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
Class Y Principal Reduction Amount to accomplish both of goals 1 and 2 above,
the amounts thereof should be adjusted to so as to accomplish such goals within
the requirement that each Class Y Principal Reduction Amount must be less than
or equal to the sum of (a) the principal portion of Realized Losses to be
allocated on the related Distribution Date for the related Group remaining after
the allocation of such Realized Losses to the related Class P-M Regular Interest
(if any) and (b) the remainder of the portion of the REMIC I Available
Distribution Amount derived from the related Group after reduction thereof by
the distributions to be made on such Distribution Date (i) to the related Class
P-M Regular Interest (if any), (ii) to the related Class X-M Regular Interests
and (iii) in respect of interest on the related Class Y and Class Z Regular
Interests, or, if both of such goals cannot be accomplished within such
requirement, such adjustment as is necessary shall be made to accomplish goal 1
within such requirement. In the event of any conflict among the provisions of
the definition of the Class Y Principal Reduction Amounts, such conflict shall
be resolved on the basis of the goals and their priorities set forth above
within the requirement set forth in the preceding sentence. If the formula
allocation of AY6 among AYkk, AYll and AYmm cannot be achieved because either
AYkk as so defined is greater than APkk, AYll as so defined is greater than APll
or AYmm as so defined is greater than APmm, such an allocation shall be made as
close as possible to the formula allocation within the requirement that AYkk <
APkk, AYll < APll and AYmm < APmm.
III. If K%<=R<=L%, make the following additional definitions:
(delta)Yjj = 0, if R3< r3; and
(R3- r3)( Yjj + Ykk)/(R3 - J%), if R3=> r3;
(delta)Ykk = 0, if R3=> r3; and
(R3- r3)( Yjj + Ykk)/(R3 - K%), if R3< r3;
(delta)Yll = 0, if R4< r4; and
(R4- r4)(Yll + Ymm)/(R4 - L%), if R4=> r4; and
(delta)Ymm = (R4- r4)(Yll + Ymm)/(R4 - M%), if R4< r4; and
0, if R4=> r4.
(delta)Yjj, (delta)Ykk, (delta)Yll, and (delta)Ymm are numbers between Yjj and
0, Ykk and 0, Yll and 0, and Ymm and 0, respectively, such that (J%(Yjj
- (delta)Yjj) + K%(Ykk.- (delta)Ykk))/(Yjj - (delta)Yjj + Ykk.-
(delta)Ykk) = R3 and (L%(Yll - (delta)Yll) + M%(Ymm.- (delta)Ymm))/(Yll
- (delta)Yll + Ymm.- (delta)Ymm) = R4.
Y7 = Yjj - (delta)Yjj + Ykk.- (delta)Ykk
P7 = Pjj + Pkk.
(DELTA)P7 = (DELTA)Pjj + (DELTA)Pkk.
AY7 = AYjj - (delta)Yjj + AYkk.- (delta)Ykk.
Y8 = Yll.- (delta)Yll + Ymm.- (delta)Ymm.
P8 = Pll + Pmm.
(DELTA)P8 = (DELTA)Pll + (DELTA)Pmm.
AY8 = AYll.- (delta)Yll + AYmm.- (delta)Ymm
1. If Y8 - (alpha)(P8 - (DELTA)P8) => 0, Y7- (alpha)(P7 - (DELTA)P7) => 0, and
(gamma)3(P7 - (DELTA)P7) < (P8 - (DELTA)P8), (DELTA)Y8 = Y8 -
(alpha)(gamma)3(P7 - (DELTA)P7) and (DELTA)Y7 = Y7 - (alpha)(P7 -
(DELTA)P7).
2. If Y8 - (alpha)(P8 - (DELTA)P8) => 0, Y7 - (alpha)(P7 - (DELTA)P7) => 0, xxx
(xxxxx)0(X0 - (XXXXX)X0) xx (X0 - (XXXXX)X0), (XXXXX)X0 = Y8 - (alpha)(P8 -
(DELTA)P8) and (DELTA)Y7 = Y7 - ((alpha)/(gamma)3)(P8 - (DELTA)P8).
3. If Y8 - (alpha)(P8 - (DELTA)P8) < 0, Y7 - (alpha)(P7 - (DELTA)P7) => 0, and
Y7 - (alpha)(P7 - (DELTA)P7) => Y7 - (Y8/(gamma)3), (DELTA)Y8 = Y8 -
(alpha)(gamma)3(P7 - (DELTA)P7) and (DELTA)Y7 = Y7 - (alpha)(P7 -
(DELTA)P7).
4. If Y8 - (alpha)(P8 - (DELTA)P8) < 0, Y7 - (Y8/(gamma)3) => 0, and Y7 -
(alpha)(P7 - (DELTA)P7) <= Y7 - (Y8/(gamma)3), (DELTA)Y8 = 0 and (DELTA)Y7 =
Y7 - (Y8/(gamma)3).
5. If Y7 - (xxxxx)(X0 - (XXXXX)X0) x 0, X0 - (X0/(xxxxx)0) < 0, and Y8 -
(alpha)(P8 - (DELTA)P8) <= Y8 - ((gamma)3Y7), (DELTA)Y8 = Y8 - ((gamma)3Y7)
and (DELTA)Y7 = 0.
6. If Y7 - (alpha)(P7 - (DELTA)P7) < 0, Y8 - (alpha)(P8 - (DELTA)P8) => 0, and
Y8 - (alpha)(P8 - (DELTA)P8) => Y8 - ((gamma)3Y7), (DELTA)Y8 = Y8 -
(alpha)(P8 - (DELTA)P8) and (DELTA)Y7 = Y7 - ((alpha)/(gamma)3)(P8 -
(DELTA)P8).
AYjj = (delta)Yjj + [(Yjj - (delta)Yjj)/(Yjj - (delta)Yjj + Ykk - (delta)Ykk)]
AY7
AYkk = (delta)Ykk + [(Ykk - (delta)Ykk)/( Yjj - (delta)Yjj + Ykk -
(delta)Ykk)]AY7
AYll = (delta)Yll + [(Yll - (delta)Yll)/(Yll - (delta)Yll + Ymm - (delta)Ymm)]
AY8
AYmm = (delta)Ymm + [(Ymm - (delta)Ymm)/(Yll - (delta)Yll + Ymm - (delta)Ymm)]
AY8
The purpose of the foregoing definitional provisions together with the
related provisions allocating Realized Losses and defining the Class Y and Class
Z Principal Distribution Amounts is to accomplish the following goals in the
following order of priority:
1. Making the ratio of Y8 to Y7 equal to (gamma)3 after taking account of the
allocation Realized Losses and the distributions that will be made through
end of the Distribution Date to which such provisions relate and assuring
that the Principal Reduction Amount for each of the Class Y-aa, Class Y-bb,
Class Y-cc, Class Y-dd, Class Z-aa, Class Z-bb, Class Z-cc and Class Z-dd
Regular Interests is greater than or equal to zero for such Distribution
Date;
2. Making the Class Y-aa Principal Balance less than or equal to 0.0005 of the
sum of the Class Y-aa and Class Z-aa Principal Balances, the Class Y-bb
Principal Balance less than or equal to 0.0005 of the sum of the Class Y-bb
and Class Z-bb Principal Balances, the Class Y-bb Principal Balance less
than or equal to 0.0005 of the sum of the Class Y-cc and Class Z-cc
Principal Balances and the Class Y-dd Principal Balance less than or equal
to 0.0005 of the sum of the Class Y-dd and Class Z-dd Principal Balances in
each case after giving effect to allocations of Realized Losses and
distributions to be made through the end of the Distribution Date to which
such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Y7 and whose
denominator is the sum of Y7, the Class Z-aa Principal Balance and the
Class Z-bb Principal Balance and (b) the fraction whose numerator is Y8 and
whose denominator is the sum of Y8, the Class Z-cc Principal Balance and
the Class Z-dd Principal Balance as large as possible while remaining less
than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
Class Y Principal Reduction Amount to accomplish both of goals 1 and 2 above,
the amounts thereof should be adjusted to so as to accomplish such goals within
the requirement that each Class Y Principal Reduction Amount must be less than
or equal to the sum of (a) the principal portion of Realized Losses to be
allocated on the related Distribution Date for the related Group remaining after
the allocation of such Realized Losses to the related Class P-M Regular Interest
(if any) and (b) the remainder of the portion of the REMIC I Available
Distribution Amount derived from the related Group after reduction thereof by
the distributions to be made on such Distribution Date (i) to the related Class
P-M Regular Interest (if any), (ii) to the related Class X-M Regular Interests
and (iii) in respect of interest on the related Class Y and Class Z Regular
Interests, or, if both of such goals cannot be accomplished within such
requirement, such adjustment as is necessary shall be made to accomplish goal 1
within such requirement. In the event of any conflict among the provisions of
the definition of the Class Y Principal Reduction Amounts, such conflict shall
be resolved on the basis of the goals and their priorities set forth above
within the requirement set forth in the preceding sentence. If the formula
allocation of AY7 between AYjj and AYkk, or of AY8 between AYll and AYmm cannot
be achieved because either AYjj as so defined is greater than APjj, AYkk as so
defined is greater than APkk, AYll as so defined is greater than APll or AYmm as
so defined is greater than APmm, such an allocation shall be made as close as
possible to the formula allocation within the requirement that AYjj < APjj, AYkk
< APkk, AYll < APll and AYmm < APmm.
