EXECUTION COPY
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING COMPANY, LLC,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee and Supplemental Interest Trust Trustee
SERIES SUPPLEMENT,
Dated as of May 1, 2007
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of May 1, 2007
Mortgage Asset-Backed Pass-Through Certificates
SERIES 2007-QA4
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.......................................................................1
SECTION 1.01. DEFINITIONS.......................................................1
SECTION 1.02. DETERMINATION OF LIBOR............................................1
SECTION 1.03. USE OF WORDS AND PHRASES..........................................1
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..................1
SECTION 2.01. CONVEYANCE OF MORTGAGE LOANS......................................1
SECTION 2.02. ACCEPTANCE BY TRUSTEE.............................................1
SECTION 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
SERVICER AND THE COMPANY..........................................1
SECTION 2.04. REPRESENTATIONS AND WARRANTIES OF SELLERS.........................1
SECTION 2.05. EXECUTION AND AUTHENTICATION OF CERTIFICATES/ISSUANCE OF
CERTIFICATES EVIDENCING INTERESTS IN REMICS.......................1
SECTION 2.06. CONVEYANCE OF UNCERTIFICATED REMIC REGULAR INTERESTS;
ACCEPTANCE BY THE TRUSTEE.........................................1
SECTION 2.07. ISSUANCE OF CERTIFICATES EVIDENCING INTEREST IN REMIC III
AND REMIC IV......................................................1
SECTION 2.08. PURPOSES AND POWERS OF THE TRUST..................................1
SECTION 2.09. AGREEMENT REGARDING ABILITY TO DISCLOSE...........................1
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..................................1
SECTION 3.01. MASTER SERVICER TO ACT AS SERVICER................................1
SECTION 3.02. SUBSERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
SUBSERVICERS; ENFORCEMENT OF SUBSERVICERS' AND SELLERS'
OBLIGATIONS.......................................................1
SECTION 3.03. SUCCESSOR SUBSERVICERS............................................1
SECTION 3.04. LIABILITY OF THE MASTER SERVICER..................................1
SECTION 3.05. NO CONTRACTUAL RELATIONSHIP BETWEEN SUBSERVICER AND TRUSTEE
OR CERTIFICATEHOLDERS.............................................1
SECTION 3.06. ASSUMPTION OR TERMINATION OF SUBSERVICING AGREEMENTS BY
TRUSTEE...........................................................1
SECTION 3.07. COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS; DEPOSIT TO
CUSTODIAL ACCOUNT.................................................1
SECTION 3.08. SUBSERVICING ACCOUNTS; SERVICING ACCOUNTS.........................1
SECTION 3.09. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE MORTGAGE LOANS................................................1
SECTION 3.10. PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT..................1
SECTION 3.11. MAINTENANCE OF THE PRIMARY INSURANCE POLICIES; COLLECTIONS
THEREUNDER........................................................1
SECTION 3.12. MAINTENANCE OF FIRE INSURANCE AND OMISSIONS AND FIDELITY
COVERAGE..........................................................1
SECTION 3.13. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AND
MODIFICATION AGREEMENTS; CERTAIN ASSIGNMENTS......................1
SECTION 3.14. REALIZATION UPON DEFAULTED MORTGAGE LOANS.........................1
SECTION 3.15. TRUSTEE TO COOPERATE; RELEASE OF CUSTODIAL FILES..................1
SECTION 3.16. SERVICING AND OTHER COMPENSATION; COMPENSATING INTEREST...........1
SECTION 3.17. REPORTS TO THE TRUSTEE AND THE COMPANY............................1
SECTION 3.18. ANNUAL STATEMENT AS TO COMPLIANCE.................................1
SECTION 3.19. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT...........1
SECTION 3.20. RIGHTS OF THE COMPANY IN RESPECT OF THE MASTER SERVICER...........1
SECTION 3.21. ADMINISTRATION OF BUYDOWN FUNDS...................................1
SECTION 3.22. ADVANCE FACILITY..................................................1
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...................................................1
SECTION 4.01. CERTIFICATE ACCOUNT...............................................1
SECTION 4.02. DISTRIBUTIONS.....................................................1
SECTION 4.03. STATEMENTS TO CERTIFICATEHOLDERS; STATEMENTS TO THE RATING
AGENCIES; EXCHANGE ACT REPORTING..................................1
SECTION 4.04. DISTRIBUTION OF REPORTS TO THE TRUSTEE AND THE COMPANY;
ADVANCES BY THE MASTER SERVICER...................................1
SECTION 4.05. ALLOCATION OF REALIZED LOSSES.....................................1
SECTION 4.06. REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED
PROPERTY..........................................................1
SECTION 4.07. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.....................1
SECTION 4.08. SURETY BOND.......................................................1
SECTION 4.09. CERTIFICATE SWAP AGREEMENT........................................1
SECTION 4.10. CERTIFICATE SWAP AGREEMENT COLLATERAL ACCOUNT.....................1
SECTION 4.11. CLASS A-1-A SWAP AGREEMENT........................................1
SECTION 4.12. CLASS A-1-A SWAP AGREEMENT COLLATERAL ACCOUNT.....................1
ARTICLE V THE CERTIFICATES..................................................................1
SECTION 5.01. THE CERTIFICATES..................................................1
SECTION 5.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.............1
SECTION 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.................1
SECTION 5.04. PERSONS DEEMED OWNERS.............................................1
SECTION 5.05. APPOINTMENT OF PAYING AGENT.......................................1
SECTION 5.06. U.S.A. PATRIOT ACT COMPLIANCE.....................................1
ARTICLE VI THE COMPANY AND THE MASTER SERVICER..............................................1
ARTICLE VII DEFAULT.........................................................................1
ARTICLE VIII CONCERNING THE TRUSTEE AND SUPPLEMENTAL INTEREST TRUST TRUSTEE.................1
SECTION 8.01. DUTIES OF THE TRUSTEE AND SUPPLEMENTAL INTEREST TRUST
TRUSTEE...........................................................1
SECTION 8.02. CERTAIN MATTERS AFFECTING THE TRUSTEE AND SUPPLEMENTAL
INTEREST TRUST TRUSTEE............................................1
SECTION 8.03. TRUSTEE AND SUPPLEMENTAL INTEREST TRUST TRUSTEE NOT LIABLE
FOR CERTIFICATES OR MORTGAGE LOANS................................1
SECTION 8.04. TRUSTEE AND SUPPLEMENTAL INTEREST TRUST TRUSTEE MAY OWN
CERTIFICATES......................................................1
SECTION 8.05. MASTER SERVICER TO PAY TRUSTEE'S AND SUPPLEMENTAL INTEREST
TRUST TRUSTEE'S FEES AND EXPENSES; INDEMNIFICATION................1
SECTION 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE..............................1
SECTION 8.07. RESIGNATION AND REMOVAL OF THE TRUSTEE AND SUPPLEMENTAL
INTEREST TRUST TRUSTEE............................................1
SECTION 8.08. SUCCESSOR TRUSTEE AND SUCCESSOR SUPPLEMENTAL INTEREST TRUST
TRUSTEE...........................................................1
SECTION 8.09. MERGER OR CONSOLIDATION OF TRUSTEE................................1
SECTION 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.....................1
SECTION 8.11. APPOINTMENT OF CUSTODIANS.........................................1
SECTION 8.12. APPOINTMENT OF OFFICE OR AGENCY...................................1
SECTION 8.13. SWAP AGREEMENTS...................................................1
ARTICLE IX TERMINATION......................................................................1
SECTION 9.01. OPTIONAL PURCHASE BY THE MASTER SERVICER OF ALL
CERTIFICATES; TERMINATION UPON PURCHASE BY THE MASTER
SERVICER OR LIQUIDATION OF ALL MORTGAGE LOANS.....................1
ARTICLE X REMIC PROVISIONS..................................................................1
SECTION 10.01. REMIC ADMINISTRATION..............................................1
SECTION 10.02. MASTER SERVICER; REMIC ADMINISTRATOR AND TRUSTEE
INDEMNIFICATION...................................................1
SECTION 10.03. DESIGNATION OF REMICS.............................................1
SECTION 10.04. DISTRIBUTIONS ON THE UNCERTIFICATED REMIC REGULAR INTERESTS.......1
SECTION 10.05. COMPLIANCE WITH WITHHOLDING REQUIREMENTS..........................1
SECTION 10.06. SUPPLEMENTAL INTEREST TRUST PROVISIONS............................1
ARTICLE XI MISCELLANEOUS PROVISIONS.........................................................1
SECTION 11.01. AMENDMENT.........................................................1
SECTION 11.02. RECORDATION OF AGREEMENT; COUNTERPARTS............................1
SECTION 11.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS........................1
SECTION 11.04. GOVERNING LAW.....................................................1
SECTION 11.05. NOTICES...........................................................1
SECTION 11.06. REQUIRED NOTICES TO RATING AGENCY AND SUBSERVICER.................1
SECTION 11.07. SEVERABILITY OF PROVISIONS........................................1
SECTION 11.08. SUPPLEMENTAL PROVISIONS FOR RESECURITIZATION......................1
SECTION 11.09. ALLOCATION OF VOTING RIGHTS.......................................1
SECTION 11.10. NO PETITION.......................................................1
ARTICLE XII COMPLIANCE WITH REGULATION AB..................................................1
EXHIBITS
Exhibit One: Mortgage Loan Schedule
Exhibit Two: Information to be Included in Monthly Distribution Date
Statement
Exhibit Three: Standard Terms of Pooling and Servicing Agreement, dated as of
May 1, 2007
Exhibit Four-A: Certificate Swap Agreement
Exhibit Four-B: Class A-1-A Swap Agreement
Exhibit Five-A: SB-AM Swap Agreement
Exhibit Five-B: SB-A1A Swap Agreement
Exhibit Six: Form Of Class SB Certificate Transferor Certificate
(Regulation S To Rule 144A)
Exhibit Seven: Form Of Class SB Certificate Transferor Certificate
(Rule 144A To Regulation S)
Exhibit Eight: Form Of Class SB Certificate Transferee Certificate
This is a Series Supplement, dated as of May 1, 2007 (the "Series Supplement"), to
the Standard Terms of Pooling and Servicing Agreement, dated as of May 1, 2007 and attached
as Exhibit Three hereto (the "Standard Terms" and, together with this Series Supplement, the
"Pooling and Servicing Agreement" or "Agreement"), among RESIDENTIAL ACCREDIT LOANS, INC.,
as the company (together with its permitted successors and assigns, the "Company"),
RESIDENTIAL FUNDING COMPANY, LLC, as master servicer (together with its permitted successors
and assigns, the "Master Servicer"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, as trustee
and supplemental interest trust trustee (together with its permitted successors and assigns,
the "Trustee" and the "Supplemental Interest Trust Trustee," respectively).
PRELIMINARY STATEMENT:
The Company intends to sell mortgage asset-backed pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Mortgage Loans.
The terms and provisions of the Standard Terms are hereby incorporated by reference
herein as though set forth in full herein. If any term or provision contained herein shall
conflict with or be inconsistent with any provision contained in the Standard Terms, the
terms and provisions of this Series Supplement shall govern. All capitalized terms not
otherwise defined herein shall have the meanings set forth in the Standard Terms. The
Pooling and Servicing Agreement shall be dated as of the date of this Series Supplement.
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
(exclusive of the Certificate Supplemental Interest Trust Account, the Certificate Swap
Agreement, the Class A-1-A Supplemental Trust Account and the Swap Agreements) 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-1 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. Component I of the Class R-1 Certificates will not bear interest or have a Certificate
Principal Balance. 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.
UNCERTIFICATED REMIC I INITIAL UNCERTIFICATED REMIC I
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
I-1-A Variable(1) $3,979,710.065
I-2-A Variable(1) $3,910,877.055
I-3-A Variable(1) $3,840,673.550
I-4-A Variable(1) $3,769,230.425
I-5-A Variable(1) $3,696,367.830
I-6-A Variable(1) $3,622,939.150
I-7-A Variable(1) $3,553,168.210
I-8-A Variable(1) $3,477,705.235
I-9-A Variable(1) $3,401,087.550
I-10-A Variable(1) $3,323,596.815
I-11-A Variable(1) $3,246,019.475
I-12-A Variable(1) $3,167,717.505
I-13-A Variable(1) $3,136,708.565
I-14-A Variable(1) $3,055,098.945
I-15-A Variable(1) $2,969,397.095
I-16-A Variable(1) $2,883,562.985
I-17-A Variable(1) $2,796,156.835
I-18-A Variable(1) $2,709,878.710
I-19-A Variable(1) $2,624,421.665
I-20-A Variable(1) $2,531,951.365
I-21-A Variable(1) $2,442,355.545
I-22-A Variable(1) $2,350,889.805
I-23-A Variable(1) $2,262,975.810
I-24-A Variable(1) $2,177,732.430
I-25-A Variable(1) $2,148,451.960
I-26-A Variable(1) $2,067,246.590
I-27-A Variable(1) $1,989,769.605
I-28-A Variable(1) $1,913,659.330
I-29-A Variable(1) $1,840,668.710
I-30-A Variable(1) $1,769,482.215
I-31-A Variable(1) $1,698,344.065
I-32-A Variable(1) $1,628,026.620
I-33-A Variable(1) $1,550,253.285
I-34-A Variable(1) $1,482,227.970
I-35-A Variable(1) $1,412,351.580
I-36-A Variable(1) $1,350,231.730
I-37-A Variable(1) $1,007,385.745
I-38-A Variable(1) $1,417,365.540
I-39-A Variable(1) $1,344,549.680
I-40-A Variable(1) $1,279,263.015
I-41-A Variable(1) $1,212,244.045
I-42-A Variable(1) $1,153,631.995
I-43-A Variable(1) $1,093,363.255
I-44-A Variable(1) $1,035,380.835
I-45-A Variable(1) $977,398.620
I-46-A Variable(1) $921,524.385
I-47-A Variable(1) $872,715.365
I-48-A Variable(1) $824,152.415
I-49-A Variable(1) $782,197.560
I-50-A Variable(1) $736,399.340
I-51-A Variable(1) $695,004.750
I-52-A Variable(1) $655,945.820
I-53-A Variable(1) $619,045.820
I-54-A Variable(1) $590,043.130
I-55-A Variable(1) $559,333.040
I-56-A Variable(1) $530,399.350
I-57-A Variable(1) $500,287.795
I-58-A Variable(1) $460,191.620
I-59-A Variable(1) $425,319.360
I-60-A Variable(1) $390,504.855
I-61-A Variable(1) $358,305.135
I-62-A Variable(1) $331,954.715
I-63-A Variable(1) $309,832.630
I-64-A Variable(1) $290,679.605
I-65-A Variable(1) $272,091.045
I-66-A Variable(1) $254,233.920
I-67-A Variable(1) $238,847.575
I-68-A Variable(1) $223,226.835
I-69-A Variable(1) $208,817.190
I-70-A Variable(1) $195,387.720
I-71-A Variable(1) $174,605.595
I-72-A Variable(1) $169,846.320
I-73-A Variable(1) $153,345.075
I-74-A Variable(1) $145,288.460
I-75-A Variable(1) $137,491.930
I-76-A Variable(1) $129,280.965
I-77-A Variable(1) $117,875.145
I-78-A Variable(1) $110,338.095
I-79-A Variable(1) $104,763.295
I-80-A Variable(1) $99,855.765
I-81-A Variable(1) $95,018.375
I-82-A Variable(1) $89,981.770
I-83-A Variable(1) $82,781.640
I-84-A Variable(1) $1,504,067.585
I-1-B Variable(1) 3,979,710.065
I-2-B Variable(1) 3,910,877.055
I-3-B Variable(1) 3,840,673.550
I-4-B Variable(1) $3,769,230.425
I-5-B Variable(1) $3,696,367.830
I-6-B Variable(1) $3,622,939.150
I-7-B Variable(1) $3,553,168.210
I-8-B Variable(1) $3,477,705.235
I-9-B Variable(1) $3,401,087.550
I-10-B Variable(1) $3,323,596.815
I-11-B Variable(1) $3,246,019.475
I-12-B Variable(1) $3,167,717.505
I-13-B Variable(1) $3,136,708.565
I-14-B Variable(1) $3,055,098.945
I-15-B Variable(1) $2,969,397.095
I-16-B Variable(1) $2,883,562.985
I-17-B Variable(1) $2,796,156.835
I-18-B Variable(1) $2,709,878.710
I-19-B Variable(1) $2,624,421.665
I-20-B Variable(1) $2,531,951.365
I-21-B Variable(1) $2,442,355.545
I-22-B Variable(1) $2,350,889.805
I-23-B Variable(1) $2,262,975.810
I-24-B Variable(1) $2,177,732.430
I-25-B Variable(1) $2,148,451.960
I-26-B Variable(1) $2,067,246.590
I-27-B Variable(1) $1,989,769.605
I-28-B Variable(1) $1,913,659.330
I-29-B Variable(1) $1,840,668.710
I-30-B Variable(1) $1,769,482.215
I-31-B Variable(1) $1,698,344.065
I-32-B Variable(1) $1,628,026.620
I-33-B Variable(1) $1,550,253.285
I-34-B Variable(1) $1,482,227.970
I-35-B Variable(1) $1,412,351.580
I-36-B Variable(1) $1,350,231.730
I-37-B Variable(1) $1,007,385.745
I-38-B Variable(1) $1,417,365.540
I-39-B Variable(1) $1,344,549.680
I-40-B Variable(1) $1,279,263.015
I-41-B Variable(1) $1,212,244.045
I-42-B Variable(1) $1,153,631.995
I-43-B Variable(1) $1,093,363.255
I-44-B Variable(1) $1,035,380.835
I-45-B Variable(1) $977,398.620
I-46-B Variable(1) $921,524.385
I-47-B Variable(1) $872,715.365
I-48-B Variable(1) $824,152.415
I-49-B Variable(1) $782,197.560
I-50-B Variable(1) $736,399.340
I-51-B Variable(1) $695,004.750
I-52-B Variable(1) $655,945.820
I-53-B Variable(1) $619,045.820
I-54-B Variable(1) $590,043.130
I-55-B Variable(1) $559,333.040
I-56-B Variable(1) $530,399.350
I-57-B Variable(1) $500,287.795
I-58-B Variable(1) $460,191.620
I-59-B Variable(1) $425,319.360
I-60-B Variable(1) $390,504.855
I-61-B Variable(1) $358,305.135
I-62-B Variable(1) $331,954.715
I-63-B Variable(1) $309,832.630
I-64-B Variable(1) $290,679.605
I-65-B Variable(1) $272,091.045
I-66-B Variable(1) $254,233.920
I-67-B Variable(1) $238,847.575
I-68-B Variable(1) $223,226.835
I-69-B Variable(1) $208,817.190
I-70-B Variable(1) $195,387.720
I-71-B Variable(1) $174,605.595
I-72-B Variable(1) $169,846.320
I-73-B Variable(1) $153,345.075
I-74-B Variable(1) $145,288.460
I-75-B Variable(1) $137,491.930
I-76-B Variable(1) $129,280.965
I-77-B Variable(1) $117,875.145
I-78-B Variable(1) $110,338.095
I-79-B Variable(1) $104,763.295
I-80-B Variable(1) $99,855.765
I-81-B Variable(1) $95,018.375
I-82-B Variable(1) $89,981.770
I-83-B Variable(1) $82,781.640
I-84-B Variable(1) $1,504,067.585
A-I Variable(1) $2,209,524.09
_______________
(1) Calculated as provided in the definition of Uncertificated REMIC I Pass-Through Rate.
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 Interests as 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-1 Certificates will represent the sole Class of "residual
interests" in REMIC II for purposes of the REMIC Provisions under federal income tax law.
Component II of the Class R-1 Certificates will not bear interest or have a Certificate
Principal Balance. 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.
UNCERTIFICATED REMIC II INITIAL UNCERTIFICATED REMIC II
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
LT1 Variable(1) $245,495,115.39
LT2 Variable(1) $8,698.40
LT3 Variable(1) $15,855.15
LT4 Variable(1) $15,855.15
LT-IO Variable(1) (2)
____________
(1) Calculated as provided in the definition of Uncertificated REMIC II Pass-Through Rate.
(2) REMIC II Regular Interest LT-IO will not have an Uncertificated Principal Balance but
will accrue interest on its uncertificated notional amount calculated in accordance
with the definition of "Uncertificated Notional Amount" herein.
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-1 Certificates will represent the sole Class of "residual interests" in
REMIC III for purposes of the REMIC Provisions under federal income tax law. Component III
of the Class R-1 Certificates will not bear interest or have a Certificate Principal
Balance. The following table irrevocably sets forth the designation, Pass-Through Rate,
aggregate Initial Certificate Principal Balance, certain features, Maturity Date, initial
ratings and minimum denominations for each Class of Certificates that evidence "regular
interests" in REMIC III and REMIC III Regular Interests SB-IO, SB-PO and IO (the "REMIC III
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 III Regular
Interest shall be the Maturity Date. REMIC III Regular Interests SB-IO, SB-PO and IO will
not be certificated.
AGGREGATE
INITIAL
CERTIFICATE
PASS-THROUGH PRINCIPAL MATURITY XXXXX'X / MINIMUM
DESIGNATION TYPE RATE BALANCE FEATURES DATE S&P DENOMINATIONS
Senior/ Super Senior
Adjustable / Adjustable Rate
Class A-1-A Regular(1) Rate(2)(3) $130,000,000 June 25, 2037 Aaa / AAA $100,000.00
Senior/ Super Senior
Regular(1) Adjustable / Adjustable Rate Aaa / AAA $100,000.00
Class A-1-B Rate(2)(3) $76,620,000 June 25, 2037
Senior/ Senior
Regular(1) Adjustable Support / Adjustable Aaa / AAA $100,000.00
Class A-2 Rate(2)(3) $22,955,000 Rate June 25, 2037
Class M-1 Regular(1) Adjustable Mezzanine/Adjustable Aa2 / AA $100,000.00
Rate(2)(3) $6,750,000 Rate June 25, 2037
Class M-2 Regular(1) Adjustable Mezzanine/Adjustable A2 / AA- $100,000.00
Rate(2)(3) $3,805,000 Rate June 25, 2037
Class M-3 Regular(1) Adjustable Mezzanine/Adjustable Baa2 / A $250,000.00
Rate(2)(3) $2,090,000 Rate June 25, 2037
Class M-4 Regular(1) Adjustable Mezzanine/Adjustable Baa3/BBB+ $250,000.00
Rate(2)(3) $1,230,000 Rate June 25, 2037
SB-IO Regular (4) (4) N/A Subordinate/Interest N/R N/A
Only June 25, 2037
SB-PO Regular (5) N/A Subordinate/Principal N/R N/A
$2,085,524.09 Only June 25, 2037
IO Regular (6) (7) Interest Only N/R N/R
(1) This Class of Certificates represents ownership of a REMIC III Regular Interest
together with (i) certain rights to payments to be made from amounts received under the
Certificate Swap Agreement which will be deemed made for federal income tax purposes outside
of REMIC III by the holders of the Class SB Certificates as the owners of the Certificate
Swap Agreement (ii) an obligation to pay the Class IO Distribution Amount (as defined in
Section 4.09(f)) and (iii) in the case of the Class A-1-A Certificates, certain rights and
obligations in respect of the Class A-1-A Swap Agreement which will not be part of their
ownership of the REMIC III Regular Interest ownership of which is represented by such
Certificates. Any amount distributed on this Class of Certificates on any Distribution Date
in excess of the amount distributable on the related REMIC III Regular Interest on such
Distribution Date shall be treated for federal income tax purposes as having been paid from
the Certificate Supplemental Interest Trust Account and, in the case of the Class A-1-A
Certificates, paid from the Class A-1-A Supplemental Interest Trust Account, and any amount
distributable on such REMIC III Regular Interest on such Distribution Date in excess of the
amount distributable on such Class of Certificates on such Distribution Date shall be
treated as having been paid to the Certificate Supplemental Interest Trust Account and, in
the case of the Class A-1-A Certificates, paid to the Class A-1-A Supplemental Interest
Trust Account, all pursuant to and as further provided in Sections 4.09 and 4.11 hereof.
(2) The Class A Certificates and Class M Certificates, will accrue interest at a per
annum rate equal to the least of (i) LIBOR plus the applicable Margin, (ii) the Net WAC Cap
Rate and (iii) 11.00% per annum. Notwithstanding the foregoing, for federal income tax
purposes, (i) the REMIC III Regular Interest, ownership of which is represented by the Class
A-1-A Certificates, will accrue at a per annum rate equal to the least of (i) LIBOR plus the
applicable Margin plus the Class A-1-A Swap Fee Amount (expressed as a per annum rate based
on the Certificate Principal Balance of the Class A-1-A Certificates immediately prior to
the applicable Distribution Date), (ii) the REMIC II Net WAC Rate and (iii) 11.00% per annum
and (ii) the REMIC III Regular Interests, ownership of which is represented by the other
Class A and Class M Certificates, will accrue interest at a per annum rate equal to the
least of (i) LIBOR plus the applicable Margin, (ii) the REMIC II Net WAC Rate and (iii)
11.00% per annum.
(3) The Class A Certificates and Class M Certificates will also entitle their holders to
receive certain payments from the holders of the Class SB Certificates from amounts to which
the REMIC III Regular Interests the ownership of which is represented by the Class SB
Certificates are entitled and from amounts received under the Certificate Swap Agreement
and, in the case of the Class A-1-A Certificates, under the Class A-1-A Swap Agreement,
which will not be a part of their ownership of the REMIC III Regular Interests.
(4) REMIC III Regular Interest SB-IO shall have no entitlement to principal, and shall be
entitled to distributions of interest subject to the terms and conditions hereof, in an
aggregate amount equal to the aggregate interest distributable with respect to the Class SB
Certificates pursuant to the terms and conditions hereof.
(5) REMIC III Regular Interest SB-PO shall have no entitlement to interest, and shall be
entitled to distributions of principal subject to the terms and conditions hereof, in
aggregate amount equal to the initial Overcollateralization Amount pursuant to the terms and
conditions hereof.
(6) For federal income tax purposes, REMIC III Regular Interest IO will not have a Pass
Through Rate, but will be entitled to 100% of the amounts distributed on REMIC II Regular
Interest LT-IO.
(7) For federal income tax purposes, REMIC III Regular Interest IO will not have an
Uncertificated Principal Balance, but will have a notional amount equal to the
Uncertificated Notional Amount of REMIC II Regular Interest LT-IO.
REMIC IV
As provided herein, the REMIC Administrator will make an election to treat the
segregated pool of assets consisting of REMIC III Regular Interests SB-IO, SB-PO and IO as a
REMIC for federal income tax purposes, and such segregated pool of assets will be designated
as REMIC IV. The Class R-X Certificates will represent the sole Class of "residual
interests" in REMIC IV for purposes of the REMIC Provisions under federal income tax law.
The Class R-X Certificates will not bear interest or have a Certificate Principal Balance.
The following table irrevocably sets forth the designation, Pass-Through Rate, aggregate
Initial Certificate Principal Balance, certain features and Maturity Date for the Class SB
Certificates which represent the two "regular interests" in REMIC IV designated REMIC IV
Regular Interest SB and REMIC IV Regular Interest IO (the "REMIC IV Regular Interests").
The "latest possible maturity date" (determined solely for purposes of satisfying Treasury
Regulation Section 1.860G-1(a)(4)(iii)) for the REMIC IV Regular Interests shall be the
Maturity Date.
AGGREGATE
INITIAL
CERTIFICATE
PASS-THROUGH PRINCIPAL MATURITY
DESIGNATION TYPE RATE BALANCE FEATURES DATE
Class SB(1) Regular (1) (1) $2,085,524.09 Subordinate June 25, 2037
----------------------------------------------------------------------------------------------
(1) The Class SB Certificates will accrue interest as described in the definition of Accrued
Certificate Interest.
REMIC IV Regular Interest IO will be held as an asset of the Certificate
Supplemental Interest Trust Account established by the Trustee and will be treated for
federal income tax purposes as owned by the holders of the Class SB Certificates.
REMIC IV Regular Interest SB will not have a Pass-Through Rate, but will be
entitled to 100% of all amounts distributed or deemed distributed on REMIC III Regular
Interests SB-IO and SB-PO. REMIC IV Regular Interest IO will not have a Pass-Through Rate,
but will be entitled to 100% of all amounts distributed or deemed distributed on REMIC III
Regular Interest IO. The rights of the holders of the Class SB Certificates to payments
under each Swap Agreement shall be outside and apart from their rights with respect to the
REMIC IV Regular Interests.
The Mortgage Loans have an aggregate Cut-off Date Principal Balance equal to
$245,535,524.09. The Mortgage Loans are hybrid adjustable-rate mortgage loans having terms
to maturity at origination or modification of generally not more than 30 years.
In consideration of the mutual agreements herein contained, the Company, the Master
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 and each
Class of Class A Certificates and Class M Certificates, interest accrued during the related
Interest Accrual Period on the Certificate Principal Balance thereof immediately prior to
such Distribution Date at the related Pass-Through Rate for that Distribution Date.
The amount of Accrued Certificate Interest on each Class of Class A Certificates and
Class M Certificates shall be reduced by the amount of Prepayment Interest Shortfalls on the
Mortgage Loans during the prior calendar month to the extent not covered by Compensating
Interest pursuant to Section 3.16 and by Relief Act Shortfalls on the Mortgage Loans during
the related Due Period. All such reductions with respect to the Mortgage Loans will be
allocated among the Class A Certificates and Class M Certificates in proportion to the
amount of Accrued Certificate Interest payable on such Certificates on such Distribution
Date absent such reductions.
Accrued Certificate Interest with respect to any Class of Class A and Class M
Certificates for any Distribution Date shall further be reduced by the interest portion of
Realized Losses allocated to any Class of Class A and Class M Certificates pursuant to
Section 4.05.
Accrued Certificate Interest with respect to the Class A Certificates and Class M
Certificates shall accrue on the basis of a 360-day year and the actual number of days in
the related Interest Accrual Period.
With respect to each Distribution Date and the Class SB Certificates, interest
accrued during the related Interest Accrual Period at the related Pass-Through Rate on the
Notional Amount as specified in the definition of Pass-Through Rate, immediately prior to
such Distribution Date, reduced by any interest shortfalls with respect to the Mortgage
Loans, including Prepayment Interest Shortfalls to the extent not covered by Compensating
Interest pursuant to Section 3.16 or by Excess Cash Flow pursuant to Section 4.02(c)(iii)
and (iv). Accrued Certificate Interest on the Class SB Certificates shall accrue on the
basis of a 360-day year and the actual number of days in the related Interest Accrual Period.
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.
Affected Party: As defined in the Certificate Swap Agreement or the Class A-1-A Swap
Agreement, as applicable.
Available Distribution Amount: As to any Distribution Date, 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, including any
Subsequent Recoveries, 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 Certificate Account Deposit Date, (iii) any amount deposited in
the Certificate Account on the related Certificate Account Deposit Date pursuant to the
second paragraph of Section 3.12(a), (iv) any amount deposited in the Certificate Account
pursuant to Section 4.07 or Section 9.01, (v) any amount that the Master Servicer is not
permitted to withdraw from the Custodial Account or the Certificate Account pursuant to
Section 3.16(e), (vi) any amount received by the Trustee pursuant to the Surety Bond in
respect of such Distribution Date and (vii) the proceeds of any Pledged Assets received by
the Master Servicer, reduced by (b) the sum as of the close of business on the immediately
preceding Determination Date of (v) any payments or collections consisting of Prepayment
Charges on the Mortgage Loans that were received during the related Prepayment Period; (w)
aggregate Foreclosure Profits, (x) the Amount Held for Future Distribution, (y) amounts
permitted to be withdrawn by the Master Servicer from the Custodial Account in respect of
the Mortgage Loans pursuant to clauses (ii)-(x), inclusive, of Section 3.10(a), and (z) any
Net Swap Payments and Swap Termination Payments not due to a Swap Counterparty Trigger Event
required to be made to the Certificate Swap Counterparty for such Distribution Date and,
unless the Class A-1-A Swap Agreement is terminated due to a Swap Counterparty Trigger
Event, the Class A-1-A Swap Fee Amount.
Basis Risk Shortfall: With respect to each Class of the Class A Certificates and
Class M Certificates and any Distribution Date, the sum of (a) with respect to any
Distribution Date on which the Net WAC Cap Rate is used to determine the Pass-Through Rate
of such Class, an amount equal to the excess, if any, of (x) Accrued Certificate Interest
for such Class calculated at a per annum rate equal to LIBOR plus the related Margin for
such Distribution Date (but not more than 11.00% per annum, except for the Class A-1-A
Certificates so long as the Class A-1-A Swap Agreement has not been terminated), over
(y) Accrued Certificate Interest for such Class calculated using the Net WAC Cap Rate,
(b) any shortfalls for such Class calculated pursuant to clause (a) above remaining unpaid
from prior Distribution Dates, and (c) interest on the amount in clause (b) from the
Distribution Date on which such amount was incurred at a per annum rate equal to the related
Pass-Through Rate.
Book-Entry Certificate: The Class A and Class M Certificates.
Certificate: Any Class A, Class M, Class SB or Class R Certificate.
Certificate Account: The separate account or accounts created and maintained
pursuant to Section 4.01 of the Standard Terms, which shall be entitled "DEUTSCHE BANK TRUST
COMPANY AMERICAS, as trustee, in trust for the registered holders of Residential Accredit
Loans, Inc., Mortgage Asset-Backed Pass-Through Certificates, Series 2007-QA4" and which
must be an Eligible Account.
Certificate Principal Balance: With respect to any Class A Certificate or Class M
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 (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(c) and (y) in the case of any Class of Class M Certificates, 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, that with respect to any
Distribution Date, the Certificate Principal Balance of the Class A Certificates and Class M
Certificates will be increased, in each case to the extent Realized Losses were previously
allocated thereto and remain unreimbursed, in the following order of priority: first to the
Class A Certificates, pro rata, and then to the Class M-1, Class M-2, Class M-3 and Class
M-4 Certificates, in that order, but only to the extent of Subsequent Recoveries received
during the preceding calendar month.
Certificate Policy: None.
Certificate Supplemental Interest Trust Account: The separate trust account created
and maintained by the Supplemental Interest Trust Trustee pursuant to Section 4.09(a)
hereof, which shall be entitled "Deutsche Bank Trust Company Americas, as supplemental
interest trust trustee, in trust for Class SB Certificateholders" and must be an Eligible
Account.
Certificate Swap Agreement: The interest rate Certificate Swap Agreement between the
Certificate Swap Counterparty and the Supplemental Interest Trust Trustee, on behalf of the
Supplemental Interest Trust, which agreement provides for Net Swap Payments and Swap
Termination Payments to be paid, as provided therein, together with any schedules,
confirmations or other agreements relating thereto, attached hereto as Exhibit Four-A.
Certificate Swap Agreement Collateral Account: The separate account created and
maintained pursuant to Section 4.10(a) hereof, which shall be entitled "DEUTSCHE BANK TRUST
COMPANY AMERICAS, as trustee, in trust for the Credit Suisse International" and which must
be an Eligible Account.
Certificate Swap Agreement Notional Balance: As to the Certificate Swap Agreement and
each Floating Rate Payer Payment Date and Fixed Rate Payer Payment Date (each as defined in
the Certificate Swap Agreement) the amount set forth on Schedule I to the Certificate Swap
Agreement for such Floating Rate Payer Payment Date and Fixed Rate Payer Payment Date.
Certificate Swap Counterparty: The Certificate Swap Counterparty under the
Certificate Swap Agreement either (a) entitled to receive payments from the Supplemental
Interest Trust Trustee from amounts payable by the Supplemental Interest Trust under this
Agreement or (b) required to make payments to the Supplemental Interest Trust Trustee for
payment to the Supplemental Interest Trust, in either case pursuant to the terms of the
Certificate Swap Agreement, and any successor in interest or assign. Initially, the
Certificate Swap Counterparty shall be Credit Suisse International.
Class A Certificate: Any one of the Class A-1-A, Class A-1-B or Class A-2
Certificates executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed to the Standard Terms as Exhibit A, senior to the Class M
Certificates, Class SB Certificates and Class R Certificates with respect to distributions
and the allocation of Realized Losses as set forth in Section 4.05, and evidencing (i) an
interest designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions, (ii) the right to receive payments under the Certificate Swap Agreement, the
Class A-1-A Swap Agreement and the SB-AM Swap Agreement, in respect of Basis Risk
Shortfalls, (iii) an obligation to pay the Class IO Distribution Amount and (iv) solely with
respect to the Class A-1-A Certificates, certain rights and obligations in respect of the
Class SB-A1A Swap Agreement.
Class A Principal Distribution Amount: With respect to any Distribution Date (i)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect
for that Distribution Date, the Principal Distribution Amount for that Distribution Date or
(ii) on or after the Stepdown Date if a Trigger Event is not in effect for that Distribution
Date, the lesser of:
(i) the Principal Distribution Amount for that Distribution Date; and
(ii) the excess, if any, of (A) the aggregate Certificate Principal Balance of the
Class A Certificates immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and (2) the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to distributions to be
made on that Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to be made
on that Distribution Date, over the Overcollateralization Floor.
Class A-1-A Certificate: The Class A-1-A Certificates, executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed to the Standard
Terms as Exhibit A.
Class A-1-A Margin: With respect to any Distribution Date prior to the second
Distribution Date after the first possible Optional Termination Date, 0.150% per annum, and
on any Distribution Date on or after the second Distribution Date after the first possible
Optional Termination Date, 0.300% per annum.
Class A-1-A Supplemental Interest Trust Account: The separate trust account created
and maintained by the Supplemental Interest Trust Trustee pursuant to Section 4.11(a)
hereof, which shall be entitled "Deutsche Bank Trust Company Americas, as supplemental
interest trust trustee, in trust for Class A-1-A Certificateholders" and must be an Eligible
Account.
Class A-1-A Supplemental Interest Trust Amount: With respect to any Distribution
Date on which there are Swap Termination Payments in the Class A-1-A Supplemental Interest
Trust Account and the holders of the Class A-1-A Certificates were paid a Pass-Through Rate
on such Distribution Date that was less than LIBOR plus the Class A-1-A Margin for such
Distribution Date, an amount equal to the lesser of (i) amounts on deposit in the Class
A-1-A Supplemental Interest Trust Account on that Distribution Date and (ii) the excess, if
any, of (a) LIBOR for such Distribution Date plus the Class A-1-A Margin over (b) the
related Pass-Through Rate multiplied by the Certificate Principal Balance of the Class A-1-A
Certificates as of the day immediately prior to the related Distribution Date multiplied by
the actual number of days in the related Interest Accrual Period divided by 360, plus any
amounts payable to the holders of the Class A-1-A Certificates pursuant to Section
4.02(c)(v) hereof.
Class A-1-A Swap Agreement: The interest rate Class A-1-A Swap Agreement between the
Class A-1-A Swap Counterparty and the Supplemental Interest Trust Trustee, on behalf of the
Supplemental Interest Trust, for the benefit of the holders of the Class A-1-A Certificates,
which agreement provides for Net Swap Payments and Swap Termination Payments to be paid, as
provided therein, together with any schedules, confirmations or other agreements relating
thereto, attached hereto as Exhibit Four-B.
Class A-1-A Swap Agreement Collateral Account: The separate account created and
maintained pursuant to Section 4.12(a) hereof, which shall be entitled "DEUTSCHE BANK TRUST
COMPANY AMERICAS, as trustee, in trust for the Credit Suisse International" and which must
be an Eligible Account.
Class A-1-A Swap Agreement Termination Date: With respect to the Class A-1-A Swap
Agreement, the earlier of the Distribution Date in June 2037 and the Distribution Date upon
which the Certificate Principal Balance of the Class A-1-A Certificates has been reduced to
zero, unless the Class A-1-A Swap Agreement is terminated earlier in accordance with its
terms.
Class A-1-A Swap Counterparty: The Class A-1-A Swap Counterparty under the Class
A-1-A Swap Agreement either (a) entitled to receive payments from the Supplemental Interest
Trust Trustee from amounts payable by the Supplemental Interest Trust under this Agreement
or (b) required to make payments to the Supplemental Interest Trust Trustee for payment to
the Supplemental Interest Trust, in either case pursuant to the terms of the Class A-1-A
Swap Agreement, and any successor in interest or assign. Initially, the Class A-1-A Swap
Counterparty shall be Credit Suisse International.
Class A-1-A Swap Event: The occurrence of the all of the following: the Class A-1-A
Swap Agreement has been terminated, no successor to the Class A-1-A Swap Counterparty was
obtained and the Class A-1-A Swap Counterparty has paid a Swap Termination Payment to the
Supplemental Interest Trust Trustee on behalf of the Class A-1-A Supplemental Interest Trust
Account.
Class A-1-A Swap Fee Amount: An amount equal to the product of (i) a per annum rate
of 0.065% before the second Distribution Date after the first possible Optional Termination
Date or a per annum rate of 0.130% on or after the second Distribution Date after the first
possible Optional Termination Date, (ii) the Class A 1 A Swap Notional Amount, and (iii) a
fraction, the numerator of which is the actual number of days elapsed in the related
calculation period (as described in the Class A-1-A Swap Agreement) and the denominator of
which is 360.
Class A-1-A Swap Notional Amount: With respect to each Distribution Date, a notional
amount equal to the lesser of (I) the Certificate Principal Balance of the Class A-1-A
Certificates immediately prior to that Distribution Date and (II) the aggregate Stated
Principal Balance of the Mortgage Loans as of the Due Date in the prior calendar month
(after giving effect to Principal Prepayments received in the Prepayment Period related to
that prior Due Date).
Class A-1-A Uncapped Pass-Through Amount: An amount in respect of each Interest
Accrual Period equal to the product of (a) LIBOR for such Interest Accrual Period plus the
related Margin on the Class A-1-A Certificates for that Distribution Date, (b) the Class
A-1-A Swap Notional Amount and (c) the actual number of days in the related calculation
period as provided in the Class A-1-A Swap Agreement (calculated on the basis of the actual
number of days) divided by 360.
Class A-1-B Certificate: The Class A-1-B Certificates, executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed to the Standard
Terms as Exhibit A.
Class A-1-B Margin: With respect to any Distribution Date prior to the second
Distribution Date after the first possible Optional Termination Date, 0.210% per annum, and
on any Distribution Date on or after the second Distribution Date after the first possible
Optional Termination Date, 0.420% per annum.
Class A-2 Certificate: The Class A-2 Certificates, executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed to the Standard
Terms as Exhibit A.
Class A-2 Margin: With respect to any Distribution Date prior to the second
Distribution Date after the first possible Optional Termination Date, 0.300% per annum, and
on any Distribution Date on or after the second Distribution Date after the first possible
Optional Termination Date, 0.600% per annum.
Class A-P Certificates: None.
Class B Certificates: None.
Class IO Distribution Amount: As defined in Section 4.09(f).
Class M Certificates: Collectively, the Class M-1, Class M-2, Class M-3 and Class M-4
Certificates.
Class M-1 Certificate: Any one of the Class M-1 Certificates executed by the Trustee
and authenticated by the Certificate Registrar substantially in the form annexed to the
Standard Terms as Exhibit B, senior to the Class M-2, Class M-3, Class M-4, Class SB and
Class R Certificates with respect to distributions and the allocation of Realized Losses as
set forth in Section 4.05, and evidencing (i) an interest designated as a "regular interest"
in REMIC III for purposes of the REMIC Provisions, (ii) the right to receive payments under
the Certificate Swap Agreement and the SB-AM Swap Agreement, in respect of Basis Risk
Shortfalls and (iiii) an obligation to pay the Class IO Distribution Amount.
Class M-1 Margin: With respect to any Distribution Date prior to the second
Distribution Date after the first possible Optional Termination Date, 0.450% per annum, and
on any Distribution Date on or after the second Distribution Date after the first possible
Optional Termination Date, 0.675% per annum.
Class M-1 Principal Distribution Amount: With respect to any Distribution Date (i)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect
for that Distribution Date, the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution Amount or (ii) on
or after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date,
the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount for that Distribution Date) and (2) the Certificate Principal
Balance of the Class M-1 Certificates immediately prior to that Distribution Date over
(B) the lesser of (x) the product of (1) the applicable Subordination Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the Overcollateralization Floor.
Class M-2 Certificate: Any one of the Class M-2 Certificates executed by the Trustee
and authenticated by the Certificate Registrar substantially in the form annexed to the
Standard Terms as Exhibit B, senior to the Class M-3, Class M-4, Class M-5, Class SB and
Class R Certificates with respect to distributions and the allocation of Realized Losses as
set forth in Section 4.05, and evidencing (i) an interest designated as a "regular interest"
in REMIC III for purposes of the REMIC Provisions, (ii) the right to receive payments under
the Certificate Swap Agreement and the SB-AM Swap Agreement, in respect of Basis Risk
Shortfalls and (iii) an obligation to pay the Class IO Distribution Amount.
Class M-2 Margin: With respect to any Distribution Date prior to the second
Distribution Date after the first possible Optional Termination Date, 1.250% per annum, and
on any Distribution Date on or after the second Distribution Date after the first possible
Optional Termination Date,1.875% per annum.
Class M-2 Principal Distribution Amount: With respect to any Distribution Date (i)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect
for that Distribution Date, the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution Amount and
Class M-1 Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount and the Class M-1 Principal
Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A Certificates and Class M-1 Certificates (after taking into account
the payment of the Class A Principal Distribution Amount and the Class M-1 Principal
Distribution Amount for that Distribution Date) and (2) the Certificate Principal Balance of
the Class M-2 Certificates immediately prior to that Distribution Date over (B) the lesser
of (x) the product of (1) the applicable Subordination Percentage and (2) the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to distributions to be
made on that Distribution Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be made on that
Distribution Date, over the Overcollateralization Floor.
Class M-3 Certificate: Any one of the Class M-3 Certificates executed by the Trustee
and authenticated by the Certificate Registrar substantially in the form annexed to the
Standard Terms as Exhibit B, senior to the Class M-4, Class M-5, Class SB Certificates and
Class R Certificates with respect to distributions and the allocation of Realized Losses as
set forth in Section 4.05, and evidencing (i) an interest designated as a "regular interest"
in REMIC III for purposes of the REMIC Provisions, (ii) the right to receive payments under
the Certificate Swap Agreement and the SB-AM Swap Agreement, in respect of Basis Risk
Shortfalls and (iii) an obligation to pay the Class IO Distribution Amount.
Class M-3 Margin: With respect to any Distribution Date prior to the second
Distribution Date after the first possible Optional Termination Date, 1.250% per annum, and
on any Distribution Date on or after the second Distribution Date after the first possible
Optional Termination Date, 1.875% per annum.
Class M-3 Principal Distribution Amount: With respect to any Distribution Date (i)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect
for that Distribution Date, the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution Amount, Class M-1
Principal Distribution Amount and Class M-2 Principal Distribution Amount or (ii) on or
after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the
lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount, Class M-1 Principal Distribution
Amount and Class M-2 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A, Class M-1 and Class M-2 Certificates (after taking into account the
payment of the Class A Principal Distribution Amount, the Class M-1 Principal Distribution
Amount and the Class M-2 Principal Distribution Amount for that Distribution Date) and
(2) the Certificate Principal Balance of the Class M-3 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date and (y) the excess, if any, of
the aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the Overcollateralization Floor.
Class M-4 Certificate: Any one of the Class M-4 Certificates executed by the Trustee
and authenticated by the Certificate Registrar substantially in the form annexed to the
Standard Terms as Exhibit B, senior to the Class M-5, Class SB Certificates and Class R
Certificates with respect to distributions and the allocation of Realized Losses as set
forth in Section 4.05, and evidencing (i) an interest designated as a "regular interest" in
REMIC III for purposes of the REMIC Provisions, (ii) the right to receive payments under the
Certificate Swap Agreement and the SB-AM Swap Agreement, in respect of Basis Risk Shortfalls
and (iii) an obligation to pay the Class IO Distribution Amount.
Class M-4 Margin: With respect to any Distribution Date prior to the second
Distribution Date after the first possible Optional Termination Date, 1.250% per annum, and
on any Distribution Date on or after the second Distribution Date after the first possible
Optional Termination Date, 1.875% per annum.
Class M-4 Principal Distribution Amount: With respect to any Distribution Date (i)
prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect
for that Distribution Date, the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution Amount, Class M-1
Principal Distribution Amount, Class M-2 Principal Distribution Amount and Class M-3
Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount, Class M-1 Principal Distribution
Amount, Class M-2 Principal Distribution Amount and Class M-3 Principal Distribution Amount;
and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A, Class M-1, Class M-2 and Class M-3 Certificates (after taking into
account the payment of the Class A Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution Amount and the Class M-3 Principal
Distribution Amount for that Distribution Date) and (2) the Certificate Principal Balance of
the Class M-4 Certificates immediately prior to that Distribution Date over (B) the lesser
of (x) the product of (1) the applicable Subordination Percentage and (2) the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to distributions to be
made on that Distribution Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be made on that
Distribution Date, over the Overcollateralization Floor.
Class R Certificate: Any one of the Class R-1 or Class R-X Certificates.
Class R-1 Certificate: Any one of the Class R-1 Certificates executed by the Trustee
and authenticated by the Certificate Registrar substantially in the form annexed to the
Standard Terms 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-1 Certificates is designated as the sole class of "residual
interest" in REMIC I, Component II of the Class R-1 Certificates is designated as the sole
class of "residual interest" in REMIC II and Component III of the Class R-1 Certificates is
designated as the sole class of "residual interest" in REMIC III.
Class R-X Certificate: Any one of the Class R-X Certificates executed by the Trustee
and authenticated by the Certificate Registrar substantially in the form annexed to the
Standard Terms as Exhibit D and evidencing ownership of an interest designated as a
"residual interest" in REMIC IV for purposes of the REMIC Provisions.
Class SB Certificate: Any one of the Class SB Certificates executed by the Trustee
and authenticated by the Certificate Registrar substantially in the form annexed to the
Standard Terms as Exhibit C-II, subordinate to the Class A Certificates and Class M
Certificates with respect to distributions and the allocation of Realized Losses as set
forth in Section 4.05, and evidencing ownership of the REMIC IV Regular Interests for
purposes of the REMIC Provisions, together with certain rights and obligations under the
Swap Agreements.
Clearstream: Clearstream Banking, societe anonyme.
Closing Date: May 30, 2007.
Corporate Trust Office: The principal office of the Trustee at which at any
particular time its corporate trust business with respect to this Agreement shall be
administered, which office at the date of the execution of this instrument is located at
0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000-0000, Attention: Residential Funding
Company, LLC, RALI 2007-QA4.
Custodial File: Any mortgage loan document in the Mortgage File that is required to
be delivered to the Trustee or the Custodian pursuant to Section 2.01(b) of this Agreement.
Cut-off Date Balance: $245,535,524.09.
Cut-off Date: May 1, 2007.
Defaulting Party: As defined in the Certificate Swap Agreement or Class A-1-A Swap
Agreement, as applicable.
Definitive Certificate: Any definitive, fully registered Certificate.
Determination Date: With respect to any Distribution Date, the second Business Day
prior to each Distribution Date.
Discount Net Mortgage Rate: Not applicable.
Due Period: With respect to each Distribution Date, the calendar month in which such
Distribution Date occurs.
Early Termination Date: Shall have the meaning set forth in the Certificate Swap
Agreement or the Class A-1-A Swap Agreement, as applicable. An Early Termination Date under
one Swap Agreement shall not be an Early Termination Date under the other Swap Agreement.
Euroclear: Not applicable.
Excess Bankruptcy Loss: Not applicable.
Excess Cash Flow: With respect to any Distribution Date, an amount equal to the sum
of (A) the excess of (i) the Available Distribution Amount for that Distribution Date over
(ii) the sum of (a) the Interest Distribution Amount for that Distribution Date and (b) the
lesser of (1) the aggregate Certificate Principal Balance of Class A Certificates and Class
M Certificates immediately prior to such Distribution Date and (2) the Principal Remittance
Amount for that Distribution Date to the extent not applied to pay interest on the Class A
Certificates and Class M Certificates on such Distribution Date, (B) the
Overcollateralization Reduction Amount, if any, for that Distribution Date and (C) any Net
Swap Payments received by the Supplemental Interest Trust Trustee under the Certificate Swap
Agreement for that Distribution Date and deposited in the Certificate Supplemental Interest
Trust Account pursuant to Section 4.09(c).
Excess Fraud Loss: Not applicable.
Excess Overcollateralization Amount: With respect to any Distribution Date, the
excess, if any, of (a) the Overcollateralization Amount on such Distribution Date over (b)
the Required Overcollateralization Amount.
Excess Special Hazard Loss: Not applicable.
Excess Subordinate Principal Amount: Not applicable.
Expense Fee Rate: With respect to any Mortgage Loan as of any date of determination,
the sum of the Servicing Fee Rate and the rate per annum at which the Subservicing Fee
accrues.
Global Offered Certificate: Not applicable.
Gross Margin: With respect to each Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and indicated on the Mortgage Loan Schedule attached hereto as the
"NOTE MARGIN," which percentage is added to the related 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.
Index: With respect to any Mortgage Loan and as to any Adjustment Date therefor, the
related index as stated in the related Mortgage Note.
Initial Subordinate Class Percentage: Not applicable.
Interest Accrual Period: (i) With respect to the Distribution Date in June 2007, the
period commencing on the Closing Date and ending on the day immediately preceding the
Distribution Date in June 2007, and with respect to any Distribution Date after the
Distribution Date in June 2007, the period commencing on the Distribution Date in the month
immediately preceding the month in which such Distribution Date occurs and ending on the day
immediately preceding such Distribution Date.
Interest Distribution Amount: For any Distribution Date, the aggregate of the
amounts payable pursuant to Section 4.02(c)(i).
Interest Only Certificates: None.
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 1.02.
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 to by law to be
closed.
LIBOR Certificates: The Class A Certificates and Class M Certificates.
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.
Liquidation Proceeds: As defined in the Standard Terms but excluding Subsequent
Recoveries.
Margin: The Class A-1-A Margin, Class A-1-B Margin, Class A-2 Margin, Class M-1
Margin, Class M-2 Margin, Class M-3 Margin or Class M-4 Margin, as applicable.
Marker Rate: With respect to the Class SB Certificates or REMIC III Regular Interest
SB-IO and any Distribution Date, in relation to the REMIC II Regular Interests LT1, LT2,
LT3, and LT4, a per annum rate equal to two (2) times the weighted average of the
Uncertificated REMIC II Pass-Through Rates for REMIC II Regular Interest LT2 and REMIC II
Regular Interest LT3.
Maturity Date: June 25, 2037, the Distribution Date in the month of the latest
scheduled maturity date of any Mortgage Loan.
Maximum Mortgage Rate: As to any Mortgage Loan, the per annum rate indicated in
Mortgage Loan Schedule hereto attached hereto as the "NOTE CEILING," 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.
Maximum Net Mortgage Rate: As to any Mortgage Loan and any date of determination,
the Maximum Mortgage Rate minus the Expense Fee Rate.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans attached hereto as
Exhibit One ( and 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:
(i) the Mortgage Loan identifying number ("RFC LOAN #");
(ii) the maturity of the Mortgage Note ("MATURITY DATE");
(iii) the Mortgage Rate as of origination ("ORIG RATE");
(iv) the Mortgage Rate as of the Cut-off Date ("CURR RATE");
(v) the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
(vi) the scheduled monthly payment of principal, if any, and interest as of the
Cut-off Date ("ORIGINAL P & I" or "CURRENT P & I");
(vii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(viii) the Maximum Mortgage Rate ("NOTE CEILING");
(ix) the maximum Net Mortgage Rate ("NET CEILING");
(x) the Note Margin ("NOTE MARGIN");
(xi) the Periodic Cap ("PERIODIC DECR" or "PERIODIC INCR");
(xii) the rounding of the semi-annual or annual adjustment to the Mortgage Rate
("NOTE METHOD");
(xiii) the Loan-to-Value Ratio at origination ("LTV");
(xiv) the rate at which the Subservicing Fee accrues ("SUBSERV FEE") and at which
the Servicing Fee accrues ("MSTR SERV FEE");
(xv) a code "T," "BT" or "CT" under the column "LN FEATURE," indicating that the
Mortgage Loan is secured by a second or vacation residence; and
(xvi) a code "N" under the column "OCCP CODE," indicating that the Mortgage Loan is
secured by a non-owner occupied residence.
Such schedule may consist of multiple reports that collectively set forth all of the
information required.
Mortgage Rate: With respect to any Mortgage Loan, the interest rate borne by the
related Mortgage Note, or any modification thereto other than a Servicing Modification. The
Mortgage Rate on each Mortgage Loan will adjust on each Adjustment Date to equal the sum
(rounded to the nearest multiple of one eighth of one percent (0.125%) or up to the nearest
one-eighth of one percent, which are indicated by a "U" on the Mortgage Loan Schedule,
except in the case of the Mortgage Loans indicated by an "X" on the Mortgage Loan Schedule
under the heading "NOTE METHOD"), of the related Index plus the Note Margin, in each case
subject to the applicable Periodic Cap, Maximum Mortgage Rate and Minimum Mortgage Rate.
Net Mortgage Rate: With respect to any Mortgage Loan as of any date of
determination, a per annum rate equal to the Mortgage Rate for such Mortgage Loan as of such
date minus the related Expense Fee Rate.
Net Swap Payment: With respect to each Distribution Date, the net payment required
to be made pursuant to the terms of the Certificate Swap Agreement or the Class A-1-A Swap
Agreement, as applicable, by either the Certificate Swap Counterparty, the Class A-1-A Swap
Counterparty or the Supplemental Interest Trust Trustee, on behalf of the Supplemental
Interest Trust, which net payment shall not take into account any Swap Termination Payment.
Net WAC Cap Rate: With respect to any Distribution Date, a per annum rate equal to
(i) the product of (a) the weighted average of the Net Mortgage Rates (or, if applicable,
the Modified Net Mortgage Rates) on the Mortgage Loans using the Net Mortgage Rates in
effect for the Monthly Payments due on the Mortgage Loans during the related Due Period,
weighted on the basis of the respective Stated Principal Balances thereof for such
Distribution Date, and (b) a fraction the numerator of which is 30 and the denominator of
which is the actual number of days in the related Interest Accrual Period minus (ii) the
product of (a) a fraction expressed as a percentage, the numerator of which is the amount of
any Net Swap Payments or Swap Termination Payment not due to a Swap Counterparty Trigger
Event, in each case, owed to the Certificate Swap Counterparty as of such Distribution Date
and, with respect to the Class A-1-A Certificates, the Class A-1-A Swap Fee Amount as of
such Distribution Date, and the denominator of which is the aggregate Stated Principal
Balance of the Mortgage Loans before giving effect to distributions of principal to be made
on such Distribution Date, and (b) a fraction expressed as percentage, the numerator of
which is 360 and the denominator of which is the actual number of days in the related
Interest Accrual Period.
Note Margin: With respect to each Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and indicated in Exhibit One hereto 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 any Distribution Date and the Class SB Certificates,
100% of the Stated Principal Balance of the Mortgage Loans immediately prior to such
Distribution Date. For REMIC purposes, with respect to the Class SB Certificates or REMIC
III Regular Interest SB-IO, immediately prior to any Distribution Date, the aggregate of the
Uncertificated Principal Balances of the REMIC II Regular Interests.
Optional Termination Date: Any Distribution Date on or after which the aggregate
Stated Principal Balance (after giving effect to distributions to be made on such
Distribution Date) of the Mortgage Loans is less than 10.00% of the Cut-off Date Balance.
Overcollateralization Amount: With respect to any Distribution Date, the excess, if
any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans before giving
effect to distributions of principal to be made on such Distribution Date over (b) the
aggregate Certificate Principal Balance of the Class A Certificates and Class M Certificates
before taking into account distributions of principal to made on such Distribution Date.
Overcollateralization Floor: An amount equal to the product of 0.50% and the Cut-off
Date Balance.
Overcollateralization Increase Amount: With respect to any Distribution Date, the
lesser of (a) Excess Cash Flow for that Distribution Date (to the extent not used to cover
the amounts described in clauses (b)(iv) and (v) of the definition of Principal Distribution
Amount as of such Distribution Date) and (b) the excess of (1) the Required
Overcollateralization Amount for such Distribution Date over (2) the Overcollateralization
Amount for such Distribution Date.
Overcollateralization Reduction Amount: With respect to any Distribution Date on
which the Excess Overcollateralization Amount is, after taking into account all other
distributions to be made on such Distribution Date, greater than zero, the
Overcollateralization Reduction Amount shall be equal to the lesser of (i) the Excess
Overcollateralization Amount for that Distribution Date and (ii) the Principal Remittance
Amount on such Distribution Date.
Pass-Through Rate: With respect to each Class of Class A Certificates and Class M
Certificates and any Distribution Date, a per annum rate equal to the least of (i) LIBOR
plus the related Margin, (ii) the Net WAC Cap Rate and (iii) 11.00% per annum.
With respect to the Class SB Certificates or REMIC III Regular Interest SB-IO and any
Distribution Date, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (i) through
(iii) below, and the denominator of which is the aggregate principal balance of the REMIC II
Regular Interests. For purposes of calculating the Pass-Through Rate for the Class SB
Certificates or REMIC III Regular Interest SB-IO, the numerator is equal to the sum of the
following components:
(i) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT1 minus
the Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance
of REMIC II Regular Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT2 minus
the Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance
of REMIC II Regular Interest LT2; and
(iii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT4 minus
twice the Marker Rate, applied to a notional amount equal to the Uncertificated Principal
Balance of REMIC II Regular Interest LT4.
Permanent Regulation S Global Offered Certificate: Not applicable.
Prepayment Assumption: The prepayment assumption to be used for determining the
accrual of original issue discount and premium and market discount on the Certificates for
federal income tax purposes, which assumes a constant prepayment rate of 30% per annum of
the then outstanding principal balance of the Mortgage Loans.
Prepayment Charge: With respect to any Mortgage Loan, the charges or premiums, if
any, received in connection with a full or partial prepayment of such Mortgage Loan in
accordance with the terms thereof.
Prepayment Charge Loan: Any Mortgage Loan for which a Prepayment Charge may be
assessed and to which such Prepayment Charge the Class SB Certificates are entitled, as
indicated on the Mortgage Loan Schedule.
Principal Distribution Amount: With respect to any Distribution Date, the lesser of
(a) the excess of (x) Available Distribution Amount plus for inclusion in Excess Cash Flow
for purposes of clauses (b)(v) and (b)(vi) below, the amounts received by the Supplemental
Interest Trust Trustee under the Certificate Swap Agreement for that Distribution Date over
(y) the Interest Distribution Amount and (b) the sum of:
(i) the principal portion of each Monthly Payment received or Advanced with
respect to the related Due Period on each Outstanding Mortgage Loan;
(ii) the Stated Principal Balance of any Mortgage Loan repurchased during the
related Prepayment Period (or deemed to have been so repurchased in accordance with Section
3.07(b)) pursuant to Section 2.02, 2.03, 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 pursuant to Section 2.03 or 2.04 during the prior calendar month;
(iii) the principal portion of all other unscheduled collections, other than
Subsequent Recoveries, on the Mortgage Loans received (or deemed to have been so received)
during the prior calendar month or, in the case of Principal Prepayments in Full, during the
related Prepayment Period, including, without limitation, Curtailments, Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and Principal Prepayments, to the extent applied by the
Master Servicer as recoveries of principal pursuant to Section 3.14;
(iv) the lesser of (1) Subsequent Recoveries for such Distribution Date and (2) the
principal portion of any Realized Losses allocated to the Class A Certificates or the Class
M Certificates on a prior Distribution Date and remaining unpaid;
(v) the lesser of (1) the Excess Cash Flow for such Distribution Date (to the
extent not used pursuant to clause (iv) of this definition on such Distribution Date) and
(2) the principal portion of any Realized Losses incurred (or deemed to have been incurred)
on any Mortgage Loans in the calendar month preceding such Distribution Date that are
allocated to any Class of Certificates; and
(vi) the lesser of (a) the Excess Cash Flow for such Distribution Date, to the
extent not used pursuant to clauses (iv) and (v) of this definition on such Distribution
Date, and (b) the amount of any Overcollateralization Increase Amount for such Distribution
Date;
minus
(vii) (A) the amount of any Overcollateralization Reduction Amount for such
Distribution Date and (B) the amount of any Capitalization Reimbursement Amount for such
Distribution Date.
Principal Only Certificates: None.
Principal Remittance Amount: With respect to any Distribution Date, all amounts
described in clauses (b)(i) through (iii) of the definition of Principal Distribution Amount
for that Distribution Date.
Record Date: With respect to each Distribution Date and each Class of Book Entry
Certificates, the Business Day immediately preceding such Distribution Date. With respect
to each Class of Definitive Certificates, the close of business on the last Business Day of
the month next preceding the month in which the related Distribution Date occurs, except in
the case of the first Record Date which shall be the Closing Date.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Shortfalls: Interest shortfalls on the Mortgage Loans resulting from the
Relief Act or similar legislation or regulations.
REMIC I: The segregated pool of assets (exclusive of the Certificate Supplemental
Interest Trust Account, the Class A-1-A Supplemental Trust Account and the Swap Agreements),
with respect to which a REMIC election is to be made, consisting of:
(i) the Mortgage Loans and the related Mortgage Files;
(ii) all payments and collections in respect of the Mortgage Loans due after
the Cut-off Date (other than Monthly Payments due in the month of the Cut-off Date) as shall
be on deposit in the Custodial Account or in the Certificate Account and identified as
belonging to the Trust Fund;
(iii) property which secured a Mortgage Loan and which 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 pertaining
to the Mortgage Loans, if any; and
(v) all proceeds of clauses (i) through (iv) above.
REMIC I Available Distribution Amount: The Available Distribution Amount increased
by the amount of any Net Swap Payment described in clause (b)(z) thereof.
REMIC I Distribution Amount: For any Distribution Date, the REMIC I Available
Distribution Amount shall be distributed to REMIC II in respect of the REMIC I Regular
Interests and the Class R-1 Certificates in respect of Component I thereof in the following
amounts and priority:
(a) to REMIC I Regular Interest A-I and REMIC I Regular Interest I-1-A
through I-84-B, pro rata, in an amount equal to (A) Uncertificated Accrued Interest for such
REMIC I Regular Interests for such Distribution Date, plus (B) any amounts payable in
respect thereof remaining unpaid from previous Distribution Dates;
(b) to the extent of amounts remaining after the distributions made
pursuant to clause (a) above, payments of principal shall be allocated as follows: first, to
REMIC I Regular Interest A-I until the Uncertificated Principal Balance of such REMIC I
Regular Interest is reduced to zero and second, to REMIC I Regular Interests I-1-A through
I-84-B starting with the lowest numerical denomination until the Uncertificated Principal
Balance of each such REMIC I Regular Interest is reduced to zero, provided that, for REMIC I
Regular Interests with the same numerical denomination, such payments of principal shall be
allocated pro rata between such REMIC I Regular Interests; and
(c) any remaining amounts to the Class R-1 Certificates in respect of
Component I thereof.
REMIC I Interests: The REMIC I Regular Interests and Component I of the Class R-1
Certificates.
REMIC I Realized Losses: All Realized Losses on the Mortgage Loans shall be
allocated first, on each Distribution Date, to REMIC I Regular Interest A-I until such
REMIC I Regular Interest has been reduced to zero. Second, Realized Losses shall be
allocated to REMIC I Regular Interest I-1-A through REMIC I Regular Interest I-84-B,
starting with the lowest numerical denomination until such REMIC I Regular Interest has been
reduced to zero, provided that, for REMIC I Regular Interests with the same numerical
denomination, such Realized Losses shall be allocated pro rata between such REMIC I Regular
Interests.
REMIC I Regular Interest. Any of the 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 the related Uncertificated REMIC I
Pass-Through Rate 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 Principal 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.
REMIC I Regular Interest A-I: A regular interest in REMIC I that is held as an asset
of REMIC II, that has an initial principal balance equal to the related Uncertificated
Principal Balance, that bears interest at the related Uncertificated REMIC I Pass-Through
Rate, and that has such other terms as are described herein.
REMIC II: The segregated pool of assets subject hereto, constituting a portion of
the primary trust created hereby and to be administered hereunder, with respect to which a
separate REMIC election is to be made, consisting of the REMIC I Regular Interests.
REMIC II Available Distribution Amount: For any Distribution Date, the amount
distributed from REMIC I to REMIC II on such Distribution Date in respect of the REMIC I
Regular Interests.
REMIC II Distribution Amount: For any Distribution Date, the REMIC II Available
Distribution Amount shall be distributed to REMIC III in respect of the REMIC II Regular
Interests and the Class R-1 Certificates in respect of Component II thereof in the following
amounts and priority:
(a) to REMIC II Regular Interest LT-IO, in an amount equal to (i)
Uncertificated Accrued Interest for such REMIC II Regular Interest for such Distribution
Date, plus (ii) any amounts in respect thereof remaining unpaid from previous Distribution
Dates;
(b) to the extent of amounts remaining after the distributions made
pursuant to clause (a) above, to REMIC II Regular Interests LT1, LT2, LT3 and LT4, pro rata,
in an amount equal to (i) their Uncertificated Accrued Interest for such Distribution Date,
plus (ii) any amounts in respect thereof remaining unpaid from previous Distribution Dates;
and
(c) to the extent of amounts remaining after the distributions made
pursuant to clauses (a) and (b) above:
(i) to REMIC II Regular Interests LT2, LT3 and LT4,
their respective Principal Distribution Amounts;
(ii) to REMIC II Regular Interest LT1 any remainder
until the Uncertificated Principal Balance thereof is reduced to zero;
(iii) any remainder to REMIC II Regular Interests LT2,
LT3 and LT4, pro rata according to their respective Uncertificated
Principal Balances as reduced by the distributions deemed made pursuant
to (i) above, until their respective Uncertificated Principal Balances
are reduced to zero; and
(d) to the extent of amounts remaining after the distributions made
pursuant to clauses (a) through (c) above:
(i) first, to each of the REMIC II Regular Interests,
pro rata according to the amount of unreimbursed Realized Losses
allocable to principal previously allocated to each such REMIC II
Regular Interest, the aggregate amount of any distributions to the
Certificates as reimbursement of such Realized Losses on such
Distribution Date pursuant to clause (vii) in Section 4.02(c);
provided, however, that any amounts distributed pursuant to this
paragraph (d)(i) of this definition of "REMIC II Distribution Amount"
shall not cause a reduction in the Uncertificated Principal Balances of
any of the REMIC II Regular Interests; and
(ii) second, to the Class R-1 Certificates in respect
of Component II thereof, any remaining amount.
REMIC II Net WAC Rate: With respect to any Distribution Date, a per annum rate equal
to the weighted average of (x) with respect to REMIC I Regular Interests ending with the
designation "B," the weighted average of the Uncertificated REMIC I Pass-Through Rates for
such REMIC I Regular Interests, weighted on the basis of the Uncertificated Principal
Balance of such REMIC I Regular Interests for each such Distribution Date, (y) with respect
to REMIC I Regular Interest A-I, the Uncertificated REMIC I Pass-Through Rate for such
REMIC I Regular Interest, and (z) with respect to REMIC I Regular Interests ending with the
designation "A," for each Distribution Date listed below, the weighted average of the rates
listed below for each such REMIC I Regular Interest listed below, weighted on the basis of
the Uncertificated Principal Balance of each such REMIC I Regular Interest for each such
Distribution Date:
DISTRIBUTION DATE REMIC I REGULAR INTEREST RATE
1 I-1-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
2 I-2-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A Uncertificated REMIC I Pass-Through Rate
3 I-3-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A and I-2-A Uncertificated REMIC I Pass-Through Rate
4 I-4-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-3-A Uncertificated REMIC I Pass-Through Rate
5 I-5-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-4-A Uncertificated REMIC I Pass-Through Rate
6 I-6-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-5-A Uncertificated REMIC I Pass-Through Rate
7 I-7-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-6-A Uncertificated REMIC I Pass-Through Rate
8 I-8-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-7-A Uncertificated REMIC I Pass-Through Rate
9 I-9-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-8-A Uncertificated REMIC I Pass-Through Rate
10 I-10-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-9-A Uncertificated REMIC I Pass-Through Rate
11 I-11-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-10-A Uncertificated REMIC I Pass-Through Rate
12 I-12-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-11-A Uncertificated REMIC I Pass-Through Rate
13 I-13-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-12-A Uncertificated REMIC I Pass-Through Rate
14 I-14-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-13-A Uncertificated REMIC I Pass-Through Rate
15 I-15-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-14-A Uncertificated REMIC I Pass-Through Rate
16 I-16-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-15-A Uncertificated REMIC I Pass-Through Rate
17 I-17-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-16-A Uncertificated REMIC I Pass-Through Rate
18 I-18-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-17-A Uncertificated REMIC I Pass-Through Rate
19 I-19-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-18-A Uncertificated REMIC I Pass-Through Rate
20 I-20-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-19-A Uncertificated REMIC I Pass-Through Rate
21 I-21-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-20-A Uncertificated REMIC I Pass-Through Rate
22 I-22-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-21-A Uncertificated REMIC I Pass-Through Rate
23 I-23-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-22-A Uncertificated REMIC I Pass-Through Rate
24 I-24-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-23-A Uncertificated REMIC I Pass-Through Rate
25 I-25-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-24-A Uncertificated REMIC I Pass-Through Rate
26 I-26-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-25-A Uncertificated REMIC I Pass-Through Rate
27 I-27-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-26-A Uncertificated REMIC I Pass-Through Rate
28 I-28-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-27-A Uncertificated REMIC I Pass-Through Rate
29 I-29-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-28-A Uncertificated REMIC I Pass-Through Rate
30 I-30-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-29-A Uncertificated REMIC I Pass-Through Rate
31 I-31-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-30-A Uncertificated REMIC I Pass-Through Rate
32 I-32-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-31-A Uncertificated REMIC I Pass-Through Rate
33 I-33-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-32-A Uncertificated REMIC I Pass-Through Rate
34 I-34-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-33-A Uncertificated REMIC I Pass-Through Rate
35 I-35-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-34-A Uncertificated REMIC I Pass-Through Rate
36 I-36-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-35-A Uncertificated REMIC I Pass-Through Rate
37 I-37-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-36-A Uncertificated REMIC I Pass-Through Rate
38 I-38-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-37-A Uncertificated REMIC I Pass-Through Rate
39 I-39-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-38-A Uncertificated REMIC I Pass-Through Rate
40 I-40-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-39-A Uncertificated REMIC I Pass-Through Rate
41 I-41-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-40-A Uncertificated REMIC I Pass-Through Rate
42 I-42-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-41-A Uncertificated REMIC I Pass-Through Rate
43 I-43-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-42-A Uncertificated REMIC I Pass-Through Rate
44 I-44-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-43-A Uncertificated REMIC I Pass-Through Rate
45 I-45-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-44-A Uncertificated REMIC I Pass-Through Rate
46 I-46-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-45-A Uncertificated REMIC I Pass-Through Rate
47 I-47-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-46-A Uncertificated REMIC I Pass-Through Rate
48 I-48-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-47-A Uncertificated REMIC I Pass-Through Rate
49 I-49-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-48-A Uncertificated REMIC I Pass-Through Rate
50 I-50-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-49-A Uncertificated REMIC I Pass-Through Rate
51 I-51-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-50-A Uncertificated REMIC I Pass-Through Rate
52 I-52-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-51-A Uncertificated REMIC I Pass-Through Rate
53 I-53-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-52-A Uncertificated REMIC I Pass-Through Rate
54 I-54-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-53-A Uncertificated REMIC I Pass-Through Rate
55 I-55-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-54-A Uncertificated REMIC I Pass-Through Rate
56 I-56-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-55-A Uncertificated REMIC I Pass-Through Rate
57 I-57-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-56-A Uncertificated REMIC I Pass-Through Rate
58 I-58-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-57-A Uncertificated REMIC I Pass-Through Rate
59 I-59-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-58-A Uncertificated REMIC I Pass-Through Rate
60 I-60-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-59-A Uncertificated REMIC I Pass-Through Rate
61 I-61-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-60-A Uncertificated REMIC I Pass-Through Rate
62 I-62-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-61-A Uncertificated REMIC I Pass-Through Rate
63 I-63-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-62-A Uncertificated REMIC I Pass-Through Rate
64 I-64-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-63-A Uncertificated REMIC I Pass-Through Rate
65 I-65-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-64-A Uncertificated REMIC I Pass-Through Rate
66 I-66-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-65-A Uncertificated REMIC I Pass-Through Rate
67 I-67-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-66-A Uncertificated REMIC I Pass-Through Rate
68 I-68-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-67-A Uncertificated REMIC I Pass-Through Rate
69 I-69-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-68-A Uncertificated REMIC I Pass-Through Rate
70 I-70-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-69-A Uncertificated REMIC I Pass-Through Rate
71 I-71-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-70-A Uncertificated REMIC I Pass-Through Rate
72 I-72-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-71-A Uncertificated REMIC I Pass-Through Rate
73 I-73-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-72-A Uncertificated REMIC I Pass-Through Rate
74 I-74-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-73-A Uncertificated REMIC I Pass-Through Rate
75 I-75-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-74-A Uncertificated REMIC I Pass-Through Rate
76 I-76-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-75-A Uncertificated REMIC I Pass-Through Rate
77 I-77-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-76-A Uncertificated REMIC I Pass-Through Rate
78 I-78-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-77-A Uncertificated REMIC I Pass-Through Rate
79 I-79-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-78-A Uncertificated REMIC I Pass-Through Rate
80 I-80-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-79-A Uncertificated REMIC I Pass-Through Rate
81 I-81-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-80-A Uncertificated REMIC I Pass-Through Rate
82 I-82-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-81-A Uncertificated REMIC I Pass-Through Rate
83 I-83-A through I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-82-A Uncertificated REMIC I Pass-Through Rate
84 I-84-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-83-A Uncertificated REMIC I Pass-Through Rate
Thereafter I-1-A through I-84-A Uncertificated REMIC I Pass-Through Rate
REMIC II Principal Reduction Amounts: For any Distribution Date, the amounts by
which the principal balances of the REMIC II Regular Interests LT1, LT2, LT3 and LT4,
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:
Y1 = the principal balance of the REMIC II Regular Interest LT1 after distributions
on the prior Distribution Date.
Y2 = the principal balance of the REMIC II Regular Interest LT2 after distributions
on the prior Distribution Date.
Y3 = the principal balance of the REMIC II Regular Interest LT3 after distributions
on the prior Distribution Date.
Y4 = the principal balance of the REMIC II Regular Interest LT4 after distributions
on the prior Distribution Date (note: Y3 = Y4).
(DELTA)Y1 = the REMIC II Regular Interest LT1 Principal Reduction Amount.
(DELTA)Y2 = the REMIC II Regular Interest LT2 Principal Reduction Amount.
(DELTA)Y3 = the REMIC II Regular Interest LT3 Principal Reduction Amount.
(DELTA)Y4 = the REMIC II Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate principal balance of REMIC II Regular Interests LT1, LT2, LT3
and LT4 after distributions and the allocation of Realized Losses on the prior
Distribution Date.
P1 = the aggregate principal balance of the REMIC II Regular Interests LT1, LT2,
LT3 and LT4 after distributions and the allocation of Realized Losses to be
made on such Distribution Date.
(DELTA)P = P0 - P1 = the aggregate of the REMIC II Regular Interests LT1, LT2, LT3
and LT4 Principal Reduction Amounts.
= the aggregate of the principal portions of Realized Losses to be allocated to,
and the principal distributions to be made on, the Certificates on such
Distribution Date (including distributions of accrued and unpaid interest on
the Class SB Certificates for prior Distribution Dates).
R0 = the REMIC II Net WAC Rate (stated as a monthly rate) after giving effect to
amounts distributed and Realized Losses allocated on the prior Distribution
Date.
R1 = the REMIC II Net WAC Rate (stated as a monthly rate) after giving effect to
amounts to be distributed and Realized Losses to be allocated on such
Distribution Date.
(alpha) = (Y2 + Y3)/P0. The initial value of (alpha) on the Closing Date for use
on the first Distribution Date shall be 0.0001.
(gamma)0 = the lesser of (A) the sum for all Classes of Certificates other than
the Class SB Certificates and Class IO Certificates of the product for each
Class of (i) the monthly interest rate (as limited by the REMIC II Net WAC
Rate, if applicable) for such Class applicable for distributions to be made on
such Distribution Date and (ii) the aggregate Certificate Principal Balance
for such Class after distributions and the allocation of Realized Losses on
the prior Distribution Date and (B) R0*P0.
(gamma)1 = the lesser of (A) the sum for all Classes of Certificates other than
the Class SB Certificates and Class IO Certificates of the product for each
Class of (i) the monthly interest rate (as limited by the REMIC II Net WAC
Rate, if applicable) for such Class applicable for distributions to be made on
the next succeeding Distribution Date and (ii) the aggregate Certificate
Principal Balance for such Class after distributions and the allocation of
Realized Losses to be made on such Distribution Date and (B) R1*P1.
Then, based on the foregoing definitions:
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - Y3 - Y4;
(DELTA)Y2 = (a/2){(a0R1 - a1R0)/R0R1};
(DELTA)Y3 = (a(DELTA)P - (DELTA)Y2; and
(DELTA)Y4 = (DELTA)Y3.
if both (DELTA)Y2 and (DELTA)Y3, as so determined, are non-negative numbers. Otherwise:
(1) If (DELTA)Y2, as so determined, is negative, then
(DELTA)Y2 = 0
(DELTA)Y3 = a{a1R0P0 - a0R1P1}/{a1R0};
(DELTA)Y4 = (DELTA)Y3; and
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.
(2) If (DELTA)Y3, as so determined, is negative, then
(DELTA)Y3 = 0;
(DELTA)Y2 = a{a0R1P1 - a1R0P0}/{2R1R0P1 - a1R0};
(DELTA)Y4 = (DELTA)Y3; and
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.
REMIC II Realized Losses: Realized Losses on the Mortgage Loans shall be allocated
to the REMIC II Regular Interests as follows. The interest portion of Realized Losses on
the Mortgage Loans, if any, shall be allocated among REMIC II Regular Interests LT1, LT2 and
LT4, 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 and allocated pursuant to the
succeeding sentences. The principal portion of Realized Losses with respect to Mortgage
Loans shall be allocated to the REMIC II Regular Interests as follows: first, to REMIC II
Regular Interests LT2, LT3 and LT4, pro-rata according to their respective REMIC II
Principal Reduction Amounts to the extent thereof in reduction of the Uncertificated
Principal Balance of such REMIC II Regular Interests and, second, the remainder, if any, of
such principal portion of such Realized Losses shall be allocated to REMIC II Regular
Interest LT1 in reduction of the Uncertificated Principal Balance thereof.
REMIC II Regular Interests: REMIC II Regular Interest LT1, REMIC II Regular Interest
LT2, REMIC II Regular Interest LT3, REMIC II Regular Interest LT4 and REMIC II Regular
Interest LT-IO.
REMIC II Regular Interest LT1: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated REMIC II
Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT1 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT1 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT1 on such Distribution Date.
REMIC II Regular Interest LT2: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated REMIC II
Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT2 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT2 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT2 on such Distribution Date.
REMIC II Regular Interest LT3: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated REMIC II
Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT3 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT3 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT3 on such Distribution Date.
REMIC II Regular Interest LT4: A regular interest in REMIC II that is held as an
asset of REMIC III, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related Uncertificated REMIC II
Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT4 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the REMIC II Regular Interest LT4 Principal Reduction Amount
for such Distribution Date over the Realized Losses allocated to the REMIC II Regular
Interest LT4 on such Distribution Date.
REMIC II Regular Interest LT-IO: A regular interest in REMIC II that is held as an
asset of REMIC III, that has no initial principal balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate on its Uncertificated Notional Amount, and
that has such other terms as are described herein.
REMIC III: The segregated pool of assets subject hereto, constituting a portion of
the primary trust created hereby and to be administered hereunder, with respect to which a
separate REMIC election is to be made, consisting of the REMIC II Regular Interests.
REMIC III Available Distribution Amount: For any Distribution Date, the amount
distributed from REMIC II to REMIC III on such Distribution Date in respect of the REMIC II
Regular Interests.
REMIC III Distribution Amount: For any Distribution Date, the REMIC III Available
Distribution Amount shall be deemed distributed to the Class A Certificates and Class M
Certificates in respect of the portion of such Certificates representing ownership of
REMIC III Regular Interests, REMIC III Regular Interests SB-IO, SB-PO and IO and the
Class R-1 Certificates in respect of Component III thereof in the following amounts and
priority:
(i) to REMIC IV in respect of REMIC III Regular Interest IO, the amount
distributable with respect to such REMIC III Regular Interest as described in the
Preliminary Statement, being paid from and in reduction of the REMIC III Available
Distribution Amount for such Distribution Date;
(ii) to the Class A Certificateholders, the Accrued Certificate Interest payable on
the Class A Certificates with respect to such Distribution Date, plus any related amounts
accrued pursuant to this clause (ii) but remaining unpaid from any prior Distribution Date,
being paid from and in reduction of the REMIC III Available Distribution Amount for such
Distribution Date;
(iii) to the Class M Certificateholders, from the amount, if any, of the Available
Distribution Amount remaining after the foregoing distributions, Accrued Certificate
Interest payable on the Class M Certificates with respect to such Distribution Date, plus
any related amounts accrued pursuant to this clause (iii) but remaining unpaid from any
prior Distribution Date, sequentially, to the Class M-1 Certificateholders, Class M-2
Certificateholders, Class M-3 Certificateholders and Class M-4 Certificateholders
Certificateholders, in that order, being paid from and in reduction of the REMIC III
Available Distribution Amount for such Distribution Date;
(iv) the Principal Distribution Amount shall be distributed as follows, to be
applied to reduce the principal balance of the REMIC III Regular Interest related to the
applicable Certificates in each case to the extent of the remaining Principal Distribution
Amount:
(A) first, to the Class A-1-A Certificates, Class A-1-B Certificates and
Class A-2 Certificates, on a pro rata basis in accordance with their respective
Certificate Principal Balances, until the Certificate Principal Balances thereof are
reduced to zero ;
(B) second, to the Class M-1 Certificateholders, the Class M-1 Principal
Distribution Amount, until the Certificate Principal Balance of the Class M-1
Certificates has been reduced to zero;
(C) third, to the Class M-2 Certificateholders, the Class M-2 Principal
Distribution Amount, until the Certificate Principal Balance of the Class M-2
Certificates has been reduced to zero;
(D) fourth, to the Class M-3 Certificateholders, the Class M-3 Principal
Distribution Amount, until the Certificate Principal Balance of the Class M-3
Certificates has been reduced to zero;
(E) fifth, to the Class M-4 Certificateholders, the Class M-4 Principal
Distribution Amount, until the Certificate Principal Balance of the Class M-4
Certificates has been reduced to zero; and
(v) to the Class A Certificateholders and Class M Certificateholders, the amount
of any Prepayment Interest Shortfalls allocated thereto for such Distribution Date, on a pro
rata basis based on Prepayment Interest Shortfalls allocated thereto to the extent not
offset by Eligible Master Servicing Compensation on such Distribution Date;
(vi) to the Class A Certificateholders and Class M Certificateholders, the amount
of any Prepayment Interest Shortfalls previously allocated thereto remaining unpaid from
prior Distribution Dates together with interest thereon at the related Pass Through Rate, on
a pro rata basis based on unpaid Prepayment Interest Shortfalls previously allocated
thereto;
(vii) to REMIC IV in respect of REMIC III Regular Interests SB-IO and SB-PO, (A)
from the amount, if any, of the REMIC III Available Distribution Amount remaining after the
foregoing distributions, the sum of (I) Accrued Certificate Interest on the Class SB
Certificates, (II) the amount of any Overcollateralization Reduction Amount for such
Distribution Date and (III) for any Distribution Date after the Certificate Principal
Balance of each Class of Class A Certificates and Class M Certificates has been reduced to
zero, the Overcollateralization Amount and (B) from Prepayment Charges on deposit in the
Certificate Account, any Prepayment Charges received on the Mortgage Loans during the
related Prepayment Period; and
(viii) to the Class R-1 Certificateholders in respect of Component III thereof, the
balance, if any, of the REMIC III Available Distribution Amount.
REMIC III Pass-Through Rate: With respect to any Distribution Date and (i) the REMIC
III Regular Interest, ownership of which is represented by the Class A-1-A Certificates, a
per annum rate equal to the least of (i) LIBOR plus the applicable Margin plus the Class
A-1-A Swap Fee Amount (expressed as a per annum rate based on the Certificate Principal
Balance of the Class A-1-A Certificates immediately prior to such Distribution Date), (ii)
the REMIC II Net WAC Rate and (iii) 11.00% per annum (ii) the REMIC III Regular Interests,
ownership of which is is represented by the other Class A and Class M Certificates, will
accrue interest at a per annum rate equal to the least of (i) LIBOR plus the applicable
Margin, (ii) the REMIC II Net WAC Rate and (iii) 11.00%.
REMIC III Regular Interest SB-PO: A separate uncertificated beneficial ownership
interest in XXXXX XXX issued hereunder and designated as a Regular Interest in REMIC III,
held as an asset of REMIC IV. REMIC III Regular Interest SB-PO shall have no entitlement to
interest, and shall be entitled to distributions of principal subject to the terms and
conditions hereof, in aggregate amount equal to the initial Overcollateralization Amount as
set forth in the Preliminary Statement hereto.
REMIC III Regular Interest SB-IO: A separate uncertificated beneficial ownership
interest in XXXXX XXX issued hereunder and designated as a Regular Interest in REMIC III,
held as an asset of REMIC IV. REMIC III Regular Interest SB-IO shall have no entitlement to
principal, and shall be entitled to distributions of interest subject to the terms and
conditions hereof, in aggregate amount equal to the interest distributable with respect to
the Class SB Certificates pursuant to the terms and conditions hereof.
REMIC III Regular Interest IO: A separate uncertificated beneficial ownership
interest in XXXXX XXX issued hereunder and designated as a Regular Interest in REMIC III,
held as an asset of REMIC IV. REMIC III Regular Interest IO shall have no entitlement to
principal, and shall be entitled to distributions of interest subject to the terms and
conditions hereof, in aggregate amount equal to the interest distributable with respect to
REMIC II Regular Interest LT-IO.
REMIC III Regular Interests: REMIC III Regular Interests SB-IO, SB-PO and IO,
together with the Class A Certificates and Class M Certificates exclusive of their
respective rights and obligations under the Swap Agreements.
REMIC IV: The segregated pool of assets subject hereto, constituting a portion of
the primary trust created hereby and to be administered hereunder, with respect to which a
separate REMIC election is to be made, consisting of REMIC III Regular Interests SB-IO,
SB-PO and IO.
REMIC IV Available Distribution Amount: For any Distribution Date, the amounts
deemed distributed from REMIC III to REMIC IV on such Distribution Date in respect of
REMIC III Regular Interests SB-IO, SB-PO and IO pursuant to the definition of REMIC III
Distribution Amount.
REMIC IV Distribution Amount: For any Distribution Date, the REMIC IV Available
Distribution Amount shall be deemed distributed by REMIC IV to the holders of the Class SB
Certificates on account of REMIC IV Regular Interest SB and to the Certificate Supplemental
Interest Trust Account on account of REMIC IV Regular Interest IO.
REMIC IV Regular Interests. Either of the separate beneficial ownership interests in
REMIC IV issued hereunder and designated as a "regular interest" in REMIC IV. The REMIC IV
Regular Interests shall be entitled to distributions of interest and principal, subject to
the terms and conditions hereof, as set forth in the Preliminary Statement hereto.
Required Overcollateralization Amount: With respect to any Distribution Date (i)
prior to the Stepdown Date, an amount equal to 0.85% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date; (ii) on or after the Stepdown Date,
the greater of (x) 1.70% of the outstanding aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions made on that Distribution Date and (y)
the Overcollateralization Floor; and (iii) on or after the Stepdown Date if a Trigger Event
is in effect, the Required Overcollateralization Amount for the immediately preceding
Distribution Date; provided that the Required Overcollateralization Amount may be reduced so
long as written confirmation is obtained from each rating agency that the reduction will not
reduce the ratings assigned to the Class A Certificates and Class M Certificates by that
rating agency below the lower of the then-current ratings or the ratings assigned to those
certificates as of the closing date by that rating agency.
Rule 144A: Rule 144A under the Securities Act of 1933, as in effect from time to
time.
Rule 144A Global Offered Certificate: Not applicable.
SB-AM Swap Agreement: The interest rate swap agreement between the Supplement
Interest Trust Trustee, on behalf of the Class A Certificateholders and Class M
Certificateholders, and the Supplement Interest Trust Trustee, on behalf of the Class SB
Certificateholders, evidenced by the confirmation attached hereto as Exhibit Five-A and
incorporated herein by reference.
SB-A1A Swap Agreement: The interest rate swap agreement between the Supplement
Interest Trust Trustee, on behalf of the Class A-1-A Certificateholders, and the Supplement
Interest Trust Trustee, on behalf of the Class SB Certificateholders, evidenced by the
confirmation attached hereto as Exhibit Five-B and incorporated herein by reference.
Senior Certificate: Any one of the Class A Certificates.
Senior Enhancement Percentage: With respect to any Distribution Date, the percentage
obtained by dividing (x) the sum of (i) the aggregate Certificate Principal Balance of the
Class M Certificates and (ii) the Overcollateralization Amount, in each case prior to the
distribution of the Principal Distribution Amount on such Distribution Date, by (y) the
aggregated Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date.
Sixty-Plus Delinquency Percentage: With respect to any Distribution Date on or after
the Stepdown Date, the arithmetic average, for each of the three consecutive Distribution
Dates ending with such Distribution Date, of the fraction, expressed as a percentage, equal
to (x) the aggregate Stated Principal Balance of the Mortgage Loans that are 60 or more days
delinquent in payment of principal and interest for that Distribution Date, including
Mortgage Loans in foreclosure, and REO Properties over (y) the aggregate Stated Principal
Balance of all of the Mortgage Loans immediately preceding that Distribution Date.
Specified Condition: Shall have the meaning set forth in the Certificate Swap
Agreement or Class A-1-A Swap Agreement, as applicable.
Stated Principal Balance: With respect to any Mortgage Loan or related REO Property,
as of any date of determination, (i) the sum of (a) the Cut-off Date Principal Balance of
the Mortgage Loan plus (b) any amount by which the Stated Principal Balance of the Mortgage
Loan has been increased pursuant to a Servicing Modification, 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 with the Due Period relating to the most recent
Distribution Date which were received or with respect to which an Advance was made, (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 Master
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 incurred with respect to such
Mortgage Loan allocated to Certificateholders with respect thereto for any previous
Distribution Date.
Stepdown Date: The earlier to occur of (i) the Distribution Date immediately
succeeding the Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero or (ii) the later to occur of (x) the
Distribution Date in June 2010 and (y) the first Distribution Date on which the Senior
Enhancement Percentage (calculated for this purpose only after taking into account payments
of principal on the Mortgage Loans due on the related Due Date or received during the
related Prepayment Period but prior to distribution of the Principal Distribution Amount in
respect of the Certificates then entitled to distributions of principal on such Distribution
Date) is greater than or equal to approximately 13.00.
Subordination Percentage: With respect to each class of Class A Certificates and
Class M Certificates, the respective approximate percentage set forth in the table below:
CLASS PERCENTAGE
A 87.00%
M-1 92.50%
M-2 95.60%
M-3 97.30%
M-4 98.30%
Supplemental Interest Trust: Together, the separate trusts created and maintained by
the Supplemental Interest Trust Trustee pursuant to Sections 4.09(a) and 4.11(a). The
primary activities of the Supplemental Interest Trust created pursuant to this Agreement
shall be:
(i) entering into and holding the Swap Agreements;
(ii) receiving collections or making payments with respect to the Swap
Agreements; and
(iii) engaging in other activities that are necessary or incidental to
accomplish these limited purposes, which activities cannot be contrary to the status
of the Supplemental Interest Trust as a qualified special purpose entity under
existing accounting literature.
Supplemental Interest Trust Trustee: Deutsche Bank Trust Company Americas, a New
York banking corporation, not in its individual capacity, but solely in its capacity as
Supplemental Interest Trust Trustee of the Supplemental Interest Trust, and any successor
thereto, and any corporation or banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any successor
supplemental interest trust trustee as may from time to time be serving as successor
supplemental interest trust trustee hereunder.
Swap Agreement(s): The Certificate Swap Agreement, the Class A-1-A Swap Agreement,
the SB-AM Swap Agreement or the SB-A1A Swap Agreement, as applicable.
Swap Agreement Event of Default: Shall have the same meaning given the term "Event
of Default" in the Certificate Swap Agreement or the Class A-1-A Swap Agreement, as
applicable.
Swap Counterparty Trigger Event: With respect to any Distribution Date and the
related swap agreement, (i) a Swap Agreement Event of Default, with respect to which the
Certificate Swap Counterparty or Class A-1-A Swap Agreement, respectively, is a Defaulting
Party, (ii) a Termination Event under the Certificate Swap Agreement or Class A-1-A Swap
Agreement, as applicable, with respect to which the Certificate Swap Counterparty or Class
A-1-A Swap Agreement, respectively, is the sole Affected Party, or (iii) an additional
termination event under the Certificate Swap Agreement or Class A-1-A Swap Agreement, as
applicable, with respect to which the Certificate Swap Counterparty or Class A-1-A Swap
Agreement, respectively, is the sole Affected Party. A Swap Counterparty Trigger Event under
one Swap Agreement shall not be a Swap Counterparty Trigger Event under the other Swap
Agreement.
Swap LIBOR: LIBOR as determined pursuant to the Certificate Swap Agreement or Class
A-1-A Swap Agreement, as applicable.
Swap Termination Payment: Upon the occurrence of an Early Termination Date of the
related Swap Agreement, the payment to be made by the Supplemental Interest Trust Trustee on
behalf of the Supplemental Interest Trust to the Certificate Swap Counterparty or Class
A-1-A Swap Counterparty, as applicable, from payments from the Supplemental Interest Trust,
or by the Certificate Swap Counterparty or Class A-1-A Swap Counterparty, as applicable, to
the Supplemental Interest Trust Trustee for payment to the Supplemental Interest Trust, as
applicable, pursuant to the terms of the Certificate Swap Agreement or the Class A-1-A Swap
Agreement, respectively.
Temporary Regulation S Global Offered Certificate: Not applicable.
Trigger Event: A Trigger Event is in effect with respect to any Distribution Date on
or after the Stepdown Date if either (a) the Sixty-Plus Delinquency Percentage, as
determined on that Distribution Date exceeds 40.00% of the Senior Enhancement Percentage for
that Distribution Date or (b) the aggregate amount of Realized Losses on the Mortgage Loans
as a percentage of the initial aggregate Stated Principal Balance as of the Cut-off Date
exceeds the applicable amount set forth below:
o June 2010 to May 2011: 0.20% with respect to June 2010, plus an additional 1/12th of
0.35% for each month through May 2011.
o June 2011 to May 2012: 0.55% with respect to June 2011, plus an additional 1/12th of
0.40% for each month through May 2012.
o June 2012 to May 2013: 0.95% with respect to June 2012, plus an additional 1/12th of
0.15% for each month through May 2013.
o June 2013 to May 2014: 1.10% with respect to June 2013, plus an additional 1/12th of
0.15% for each month through May 2014.
o June 2014 and thereafter: 1.25%.
Uncertificated Accrued Interest: With respect to any Uncertificated REMIC Regular
Interest for any Distribution Date, one month's interest at the related Uncertificated
Pass-Through Rate for such Distribution Date, accrued on the Uncertificated Principal Balance
or Uncertificated Notional Amount, as applicable, immediately prior to such Distribution
Date. Uncertificated Accrued Interest for the Uncertificated REMIC Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day months. For purposes of
calculating the amount of Uncertificated Accrued Interest for the REMIC I Regular Interests
for any Distribution Date, any Prepayment Interest Shortfalls and Relief Act Shortfalls (to
the extent not covered by Compensating Interest) shall be allocated among REMIC I Regular
Interests, pro rata, based on, and to the extent of, Uncertificated Accrued Interest, as
calculated without application of this sentence. For purposes of calculating the amount of
Uncertificated Accrued Interest for the REMIC II Regular Interests for any Distribution
Date, any Prepayment Interest Shortfalls and Relief Act Shortfalls (to the extent not
covered by Compensating Interest) shall be allocated among the REMIC II Regular Interests,
pro rata, based on, and to the extent of, Uncertificated Accrued Interest, as calculated
without application of this sentence. Uncertificated Interest on REMIC III Regular Interest
SB-PO shall be zero. Uncertificated Accrued Interest on REMIC III Regular Interest SB-IO
for each Distribution Date shall equal Accrued Certificate Interest for the Class SB
Certificates.
Uncertificated Notional Amount: With respect to the Class SB Certificates or REMIC
III Regular Interest SB-IO, immediately prior to any Distribution Date, the aggregate of the
Uncertificated Principal Balances of the REMIC II Regular Interests.
With respect to REMIC II Regular Interest LT-IO and each Distribution Date listed
below, the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests
ending with the designation "A" listed below:
DISTRIBUTION DATE REMIC I REGULAR INTERESTS
1 I-1-A through I-84-A
2 I-2-A through I-84-A
3 I-3-A through I-84-A
4 I-4-A through I-84-A
5 I-5-A through I-84-A
6 I-6-A through I-84-A
7 I-7-A through I-84-A
8 I-8-A through I-84-A
9 I-9-A through I-84-A
10 I-10-A through I-84-A
11 I-11-A through I-84-A
12 I-12-A through I-84-A
13 I-13-A through I-84-A
14 I-14-A through I-84-A
15 I-15-A through I-84-A
16 I-16-A through I-84-A
17 I-17-A through I-84-A
18 I-18-A through I-84-A
19 I-19-A through I-84-A
20 I-20-A through I-84-A
21 I-21-A through I-84-A
22 I-22-A through I-84-A
23 I-23-A through I-84-A
24 I-24-A through I-84-A
25 I-25-A through I-84-A
26 I-26-A through I-84-A
27 I-27-A through I-84-A
28 I-28-A through I-84-A
29 I-29-A through I-84-A
30 I-30-A through I-84-A
31 I-31-A through I-84-A
32 I-32-A through I-84-A
33 I-33-A through I-84-A
34 I-34-A through I-84-A
35 I-35-A through I-84-A
36 I-36-A through I-84-A
37 I-37-A through I-84-A
38 I-38-A through I-84-A
39 I-39-A through I-84-A
40 I-40-A through I-84-A
41 I-41-A through I-84-A
42 I-42-A through I-84-A
43 I-43-A through I-84-A
44 I-44-A through I-84-A
45 I-45-A through I-84-A
46 I-46-A through I-84-A
47 I-47-A through I-84-A
48 I-48-A through I-84-A
49 I-49-A through I-84-A
50 I-50-A through I-84-A
51 I-51-A through I-84-A
52 I-52-A through I-84-A
53 I-53-A through I-84-A
54 I-54-A through I-84-A
55 I-55-A through I-84-A
56 I-56-A through I-84-A
57 I-57-A through I-84-A
58 I-58-A through I-84-A
59 I-59-A through I-84-A
60 I-60-A through I-84-A
61 I-61-A through I-84-A
62 I-62-A through I-84-A
63 I-63-A through I-84-A
64 I-64-A through I-84-A
65 I-65-A through I-84-A
66 I-66-A through I-84-A
67 I-67-A through I-84-A
68 I-68-A through I-84-A
69 I-69-A through I-84-A
70 I-70-A through I-84-A
71 I-71-A through I-84-A
72 I-72-A through I-84-A
73 I-73-A through I-84-A
74 I-74-A through I-84-A
75 I-75-A through I-84-A
76 I-76-A through I-84-A
77 I-77-A through I-84-A
78 I-78-A through I-84-A
79 I-79-A through I-84-A
80 I-80-A through I-84-A
81 I-81-A through I-84-A
82 I-82-A through I-84-A
83 I-83-A through I-84-A
84 I-84-A
thereafter $0.00
With respect to REMIC III Regular Interest IO, immediately prior to any Distribution
Date, an amount equal to the Uncertificated Notional Amount of REMIC II Regular Interest
LT-IO.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I Pass-Through Rate or the
Uncertificated REMIC II Pass-Through Rate, as applicable
Uncertificated Principal Balance: The principal amount of any Uncertificated Regular
Interest outstanding as of any date of determination. The Uncertificated Principal Balance
of each Uncertificated Regular Interest shall be reduced first by Realized Losses allocated
thereto by the definition of REMIC I Realized Losses or REMIC II Realized Losses, as
applicable, and by all distributions of principal deemed made on such Uncertificated Regular
Interest on such Distribution Date. The Uncertificated Principal Balance of each
Uncertificated Regular Interest shall never be less than zero. With respect to REMIC III
Regular Interest SB-PO the initial amount set forth with respect thereto in the Preliminary
Statement as reduced by distributions deemed made in respect thereof pursuant to Section
4.02 and Realized Losses allocated thereto pursuant to Section 4.05.
Uncertificated REMIC Regular Interests: The REMIC I Regular Interests, the REMIC II
Regular Interests and REMIC III Regular Interests SB-IO, SB-PO and IO.
Uncertificated REMIC I Pass-Through Rate: With respect to each REMIC I Regular
Interest ending with the designation "A", a per annum rate equal to the weighted average Net
Mortgage Rate of the Mortgage Loans multiplied by two (2), subject to a maximum rate
of 10.4940%. With respect to each REMIC I Regular Interest ending with the designation "B",
the greater of (x) a per annum rate equal to the excess, if any, of (i) 2 multiplied by the
weighted average Net Mortgage Rate of the Mortgage Loans over (ii) 10.4940% and (y)
0.00000%. With respect to REMIC I Regular Interest A-I, the weighted average of the Net
Mortgage Rates of the Mortgage Loans.
Uncertificated REMIC II Pass-Through Rate: With respect to any Distribution Date and
(i) REMIC II Regular Interests LT1 and LT2, the REMIC II Net WAC Rate, (ii) REMIC II Regular
Interest LT3, zero (0.00%), (iii) REMIC II Regular Interest LT4, twice the REMIC II Net WAC
Rate, and (iv) REMIC II Regular Interest LT-IO, the excess of (i) the weighted average of
the Uncertificated REMIC I Pass-Through Rates for REMIC I Regular Interests ending with the
designation "A", over (ii) 2 multiplied by Swap LIBOR.
Underwriter: Credit Suisse Securities (USA) LLC.
Section 1.02. Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on the LIBOR
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 Reuters Screen LIBOR01 Page as of 11:00
a.m., London time, on such LIBOR Rate Adjustment Date. "Reuters Screen LIBOR01" means the
display designated as that page on the Reuters Monitor Money Rates (or such other page as
may replace such page 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 LIBOR 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 LIBOR 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, after consultation with the Master
Servicer, 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 and the Master Servicer on any LIBOR Rate
Adjustment Date and the Master Servicer's subsequent calculation of the Pass-Through Rate
applicable to the LIBOR 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 telephone by calling (800)
000-0000 the Pass-Through Rate on the LIBOR Certificates for the current and the immediately
preceding Interest Accrual Period.
Notwithstanding the foregoing, for the purpose of determining the amount of any
payment to be made under the Certificate Swap Agreement, LIBOR will be calculated as
provided in the Certificate Swap Agreement.
Section 1.03. 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 definitions set forth herein
include both the singular and the plural.
References in the Pooling and Servicing Agreement to "interest" on and "principal" of
the Mortgage Loans shall mean, with respect to the Sharia Mortgage Loans, if any, amounts in
respect of profit payments and acquisition payments, respectively.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(See Section 2.01 of the Standard Terms).
Section 2.02. Acceptance by Trustee.
(See Section 2.02 of the Standard Terms).
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the
Company.
(a) (See Section 2.03(a) of the Standard Terms).
(b) The Company hereby represents and warrants to the Trustee for the benefit of
Certificateholders that as of the Closing Date (or, if otherwise specified below, as of the
date so specified and provided that the percentages of the Mortgage Loans described in this
clause (b) are approximate percentages by aggregate Stated Principal Balance determined as
of the Cut-off Date after deducting payments due during the month of the Cut-off Date):
(i) No Mortgage Loan is 30 or more days Delinquent in payment of principal and interest
as of the Cut-off Date and no Mortgage Loan has been so Delinquent more than
once in the 12-month period prior to the Cut-off Date;
(ii) The information set forth in Exhibit One hereto with respect to each Mortgage Loan or
the Mortgage Loans, as the case may be, is true and correct in all material
respects at the date or dates respecting which such information is furnished;
(iii) The Mortgage Loans are adjustable-rate mortgage loans with Monthly Payments due, with
respect to a majority of the Mortgage Loans, on the first day of each month
and terms to maturity at origination or modification of not more than 30 years;
(iv) To the best of the Company's knowledge, each Mortgage Loan is required to be covered
by a standard hazard insurance policy. If a Mortgage Loan is secured by a
Mortgaged Property with a Loan-to-Value Ratio at origination in excess of 80%,
such Mortgage Loan is the subject of a Primary Insurance Policy that insures
(a) at least 35% of the Stated Principal Balance of the Mortgage Loan at
origination if the Loan-to-Value Ratio is between 100.00% and 95.01%, (b) at
least 30% of the Stated Principal Balance of the Mortgage Loan at origination
if the Loan-to-Value Ratio is between 95.00% and 90.01%, (c) at least 25% of
such balance if the Loan-to-Value Ratio is between 90.00% and 85.01% and (d)
at least 12% of such balance if the Loan-to-Value Ratio is between 85.00% and
80.01%. To the best of the Company's knowledge, each such Primary Insurance
Policy is in full force and effect and the Trustee is entitled to the benefits
thereunder;
(v) The issuers of the Primary Insurance Policies are insurance companies whose
claims-paying abilities are currently acceptable to each Rating Agency;
(vi) No more than approximately 1.2% of the Mortgage Loans are secured by Mortgaged
Properties located in any one zip code area in Virginia, and no more than
approximately 0.9% of the Mortgage Loans are secured by Mortgaged Properties
located in any one zip code area outside Virginia;
(vii) The improvements upon the Mortgaged Properties are insured against loss by fire and
other hazards as required by the Program Guide, including flood insurance if
required under the National Flood Insurance Act of 1968, as amended. The
Mortgage requires the Mortgagor to maintain such casualty insurance at the
Mortgagor's expense, and on the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to obtain and maintain such insurance at the
Mortgagor's expense and to seek reimbursement therefor from the Mortgagor;
(viii) Immediately prior to the assignment of the Mortgage Loans to the Trustee, the Company
had good title to, and was the sole owner of, each Mortgage Loan free and
clear of any pledge, lien, encumbrance or security interest (other than rights
to servicing and related compensation) and such assignment validly transfers
ownership of the Mortgage Loans to the Trustee free and clear of any pledge,
lien, encumbrance or security interest;
(ix) No more than approximately 52.8% of the Mortgage Loans were underwritten under a
reduced loan documentation program, no more than approximately 18.71% of the
Mortgage Loans were underwritten under a no-stated income program, and no more
than approximately 6.49% of the Mortgage Loans were underwritten under a no
income/no asset program;
(x) Except with respect to no more than approximately 20.53% of the Mortgage Loans, the
Mortgagor represented in its loan application with respect to the related
Mortgage Loan that the Mortgaged Property would be owner-occupied;
(xi) None of the Mortgage Loans is a Buy-Down Mortgage Loan;
(xii) Each Mortgage Loan constitutes a qualified mortgage under Section 860G(a)(3)(A) of
the Code and Treasury Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6),
(7) and (9) without reliance on the provisions of Treasury Regulation Section
1.860G-2(a)(3) or Treasury Regulation Section 1.860G-2(f)(2) or any other
provision that would allow a Mortgage Loan to be treated as a "qualified
mortgage" notwithstanding its failure to meet the requirements of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1), (2),
(4), (5), (6), (7) and (9);
(xiii) A policy of title insurance was effective as of the closing of each Mortgage Loan and
is valid and binding and remains in full force and effect, unless the
Mortgaged Properties are located in the State of Iowa and an attorney's
certificate has been provided as described in the Program Guide;
(xiv) None of the Mortgage Loans are Cooperative Loans;
(xv) No more than approximately 0.2% of the Mortgage Loans are Sharia Mortgage Loans;
(xvi) With respect to each Mortgage Loan originated under a "streamlined" Mortgage Loan
program (through which no new or updated appraisals of Mortgaged Properties
are obtained in connection with the refinancing thereof), the related Seller
has represented that either (a) the value of the related Mortgaged Property as
of the date the Mortgage Loan was originated was not less than the appraised
value of such property at the time of origination of the refinanced Mortgage
Loan or (b) the Loan-to-Value Ratio of the Mortgage Loan as of the date of
origination of the Mortgage Loan generally meets the Company's underwriting
guidelines;
(xvii) Interest on each Mortgage Loan is calculated on the basis of a 360-day year
consisting of twelve 30-day months;
(xviii) None of the Mortgage Loans contain in the related Mortgage File a Destroyed Mortgage
Note;
(xix) None of the Mortgage Loans have been made to International Borrowers;
(xx) No Mortgage Loan provides for payments that are subject to reduction by withholding
taxes levied by any foreign (non-United States) sovereign government; and
(xxi) None of the Mortgage Loans are Additional Collateral Loans and none of the Mortgage
Loans are Pledged Asset Loans.
It is understood and agreed that the representations and warranties set forth in this
Section 2.03(b) shall survive delivery of the respective Custodial Files to the Trustee or
any Custodian.
Upon discovery by any of the Company, the Master Servicer, the Trustee or any
Custodian of a breach of any of the representations and warranties set forth in this Section
2.03(b) that materially and adversely affects the interests of the Certificateholders in any
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); provided,
however, that in the event of a breach of the representation and warranty set forth in
Section 2.03(b)(xii), the party discovering such breach shall give such notice within five
days of discovery. Within 90 days of its discovery or its receipt of notice of breach, the
Company shall either (i) cure such breach in all material respects 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 the Company 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 omission or 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 or repurchase must occur within 90 days from the date such breach
was discovered. Any such substitution shall be effected by the Company under the same terms
and conditions as provided in Section 2.04 for substitutions by Residential Funding. It is
understood and agreed that the obligation of the Company to cure such breach or to so
purchase or substitute for any Mortgage Loan as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf of the Certificateholders.
Section 2.04. Representations and Warranties of Sellers.
(See Section 2.04 of the Standard Terms).
Section 2.05. Execution and Authentication of Certificates/Issuance of Certificates
Evidencing Interests in REMICs.
The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery
of the Custodial Files to it, or any 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 Class R-1 Certificates in authorized
denominations Component I of which, together with the REMIC I Regular Interests, evidence
the beneficial interest in REMIC I, and Component II of which, together with the REMIC II
Regular Interests, evidence the beneficial interest in REMIC II.
Section 2.06. Conveyance of Uncertificated REMIC Regular Interests; Acceptance by the
Trustee.
The Company, as of the Closing Date, and concurrently with the execution and delivery
hereof, does hereby assign without recourse all the right, title and interest of the Company
in and to the Uncertificated REMIC Regular Interests to the Trustee for the benefit of the
Holders of each Class of Certificates (other than the Class R-1 Certificates in respect of
Components I and II, and with respect to REMIC III Regular Interests SB-IO, SB-PO and IO,
the Class R-1 Certificates in respect of Components III). The Trustee acknowledges receipt
of the Uncertificated REMIC Regular Interests and declares that it holds and will hold the
same in trust for the exclusive use and benefit of all present and future Holders of each
Class of Certificates (other than the Class R-1 Certificates in respect of Components I and
II, and with respect to REMIC III Regular Interests SB-IO, SB-PO and IO, the Class R-1
Certificates in respect of Components III). The rights of the Holders of each Class of
Certificates (other than the Class R-1 Certificates in respect of Components I and II) to
receive distributions from the proceeds of REMIC III in respect of such Classes and the
rights of the Holders of the Class SB Certificates and the Class R-X Certificates to receive
distributions from the proceeds of REMIC IV in respect of such Classes, and all ownership
interests of the Holders of such Classes in such distributions, shall be as set forth in
this Agreement.
Section 2.07. Issuance of Certificates Evidencing Interest in REMIC III and REMIC IV.
The Trustee acknowledges the assignment to it of the Uncertificated REMIC Regular
Interests, and, concurrently therewith and in exchange therefor, pursuant to the written
request of the Company executed by an officer of the Company, the Trustee has executed and
caused to be authenticated and delivered to or upon the order of the Company, (i) all
Classes of Certificates (other than the Class SB Certificates and the Class R-1 Certificates
in respect of Components I and II) in authorized denominations, which, together with REMIC
III Regular Interests SB-IO, SB-PO and IO, evidence the beneficial interests in the entire
REMIC III and (ii) the Class SB and Class R-X Certificates which evidence the beneficial
interests in the entire REMIC IV.
Section 2.08. Purposes and Powers of the Trust.
(See Section 2.08 of the Standard Terms.)
Section 2.09. Agreement Regarding Ability to Disclose.
The Company, the Master Servicer and the Trustee hereby agree, notwithstanding any
other express or implied agreement to the contrary, that any and all Persons, and any of
their respective employees, representatives, and other agents may disclose, immediately upon
commencement of discussions, to any and all Persons, without limitation of any kind, the tax
treatment and tax structure of the transaction and all materials of any kind (including
opinions or other tax analyses) that are provided to any of them relating to such tax
treatment and tax structure. For purposes of this paragraph, the terms "tax treatment" and
"tax structure" are defined under Treasury Regulationss.1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer. (See Section 3.01 of the Standard Terms)
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers; Enforcement
of Subservicers' and Sellers' Obligations. (See Section 3.02 of the
Standard Terms)
Section 3.03. Successor Subservicers. (See Section 3.03 of the Standard Terms)
Section 3.04. Liability of the Master Servicer. (See Section 3.04 of the Standard Terms)
Section 3.05. No Contractual Relationship Between Subservicer and Trustee or
Certificateholders. (See Section 3.05 of the Standard Terms)
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee. (See Section
3.06 of the Standard Terms)
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposit to Custodial Account.
(a) (See Section 3.07(a) of the Standard Terms)
(b) (See Section 3.07(b) of the Standard Terms)
(c) (See Section 3.07(c) of the Standard Terms)
(d) (See Section 3.07(d) of the Standard Terms)
(e) Notwithstanding Section 3.07(a), The Master Servicer shall not waive
(or permit a Subservicer to waive) any Prepayment Charge unless: (i) the enforceability
thereof shall have been limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally, (ii) the enforcement thereof is
illegal, or any local, state or federal agency has threatened legal action if the prepayment
penalty is enforced, (iii) the collectability thereof shall have been limited due to
acceleration in connection with a foreclosure or other involuntary payment or (iv) such
waiver is standard and customary in servicing similar Mortgage Loans and relates to a
default or a reasonably foreseeable default and would, in the reasonable judgment of the
Master Servicer, maximize recovery of total proceeds taking into account the value of such
Prepayment Charge and the related Mortgage Loan. In no event will the Master Servicer waive
a Prepayment Charge in connection with a refinancing of a Mortgage Loan that is not related
to a default or a reasonably foreseeable default. If a Prepayment Charge is waived, but
does not meet the standards described above, then the Master Servicer is required to remit
the amount of such waived Prepayment Charge to the Trustee at the time that the amount
prepaid on the related Mortgage Loan is required to be deposited into the Custodial Account,
and upon receipt thereof and written direction with respect thereto, the Trustee shall
deposit such amount into the Certificate Account. Notwithstanding any other provisions of
this Agreement, any payments made by the Master Servicer in respect of any waived Prepayment
Charges pursuant to this Section shall be deemed to be paid outside of the Trust Fund and
not part of any REMIC.
Section 3.08. Subservicing Accounts; Servicing Accounts. (See Section 3.08 of the Standard
Terms)
Section 3.09. Access to Certain Documentation and Information Regarding the Mortgage Loans.
(See Section 3.09 of the Standard Terms)
Section 3.10. Permitted Withdrawals from the Custodial Account. (See Section 3.10 of the
Standard Terms)
Section 3.11. Maintenance of the Primary Insurance Policies; Collections Thereunder. (See
Section 3.011 of the Standard Terms)
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage. (See
Section 3.12 of the Standard Terms)
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements;
Certain Assignments. (See Section 3.13 of the Standard Terms)
Section 3.14. Realization Upon Defaulted Mortgage Loans. (See Section 3.14 of the Standard
Terms)
Section 3.15. Trustee to Cooperate; Release of Custodial Files.
(a) (See Section 3.15(a) of the Standard Terms)
(b) (See Section 3.15(b) of the Standard Terms)
(c) (See Section 3.15(c) of the Standard Terms)
Section 3.16. Servicing and Other Compensation; Compensating Interest.
(a) (See Section 3.16(a) of the Standard Terms)
(b) Additional servicing compensation in the form of assumption fees, late
payment charges, investment income on amounts in the Custodial Account or the
Certificate Account or otherwise (but not including Prepayment Charges) shall be
retained by the Master Servicer or the Subservicer to the extent provided herein,
subject to clause (e) below. Prepayment charges, if any, shall be deposited into the
Certificate Account and shall be paid on each Distribution Date to the holders of the
Class SB Certificates in accordance with the Certificate Principal Balance thereof.
(c) (See Section 3.16(c) of the Standard Terms)
(d) (See Section 3.16(d) of the Standard Terms)
(e) (See Section 3.16(e) of the Standard Terms)
Section 3.17. Reports to the Trustee and the Company. (See Section 3.17 of the Standard
Terms)
Section 3.18. Annual Statement as to Compliance. (See Section 3.18 of the Standard Terms)
Section 3.19. Annual Independent Public Accountants' Servicing Report. (See Section 3.19 of
the Standard Terms)
Section 3.20. Rights of the Company in Respect of the Master Servicer. (See Section 3.20 of
the Standard Terms)
Section 3.21. Administration of Buydown Funds. (See Section 3.21 of the Standard Terms)
Section 3.22. Advance Facility. (See Section 3.22 of the Standard Terms)
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account.
(a) The Master Servicer on behalf of the Trustee shall establish and maintain a
Certificate Account in which the Master Servicer shall cause to be deposited on behalf of
the Trustee on or before 2:00 P.M. New York time on each Certificate 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 Certificate Account pursuant to Section 3.12(a), (iii) any amount required to be
deposited in the Certificate Account pursuant to Section 3.16(e) or 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.
On or prior to the Business Day immediately following each Determination Date,
the Master Servicer shall determine any amounts owed by the Certificate Swap Counterparty
under the Certificate Swap Agreement and the Class A-1-A Swap Counterparty under the Class
A-1-A Swap Agreement and inform the Supplemental Interest Trust Trustee in writing of the
amount so calculated.
(b) (See Section 4.01(b) of the Standard Terms)
Section 4.02. Distributions.
(a) On each Distribution Date, the Trustee (or the Paying Agent on behalf of the Trustee)
shall allocate and distribute the Available Distribution Amount to the extent on deposit in
the Certificate Account for such date to the interests issued in respect of REMIC I, REMIC
II, REMIC III and REMIC IV, as specified in this Section.
(b) (1) On each Distribution Date, the REMIC I Distribution Amount shall be
distributed by REMIC I to REMIC II on account of the REMIC I Regular Interests in the
amounts and with the priorities set forth in the definition thereof.
(2) On each Distribution Date, the REMIC II Distribution Amount
shall be distributed by REMIC II to REMIC III on account of the REMIC II Regular
Interests in the amounts and with the priorities set forth in the definition thereof.
(3) On each Distribution Date, the REMIC III Distribution Amount
shall be deemed to have been distributed by REMIC III to the Certificateholders (other
than the Class SB Certificateholders) on account of the REMIC III Regular Interests
represented thereby and to REMIC IV on account of REMIC III Regular Interests SB-IO,
SB-PO and IO in the amounts and with the priorities set forth in the definition thereof.
(4) On each Distribution Date, the REMIC IV Distribution Amount
shall be deemed to have been distributed by REMIC IV to the Class SB Certificateholders
on account of the REMIC IV Regular Interests as set forth in the definition thereof.
(5) On each Distribution Date, the amount, if any, deemed received
by the holders of the Class SB Certificates in respect of REMIC IV Regular Interest IO
and under the SB-AM Swap Agreement shall be deemed to have been paid on behalf of the
Class SB Certificates by the Trustee pursuant to Section 4.09 in respect of the Net Swap
Payment owed to the Certificate Swap Counterparty. On each Distribution Date, the
amount, if any, deemed received by the holders of the Class SB Certificates under the
SB-A1A Swap Agreement shall be deemed to have been paid on behalf of the Class SB
Certificates by the Trustee pursuant to Section 4.11 in respect of the Net Swap Payment
owed to the Class A-1-A Swap Counterparty. On each Distribution Date, the amount, if
any, received by the Supplememental Interest Trust Trustee from the Certificate Swap
Counterparty in respect of the Certificate Swap Agreement and the Class A-1-A Swap
Counterparty in respect of the Class A-1-A Swap Agreement shall be deemed to have been
received by the Supplemental Interest Trust Trustee on behalf of the Class SB
Certificates. On each Distribution Date, amounts paid to the Class A Certificates and
Class M Certificates pursuant to Section 4.02(c)(v) in respect of Basis Risk Shortfall
(including any such amounts, otherwise distributable to the Class A-1-A Certificates,
that are distributed to the Class A-1-A Supplemental Interest Trust Account for payment
to the Class A-1-A Swap Counterparty) shall be deemed to have been paid by the Class SB
Certificateholder pursuant to the SB-AM Swap Agreement. On each Distribution Date,
Class A-1-A Uncapped Pass-Through Amounts paid to the Class A-1-A Certificates pursuant
to Section 4.11(c), less the Accrued Certificate Interest for the Class A-1-A
Certificates calculated using the Net WAC Cap Rate and less any Basis Risk Shortfalls
otherwise distributable to the Class A-1-A Certificates from Excess Cash Flow in the
absence of the Class A-1-A Swap Agreement on such Distribution Date shall be deemed to
have been paid by the Class SB Certificateholder pursuant to the SB-A1A Swap Agreement.
(6) Notwithstanding the distributions described in this Section
4.02(b), distribution of funds from the Certificate Account shall be made only in accordance
with Section 4.02(c).
(c) On each Distribution Date (x) the Master Servicer on behalf of the Trustee or (y) the
Paying Agent appointed by the Trustee and the Supplemental Interest Trust Trustee, shall
distribute to each Certificateholder of record on the next preceding Record Date (other than
as provided in Section 9.01 of the Standard Terms 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 Master Servicer or the Paying Agent, as the case may
be, or, if such Certificateholder has not so notified the Master Servicer 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, in each case to the extent of
the Available Distribution Amount on deposit in the Certificate Account (except with respect
to clause (ix)(B) below, to the extent of Prepayment Charges on deposit in the Certificate
Account) and the Certificate Supplemental Interest Trust Account pursuant to Section 4.09(c):
(i) The Interest Distribution Amount, sequentially:
(A) first, to the Class A Certificates, on a pro rata basis,
Accrued Certificate Interest due thereon for such Distribution Date plus any
Accrued Certificate Interest due thereon remaining unpaid from any prior
Distribution Date, together with interest thereon at the related Pass-Through
Rate in effect for such Distribution Date; provided, however, that prior to
the termination of the Class A-1-A Swap Agreement, interest distributions that
are otherwise payable to Holders of the Class A-1-A Certificates will instead
be deposited in the Class A-1-A Supplemental Interest Trust Account for
payment to the Class A-1-A Swap Counterparty, and Holders of the Class A-1-A
Certificates will receive amounts payable by the Class A-1-A Swap Counterparty
(as described in Section 4.11(c) below) to the Class A-1-A Supplemental
Interest Trust Account;
(B) second, to the Class M-1 Certificates, Accrued
Certificate Interest due thereon for such Distribution Date plus any Accrued
Certificate Interest due thereon remaining unpaid from any prior Distribution
Date, together with interest thereon at the related Pass-Through Rate in
effect for such Distribution Date;
(C) third, to the Class M-2 Certificates Accrued Certificate
Interest due thereon for such Distribution Date plus any Accrued Certificate
Interest due thereon remaining unpaid from any prior Distribution Date,
together with interest thereon at the related Pass-Through Rate in effect for
such Distribution Date;
(D) fourth, to the Class M-3 Certificates Accrued
Certificate Interest due thereon for such Distribution Date plus any related
Accrued Certificate Interest due thereon remaining unpaid from any prior
Distribution Date, together with interest thereon at the related Pass-Through
Rate in effect for such Distribution Date;
(E) fifth, to the Class M-4 Certificates, Accrued
Certificate Interest due thereon for such Distribution Date plus any Accrued
Certificate Interest due thereon remaining unpaid from any prior Distribution
Date, together with interest thereon at the related Pass-Through Rate in
effect for such Distribution Date;
(ii) to the Class A Certificateholders and Class M Certificateholders from the amount, if
any, of Available Distribution Amount remaining after the foregoing
distributions, the Principal Distribution Amount, which amount shall be
allocated in the manner and priority set forth in Section 4.02(d), until the
aggregate Certificate Principal Balance of each Class of Class A Certificates
and Class M Certificates has been reduced to zero;
(iii) to the Class A Certificateholders and Class M Certificateholders from the amount, if
any, of Excess Cash Flow remaining after the foregoing distributions, the
amount of any related Prepayment Interest Shortfalls with respect to the
Mortgage Loans for that Distribution Date, to the extent not covered by
Compensating Interest on such Distribution Date, which amount shall be
allocated to the Class A Certificateholders and Class M Certificateholders on
a pro rata basis, based on the amount of Prepayment Interest Shortfalls
allocated thereto for such Distribution Date;
(iv) to the Class A Certificateholders and Class M Certificateholders from the amount, if
any, of Excess Cash Flow remaining after the foregoing distributions, the
amount of any Prepayment Interest Shortfalls allocated thereto remaining
unpaid from prior Distribution Dates together with interest thereon at the
related Pass-Through Rate in effect for such Distribution Date, which amount
shall be allocated to the Class A Certificateholders and Class M
Certificateholders on a pro rata basis, based on the amount of Prepayment
Interest Shortfalls remaining unpaid;
(v) to the Class A Certificates and Class M Certificates from the amount, if any, of
Excess Cash Flow remaining after the foregoing distributions the amount of any
Basis Risk Shortfall on such Certificates, which amount shall be allocated
first, to the Class A Certificates on a pro rata basis, based on their
respective Basis Risk Shortfall for such Distribution Date, and then,
sequentially, to the Class M-1, Class M-2, Class M-3 and Class M-4
Certificateholders, in that order; provided, however, that prior to the
termination of the Class A-1-A Swap Agreement, any amounts otherwise
distributable to the Class A-1-A Certificates in the absence of the Class
A-1-A Swap Agreement will instead be distributed to the Class A-1-A
Supplemental Interest Trust Account for payment to the Class A-1-A Swap
Counterparty;
(vi) to the holders of the Class A Certificates and Class M Certificates, on a pro rata
basis, based on Relief Act Shortfalls allocated thereto for such Distribution
Date, the amount of any Relief Act Shortfalls allocated thereto with respect
to the Mortgage Loans for such Distribution Date,
(vii) first, to the Class A Certificateholders, the principal portion of any Realized
Losses previously allocated to those Certificates and remaining unreimbursed,
on a pro rata basis based on their respective principal portion of any
Realized Losses previously allocated to those Certificates and remaining
unreimbursed, and then, sequentially, to the Class M-1, Class M-2, Class M-3
and Class M-4 Certificateholders, in that order, the principal portion of any
Realized Losses previously allocated to such Class and remaining unreimbursed;
(viii) on a pro rata basis, to (A) the Certificate Supplemental Interest Trust Account for
payment to the Certificate Swap Counterparty, any Swap Termination Payments
due to a Swap Counterparty Trigger Event in respect of the Certicate Swap
Agreement or otherwise unpaid pursuant to the Certificate Swap Agreement and
(B) the Class A-1-A Supplemental Interest Trust Account for payment to the
Class A-1-A Swap Counterparty, any Swap Termination Payments due to a Swap
Counterparty Trigger Event in respect of the Class A-1-A Swap Agreement or
otherwise unpaid pursuant to the Class A-1-A Swap Agreement;
(ix) to the Class SB Certificates in accordance with the Notional Amount thereof, (A) from
the amount, if any, of the Available Distribution Amount remaining after the
foregoing distributions, the sum of (I) Accrued Certificate Interest thereon,
(II) the amount of any Overcollateralization Reduction Amount for such
Distribution Date and (III) for any Distribution Date after the Certificate
Principal Balance of each Class A Certificate and Class M Certificate has been
reduced to zero, the Overcollateralization Amount, (B) from Prepayment Charges
on deposit in the Certificate Account, any Prepayment Charges received on the
Mortgage Loans during the related Prepayment Period, and (C) from the Net Swap
Payments owed by the Certificate Swap Counterparty, if any, the amount of such
Net Swap Payments remaining after the foregoing distributions; and
(x) to the Class R-1 Certificateholders in respect of Component III, the balance, if any,
of the Available Distribution Amount.
All payments of amounts in respect of Basis Risk Shortfall made pursuant to Section
4.02(c)(v) (including any such amounts, otherwise distributable to the Class A-1-A
Certificates, that are distributed to the Class A-1-A Supplemental Interest Trust Account
for payment to the Class A-1-A Swap Counterparty) shall, for federal income tax purposes, be
deemed to have been distributed from REMIC IV to the holders of the Class SB Certificates
and then paid outside of any REMIC to the recipients thereof pursuant to an interest rate
cap contract. By accepting their Certificates the Holders of the Certificates agree to
treat such payments in the manner described in the preceding sentence for purposes of filing
their income tax returns.
(d) The Principal Distribution Amount payable to the Class A Certificateholders and Class
M Certificateholders shall be distributed as follows:
(i) first, to the Class A-1-A Certificates, Class A-1-B Certificates and Class A-2
Certificates, on a pro rata basis in accordance with their respective
Certificate Principal Balances, until the Certificate Principal Balances
thereof are reduced to zero; provided, however, that if a Swap Termination
Payment (other than a Swap Termination Payment due to a Swap Counterparty
Trigger Event) is payable to the Class A-1-A Swap Counterparty pursuant to the
terms of the Class A-1-A Swap Agreement, then the portion of the Class A
Principal Distribution Amount that otherwise would be distributed to the
Holders of the Class A-1-A Certificates in the absence of the Class A-1-A Swap
Agreement will instead be distributed, up to the amount of such Swap
Termination Payment remaining unpaid after distributions of interest, to the
Class A-1-A Supplement Interest Trust Account for payment to the Class A-1-A
Swap Counterparty;
(ii) second, the Class M-1 Principal Distribution Amount shall be distributed to the Class
M-1 Certificates until the Certificate Principal Balance thereof has been
reduced to zero;
(iii) third, the Class M-2 Principal Distribution Amount shall be distributed to the Class
M-2 Certificates until the Certificate Principal Balance thereof has been
reduced to zero;
(iv) fourth, the Class M-3 Principal Distribution Amount shall be distributed to the Class
M-3 Certificates until the Certificate Principal Balance thereof has been
reduced to zero; and
(v) fifth, the Class M-4 Principal Distribution Amount shall be distributed to the Class
M-4 Certificates until the Certificate Principal Balance thereof has been
reduced to zero.
(e) Notwithstanding the foregoing clauses (c) and (d), upon the reduction of the
Certificate Principal Balance of a Class of Class A Certificates or Class M Certificates to
zero, such Class of Certificates will not be entitled to further distributions pursuant to
Section 4.02, including, without limitation, the payment of current and unreimbursed
Prepayment Interest Shortfalls pursuant to clauses (c)(iii) and (iv) and Basis Risk
Shortfall pursuant to clause (c)(v).
(f) Each distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, as Holder thereof, and the Depository shall be solely responsible for crediting
the amount of such distribution to the accounts of its Depository Participants in accordance
with its normal procedures. Each Depository Participant shall be responsible for disbursing
such distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm") for which it acts as agent. Each
brokerage firm shall be responsible for disbursing funds to the Certificate Owners that it
represents. None of the Trustee, the Certificate Registrar, the Company or the Master
Servicer shall have any responsibility therefor.
(g) [Reserved].
(h) Except as otherwise provided in Section 9.01 of the Standard Terms, if the Master
Servicer anticipates that a final distribution with respect to any Class of Certificates
will be made on a future Distribution Date, the Master Servicer shall, no later than 40 days
prior to such final Distribution Date, notify the Trustee and the Trustee shall, not earlier
than the 15th day and not later than the 25th day of the month next preceding the month of
such final distribution, distribute, or cause to be distributed, 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 will 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) of the Standard Terms do not surrender their Certificates for final cancellation,
the Trustee shall cause funds distributable with respect to such Certificates to be
withdrawn from the Certificate Account and credited to a separate non-interest bearing
escrow account for the benefit of such Certificateholders as provided in Section 9.01(d) of
the Standard Terms.
Section 4.03. Statements to Certificateholders; Statements to the Rating Agencies; Exchange
Act Reporting. (See Section 4.03 of the Standard Terms)
Section 4.04. Distribution of Reports to the Trustee and the Company; Advances by the Master
Servicer.
(a) (See Section 4.04(a) of the Standard Terms)
(b) (See Section 4.04(b) of the Standard Terms)
Section 4.05. Allocation of Realized Losses.
(a) Prior to each Distribution Date, the Master Servicer shall determine the total amount
of Realized Losses, if any, that resulted from any Cash Liquidation, Servicing
Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred
during the related Prepayment Period 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 in the month in which such Distribution
Date occurs. The amount of each Realized Loss shall be evidenced by an Officers'
Certificate. All Realized Losses on the Mortgage Loans shall be allocated as follows:
first, to the Excess Cash Flow as part of the Principal Distribution Amount as
provided in Section 4.02(c), to the extent of the Excess Cash Flow for such Distribution
Date,
second, in reduction of the Overcollateralization Amount, until such amount has been
reduced to zero;
third, to the Class M-4 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
seventh, to the Class A Certificates on a pro rata basis, provided, however, that
losses otherwise allocable to the Class A-1-A Certificates and Class A-1-B Certificates will
be allocated first to the Class A-2 Certificates until the Certificate Principal Balance of
the Class A-2 Certificates has been reduced to zero.
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 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 in respect of such Distribution
Date (without regard to any Compensating Interest allocated to the Available Distribution
Amount for such Distribution Date) in the case of an interest portion of a Realized Loss.
(b) Any allocation of the principal portion of Realized Losses (other than Debt Service
Reductions) to any Class of Class A Certificates or Class M Certificates on any Distribution
Date 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,
until the Certificate Principal Balance thereof has been reduced to zero; provided, that no
such reduction shall reduce the aggregate Certificate Principal Balance of the Certificates
below the aggregate Stated Principal Balance of the Mortgage Loans. Allocations of the
interest portions of Realized Losses (other than any interest rate reduction resulting from
a Servicing Modification) to any Class of Class A Certificates or Class M Certificates on
any Distribution Date shall be made by operation of the definition of "Accrued Certificate
Interest" for each Class for such Distribution Date. Allocations of the interest portion of
a Realized Loss resulting from an interest rate reduction in connection with a Servicing
Modification shall be made by operation of the priority of payment provisions of Section
4.02(c). 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.
(c) Realized Losses shall be allocated among the REMIC I Regular Interests pursuant to
the definition of REMIC I Realized Losses and the REMIC II Regular Interests pursuant to the
definition of REMIC II Realized Losses.
(d) Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount
pursuant to paragraphs (a), (b) or (c) of this Section, the definition of Accrued
Certificate Interest and the operation of Section 4.02(c) shall be deemed allocated to the
Class SB Certificates in accordance with the Notional Amount thereof. Realized Losses
allocated to the Class SB Certificates shall, to the extent such Realized Losses represent
Realized Losses on an interest portion, be allocated to REMIC III Regular Interest SB-IO.
Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of this
Section shall be deemed to reduce Accrued Certificate Interest on REMIC III Regular Interest
SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph
(b) of this Section shall be deemed first to reduce the principal balance of REMIC III
Regular Interest SB-PO until such principal balance shall have been reduced to zero and
thereafter to reduce accrued and unpaid interest on REMIC III Regular Interest SB-IO.
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property. (See Section
4.06 of the Standard Terms.)
Section 4.07. Optional Purchase of Defaulted Mortgage Loans. (See Section 4.07 of the
Standard Terms.)
Section 4.08. Surety Bond. (See Section 4.08 of the Standard Terms.)
Section 4.09. Certificate Swap Agreement.
(a) On the Closing Date, the Supplemental Interest Trust Trustee shall (i) establish and
maintain in its name, in trust for the benefit of the Certificateholders (other than the
Class R Certificateholders), the Certificate Supplemental Interest Trust Account and (ii)
for the benefit of the Certificateholders (other than the Class R Certificateholders), cause
the Supplemental Interest Trust to enter into the Certificate Swap Agreement.
(b) The Supplemental Interest Trust Trustee shall deposit in the Certificate Supplemental
Interest Trust Account all payments that are payable to the Supplemental Interest Trust
under the Certificate Swap Agreement. Net Swap Payments and Swap Termination Payments
(other than Swap Termination Payments resulting from a Swap Counterparty Trigger Event)
payable by the Supplemental Interest Trust Trustee on behalf of the Supplemental Interest
Trust to the Certificate Swap Counterparty pursuant to the Certificate Swap Agreement shall
be excluded from the Available Distribution Amount and paid to the Certificate Swap
Counterparty prior to any distributions to the Certificateholders. On each Distribution
Date, such amounts will be remitted by the Supplemental Interest Trust Trustee to the
Certificate Supplemental Interest Trust Account for payment to the Certificate Swap
Counterparty, first to make any Net Swap Payment owed to the Certificate Swap Counterparty
pursuant to the Certificate Swap Agreement for such Distribution Date, and second to make
any Swap Termination Payment (not due to a Swap Counterparty Trigger Event) owed to the
Certificate Swap Counterparty pursuant to the Certificate Swap Agreement for such
Distribution Date. For federal income tax purposes, such amounts paid to the Certificate
Supplemental Interest Trust Account on each Distribution Date shall first be deemed paid to
the Certificate Supplemental Interest Trust Account in respect of REMIC IV Regular Interest
IO to the extent of the amount distributable on such REMIC IV Regular Interest IO on such
Distribution Date, and any remaining amount shall be deemed paid to the Certificate
Supplemental Interest Trust Account in respect of the SB-AM Swap Agreement. Any Swap
Termination Payment triggered by a Swap Counterparty Trigger Event owed to the Certificate
Swap Counterparty pursuant to the Certificate Swap Agreement will be subordinated to
distributions to the Holders of the Class A Certificates and Class M Certificates and shall
be paid as set forth under Section 4.02.
(c) Net Swap Payments payable by the Certificate Swap Counterparty to the Supplemental
Interest Trust Trustee on behalf of the Supplemental Interest Trust pursuant to the
Certificate Swap Agreement shall be deposited by the Supplemental Interest Trust Trustee
into the Certificate Supplemental Interest Trust Account and shall be applied in accordance
with Section 4.02.
(d) Subject to Sections 8.01 and 8.02 of the Standard Terms, the Supplemental Interest
Trust Trustee agrees to comply with the terms of the Certificate Swap Agreement and to
enforce the terms and provisions thereof against the Certificate Swap Counterparty at the
written direction of the Holders of Certificates entitled to at least 51% of the Voting
Rights, or if the Supplemental Interest Trust Trustee does not receive such direction from
such Certificateholders, then at the written direction of Residential Funding.
(e) The Certificate Supplemental Interest Trust Account shall be an Eligible Account.
Amounts held in the Certificate Supplemental Interest Trust Account from time to time shall
continue to constitute assets of the Trust Fund, but not of the REMICs, until released from
the Certificate Supplemental Interest Trust Account pursuant to this Section 4.09. The
Certificate Supplemental Interest Trust Account constitutes an "outside reserve fund" within
the meaning of Treasury Regulation Section 1.860G-2(h) and is not an asset of the REMICs.
The Class SB Certificateholders shall be the owners of the Certificate Supplemental Interest
Trust Account. The Supplemental Interest Trust Trustee shall keep records that accurately
reflect the funds on deposit in the Certificate Supplemental Interest Trust Account. The
Supplemental Interest Trust Trustee shall, at the written direction of the Master Servicer,
invest amounts on deposit in the Certificate Supplemental Interest Trust Account in
Permitted Investments. In the absence of written direction to the Supplemental Interest
Trust Trustee from the Master Servicer, all funds in the Certificate Supplemental Interest
Trust Account shall remain uninvested.
(f) The Supplemental Interest Trust Trustee shall enter into the SB-AM Swap Agreement on
behalf of the Holders of the Class A Certificates and Class M Certificates on the one hand,
and on behalf of the Holders of the Class SB Certificates on the other hand. Pursuant to
the SB-AM Swap Agreement, all Holders of Certificates (other than the Class SB Certificates
and Class R Certificates) shall be treated as having agreed to pay, on each Distribution
Date, to the holder of the Class SB Certificates an aggregate amount equal to the excess, if
any, of (i) the amount payable on such Distribution Date on the REMIC III Regular Interest
corresponding to such Class of Certificates less, in the case of the Class A-1-A
Certificates, the Class A-1-A Swap Fee Amount (expressed as a per annum rate based on the
Certificate Principal Balance of the Class A-1-A Certificates immediately prior to such
Distribution Date) over (ii) the amount payable on such Class of Certificates on such
Distribution Date (such excess, a "Class IO Distribution Amount"). In addition, pursuant to
the SB-AM Swap Agreement, the Holders of the Class SB Certificates shall be treated as
having agreed to pay, on each Distribution Date, the related Basis Risk Shortfalls to the
Certificateholders (other than the Class R Certificateholders) (including any such amounts,
otherwise distributable to the Class A-1-A Certificates, that are distributed to the Class
A-1-A Supplemental Interest Trust Account for payment to the Class A-1-A Swap Counterparty)
in accordance with the terms of this Agreement. Any payments to the Certificates from
amounts deemed received in respect of the SB-AM Swap Agreement shall not be payments with
respect to a "regular interest" in a REMIC within the meaning of Code Section 860G(a)(1).
However, any payment from the Certificates (other than the Class SB Certificates and Class R
Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having
been received by the Holders of such Certificates in respect of the REMIC III Regular
Interest corresponding to such Class of Certificates and as having been paid by such Holders
to the Certificate Supplemental Interest Trust Account pursuant to the SB-AM Swap
Agreement. Thus, each Certificate (other than the Class R Certificates) shall be treated as
representing not only ownership of regular interests in REMIC III or REMIC IV, as
applicable, but also ownership of an interest in, and obligations with respect to, a notional
principal contract.
(g) Upon the occurrence of an Early Termination Date, the Supplemental Interest Trust
Trustee shall use reasonable efforts to appoint a successor Certificate Swap Counterparty.
To the extent that the Supplemental Interest Trust Trustee receives a Swap Termination
Payment from the Certificate Swap Counterparty, the Supplemental Interest Trust Trustee
shall apply such Swap Termination Payment to appoint a successor Certificate Swap
Counterparty. In the event that the Supplemental Interest Trust Trustee receives a Swap
Termination Payment from the Certificate Swap Counterparty and a replacement Certificate
Swap Agreement or similar agreement cannot be obtained within 30 days after receipt by the
Supplemental Interest Trust Trustee of such Swap Termination Payment, then the Supplemental
Interest Trust Trustee shall deposit such Swap Termination Payment into a separate, non
interest bearing account and will, on each subsequent Distribution Date, withdraw from the
amount then remaining on deposit in such reserve account an amount equal to the Net Swap
Payment, if any, that would have been paid to the Supplemental Interest Trust Trustee by the
original Certificate Swap Counterparty calculated in accordance with the terms of the
original Certificate Swap Agreement, and deposit such amount into the Certificate
Supplemental Interest Trust Account for distribution on such Distribution Date pursuant to
Section 4.02(c). To the extent that the Supplemental Interest Trust Trustee is required to
pay a Swap Termination Payment to the Certificate Swap Counterparty, any upfront payment
received from the counterparty to a replacement Certificate Swap Agreement will be used to
pay such Swap Termination Payment prior to using any portion of the Available Distribution
Amount for such Distribution Date.
Section 4.10. Certificate Swap Agreement Collateral Account.
(a) The Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust
shall establish and maintain the Certificate Swap Agreement Collateral Account, a
non-interest bearing trust account, in which collateral received from the Certificate Swap
Counterparty pursuant to the Certificate Swap Agreement shall be deposited. Funds in the
Certificate Swap Agreement Collateral Account may be invested in Permitted Investments as
directed by the Certificate Swap Counterparty in writing to the Supplemental Interest Trust
Trustee. All such investments shall be made in the name of the Supplemental Interest Trust
Trustee and all income and gain realized from the investment of funds deposited in the
Certificate Swap Agreement Collateral Account shall be for the benefit of the Certificate
Swap Counterparty. At the time the Certificate Swap Counterparty directs the Supplemental
Interest Trust Trustee to invest funds held in the Certificate Swap Agreement Collateral
Account, the Certificate Swap Counterparty shall agree in writing to deposit in the
Certificate Swap Agreement Collateral Account the amount of any loss of principal incurred
in respect of any investment made with funds in such account immediately upon realization of
such loss. In the absence of written instructions and the agreement described in the
preceeding sentence, all funds in the Certificate Swap Agreement Collateral Account shall
remain uninvested. The Supplemental Interest Trust Trustee on behalf of the Supplemental
Interest Trust shall withdraw from the Certificate Swap Agreement Collateral Account and
return to the Certificate Swap Counterparty collateral held in the Certificate Swap
Agreement Collateral Account as provided in the Certificate Swap Agreement. Upon the
occurrence of a Swap Agreement Event of Default, Specified Condition or Early Termination
Date which results from a Swap Agreement Event of Default or Specified Condition, the
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust shall apply
any proceeds in respect of collateral held in the Certificate Swap Agreement Collateral
Account to any amounts payable by the Certificate Swap Counterparty under the Certificate
Swap Agreement.
(b) The Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust
shall give notice to the Certificate Swap Counterparty of the location of the Certificate
Swap Agreement Collateral Account maintained by it when established and prior to any change
thereof.
Section 4.11. Class A-1-A Swap Agreement.
(a) On the Closing Date, the Supplemental Interest Trust Trustee shall (i) establish and
maintain in its name, in trust for the benefit of the Class A-1-A Certificateholders, the
Class A-1-A Supplemental Interest Trust Account and (ii) for the benefit of the Class A-1-A
Certificateholders and the Class SB Certificateholders, cause the Supplemental Interest
Trust to enter into the Class A-1-A Swap Agreement.
(b) The Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust
shall deposit in the Class A-1-A Supplemental Interest Trust Account all payments that are
payable to the Supplemental Interest Trust Trustee under the Class A-1-A Swap Agreement. The
Class A-1-A Swap Fee Amount shall be excluded from the Available Distribution Amount and
paid to the Class A-1-A Swap Counterparty prior to any distributions to the
Certificateholders. Net Swap Payments payable by the Supplemental Interest Trust Trustee to
the Class A-1-A Swap Counterparty pursuant to the Class A-1-A Swap Agreement with respect to
each Distribution Date shall be paid to the Class A-1-A Swap Counterparty from amounts on
deposit in the Class A-1-A Supplement Interest Trust Account in an amount equal to the sum
of:
(i) the Class A-1-A Swap Fee Amount;
(ii) an amount equal to the product of (A) the Pass-Through Rate on the
Class A-1-A Certificates for such Distribution Date, (B) the Class A-1-A Swap
Notional Amount and (C) the number of days in the related calculation period as
provided in the Class A-1-A Swap Agreement (calculated on the basis of the actual
number of days) divided by 360; and
(iii) Basis Risk Shortfalls, if any, otherwise distributable to the Class
A-1-A Certificates from Excess Cash Flow in the absence of the Class A-1-A Swap
Agreement on such Distribution Date.
On each Distribution Date, such amounts will be remitted by the Supplemental Interest Trust
Trustee on behalf of the Supplemental Interest Trust to the Class A-1-A Supplemental
Interest Trust Account for payment to the Class A-1-A Swap Counterparty to make any Net Swap
Payment owed to the Class A-1-A Swap Counterparty pursuant to the Class A-1-A Swap Agreement
for such Distribution Date. For the avoidance of doubt, payments made to the Class A-1-A
Swap Counterparty pursuant to this Agreement and the Class A-1-A Swap Agreement shall be
without duplication. For federal income tax purposes, the Class A-1-A Swap Fee Amount paid
to the Class A-1-A Supplemental Interest Trust Account on each Distribution Date shall be
treated as having been received by the Holders of the Class A-1-A Certificates in respect of
the REMIC III Regular Interest corresponding to such Class of Certificates and as having
been paid by such Holders pursuant to the SB-A1A Swap Agreement. Notwithstanding the
foregoing, if the Class A-1-A Swap Agreement terminates while the Class A-1-A Certificates
remain outstanding and a Swap Termination Payment (other than a Swap Termination Payment due
to a Swap Counterparty Trigger Event) in respect thereof is owed by the Supplemental
Interest Trust Trustee on behalf of the Supplemental Interest Trust in respect thereof and
the Class A-1-A Swap Counterparty has not been paid in full as of such Distribution Date,
the Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust shall
be paid solely in accordance with Section 4.11(i) below.
(c) Net Swap Payments paid by the Class A-1-A Swap Counterparty to the Supplemental
Interest Trust Trustee on behalf of the Supplemental Interest Trust with respect to any
Distribution Date pursuant to the Class A-1-A Swap Agreement shall be deposited by the
Supplemental Interest Trust Trustee into the Class A-1-A Supplemental Interest Trust Account
and only for such Distribution Date shall be paid to the Class A-1-A Certificates in an
amount equal to the Uncapped Pass-Through Amount.
(d) Following distributions of Accrued Certificate Interest, distributions of the
Principal Distribution Amount and distributions of Excess Cash Flow, the Supplemental
Interest Trust Trustee, on behalf of the Supplemental Interest Trust, will distribute all
amounts on deposit in the Class A-1-A Supplement Interest Trust Account in the following
amounts and order of priority:
(i) first, to the Class A-1-A Swap Counterparty, any Net Swap Payment owed to
the Class A-1-A Swap Counterparty;
(ii) second, to the Class A-1-A Swap Counterparty, any Swap Termination
Payment in respect of the Class A-1-A Swap Agreement owed to the Class A-1-A Swap
Counterparty not due to a Swap Counterparty Trigger Event;
(iii) third, to the Class A-1-A Certificates, the Class A-1-A Uncapped
Pass-Through Amount;
(iv) fourth, to the Class A-1-A Swap Counterparty, an amount equal to any Swap
Termination Payment in respect of the Class A-1-A Swap Agreement owed to the Class
A-1-A Counterparty due to a Swap Counterparty Trigger Event; and
(v) fifth, to the Class SB Certficateholders, any remaining amounts.
(e) After the occurrence of a Class A-1-A Swap Event, if on any Distribution Date the
Class A-1-A Certificates are outstanding, in addition to the Accrued Certificate Interest to
be paid to the Class A-1-A Certificates at the related Pass-Through Rate on such
Distribution Date, the Supplemental Interest Trust Trustee on behalf of the Supplement
Interest Trust shall withdraw the Class A-1-A Supplemental Interest Trust Amount for such
Distribution Date from the Class A-1-A Supplemental Interest Trust Account and pay such
amounts to the Class A-1-A Certificateholders. If, on any Distribution Date, any amounts
remain in the Class A-1-A Supplemental Interest Trust Account after the Certificate
Principal Balance of the Class A-1-A Certificates has been reduced to zero, such amounts
shall be withdrawn by the Supplemental Interest Trust Trustee on behalf of the Supplemental
Interest Trust and paid to the holders of the Class SB Certificates on such Distribution Date.
(f) Subject to Sections 8.01 and 8.02 of the Standard Terms, the Supplemental Interest
Trust Trustee on behalf of the Supplemental Interest Trust agrees to comply with the terms
of the Class A-1-A Swap Agreement and to enforce the terms and provisions thereof against
the Class A-1-A Swap Counterparty at the written direction of the Holders of the Class A-1-A
Certificates entitled to at least 51% of the Voting Rights, or if the Supplemental Interest
Trust Trustee does not receive such direction from such Class A-1-A Certificateholders, then
at the written direction of Residential Funding.
(g) The Class A-1-A Supplemental Interest Trust Account shall be an Eligible Account.
Amounts held in the Class A-1-A Supplemental Interest Trust Account from time to time shall
continue to constitute assets of the Trust Fund, but not of the REMICs, until released from
the Class A-1-A Supplemental Interest Trust Account pursuant to this Section 4.11. The Class
A-1-A Supplemental Interest Trust Account constitutes an "outside reserve fund" within the
meaning of Treasury Regulation Section 1.860G-2(h) and is not an asset of the REMICs. The
Class SB Certificateholders shall be the owners of the Class A-1-A Supplemental Interest
Trust Account. The Supplemental Interest Trust Trustee on behalf of the Supplemental
Interest Trust shall keep records that accurately reflect the funds on deposit in the Class
A-1-A Supplemental Interest Trust Account. The Supplemental Interest Trust Trustee on behalf
of the Supplemental Interest Trust shall, at the written direction of the Master Servicer,
invest amounts on deposit in the Class A-1-A Supplemental Interest Trust Account in
Permitted Investments. In the absence of written direction to the Supplemental Interest
Trust Trustee from the Master Servicer, all funds in the Class A-1-A Supplemental Interest
Trust Account shall remain uninvested.
(h) Upon the occurrence of an Early Termination Date, the Supplemental Interest Trust
Trustee, at the direction of the Depositor, shall use reasonable efforts to appoint a
successor Class A-1-A Swap Counterparty. To the extent that the Supplemental Interest Trust
Trustee receives a Swap Termination Payment from the Class A-1-A Swap Counterparty, the
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust shall apply
such Swap Termination Payment to appoint a successor Class A-1-A Swap Counterparty. In the
event that the Supplemental Interest Trust Trustee receives a Swap Termination Payment from
the Class A-1-A Swap Counterparty and a replacement Class A-1-A Swap Agreement or similar
agreement cannot be obtained within 30 days after receipt by the Supplemental Interest Trust
Trustee of such Swap Termination Payment, then the Supplemental Interest Trust Trustee on
behalf of the Supplemental Interest Trust shall deposit such Swap Termination Payment into a
separate, non-interest bearing account and will, on each subsequent Distribution Date,
withdraw from the amount then remaining on deposit in such reserve account an amount equal
to the Net Swap Payment, if any, that would have been paid to the Supplemental Interest
Trust by the original Class A-1-A Swap Counterparty calculated in accordance with the terms
of the original Class A-1-A Swap Agreement, and deposit such amount into the Class A-1-A
Supplemental Interest Trust Account for distribution on such Distribution Date pursuant to
this Section 4.11. To the extent that the Supplemental Interest Trust is required to pay a
Swap Termination Payment to the Class A-1-A Swap Counterparty, any upfront payment received
from the counterparty to a replacement Class A-1-A Swap Agreement will be used to pay such
Swap Termination Payment prior to using any portion of the Available Distribution Amount for
such Distribution Date.
(i) In the event that the Class A-1-A Swap Agreement terminates while the Class A-1-A
Certificates remain outstanding and a Swap Termination Payment (other than a Swap
Termination Payment due to a Swap Counterparty Trigger Event) in respect thereof is owed by
the Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust in
respect thereof and the Class A-1-A Swap Counterparty has not been paid in full as of such
Distribution Date, the Supplemental Interest Trust Trustee shall deposit (i) the Accrued
Certificate Interest payable to the Class A-1-A Certificates for such Distribution Date in
accordance with Section 4.02(c)(i) hereof in an amount up to the amount of such Swap
Termination Payment and (ii) that portion of the Class A Principal Distribution Amount
otherwise payable to the Class A-1-A Certificates in accordance with 4.02(d)(i) hereof up to
the amount of such Swap Termination Payment remaining after the deposit in clause (i) of
this Section 4.11(i), into the Class A-1-A Supplemental Interest Trust Account for payment
to the Class A-1-A Swap Counterparty and such amounts of interest and principal shall not be
paid to the Class A-1-A Certificateholders for such Distribution Date. For federal income
tax purposes, any such amounts paid to the Class A-1-A Supplemental Interest Trust Account
shall be treated as having been received by the Holders of the Class A-1-A Certificates in
respect of the REMIC III Regular Interest corresponding to such Class of Certificates and as
having been paid by such Holders pursuant to the SB-A1A Swap Agreement.
(j) The Supplemental Interest Trust Trustee shall enter into the SB-A1A Swap Agreement on
behalf of the Holders of the Class A-1-A Certificates on the one hand, and on behalf of the
Holders of the Class SB Certificates on the other hand. Pursuant to the SB-A1A Swap
Agreement, the Class A-1-A Certificateholders shall be treated as having agreed to pay, on
each Distribution Date, to the Holders of the Class SB Certificates an aggregate amount
equal to the Class A-1-A Swap Fee Amount paid to the Class A-1-A Supplemental Interest Trust
Account and any amounts deposited into the the Class A-1-A Supplemental Interest Trust
Account pursuant to section 4.11(i) hereof on such Distribution Date . In addition,
pursuant to the SB-A1A Swap Agreement, the Holders of the Class SB Certificates shall be
treated as having agreed to pay, on each Distribution Date, an amount equal to the Class
A-1-A Uncapped Pass-Through Amount less the Accrued Certificate Interest for the Class A-1-A
Certificates calculated using the Net WAC Cap Rate and less any Basis Risk Shortfalls
otherwise distributable to the Class A-1-A Certificates from Excess Cash Flow in the absence
of the Class A-1-A Swap Agreement on such Distribution Date. Any payments to the Class
A-1-A Certificates from amounts deemed received in respect of the SB-A1A Swap Agreement
shall not be payments with respect to a "regular interest" in a REMIC within the meaning of
Code Section 860G(a)(1). However, any payments that are deemed to be made by the Class
A-1-A Certificates in respect of the SB-A1A Swap Agreement shall be treated for tax purposes
as having been received by the Class A-1-A Certificateholders in respect of the REMIC III
Regular Interest corresponding to such Class of Certificates and as having been paid by such
Holders to the Class A-1-A Supplemental Interest Trust Account pursuant to the SB-A1A Swap
Agreement. Thus, the Class A-1-A Certificates shall be treated as representing not only
ownership of regular interests in REMIC III and ownership of an interest in the SB-AM Swap
Agreement, but also ownership of an interest in, and obligations with respect to, a notional
principal contract. By accepting their Certificates the Holders of the Class A-1-A
Certificates agree to treat such payments in the manner described in the preceding sentence
for purposes of filing their income tax returns.
Section 4.12. Class A-1-A Swap Agreement Collateral Account.
(a) The Supplemental Interest Trust Trustee shall establish and maintain the Class A-1-A
Swap Agreement Collateral Account, a non-interest bearing trust account, in which collateral
received from the Class A-1-A Swap Counterparty pursuant to the Class A-1-A Swap Agreement
shall be deposited. Funds in the Class A-1-A Swap Agreement Collateral Account may be
invested in Permitted Investments as directed by the Class A-1-A Swap Agreement in writing
to the Supplemental Interest Trust Trustee. All such investments shall be made in the name
of the Supplemental Interest Trust Trustee and all income and gain realized from the
investment of funds deposited in the Class A-1-A Swap Agreement Collateral Account shall be
for the benefit of the Class A-1-A Swap Counterparty. At the time the Class A-1-A Swap
Counterparty directs the Supplemental Interest Trust Trustee to invest funds held in the
Class A-1-A Swap Agreement Collateral Account, the Class A-1-A Swap Counterparty shall agree
in writing to deposit in the Class A-1-A Swap Agreement Collateral Account the amount of any
loss of principal incurred in respect of any investment made with funds in such account
immediately upon realization of such loss. In the absence of written instructions and the
agreement described in the preceeding sentence, all funds in the Class A-1-A Swap Agreement
Collateral Account shall remain uninvested. The Supplemental Interest Trust Trustee on
behalf of the Supplemental Interest Trust shall withdraw from the Class A-1-A Swap Agreement
Collateral Account and return to the Class A-1-A Swap Counterparty collateral held in the
Class A-1-A Swap Agreement Collateral Account as provided in the Class A-1-A Swap Agreement.
Upon the occurrence of a Swap Agreement Event of Default, Specified Condition or Early
Termination Date, in each case with respect to the Class A-1-A Swap Agreement, which results
from a Swap Agreement Event of Default or Specified Condition, the Supplemental Interest
Trust Trustee on behalf of the Supplemental Interest Trust shall apply any proceeds in
respect of collateral held in the Class A-1-A Swap Agreement Collateral Account to any
amounts payable by the Class A-1-A Swap Counterparty under the Class A-1-A Swap Agreement.
(b) The Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust
shall give notice to the Class A-1-A Swap Counterparty of the location of the Class A-1-A
Swap Agreement Collateral Account maintained by it when established and prior to any change
thereof.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates. (See Section 5.01 of the Standard Terms)
Section 5.02. Registration of Transfer and Exchange of Certificates
(a) (See Section 5.02(a) of the Standard Terms)
(b) (See Section 5.02(b) of the Standard Terms)
(c) (See Section 5.02(c) of the Standard Terms)
(d) No transfer, sale, pledge or other disposition of a Class SB Certificate that is a
Definitive 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.
Except with respect to (i) the transfer of a Class SB Certificate by the Company to an
Affiliate of the Company or the transfer of a Class SB Certificate from the Company or an
Affiliate of the Company to an owner trust or other entity established by the Company
(including to the Trustee, as a NIM Trustee), or (ii) a transfer of a Class SB Certificate
from the NIM Trustee to the Company or an Affiliate of the Company, in the event that a
transfer of a Class SB 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 Master Servicer (except that, if such transfer is made by the
Company or the Master Servicer or any Affiliate thereof, the Company or the Master Servicer
shall provide such Opinion of Counsel at their own expense); provided that such Opinion of
Counsel will 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 (i) in the case of a transfer solely pursuant to Rule 144A,
the transferee to execute a representation letter, substantially in the form of Exhibit H to
the Standard Terms, and the Trustee shall require the transferor to execute a representation
letter, substantially in the form of Exhibit I to the Standard Terms, (ii) in the case of an
transfer from a 144A Class SB Certificate to a transferee that is not a U.S. person and is
purchasing the Class SB Certificate pursuant to Rule 903 or 904 of Regulation S (a
"Regulation S Purchaser"), the Trustee shall require the transferor to execute a transferor
certificate, substantially in the form of Exhibit Seven hereto, and the Trustee shall
require the transferee to execute a transferee certificate substantially in the form of
Exhbit Eight hereto and (iii) in the case of a transfer from a Regulation S Purchaser to a
144A Class SB Certificate, the Trustee shall require the transferor to execute a transferor
certificate, substantially in the form of Exhibit Six hereto, and the Trustee shall require
the transferee to execute a transferee certificate substantially in the form of Exhbit Eight
hereto, in each case, such certificate or letter 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 Master Servicer; provided, however, that such representation
letters will 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 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 Master Servicer
with an investment letter substantially in the form of Exhibit J attached to the Standard
Terms (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 Master
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 Master
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 SB Certificate that is a Definitive
Certificate or Class R Certificate presented for registration in the name of any Person,
either (I) (A) the Trustee shall require an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Company and the Master Servicer to the effect
that the purchase or holding of such Class SB Certificate 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 Master Servicer to any
obligation or liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in this Agreement, which Opinion of Counsel shall
not be an expense of the Trustee, the Company or the Master Servicer or (B) the prospective
Transferee shall be required to provide the Trustee, the Company and the Master Servicer
with a certification to the effect set forth in paragraph six of Exhibit H (with respect to
any Class SB Certificate) or paragraph fifteen of Exhibit G-1, which the Trustee may rely
upon without further inquiry or investigation, or such other certifications as the Trustee
may deem desirable or necessary in order to establish that such Transferee or the Person in
whose name such registration is requested is not an employee benefit plan or other plan
subject to the prohibited transaction provisions of ERISA or Section 4975 of the Code, or
any Person (including an investment manager, a named fiduciary or a trustee of any such
plan) who is using "plan assets" of any such plan to effect such acquisition (each, a "Plan
Investor") or (II) in the case of any Class SB Certificate, the following conditions are
satisfied: (i) such Transferee is an insurance company, (ii) the source of funds used to
purchase or hold such Certificate (or interest therein) is an "insurance company general
account" (as defined in the U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60, and (iii) the conditions of PTCE 95-60 have been satisfied (each entity that
satisfies this clause (II), a Complying Insurance Company"). Notwithstanding anything to
the contrary contained herein, the Trustee and the Supplemental Interest Trust Trustee shall
not permit the transfer of a beneficial interest in a Class SB Certificate unless the
transferee executes and delivers to the Trustee or the Supplemental Interest Trust Trustee,
as applicable, any certification that is required pursuant to Section 10.06(c) prior to
transfer.
(ii) Any Transferee of a Class M Certificate (or interest therein) acquired after
termination of the Supplemental Interest Trust will 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, as
most recently amended, PTE 2007-05, 72 Fed. Reg. 13130 (March 20, 2007) (the "RFC
Exemption"), and that it understands that there are certain conditions to the
availability of the RFC Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by Standard & Poor's,
Fitch, Moody's, DBRS Limited or DBRS, Inc.or (c) such Transferee is Complying
Insurance Company.
(iii) Each Holder of a Class A or Class M Certificate or any interest therein that
is acquired by a Plan Investor as of any date prior to the termination of the
Supplemental Interest Trust shall be deemed to have represented, by its acquisition
or holding of such Certificate or any interest therein, that at least one of PTCE
84-14, 90-1, 91-38, 95-60 or 96-23 or other applicable exemption applies to such
Holder's right to receive payments from the Supplemental Interest Trust.
(iv) (A) If any Certificate (or any interest therein) is acquired or held by any
Person that does not satisfy the conditions described in paragraph (i), (ii) or (iii)
as applicable, above,then the last preceding Transferee that either (i) is not a Plan
Investor or (ii) acquired such Certificate in compliance with the conditions
described in paragraph (i), (ii) or (iii), as applicable, 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
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
Master Servicer, any Subservicer, the Underwriters 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) (See Section 5.02(f) of the Standard Terms)
(g) (See Section 5.02(g) of the Standard Terms)
(h) (See Section 5.02(h) of the Standard Terms)
(i) Notwithstanding anything to the contrary contained herein, the Trustee and
Supplemental Interest Trust Trustee shall not permit the transfer of a beneficial interest
in a Class SB Certificate unless the transferee executes and delivers to the Trustee or the
Supplemental Interest Trust Trustee, as applicable, any certification that is required
pursuant to Section 10.06(c) prior to transfer.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates. (See Section 5.03 of the
Standard Terms)
Section 5.04. Persons Deemed Owners. (See Section 5.04 of the Standard Terms)
Section 5.05. Appointment of Paying Agent.
The Trustee and Supplemental Interest Trust 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 Master
Servicer on behalf of the Trustee or Supplemental Interest Trust Trustee, as applicable,
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 or Supplemental Interest Trust Trustee, as applicable, shall cause
each Paying Agent to execute and deliver to the Trustee or Supplemental Interest Trust
Trustee, as applicable, an instrument in which such Paying Agent shall agree with the
Trustee or Supplemental Interest Trust Trustee, as applicable, 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. U.S.A. Patriot Act Compliance. (See Section 5.05 of the Standard Terms)
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
(See Article VI of the Standard Terms.)
ARTICLE VII
DEFAULT
(See Article VII of the Standard Terms.)
ARTICLE VIII
CONCERNING THE TRUSTEE AND SUPPLEMENTAL INTEREST TRUST TRUSTEE
Section 8.01. Duties of the Trustee and Supplemental Interest Trust Trustee.
(a) The Trustee and Supplemental Interest Trust 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, undertake 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 and Supplemental Interest Trust Trustee shall exercise such of the
rights and powers vested in each 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 or Supplemental Interest Trust Trustee, as applicable, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee or Supplemental Interest Trust 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 or Supplemental Interest Trust Trustee, as applicable, 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 or Supplemental Interest Trust Trustee, as
applicable, 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,
4.06, 7.03 and 9.01. The Trustee and Supplemental Interest Trust Trustee shall furnish in a
timely fashion to the Master Servicer such information as the Master Servicer may reasonably
request from time to time for the Master Servicer to fulfill its duties as set forth in this
Agreement. The Trustee and Supplemental Interest Trust Trustee covenant and agree that each
shall perform its respective obligations hereunder in a manner so as to maintain the status
of any portion of any REMIC formed under the Series Supplement 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 or
Supplemental Interest Trust to the extent that maintaining such status and avoiding such
taxes are reasonably within the control of the Trustee or Supplemental Interest Trust
Trustee and are reasonably within the scope of their respective duties under this Agreement.
(c) No provision of this Agreement shall be construed to relieve the Trustee or
Supplemental Trust Trustee, as applicable, 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 and Supplemental Interest Trust Trustee, as applicable, shall be determined
solely by the express provisions of this Agreement, the Trustee or Supplemental
Interest Trust Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the Trustee or Supplemental
Interest Trust Trustee, and, in the absence of bad faith on the part of the Trustee
or Supplemental Interest Trust Trustee, the Trustee or Supplemental Interest Trust
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 or Supplemental Interest Trust Trustee, as applicable, by the Company or the
Master Servicer and which on their face, do not contradict the requirements of this
Agreement;
(ii) The Trustee or Supplemental Interest Trust 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 or Supplemental Interest Trust Trustee, as applicable, unless
it shall be proved that the Trustee or Supplemental Interest Trust Trustee, as
applicable, 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 Master
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 or Supplemental Interest Trust Trustee, as applicable, 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 or Supplemental Interest Trust Trustee, as applicable, hereunder,
or in the exercise of any of its rights or powers, if the Trustee or Supplemental
Interest Trust Trustee, as applicable, 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 and Supplemental Interest Trust Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee or Supplemental Interest Trust Trustee, as applicable, may rely and shall
be protected in acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper or
document believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) The Trustee or Supplemental Interest Trust Trustee, as applicable, may consult with
counsel and any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee or Supplemental Interest Trust Trustee, as applicable, 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 or Supplemental Interest Trust Trustee, as applicable, 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 or Supplemental Interest Trust Trustee, as applicable, 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 Master Servicer, if an Event of Default
shall have occurred and is continuing, and otherwise by the Certificateholder
requesting the investigation;
(vi) The Trustee or Supplemental Interest Trust Trustee, as applicable, may execute any of
the trusts or powers hereunder or perform any duties hereunder either directly or by
or through 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 Master Servicer in a timely manner any Tax Returns
prepared by or on behalf of the Master Servicer that the Trustee is required to sign
as determined by the Master Servicer pursuant to applicable federal, state or local
tax laws, provided that the Master Servicer shall indemnify the Trustee for signing
any such Tax Returns that contain errors or omissions.
(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 to the effect that such contribution
will not (i) cause any portion of any REMIC formed under the Series Supplement 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 and Supplemental Interest Trust 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 Master Servicer as the case may be, and the
Trustee and Supplemental Interest Trust Trustee assume no responsibility for their
correctness. The Trustee and Supplemental Interest Trust Trustee make 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 or related document, or of MERS or the MERS(R)System.
Except as otherwise provided herein, the Trustee and Supplemental Interest Trust Trustee
shall not be accountable for the use or application by the Company or the Master 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 Master Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Custodial Account or the Certificate
Account by the Company or the Master Servicer.
In addition, notwithstanding anything to the contrary contained herein or in the
Custodial Agreement, in no event shall the Trustee have any liability in respect of any
actions or omissions of the Custodian herein or pursuant to the Custodial Agreement.
Section 8.04. Trustee and Supplemental Interest Trust Trustee May Own Certificates.
The Trustee and Supplemental Interest Trust Trustee, in their individual or any other
capacity may become the owner or pledgee of Certificates with the same rights it would have
if it were not Trustee.
Section 8.05. Master Servicer to Pay Trustee's and Supplemental Interest Trust Trustee's
Fees and Expenses; Indemnification.
(a) The Master Servicer covenants and agrees to pay to the Trustee, any
co-trustee and the Supplemental Interest Trust Trustee from time to time, and the Trustee,
any co-trustee and the Supplemental Interest Trust Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by each of them in
the execution of the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, any co-trustee and the Supplemental Interest
Trust Trustee, and the Master Servicer will pay or reimburse the Trustee, any co-trustee and
the Supplemental Interest Trust Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee, any co-trustee or the
Supplemental Interest Trust Trustee in accordance with any of the provisions of this
Agreement (including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ, and the expenses incurred by the
Trustee, any co-trustee or the Supplemental Interest Trust Trustee in connection with the
appointment of an office or agency pursuant to Section 8.12) except any such expense,
disbursement or advance as may arise from its negligence or bad faith.
(b) The Master Servicer agrees to indemnify the Trustee or Supplemental
Interest Trust Trustee, as applicable, for, and to hold the Trustee or Supplemental Interest
Trust Trustee, as applicable, harmless against, any loss, liability or expense incurred
without negligence or willful misconduct on the Trustee's or Supplemental Interest Trust
Trustee's, as applicable, part, arising out of, or in connection with, the acceptance and
administration of the Trust Fund or Supplemental Interest Trust, as applicable, 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 their respective
powers or duties under this Agreement, the Certificate Swap Agreement, the Class A-1-A Swap
Agreement and the Custodial Agreement, and the Master Servicer further agrees to indemnify
the Trustee for, and to hold the Trustee harmless against, any loss, liability or expense
arising out of, or in connection with, the provisions set forth in the second paragraph of
Section 2.01(c) hereof, including, without limitation, all costs, liabilities and expenses
(including reasonable legal fees and expenses) of investigating and defending itself against
any claim, action or proceeding, pending or threatened, relating to the provisions of this
paragraph, provided that:
(i) with respect to any such claim, the Trustee shall have given the Master 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 Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Agreement to the contrary, the Master Servicer shall
not be liable for settlement of any claim by the Trustee entered into without the
prior consent of the Master Servicer which consent shall not be unreasonably
withheld.
No termination of this Agreement shall affect the obligations created by this
Section 8.05(b) of the Master Servicer to indemnify the Trustee or Supplemental Interest
Trust Trustee, as applicable, under the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the Master
Servicer in this Section 8.05(b) shall not be available (A) for any loss, liability or
expense of the Trustee or Supplemental Interest Trust Trustee, as applicable, including the
costs and expenses of defending itself against any claim, incurred in connection with any
actions taken by the Trustee or Supplemental Interest Trust Trustee, as applicable, at the
direction of the Certificateholders pursuant to the terms of this Agreement or (B) where the
Trustee is required to indemnify the Master Servicer pursuant to Section 12.05(a).
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.
The Trustee and Supplemental Interest Trust Trustee, and any successors thereto,
shall at all times be the same Person.
Section 8.07. Resignation and Removal of the Trustee and Supplemental Interest Trust
Trustee.
(a) The Trustee and Supplemental Interest Trust Trustee, together, 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 and successor supplemental interest trust 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 and successor supplemental
interest trust trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Trustee and Supplemental
Interest Trust Trustee may petition any court of competent jurisdiction for the appointment
of a successor trustee and successor supplemental interest trust 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 Supplemental Interest Trust 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 or Supplemental Interest Trust
Trustee, as applicable, 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 Master Servicer or the Company) or the
Supplemental Interest Trust Trustee for distribution or (ii) to otherwise observe or perform
in any material respect any of its covenants, agreements or obligations hereunder, and such
failure shall continue unremedied for a period of 5 days (in respect of clause (i) above) or
30 days (in respect of clause (ii) above other than any failure to comply with the
provisions of Article XII, in which case no notice or grace period shall be applicable)
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 Supplemental Interest Trust Trustee and appoint a successor trustee and successor
supplemental interest trust trustee by written instrument delivered as provided in the
preceding sentence. In connection with the appointment of a successor trustee and successor
supplemental interest trust 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 and
successor supplemental interest trust 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 Supplemental Interest Trust Trustee, together, and appoint a
successor trustee and successor supplemental interest trust 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 and Supplemental Interest Trust Trustee so removed and one
complete set to the successors so appointed.
(d) Any resignation or removal of the Trustee and Supplemental Interest Trust Trustee and
appointment of a successor trustee and successor supplemental interest trust trustee
pursuant to any of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee and successor supplemental interest trust trustee as
provided in Section 8.08.
Section 8.08. Successor Trustee and Successor Supplemental Interest Trust Trustee.
(a) Any successor trustee and successor supplemental interest trust trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Company and to its
predecessor trustee or predecessor supplemental interest trust trustee, as applicable, an
instrument accepting such appointment hereunder, and thereupon the resignation or removal of
the predecessor trustee and predecessor supplemental interest trust trustee shall become
effective and such successor trustee and successor supplemental interest trust trustee shall
become effective and such successor trustee and successor supplemental interest trust
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 or supplemental interest trust trustee herein. The
predecessor trustee and predecessor supplemental interest trust trustee shall deliver to the
successor trustee and successor supplemental interest trust trustee, as applicable, all
Custodial Files and related documents and statements held by it hereunder (other than any
Custodial Files at the time held by a Custodian, which shall become the agent of any
successor trustee hereunder), and the Company, the Master Servicer, predecessor trustee and
predecessor supplemental interest trust 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 and successor supplemental interest trust trustee
all such rights, powers, duties and obligations.
(b) No successor trustee or successor supplemental interest trust trustee shall accept
appointment as provided in this Section unless at the time of such acceptance (i) such
successor trustee shall be eligible under the provisions of Section 8.06, and (ii) such
successor trustee and successor supplemental interest trust trustee shall be the same Person.
(c) Upon acceptance of appointment by a successor trustee or successor supplemental
interest trust trustee as provided in this Section, the Company shall mail notice of the
succession of such trustee and supplemental interest trust trustee hereunder to (i) all
Holders of Certificates at their addresses as shown in the Certificate Register and (ii) to
the Certificate Swap Counterparty unless the Certificate Swap Agreement has been
terminated. If the Company fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee and successor supplemental interest trust 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 and
Supplemental Interest Trust 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 and Supplemental Interest Trust Trustee
shall be a party, or any corporation or national banking association succeeding to the
business of the Trustee and Supplemental Interest Trust Trustee, shall be the successor of
the Trustee and Supplemental Interest Trust Trustee, as applicable, 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.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
(See Section 8.10 of the Standard Terms).
Section 8.11. Appointment of Custodians.
(See Section 8.11 of the Standard Terms).
Section 8.12. Appointment of Office or Agency.
(See Section 8.12 of the Standard Terms).
Section 8.13. Swap Agreements.
The Supplemental Interest Trust Trustee is hereby authorized and directed to, and
agrees that it shall (a) enter into the Certificate Swap Agreement on behalf of the
Supplemental Interest Trust, (b) enter into the Class A-1-A Swap Agreement on behalf of the
Supplemental Interest Trust, (c) enter into the SB-AM Swap Agreement on behalf of (i) the
Class A Certificateholders and Class M Certificateholders on the one hand, and (ii) the
Class SB Certificateholders on the other hand and (d) enter into the SB-A1A Swap Agreement
on behalf of (i) the Class A-1-A Certificateholders on the one hand, and (ii) the Class SB
Certificateholders on the other hand.
ARTICLE IX
TERMINATION
Section 9.01. Optional Purchase by the Master Servicer of All Certificates; Termination Upon
Purchase by the Master Servicer or Liquidation of All Mortgage
Loans.
(a) Subject to Section 9.02, the respective obligations and responsibilities of the
Company, the Master 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) at the option of the Master Servicer, the purchase of all Mortgage Loans and all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund, at a
price equal to the sum of (A) 100% of the unpaid principal balance of each Mortgage
Loan (or, if less than such unpaid principal balance, 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, and (B) any
unpaid Swap Termination Payment payable to the Certificate Swap Counterparty or the
Class A-1-A Swap Counterparty (or any Swap Termination Payment payable to the
Certificate Swap Counterparty as a result of the exercise of the option provided for
in this Section 9.01(a)(ii))); 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 Master Servicer, to avoid disqualification of any portion of any
REMIC formed under this Series Supplement as a REMIC. The purchase price paid by the
Master Servicer, pursuant to Section 9.01(a)(ii) shall also include any amounts owed
by Residential Funding pursuant to the last paragraph of Section 4 of the Assignment
Agreement in respect of any liability, penalty or expense that resulted from a breach
of the Compliance With Laws Representation that remain unpaid on the date of such
purchase.
The right of the Master Servicer to purchase all 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 Master Servicer, the Master 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 Master Servicer shall
provide to the Trustee the certification required by Section 3.15 and the Trustee and any
Custodian shall, promptly following payment of the purchase price, release to the Master
Servicer the Custodial Files pertaining to the Mortgage Loans being purchased.
In addition to the foregoing, 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 Master Servicer shall have the right, at its option, to purchase the Class A
Certificates, Class M Certificates and Class SB 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, and any unpaid Prepayment Interest
Shortfalls previously allocated thereto and, in the case of Prepayment Interest Shortfalls,
accrued interest thereon at the applicable Pass-Through Rate. If the Master Servicer
exercises this right to purchase the outstanding Class A Certificates, Class M Certificates
and Class SB Certificates, the Master Servicer will promptly terminate the respective
obligations and responsibilities created hereby in respect of these Certificates pursuant to
this Article IX.
(b) The Master Servicer shall give the Trustee, the Supplemental Interest Trust
Trustee, the Certificate Swap Counterparty and the Class A-1-A Swap Counterparty (so long as
the Certificate Swap Agreement or the Class A-1-A Swap Agreement, respectively, have not
previously been terminated) not less than 40 days prior notice of the Distribution Date on
which (1) the Master Servicer anticipates that the final distribution will be made to
Certificateholders as a result of the exercise by the Master Servicer of its right to
purchase the Mortgage Loans or on which (2) the Master Servicer anticipates that the
Certificates will be purchased as a result of the exercise by the Master Servicer to
purchase the outstanding Certificates. 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 or notice of any purchase of the outstanding Certificates, specifying the
Distribution Date upon which the Holders may surrender their Certificates to the Trustee for
payment, shall be given promptly by the Master Servicer, or by the Trustee (in any other
case) by letter to the Certificateholders (with a copy to the Certificate Registrar) mailed
(or distributed through the Depository with respect to any Book-Entry Certificates) not
earlier than the 15th day and not later than the 25th 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 where required pursuant
to this Agreement or, in the case of the purchase by the Master Servicer of
the outstanding Certificates, the Distribution Date on which such purchase is
to be made,
(ii) the amount of any such final payment, or in the case of the purchase of the
outstanding Certificates, the purchase price, in either case, 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, or in the case of all
of the Certificates in connection with the exercise by the Master Servicer of
its right to purchase the Certificates, that payment will be made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee therein specified.
If the Master Servicer or the Trustee is obligated to give notice to Certificateholders
as required above, it shall give such notice to the Certificate Registrar at the time such
notice is given to Certificateholders and, if the Master Servicer is exercising its rights
to purchase the outstanding Certificates, it shall give such notice to each Rating Agency at
the time such notice is given to Certificateholders. In the event of a purchase of the
assets of the Trust Fund by the Master Servicer, the Master Servicer shall deposit in the
Certificate Account before the Final Distribution Date in immediately available funds an
amount equal to the purchase price computed as provided above. As a result of the exercise
by the Master Servicer of its right to purchase the outstanding Certificates, the Master
Servicer shall deposit in the Certificate Account before the Distribution Date on which such
purchase is to occur in immediately available funds an amount equal to the purchase price
for the Certificates, computed as above provided, and provide notice of such deposit to the
Trustee. The Trustee will withdraw from such account the amount specified in subsection (c)
below and distribute such amount to the Certificateholders as specified in subsection (c)
below. The Master Servicer shall provide to the Trustee written notification of any change
to the anticipated Final Distribution Date as soon as practicable. If the Trust Fund is not
terminated on the anticipated Final Distribution Date, for any reason, the Trustee shall
promptly mail notice thereof to each affected Certificateholder.
(c) In the case of the Senior Certificates, upon presentation and surrender of the
Certificates by the Certificateholders thereof, and in the case of the Class M Certificates
and Class SB Certificates, upon presentation and surrender of the Certificates by the
Certificateholders thereof in connection with the exercise by the Master Servicer of its
right to purchase the Certificates, and otherwise in accordance with Section 4.01(a), the
Trustee and the Supplemental Interest Trust Trustee, as applicable, shall distribute to the
Certificateholders (i) the amount otherwise distributable on such Distribution Date, if not
in connection with the Master Servicer's election to repurchase the assets of the Trust Fund
or the outstanding Certificates, or (ii) if the Master Servicer elected to so repurchase the
assets of the Trust Fund or the outstanding Class A Certificates, Class M Certificates and
Class SB Certificates, an amount equal to the price paid pursuant to Section 9.01(a) as
follows: (A) with respect to each Class A Certificate and Class M 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), (B) with respect to the
Class A Certificates and Class M Certificates, the amount of any Prepayment Interest
Shortfalls allocated thereto for such Distribution Date or remaining unpaid from prior
Distribution Dates and accrued interest thereon at the applicable Pass Through Rate, on a
pro rata basis based on Prepayment Interest Shortfalls allocated thereto for such
Distribution Date or remaining unpaid from prior Distribution Dates, (C) to the Certificate
Swap Counterparty (without duplication of amounts payable to the Certificate Swap
Counterparty on such date in accordance with Section 4.02) any Swap Termination Payment
payable to the Certificate Swap Counterparty then remaining unpaid or which is due to the
exercise of any early termination of the Trust Fund pursuant to this Section 9.01, and (D)
to the Class SB Certificates, all remaining amounts in accordance with the respective
Notional Amount thereof. Notwithstanding the reduction of the Certificate Principal Balance
of any Class of Subordinate Certificates to zero, such Class will be outstanding hereunder
until the termination of the respective obligations and responsibilities of the Company, the
Master Servicer and the Trustee hereunder in accordance with Article IX.
(d) In the event that any Certificateholders shall not surrender their Certificates for
final payment and cancellation on or before the Final Distribution Date, the Master Servicer
(if it exercised its right to purchase the Mortgage Loans) 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
Master Servicer to contact the remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the Certificate Account and of
contacting Certificateholders shall be paid out of the assets which remain in the
Certificate Account. If within nine months after the second notice any Certificates shall
not have been surrendered for cancellation, the Trustee shall pay to the Master Servicer all
amounts distributable to the Holders thereof and the Master 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 Certificate Account or by the Master
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 and the Certificateholders shall
look only to the Master Servicer for such payment.
(e) If any Certificateholders do not surrender their Certificates on or before the
Distribution Date on which a purchase of the outstanding Certificates is to be made, the
Master 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 Master Servicer to contact the
Holders of such Certificates concerning surrender of their Certificates. The costs and
expenses of maintaining the Certificate Account and of contacting Certificateholders shall
be paid out of the assets which remain in the Certificate Account. If within nine months
after the second notice any Certificates shall not have been surrendered for cancellation in
accordance with this Section 9.01, the Trustee shall pay to the Master Servicer all amounts
distributable to the Holders thereof and shall have no further obligation or liability
therefor and the Master 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 Certificate Account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for payment in accordance with
this Section 9.01. Any Certificate that is not surrendered on the Distribution Date on
which a purchase pursuant to this Section 9.01 occurs as provided above will be deemed to
have been purchased and the Holder as of such date will have no rights with respect thereto
except to receive the purchase price therefor minus any costs and expenses associated with
such Certificate Account and notices allocated thereto. Any Certificates so purchased or
deemed to have been purchased on such Distribution Date shall remain outstanding hereunder.
The Master Servicer shall be for all purposes the Holder thereof as of such date.
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration. (See Section 10.01 of the Standard Terms.)
Section 10.02. Master Servicer; REMIC Administrator and Trustee Indemnification. (See
Section 10.02 of the Standard Terms.)
Section 10.03. Designation of REMICs.
The REMIC Administrator will make an election to treat the segregated pool of assets
described in the definition of REMIC I (as defined herein) (including the Mortgage Loans but
excluding the Certificate Supplemental Interest Trust Account, the Class A-1-A Supplemental
Interest Trust Account and the Swap Agreements), and subject to this Agreement, as a REMIC
(REMIC I) for federal income tax purposes. The REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
(REMIC II) for federal income tax purposes. The REMIC Administrator will make an election
to treat the segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC (REMIC III) for federal income tax purposes. The REMIC Administrator will make an
election to treat the segregated pool of assets consisting of REMIC III Regular Interests
SB-PO, SB-IO and IO as a REMIC (REMIC IV) for federal income tax purposes.
The REMIC I Regular Interests will be "regular interests" in REMIC I and Component I
of the Class R-1 Certificates will be the sole class of "residual interests" in REMIC I for
purposes of the REMIC Provisions 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-1 Certificates will be the sole class of "residual interests" in REMIC II
for purposes of the REMIC Provisions under the federal income tax law.
The REMIC III Regular Interests will be the "regular interests" in REMIC III,
ownership of which, except in the case of REMIC III Regular Interests SB-IO, SB-PO and IO,
will be represented by the Class A Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates and Class M-4 Certificates, and Component III of the
Class R-1 Certificates will represent the sole class of "residual interests" in REMIC III
for purposes of the REMIC Provisions under federal income tax law.
The REMIC IV Regular Interests will be the "regular interests" in REMIC IV, ownership
of which will be represented by the Class SB Certificates, and the Class R-X Certificates
will represent the sole class of "residual interests" in REMIC IV for purposes of the REMIC
Provisions under federal income tax law.
Section 10.04. Distributions on the Uncertificated REMIC Regular Interests. (See Section
4.02(c) of this Series Supplement.)
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 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.
Section 10.06. Supplemental Interest Trust Provisions.
(a) It is intended that the Supplemental Interest Trust be classified for federal income
tax purposes as a grantor trust under Subpart E, part I of subchapter J of chapter 1 of the
Code, of which the Class SB Certificateholders and the Class A-1-A Certificateholders are
owners, rather than a partnership, an association taxable as a corporation or a taxable
mortgage pool; and the powers granted and obligations undertaken in this Agreement shall be
construed so as to further such intent.
(b) The REMIC Administrator shall prepare or cause to be prepared all of the Tax Returns
that it determines are required with respect to the Supplemental Interest Trust and deliver
such Tax Returns in a timely manner to the Supplemental Interest Trust Trustee, and if
required by applicable law and as directed, the Supplemental Interest Trust Trustee shall
sign and file such Tax Returns in a timely manner. The expenses of preparing such Tax
Returns shall be borne by the REMIC Administrator without any right of reimbursement
therefor. The REMIC Administrator agrees to indemnify and hold harmless the Supplemental
Interest Trust Trustee with respect to any tax or liability arising from the Supplemental
Interest Trust Trustee's signing of such Tax Returns that contain errors or omissions. The
Supplemental Interest Trust Trustee and the Master 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 such Tax Returns.
(c) Each Class SB Certificateholder and Class A-1-A Certificateholder shall provide the
appropriate tax certification to the Trustee and Supplemental Interest Trust Trustee to
enable the Trust to make payments on the Class SB Certificates and Class A-1-A Certificates
without withholding or backup withholding taxes. Each Class SB Certificateholder and Class
A-1-A Certificateholder agrees to update or replace such form or certification in accordance
with its terms or its subsequent amendments and consents to the delivery by the Supplemental
Interest Trust Trustee to the Certificate Swap Counterparty and the Class A-1-A Swap
Counterparty, respectively, of any such certification. Such certification may include Form
W-8BEN, Form W-8IMY, Form W-9 or Form W-8ECI or any successors to such IRS forms. Any
purported sales or transfers of any Class SB Certificate or Class A-1-A Certificate to a
transferee which does not comply with these requirements shall be deemed null and void under
the Agreement. The Supplemental Interest Trust Trustee and the Trustee, respectively, shall
not be liable for the completeness, accuracy, content or truthfulness of any such tax
certification provided to it. The Supplemental Interest Trust Trustee and the Trustee shall
only be required to forward any tax certification received by it to the Certificate Swap
Counterparty and Class A-1-A Swap Counterparty, as applicable, at the last known address
provided to it, and shall not be liable for the receipt of such tax certification by the
Certificate Swap Counterparty or Class A-1-A Swap Counterparty, nor any failure of the
Certificate Swap Counterparty or Class A-1-A Swap Counterparty to process such certification
or to take any action as required under the Certificate Swap Agreement or Class A-1-A Swap
Counterparty or under applicable law. The Supplemental Interest Trust Trustee and the
Trustee shall have no duty to take action to correct any misstatement or omission in any tax
certification provided to it and forwarded to the Certificate Swap Counterparty or Class
A-1-A Swap Counterparty.
(d) The Supplemental Interest Trust Trustee, on behalf of the Supplemental Interest
Trust, upon receipt of the requisite tax identification number from the appropriate taxing
authority, (i) shall execute, if required, and deliver a United States Internal Revenue
Service Form W-9 or successor applicable form, or other appropriate United States tax forms
as may be required to prevent withholding or backup withholding taxes on payments to the
Supplemental Interest Trust under the Certificate Swap Agreement and Class A-1-A Swap
Agreement, as applicable, to the Certificate Swap Counterparty and Class A-1-A Swap
Counterparty, as applicable, on or before the later of (A) the first payment date under the
Certificate Swap Agreement and Class A-1-A Swap Agreement and (B) the date the Supplemental
Interest Trust Trustee receives the tax identification number, and thereafter prior to the
expiration or obsolescence of such form if the Supplemental Interest Trust Trustee is
notified in writing or otherwise has actual knowledge thereof and (ii) shall, if requested
by the Certificate Swap Counterparty or Class A-1-A Swap Counterparty, deliver to the
Certificate Swap Counterparty or Class A-1-A Swap Counterparty, respectively, promptly upon
receipt each certification received from the Class SB Certificateholders and the Class A-1-A
Certificateholders pursuant to Section 10.06(c). If such tax identification number is
obtained by the REMIC Administrator, the Form W-9 or equivalent form as required shall be
executed, if required, and delivered by the REMIC Administrator to the same extent as set
forth in the foregoing sentence, if permitted by applicable law.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. AMENDMENT.
(a) (See Section 11.01(a) of the Standard Terms.)
(b) (See Section 11.01(b) of the Standard Terms.)
(c) (See Section 11.01(c) of the Standard Terms.)
(d) (See Section 11.01(d) of the Standard Terms.)
(e) (See Section 11.01(e) of the Standard Terms.)
(f) Notwithstanding anything to the contrary set forth in Sections 11.01 (b), (c), (d),
and (e), any amendment of Sections 4.02(c)(viii), 4.09, 4.10, 4.11, 4.12, 9.01 and 11.01 of
this Agreement shall require the consent of the Certificate Swap Counterparty or the Class
A-1-A Swap Counterparty, as applicable, as a third-party beneficiary of such sections.
Section 11.02. RECORDATION OF AGREEMENT; COUNTERPARTS. (See Section 11.02 of the Standard
Terms.)
Section 11.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (See Section 11.03 of the
Standard Terms.)
Section 11.04. GOVERNING LAW. (See Section 11.04 of the Standard Terms.)
Section 11.05. NOTICES. All demands and notices hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed by registered mail,
postage prepaid (except for notices to the Trustee which shall be deemed to have been duly
given only when received), to 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
Master Servicer, the Trustee and the Company, as applicable:
------------------------------------------------- -------------------------------------------------------------------------------
RECIPIENT ADDRESS
------------------------------------------------- -------------------------------------------------------------------------------
------------------------------------------------- -------------------------------------------------------------------------------
Company 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: President
------------------------------------------------- -------------------------------------------------------------------------------
------------------------------------------------- -------------------------------------------------------------------------------
Master Servicer 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Managing Director/Master Servicing
------------------------------------------------- -------------------------------------------------------------------------------
------------------------------------------------- -------------------------------------------------------------------------------
Trustee Corporate Trust Office
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000,
Attention: Residential Accredit Loans, Inc. Series 2007-QA4
The Trustee designates its offices located at DB Services Tennessee, 000
Xxxxxxxxx Xxxx Xxxx, Xxxxxxxxx, XX 00000-0000, Attn: Transfer Unit, for the
purposes of Section 8.12 of the Standard Terms
------------------------------------------------- -------------------------------------------------------------------------------
------------------------------------------------- -------------------------------------------------------------------------------
Xxxxx'x Investors Service, Inc. 00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
------------------------------------------------- -------------------------------------------------------------------------------
------------------------------------------------- -------------------------------------------------------------------------------
Standard & Poor's Ratings Services, a division 55 Water Street
of The XxXxxx-Xxxx Companies, Inc. 41st Floor
New York, New York 10041
------------------------------------------------- -------------------------------------------------------------------------------
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. (See Section 11.06 of the
Standard Terms.)
Section 11.07. SEVERABILITY OF PROVISIONS. (See Section 11.07 of the Standard Terms.)
Section 11.08. SUPPLEMENTAL PROVISIONS FOR RESECURITIZATION. (See Section 11.08 of the
Standard Terms.)
Section 11.09. ALLOCATION OF VOTING RIGHTS.
98.0% of all of the Voting Rights shall be allocated among Holders of the Class A
Certificates and Class M Certificates, in proportion to the outstanding Certificate
Principal Balances of their respective Certificates; 1.0% of all Voting Rights shall be
allocated among the Holders of Class SB Certificates; 0.25% of all Voting Rights shall be
allocated among the Holders of the Class R-1 Certificates in respect of Component I, in
accordance with their respective Percentage Interests; 0.25% of all Voting Rights shall be
allocated among the Holders of the Class R-1 Certificates in respect of Component II, in
accordance with their respective Percentage Interests; 0.25% of all Voting Rights shall be
allocated among the Holders of the Class R-1 Certificates in respect of Component III, in
accordance with their respective Percentage Interests; and 0.25% of all Voting Rights shall
be allocated among the Holders of the Class R-X Certificates, in accordance with their
respective Percentage Interests.
Section 11.10. NO PETITION.
The Company, Master 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.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
(See Article XII of the Standard Terms)
OHS West:260239591.6
IN WITNESS WHEREOF, the Company, the Master Servicer and the Trustee have caused
their names to be signed hereto by their respective officers thereunto duly authorized and
their respective seals, duly attested, to be hereunto affixed, all as of the day and year
first above written.
RESIDENTIAL ACCREDIT LOANS, INC.
[Seal]
By:
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Attest:
Name: Xxxxxx Xxxxxx
Title: Vice President
RESIDENTIAL FUNDING COMPANY, LLC
[Seal]
By:
Name: Xxxxxx Xxxxxx
Title: Associate
Attest:
Name: [Xxxxxxx Xxxxxxxx]
Title: Associate
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee
[Seal]
By:
Name: Xxx Xxxxxxxx
Title: Authorized Signer
By:
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Signer
Attest:
Name: Xxxxxxx Xxxxxx
Title: Vice President
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the ___th day of May, 2007 before me, a notary public in and for said State,
personally appeared ___________ known to me to be a Vice President of Residential Accredit
Loans, 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 MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the ___th day of May, 2007 before me, a notary public in and for said State,
personally appeared ___________ known to me to be a(n) Associate of Residential Funding
Company, LLC, one of the companies that executed the within instrument, and also known to me
to be the person who executed it on behalf of said company, and acknowledged to me that such
company 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 CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the ___th day of May, 2007 before me, a notary public in and for said State,
personally appeared ____________ known to me to be a(n) Authorized Signer of Deutsche Bank
Trust Company Americas, the New York banking corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of said New York
banking corporation and acknowledged to me that such New York 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]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the ___th day of May, 2007 before me, a notary public in and for said State,
personally appeared ____________ known to me to be a(n) Authorized Signer of Deutsche Bank
Trust Company Americas, the New York banking corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of said New York
banking corporation and acknowledged to me that such New York 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]
EXHIBIT ONE
MORTGAGE LOAN SCHEDULE
(On file with RFC)
EXHIBIT TWO
INFORMATION TO BE INCLUDED IN
MONTHLY DISTRIBUTION DATE STATEMENT
(i) the applicable Record Date, Determination Date and Distribution Date, and the
date on which the applicable interest accrual period commenced;
(ii) the aggregate amount of payments received with respect to the Mortgage Loans,
including prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the Master Servicer and the
Subservicer;
(iv) the amount of any other fees or expenses paid, and the identity of the party
receiving such fees or expenses;
(v) (a) the amount of such distribution to the Certificateholders of such Class
applied to reduce the Certificate Principal Balance thereof, and (b) the aggregate
amount included therein representing Principal Prepayments;
(vi) the amount of such distribution to Holders of such Class of Certificates
allocable to interest;
(vii) if the distribution to the Holders of such Class of Certificates is less than
the full amount that would be distributable to such Holders if there were sufficient
funds available therefor, the amount of the shortfall;
(viii) the aggregate Certificate Principal Balance of each Class of Certificates,
before and after giving effect to the amounts distributed on such Distribution Date,
separately identifying any reduction thereof due to Realized Losses other than
pursuant to an actual distribution of principal;
(ix) the aggregate Certificate Principal Balance of each of the Class A, Class M and
Class SB Certificates as of the Closing Date.
(x) the weighted average remaining term to maturity of the Mortgage Loans after
giving effect to the amounts distributed on such Distribution Date;
(xi) the weighted average Mortgage Rates of the Mortgage Loans after giving effect to
the amounts distributed on such Distribution Date;
(xii) the number and Pool Stated Principal Balance of the Mortgage Loans after giving
effect to the distribution of principal on such Distribution Date and the number of
Mortgage Loans at the beginning and end of the related Due Period;
(xiii) on the basis of the most recent reports furnished to it by Sub-Servicers, the
number and Stated Principal Balances of Mortgage Loans that are Delinquent (A) 30-59
days, (B) 60-89 days and (C) 90 or more days and the number and Stated Principal
Balances of Mortgage Loans that are in foreclosure;
(xiv) the aggregate amount of Realized Losses for such Distribution Date;
(xv) the amount, terms and general purpose of any Advance by the Master Servicer
pursuant to Section 4.04 and the amount of all Advances that have been reimbursed
during the related Due Period;
(xvi) any material modifications, extensions or waivers to the terms of the Mortgage
Loans during the Due Period or that have cumulatively become material over time;
(xvii) any material breaches of Mortgage Loan representations or warranties or
covenants in the Agreement.
(xviii) the number, stated and aggregate principal balance of any REO Properties;
(xix) the aggregate Accrued Certificate Interest remaining unpaid, if any, for each
Class of Certificates, after giving effect to the distribution made on such
Distribution Date;
(xx) the Pass-Through Rates on each Class of Certificates and the Net WAC Cap Rate
for such Distribution Date, separately identifying LIBOR for such Distribution Date;
(xxi) the Basis Risk Shortfall and Prepayment Interest Shortfalls;
(xxii) the related Senior Enhancement Percentage for such Distribution Date;
(xxiii) the Overcollateralization Amount and Required Overcollateralization Amount
following such Distribution Date;
(xxiv) the occurrence of the Stepdown Date, and the aggregate amount of Realized
Losses since the Cut-off Date for the Mortgage Loans;
(xxv) the occurrence of the Credit Support Depletion Date;
(xxvi) the aggregate amount of any recoveries on previously foreclosed loans; and
(xxvii) the amount of any Net Swap Payment payable to the Trustee on behalf of the
Trust, any Net Swap Payment payable to the Certificate Swap Counterparty, any Swap
Termination Payment payable to the Trustee on behalf of the Trust and any Swap
Termination Payment payable to the Certificate Swap Counterparty.
In the case of information furnished pursuant to clauses (v)(a) and (vi) above, the
amounts shall be expressed as a dollar amount per Certificate with a $1,000 denomination.
The Trustee's internet website will initially be located at xxx.xxx.xx.xxx/xxxx. To
receive this statement via first class mail, telephone the trustee at (000) 000-0000.
EXHIBIT THREE
STANDARD TERMS OF POOLING AND SERVICING
AGREEMENT DATED AS OF MAY 1, 2007
==============================================================================================
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2007
Residential Accredit Loans, Inc.
Mortgage Asset-Backed Pass-Through Certificates
==============================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................................2
Section 1.01. Definitions...........................................................2
Section 1.02. Use of Words and Phrases.............................................35
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..........36
Section 2.01. Conveyance of Mortgage Loans.........................................36
Section 2.02. Acceptance by Trustee................................................43
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Company.........................................44
Section 2.04. Representations and Warranties of Residential Funding................46
Section 2.05. Execution and Authentication of Certificates/Issuance of
Certificates Evidencing Interests in REMIC I Certificates........48
Section 2.06. Conveyance of Uncertificated REMIC I and REMIC II Regular
Interests; Acceptance by the Trustee.............................48
Section 2.07. Issuance of Certificates Evidencing Interests in REMIC II............48
Section 2.08. Purposes and Powers of the Trust.....................................48
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...........................48
Section 3.01. Master Servicer to Act as Servicer...................................48
Section 3.02. Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' and Sellers'
Obligations......................................................50
Section 3.03. Successor Subservicers...............................................51
Section 3.04. Liability of the Master Servicer.....................................51
Section 3.05. No Contractual Relationship Between Subservicer and Trustee or
Certificateholders...............................................52
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee......52
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to
Custodial Account................................................52
Section 3.08. Subservicing Accounts; Servicing Accounts............................55
Section 3.09. Access to Certain Documentation and Information Regarding the
Mortgage Loans...................................................57
Section 3.10. Permitted Withdrawals from the Custodial Account.....................57
Section 3.11. Maintenance of the Primary Insurance Policies; Collections
Thereunder.......................................................59
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity
Coverage.........................................................60
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.....................61
Section 3.14. Realization Upon Defaulted Mortgage Loans............................63
Section 3.15. Trustee to Cooperate; Release of Custodial Files.....................67
Section 3.16. Servicing and Other Compensation; Compensating Interest..............68
Section 3.17. Reports to the Trustee and the Company...............................69
Section 3.18. Annual Statement as to Compliance and Servicing Assessment...........69
Section 3.19. Annual Independent Public Accountants' Servicing Report..............70
Section 3.20. Rights of the Company in Respect of the Master Servicer..............70
Section 3.21. Administration of Buydown Funds......................................70
Section 3.22. Advance Facility.....................................................71
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...........................................75
Section 4.01. Certificate Account..................................................75
Section 4.02. Distributions. ..................................................76
Section 4.03. Statements to Certificateholders; Statements to Rating
Agencies; Exchange Act Reporting.................................76
Section 4.04. Distribution of Reports to the Trustee and the Company;
Advances by the Master Servicer..................................78
Section 4.05. Allocation of Realized Losses........................................79
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property........80
Section 4.07. Optional Purchase of Defaulted Mortgage Loans........................80
Section 4.08. Surety Bond..........................................................80
ARTICLE V THE CERTIFICATES.........................................................81
Section 5.01. The Certificates.....................................................81
Section 5.02. Registration of Transfer and Exchange of Certificates................83
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates....................89
Section 5.04. Persons Deemed Owners................................................89
Section 5.05. Appointment of Paying Agent..........................................90
Section 5.06. U.S.A. Patriot Act Compliance........................................90
ARTICLE VI THE COMPANY AND THE MASTER SERVICER......................................91
Section 6.01. Respective Liabilities of the Company and the Master Servicer........91
Section 6.02. Merger or Consolidation of the Company or the Master Servicer;
Assignment of Rights and Delegation of Duties by Master
Servicer.........................................................91
Section 6.03. Limitation on Liability of the Company, the Master Servicer
and Others.......................................................92
Section 6.04. Company and Master Servicer Not to Resign............................93
ARTICLE VII DEFAULT..................................................................94
Section 7.01. Events of Default....................................................94
Section 7.02. Trustee or Company to Act; Appointment of Successor..................96
Section 7.03. Notification to Certificateholders...................................97
Section 7.04. Waiver of Events of Default..........................................97
ARTICLE VIII CONCERNING THE TRUSTEE...................................................98
Section 8.01. Duties of Trustee....................................................98
Section 8.02. Certain Matters Affecting the Trustee................................99
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans...............101
Section 8.04. Trustee May Own Certificates........................................101
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification.................................................101
Section 8.06. Eligibility Requirements for Trustee................................102
Section 8.07. Resignation and Removal of the Trustee..............................103
Section 8.08. Successor Trustee...................................................104
Section 8.09. Merger or Consolidation of Trustee..................................104
Section 8.10. Appointment of Co-Trustee or Separate Trustee.......................104
Section 8.11. Appointment of the Custodian........................................105
Section 8.12. Appointment of Office or Agency.....................................106
ARTICLE IX TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES....................107
Section 9.01. Optional Purchase by the Master Servicer of All Certificates;
Termination Upon Purchase by the Master Servicer or
Liquidation of All Mortgage Loans...............................107
Section 9.02. Additional Termination Requirements.................................110
Section 9.03. Termination of Multiple REMICs......................................111
ARTICLE X REMIC PROVISIONS........................................................112
Section 10.01.REMIC Administration................................................112
Section 10.02.Master Servicer, REMIC Administrator and Trustee Indemnification....115
Section 10.03.Designation of REMIC(s).............................................116
Section 10.04.Distributions on the Uncertificated REMIC I and REMIC II
Regular Interests...............................................116
Section 10.05.Compliance with Withholding Requirements............................116
ARTICLE XI MISCELLANEOUS PROVISIONS................................................117
Section 11.01.Amendment...........................................................117
Section 11.02.Recordation of Agreement; Counterparts..............................119
Section 11.03.Limitation on Rights of Certificateholders..........................120
Section 11.04.Governing Law.......................................................120
Section 11.05.Notices.............................................................121
Section 11.06.Required Notices to Rating Agency and Subservicer...................121
Section 11.07.Severability of Provisions..........................................122
Section 11.08.Supplemental Provisions for Resecuritization........................122
Section 11.09.Allocation of Voting Rights.........................................122
Section 00.00.Xx Petition.........................................................122
ARTICLE XII COMPLIANCE WITH REGULATION AB...........................................123
Section 12.01.Intent of the Parties; Reasonableness...............................123
Section 12.02.Additional Representations and Warranties of the Trustee............123
Section 12.03.Information to Be Provided by the Trustee...........................124
Section 00.00.Xxxxxx on Assessment of Compliance and Attestation..................124
Section 12.05.Indemnification; Remedies...........................................125
EXHIBITS
Exhibit A: Form of Class A Certificate
Exhibit A-I: Form of Class X Certificate
Exhibit B: Form of Class M Certificate
Exhibit C: Form of Class B Certificate
Exhibit C-I: Form of Class P Certificate
Exhibit C-II: Form of Class SB Certificate
Exhibit D: Form of Class R Certificate
Exhibit E: Form of Seller/Servicer Contract
Exhibit F: Forms 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: Text of Amendment to Pooling and Servicing Agreement Pursuant to
Section 11.01(e) for a Limited Guaranty
Exhibit L: Form of Limited Guaranty
Exhibit M: Form of Lender Certification for Assignment of Mortgage Loan
Exhibit N: Request for Exchange Form
Exhibit O: Form of Form 10-K Certification
Exhibit P: Form of Back-Up Certification to Form 10-K Certificate
Exhibit Q: Information to be Provided by the Master Servicer to the Rating
Agencies Relating to Reportable Modified Mortgage Loans
Exhibit R: Servicing Criteria
This is the Standard Terms of Pooling and Servicing Agreement, dated as of December
1, 2006 (the "Standard Terms", and as incorporated by reference into a Series Supplement
dated as of the Cut-off Date, the "Pooling and Servicing Agreement" or "Agreement"), among
RESIDENTIAL ACCREDIT LOANS, INC., as the company (together with its permitted successors and
assigns, the "Company"), RESIDENTIAL FUNDING COMPANY, LLC, as master servicer (together with
its permitted successors and assigns, the "Master Servicer"), and the trustee named in the
applicable Series Supplement (together with its permitted successors and assigns, the
"Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell certain mortgage asset-backed pass-through certificates
(collectively, the "Certificates"), to be issued under the Agreement in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in the
Mortgage Loans.
In consideration of the mutual agreements herein contained, the Company, the Master
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.
Accretion Termination Date: As defined in the Series Supplement.
Accrual Certificates: As defined in the Series Supplement.
Accrued Certificate Interest: With respect to each Distribution Date, as to any
Class or Subclass of Certificates (other than any Principal Only Certificates), interest
accrued during the related Interest Accrual Period at the related Pass-Through Rate on the
Certificate Principal Balance or Notional Amount thereof immediately prior to such
Distribution Date. Accrued Certificate Interest will be calculated on the basis of a 360-day
year, consisting of twelve 30-day months. In each case Accrued Certificate Interest on any
Class or Subclass of Certificates will be reduced by the amount of:
(i) Prepayment Interest Shortfalls on all Mortgage Loans or, if the Mortgage Pool
is comprised of two or more Loan Groups, on the Mortgage Loans in the related
Loan Group (to the extent not offset by the Master Servicer with a payment of
Compensating Interest as provided in Section 4.01),
(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
all Mortgage Loans or, if the Mortgage Pool is comprised of two or more Loan
Groups, 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 (A) previously made with respect to
a Mortgage Loan or REO Property on all Mortgage Loans or, if the Mortgage Pool
is comprised of two or more Loan Groups, on the Mortgage Loans in the related
Loan Group, which remained unreimbursed following the Cash Liquidation or REO
Disposition of such Mortgage Loan or REO Property and (B) made with respect to
delinquencies 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 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 Servicemembers Civil Relief Act
of 1940, as amended, or similar legislation or regulations as in effect from
time to time,
with all such reductions allocated (A) among all of the Certificates in proportion to their
respective amounts of Accrued Certificate Interest payable on such Distribution Date absent
such reductions or (B) if the Mortgage Pool is comprised of two or more Loan Groups, the
related Senior Percentage of such reductions 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
in proportion to their respective amounts of Accrued Certificate Interest payable 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.
Addendum and Assignment Agreement: The Addendum and Assignment Agreement, dated as
of January 31, 1995, between MLCC and the Master Servicer.
Additional Collateral: Any of the following held, in addition to the related
Mortgaged Property, as security for a Mortgage Loan: (i) all money, securities, security
entitlements, accounts, general intangibles, payment rights, instruments, documents, deposit
accounts, certificates of deposit, commodities contracts and other investment property and
other property of whatever kind or description now existing or hereafter acquired which is
pledged as security for the repayment of such Mortgage Loan, (ii) third-party guarantees,
and (A) all money, securities, security entitlements, accounts, general intangibles, payment
rights, instruments, documents, deposit accounts, certificates of deposit, commodities
contracts and other investment property and other property of whatever kind or description
now existing or hereafter acquired which is pledged as collateral for such guarantee or (B)
any mortgaged property securing the performance of such guarantee, or (iii) such other
collateral as may be set forth in the Series Supplement.
Additional Collateral Loan: Each Mortgage Loan that is supported by Additional
Collateral.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and any date of
determination, the Mortgage Rate borne by the related Mortgage Note, less the rate at which
the related Subservicing Fee accrues.
Advance: As to any Mortgage Loan, any advance made by the Master Servicer, pursuant
to Section 4.04.
Advance Facility: As defined in Section 3.22.
Advance Facility Notice: As defined in Section 3.22.
Advance Facility Trustee: As defined in Section 3.22.
Advancing Person: As defined in Section 3.22.
Advance Reimbursement Amounts: As defined in Section 3.22.
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.
Ambac: Ambac Assurance Corporation (formerly known as AMBAC Indemnity Corporation).
Amount Held for Future Distribution: As to any Distribution Date and, with respect
to any Mortgage Pool that is comprised of two or more Loan Groups, each Loan Group, the
total of the amounts held in the Custodial Account at the close of business on the preceding
Determination Date on account of (i) Liquidation Proceeds, Subsequent Recoveries, Insurance
Proceeds, Curtailments, Mortgage Loan purchases made pursuant to Section 2.02, 2.03, 2.04 or
4.07 and Mortgage Loan substitutions made pursuant to Section 2.03 or 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 Master Servicer has deemed to have been
received in the preceding month in accordance with Section 3.07(b)), and Principal
Prepayments in Full 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.
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.
Assigned Contracts: With respect to any Pledged Asset Loan: the Credit Support
Pledge Agreement; the Funding and Pledge Agreement, among GMAC Mortgage, LLC, National
Financial Services Corporation and the Mortgagor or other person pledging the related
Pledged Assets; the Additional Collateral Agreement, between GMAC Mortgage, LLC and the
Mortgagor or other person pledging the related Pledged Assets; or such other contracts as
may be set forth in the Series Supplement.
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 Agreement: The Assignment and Assumption Agreement, dated the Closing
Date, between Residential Funding and the Company relating to the transfer and assignment of
the Mortgage Loans.
Assignment Agreement and Amendment of Security Instrument: With respect to a Sharia
Mortgage Loan, the agreement between the consumer and the co-owner pursuant to which all of
the co-owner's interest as a beneficiary under the related Sharia Mortgage Loan Security
Instrument and the co-owner's interest in the related Mortgaged Property is conveyed to a
subsequent owner, which may take the form of an "Assignment Agreement" and an "Amendment of
Security Instrument" or an "Assignment Agreement and Amendment of Security Instrument", as
applicable.
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.
Available Distribution Amount: As to any Distribution Date and, with respect to any
Mortgage Pool comprised of two or more Loan Groups, 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, including any
Subsequent Recoveries, 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 Certificate Account Deposit Date, (iii) any amount deposited in
the Certificate Account on the related Certificate Account Deposit Date pursuant to the
second paragraph of Section 3.12(a), (iv) any amount deposited in the Certificate Account
pursuant to Section 4.07 or Section 9.01, (v) any amount that the Master Servicer is not
permitted to withdraw from the Custodial Account or the Certificate Account pursuant to
Section 3.16(e), (vi) any amount received by the Trustee pursuant to the Surety Bond in
respect of such Distribution Date and (vii) the proceeds of any Pledged Assets received by
the Master Servicer, 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 Master 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, with respect to any Mortgage Pool that is comprised of two or more Loan
Groups, if on any Distribution Date Compensating Interest provided pursuant to this Section
3.16(e) is less than Prepayment Interest Shortfalls incurred on the Mortgage Loans in
connection with Principal Prepayments in Full 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 Code: The Bankruptcy Code of 1978, as amended.
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 Master Servicer has
notified the Trustee in writing that the Master 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 Master 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, and designated as such in the Preliminary Statement to the Series Supplement.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which
banking institutions in the State of New York, the State of Michigan, the State of
California, the State of Illinois or the State of Minnesota (and such other state or states
in which the Custodial Account or the Certificate Account are at the time located) are
required or authorized by law or executive order to be closed.
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 Certificate 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.
Calendar Quarter: A Calendar Quarter shall consist of one of the following time
periods in any given year: January 1 through March 31, April 1 through June 30, July 1
through September 30, and October 1 through December 31.
Capitalization Reimbursement Amount: With respect to any Distribution Date and, with
respect to any Mortgage Pool comprised of two or more Loan Groups, each Loan Group, the
amount of Advances or Servicing Advances that were added to the Stated Principal Balance of
all Mortgage Loans or, if the Mortgage Pool is comprised of two or more Loan Groups, on the
Mortgage Loans in the related Loan Group, during the prior calendar month and reimbursed to
the Master Servicer or Subservicer on or prior to such Distribution Date pursuant to Section
3.10(a)(vii), plus the Capitalization Reimbursement Shortfall Amount remaining unreimbursed
from any prior Distribution Date and reimbursed to the Master Servicer or Subservicer on or
prior to such Distribution Date.
Capitalization Reimbursement Shortfall Amount: With respect to any Distribution Date
and, with respect to any Mortgage Pool comprised of two or more Loan Groups, each Loan
Group, the amount, if any, by which the amount of Advances or Servicing Advances that were
added to the Stated Principal Balance of all Mortgage Loans (or, if the Mortgage Pool is
comprised of two or more Loan Groups, on the Mortgage Loans in the related Loan Group)
during the preceding calendar month exceeds the amount of principal payments on the Mortgage
Loans included in the Available Distribution Amount (or, if the Mortgage Pool is comprised
of two or more Loan Groups, Available Distribution Amount for the related Loan Group) for
that Distribution Date.
Cash Liquidation: As to any defaulted Mortgage Loan other than a Mortgage Loan as to
which an REO Acquisition occurred, a determination by the Master Servicer that it has
received all Insurance Proceeds, Liquidation Proceeds and other payments or cash recoveries
which the Master Servicer reasonably and in good faith expects to be finally recoverable
with respect to such Mortgage Loan.
Certificate Account Deposit Date: As to any Distribution Date, the Business Day
prior thereto.
Certificateholder or Holder: The Person in whose name a Certificate is registered in
the Certificate Register, and, in respect of any Insured Certificates, the Certificate
Insurer to the extent of Cumulative Insurance Payments, 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 Master 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.
Certificate Insurer: As defined in the Series Supplement.
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, plus
(ii) any Subsequent Recoveries added to the Certificate Principal Balance of such
Certificate pursuant to Section 4.02, plus
(iii) in the case of each Accrual Certificate, an amount equal to the aggregate
Accrued Certificate Interest added to the Certificate Principal Balance
thereof prior to such date of determination, minus
(iv) 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(a)
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, that the Certificate Principal Balance of each Certificate of the Class of
Subordinate Certificates with the Lowest Priority at any given time shall be further reduced
by an amount equal to the Percentage Interest represented by such Certificate multiplied by
the excess, if any, of (A) the then aggregate Certificate Principal Balance of all Classes
of Certificates then outstanding over (B) the then aggregate Stated Principal Balance of the
Mortgage Loans.
Certificate Register and Certificate Registrar: The register maintained and the
registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates bearing the same designation. The
initial Class A-V Certificates and any Subclass thereof issued pursuant to Section 5.01(c)
shall be a single Class for purposes of this Agreement.
Class A-P Certificate: Any one of the Certificates designated as a Class A-P
Certificate.
Class A-P Collection Shortfall: With respect to the Cash Liquidation or REO
Disposition of a Discount Mortgage Loan, any Distribution Date and, with respect to any
Mortgage Pool comprised of two or more Loan Groups, each Loan Group, the excess of the
amount described in clause (C)(1) of the definition of Class A-P Principal Distribution
Amount (for the related Loan Group, if applicable) over the amount described in clause
(C)(2) of such definition.
Class A-P Principal Distribution Amount: With respect to any Distribution Date and,
with respect to any Mortgage Pool comprised of two or more Loan Groups, each Loan Group, an
amount equal to the aggregate of:
(A) the related Discount Fraction of the principal portion of each Monthly
Payment on each Discount Mortgage Loan (or, with respect to any Mortgage Pool
comprised of two or more Loan Groups, each Discount Mortgage Loan in the related Loan
Group) due during the related Due Period, whether or not received on or prior to the
related Determination Date, minus the Discount Fraction of the principal portion of
any related Debt Service Reduction which together with other Bankruptcy Losses
exceeds the Bankruptcy Amount;
(B) the related Discount Fraction of the principal portion of all
unscheduled collections on each Discount Mortgage Loan (or, with respect to any
Mortgage Pool comprised of two or more Loan Groups, each Discount Mortgage Loan in
the related Loan Group) received during the preceding calendar month or, in the case
of Principal Prepayments in Full, during the related Prepayment Period (other than
amounts received in connection with a Cash Liquidation or REO Disposition of a
Discount Mortgage Loan described in clause (C) below), including Principal
Prepayments in Full, Curtailments, Subsequent Recoveries and repurchases (including
deemed repurchases under Section 3.07(b)) of such Discount Mortgage Loans (or, in the
case of a substitution of a Deleted Mortgage Loan, the Discount Fraction of the
amount of any shortfall deposited in the Custodial Account in connection with such
substitution);
(C) in connection with the Cash Liquidation or REO Disposition of a
Discount Mortgage Loan (or, with respect to any Mortgage Pool comprised of two or
more Loan Groups, each Discount Mortgage Loan in the related Loan Group) that
occurred during the preceding calendar month (or was deemed to have occurred during
such period in accordance with Section 3.07(b)) that 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 (1) the applicable Discount Fraction of the
Stated Principal Balance of such Discount Mortgage Loan immediately prior to such
Distribution Date and (2) the aggregate amount of the collections on such Mortgage
Loan to the extent applied as recoveries of principal;
(D) any amounts allocable to principal for any previous Distribution Date
(calculated pursuant to clauses (A) through (C) above) that remain undistributed; and
(E) the amount of any Class A-P Collection Shortfalls for such Distribution
Date and the related Loan Group, if applicable, and the amount of any Class A-P
Collection Shortfalls (for the related Loan Group, if applicable) remaining unpaid
for all previous Distribution Dates, but only to the extent of the Eligible Funds for
such Distribution Date; minus
(F) the related Discount Fraction of the portion of the Capitalization
Reimbursement Amount (for the related Loan Group, if applicable) for such
Distribution Date, if any, related to each Discount Mortgage Loan (in the related
Loan Group, if applicable).
Notwithstanding the foregoing, with respect to any Distribution Date on and after the
Credit Support Depletion Date, the Class A-P Principal Distribution Amount (for a Loan
Group, if applicable) shall equal the excess of (i) the sum of (a) the related Discount
Fraction of the principal portion of each Monthly Payment on each Discount Mortgage Loan (in
the related Loan Group, if applicable) received or advanced prior to the related
Determination Date and not previously distributed minus the Discount Fraction of the
principal portion of any related Debt Service Reduction which together with other Bankruptcy
Losses exceeds the Bankruptcy Amount and (b) the related Discount Fraction of the aggregate
amount of unscheduled collections described in clauses (B) and (C) above over (ii) the
amount calculated pursuant to clause (F) above.
Class A-V Certificate: Any one of the Certificates designated as a Class A-V
Certificate, including any Subclass thereof.
Class B Certificate: Any one of the Certificates designated as a Class B-1
Certificate, Class B-2 Certificate or Class B-3 Certificate.
Class M Certificate: Any one of the Certificates designated as a Class M-1
Certificate, Class M-2 Certificate or Class M-3 Certificate.
Class P Certificate: Any one of the Certificates designated as a Class P
Certificate.
Class SB Certificate: Any one of the Certificates designated as a Class SB
Certificate.
Class X Certificate: Any one of the Certificates designated as a Class X
Certificate.
Closing Date: As defined in the Series Supplement.
Code: The Internal Revenue Code of 1986, as amended.
Combined Collateral LLC: Combined Collateral LLC, a Delaware limited liability
company.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date, an amount equal to
Prepayment Interest Shortfalls resulting from Principal Prepayments in Full during the
related Prepayment Period and Curtailments during the prior calendar month and included in
the Available Distribution Amount for such Distribution Date, but not more than the lesser
of (a) one-twelfth of 0.125% of the Stated Principal Balance of the Mortgage Loans
immediately preceding such Distribution Date and (b) the sum of the Servicing Fee and all
income and gain on amounts held in the Custodial Account and the Certificate Account and
payable to the Certificateholders with respect to such Distribution Date; provided that for
purposes of this definition the amount of the Servicing Fee will not be reduced pursuant to
Section 7.02(a) except as may be required pursuant to the last sentence of such Section.
Compliance With Laws Representation: The following representation and warranty (or
any representation and warranty that is substantially similar) made by Residential Funding
in Section 4 of Assignment Agreement: "Each Mortgage Loan at the time it was made complied
in all material respects with applicable local, state, and federal laws, including, but not
limited to, all applicable anti-predatory lending laws".
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.
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.
Credit Repository: Equifax, Transunion and Experian, or their successors in interest.
Credit Support Depletion Date: The first Distribution Date on which the Certificate
Principal Balances of the Subordinate Certificates have been reduced to zero.
Credit Support Pledge Agreement: The Credit Support Pledge Agreement, dated as of
November 24, 1998, among the Master Servicer, GMAC Mortgage, LLC, Combined Collateral LLC
and The First National Bank of Chicago (now known as Bank One, National Association), as
custodian.
Cumulative Insurance Payments: As defined in the Series Supplement.
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 in the name of a depository institution, as custodian for the holders of the
Certificates, for the holders of certain other interests in mortgage loans serviced or sold
by the Master Servicer and for the Master Servicer, into which the amounts set forth in
Section 3.07 shall be deposited directly. Any such account or accounts shall be an Eligible
Account.
Custodial Agreement: An agreement that may be entered into among the Company, the
Master 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.
Custodial File: Any mortgage loan document in the Mortgage File that is required to
be delivered to the Trustee or Custodian pursuant to Section 2.01(b) of this Agreement.
Custodian: A custodian appointed pursuant to a Custodial Agreement.
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 (or due during the month of the Cut-off Date), 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 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.
Destroyed Mortgage Note: A Mortgage Note the original of which was permanently lost
or destroyed and has not been replaced.
Destroyed Obligation to Pay: An Obligation to Pay the original of which was
permanently lost or destroyed and has not been replaced.
Determination Date: As defined in the Series Supplement.
Discount Fraction: With respect to each Discount Mortgage Loan, the fraction
expressed as a percentage, the numerator of which is the Discount Net Mortgage Rate minus
the Net Mortgage Rate (or the initial Net Mortgage Rate with respect to any Discount
Mortgage Loans as to which the Mortgage Rate is modified pursuant to 3.07(a)) for such
Mortgage Loan and the denominator of which is the Discount Net Mortgage Rate. The Discount
Fraction with respect to each Discount Mortgage Loan is set forth as an exhibit attached to
the Series Supplement.
Discount Mortgage Loan: Any Mortgage Loan having a Net Mortgage Rate (or the initial
Net Mortgage Rate) of less than the Discount Net Mortgage Rate per annum and any Mortgage
Loan deemed to be a Discount Mortgage Loan pursuant to the definition of Qualified
Substitute Mortgage Loan.
Discount Net Mortgage Rate: As defined in the Series Supplement.
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 Freddie Mac, a majority of its board of directors is not selected by such
governmental unit), (ii) a foreign government, any international organization, or any agency
or instrumentality of any of the foregoing, (iii) any organization (other than certain
farmers' cooperatives described in Section 521 of the 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 25th day of any month beginning in the month immediately
following the month of the initial issuance of the Certificates or, if such 25th day is not
a Business Day, the Business Day immediately following such 25th 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 any Distribution Date, the one-month period set forth in
the Series Supplement.
Eligible Account: An account that is any of the following: (i) maintained with a
depository institution the debt obligations of which have been rated by each Rating Agency
in its highest rating available, or (ii) an account or accounts in a depository institution
in which such accounts are fully insured to the limits established by the FDIC, provided
that any deposits not so insured shall, to the extent acceptable to each Rating Agency, as
evidenced in writing, be maintained such that (as evidenced by an Opinion of Counsel
delivered to the Trustee and each Rating Agency) the registered Holders of Certificates have
a claim with respect to the funds in such account or a perfected first security interest
against any collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the depository
institution with which such account is maintained, or (iii) in the case of the Custodial
Account, a trust account or accounts maintained in the corporate trust department of the
Trustee, or (iv) in the case of the Certificate Account, a trust account or accounts
maintained in the corporate trust department of the Trustee, or (v) an account or accounts
of a depository institution acceptable to each Rating Agency (as evidenced in writing by
each Rating Agency that use of any such account as the Custodial Account or the Certificate
Account will not reduce the rating assigned to any Class of Certificates by such Rating
Agency below the then-current rating assigned to such Certificates).
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 as reduced by any amount calculated
pursuant to clause (E) of the definition of Class A-P Principal Distribution Amount. With
respect to any Mortgage Pool that is comprised of two or more Loan Groups, 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
allocated to the Certificates on such Distribution Date.
Exchange Act: The Securities and Exchange Act of 1934, as amended.
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:
(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, a federally chartered and
privately owned corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
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 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.
Form 10-K Certification: As defined in Section 4.03(e).
Fraud Losses: Realized Losses on Mortgage Loans as to which there was fraud in the
origination of such Mortgage Loan.
Freddie Mac: Federal Home Loan Mortgage Corporation, 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.
Highest Priority: As of any date of determination, the Class of Subordinate
Certificates then outstanding with a Certificate Principal Balance greater than zero, 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 Master 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 Master Servicer or the Trustee or in an Affiliate
thereof, and (iii) is not connected with the Company, the Master Servicer or the Trustee as
an officer, employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
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 Series Supplement.
Initial Monthly Payment Fund: An amount representing scheduled principal amortization
and interest at the Net Mortgage Rate for the Due Date in the first Due Period commencing
subsequent to the Cut-off Date for those Mortgage Loans for which the Trustee will not be
entitled to receive such payment, and as more specifically defined in the Series Supplement.
Initial Notional Amount: With respect to any Class or Subclass of Interest Only
Certificates, the amount initially used as the principal basis for the calculation of any
interest payment amount, as more specifically defined in the Series Supplement.
Initial Subordinate Class Percentage: As defined in the Series Supplement.
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
(excluding any Certificate Policy (as defined in the Series Supplement)), to the extent such
proceeds are payable to the mortgagee under the Mortgage, any Subservicer, the Master
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 Master 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: As defined in the Series Supplement.
Interest Only Certificates: A Class or Subclass of Certificates not entitled to
payments of principal, and designated as such in the Series Supplement. The Interest Only
Certificates will have no Certificate Principal Balance.
Interim Certification: As defined in Section 2.02.
International Borrower: In connection with any Mortgage Loan, a borrower who is (a)
a United States citizen employed in a foreign country, (b) a non-permanent resident alien
employed in the United States or (c) a citizen of a country other than the United States
with income derived from sources outside the United States.
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.
Liquidation Proceeds: Amounts (other than Insurance Proceeds) received by the Master
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: Any group of Mortgage Loans designated as a separate loan group in the
Series Supplement. The Certificates relating to each Loan Group will be designated in the
Series Supplement.
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 a Certificate Principal Balance greater than zero, 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: The latest possible maturity date, solely for purposes of Section
1.860G-1(a)(4)(iii) of the Treasury regulations, by which the Certificate Principal Balance
of each Class of Certificates (other than the Interest Only Certificates which have no
Certificate Principal Balance) and each Uncertificated REMIC Regular Interest would be
reduced to zero, as designated in the Series Supplement.
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.
MLCC: Xxxxxxx Xxxxx Credit Corporation, or its successor in interest.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject of a Servicing
Modification.
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. With respect to each Obligation to Pay related to a Sharia Mortgage Loan,
the Sharia Mortgage Loan Security Instrument.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining to a
particular Mortgage Loan and any additional documents required to be added to the Mortgage
File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans, including any Sharia 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, (ii) with respect to each Sharia Mortgage Loan, the related
Obligation to Pay, Sharia Mortgage Loan Security Instrument, Sharia Mortgage Loan
Co-Ownership Agreement, Assignment Agreement and Amendment of Security Instrument and
Mortgage File and all rights appertaining thereto and (iii) with respect to each Mortgage
Loan other than a Cooperative Loan or a Sharia Mortgage Loan, each related Mortgage Note,
Mortgage and Mortgage File and all rights appertaining thereto.
Mortgage Loan Schedule: As defined in the Series Supplement.
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. With respect to each Sharia Mortgage Loan, the related Obligation to
Pay.
Mortgage Pool: The pool of mortgage loans, including all Loan Groups, if any,
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. As to any
Sharia Mortgage Loan, the profit factor described in the related Obligation to Pay, 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, or with respect to a Sharia Mortgage
Loan, the consumer on an Obligation to Pay.
Net Mortgage Rate: As to each Mortgage Loan, a per annum rate of interest equal to
the Adjusted Mortgage Rate less the per annum rate at which the Servicing Fee is calculated.
Non-Discount Mortgage Loan: A Mortgage Loan that is not a Discount Mortgage Loan.
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.
Nonrecoverable Advance: Any Advance previously made or proposed to be made by the
Master Servicer or Subservicer in respect of a Mortgage Loan (other than a Deleted Mortgage
Loan) which, in the good faith judgment of the Master Servicer, will not, or, in the case of
a proposed Advance, would not, be ultimately recoverable by the Master Servicer from related
Late Collections, Insurance Proceeds, Liquidation Proceeds, REO Proceeds or amounts
reimbursable to the Master Servicer pursuant to Section 4.02(a) hereof. To the extent that
any Mortgagor is not obligated under the related Mortgage documents to pay or reimburse any
portion of any Servicing Advances that are outstanding with respect to the related Mortgage
Loan as a result of a modification of such Mortgage Loan by the Master Servicer, which
forgives amounts which the Master Servicer or Subservicer had previously advanced, and the
Master Servicer determines that no other source of payment or reimbursement for such
advances is available to it, such Servicing Advances shall be deemed to be Nonrecoverable
Advances. The determination by the Master Servicer that it has made a Nonrecoverable
Advance or that any proposed Advance would constitute a Nonrecoverable Advance, shall be
evidenced by an Officers' Certificate delivered to the Company, the Trustee and any
Certificate Insurer.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of reference
thereto, is not subject to a Subservicing Agreement.
Notional Amount: With respect to any Class or Subclass of Interest Only Certificates,
an amount used as the principal basis for the calculation of any interest payment amount, as
more specifically defined in the Series Supplement.
Obligation to Pay: The originally executed obligation to pay or similar agreement
evidencing the obligation of the consumer under a Sharia Mortgage Loan, together with any
modification thereto.
Officers' Certificate: A certificate signed by the Chairman of the Board, the
President or a Vice President or Assistant Vice President, or a Director or Managing
Director, and by the Treasurer, the Secretary, or one of the Assistant Treasurers or
Assistant Secretaries of the Company or the Master 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
Master Servicer, who may be counsel for the Company or the Master 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 formed under the Series Supplement 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, 2.03, 2.04 or 4.07.
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: As defined in the Series Supplement.
Paying Agent: The Trustee or any successor Paying Agent appointed by the Trustee.
Percentage Interest: With respect to any Certificate (other than a 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 thereof or Initial Notional Amount (in the case of any
Interest Only Certificate) thereof divided by the aggregate Initial Certificate Principal
Balance or the aggregate of the Initial Notional Amounts, as applicable, of all the
Certificates of the same Class. With respect to 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.
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 debt obligations of such depository institution or trust 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 original maturity of such
short-term 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 a 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 (in the case of Standard & Poor's such
rating shall be either AAAm or AAAm-G), 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 (without giving effect to any Certificate
Policy (as defined in the Series Supplement) in the case of Insured Certificates (as
defined in the Series Supplement) below the lower of the then-current rating assigned
to such Certificates 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 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 debt shall mean AAA in the case of Standard & Poor's and Fitch and Aaa
in the case of Xxxxx'x, and for purposes of this Agreement, any references herein to the
highest rating available on unsecured commercial paper and short-term debt obligations shall
mean the following: A-1 in the case of Standard & Poor's, P-1 in the case of Xxxxx'x and F-1
in the case of Fitch; provided, however, that any Permitted Investment that is a short-term
debt obligation rated A-1 by Standard & Poor's must satisfy the following additional
conditions: (i) the total amount of debt from A-1 issuers must be limited to the investment
of monthly principal and interest payments (assuming fully amortizing collateral); (ii) the
total amount of A-1 investments must not represent more than 20% of the aggregate
outstanding Certificate Principal Balance of the Certificates and each investment must not
mature beyond 30 days; (iii) the terms of the debt must have a predetermined fixed dollar
amount of principal due at maturity that cannot vary; and (iv) if the investments may be
liquidated prior to their maturity or are being relied on to meet a certain yield, interest
must be tied to a single interest rate index plus a single fixed spread (if any) and must
move proportionately with that index. Any Permitted Investment may be held by or through
the Trustee or its Affiliates.
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.
Pledged Amount: With respect to any Pledged Asset Loan, the amount of money remitted
to Combined Collateral LLC, at the direction of or for the benefit of the related Mortgagor.
Pledged Asset Loan: Any Mortgage Loan supported by Pledged Assets or such other
collateral, other than the related Mortgaged Property, set forth in the Series Supplement.
Pledged Assets: With respect to any Mortgage Loan, all money, securities, security
entitlements, accounts, general intangibles, payment intangibles, instruments, documents,
deposit accounts, certificates of deposit, commodities contracts and other investment
property and other property of whatever kind or description pledged by Combined Collateral
LLC as security in respect of any Realized Losses in connection with such Mortgage Loan up
to the Pledged Amount for such Mortgage Loan, and any related collateral, or such other
collateral as may be set forth in the Series Supplement.
Pledged Asset Mortgage Servicing Agreement: The Pledged Asset Mortgage Servicing
Agreement, dated as of February 28, 1996 between MLCC and the Master Servicer.
Pooling and Servicing Agreement or Agreement: With respect to any Series, this
Standard Terms together with the related Series Supplement.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate of the
Stated Principal Balances of each Mortgage Loan.
Pool Strip Rate: With respect to each Mortgage Loan, a per annum rate equal to the
excess of (a) the Net Mortgage Rate of such Mortgage Loan over (b) the Discount Net Mortgage
Rate (but not less than 0.00%) per annum.
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 portion of the related Prepayment Period that falls
during the prior calendar month, 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 for such month to the date of such Principal
Prepayment in Full or (b) a Curtailment during the prior 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 on the 16th day of the month prior to the month in which that Distribution
Date occurs and ending on the 15th day of the month in which such Distribution Date occurs.
Primary Insurance Policy: Each primary policy of mortgage guaranty insurance or any
replacement policy therefor referred to in Section 2.03(b)(iv) and (v).
Principal Only Certificates: A Class of Certificates not entitled to payments of
interest, and more specifically designated as such in the Series Supplement.
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 of the entire principal
balance of a Mortgage Loan that is made by the Mortgagor.
Program Guide: Collectively, the Client Guide and the Servicer Guide for Residential
Funding's Expanded Criteria Mortgage Program.
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, 2.03, 2.04 or 4.07, an amount
equal to the sum of (i) 100% of the Stated Principal Balance thereof plus the principal
portion of any related unreimbursed Advances and (ii) unpaid accrued interest at the
Adjusted Mortgage Rate (or Modified Net Mortgage Rate plus the rate per annum at which the
Servicing Fee is calculated 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 Master 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.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by Residential
Funding or the Company for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officers' 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 Residential Funding 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) comply with each representation and warranty set forth in Sections 2.03 and
2.04 hereof and Section 4 of the Assignment Agreement; and
(vi) have a Pool Strip Rate equal to or greater than that of the Deleted Mortgage
Loan.
Notwithstanding any other provisions herein, (x) with respect to any Qualified Substitute
Mortgage Loan substituted for a Deleted Mortgage Loan which was a Discount Mortgage Loan,
such Qualified Substitute Mortgage Loan shall be deemed to be a Discount Mortgage Loan and
to have a Discount Fraction equal to the Discount Fraction of the Deleted Mortgage Loan and
(y) in the event that the "Pool Strip Rate" of any Qualified Substitute Mortgage Loan as
calculated pursuant to the definition of "Pool Strip Rate" is greater than the Pool Strip
Rate of the related Deleted Mortgage Loan
(i) the Pool Strip Rate of such Qualified Substitute Mortgage Loan shall be equal
to the Pool Strip Rate of the related Deleted Mortgage Loan for purposes of
calculating the Pass-Through Rate on the Class A-V Certificates and
(ii) the excess of the Pool Strip Rate on such Qualified Substitute Mortgage Loan
as calculated pursuant to the definition of "Pool Strip Rate" over the Pool
Strip Rate on the related Deleted Mortgage Loan shall be payable to the Class
R Certificates pursuant to Section 4.02 hereof.
Rating Agency: Each of the statistical credit rating agencies specified in the
Preliminary Statement of the Series Supplement. 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 Master 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 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 Master
Servicer or any Subservicer with respect to related Advances, Servicing
Advances or other expenses as to which the Master 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) (1) the amount by which
the interest portion of a Monthly Payment or the principal balance of such
Mortgage Loan was reduced or (2) the sum of any other amounts owing under the
Mortgage Loan that were forgiven and that constitute Servicing Advances that
are reimbursable to the Master Servicer or a Subservicer, 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 Master Servicer has notified the Trustee
in writing that the Master 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 Master Servicer or a Subservicer, in either case without giving effect to any Debt
Service Reduction.
To the extent the Master Servicer receives Subsequent Recoveries with respect to any
Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage Loan will be
reduced to the extent such recoveries are applied to reduce the Certificate Principal
Balance of any Class of Certificates on any Distribution Date.
Record Date: With respect to each Distribution Date, the close of business on the
last Business Day of the month next preceding the month in which the related Distribution
Date occurs.
Regular Certificate: Any of the Certificates other than a Class R Certificate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
ss.ss.229.1100-229.1123, as such may be amended from time to time, and subject to sUch
clarification and interpretation as have been provided by the Commission in the adopting
release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506,
1,531 (January 7, 2005)) or by the staff of the Commission, or as may be provided by the
Commission or its staff from time to time.
Reimbursement Amounts: As defined in Section 3.22.
REMIC: A "real estate mortgage investment conduit" within the meaning of Section
860D of the Code.
REMIC Administrator: Residential Funding Company, LLC. If Residential Funding
Company, LLC is found by a court of competent jurisdiction to no longer be able to fulfill
its obligations as REMIC Administrator under this Agreement the Master Servicer or Trustee
acting as Master Servicer shall appoint a successor REMIC Administrator, subject to
assumption of the REMIC Administrator obligations under this Agreement.
REMIC Provisions: Provisions of the federal income tax law relating to real estate
mortgage investment conduits, which appear at Sections 860A through 860G of Subchapter M of
Chapter 1 of the Code, and related provisions, and temporary and final regulations (or, to
the extent not inconsistent with such temporary or final regulations, proposed regulations)
and published rulings, notices and announcements promulgated thereunder, as the foregoing
may be in effect from time to time.
REO Acquisition: The acquisition by the Master 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 Master 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 Master 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.
REO Property: A Mortgaged Property acquired by the Master Servicer through
foreclosure or deed in lieu of foreclosure in connection with a defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i) has been subject to an
interest rate reduction, (ii) has been subject to a term extension or (iii) has had amounts
owing on such Mortgage Loan capitalized by adding such amount to the Stated Principal
Balance of such Mortgage Loan; provided, however, that a Mortgage Loan modified in
accordance with clause (i) above for a temporary period shall not be a Reportable Modified
Mortgage Loan if such Mortgage Loan has not been delinquent in payments of principal and
interest for six months since the date of such modification if that interest rate reduction
is not made permanent thereafter.
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, the Program Guide
or the related Subservicing Agreement in respect of such Mortgage Loan.
Required Surety Payment: With respect to any Additional Collateral Loan that becomes
a Liquidated Mortgage Loan, the lesser of (i) the principal portion of the Realized Loss
with respect to such Mortgage Loan and (ii) the excess, if any, of (a) the amount of
Additional Collateral required at origination with respect to such Mortgage Loan over (b)
the net proceeds realized by the Subservicer from the related Additional Collateral.
Residential Funding: Residential Funding Company, LLC, a Delaware limited liability
company, in its capacity as seller of the Mortgage Loans to the Company and any successor
thereto.
Responsible Officer: When used with respect to the Trustee, any officer of the
Corporate Trust Department 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, in each case with direct
responsibility for the administration of the Agreement.
Retail Certificates: A Senior Certificate, if any, offered in smaller minimum
denominations than other Senior Certificates, and designated as such in the Series
Supplement.
Schedule of Discount Fractions: The schedule setting forth the Discount Fractions
with respect to the Discount Mortgage Loans, attached as an exhibit to the Series Supplement.
Securitization Transaction: Any transaction involving a sale or other transfer of
mortgage loans directly or indirectly to an issuing entity in connection with an issuance of
publicly offered or privately placed, rated or unrated mortgage-backed securities.
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: As to any Mortgage Loan, a Person, including any Subservicer, that executed
a Seller's Agreement applicable to such Mortgage Loan.
Seller's Agreement: An agreement for the origination and sale of Mortgage Loans
generally in the form of the Seller Contract referred to or contained in the Program Guide,
or in such other form as has been approved by the Master Servicer and the Company, each
containing representations and warranties in respect of one or more Mortgage Loans
consistent in all material respects with those set forth in the Program Guide.
Senior Accelerated Distribution Percentage: With respect to any Distribution Date
occurring on or prior to the 60th Distribution Date and, with respect to any Mortgage Pool
comprised of two or more Loan Groups, any Loan Group, 100%. With respect to any
Distribution Date thereafter and any such Loan Group, if applicable, as follows:
(i) for any Distribution Date after the 60th Distribution Date but on or prior to the
72nd Distribution Date, the related Senior Percentage for such Distribution Date plus
70% of the related Subordinate Percentage for such Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date but on or prior to the
84th Distribution Date, the related Senior Percentage for such Distribution Date plus
60% of the related Subordinate Percentage for such Distribution Date;
(iii) for any Distribution Date after the 84th Distribution Date but on or prior to the
96th Distribution Date, the related Senior Percentage for such Distribution Date plus
40% of the related Subordinate Percentage for such Distribution Date;
(iv) for any Distribution Date after the 96th Distribution Date but on or prior to the
108th Distribution Date, the related Senior Percentage for such Distribution Date
plus 20% of the related Subordinate Percentage 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
described above shall not occur as of any Distribution Date unless either
(a)(1)(X) 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 50% or (Y) the outstanding principal balance of 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 principal balance of all Mortgage Loans
averaged over the last six months, does not exceed 2% and (2) 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
are less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial
Certificate Principal Balances of the Subordinate Certificates or
(b)(1) the outstanding principal balance of 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 principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 4% and (2) 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 are less than 10%, 15%,
20%, 25% or 30%, respectively, of the sum of the Initial Certificate Principal
Balances of the Subordinate Certificates, and
(ii) that for any Distribution Date on which the Senior Percentage is greater than
the Senior Percentage as of the Closing Date, the Senior Accelerated Distribution Percentage
for such Distribution Date shall be 100%, or, if the Mortgage Pool is comprised of two or
more Loan Groups, for any Distribution Date on which the weighted average of the Senior
Percentages for each Loan Group, weighted on the basis of the Stated Principal Balances of
the Mortgage Loans in the related Loan Group (excluding the Discount Fraction of the
Discount Mortgage Loans in such Loan Group) exceeds the weighted average of the initial
Senior Percentages (calculated on such basis) for each Loan Group, each of the Senior
Accelerated Distribution Percentages for such Distribution Date will equal 100%.
Notwithstanding the foregoing, upon the reduction of the Certificate Principal Balances of
the related Senior Certificates (other than the Class A-P Certificates, if any) to zero, the
related Senior Accelerated Distribution Percentage shall thereafter be 0%.
Senior Certificate: As defined in the Series Supplement.
Senior Percentage: As defined in the Series Supplement.
Senior Support Certificate: A Senior Certificate that provides additional credit
enhancement to certain other classes of Senior Certificates and designated as such in the
Preliminary Statement of the Series Supplement.
Series: All of the Certificates issued pursuant to a Pooling and Servicing Agreement
and bearing the same series designation.
Series Supplement: The agreement into which this Standard Terms is incorporated and
pursuant to which, together with this Standard Terms, a Series of Certificates is issued.
Servicing Accounts: The account or accounts created and maintained pursuant to
Section 3.08.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of Regulation
AB, as such may be amended from time to time.
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 Master Servicer or a Subservicer 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, (iv) any mitigation procedures implemented in accordance with Section 3.07, and
(v) compliance with the obligations under Sections 3.01, 3.08, 3.11, 3.12(a) and 3.14,
including, if the Master Servicer or any Affiliate of the Master 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 Advance Reimbursement Amounts: As defined in Section 3.22.
Servicing Fee: With respect to any Mortgage Loan and Distribution Date, the fee
payable monthly to the Master Servicer in respect of master servicing compensation that
accrues at an annual rate designated on the Mortgage Loan Schedule as the "MSTR SERV FEE"
for such Mortgage Loan, as may be adjusted with respect to successor Master Servicers as
provided in Section 7.02.
Servicing Modification: Any reduction of the interest rate on or the outstanding
principal balance of a Mortgage Loan, any extension of the final maturity date of a Mortgage
Loan, and any increase to the outstanding principal balance of a Mortgage Loan by adding to
the Stated Principal Balance unpaid principal and interest and other amounts owing under the
Mortgage Loan, in each case pursuant to a modification of a Mortgage Loan that is in
default, or for which, in the judgment of the Master Servicer, default is reasonably
foreseeable in accordance with Section 3.07(a).
Servicing Officer: Any officer of the Master 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 Master
Servicer, as such list may from time to time be amended.
Sharia Mortgage Loan: A declining balance co-ownership transaction, structured so as
to comply with Islamic religious law.
Sharia Mortgage Loan Co-Ownership Agreement: The agreement that defines the
relationship between the consumer and co-owner and the parties' respective rights under a
Sharia Mortgage Loan, including their respective rights with respect to the indicia of
ownership of the related Mortgaged Property.
Sharia Mortgage Loan Security Instrument: The mortgage, security instrument or other
comparable instrument creating a first lien on an estate in fee simple or leasehold interest
in real property securing an Obligation to Pay.
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.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., or its successor in interest.
Stated Principal Balance: With respect to any Mortgage Loan or related REO Property,
as of any Distribution Date, (i) the sum of (a) the Cut-off Date Principal Balance of the
Mortgage Loan plus (b) any amount by which the Stated Principal Balance of the Mortgage
Loan has been increased pursuant to a Servicing Modification, 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 with the Due Period related to the previous
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
Master 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.
Subclass: With respect to the Class A-V Certificates, any Subclass thereof issued
pursuant to Section 5.01(c). Any such Subclass will represent the Uncertificated REMIC
Regular Interest or Interests Z specified by the initial Holder of the Class A-V
Certificates pursuant to Section 5.01(c).
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) (other than the
related Discount Fraction of each Discount Mortgage Loan) immediately prior to such
Distribution Date.
Subordinate Percentage: As of any Distribution Date and, with respect to any Mortgage
Pool comprised of two or more Loan Groups, any Loan Group, 100% minus the related Senior
Percentage as of such Distribution Date.
Subsequent Recoveries: As of any Distribution Date, amounts received by the Master
Servicer (net of any related expenses permitted to be reimbursed pursuant to Section 3.10)
or surplus amounts held by the Master Servicer to cover estimated expenses (including, but
not limited to, recoveries in respect of the representations and warranties made by the
related Seller pursuant to the applicable Seller's Agreement and assigned to the Trustee
pursuant to Section 2.04) specifically related to a Mortgage Loan that was the subject of a
Cash Liquidation or an REO Disposition prior to the related Prepayment Period that resulted
in a Realized Loss.
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 Master Servicer has entered into a
Subservicing Agreement and who generally satisfied the requirements set forth in the Program
Guide in respect of the qualification of a Subservicer as of the date of its approval as a
Subservicer by the Master Servicer.
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 Master Servicer and any
Subservicer relating to servicing and administration of certain Mortgage Loans as provided
in Section 3.02, generally in the form of the servicer contract referred to or contained in
the Program Guide or in such other form as has been approved by the Master Servicer and the
Company. With respect to Additional Collateral Loans subserviced by MLCC, the Subservicing
Agreement shall also include the Addendum and Assignment Agreement and the Pledged Asset
Mortgage Servicing Agreement. With respect to any Pledged Asset Loan subserviced by GMAC
Mortgage, LLC, the Addendum and Assignment Agreement, dated as of November 24, 1998, between
the Master Servicer and GMAC Mortgage, LLC, as such agreement may be amended from time to
time.
Subservicing Fee: As to any Mortgage Loan, the fee payable monthly to the related
Subservicer (or, in the case of a Nonsubserviced Mortgage Loan, to the Master Servicer) in
respect of subservicing and other compensation that accrues at an annual rate equal to the
excess of the Mortgage Rate borne by the related Mortgage Note over the rate per annum
designated on the Mortgage Loan Schedule as the "CURR NET" for such Mortgage Loan.
Successor Master Servicer: As defined in Section 3.22.
Surety: Ambac, or its successors in interest, or such other surety as may be
identified in the Series Supplement.
Surety Bond: The Limited Purpose Surety Bond (Policy No. AB0039BE), dated February
28, 1996 in respect to Mortgage Loans originated by MLCC, or the Surety Bond (Policy No.
AB0240BE), dated March 17, 1999 in respect to Mortgage Loans originated by Novus Financial
Corporation, in each case issued by Ambac for the benefit of certain beneficiaries,
including the Trustee for the benefit of the Holders of the Certificates, but only to the
extent that such Surety Bond covers any Additional Collateral Loans, or such other Surety
Bond as may be identified in the Series Supplement.
Tax Returns: The federal income tax return on Internal Revenue Service Form 1066,
U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q
thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income or Net Loss
Allocation, or any successor forms, to be filed on behalf of any REMIC formed under the
Series Supplement and under the REMIC Provisions, together with any and all other
information, reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other governmental
taxing authority under any applicable provisions of federal, state or local tax laws.
Transaction Party: As defined in Section 12.02(a).
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 related to a Series, with respect to which
one or more REMIC elections are to be made pursuant to this Agreement, 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 Certificate
Account and identified as belonging to the Trust Fund, including the proceeds from
the liquidation of Additional Collateral for any Additional Collateral Loan or
Pledged Assets for any Pledged Asset Loan, but not including amounts on deposit in
the Initial Monthly Payment 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, the Pledged
Assets with respect to each Pledged Asset Loan, and the interest in the Surety Bond
transferred to the Trustee pursuant to Section 2.01, and
(v) all proceeds of clauses (i) through (iv) above.
Trustee Information: As specified in Section 12.05(a)(i)(A).
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 or U.S. 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 or U.S. 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 U.S. Person.
U.S.A. Patriot Act: Uniting and Strengthening America by Providing Appropriate Tools
to Intercept and Obstruct Terrorism Act of 2001, as amended.
Voting Rights: The portion of the voting rights of all of the Certificates which is
allocated to any Certificate, and more specifically designated in Article XI of the Series
Supplement.
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 definitions set forth herein
include both the singular and the plural.
References in the Pooling and Servicing Agreement to "interest" on and "principal" of
the Mortgage Loans shall mean, with respect to the Sharia Mortgage Loans, amounts in respect
profit payments and acquisition payments, respectively.
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 in the month of the
Cut-off Date). In connection with such transfer and assignment, the Company does hereby
deliver to the Trustee the Certificate Policy (as defined in the Series Supplement), if any
for the benefit of the Holders of the Insured Certificates (as defined in the Series
Supplement).
(b) In connection with such assignment, except as set forth in Section 2.01(c) and
subject to Section 2.01(d) below, the Company does hereby (1) with respect to each Mortgage
Loan (other than a Cooperative Loan or a Sharia Mortgage Loan), deliver to the Master
Servicer (or an Affiliate of the Master Servicer) each of the documents or instruments
described in clause (I)(ii) below (and the Master Servicer shall hold (or cause such
Affiliate to hold) such documents or instruments in trust for the use and benefit of all
present and future Certificateholders), (2) with respect to each MOM Loan, deliver to and
deposit with the Trustee, or the Custodian on behalf of the Trustee, the documents or
instruments described in clauses (I)(i) and (v) below, (3) with respect to each Mortgage
Loan that is not a MOM Loan but is registered on the MERS(R)System, deliver to and deposit
with the Trustee, or to the Custodian on behalf of the Trustee, the documents or instruments
described in clauses (I)(i), (iv) and (v) below, (4) with respect to each Mortgage Loan that
is not a MOM Loan and is not registered on the MERS(R)System, deliver to and deposit with the
Trustee, or to the Custodian on behalf of the Trustee, the documents or instruments
described in clauses (I)(i), (iii), (iv) and (v) below, and (5) with respect to each
Cooperative Loan and Sharia Mortgage Loan, deliver to and deposit with the Trustee, or to
the Custodian on behalf of the Trustee, the documents and instruments described in clause
(II) and clause (III) below:
(I) with respect to each Mortgage Loan so assigned (other than a Cooperative Loan or
a Sharia Mortgage Loan):
(i) The original Mortgage Note, endorsed without recourse in blank or to
the order of the Trustee, and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or with respect to any
Destroyed Mortgage Note, an original lost note affidavit from the related Seller or
Residential Funding stating that the original Mortgage Note was lost, misplaced or
destroyed, together with a copy of the related Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of the Mortgage Loan 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 with
evidence of recording indicated thereon;
(iii) The original Assignment of the Mortgage to the Trustee with evidence of recording
indicated thereon or a copy of such assignment with evidence of recording indicated
thereon;
(iv) The original recorded assignment or assignments of the Mortgage showing an unbroken
chain of title from the originator thereof to the Person assigning it to the Trustee
(or to MERS, if the Mortgage Loan is registered on the MERS(R)System and noting the
presence of a MIN) with evidence of recordation noted thereon or attached thereto, or
a copy of such assignment or assignments of the Mortgage with evidence of recording
indicated thereon; and
(v) The original of each modification, assumption agreement or preferred loan agreement,
if any, relating to such Mortgage Loan or a copy of each modification, assumption
agreement or preferred loan agreement
(II) with respect to each Cooperative Loan so assigned:
(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 the Person
endorsing it to the Trustee, or with respect to any Destroyed Mortgage Note, an
original lost note affidavit from the related Seller or Residential Funding stating
that the original Mortgage Note was lost, misplaced or destroyed, together with a
copy of the related Mortgage Note;
(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 or a copy of such Cooperative
Lease and Assignment of Proprietary Lease and copies of such intervening assignments;
(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 or copies thereof;
(iv) The original recognition agreement by the Cooperative of the interests of the
mortgagee with respect to the related Cooperative Loan or a copy thereof;
(v) The Security Agreement or a copy thereof;
(vi) Copies of the original UCC-1 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-3 assignments 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, or
a copy thereof;
(ix) The original of each modification, assumption agreement or preferred loan agreement,
if any, relating to such Cooperative Loan or a copy of each modification, assumption
agreement or preferred loan agreement; and
(x) A duly completed UCC-1 financing statement showing the Master Servicer as debtor, the
Company as secured party and the Trustee as assignee and a duly completed UCC-1
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 or copies thereof;
(III) with respect to each Sharia Mortgage Loan so assigned:
(i) The original Obligation to Pay, endorsed without recourse in blank or
to the order of the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or with respect to any
Destroyed Obligation to Pay, an original affidavit from the related Seller or
Residential Funding stating that the original Obligation to Pay was lost, misplaced
or destroyed, together with a copy of the related Obligation to Pay;
(ii) The original Sharia Mortgage Loan Security Instrument, with evidence of
recording indicated thereon or a copy of the Sharia Mortgage Loan Security Instrument
with evidence of recording indicated thereon;
(iii) An original Assignment and Amendment of Security Instrument, assigned
to the Trustee with evidence of recording indicated thereon or a copy of such
Assignment and Amendment of Security Instrument with evidence of recording indicated
thereon;
(iv) The original recorded assignment or assignments of the Sharia Mortgage
Loan Security Instrument showing an unbroken chain of title from the originator
thereof to the Person assigning it to the Trustee with evidence of recordation noted
thereon or attached thereto, or a copy of such assignment or assignments of the
Sharia Mortgage Loan Security Instrument with evidence of recording indicated thereon;
(v) The original Sharia Mortgage Loan Co-Ownership Agreement with respect
to the related Sharia Mortgage Loan or a copy of such Sharia Mortgage Loan
Co-Ownership Agreement; and
(vi) The original of each modification or assumption agreement, if any,
relating to such Sharia Mortgage Loan or a copy of each modification or assumption
agreement.
(c) The Company may, in lieu of delivering the original of the documents set forth in
Sections 2.01(b)(I)(iii), (iv) and (v), Sections (b)(II)(ii), (iv), (vii), (ix) and (x) and
Sections 2.01(b)(III)(ii), (iii), (iv), (v) and (vi) (or copies thereof) to the Trustee or
to the Custodian on behalf of the Trustee, deliver such documents to the Master Servicer,
and the Master Servicer shall hold such documents in trust for the use and benefit of all
present and future Certificateholders until such time as is set forth in the next sentence.
Within thirty Business Days following the earlier of (i) the receipt of the original of all
of the documents or instruments set forth in Sections 2.01(b)(I)(iii), (iv) and (v),
Sections (b)(II)(ii), (iv), (vii), (ix) and (x) and Sections 2.01(b)(III)(ii), (iii), (iv),
(v) and (vi) (or copies thereof) for any Mortgage Loan and (ii) a written request by the
Trustee to deliver those documents with respect to any or all of the Mortgage Loans then
being held by the Master Servicer, the Master Servicer shall deliver a complete set of such
documents to the Trustee or to the Custodian on behalf of the Trustee.
The parties hereto agree that it is not intended that any Mortgage Loan be included
in the Trust Fund that is either (i) a "High-Cost Home Loan" as defined in the New Jersey
Home Ownership Act effective November 27, 2003, (ii) a "High-Cost Home Loan" as defined in
the New Mexico Home Loan Protection Act effective January 1, 2004, (iii) a "High Cost Home
Mortgage Loan" as defined in the Massachusetts Predatory Home Loan Practices Act effective
November 7, 2004 or (iv) a "High-Cost Home Loan" as defined in the Indiana House Enrolled
Act No. 1229, effective as of January 1, 2005.
(d) Notwithstanding the provisions of Section 2.01(c), in connection with any Mortgage
Loan, if the Company cannot deliver the original of the Mortgage, any assignment,
modification, assumption agreement or preferred loan agreement (or copy thereof as permitted
by Section 2.01(b)) with evidence of recording thereon concurrently with the execution and
delivery of this Agreement because of (i) a delay caused by the public recording office
where such Mortgage, assignment, modification, assumption agreement or preferred loan
agreement as the case may be, has been delivered for recordation, or (ii) a delay in the
receipt of certain information necessary to prepare the related assignments, the Company
shall deliver or cause to be delivered to the Trustee or to the Custodian on behalf of the
Trustee a copy of such Mortgage, assignment, modification, assumption agreement or preferred
loan agreement.
The Company (i) shall promptly cause to be recorded in the appropriate public office
for real property records the Assignment referred to in clause (I)(iii) of Section 2.01(b),
except (a) in states where, in the opinion of counsel acceptable to the Trustee and the
Master Servicer, such recording is not required to protect the Trustee's interests in the
Mortgage Loan against the claim of any subsequent transferee or any successor to or creditor
of the Company or the originator of such Mortgage Loan or (b) if MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage as the mortgagee of record
solely as nominee for the Seller and its successors and assigns, (ii) shall promptly cause
to be filed the Form UCC-3 assignment and UCC-1 financing statement referred to in clauses
(II)(vii) and (x), respectively, of Section 2.01(b) and (iii) shall promptly cause to be
recorded in the appropriate public recording office for real property records the Assignment
Agreement and Amendment of Security Instrument referred to in clause (III)(iii) of Section
2.01(b). If any Assignment, Assignment Agreement and Amendment of Security Instrument, Form
UCC-3 or Form UCC-1, as applicable, is lost or returned unrecorded to the Company because of
any defect therein, the Company shall prepare a substitute Assignment, Assignment Agreement
and Amendment of Security Instrument, Form UCC-3 or Form UCC-1, as applicable, or cure such
defect, as the case may be, and cause such Assignment or Assignment Agreement and Amendment
of Security Instrument to be recorded in accordance with this paragraph. The Company shall
promptly deliver or cause to be delivered to the applicable person described in Section
2.01(b), any Assignment, substitute Assignment, Assignment Agreement and Amendment of
Security Instrument or Form UCC-3 or Form UCC-1, as applicable, (or copy thereof) recorded
in connection with this paragraph, with evidence of recording indicated thereon at the time
specified in Section 2.01(c). In connection with its servicing of Cooperative Loans, the
Master Servicer will use its 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.
If the Company delivers to the Trustee or to the Custodian on behalf of the Trustee
any Mortgage Note, Obligation to Pay, Assignment Agreement and Amendment of Security
Instrument or Assignment of Mortgage in blank, the Company shall, or shall cause the
Custodian to, complete the endorsement of the Mortgage Note, Obligation to Pay, Assignment
Agreement and Amendment of Security Instrument and Assignment of Mortgage in the name of the
Trustee in conjunction with the Interim Certification issued by the Custodian, as
contemplated by Section 2.02.
In connection with the assignment of any Mortgage Loan registered on the MERS(R)
System, the Company further agrees that it will cause, at the Company's own expense, within
30 Business Days after the Closing Date, the MERS(R)System to indicate that such Mortgage
Loans have been assigned by the Company 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 in the field which identifies the specific Trustee and (b) the code in the field
"Pool Field" which identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Company further agrees that it will not, and will not permit the Master
Servicer to, and the Master Xxxxxxxx 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.
(e) Residential Funding hereby assigns to the Trustee its security interest in and to any
Additional Collateral or Pledged Assets, its right to receive amounts due or to become due
in respect of any Additional Collateral or Pledged Assets pursuant to the related
Subservicing Agreement and its rights as beneficiary under the Surety Bond in respect of any
Additional Collateral Loans. With respect to any Additional Collateral Loan or Pledged
Asset Loan, Residential Funding shall cause to be filed in the appropriate recording office
a UCC-3 statement giving notice of the assignment of the related security interest to the
Trust Fund and shall thereafter cause the timely filing of all necessary continuation
statements with regard to such financing statements.
(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 and the Uncertificated REMIC Regular
Interests, if any (as provided for in Section 2.06), be construed as a sale by the Company
to the Trustee of the Mortgage Loans and any Uncertificated REMIC Regular Interests for the
benefit of the Certificateholders. Further, it is not intended that such conveyance be
deemed to be a pledge of the Mortgage Loans and any Uncertificated REMIC Regular Interests
by the Company to the Trustee to secure a debt or other obligation of the Company.
Nonetheless, (a) this Agreement is intended to be and hereby is a security agreement within
the meaning of Articles 8 and 9 of the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction; (b) the conveyance provided for in
Section 2.01 shall be deemed to be, and hereby is, (1) a grant by the Company to the Trustee
of a security interest in all of the Company's right (including the power to convey title
thereto), title and interest, whether now owned or hereafter acquired, in and to any and all
general intangibles, payment intangibles, accounts, chattel paper, instruments, documents,
money, deposit accounts, certificates of deposit, goods, letters of credit, advices of
credit and investment property and other property of whatever kind or description now
existing or hereafter acquired consisting of, arising from or relating to any of the
following: (A) 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 Sharia Mortgage Loan, the
related Sharia Mortgage Loan Security Instrument, Sharia Mortgage Loan Co-Ownership
Agreement, Obligation to Pay and Assignment Agreement and Amendment of Security Instrument,
(iii) with respect to each Mortgage Loan other than a Cooperative Loan or a Sharia Mortgage
Loan, the related Mortgage Note and Mortgage, and (iv) 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) any Uncertificated REMIC Regular Interests
and (D) all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation all amounts
from time to time held or invested in the Certificate Account or the Custodial Account,
whether in the form of cash, instruments, securities or other property and (2) an assignment
by the Company to the Trustee of any security interest in any and all of Residential
Funding'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) and (D) granted by Residential Funding to the Company pursuant to the
Assignment Agreement; (c) the possession by the Trustee, any Custodian on behalf of the
Trustee or any other agent of the Trustee of Mortgage Notes or such other items of property
as constitute instruments, money, payment intangibles, negotiable documents, goods, deposit
accounts, letters of credit, advices of credit, investment property, certificated securities
or chattel paper shall be deemed to be "possession by the secured party," or possession by a
purchaser or a person designated by such secured party, for purposes of perfecting the
security interest pursuant to the Minnesota Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction as in effect (including, without
limitation, Sections 8-106, 9-313, 9-314 and 9-106 thereof); and (d) notifications to
persons holding such property, and acknowledgments, receipts or confirmations from persons
holding such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, securities intermediaries, bailees or agents of, or persons holding for
(as applicable) the Trustee for the purpose of perfecting such security interest under
applicable law.
The Company and, at the Company's direction, Residential Funding 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, any Uncertificated REMIC Regular Interests and the other property
described above, such security interest would be determined to be a perfected security
interest of first priority under applicable law and will be maintained as such throughout
the term of this Agreement. Without limiting the generality of the foregoing, the Company
shall prepare and deliver to the Trustee not less than 15 days prior to any filing date and,
the Trustee shall forward for filing, or shall cause to be forwarded for filing, at the
expense of the Company, all filings necessary to maintain the effectiveness of any original
filings necessary under the Uniform Commercial Code as in effect in any jurisdiction to
perfect the Trustee's security interest in or lien on the Mortgage Loans and any
Uncertificated REMIC Regular Interests, as evidenced by an Officers' Certificate of the
Company, including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of Residential Funding, 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 Residential Funding or the Company, (3) any transfer of any interest of
Residential Funding or the Company in any Mortgage Loan or (4) any transfer of any interest
of Residential Funding or the Company in any Uncertificated REMIC Regular Interest.
(g) The Master Servicer hereby acknowledges the receipt by it of the Initial Monthly
Payment Fund. The Master Servicer shall hold such Initial Monthly Payment Fund in the
Custodial Account and shall include such Initial Monthly Payment Fund in the Available
Distribution Amount for the initial Distribution Date. Notwithstanding anything herein to
the contrary, the Initial Monthly Payment Fund shall not be an asset of any REMIC. To the
extent that the Initial Monthly Payment Fund constitutes a reserve fund for federal income
tax purposes, (1) it shall be an outside reserve fund and not an asset of any REMIC, (2) it
shall be owned by the Seller and (3) amounts transferred by any REMIC to the Initial Monthly
Payment Fund shall be treated as transferred to the Seller or any successor, all within the
meaning of Section 1.860G-2(h) of the Treasury Regulations.
(h) The Company agrees that the sale of each Pledged Asset Loan pursuant to this
Agreement will also constitute the assignment, sale, setting-over, transfer and conveyance
to the Trustee, without recourse (but subject to the Company's covenants, representations
and warranties specifically provided herein), of all of the Company's obligations and all of
the Company's right, title and interest in, to and under, whether now existing or hereafter
acquired as owner of the Mortgage Loan with respect to any and all money, securities,
security entitlements, accounts, general intangibles, payment intangibles, instruments,
documents, deposit accounts, certificates of deposit, commodities contracts, and other
investment property and other property of whatever kind or description consisting of,
arising from or related to (i) the Assigned Contracts, (ii) all rights, powers and remedies
of the Company as owner of such Mortgage Loan under or in connection with the Assigned
Contracts, whether arising under the terms of such Assigned Contracts, by statute, at law or
in equity, or otherwise arising out of any default by the Mortgagor under or in connection
with the Assigned Contracts, including all rights to exercise any election or option or to
make any decision or determination or to give or receive any notice, consent, approval or
waiver thereunder, (iii) the Pledged Amounts and all money, securities, security
entitlements, accounts, general intangibles, payment intangibles, instruments, documents,
deposit accounts, certificates of deposit, commodities contracts, and other investment
property and other property of whatever kind or description and all cash and non-cash
proceeds of the sale, exchange, or redemption of, and all stock or conversion rights, rights
to subscribe, liquidation dividends or preferences, stock dividends, rights to interest,
dividends, earnings, income, rents, issues, profits, interest payments or other
distributions of cash or other property that secures a Pledged Asset Loan, (iv) all
documents, books and records concerning the foregoing (including all computer programs,
tapes, disks and related items containing any such information) and (v) all insurance
proceeds (including proceeds from the Federal Deposit Insurance Corporation or the
Securities Investor Protection Corporation or any other insurance company) of any of the
foregoing or replacements thereof or substitutions therefor, proceeds of proceeds and the
conversion, voluntary or involuntary, of any thereof. The foregoing transfer, sale,
assignment and conveyance does not constitute and is not intended to result in the creation,
or an assumption by the Trustee, of any obligation of the Company, or any other person in
connection with the Pledged Assets or under any agreement or instrument relating thereto,
including any obligation to the Mortgagor, other than as owner of the Mortgage Loan.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to a
Custodial Agreement, and based solely upon a receipt or certification executed by the
Custodian, receipt by the respective Custodian as the duly appointed agent of the Trustee)
of the documents required to be delivered to the Trustee (or the Custodian on behalf of the
Trustee) pursuant to Section 2.01(b) above (except that for purposes of such acknowledgement
only, a Mortgage Note may be endorsed in blank) and declares that it, or the Custodian as
its agent, holds and will hold such documents and the other documents constituting a part of
the Custodial Files delivered to it, or a Custodian as its agent, and the rights of
Residential Funding with respect to any Pledged Assets, Additional Collateral and the Surety
Bond assigned to the Trustee pursuant to Section 2.01, in trust for the use and benefit of
all present and future Certificateholders. The Trustee or Custodian (the Custodian being so
obligated under a Custodial Agreement) agrees, for the benefit of Certificateholders, to
review each Custodial File delivered to it pursuant to Section 2.01(b) within 45 days after
the Closing Date to ascertain that all required documents (specifically as set forth in
Section 2.01(b)), have been executed and received, and that such documents relate to the
Mortgage Loans identified on the Mortgage Loan Schedule, as supplemented, that have been
conveyed to it, and to deliver to the Trustee a certificate (the "Interim Certification") to
the effect that all documents required to be delivered pursuant to Section 2.01(b) above
have been executed and received and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, except for any exceptions listed on Schedule A
attached to such Interim Certification. Upon delivery of the Custodial Files by the Company
or the Master Servicer, the Trustee shall acknowledge receipt (or, with respect to Mortgage
Loans subject to a Custodial Agreement, and based solely upon a receipt or certification
executed by the Custodian, receipt by the respective Custodian as the duly appointed agent
of the Trustee) of the documents referred to in Section 2.01(c) above.
If the Custodian, as the Trustee's agent, finds any document or documents
constituting a part of a Custodial File to be missing or defective, the Trustee shall
promptly so notify the Master Servicer and the Company. Pursuant to Section 2.3 of the
Custodial Agreement, the Custodian will notify the Master Servicer, the Company and the
Trustee of any such omission or defect found by it in respect of any Custodial File held by
it in respect of the items reviewed by it pursuant to the Custodial Agreement. If such
omission or defect materially and adversely affects the interests of the Certificateholders,
the Master Servicer shall promptly notify Residential Funding of such omission or defect and
request Residential Funding to correct or cure such omission or defect within 60 days from
the date the Master Servicer was notified of such omission or defect and, if Residential
Funding does not correct or cure such omission or defect within such period, require
Residential Funding to purchase such Mortgage Loan from the Trust Fund at its Purchase
Price, within 90 days from the date the Master Servicer was notified of such omission or
defect; provided that if the omission or 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 or
repurchase must occur within 90 days from the date such breach was discovered. The Purchase
Price for any such Mortgage Loan shall be deposited by the Master Servicer in the Custodial
Account maintained by it pursuant to Section 3.07 and, upon receipt by the Trustee of
written notification of such deposit signed by a Servicing Officer, the Master Servicer, the
Trustee or the Custodian, as the case may be, shall release the contents of any related
Mortgage File in its possession to the owner of such Mortgage Loan (or such owners'
designee) and the Trustee shall execute and deliver such instruments of transfer or
assignment prepared by the Master Servicer, in each case without recourse, as shall be
necessary to vest in Residential Funding or its designee any Mortgage Loan released pursuant
hereto and thereafter such Mortgage Loan shall not be part of the Trust Fund. It is
understood and agreed that the obligation of Residential Funding to so cure or purchase any
Mortgage Loan as to which a material and adverse defect in or omission of a constituent
document exists shall constitute the sole remedy respecting such defect or omission
available to Certificateholders or the Trustee on behalf of the Certificateholders.
Section 2.03. Representations, Warranties and Covenants
of the Master Servicer and the Company.
(a) The Master Servicer hereby represents and warrants to the Trustee for the benefit of
the Certificateholders that as of the Closing Date:
(i) The Master Servicer is a limited liability company 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 Master Servicer and its
performance and compliance with the terms of this Agreement will not violate the
Master Servicer's Certificate of Formation or Limited Liability Company Agreement or
constitute a material default (or an event which, with notice or lapse of time, or
both, would constitute a material default) under, or result in the material breach
of, any material contract, agreement or other instrument to which the Master Servicer
is a party or which may be applicable to the Master 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 Master
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;
(iv) The Master 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 Master
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 Master Servicer's knowledge,
threatened against the Master Servicer which would prohibit its entering into this
Agreement or performing its obligations under this Agreement;
(vi) The Master 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;
(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 Master
Servicer will, to the knowledge of the Master 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;
(viii) The Master Servicer has examined each existing, and will examine each new,
Subservicing Agreement and is or will be familiar with the terms thereof. The terms
of each existing Subservicing Agreement and each designated Subservicer are
acceptable to the Master Servicer and any new Subservicing Agreements will comply
with the provisions of Section 3.02; and
(ix) The Master 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(a) shall survive delivery of the respective Custodial Files to the Trustee or
the Custodian.
Upon discovery by either the Company, the Master Servicer, the Trustee or the
Custodian of a breach of any representation or warranty set forth in this Section 2.03(a)
which materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the party discovering such breach shall give prompt written notice to the
other parties (the Custodian being so obligated under a Custodial Agreement). Within 90
days of its discovery or its receipt of notice of such breach, the Master Servicer shall
either (i) cure such breach in all material respects or (ii) to the extent that such breach
is with respect to a Mortgage Loan or a related document, purchase such Mortgage Loan from
the Trust Fund at the Purchase Price and in the manner set forth in Section 2.02; provided
that if the omission or 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 or repurchase must
occur within 90 days from the date such breach was discovered. The obligation of the Master
Servicer to cure such breach or to so purchase such Mortgage Loan shall constitute the sole
remedy in respect of a breach of a representation and warranty set forth in this Section
2.03(a) available to the Certificateholders or the Trustee on behalf of the
Certificateholders.
(b) Representations and warranties relating to the Mortgage Loans are set forth in
Section 2.03(b) of the Series Supplement.
Section 2.04. Representations and Warranties of Residential Funding.
The Company, as assignee of Residential Funding under the Assignment Agreement,
hereby assigns to the Trustee for the benefit of Certificateholders all of its right, title
and interest in respect of the Assignment Agreement applicable to a Mortgage Loan. Insofar
as the Assignment Agreement relates to the representations and warranties made by
Residential Funding in respect of such Mortgage Loan and any remedies provided thereunder
for any breach of such representations and warranties, such right, title and interest may be
enforced by the Master Servicer on behalf of the Trustee and the Certificateholders. Upon
the discovery by the Company, the Master Servicer, the Trustee or the Custodian of a breach
of any of the representations and warranties made in the Assignment Agreement (which, for
purposes hereof, will be deemed to include any other cause giving rise to a repurchase
obligation under the Assignment 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 (the
Custodian being so obligated under a Custodial Agreement). The Master Servicer shall
promptly notify Residential Funding of such breach and request that Residential Funding
either (i) cure such breach in all material respects within 90 days from the date the Master
Servicer 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 Residential
Funding 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. If a
breach of the Compliance With Laws Representation has given rise to the obligation to
repurchase or substitute a Mortgage Loan pursuant to Section 4 of the Assignment Agreement,
then the Master Servicer shall request that Residential Funding pay to the Trust Fund,
concurrently with and in addition to the remedies provided in the preceding sentence, an
amount equal to any liability, penalty or expense that was actually incurred and paid out of
or on behalf of the Trust Fund, and that directly resulted from such breach, or if incurred
and paid by the Trust Fund thereafter, concurrently with such payment. In the event that
Residential Funding elects to substitute a Qualified Substitute Mortgage Loan or Loans for a
Deleted Mortgage Loan pursuant to this Section 2.04, Residential Funding shall deliver to
the Trustee or the Custodian for the benefit of the Certificateholders with respect to such
Qualified Substitute Mortgage Loan or Loans, the original Mortgage Note, 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 by Section 2.01, with the Mortgage Note
endorsed as required by 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 Master Servicer and remitted by the Master Servicer to
Residential Funding on the next succeeding Distribution Date. For the month of
substitution, distributions to the Certificateholders will include the Monthly Payment due
on a Deleted Mortgage Loan for such month and thereafter Residential Funding shall be
entitled to retain all amounts received in respect of such Deleted Mortgage Loan. The Master
Servicer shall amend or cause to be amended the Mortgage Loan Schedule, and, if the Deleted
Mortgage Loan was a Discount Mortgage Loan, the Schedule of Discount Fractions, 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 Master Servicer
shall deliver the amended Mortgage Loan Schedule, and, if the Deleted Mortgage Loan was a
Discount Mortgage Loan, the amended Schedule of Discount Fractions, 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, Residential
Funding shall be deemed to have made the representations and warranties with respect to the
Qualified Substitute Mortgage Loan contained in the related Assignment Agreement, and the
Company and the Master Servicer shall be deemed to have made with respect to any Qualified
Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants,
representations and warranties set forth in this Section 2.04, in Section 2.03 hereof and in
Section 4 of the Assignment Agreement, and the Master Servicer shall be obligated to
repurchase or substitute for any Qualified Substitute Mortgage Loan as to which a Repurchase
Event (as defined in the Assignment Agreement) has occurred pursuant to Section 4 of the
Assignment Agreement.
In connection with the substitution of one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Master 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). Residential Funding shall deposit the
amount of such shortfall into the Custodial Account on the day of substitution, without any
reimbursement therefor. Residential Funding shall give notice in writing to the Trustee of
such event, which notice shall be accompanied by an Officers' 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 any REMIC to fail to qualify
as such at any time that any Certificate is outstanding.
It is understood and agreed that the obligation of Residential Funding to cure such
breach or purchase, or to substitute for, a Mortgage Loan as to which such a breach has
occurred and is continuing and to make any additional payments required under the Assignment
Agreement in connection with a breach of the Compliance With Laws Representation shall
constitute the sole remedy respecting such breach available to the Certificateholders or the
Trustee on behalf of Certificateholders. If the Master Servicer is Residential Funding,
then the Trustee shall also have the right to give the notification and require the purchase
or substitution provided for in the second preceding paragraph in the event of such a breach
of a representation or warranty made by Residential Funding in the Assignment Agreement. In
connection with the purchase of or substitution for any such Mortgage Loan by Residential
Funding, the Trustee shall assign to Residential Funding all of the Trustee's right, title
and interest in respect of the Assignment Agreement applicable to such Mortgage Loan.
Section 2.05. Execution and Authentication of Certificates/Issuance of Certificates
Evidencing Interests in REMIC I Certificates.
As provided in Section 2.05 of the Series Supplement.
Section 2.06. Conveyance of Uncertificated REMIC I and REMIC II Regular Interests;
Acceptance by the Trustee.
As provided in Section 2.06 of the Series Supplement.
Section 2.07. Issuance of Certificates Evidencing Interests in REMIC II.
As provided in Section 2.07 of the Series Supplement.
Section 2.08. Purposes and Powers of the Trust.
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.
The trust is hereby authorized to engage in the foregoing activities.
Notwithstanding the provisions of Section 11.01, 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, and this Section 2.08 may not
be amended, 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. Master Servicer to Act as Servicer.
(a) The Master Servicer shall service and administer the Mortgage Loans in accordance
with the terms of this Agreement and the respective Mortgage Loans 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 Master Servicer
in its own name or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Master 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 Master 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 Master 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 Master 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 Master Servicer. Notwithstanding the
foregoing, subject to Section 3.07(a), the Master 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 the Series
Supplement to fail to qualify as a REMIC under the Code. The Trustee shall furnish the
Master Servicer with any powers of attorney and other documents necessary or appropriate to
enable the Master Servicer to service and administer the Mortgage Loans. The Trustee shall
not be liable for any action taken by the Master Servicer or any Subservicer pursuant to
such powers of attorney. In servicing and administering any Nonsubserviced Mortgage Loan,
the Master Servicer shall, to the extent not inconsistent with this Agreement, comply with
the Program Guide as if it were the originator of such Mortgage Loan and had retained the
servicing rights and obligations in respect thereof. In connection with servicing and
administering the Mortgage Loans, the Master Servicer and any Affiliate of the Master
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 Master 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 Master 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 Master Servicer of amounts received by the
Master 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 Master Servicer hereunder.
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers; Enforcement
of Subservicers' and Sellers' Obligations.
(a) The Master Servicer may continue in effect Subservicing Agreements entered into by
Residential Funding and Subservicers prior to the execution and delivery of this Agreement,
and may enter into new 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 Master Servicer in
respect of such Mortgage Loan. For any Mortgage Loan that is a Nonsubserviced Mortgage
Loan, the Master Servicer shall be entitled to receive and retain an amount equal to the
Subservicing Fee from payments of interest. Unless the context otherwise requires,
references in this Agreement to actions taken or to be taken by the Master Servicer in
servicing the Mortgage Loans include actions taken or to be taken by a Subservicer on behalf
of the Master Servicer. Each Subservicing Agreement will be upon such terms and conditions
as are generally required or permitted by the Program Guide and are not inconsistent with
this Agreement and as the Master Servicer and the Subservicer have agreed. A representative
form of Subservicing Agreement is attached hereto as Exhibit E. With the approval of the
Master Servicer, a Subservicer may delegate its servicing obligations to third-party
servicers, but such Subservicer will remain obligated under the related Subservicing
Agreement. The Master Servicer and a Subservicer may enter into amendments thereto or a
different form of Subservicing Agreement, and the form referred to or included in the
Program Guide is merely provided for information and shall not be deemed to limit in any
respect the discretion of the Master Servicer to modify or enter into different Subservicing
Agreements; provided, however, that any such amendments or different forms shall be
consistent with and not violate the provisions of either this Agreement or the Program Guide
in a manner which would materially and adversely affect the interests of the
Certificateholders. The Program Guide and any other Subservicing Agreement entered into
between the Master Servicer and any Subservicer shall require the Subservicer to accurately
and fully report its borrower credit files to each of the Credit Repositories in a timely
manner.
(b) As part of its servicing activities hereunder, the Master Servicer, for the benefit
of the Trustee and the Certificateholders, shall use its best reasonable efforts to enforce
the obligations of each Subservicer under the related Subservicing Agreement and of each
Seller under the related Seller's Agreement insofar as the Company's rights with respect to
Seller's obligation has been assigned to the Trustee hereunder, to the extent that the
non-performance of any such Seller's obligation would have a material and adverse effect on
a Mortgage Loan, including, without limitation, the obligation to purchase a Mortgage Loan
on account of defective documentation, as described in Section 2.02, or on account of a
breach of a representation or warranty, as described in Section 2.04. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of Subservicing
Agreements or Seller's Agreements, as appropriate, and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such time as the
Master Servicer would employ in its good faith business judgment and which are normal and
usual in its general mortgage servicing activities. The Master Servicer shall pay the costs
of such enforcement at its own expense, and shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loan or (ii) from a specific
recovery of costs, expenses or attorneys fees against the party against whom such
enforcement is directed. For purposes of clarification only, the parties agree that the
foregoing is not intended to, and does not, limit the ability of the Master Servicer to be
reimbursed for expenses that are incurred in connection with the enforcement of a Seller's
obligations (insofar as the Company's rights with respect to such Seller's obligations have
been assigned to the Trustee hereunder) and are reimbursable pursuant to Section
3.10(a)(viii).
Section 3.03. Successor Subservicers.
The Master 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 Master Servicer or the Subservicer, the
Master 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. If the Master Servicer or any Affiliate of Residential
Funding acts as servicer, it will not assume liability for the representations and
warranties of the Subservicer which it replaces. If the Master Servicer enters into a
Subservicing Agreement with a successor Subservicer, the Master Servicer shall use
reasonable efforts to have the successor Subservicer assume liability for the
representations and warranties made by the terminated Subservicer in respect of the related
Mortgage Loans and, in the event of any such assumption by the successor Subservicer, the
Master Servicer may, in the exercise of its business judgment, release the terminated
Subservicer from liability for such representations and warranties.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions of this Agreement
relating to agreements or arrangements between the Master Servicer or a Subservicer or
reference to actions taken through a Subservicer or otherwise, the Master 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 and to
the same extent and under the same terms and conditions as if the Master Servicer alone were
servicing and administering the Mortgage Loans. The Master Servicer shall be entitled to
enter into any agreement with a Subservicer or Seller for indemnification of the Master
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 Master 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. The foregoing
provision shall not in any way limit a Subservicer's obligation to cure an omission or
defect or to repurchase a Mortgage Loan as referred to in Section 2.02 hereof.
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee.
(a) If the Master Servicer shall for any reason no longer be the master 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 Master 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 Master
Servicer's interest therein and to have replaced the Master 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 Master Servicer shall not thereby be relieved of any
liability or obligations under the Subservicing Agreement.
(b) The Master Servicer shall, upon request of the Trustee but at the expense of the
Master 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 best 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 Master 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 Master 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 Loan in accordance with the Program Guide; provided, however, that the
Master 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. Notwithstanding anything in this Section to the contrary, the Master
Servicer shall not enforce any prepayment charge to the extent that such enforcement would
violate any applicable law. In the event of any such arrangement, the Master 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 Master 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 Master 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 Master 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 reamortization is not inconsistent
with the terms of the Mortgage Loan), capitalize any amounts owing on the Mortgage Loan by
adding such amount to the outstanding principal balance 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 Master Servicer, such default is reasonably foreseeable; provided,
further, that (1) no such modification shall reduce the interest rate on a Mortgage Loan
below one-half of the Mortgage Rate as in effect on the Cut-off Date, but not less than the
sum of the rates at which the Servicing Fee and the Subservicing Fee with respect to such
Mortgage Loan accrues plus the rate at which the premium paid to the Certificate Insurer, if
any, accrues, (2) the final maturity date for any Mortgage Loan shall not be extended
beyond the Maturity Date, (3) the Stated Principal Balance of all Reportable Modified
Mortgage Loans subject to Servicing Modifications (measured at the time of the Servicing
Modification and after giving effect to any Servicing Modification) can be no more than five
percent of the aggregate principal balance of the Mortgage Loans as of the Cut-off Date,
unless such limit is increased from time to time with the consent of the Rating Agencies and
the Certificate Insurer, if any. In addition, any amounts owing on a Mortgage Loan added to
the outstanding principal balance of such Mortgage Loan must be fully amortized over the
remaining term of such Mortgage Loan, and such amounts may be added to the outstanding
principal balance of a Mortgage Loan only once during the life of such Mortgage Loan. Also,
the addition of such amounts described in the preceding sentence shall be implemented in
accordance with the Program Guide and may be implemented only by Subservicers that have been
approved by the Master Servicer for such purpose. In connection with any Curtailment of a
Mortgage Loan, the Master 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).
(b) The Master Servicer shall establish and maintain a Custodial Account in which the
Master Servicer shall deposit or cause to be deposited on a daily basis, except as otherwise
specifically provided herein, 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 on the Mortgage Loans due on or before
the Cut-off Date):
(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 Adjusted Mortgage Rate on the Mortgage
Loans, including Buydown Funds, if any, 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;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation Proceeds (net of any
related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to Section 2.02, 2.03, 2.04 or
4.07 (including amounts received from Residential Funding pursuant to the last
paragraph of Section 4 of the Assignment Agreement in respect of any liability,
penalty or expense that resulted from a breach of the Compliance With Laws
Representation and all amounts required to be deposited in connection with the
substitution of a Qualified Substitute Mortgage Loan pursuant to Section 2.03 or 2.04;
(v) Any amounts required to be deposited pursuant to Section 3.07(c) or 3.21;
(vi) All amounts transferred from the Certificate Account to the Custodial Account in
accordance with Section 4.02(a);
(vii) Any amounts realized by the Subservicer and received by the Master Servicer in
respect of any Additional Collateral; and
(viii) Any amounts received by the Master Servicer in respect of Pledged Assets.
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,
unless otherwise set forth in the series supplement, payments or collections in the nature
of prepayment charges or late payment charges or assumption fees may but need not be
deposited by the Master Servicer in the Custodial Account. In the event any amount not
required to be deposited in the Custodial Account is so deposited, the Master Servicer may
at any time withdraw such amount from the Custodial Account, any provision herein to the
contrary notwithstanding. The Custodial Account may contain funds that belong to one or
more trust funds created for mortgage pass-through certificates of other series and may
contain other funds respecting payments on mortgage loans belonging to the Master Servicer
or serviced or master serviced by it on behalf of others. Notwithstanding such commingling
of funds, the Master Servicer shall keep records that accurately reflect the funds on
deposit in the Custodial Account that have been identified by it as being attributable to
the Mortgage Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds and the
proceeds of the purchase of any Mortgage Loan pursuant to Sections 2.02, 2.03, 2.04 and 4.07
received in any calendar month, the Master 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 Master 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 Master Servicer shall use its best 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 Certificate
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 Master 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 Master Servicer out of its own
funds immediately as realized without any right of reimbursement.
(d) The Master Servicer shall give notice to the Trustee and the Company of any change in
the location of the Custodial Account and the location of the Certificate Account prior to
the use thereof.
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 Master 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 generally
satisfy the requirements of the Program Guide and be otherwise acceptable to the Master
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 Master 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 the date specified in the Program Guide, but in no
event later than the Determination Date, the Master Servicer shall cause the Subservicer,
pursuant to the Subservicing Agreement, to remit to the Master 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 Master Servicer.
The Subservicer will also be required, pursuant to the Subservicing Agreement, to advance on
such scheduled date of remittance amounts equal to any scheduled monthly installments of
principal and interest less its Subservicing Fees on any Mortgage Loans for which payment
was not received by the Subservicer. This obligation to advance with respect to each
Mortgage Loan will continue up to and including the first of the month following the date on
which the related Mortgaged Property is sold at a foreclosure sale or is acquired by the
Trust Fund by deed in lieu of foreclosure or otherwise. All such advances received by the
Master Servicer shall be deposited promptly by it in the Custodial Account.
(b) The Subservicer may also be required, pursuant to the Subservicing Agreement, to
remit to the Master Servicer for deposit in the Custodial Account interest at the Adjusted
Mortgage Rate (or Modified Net Mortgage Rate plus the rate per annum at which the Servicing
Fee accrues in the case of a Modified Mortgage Loan) on any Curtailment received by such
Subservicer in respect of a Mortgage Loan from the related Mortgagor during any month that
is to be applied by the Subservicer to reduce the unpaid principal balance of the related
Mortgage Loan as of the first day of such month, from the date of application of such
Curtailment to the first day of the following month. Any amounts paid by a Subservicer
pursuant to the preceding sentence shall be for the benefit of the Master Servicer as
additional servicing compensation and shall be subject to its withdrawal or order from time
to time pursuant to Sections 3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate Account, the Master 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 satisfy the requirements for a Subservicing Account and, to the extent
permitted by the Program Guide or as is otherwise acceptable to the Master Servicer, may
also function as a Subservicing Account. 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 Master 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 or in accordance with the Program Guide.
As part of its servicing duties, the Master 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.
(d) The Master 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
Master Servicer shall be required so to advance only to the extent that such advances, in
the good faith judgment of the Master Servicer, will be recoverable by the Master 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 Master 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 Master Servicer.
The Master 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 Master Servicer.
Section 3.10. Permitted Withdrawals from the Custodial Account.
(a) The Master 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 Certificate 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,
Servicing Advances or other 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 the related
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, 2.03, 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 Master 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 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, any
amounts remitted by Subservicers as interest in respect of Curtailments pursuant to
Section 3.08(b), and any amounts paid by a Mortgagor in connection with a Principal
Prepayment in Full in respect of interest for any period during the calendar month in
which such Principal Prepayment in Full is to be distributed to the
Certificateholders;
(vi) to pay to itself, a Subservicer, a Seller, Residential Funding, the Company or any
other appropriate Person, as the case may be, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased or otherwise transferred
pursuant to Section 2.02, 2.03, 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
Advances in the manner and to the extent provided in subsection (c) below, and any
Advance or Servicing Advance made in connection with a modified Mortgage Loan that is
in default or, in the judgment of the Master Servicer, default is reasonably
foreseeable pursuant to Section 3.07(a), to the extent the amount of the Advance or
Servicing Advance was added to the Stated Principal Balance of the Mortgage Loan in a
prior calendar month, or any Advance reimbursable to the Master 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, or in connection with enforcing, in accordance with this Agreement, any
repurchase, substitution or indemnification obligation of any Seller (other than an
Affiliate of the Company) pursuant to the related Seller's Agreement;
(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.
(b) Since, in connection with withdrawals pursuant to clauses (ii), (iii), (v) and (vi),
the Master Servicer's entitlement thereto is limited to collections or other recoveries on
the related Mortgage Loan, the Master 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.
(c) The Master Servicer shall be entitled to reimburse itself or the related Subservicer
for any advance made in respect of a Mortgage Loan that the Master Servicer determines to be
a Nonrecoverable Advance by withdrawal from the Custodial Account of amounts on deposit
therein attributable to the Mortgage Loans on any Certificate Account Deposit Date
succeeding the date of such determination. Such right of reimbursement in respect of a
Nonrecoverable Advance relating to an Advance pursuant to Section 4.04 on any such
Certificate 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
Master Servicer or the related Subservicer).
Section 3.11. Maintenance of the Primary Insurance
Policies; Collections Thereunder.
(a) The Master 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 Master Servicer or Subservicer, would have been covered
thereunder. To the extent coverage is available, the Master Servicer shall keep or cause to
be kept in full force and effect each such Primary Insurance Policy until the principal
balance of the related Mortgage Loan secured by a Mortgaged Property is reduced to 80% or
less of the Appraised Value in the case of such a Mortgage Loan having a Loan-to-Value Ratio
at origination in excess of 80%, provided that such Primary Insurance Policy was in place as
of the Cut-off Date and the Company had knowledge of such Primary Insurance Policy. The
Master Servicer shall be entitled to cancel or permit the discontinuation of any Primary
Insurance Policy as to any Mortgage Loan, if the Stated Principal Balance of the Mortgage
Loan is reduced below an amount equal to 80% of the appraised value of the related Mortgaged
Property as determined in any appraisal thereof after the Closing Date, or if the
Loan-to-Value Ratio is reduced below 80% as a result of principal payments on the Mortgage
Loan after the Closing Date. In the event that the Company gains knowledge that as of the
Closing Date, a Mortgage Loan had a Loan-to-Value Ratio at origination in excess of 80% and
is not the subject of a Primary Insurance Policy (and was not included in any exception to
the representation in Section 2.03(b)(iv)) and that such Mortgage Loan has a current
Loan-to-Value Ratio in excess of 80% then the Master Servicer shall use its reasonable
efforts to obtain and maintain a Primary Insurance Policy to the extent that such a policy
is obtainable at a reasonable price. The Master 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.
(b) In connection with its activities as administrator and servicer of the Mortgage
Loans, the Master Servicer agrees to present or to cause the related Subservicer to present,
on behalf of the Master 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 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 Master 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 Master 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 the principal balance owing on such Mortgage Loan or 100 percent of the insurable
value of the improvements; provided, however, that such coverage may not be less than the
minimum amount required to fully compensate for any loss or damage on a replacement cost
basis. To the extent it may do so without breaching the related Subservicing Agreement, the
Master Servicer shall replace any Subservicer that does not cause such insurance, to the
extent it is available, to be maintained. The Master 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 amount necessary to avoid the application of any
co-insurance clause contained in the related hazard insurance policy. Pursuant to Section
3.07, any amounts collected by the Master 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 Master
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 Master 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 Master 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. Whenever the improvements securing a Mortgage Loan
(other than a Cooperative Loan) are located at the time of origination of such Mortgage Loan
in a federally designated special flood hazard area, the Master Servicer shall cause flood
insurance (to the extent available) to be maintained in respect thereof. Such flood
insurance shall be in an amount equal to the lesser of (i) the amount required to compensate
for any loss or damage to the Mortgaged Property on a replacement cost basis and (ii) the
maximum amount of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).
If the Master 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 Master 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 Certificate Account the amount not otherwise payable
under the blanket policy because of such deductible clause. Any such deposit by the Master
Servicer shall be made on the Certificate 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 Master Servicer agrees
to present, on behalf of itself, the Trustee and the Certificateholders, claims under any
such blanket policy.
(b) The Master 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 Master Servicer's officers and employees and
other persons acting on behalf of the Master Servicer in connection with its activities
under this Agreement. The amount of coverage shall be at least equal to the coverage that
would be required by Xxxxxx Xxx or Freddie Mac, whichever is greater, with respect to the
Master Servicer if the Master Servicer were servicing and administering the Mortgage Loans
for Xxxxxx Xxx or Freddie Mac. In the event that any such bond or policy ceases to be in
effect, the Master Servicer shall obtain a comparable replacement bond or policy from an
issuer or insurer, as the case may be, meeting the requirements, if any, of the Program
Guide and acceptable to the Company. Coverage of the Master Servicer under a policy or bond
obtained by an Affiliate of the Master Servicer and providing the coverage required by this
Section 3.12(b) shall satisfy the requirements of this Section 3.12(b).
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 Master 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:
(i) the Master Servicer shall not be deemed to be in default under this Section 3.13(a)
by reason of any transfer or assumption which the Master Servicer is restricted by
law from preventing; and
(ii) if the Master Servicer determines that it is reasonably likely that any Mortgagor
will bring, or if any Mortgagor does bring, legal action to declare invalid or
otherwise avoid enforcement of a due-on-sale clause contained in any Mortgage Note or
Mortgage, the Master Servicer shall not be required to enforce the due-on-sale clause
or to contest such action.
(b) Subject to the Master 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 Master 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, none of such terms and
requirements shall either (i) both (A) constitute a "significant modification" effecting an
exchange or reissuance of such Mortgage Loan under the REMIC Provisions and (B) cause any
portion of any REMIC formed under the Series Supplement to fail to qualify as a REMIC under
the Code or (subject to Section 10.01(f)), result in the imposition of any tax on
"prohibited transactions" or (ii) constitute "contributions" after the start-up date under
the REMIC Provisions. The Master Servicer shall execute and deliver such documents only if
it reasonably determines that (i) its execution and delivery thereof will not conflict with
or violate any terms of this Agreement or cause the unpaid balance and interest on the
Mortgage Loan to be uncollectible in whole or in part, (ii) any required consents of
insurers under any Required Insurance Policies have been obtained and (iii) subsequent to
the closing of the transaction involving the assumption or transfer (A) the Mortgage Loan
will continue to be secured by a first mortgage lien pursuant to the terms of the Mortgage,
(B) such transaction will not adversely affect the coverage under any Required Insurance
Policies, (C) the Mortgage Loan will fully amortize over the remaining term thereof, (D) no
material term of the Mortgage Loan (including the interest rate on the Mortgage Loan) will
be altered nor will the term of the Mortgage Loan be changed and (E) if the
seller/transferor of the Mortgaged Property is to be released from liability on the Mortgage
Loan, such release will not (based on the Master Servicer's or Subservicer's good faith
determination) adversely affect the collectability of the Mortgage Loan. Upon receipt of
appropriate instructions from the Master 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 Master Servicer. Upon the closing of the
transactions contemplated by such documents, the Master 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 Master Servicer or such related Subservicer for entering into an assumption
or substitution of liability agreement will be retained by the Master Servicer or such
Subservicer as additional servicing compensation.
(c) The Master 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 that any portion of any REMIC formed under the Series Supplement 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 any such REMIC as a result thereof. Any fee collected by the Master
Servicer or the related Subservicer for processing such a request will be retained by the
Master Servicer or such Subservicer as additional servicing compensation.
(d) Subject to any other applicable terms and conditions of this Agreement, the Trustee
and Master 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 Master Servicer with a "Lender
Certification for Assignment of Mortgage Loan" in the form attached hereto as Exhibit M, in
form and substance satisfactory to the Trustee and Master 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 Master Servicer shall receive cash in an
amount equal to the unpaid principal balance of and accrued interest on such Mortgage Loan
and the Master 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 Master 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. Alternatively, the
Master Servicer may take other actions in respect of a defaulted Mortgage Loan, which may
include (i) accepting a short sale (a payoff of the Mortgage Loan for an amount less than
the total amount contractually owed in order to facilitate a sale of the Mortgaged Property
by the Mortgagor) or permitting a short refinancing (a payoff of the Mortgage Loan for an
amount less than the total amount contractually owed in order to facilitate refinancing
transactions by the Mortgagor not involving a sale of the Mortgaged Property), (ii)
arranging for a repayment plan or (iii) agreeing to a modification in accordance with
Section 3.07. In connection with such foreclosure or other conversion, the Master 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 and as shall be required or permitted by the Program Guide; provided that the
Master Servicer shall not be liable in any respect hereunder if the Master Servicer is
acting in connection with any such foreclosure or other conversion in a manner that is
consistent with the provisions of this Agreement. The Master 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 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 Master Servicer
pursuant to this Section 3.14(a), the Master Servicer shall be entitled to reimbursement of
such amounts pursuant to Section 3.10.
In addition to the foregoing, the Master Servicer shall use its best
reasonable efforts to realize upon any Additional Collateral for such of the Additional
Collateral 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;
provided that the Master Servicer shall not, on behalf of the Trustee, obtain title to any
such Additional Collateral as a result of or in lieu of the disposition thereof or
otherwise; and provided further that (i) the Master Servicer shall not proceed with respect
to such Additional Collateral in any manner that would impair the ability to recover against
the related Mortgaged Property, and (ii) the Master Servicer shall proceed with any REO
Acquisition in a manner that preserves the ability to apply the proceeds of such Additional
Collateral against amounts owed under the defaulted Mortgage Loan. Any proceeds realized
from such Additional Collateral (other than amounts to be released to the Mortgagor or the
related guarantor in accordance with procedures that the Master Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note and to the terms and conditions of any security agreement,
guarantee agreement, mortgage or other agreement governing the disposition of the proceeds
of such Additional Collateral) shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 3.10. Any other payment received by the Master Servicer in
respect of such Additional Collateral shall be deposited in the Custodial Account subject to
withdrawal pursuant to Section 3.10.
For so long as the Master Servicer is the Master Servicer under the Credit
Support Pledge Agreement, the Master Servicer shall perform its obligations under the Credit
Support Pledge Agreement in accordance with such Agreement and in a manner that is in the
best interests of the Certificateholders. Further, the Master Servicer shall use its best
reasonable efforts to realize upon any Pledged Assets for such of the Pledged Asset 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; provided that the Master
Servicer shall not, on behalf of the Trustee, obtain title to any such Pledged Assets as a
result of or in lieu of the disposition thereof or otherwise; and provided further that (i)
the Master Servicer shall not proceed with respect to such Pledged Assets in any manner that
would impair the ability to recover against the related Mortgaged Property, and (ii) the
Master Servicer shall proceed with any REO Acquisition in a manner that preserves the
ability to apply the proceeds of such Pledged Assets against amounts owed under the
defaulted Mortgage Loan. Any proceeds realized from such Pledged Assets (other than amounts
to be released to the Mortgagor or the related guarantor in accordance with procedures that
the Master Servicer would follow in servicing loans held for its own account, subject to the
terms and conditions of the related Mortgage and Mortgage Note and to the terms and
conditions of any security agreement, guarantee agreement, mortgage or other agreement
governing the disposition of the proceeds of such Pledged Assets) shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 3.10. Any other payment
received by the Master Servicer in respect of such Pledged Assets shall be deposited in the
Custodial Account subject to withdrawal pursuant to Section 3.10.
Concurrently with the foregoing, the Master Servicer may pursue any remedies
that may be available in connection with a breach of a representation and warranty with
respect to any such Mortgage Loan in accordance with Sections 2.03 and 2.04. However, the
Master Servicer is not required to continue to pursue both foreclosure (or similar remedies)
with respect to the Mortgage Loans and remedies in connection with a breach of a
representation and warranty if the Master Servicer determines in its reasonable discretion
that one such remedy is more likely to result in a greater recovery as to the Mortgage
Loan. 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 the Custodian, as the case may be, shall release to the
Master Servicer the related Custodial File and the Trustee shall execute and deliver such
instruments of transfer or assignment prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in the Master 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 Master 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 Master 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 Master 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 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.
(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 Master Servicer on behalf of the
Trust Fund shall dispose of such REO Property as soon as practicable, giving due
consideration to the interests of the Certificateholders, but in all cases 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 any REMIC formed under the Series Supplement 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 Master Servicer (subject to Section 10.01(f)) obtains for the Trustee an
Opinion of Counsel, addressed to the Trustee and the Master 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 any REMIC formed under the Series Supplement 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 Master
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 Master 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 Master Servicer or the
related Subservicer in accordance with Section 3.10(a)(ii); second, 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; third, to the Certificateholders as a recovery
of principal on the Mortgage Loan (or REO Property); fourth, to all Servicing Fees and
Subservicing Fees payable therefrom (and the Master Servicer and the Subservicer shall have
no claims for any deficiencies with respect to such fees which result from the foregoing
allocation); 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 Master Servicer
will cause compliance with the provisions of 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 Custodial Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or upon the receipt
by the Master Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Master Servicer will immediately notify the Trustee (if it
holds the related Custodial File) or the Custodian by a certification of a Servicing Officer
(which certification shall include a statement to the effect that all amounts received or to
be received in connection with such payment which are required to be deposited in the
Custodial Account pursuant to Section 3.07 have been or will be so deposited), substantially
in one of the forms attached hereto as Exhibit F, or, in the case of the Custodian, an
electronic request in a form acceptable to the Custodian, requesting delivery to it of the
Custodial File. Within two Business Days of receipt of such certification and request, the
Trustee shall release, or cause the Custodian to release, the related Custodial File to the
Master Servicer. The Master 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 Certificate Account.
(b) From time to time as is appropriate for the servicing or foreclosure of any Mortgage
Loan, the Master Servicer shall deliver to the Custodian, with a copy to the Trustee, a
certificate of a Servicing Officer substantially in one of the forms attached as Exhibit F
hereto, or, in the case of the Custodian, an electronic request in a form acceptable to the
Custodian, requesting that possession of all, or any document constituting part of, the
Custodial File be released to the Master 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 shall deliver, or cause the Custodian to deliver, the Custodial File or any
document therein to the Master Servicer. The Master Servicer shall cause each Custodial
File or any document therein so released to be returned to the Trustee, or the Custodian as
agent for the Trustee when the need therefor by the Master 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 Custodial File or
such document 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 Master Servicer has delivered directly or
through a Subservicer to the Trustee a certificate of a Servicing Officer certifying as to
the name and address of the Person to which such Custodial File or such document was
delivered and the purpose or purposes of such delivery. In the event of the liquidation of
a Mortgage Loan, the Trustee shall deliver the Request for Release with respect thereto to
the Master Servicer upon deposit of the related Liquidation Proceeds in the Custodial
Account.
(c) The Trustee or the Master Servicer on the Trustee's behalf shall execute and deliver
to the Master 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
Master 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.
Section 3.16. Servicing and Other Compensation; Compensating Interest.
(a) The Master Servicer, as compensation for its activities hereunder, shall be entitled
to receive on each Distribution Date the amounts provided for by clauses (iii), (iv), (v)
and (vi) 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 Master 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 the
Certificate Account or otherwise shall be retained by the Master Servicer or the Subservicer
to the extent provided herein, subject to clause (e) below.
(c) The Master 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, and the fees and expenses of the Trustee and
any co-trustee (as provided in Section 8.05) and the fees and expense of the Custodian) and
shall not be entitled to reimbursement therefor except as specifically provided in Sections
3.10 and 3.14.
(d) The Master 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 Master Servicer under this Agreement.
(e) Notwithstanding any other provision herein, the amount of servicing compensation that
the Master 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. Such reduction shall be applied
during such period as follows: first, to any Servicing Fee or Subservicing Fee to which the
Master Servicer is entitled pursuant to Section 3.10(a)(iii), and second, to any income or
gain realized from any investment of funds held in the Custodial Account or the Certificate
Account to which the Master Servicer is entitled pursuant to Sections 3.07(c) or 4.01(b),
respectively. In making such reduction, the Master Servicer (i) 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), and (ii) will not withdraw from the
Custodial Account or Certificate Account any such amount to which it is entitled pursuant to
Section 3.07(c) or 4.01(b).
Section 3.17. Reports to the Trustee and the Company.
Not later than fifteen days after it receives a written request from the Trustee or
the Company, the Master Servicer shall forward to the Trustee and the Company a statement,
certified by a Servicing Officer, setting forth the status of the Custodial Account as of
the close of business on the immediately preceding Distribution Date as it relates to the
Mortgage Loans and showing, for the period covered by such statement, the aggregate of
deposits in or withdrawals from the Custodial Account in respect of the Mortgage Loans for
each category of deposit specified in Section 3.07 and each category of withdrawal specified
in Section 3.10.
Section 3.18. Annual Statement as to Compliance and Servicing Assessment.
The Master Servicer will deliver to the Company and the Trustee on or before the
earlier of (a) March 31 of each year or (b) with respect to any calendar year during which
the Company's annual report on Form 10-K is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, the date on which the annual
report on Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, (i) a servicing assessment as described in Section
4.03(f)(ii) and (ii) a servicer compliance statement, signed by an authorized officer of the
Master Servicer, as described in Items 1122(a), 1122(b) and 1123 of Regulation AB, to the
effect that:
(A) A review of the Master Servicer's activities during the reporting period and
of its performance under this Agreement has been made under such officer's supervision.
(B) To the best of such officer's knowledge, based on such review, the Master
Servicer has fulfilled all of its obligations under this Agreement in all material respects
throughout the reporting period or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such officer and
the nature and status thereof.
The Master Servicer shall use commercially reasonable efforts to obtain from all
other parties participating in the servicing function any additional certifications required
under Item 1122 and Item 1123 of Regulation AB to the extent required to be included in a
Report on Form 10-K; provided, however, that a failure to obtain such certifications shall
not be a breach of the Master Servicer's duties hereunder if any such party fails to deliver
such a certification.
Section 3.19. Annual Independent Public Accountants' Servicing Report.
On or before the earlier of (a) March 31 of each year or (b) with respect to any
calendar year during which the Company's annual report on Form 10-K is required to be filed
in accordance with the Exchange Act and the rules and regulations of the Commission, the
date on which the annual report on Form 10-K is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, the Master Servicer at its
expense shall cause a firm of independent public accountants, which shall be members of the
American Institute of Certified Public Accountants, to furnish to the Company and the
Trustee the attestation required under Item 1122(b) of Regulation AB. In rendering such
statement, such firm may rely, as to matters relating to the direct servicing of mortgage
loans by Subservicers, upon comparable statements for examinations conducted by independent
public accountants substantially in accordance with standards established by the American
Institute of Certified Public Accountants (rendered within one year of such statement) with
respect to such Subservicers.
Section 3.20. Rights of the Company in Respect of the Master Servicer.
The Master Servicer shall afford the Company, upon reasonable notice, during normal
business hours access to all records maintained by the Master Servicer in respect of its
rights and obligations hereunder and access to officers of the Master Servicer responsible
for such obligations. Upon request, the Master Servicer shall furnish the Company with its
most recent financial statements and such other information as the Master Servicer possesses
regarding its business, affairs, property and condition, financial or otherwise. The Master
Servicer shall also cooperate with all reasonable requests for information including, but
not limited to, notices, tapes and copies of files, regarding itself, the Mortgage Loans or
the Certificates from any Person or Persons identified by the Company or Residential
Funding. The Company may, but is not obligated to, enforce the obligations of the Master
Servicer hereunder and may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of the Master Servicer hereunder or exercise the rights of
the Master Servicer hereunder; provided that the Master Servicer shall not be relieved of
any of its obligations hereunder by virtue of such performance by the Company or its
designee. The Company shall not have any responsibility or liability for any action or
failure to act by the Master Servicer and is not obligated to supervise the performance of
the Master Servicer under this Agreement or otherwise.
Section 3.21. Administration of Buydown Funds
(a) With respect to any Buydown Mortgage Loan, the Subservicer has deposited Buydown
Funds in an account that satisfies the requirements for a Subservicing Account (the "Buydown
Account"). The Master Servicer shall cause the Subservicing Agreement to require that upon
receipt from the Mortgagor of the amount due on a Due Date for each Buydown Mortgage Loan,
the Subservicer will withdraw from 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
transmit that amount in accordance with the terms of the Subservicing Agreement to the
Master Servicer 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 Subservicer shall be required to 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 Master Servicer or
the insurer under any related Primary Insurance Policy), the Subservicer shall be required
to withdraw from the Buydown Account the Buydown Funds for such Buydown Mortgage Loan still
held in the Buydown Account and remit the same to the Master Servicer in accordance with the
terms of the Subservicing Agreement for deposit in the Custodial Account or, if instructed
by the Master Servicer, 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.
Section 3.22. Advance Facility
(a) The Master Servicer is hereby authorized to enter into a financing or other facility
(any such arrangement, an "Advance Facility") under which (1) the Master Servicer sells,
assigns or pledges to another Person (an "Advancing Person") the Master Servicer's rights
under this Agreement to be reimbursed for any Advances or Servicing Advances and/or (2) an
Advancing Person agrees to fund some or all Advances and/or Servicing Advances required to
be made by the Master Servicer pursuant to this Agreement. No consent of the Depositor, the
Trustee, the Certificateholders or any other party shall be required before the Master
Servicer may enter into an Advance Facility. Notwithstanding the existence of any Advance
Facility under which an Advancing Person agrees to fund Advances and/or Servicing Advances
on the Master Servicer's behalf, the Master Servicer shall remain obligated pursuant to
this Agreement to make Advances and Servicing Advances pursuant to and as required by this
Agreement. If the Master Servicer enters into an Advance Facility, and for so long as an
Advancing Person remains entitled to receive reimbursement for any Advances including
Nonrecoverable Advances ("Advance Reimbursement Amounts") and/or Servicing Advances
including Nonrecoverable Advances ("Servicing Advance Reimbursement Amounts" and together
with Advance Reimbursement Amounts, "Reimbursement Amounts") (in each case to the extent
such type of Reimbursement Amount is included in the Advance Facility), as applicable,
pursuant to this Agreement, then the Master Servicer shall identify such Reimbursement
Amounts consistent with the reimbursement rights set forth in Section 3.10(a)(ii) and (vii)
and remit such Reimbursement Amounts in accordance with this Section 3.22 or otherwise in
accordance with the documentation establishing the Advance Facility to such Advancing Person
or to a trustee, agent or custodian (an "Advance Facility Trustee") designated by such
Advancing Person in an Advance Facility Notice described below in Section 3.22(b).
Notwithstanding the foregoing, if so required pursuant to the terms of the Advance Facility,
the Master Servicer may direct, and if so directed in writing the Trustee is hereby
authorized to and shall pay to the Advance Facility Trustee the Reimbursement Amounts
identified pursuant to the preceding sentence. An Advancing Person whose obligations
hereunder are limited to the funding of Advances and/or Servicing Advances shall not be
required to meet the qualifications of a Master Servicer or a Subservicer pursuant to
Section 3.02(a) or 6.02(c) hereof and shall not be deemed to be a Subservicer under this
Agreement. Notwithstanding anything to the contrary herein, in no event shall Advance
Reimbursement Amounts or Servicing Advance Reimbursement Amounts be included in the
Available Distribution Amount or distributed to Certificateholders.
(b) If the Master Servicer enters into an Advance Facility and makes the election set
forth in Section 3.22(a), the Master Servicer and the related Advancing Person shall deliver
to the Certificate Insurer and the Trustee a written notice and payment instruction (an
"Advance Facility Notice"), providing the Trustee with written payment instructions as to
where to remit Advance Reimbursement Amounts and/or Servicing Advance Reimbursement Amounts
(each to the extent such type of Reimbursement Amount is included within the Advance
Facility) on subsequent Distribution Dates. The payment instruction shall require the
applicable Reimbursement Amounts to be distributed to the Advancing Person or to an Advance
Facility Trustee designated in the Advance Facility Notice. An Advance Facility Notice may
only be terminated by the joint written direction of the Master Servicer and the related
Advancing Person (and any related Advance Facility Trustee). The Master Servicer shall
provide the Certificate Insurer, if any, with notice of any termination of any Advance
Facility pursuant to this Section 3.22(b).
(c) Reimbursement Amounts shall consist solely of amounts in respect of Advances and/or
Servicing Advances made with respect to the Mortgage Loans for which the Master Servicer
would be permitted to reimburse itself in accordance with Section 3.10(a)(ii) and (vii)
hereof, assuming the Master Servicer or the Advancing Person had made the related Advance(s)
and/or Servicing Advance(s). Notwithstanding the foregoing, except with respect to
reimbursement of Nonrecoverable Advances as set forth in Section 3.10(c) of this Agreement,
no Person shall be entitled to reimbursement from funds held in the Collection Account for
future distribution to Certificateholders pursuant to this Agreement. Neither the Company
nor the Trustee shall have any duty or liability with respect to the calculation of any
Reimbursement Amount, nor shall the Company or the Trustee have any responsibility to track
or monitor the administration of the Advance Facility or have any responsibility to track,
monitor or verify the payment of Reimbursement Amounts to the related Advancing Person or
Advance Facility Trustee. The Master Servicer shall maintain and provide to any Successor
Master Servicer a detailed accounting on a loan-by-loan basis as to amounts advanced by,
sold, pledged or assigned to, and reimbursed to any Advancing Person. The Successor Master
Servicer shall be entitled to rely on any such information provided by the Master Servicer
and the Successor Master Servicer shall not be liable for any errors in such information.
(d) Upon the direction of and at the expense of the Master Servicer, the Trustee agrees
to execute such acknowledgments, certificates and other documents reasonably satisfactory to
the Trustee provided by the Master Servicer recognizing the interests of any Advancing
Person or Advance Facility Trustee in such Reimbursement Amounts as the Master Servicer may
cause to be made subject to Advance Facilities pursuant to this Section 3.22.
(e) Reimbursement Amounts collected with respect to each Mortgage Loan shall be allocated
to outstanding unreimbursed Advances or Servicing Advances (as the case may be) made with
respect to that Mortgage Loan on a "first-in, first out" ("FIFO") basis, subject to the
qualifications set forth below:
(i) Any successor Master Servicer to Residential Funding (a "Successor
Master Servicer") and the Advancing Person or Advance Facility Trustee shall be
required to apply all amounts available in accordance with this Section 3.22(e) to
the reimbursement of Advances and Servicing Advances in the manner provided for
herein; provided, however, that after the succession of a Successor Master Servicer,
(A) to the extent that any Advances or Servicing Advances with respect to any
particular Mortgage Loan are reimbursed from payments or recoveries, if any, from the
related Mortgagor, and Liquidation Proceeds or Insurance Proceeds, if any, with
respect to that Mortgage Loan, reimbursement shall be made, first, to the Advancing
Person or Advance Facility Trustee in respect of Advances and/or Servicing Advances
related to that Mortgage Loan to the extent of the interest of the Advancing Person
or Advance Facility Trustee in such Advances and/or Servicing Advances, second to the
Master Servicer in respect of Advances and/or Servicing Advances related to that
Mortgage Loan in excess of those in which the Advancing Person or Advance Facility
Trustee Person has an interest, and third, to the Successor Master Servicer in
respect of any other Advances and/or Servicing Advances related to that Mortgage
Loan, from such sources as and when collected, and (B) reimbursements of Advances and
Servicing Advances that are Nonrecoverable Advances shall be made pro rata to the
Advancing Person or Advance Facility Trustee, on the one hand, and any such Successor
Master Servicer, on the other hand, on the basis of the respective aggregate
outstanding unreimbursed Advances and Servicing Advances that are Nonrecoverable
Advances owed to the Advancing Person, Advance Facility Trustee or Master Servicer
pursuant to this Agreement, on the one hand, and any such Successor Master Servicer,
on the other hand, and without regard to the date on which any such Advances or
Servicing Advances shall have been made. In the event that, as a result of the FIFO
allocation made pursuant to this Section 3.22(e), some or all of a Reimbursement
Amount paid to the Advancing Person or Advance Facility Trustee relates to Advances
or Servicing Advances that were made by a Person other than Residential Funding or
the Advancing Person or Advance Facility Trustee, then the Advancing Person or
Advance Facility Trustee shall be required to remit any portion of such Reimbursement
Amount to the Person entitled to such portion of such Reimbursement Amount. Without
limiting the generality of the foregoing, Residential Funding shall remain entitled
to be reimbursed by the Advancing Person or Advance Facility Trustee for all Advances
and Servicing Advances funded by Residential Funding to the extent the related
Reimbursement Amount(s) have not been assigned or pledged to an Advancing Person or
Advance Facility Trustee. The documentation establishing any Advance Facility shall
require Residential Funding to provide to the related Advancing Person or Advance
Facility Trustee loan by loan information with respect to each Reimbursement Amount
distributed to such Advancing Person or Advance Facility Trustee on each date of
remittance thereof to such Advancing Person or Advance Facility Trustee, to enable
the Advancing Person or Advance Facility Trustee to make the FIFO allocation of each
Reimbursement Amount with respect to each Mortgage Loan.
(ii) By way of illustration, and not by way of limiting the generality of
the foregoing, if the Master Servicer resigns or is terminated at a time when the
Master Servicer is a party to an Advance Facility, and is replaced by a Successor
Master Servicer, and the Successor Master Servicer directly funds Advances or
Servicing Advances with respect to a Mortgage Loan and does not assign or pledge the
related Reimbursement Amounts to the related Advancing Person or Advance Facility
Trustee, then all payments and recoveries received from the related Mortgagor or
received in the form of Liquidation Proceeds with respect to such Mortgage Loan
(including Insurance Proceeds collected in connection with a liquidation of such
Mortgage Loan) will be allocated first to the Advancing Person or Advance Facility
Trustee until the related Reimbursement Amounts attributable to such Mortgage Loan
that are owed to the Master Servicer and the Advancing Person, which were made prior
to any Advances or Servicing Advances made by the Successor Master Servicer, have
been reimbursed in full, at which point the Successor Master Servicer shall be
entitled to retain all related Reimbursement Amounts subsequently collected with
respect to that Mortgage Loan pursuant to Section 3.10 of this Agreement. To the
extent that the Advances or Servicing Advances are Nonrecoverable Advances to be
reimbursed on an aggregate basis pursuant to Section 3.10 of this Agreement, the
reimbursement paid in this manner will be made pro rata to the Advancing Person or
Advance Facility Trustee, on the one hand, and the Successor Master Servicer, on the
other hand, as described in clause (i)(B) above.
(f) The Master Servicer shall remain entitled to be reimbursed for all Advances
and Xxxxxxxxx Advances funded by the Master Servicer to the extent the related rights to be
reimbursed therefor have not been sold, assigned or pledged to an Advancing Person.
(g) Any amendment to this Section 3.22 or to any other provision of this Agreement
that may be necessary or appropriate to effect the terms of an Advance Facility as described
generally in this Section 3.22, including amendments to add provisions relating to a
successor Master Servicer, may be entered into by the Trustee, the Certificate Insurer,
Company and the Master Servicer without the consent of any Certificateholder, with written
confirmation from each Rating Agency that the amendment 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, and an opinion of counsel as required by Section
11.01(c), notwithstanding anything to the contrary in Section 11.01 of or elsewhere in this
Agreement.
(h) Any rights of set-off that the Trust Fund, the Trustee, the Company, any
Successor Master Servicer or any other Person might otherwise have against the Master
Servicer under this Agreement shall not attach to any rights to be reimbursed for Advances
or Servicing Advances that have been sold, transferred, pledged, conveyed or assigned to any
Advancing Person.
(i) At any time when an Advancing Person shall have ceased funding Advances and/or
Servicing Advances (as the case may be) and the Advancing Person or related Advance Facility
Trustee shall have received Reimbursement Amounts sufficient in the aggregate to reimburse
all Advances and/or Servicing Advances (as the case may be) the right to reimbursement for
which were assigned to the Advancing Person, then upon the delivery of a written notice
signed by the Advancing Person and the Master Servicer or its successor or assign) to the
Trustee terminating the Advance Facility Notice (the "Notice of Facility Termination"), the
Master Servicer or its Successor Master Servicer shall again be entitled to withdraw and
retain the related Reimbursement Amounts from the Custodial Account pursuant to Section 3.10.
(j) After delivery of any Advance Facility Notice, and until any such Advance
Facility Notice has been terminated by a Notice of Facility Termination, this Section 3.22
may not be amended or otherwise modified without the prior written consent of the related
Advancing Person.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account.
(a) The Master Servicer on behalf of the Trustee shall establish and maintain a
Certificate Account in which the Master Servicer shall cause to be deposited on behalf of
the Trustee on or before 2:00 P.M. New York time on each Certificate 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 Certificate Account pursuant to Section 3.12(a), (iii) any amount required to be
deposited in the Certificate Account pursuant to Section 3.16(e) or 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 shall, upon written request from the Master Servicer, invest or cause the
institution maintaining the Certificate Account to invest the funds in the Certificate
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 Certificate 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 Certificate 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. Subject to Section 3.16(e), all income and gain realized from any such investment
shall be for the benefit of the Master Servicer 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 Certificate Account by the Master Servicer out of its
own funds immediately as realized without any right of reimbursement. The Trustee or its
Affiliates are permitted to receive compensation that could be deemed to be in the Trustee's
economic self-interest for (i) serving as investment adviser (with respect to investments
made through its Affiliates), administrator, shareholder servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments, (ii) using Affiliates to
effect transactions in certain Permitted Investments and (iii) effecting transactions in
certain Permitted Investments.
Section 4.02. Distributions.
As provided in Section 4.02 of the Series Supplement.
Section 4.03. Statements to Certificateholders; Statements to Rating Agencies; Exchange Act
Reporting.
(a) Concurrently with each distribution charged to the Certificate Account and with
respect to each Distribution Date the Master Servicer shall forward to the Trustee and the
Trustee shall either forward by mail or make available to each Holder and the Company, via
the Trustee's internet website, a statement (and at its option, any additional files
containing the same information in an alternative format) setting forth information as to
each Class of Certificates, the Mortgage Pool and, if the Mortgage Pool is comprised of two
or more Loan Groups, each Loan Group, to the extent applicable. This statement will include
the information set forth in an exhibit to the Series Supplement. The Trustee shall mail to
each Holder that requests a paper copy by telephone a paper copy via first class mail. The
Trustee may modify the distribution procedures set forth in this Section provided that such
procedures are no less convenient for the Certificateholders. The Trustee shall provide
prior notification to the Company, the Master Servicer and the Certificateholders regarding
any such modification. In addition, the Master Servicer shall provide to any manager of a
trust fund consisting of some or all of the Certificates, upon reasonable request, such
additional information as is reasonably obtainable by the Master Servicer at no additional
expense to the Master Servicer. Also, at the request of a Rating Agency, the Master
Servicer shall provide the information relating to the Reportable Modified Mortgage Loans
substantially in the form attached hereto as Exhibit Q to such Rating Agency within a
reasonable period of time; provided, however, that the Master Servicer shall not be required
to provide such information more than four times in a calendar year to any Rating Agency.
(b) Within a reasonable period of time after it receives a written request from a Holder
of a Certificate, other than a Class R Certificate, the Master Servicer 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 (v) and (vi) of the
exhibit to the Series Supplement referred to in subsection (a) above aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Master Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be provided by the
Master Servicer pursuant to any requirements of the Code.
(c) Within a reasonable period of time after it receives a written request from a Holder
of a Class R Certificate, the Master Servicer 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 the Holder of a Class R
Certificate. Such obligation of the Master Servicer shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the Master
Servicer pursuant to any requirements of the Code.
(d) Upon the written request of any Certificateholder, the Master Servicer, as soon as
reasonably practicable, shall provide the requesting Certificateholder with such information
as is necessary and appropriate, in the Master Servicer's sole discretion, for purposes of
satisfying applicable reporting requirements under Rule 144A.
(e) The Master Servicer shall, on behalf of the Company and in respect of the Trust Fund,
sign and cause to be filed with the Commission any periodic reports required to be filed
under the provisions of the Exchange Act, and the rules and regulations of the Commission
thereunder including, without limitation, reports on Form 10-K, Form 10-D and Form 8-K. In
connection with the preparation and filing of such periodic reports, the Trustee shall
timely provide to the Master Servicer (I) a list of Certificateholders as shown on the
Certificate Register as of the end of each calendar year, (II) copies of all pleadings,
other legal process and any other documents relating to any claims, charges or complaints
involving the Trustee, as trustee hereunder, or the Trust Fund that are received by a
Responsible Officer of 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 Master Servicer, and (IV) notice of
any failure of the Trustee to make any distribution to the Certificateholders as required
pursuant to the Series Supplement. Neither the Master Servicer nor the Trustee shall have
any liability with respect to the Master Servicer's failure to properly prepare or file such
periodic reports resulting from or relating to the Master Servicer's inability or failure to
obtain any information not resulting from the Master Servicer's own negligence or willful
misconduct.
(f) Any Form 10-K filed with the Commission in connection with this Section 4.03 shall
include, with respect to the Certificates relating to such 10-K:
(i) A certification, signed by the senior officer in charge of the servicing functions of
the Master Servicer, in the form attached as Exhibit O hereto or such other form as
may be required or permitted by the Commission (the "Form 10-K Certification"), in
compliance with Rules 13a-14 and 15d-14 under the Exchange Act and any additional
directives of the Commission.
(ii) A report regarding its assessment of compliance during the preceding calendar year
with all applicable servicing criteria set forth in relevant Commission regulations
with respect to mortgage-backed securities transactions taken as a whole involving
the Master Servicer that are backed by the same types of assets as those backing the
certificates, as well as similar reports on assessment of compliance received from
other parties participating in the servicing function as required by relevant
Commission regulations, as described in Item 1122(a) of Regulation AB. The Master
Servicer shall obtain from all other parties participating in the servicing function
any required assessments.
(iii) With respect to each assessment report described immediately above, a report by a
registered public accounting firm that attests to, and reports on, the assessment
made by the asserting party, as set forth in relevant Commission regulations, as
described in Regulation 1122(b) of Regulation AB and Section 3.19.
(iv) The servicer compliance certificate required to be delivered pursuant Section 3.18.
(g) In connection with the Form 10-K Certification, the Trustee shall provide the Master
Servicer with a back-up certification substantially in the form attached hereto as Exhibit P.
(h) This Section 4.03 may be amended in accordance with this Agreement without the
consent of the Certificateholders.
(i) The Trustee shall make available on the Trustee's internet website each of the
reports filed with the Commission by or on behalf of the Company under the Exchange Act, as
soon as reasonably practicable upon delivery of such reports to the Trustee.
Section 4.04. Distribution of Reports to the Trustee and
the Company; Advances by the Master Servicer.
(a) Prior to the close of business on the Determination Date, the Master Servicer shall
furnish a written statement to the Trustee, any Paying Agent and the Company (the
information in such statement to be made available to any Certificate Insurer and
Certificateholders by the Master Servicer on request) setting forth (i) the Available
Distribution Amount and (ii) the amounts required to be withdrawn from the Custodial Account
and deposited into the Certificate Account on the immediately succeeding Certificate Account
Deposit Date pursuant to clause (iii) of Section 4.01(a). The determination by the Master
Servicer of such amounts shall, in the absence of obvious error, be presumptively deemed to
be correct for all purposes hereunder and the Trustee shall be protected in relying upon the
same without any independent check or verification.
(b) On or before 2:00 P.M. New York time on each Certificate Account Deposit Date, the
Master Servicer shall either (i) deposit in the Certificate Account from its own funds, or
funds received therefor from the Subservicers, an amount equal to the Advances to be made by
the Master 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 Servicemembers Civil Relief Act, as amended, or similar
legislation or regulations then in effect, on the Outstanding Mortgage Loans as of the
related Due Date, which Monthly Payments were not received 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 Certificate 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 Master Servicer by
deposit in the Certificate Account on or before 11:00 A.M. New York time on any future
Certificate Account Deposit Date to the extent that funds attributable to the Mortgage Loans
that are available in the Custodial Account for deposit in the Certificate Account on such
Certificate Account Deposit Date shall be less than payments to Certificateholders required
to be made on the following Distribution Date. The Master 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
Master 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 Master Servicer from recoveries on related Mortgage Loans
pursuant to Section 3.10.
The determination by the Master 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 Officers' Certificate of the Master Servicer delivered to the Company and
the Trustee.
If the Master Servicer determines as of the Business Day preceding any Certificate
Account Deposit Date that it will be unable to deposit in the Certificate 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 Certificate 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 Master Servicer shall have directly or indirectly deposited in the Certificate
Account such portion of the amount of the Advance as to which the Master 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 Master Servicer under this Agreement in accordance with
Section 7.01 and (b) assume the rights and obligations of the Master Servicer hereunder,
including the obligation to deposit in the Certificate 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 Certificate Account.
Section 4.05. Allocation of Realized Losses.
As provided in Section 4.05 of the Series Supplement.
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property.
The Master 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, and deliver to the Trustee an
Officers' Certificate on or before March 31 of each year stating that such reports have been
filed. 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.
(a) With respect to any Mortgage Loan that is delinquent in payment by 90 days or more,
the Master Servicer may, at its option, purchase such Mortgage Loan from the Trustee at the
Purchase Price therefor; provided, that such Mortgage Loan that becomes 90 days or more
delinquent during any given Calendar Quarter shall only be eligible for purchase pursuant to
this Section during the period beginning on the first Business Day of the following Calendar
Quarter, and ending at the close of business on the second-to-last Business Day of such
following Calendar Quarter; and provided, further, that such Mortgage Loan is 90 days or
more delinquent at the time of repurchase. Such option if not exercised shall not
thereafter be reinstated as to any Mortgage Loan, unless the delinquency is cured and the
Mortgage Loan thereafter again becomes delinquent in payment by 90 days or more in a
subsequent Calendar Quarter.
(b) If at any time the Master Servicer makes a payment to the Certificate Account
covering the amount of the Purchase Price for such a Mortgage Loan as provided in clause (a)
above, and the Master Servicer provides to the Trustee a certification signed by a Servicing
Officer stating that the amount of such payment has been deposited in the Certificate
Account, then the Trustee shall execute the assignment of such Mortgage Loan at the request
of the Master Servicer, without recourse, to the Master Servicer, 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 Master Servicer will thereupon own such Mortgage, and all such security and
documents, free of any further obligation to the Trustee or the Certificateholders with
respect thereto.
If, however, the Master Servicer shall have exercised its right to repurchase a
Mortgage Loan pursuant to this Section 4.07 upon the written request of and with funds
provided by the Junior Certificateholder and thereupon transferred such Mortgage Loan to the
Junior Certificateholder, the Master Servicer shall so notify the Trustee in writing.
Section 4.08. Surety Bond.
(a) If a Required Surety Payment is payable pursuant to the Surety Bond with respect to
any Additional Collateral Loan, the Master Servicer shall so notify the Trustee as soon as
reasonably practicable and the Trustee shall promptly complete the notice in the form of
Attachment 1 to the Surety Bond and shall promptly submit such notice to the Surety as a
claim for a Required Surety. The Master Servicer shall upon request assist the Trustee in
completing such notice and shall provide any information requested by the Trustee in
connection therewith.
(b) Upon receipt of a Required Surety Payment from the Surety on behalf of the Holders of
Certificates, the Trustee shall deposit such Required Surety Payment in the Certificate
Account and shall distribute such Required Surety Payment, or the proceeds thereof, in
accordance with the provisions of Section 4.02.
(c) The Trustee shall (i) receive as attorney-in-fact of each Holder of a Certificate any
Required Surety Payment from the Surety and (ii) disburse the same to the Holders of such
Certificates as set forth in Section 4.02.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Senior, Class X, Class M, Class B, Class P, Class SB and Class R Certificates
shall be substantially in the forms set forth in Exhibits A, A-I, B, C, C-I, C-II and D,
respectively, or such other form or forms as shall be set forth in the Series Supplement,
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 the Custodian of the documents specified in Section 2.01. The
Certificates shall be issuable in the minimum denominations designated in the Preliminary
Statement to the Series Supplement.
The Certificates shall be executed by manual or facsimile signature on behalf of an
authorized officer of the Trustee. Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Trustee shall bind the
Trustee, notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such 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 Master 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 notifies the Depository and
the Trustee of its intent to terminate the book-entry system and, upon receipt of notice of
such intent from the Depository, the Depository Participants holding beneficial interests in
the Book-Entry Certificates agree to such termination 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 execute, authenticate and deliver the Definitive Certificates. In
addition, if an Event of Default has occurred and is continuing, each Certificate Owner
materially adversely affected thereby may at its option request a Definitive Certificate
evidencing such Certificate Owner's Percentage Interest in the related Class of
Certificates. In order to make such a request, such Certificate Owner shall, subject to the
rules and procedures of the Depository, provide the Depository or the related Depository
Participant with directions for the Certificate Registrar to exchange or cause the exchange
of the Certificate Owner's interest in such Class of Certificates for an equivalent
Percentage Interest in fully registered definitive form. Upon receipt by the Certificate
Registrar of instructions from the Depository directing the Certificate Registrar to effect
such exchange (such instructions shall contain information regarding the Class of
Certificates and the Certificate Principal Balance being exchanged, the Depository
Participant account to be debited with the decrease, the registered holder of and delivery
instructions for the Definitive Certificate, and any other information reasonably required
by the Certificate Registrar), (i) the Certificate Registrar shall instruct the Depository
to reduce the related Depository Participant's account by the aggregate Certificate
Principal Balance of the Definitive Certificate, (ii) the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver, in accordance with the registration
and delivery instructions provided by the Depository, a Definitive Certificate evidencing
such Certificate Owner's Percentage Interest in such Class of Certificates and (iii) the
Trustee shall execute and the Certificate Registrar shall authenticate a new Book-Entry
Certificate reflecting the reduction in the aggregate Certificate Principal Balance of such
Class of Certificates by the Certificate Principal Balance of the Definitive Certificate.
None of the Company, the Master Servicer or the Trustee shall be liable for any
actions taken by the Depository or its nominee, including, without limitation, any delay in
delivery of any instructions required under Section 5.01 and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, the Trustee and the Master Servicer shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
(c) If the Class A-V Certificates are Definitive Certificates, from time to time
Residential Funding, as the initial Holder of the Class A-V Certificates, may exchange such
Holder's Class A-V Certificates for Subclasses of Class A-V Certificates to be issued under
this Agreement by delivering a "Request for Exchange" substantially in the form attached to
this Agreement as Exhibit N executed by an authorized officer, which Subclasses, in the
aggregate, will represent the Uncertificated REMIC Regular Interests Z corresponding to the
Class A-V Certificates so surrendered for exchange. Any Subclass so issued shall bear a
numerical designation commencing with Class A-V-1 and continuing sequentially thereafter,
and will evidence ownership of the Uncertificated REMIC Regular Interest or Interests
specified in writing by such initial Holder to the Trustee. The Trustee may conclusively,
without any independent verification, rely on, and shall be protected in relying on,
Residential Funding's determinations of the Uncertificated REMIC Regular Interests Z
corresponding to any Subclass, the Initial Notional Amount and the initial Pass-Through Rate
on a Subclass as set forth in such Request for Exchange and the Trustee shall have no duty
to determine if any Uncertificated REMIC Regular Interest Z designated on a Request for
Exchange corresponds to a Subclass which has previously been issued. Each Subclass so issued
shall be substantially in the form set forth in Exhibit A and shall, on original issue, be
executed and delivered by the Trustee to the Certificate Registrar for authentication and
delivery in accordance with Section 5.01(a). Every Certificate presented or surrendered for
exchange by the initial Holder shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer
attached to such Certificate and shall be completed to the satisfaction of the Trustee and
the Certificate Registrar duly executed by, the initial Holder thereof or his attorney duly
authorized in writing. The Certificates of any Subclass of Class A-V Certificates may be
transferred in whole, but not in part, in accordance with the provisions of Section 5.02.
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.
The Certificate Registrar, or the Trustee, shall provide the Master Servicer with a
certified list of Certificateholders as of each Record Date prior to the related
Determination Date.
(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, Class P 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 (or Subclass) 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 (or Subclass) 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 or Class P
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 or Class P 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 Master Servicer (except that, if
such transfer is made by the Company or the Master Servicer or any Affiliate thereof, the
Company or the Master Servicer shall provide such Opinion of Counsel at their own expense);
provided that such Opinion of Counsel will 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 (with respect to any Class B
Certificate) or Exhibit G-1 (with respect to any Class P Certificate) 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 Master Servicer; provided, however, that such representation letters will 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 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 Master 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 Master 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 Master 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, Class P or Class R Certificate presented for
registration in the name of any Person, either (A) the Trustee shall require
an Opinion of Counsel addressed to the Trustee, the Company and the Master
Servicer, acceptable to and in form and substance satisfactory to the Trustee
to the effect that the purchase or holding of such Class B, Class P 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 Master Servicer to any obligation
or liability (including obligations or liabilities under ERISA or Section 4975
of the Code) in addition to those undertaken in this Agreement, which Opinion
of Counsel shall not be an expense of the Trustee, the Company or the Master
Servicer or (B) the prospective Transferee shall be required to provide the
Trustee, the Company and the Master Servicer with a certification to the
effect set forth in paragraph six of Exhibit H (with respect to any Class B
Certificate) or paragraph fifteen of Exhibit G-1 (with respect to any Class R
Certificate or Class P 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 or 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 this clause (b), a "Complying Insurance
Company").
(ii) Any Transferee of a Class M Certificate will 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, as most recently amended, PTE 2007-05, 72
Fed. Reg. 13130 (March 20, 2007) (the "RFC Exemption"), and that it
understands that there are certain conditions to the availability of the RFC
Exemption including that such Certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by Standard & Poor's,
Fitch, Moody's, DBRS Limited, or DBRS, Inc. or (c) such Transferee is a
Complying Insurance Company.
(iii) (A) If 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 Investor, (ii) acquired such Certificate in compliance with the RFC
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 Class M 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 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 Master Servicer, any Subservicer, the Underwriters
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 Master 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 will 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 Master
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 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 Master 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 Master Servicer on such
terms as the Master Servicer may choose. Such purported Transferee shall
promptly endorse and deliver each Class R Certificate in accordance with the
instructions of the Master Servicer. Such purchaser may be the Master
Servicer itself or any Affiliate of the Master Servicer. The proceeds of such
sale, net of the commissions (which may include commissions payable to the
Master Servicer or its Affiliates), expenses and taxes due, if any, shall be
remitted by the Master 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 Master Servicer, and the Master 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.
(iv) The Master Servicer, on behalf of the Trustee, shall make available, upon written
request from the Trustee, 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 Master Servicer from such 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 (in the case of
the Insured Certificates (as defined in the Series Supplement), such determination shall
be made without giving effect to the Certificate Policy (as defined in the Series
Supplement)), 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 Officers' Certificate of the Master Servicer stating that
the Master Servicer has received an Opinion of Counsel, in form and substance
satisfactory to the Master Servicer, to the effect that such modification, addition to or
absence of such provisions will not cause any portion of any REMIC formed under the
Series Supplement to cease to qualify as a REMIC and will not cause (x) any portion of
any REMIC formed under the Series Supplement 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 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 Master Servicer, the Trustee, any Certificate Insurer, the Certificate Registrar and any
agent of the Company, the Master Servicer, the Trustee, any Certificate Insurer 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 Master Servicer, the
Trustee, any Certificate Insurer, the Certificate Registrar nor any agent of the Company,
the Master Servicer, the Trustee, any Certificate Insurer 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 Master Servicer on behalf of 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. U.S.A. Patriot Act Compliance.
In order for it to comply with its duties under the U.S.A. Patriot Act, the Trustee
may obtain and verify certain information from the other parties hereto, including but not
limited to such parties' name, address and other identifying information.
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Company and the Master Servicer.
The Company and the Master 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 Master Servicer herein. By way of illustration and not limitation,
the Company is not liable for the servicing and administration of the Mortgage Loans, nor is
it obligated by Section 7.01 or Section 10.01 to assume any obligations of the Master
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 Master Servicer; Assignment of
Rights and Delegation of Duties by Master Servicer.
(a) The Company and the Master 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
as a limited liability company under the laws of the state of its organization,
respectively, and shall each obtain and preserve its qualification to do business as a
foreign corporation or other Person 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 Master Servicer may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Company or the Master Servicer shall be a party, or any Person
succeeding to the business of the Company or the Master Servicer, shall be the successor of
the Company or the Master 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 in
this Section 6.02(b) to the contrary notwithstanding; provided, however, that the successor
or surviving Person to the Master Servicer shall be qualified to service mortgage loans on
behalf of Xxxxxx Xxx or Freddie Mac; and provided further that the Master Servicer (or the
Company, as applicable) shall notify each Rating Agency and the Trustee in writing of any
such merger, conversion or consolidation at least 30 days prior to the effective date of
such event.
(c) Notwithstanding anything else in this Section 6.02 and Section 6.04 to the contrary,
the Master 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 Xxx or Freddie 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 Master Servicer under this
Agreement; provided further that each Rating Agency's rating of the Classes of Certificates
(in the case of the Insured Certificates (as defined in the Series Supplement), such
determination shall be made without giving effect to the Certificate Policy (as defined in
the Series Supplement)) 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 Master Servicer shall be released from its
obligations under this Agreement, except that the Master Servicer shall remain liable for
all liabilities and obligations incurred by it as Master Servicer hereunder prior to the
satisfaction of the conditions to such assignment and delegation set forth in the next
preceding sentence. Notwithstanding the foregoing, in the event of a pledge or assignment
by the Master Servicer solely of its rights to purchase all assets of the Trust Fund under
Section 9.01(a) (or, if so specified in Section 9.01(a), its rights to purchase the Mortgage
Loans and property acquired related to such Mortgage Loans or its rights to purchase the
Certificates related thereto), the provisos of the first sentence of this paragraph will not
apply.
Section 6.03. Limitation on Liability of the Company,
the Master Servicer and Others.
Neither the Company, the Master Servicer nor any of the directors, officers,
employees or agents of the Company or the Master 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 Master 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 Master Servicer and any director,
officer, employee or agent of the Company or the Master 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 Master Servicer and any
director, officer, employee or agent of the Company or the Master 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 Master 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 Master 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 Master 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 Master Servicer Not to Resign.
Subject to the provisions of Section 6.02, neither the Company nor the Master
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 Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the
Trustee. No such resignation by the Master Servicer shall become effective until the
Trustee or a successor servicer shall have assumed the Master 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 Master Servicer shall fail to deposit or cause to be deposited into the
Certificate Account any amounts required to be so deposited therein at the time
required pursuant to Section 4.01 or otherwise or the Master Servicer shall fail to
distribute or cause to be distributed to the Holders of Certificates of any Class any
distribution required to be made under the terms of the Certificates of such Class
and this Agreement and, in each 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 Master Servicer by the
Trustee or the Company or to the Master Servicer, the Company and the Trustee by the
Holders of Certificates of such Class evidencing Percentage Interests aggregating not
less than 25%; or
(ii) the Master Servicer shall fail to observe or perform in any material respect any
other of the covenants or agreements on the part of the Master 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 Master Servicer by the Trustee or the Company, or to the
Master 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 Master Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60 days; or
(iv) the Master 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 Master Servicer or of, or
relating to, all or substantially all of the property of the Master Servicer; or
(v) the Master 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 Master Servicer shall notify the Trustee pursuant to Section 4.04(b) that it is
unable to deposit in the Certificate 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, either the Company or the Trustee 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 Master 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 Master 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 Master Servicer and the
Company, immediately terminate all of the rights and obligations of the Master 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 Master Servicer of such written notice, all authority and power of the Master
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 Master 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 Master Servicer agrees to cooperate with the Trustee in effecting the
termination of the Master Servicer's 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
Certificate Account or thereafter be received with respect to the Mortgage Loans. No such
termination shall release the Master 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 Residential Funding in its
capacity as Master Servicer hereunder, Residential Funding 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 Residential Funding's rights and obligations as Master Servicer hereunder
and received after such notice, that portion to which Residential Funding 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 Residential Funding hereunder the
entitlement to which arose prior to the termination of its activities hereunder. Upon the
termination of Residential Funding as Master Servicer hereunder the Company shall deliver to
the Trustee a copy of the Program Guide.
Section 7.02. Trustee or Company to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of termination pursuant
to Section 7.01 or resigns in accordance with Section 6.04, the Trustee or, upon notice to
the Company and with the Company's consent (which shall not be unreasonably withheld) a
designee (which meets the standards set forth below) of the Trustee, shall be the successor
in all respects to the Master Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master Servicer
(except for the responsibilities, duties and liabilities contained in Sections 2.02 and
2.03(a), excluding the duty to notify related Subservicers or Sellers as set forth in such
Sections, and its obligations to deposit amounts in respect of losses incurred prior to such
notice or termination on the investment of funds in the Custodial Account or the Certificate
Account pursuant to Sections 3.07(c) and 4.01(b) by the terms and provisions hereof);
provided, however, that any failure to perform such duties or responsibilities caused by the
preceding Master Servicer's failure to provide information required by Section 4.04 shall
not be considered a default by the Trustee hereunder. As compensation therefor, the Trustee
shall be entitled to all funds relating to the Mortgage Loans which the Master Servicer
would have been entitled to charge to the Custodial Account or the Certificate Account if
the Master Servicer had continued to act hereunder and, in addition, shall be entitled to
the income from any Permitted Investments made with amounts attributable to the Mortgage
Loans held in the Custodial Account or the Certificate Account. If the Trustee has become
the successor to the Master Servicer in accordance with Section 6.04 or Section 7.01, then
notwithstanding the above, the Trustee may, if it shall be unwilling to so act, or shall, if
it is unable to so act, appoint, or petition a court of competent jurisdiction to appoint,
any established housing and home finance institution, which is also a Xxxxxx Xxx- or Freddie
Mac-approved mortgage servicing institution, having a net worth of not less than $10,000,000
as the successor to the Master Servicer hereunder in the assumption of all or any part of
the responsibilities, duties or liabilities of the Master Servicer hereunder. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee shall become
successor to the Master Servicer and shall act in such capacity as hereinabove 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 initial Master Servicer hereunder. The Company, the Trustee, the
Custodian and such successor shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession. The Servicing Fee for any successor
Master Servicer appointed pursuant to this Section 7.02 will be lowered with respect to
those Mortgage Loans, if any, where the Subservicing Fee accrues at a rate of less than
0.20% per annum in the event that the successor Master Servicer is not servicing such
Mortgage Loans directly and it is necessary to raise the related Subservicing Fee to a rate
of 0.20% per annum in order to hire a Subservicer with respect to such Mortgage Loans. The
Master Servicer shall pay the reasonable expenses of the Trustee in connection with any
servicing transition hereunder.
(b) In connection with the termination or resignation of the Master Servicer
hereunder, either (i) the successor Master Servicer, including the Trustee if the Trustee is
acting as successor Master 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 Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to revise its records to reflect the transfer of
servicing to the successor Master Servicer as necessary under MERS' rules and regulations,
or (ii) the predecessor Master Servicer shall cooperate with the successor Master 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 Master Servicer. The predecessor Master Servicer shall file or cause to be filed
any such assignment in the appropriate recording office. The predecessor Master 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 Master 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 Master 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.
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,
4.06, 7.03 and 10.01. The Trustee shall furnish in a timely fashion to the Master Servicer
such information as the Master Servicer may reasonably request from time to time for the
Master 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 any REMIC formed under the Series Supplement 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 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 Master
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 Master
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.
(e) Notwithstanding anything to the contrary contained herein or in any related Custodial
Agreement, in no event shall the Trustee have any liability in respect of any actions or
omissions of the Custodian herein or pursuant to any related Custodial Agreement.
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, Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the 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 Master 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 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 Master Servicer in a timely manner any Tax Returns
prepared by or on behalf of the Master Servicer that the Trustee is required to sign
as determined by the Master Servicer pursuant to applicable federal, state or local
tax laws, provided that the Master Servicer shall indemnify the Trustee for signing
any such Tax Returns that contain errors or omissions.
(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 to the effect that such contribution
will not (i) cause any portion of any REMIC formed under the Series Supplement 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 Master 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 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 Master 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 Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Custodial Account or the Certificate Account by the Company or the Master 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.
Section 8.05. Master Servicer to Pay Trustee's Fees
and Expenses; Indemnification.
(a) The Master Servicer covenants and agrees to pay to the Trustee and any co-trustee
from time to time, and the Trustee and any co-trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by each of them in
the execution of the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee and any co-trustee, and the Master Servicer will
pay or reimburse the Trustee and any co-trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee or any co-trustee in accordance
with any of the provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in its employ,
and the expenses incurred by the Trustee or any co-trustee in connection with the
appointment of an office or agency pursuant to Section 8.12) except any such expense,
disbursement or advance as may arise from its negligence or bad faith.
(b) The Master 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, and the Master Servicer further agrees to indemnify the Trustee for,
and to hold the Trustee harmless against, any loss, liability or expense arising out of, or
in connection with, the provisions set forth in the second paragraph of Section 2.01(c)
hereof, including, without limitation, all costs, liabilities and expenses (including
reasonable legal fees and expenses) of investigating and defending itself against any claim,
action or proceeding, pending or threatened, relating to the provisions of this paragraph,
provided that:
(i) with respect to any such claim, the Trustee shall have given the Master 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 Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Agreement to the contrary, the Master Servicer shall
not be liable for settlement of any claim by the Trustee entered into without the
prior consent of the Master Servicer which consent shall not be unreasonably
withheld.
No termination of this Agreement shall affect the obligations created by this Section
8.05(b) of the Master Servicer to indemnify the Trustee under the conditions and to the
extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the Master Servicer in
this Section 8.05(b) shall not be available (A) for 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 or (B) where the Trustee is required to indemnify
the Master Servicer pursuant to Section 12.05(a).
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, subject to supervision or examination by federal or state
authority and the short-term rating of such institution shall be A-1 in the case of Standard
& Poor's if Standard & Poor's is a Rating Agency. 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 Master 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 other than any failure to comply with the provisions of Article XII, in which
case no notice or grace period shall be applicable) after the date on which written notice
of such failure, requiring that the same be remedied, shall have been given to the Trustee
by the Company, then the Company may remove the Trustee and appoint a successor trustee by
written instrument delivered as provided in the preceding sentence. In connection with the
appointment of a successor trustee pursuant to the preceding sentence, the Company shall, on
or before the date on which any such appointment becomes effective, obtain from each Rating
Agency written confirmation that the appointment of any such successor trustee will not
result in the reduction of the ratings on any class of the Certificates below the lesser of
the then current or original ratings on such Certificates.
(c) The Holders of 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 Custodial Files and related documents and
statements held by it hereunder (other than any Custodial Files at the time held by a
Custodian, which shall become the agent of any successor trustee hereunder), and the
Company, the Master 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.
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 Master 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 Master Servicer and the Trustee may consider
necessary or desirable. If the Master 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 Master 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 the Custodian.
The Trustee may, with the consent of the Master Servicer and the Company, or shall,
at the direction of the Company and the Master Servicer, appoint custodians who are not
Affiliates of the Company, the Master Servicer or any Seller to hold all or a portion of the
Custodial Files as agent for the Trustee, by entering into a Custodial Agreement.
Notwithstanding anything to the contrary contained herein, the Company, Master Servicer and
Trustee acknowledge that the functions of the Trustee hereunder with respect to the
acceptance, custody, inspection and release of Custodial Files, and the preparation and
delivery of the Interim Certification required pursuant to Section 2.02, shall be performed
by the Custodian as and to the extent set forth in the Custodial Agreement. Subject to
Article VIII, the Trustee agrees to comply with the terms of each Custodial Agreement with
respect to the Custodial Files and to enforce the terms and provisions thereof against the
related custodian for the benefit of the Certificateholders. Each custodian shall be a
depository institution subject to supervision by federal or state authority, shall have a
combined capital and surplus of at least $15,000,000 and shall be qualified to do business
in the jurisdiction in which it holds any Custodial File. Each Custodial Agreement, with
respect to the Custodial Files, 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.
Appointment of Office or Agency.
The Trustee will maintain an office or agency in the United States at the address
designated in Section 11.05 of the Series Supplement where Certificates may be surrendered
for registration of transfer or exchange. The Trustee will maintain an office at the address
stated in Section 11.05 of the Series Supplement where notices and demands to or upon the
Trustee in respect of this Agreement may be served.
ARTICLE IX
TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES
Section 9.01. Optional Purchase by the Master Servicer of All Certificates; Termination Upon
Purchase by the Master Servicer or Liquidation of All Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and responsibilities of the
Company, the Master 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 Master 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, if less than such unpaid
principal balance, 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 Master Servicer, to avoid disqualification of any
portion of any REMIC formed under the Series Supplement as a REMIC. The purchase
price paid by the Master Servicer shall also include any amounts owed by Residential
Funding pursuant to the last paragraph of Section 4 of the Assignment Agreement in
respect of any liability, penalty or expense that resulted from a breach of the
Compliance With Laws Representation, that remain unpaid on the date of such purchase.
The right of the Master 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 Master Servicer, the Master 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 Master Servicer shall
provide to the Trustee the certification required by Section 3.15 and the Trustee and the
Custodian shall, promptly following payment of the purchase price, release to the Master
Servicer the Custodial Files pertaining to the Mortgage Loans being purchased.
In addition to the foregoing, 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 Master 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. If the
Master Servicer exercises this right to purchase the outstanding Certificates, the Master
Servicer will promptly terminate the respective obligations and responsibilities created
hereby in respect of the Certificates pursuant to this Article IX.
(b) The Master Servicer shall give the Trustee not less than 40 days' prior notice of the
Distribution Date on which the Master Servicer anticipates that the final distribution will
be made to Certificateholders (whether as a result of the exercise by the Master Servicer of
its right to purchase the assets of the Trust Fund or otherwise) or on which the Master
Servicer anticipates that the Certificates will be purchased (as a result of the exercise by
the Master Servicer to purchase the outstanding Certificates). 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 or notice of any purchase of the outstanding Certificates,
specifying the Distribution Date upon which the Holders may surrender their Certificates to
the Trustee for payment, shall be given promptly by the Master Servicer (if it is exercising
its right to purchase the assets of the Trust Fund or to purchase the outstanding
Certificates), or by the Trustee (in any other case) by letter. Such notice shall be
prepared by the Master Servicer (if it is exercising its right to purchase the assets of the
Trust Fund or to purchase the outstanding Certificates), or by the Trustee (in any other
case) and mailed by the Trustee to the Certificateholders not earlier than the 15th day and
not later than the 25th 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 where required pursuant to this
Agreement or, in the case of the purchase by the Master Servicer of the outstanding
Certificates, the Distribution Date on which such purchase is to be made,
(ii) the amount of any such final payment, or in the case of the purchase of the
outstanding Certificates, the purchase price, in either case, 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, or in the case of all of the
Certificates in connection with the exercise by the Master Servicer of its right to
purchase the Certificates, that payment will be made only upon presentation and
surrender of the Certificates at the office or agency of the Trustee therein
specified.
If the Master 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 and, if the Master Servicer is exercising its rights to purchase the
outstanding Certificates, it shall give such notice to each Rating Agency at the time such
notice is given to Certificateholders. As a result of the exercise by the Master Servicer of
its right to purchase the assets of the Trust Fund, the Master Servicer shall deposit in the
Certificate 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 provided
above. As a result of the exercise by the Master Servicer of its right to purchase the
outstanding Certificates, the Master Servicer shall deposit in an Eligible Account,
established by the Master Servicer on behalf of the Trustee and separate from the
Certificate Account in the name of the Trustee in trust for the registered holders of the
Certificates, before the Distribution Date on which such purchase is to occur in immediately
available funds an amount equal to the purchase price for the Certificates, computed as
above provided, and provide notice of such deposit to the Trustee. The Trustee will
withdraw from such account the amount specified in subsection (c) below.
(c) In the case of the Senior Certificates, upon presentation and surrender of the
Certificates by the Certificateholders thereof, and in the case of the Class M and Class B
Certificates, upon presentation and surrender of the Certificates by the Certificateholders
thereof in connection with the exercise by the Master Servicer of its right to purchase the
Certificates, and otherwise in accordance with Section 4.01(a), the Trustee shall distribute
to the Certificateholders (i) the amount otherwise distributable on such Distribution Date,
if not in connection with the Master Servicer's election to repurchase the assets of the
Trust Fund or the outstanding Certificates, or (ii) if the Master Servicer elected to so
repurchase the assets of the Trust Fund or the outstanding Certificates, 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). Notwithstanding the reduction of
the Certificate Principal Balance of any Class of Subordinate Certificates to zero, such
Class will be outstanding hereunder until the termination of the respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee hereunder in accordance
with Article IX.
(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 Certificate 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, which may be non-interest bearing, for the benefit of such Certificateholders, and
the Master Servicer (if it exercised its right to purchase the 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 Master 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 Master Servicer all amounts distributable to the holders thereof and the Master 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 Master 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.
(e) If any Certificateholders do not surrender their Certificates on or before the
Distribution Date on which a purchase of the outstanding Certificates is to be made, the
Trustee shall on such date cause all funds in the Certificate Account deposited therein by
the Master Servicer pursuant to Section 9.01(b) to be withdrawn therefrom and deposited in a
separate escrow account, which may be non-interest bearing, for the benefit of such
Certificateholders, and the Master 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
Master 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 9.01, the Trustee shall pay to the Master
Servicer all amounts distributable to the Holders thereof and the Master 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
Master Servicer as a result of such Certificateholder's failure to surrender its
Certificate(s) for payment in accordance with this Section 9.01. Any Certificate that is
not surrendered on the Distribution Date on which a purchase pursuant to this Section 9.01
occurs as provided above will be deemed to have been purchased and the Holder as of such
date will 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 until the Master Servicer has
terminated the respective obligations and responsibilities created hereby in respect of the
Certificates pursuant to this Article IX. The Master Servicer shall be for all purposes the
Holder thereof as of such date.
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
Master 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 each such 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 such REMIC to fail to qualify as a REMIC at any time that any Certificate is
outstanding:
(i) The Master Servicer shall establish a 90-day liquidation period for each 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 Master
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 Master 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 Master Servicer or the Company is exercising its right to purchase the assets
of the Trust Fund, the Master 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 Master Servicer as its attorney-in-fact to adopt a plan of complete liquidation for each
REMIC at the expense of the Trust Fund in accordance with the terms and conditions of this
Agreement.
Section 9.03. Termination of Multiple REMICs.
If the REMIC Administrator makes two or more separate REMIC elections, the applicable
REMIC shall be terminated on the earlier of the Final Distribution Date and the date on
which it is deemed to receive the last deemed distributions on the related Uncertificated
REMIC Regular Interests and the last distribution due on the Certificates is made.
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The REMIC Administrator shall make an election to treat the Trust Fund as one or more
REMICs under the Code and, if necessary, under applicable state law. The assets of each
such REMIC will be set forth in the Series Supplement. Such election will be made on Form
1066 or other appropriate federal tax or information return (including Form 8811) or any
appropriate state return for the taxable year ending on the last day of the calendar year in
which the Certificates are issued. For the purposes of each REMIC election in respect of
the Trust Fund, Certificates and interests to be designated as the "regular interests" and
the sole class of "residual interests" in the REMIC will be set forth in Section 10.03 of
the Series Supplement. The REMIC Administrator and the Trustee shall not permit the
creation of any "interests" (within the meaning of Section 860G of the Code) in any 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 the Trust Fund within
the meaning of Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate representing a 0.01%
Percentage Interest 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. If the REMIC Administrator is no longer the
Master Servicer hereunder, at its option the REMIC Administrator may continue its duties as
REMIC Administrator and shall be paid reasonable compensation not to exceed $3,000 per year
by any successor Master Servicer hereunder for so acting as the REMIC Administrator.
(d) The REMIC Administrator shall prepare or cause to be prepared all of the Tax Returns
that it determines are required with respect to each REMIC created hereunder and deliver
such Tax Returns in a timely manner to the Trustee and the Trustee shall sign and file such
Tax Returns in a timely manner. The expenses of preparing such returns shall be borne by
the REMIC Administrator without any right of reimbursement therefor. The REMIC
Administrator agrees to indemnify and hold harmless the Trustee with respect to any tax or
liability arising from the Trustee's signing of Tax Returns that contain errors or
omissions. The Trustee and Master 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.
(f) The Master 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 Master
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 Master
Servicer and the REMIC Administrator, to the extent reasonably requested by the Master
Servicer and the REMIC Administrator to do so). The Master 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 formed under the
Series Supplement as a REMIC or (ii) result in the imposition of a tax upon any such REMIC
(including but not limited to the tax on prohibited transactions as 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 Master
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 Master 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 Master 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 Master
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 Master 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 such REMIC to take any action, which is not expressly permitted under the terms
of this Agreement, the Trustee will consult with the Master 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 such REMIC, and the
Trustee shall not take any such action or cause any such REMIC to take any such action as to
which the Master Servicer or the REMIC Administrator, as applicable, has advised it in
writing that an Adverse REMIC Event could occur. The Master 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 Master Servicer or the REMIC
Administrator. At all times as may be required by the Code, the Master Servicer will 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 such REMIC as defined in Section 860G(c) of the Code, on any
contributions to any such REMIC after the Startup Day therefor pursuant to Section 860G(d)
of the Code, or any other tax is imposed by the Code or any applicable provisions of state
or local tax laws, such tax shall be charged (i) to the Master Servicer, if such tax arises
out of or results from a breach by the Master Servicer of any of its obligations under this
Agreement or the Master 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 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 Master 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 Master Servicer nor the Trustee shall accept
any contributions of assets to any REMIC created hereunder unless (subject to Section
10.01(f)) the Master 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 the REMIC to fail to qualify as a REMIC at any
time that any Certificates are outstanding or subject the REMIC to any tax under the REMIC
Provisions or other applicable provisions of federal, state and local law or ordinances.
(j) Neither the Master 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 such REMIC to receive any income from assets other
than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations,
the "latest possible maturity date" by which the Certificate Principal Balance of each Class
of Certificates (other than the Interest Only Certificates) representing a regular interest
in the applicable REMIC and the Uncertificated Principal Balance of each Uncertificated
REMIC Regular Interest (other than each Uncertificated REMIC Regular Interest represented by
a Class A-V Certificate, if any) and the rights to the Interest Only Certificates and
Uncertificated REMIC Regular Interest represented by a Class A-V Certificate would be
reduced to zero is the Maturity Date for each such Certificate and Interest.
(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 Master 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 any such 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 such REMIC, nor sell or dispose of any investments
in the Custodial Account or the Certificate Account for gain nor accept any contributions to
any such 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
such REMIC as a REMIC or (b) unless the Master Servicer has determined in its sole
discretion to indemnify the Trust Fund against such tax, cause such REMIC to be subject to a
tax on "prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
Section 10.02. Master Servicer, REMIC Administrator and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Company, the REMIC Administrator
and the Master 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
Master 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 Master
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
Master 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 will not be imposed to the extent such breach is a result of an
error or omission in information provided to the REMIC Administrator by the Master Servicer
in which case Section 10.02(c) will apply.
(c) The Master 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 Master 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 Master Servicer that contain errors or omissions.
Section 10.03. Designation of REMIC(s).
As provided in Section 10.03 of the Series Supplement.
Section 10.04. Distributions on the Uncertificated REMIC I and REMIC II Regular Interests.
As provided in Section 10.04 of the Series Supplement.
Section 10.05. Compliance with Withholding Requirements.
As provided in Section 10.05 of the Series Supplement.
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 Master 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 the Trust Fund 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
Certificate Account or to change the name in which the Custodial Account is
maintained, provided that (A) the Certificate 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 (in the
case of the Insured Certificates (as defined in the Series Supplement), such
determination shall be made without giving effect to the Certificate Policy (as
defined in the Series Supplement)), 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 (in the case of the Insured Certificates (as defined in the
Series Supplement), such determination shall be made without giving effect to the
Certificate Policy (as defined in the Series Supplement)), 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,
(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 Master 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 with a Certificate Principal Balance greater than zero 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 Master
Servicer, the Company or the Trustee in accordance with such amendment is permitted
hereunder and will not result in the imposition of a federal tax on the Trust Fund or cause
any REMIC created under the Series Supplement 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.
(e) The Company shall have the option, in its sole discretion, to obtain and deliver to
the Trustee any corporate guaranty, payment obligation, irrevocable letter of credit, surety
bond, insurance policy or similar instrument or a reserve fund, or any combination of the
foregoing, for the purpose of protecting the Holders of the Class B Certificates against any
or all Realized Losses or other shortfalls. Any such instrument or fund shall be held by
the Trustee for the benefit of the Class B Certificateholders, but shall not be and shall
not be deemed to be under any circumstances included in the Trust Fund. To the extent that
any such instrument or fund constitutes a reserve fund for federal income tax purposes, (i)
any reserve fund so established shall be an outside reserve fund and not an asset of the
Trust Fund, (ii) any such reserve fund shall be owned by the Company, and (iii) amounts
transferred by the Trust Fund to any such reserve fund shall be treated as amounts
distributed by the Trust Fund to the Company or any successor, all within the meaning of
Treasury Regulations Section 1.860G-2(h) as it reads as of the Cut-off Date. In connection
with the provision of any such instrument or fund, this Agreement and any provision hereof
may be modified, added to, deleted or otherwise amended in any manner that is related or
incidental to such instrument or fund or the establishment or administration thereof, such
amendment to be made by written instrument executed or consented to by the Company but
without the consent of any Certificateholder and without the consent of the Master Servicer
or the Trustee being required unless any such amendment would impose any additional
obligation on, or otherwise adversely affect the interests of the Senior Certificateholders,
the Class M Certificateholders, the Master Servicer or the Trustee, as applicable; provided
that the Company obtains (subject to Section 10.01(f)) an Opinion of Counsel (which need not
be an opinion of Independent counsel) to the effect that any such amendment 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 and (b) any REMIC
created hereunder to fail to qualify as a REMIC at any time that any Certificate is
outstanding. In the event that the Company elects to provide such coverage in the form of a
limited guaranty provided by GMAC LLC, the Company may elect that the text of such amendment
to this Agreement shall be substantially in the form attached hereto as Exhibit K (in which
case Residential Funding's Subordinate Certificate Loss Obligation as described in such
exhibit shall be established by Residential Funding's consent to such amendment) and that
the limited guaranty shall be executed in the form attached hereto as Exhibit L, with such
changes as the Company shall deem to be appropriate; it being understood that the Trustee
has reviewed and approved the content of such forms and that the Trustee's consent or
approval to the use thereof is not required.
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 Master 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.
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.
Section 11.05. Notices.
As provided in Section 11.05 of the Series Supplement.
Section 11.06. Required Notices to Rating Agency and Subservicer.
The Company, the Master Servicer or the Trustee, as applicable, (i) shall notify each
Rating Agency at such time as it is otherwise required pursuant to this Agreement to give
notice of the occurrence of, any of the events described in clause (a), (b), (c), (d), (g),
(h), (i) or (j) below, (ii) shall notify 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)(1), (g)(1), or (i) below, or (iii) 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,
(c) (1) the termination or appointment of a successor Master Servicer or (2) the
termination or appointment of a successor Trustee or a change in the majority
ownership of the Trustee,
(d) the filing of any claim under the Master 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,
(f) the statements required to be delivered pursuant to Sections 3.18 and 3.19,
(g) (1) a change in the location of the Custodial Account or (2) a change in the location
of the Certificate Account,
(h) the occurrence of any monthly cash flow shortfall to the Holders of any Class of
Certificates resulting from the failure by the Master Servicer to make an Advance
pursuant to Section 4.04,
(i) the occurrence of the Final Distribution Date, and
(j) the repurchase of or substitution for any Mortgage Loan,
provided, however, that with respect to notice of the occurrence of the events described in
clauses (d), (g) or (h) above, the Master Servicer shall provide prompt written notice to
each Rating Agency and the Subservicer, if applicable, of any such event known to the Master
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 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 Master Servicer and the Trustee; provided,
that neither the Master 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 or other entity not subject to
taxation for federal income tax purposes and (ii) the adoption of the Supplemental Article
will not endanger the status of the Trust Fund as a REMIC or (subject to Section 10.01(f))
result in the imposition of a tax upon the Trust Fund (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.
As provided in Section 11.09 of the Series Supplement.
Section 11.10. No Petition.
As provided in Section 11.10 of the Series Supplement.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01. Intent of the Parties; Reasonableness.
The Company, the Trustee and the Master Servicer acknowledge and agree that
the purpose of this Article XII is to facilitate compliance by the Company with the
provisions of Regulation AB and related rules and regulations of the Commission. The
Company shall not exercise its right to request delivery of information or other performance
under these provisions other than in good faith, or for purposes other than compliance with
the Securities Act, the Exchange Act and the rules and regulations of the Commission under
the Securities Act and the Exchange Act. Each of the Master Servicer and the Trustee
acknowledges that interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff, consensus
among participants in the mortgage-backed securities markets, advice of counsel, or
otherwise, and agrees to comply with reasonable requests made by the Company in good faith
for delivery of information under these provisions on the basis of evolving interpretations
of Regulation AB. Each of the Master Servicer and the Trustee shall cooperate reasonably
with the Company to deliver to the Company (including any of its assignees or designees),
any and all disclosure, statements, reports, certifications, records and any other
information necessary in the reasonable, good faith determination of the Company to permit
the Company to comply with the provisions of Regulation AB.
Section 12.02. Additional Representations and Warranties of the Trustee.
(a) The Trustee shall be deemed to represent and warrant to the Company as
of the Closing Date and on each date on which information is provided to the Company under
Sections 12.01, 12.02(b) or 12.03 that, except as disclosed in writing to the Company prior
to such date: (i) it is not aware and has not received notice that any default, early
amortization or other performance triggering event has occurred as to any other
Securitization Transaction due to any default of the Trustee; (ii) there are no aspects of
its financial condition that could have a material adverse effect on the performance by it
of its trustee obligations under this Agreement or any other Securitization Transaction as
to which it is the trustee; (iii) there are no material legal or governmental proceedings
pending (or known to be contemplated) against it that would be material to
Certificateholders; (iv) there are no relationships or transactions (as described in Item
1119(b) of Regulation AB) relating to the Trustee with respect to the Company or any
sponsor, issuing entity, servicer, trustee, originator, significant obligor, enhancement or
support provider or other material transaction party (as each of such terms are used in
Regulation AB) relating to the Securitization Transaction contemplated by the Agreement, as
identified by the Company to the Trustee in writing as of the Closing Date (each, a
"Transaction Party") that are outside the ordinary course of business or on terms other than
would be obtained in an arm's length transaction with an unrelated third party, apart from
the Securitization Transaction, and that are material to the investors' understanding of the
Certificates; and (v) the Trustee is not an affiliate (as contemplated by Item 1119(a) of
Regulation AB) of any Transaction Party. The Company shall notify the Trustee of any change
in the identity of a Transaction Party after the Closing Date.
(b) If so requested by the Company on any date following the Closing Date,
the Trustee shall, within five Business Days following such request, confirm in writing the
accuracy of the representations and warranties set forth in paragraph (a) of this Section
or, if any such representation and warranty is not accurate as of the date of such
confirmation, provide the pertinent facts, in writing, to the Company. Any such request
from the Company shall not be given more than once each calendar quarter, unless the Company
shall have a reasonable basis for questioning the accuracy of any of the representations and
warranties.
Section 12.03. Information to Be Provided by the Trustee.
For so long as the Certificates are outstanding, for the purpose of satisfying
the Company's reporting obligation under the Exchange Act with respect to any class of
Certificates, the Trustee shall provide to the Company a written description of (a) any
litigation or governmental proceedings pending against the Trustee as of the last day of
each calendar month that would be material to Certificateholders, and (b) any affiliations
or relationships (as described in Item 1119 of Regulation AB) that develop following the
Closing Date between the Trustee and any Transaction Party of the type described in Section
12.02(a)(iv) or 12.02(a)(v) as of the last day of each calendar year. Any descriptions
required with respect to legal proceedings, as well as updates to previously provided
descriptions, under this Section 12.03 shall be given no later than five Business Days prior
to the Determination Date following the month in which the relevant event occurs, and any
notices and descriptions required with respect to affiliations, as well as updates to
previously provided descriptions, under this Section 12.03 shall be given no later than
January 31 of the calendar year following the year in which the relevant event occurs. As
of the related Distribution Date with respect to each Report on Form 10-D with respect to
the Certificates filed by or on behalf of the Company, and as of March 15 preceding the date
each Report on Form 10-K with respect to the Certificates is filed, the Trustee shall be
deemed to represent and warrant that any information previously provided by the Trustee
under this Article XII is materially correct and does not have any material omissions unless
the Trustee has provided an update to such information. The Company will allow the Trustee
to review any disclosure relating to material litigation against the Trustee prior to filing
such disclosure with the Commission to the extent the Company changes the information
provided by the Trustee.
Section 12.04. Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Trustee shall:
(a) deliver to the Company a report (in form and substance reasonably satisfactory to the
Company) regarding the Trustee's assessment of compliance with the applicable Servicing
Criteria during the immediately preceding calendar year, as required under Rules 13a-18 and
15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be signed by
an authorized officer of the Trustee, and shall address each of the Servicing Criteria
specified on Exhibit R hereto; and
(b) deliver to the Company a report of a registered public accounting firm satisfying the
requirements of Rule 2-01 of Regulation S-X under the Securities Act and the Exchange Act
that attests to, and reports on, the assessment of compliance made by the Trustee and
delivered pursuant to the preceding paragraph. Such attestation shall be in accordance with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.
Section 12.05. Indemnification; Remedies.
(a) The Trustee shall indemnify the Company, each affiliate of the Company, the Master
Servicer and each affiliate of the Master Servicer, and the respective present and former
directors, officers, employees and agents of each of the foregoing, and shall hold each of
them harmless from and against any losses, damages, penalties, fines, forfeitures, legal
fees and expenses and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or alleged to
be contained in any information, report, certification, accountants' attestation or other
material provided under this Article XII by or on behalf of the Trustee (collectively, the
"Trustee Information"), or (B) the omission or alleged omission to state in the Trustee
Information a material fact required to be stated in the Trustee Information or necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading; or
(ii) any failure by the Trustee to deliver any information, report,
certification or other material when and as required under this Article XII, other than a
failure by the Trustee to deliver an accountants' attestation.
(b) In the case of any failure of performance described in clause (ii) of
Section 12.05(a), as well as a failure to deliver an accountants' attestation, the Trustee
shall (i) promptly reimburse the Company for all costs reasonably incurred by the Company in
order to obtain the information, report, certification, accountants' attestation or other
material not delivered by the Trustee as required and (ii) cooperate with the Company to
mitigate any damages that may result from such failure.
(c) The Company and the Master Servicer shall indemnify the Trustee, each affiliate of
the Trustee and the respective present and former directors, officers, employees and agents
of the Trustee, and shall hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs, judgments, and any
other costs, fees and expenses that any of them may sustain arising out of or based upon (i)
any untrue statement of a material fact contained or alleged to be contained in any
information provided under this Agreement by or on behalf of the Company or Master Servicer
for inclusion in any report filed with Commission under the Exchange Act (collectively, the
"RFC Information"), or (ii) the omission or alleged omission to state in the RFC Information
a material fact required to be stated in the RFC Information or necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading.
(d) Notwithstanding any provision in this Section 12.05 to the contrary, the parties
agree that none of the Trustee, the Company or the Master Servicer shall be liable to the
other for any consequential or punitive damages whatsoever, whether in contract, tort
(including negligence and strict liability), or any other legal or equitable principle;
provided, however, that such limitation shall not be applicable with respect to third party
claims made against a party.
EXHIBIT A
FORM OF CLASS A CERTIFICATE, [PRINCIPAL ONLY/CLASS A-P] CERTIFICATE AND [INTEREST ONLY/CLASS
A-V] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE
DATE OF THIS CERTIFICATE IS ___________ __, ____. ASSUMING THAT THE MORTGAGE LOANS PREPAY
AT [___]% OF THE PREPAYMENT SPEED ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT),
[AND ASSUMING A CONSTANT PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS
CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $[ ] OF OID PER [$1,000] [$100,000]
OF [INITIAL CERTIFICATE PRINCIPAL BALANCE] [NOTIONAL AMOUNT], THE YIELD TO MATURITY IS
[ ]% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN
$[ ] PER [$1,000] [$100,000] OF [INITIAL CERTIFICATE PRINCIPAL BALANCE]
[NOTIONAL AMOUNT], COMPUTED USING THE APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT
THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT SPEED ASSUMPTION OR AT ANY
OTHER RATE OR AS TO THE CONSTANCY OF THE PASS-THROUGH RATE.]
Certificate No. [ %][Variable] Pass-Through Rate [based on a Notional
Amount]
Class A- Senior
Date of Pooling and Servicing [Percentage Interest: %]
Agreement and Cut-off Date:
___________ 1, ____ Aggregate Initial [Certificate Principal Balance] [[Interest
Only/Class A-V] Notional Amount] [Subclass Notional Amount]
First Distribution Date: of the Class A- Certificates:
_________ 25, ____
[Initial] [Certificate Principal
Master Servicer: Balance] [Interest Only/Class A-V] [Subclass]
Residential Funding Notional Amount] of this Certificate:
Company, LLC $ ]
Assumed Final CUSIP 76110F-
Distribution Date:
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES ____-___
evidencing a percentage interest in the distributions allocable
to the Class A- Certificates with respect to a Trust Fund
consisting primarily of a pool of [conventional one- to
four-family fixed interest rate first mortgage loans] formed
and sold by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does
not represent an obligation of or interest in Residential Accredit Loans, Inc., the Master
Servicer, the Trustee referred to below or GMAC Mortgage Group, LLC or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Residential Accredit Loans,
Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, LLC or any of
their affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that
is the registered owner of the Percentage Interest evidenced by this Certificate [(obtained
by dividing the [Initial Certificate Principal Balance] [Initial [Interest Only/Class A-V]
Notional Amount] of this Certificate by the aggregate [Initial Certificate Principal Balance
of all Class A- Certificates] [Initial [Interest Only/Class A-V] Notional Amounts of
all [Interest Only/Class A-V] Certificates], both as specified above)] in certain
distributions with respect to the Trust Fund consisting primarily of an interest in a pool
of [conventional one- to four-family fixed interest rate first mortgage loans] (the
"Mortgage Loans"), formed and sold by Residential Accredit Loans, Inc. (hereinafter called
the "Company," which term includes any successor entity under the Agreement referred to
below). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Company, the Master Servicer and
__________________, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents
and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing as described in the Agreement,
to the Person in whose name this Certificate is registered at the close of business on the
last day (or if such last day is not a Business Day, the Business Day immediately preceding
such last day) of the month immediately preceding the month of such distribution (the
"Record Date"), from the Available Distribution Amount in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount [(of interest and
principal, if any)] required to be distributed to Holders of Class A- Certificates on
such Distribution Date. [The [Interest Only/Class A-V] Notional Amount of the [Interest
Only/Class A-V] Certificates as of any date of determination is equal to the aggregate
Stated Principal Balance of the Mortgage Loans corresponding to the Uncertificated REMIC
Regular Interests represented by such [Interest Only/Class A-V] Certificates.] [The Subclass
Notional Amount of the [Interest Only/Class A-V]- Certificates as of any date of
determination is equal to the aggregate Stated Principal Balance of the Mortgage Loans
corresponding to the Uncertificated REMIC Regular Interests represented by such [Interest
Only/Class A-V]- Certificates immediately prior to such date.] [The [Interest Only/Class
A-V][- ] Certificates have no Certificate Principal Balance.]
Distributions on this Certificate will be made either by the Master Servicer
acting on behalf of the Trustee or by a Paying Agent appointed by the Trustee in immediately
available funds (by wire transfer or otherwise) for the account of the Person entitled
thereto if such Person shall have so notified the Master Servicer or such Paying Agent, or
by check mailed to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee for that
purpose. The [Initial Certificate Principal Balance] [Initial [Interest Only/Class A-V]
Notional Amount] [initial Subclass Notional Amount] of this Certificate is set forth above.]
[The Certificate Principal Balance hereof will be reduced to the extent of distributions
allocable to principal and any Realized Losses allocable hereto.]
This Certificate is one of a duly authorized issue of Certificates issued in
several Classes designated as Mortgage Asset-Backed Pass-Through Certificates of the Series
specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in
the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the
Agreement, from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be made by the
Master Servicer from time to time for purposes other than distributions to
Certificateholders, such purposes including without limitation reimbursement to the Company
and the Master Servicer of advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the amendment
of the Agreement and the modification of the rights and obligations of the Company, the
Master Servicer and the Trustee and the rights of the Certificateholders under the Agreement
at any time by the Company, the Master 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. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders
of this Certificate and of any Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain circumstances
without the consent of the Holders of any of the Certificates and, in certain additional
circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the offices or agencies
appointed by the Trustee, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons
in Classes and in denominations specified in the Agreement. As provided in the Agreement
and subject to certain limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same Class and aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar
and any agent of the Company, the Master Servicer, the Trustee or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan and (ii) the purchase by the Master
Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to (i) purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all property
acquired in respect of any Mortgage Loan or (ii) purchase in whole, but not in part, all of
the Certificates from the Holders thereof; provided, that any such option may only be
exercised if the Pool Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: _________________ [_________________________],
as Trustee
By: _________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the
within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: __________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _________________________________________________________________________________(Please
print or typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Asset-Backed Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such Certificate to
the following address:
_________________________________________
Dated:____________________ Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available
funds to ______________________________ for the account of _________________________ account
number __________________, or, if mailed by check, to ______________________________.
Applicable statements should be mailed to __________________________.
This information is provided by ____________________, the assignee named above, or
_____________________, as its agent.
EXHIBIT A-1
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST" IN A
"REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
Certificate No. ____ Variable Pass-Through Rate
Class X Senior
Date of Pooling and Servicing Agreement Percentage Interest: 100%
and Cut-off Date: __________ 1, ____
Master Servicer: Aggregate Initial Notional Amount of the Class X
Residential Funding Company, LLC Certificates: $__________
First Distribution Date: Initial Notional Amount of this Certificate: $_____________
__________ 25, ____
Assumed Final Distribution Date: CUSIP ________
_____________
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES ____-____
Evidencing a percentage interest in the distributions allocable to the Class X
Certificates with respect to a Trust Fund consisting primarily of a pool of
[one- to four-family residential, payment-option, adjustable-rate first lien
mortgage loans with a negative amortization feature] formed and sold by
RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Residential Accredit Loans, Inc., the Master
Servicer, the Trustee referred to below or GMAC Mortgage Group, LLC or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Residential Accredit Loans,
Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, LLC or any of
their affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that _________________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the Initial Notional
Amount of this Certificate by the Aggregate Notional Amount of all Class X Certificates,
both as specified above) in certain distributions with respect to the Trust Fund consisting
primarily of an interest in a pool of [one- to four-family residential, payment-option,
adjustable-rate first lien mortgage loans with a negative amortization feature] (the
"Mortgage Loans"), formed and sold by Residential Accredit Loans, Inc. (hereinafter called
the "Company," which term includes any successor entity under the Agreement referred to
below). The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Company, the Master Servicer and
________________________, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents
and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day
of each month or, if such 25th day is not a Business Day, the Business Day immediately
following (the "Distribution Date"), commencing as described in the Agreement, to the Person
in whose name this Certificate is registered at the close of business on the last day (or if
such last day is not a Business Day, the Business Day immediately preceding such last day)
of the month immediately preceding the month of such distribution (the "Record Date"), from
the Available Distribution Amount in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed to Holders
of Class X Certificates on such Distribution Date. The Class X Certificates have no
Certificate Principal Balance.
Distributions on this Certificate will be made either by the Master Servicer acting
on behalf of the Trustee or by a Paying Agent appointed by the Trustee in immediately
available funds (by wire transfer or otherwise) for the account of the Person entitled
thereto if such Person shall have so notified the Master Servicer or such Paying Agent, or
by check mailed to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be made
after due notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee for that
purpose. The Initial Notional Amount of this Certificate is set forth above.
This Certificate is one of a duly authorized issue of Certificates issued in several
Classes designated as Mortgage Asset-Backed Pass-Through Certificates of the Series
specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in
the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the
Agreement, from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or the
Certificate Account created for the benefit of Certificateholders may be made by the Master
Servicer from time to time for purposes other than distributions to Certificateholders, such
purposes including without limitation reimbursement to the Company and the Master Servicer
of advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the amendment of the
Agreement and the modification of the rights and obligations of the Company, the Master
Servicer and the Trustee and the rights of the Certificateholders under the Agreement at any
time by the Company, the Master 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. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future holders of
this Certificate and of any Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain circumstances
without the consent of the Holders of any of the Certificates and, in certain additional
circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set forth,
the transfer of this Certificate is registrable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the offices or agencies appointed by the
Trustee, duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable only as registered Certificates without coupons in
Classes and in denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same Class and aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange, but
the Trustee may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar and any
agent of the Company, the Master Servicer, the Trustee or the Certificate Registrar may
treat the Person in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Company, the Master Servicer, the Trustee nor any such agent shall
be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of
the State of New York.
The obligations created by the Agreement in respect of the Certificates and the Trust
Fund created thereby shall terminate upon the payment to Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan and (ii) the purchase by the Master
Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to (i) purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all property
acquired in respect of any Mortgage Loan or (ii) purchase in whole, but not in part, all of
the Certificates from the Holders thereof; provided, that any such option may only be
exercised if the Pool Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans.
Reference is hereby made to the further provisions of this Certificate set forth on
the reverse hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Certificate
Registrar, by manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated:_________________ [________________________________],
as Trustee
By:______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class X Certificates referred to in the within-mentioned Agreement.
[________________________________],
as Certificate Registrar
By: ________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
_____________________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of assignee) a
Percentage Interest evidenced by the within Mortgage Asset-Backed Pass-Through Certificate
and hereby authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate to the
following address:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
Dated:________________________
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available
funds to ______________________________ for the account of _________________________ account
number __________________, or, if mailed by check, to ______________________________.
Applicable statements should be mailed to __________________________.
This information is provided by ____________________, the assignee named above, or
_____________________, as its agent.
EXHIBIT B
FORM OF CLASS M CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES
[CLASS M-1 CERTIFICATES] [AND CLASS M-2 CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS
DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S.
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE
DATE OF THIS CERTIFICATE IS ___________ __, ____. ASSUMING THAT THE MORTGAGE LOANS PREPAY
AT [___]% OF THE PREPAYMENT SPEED ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT),
THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $[____] OF OID PER $[1,000] OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS [_____]% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $[____] PER $[1,000] OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE APPROXIMATE METHOD. NO REPRESENTATION IS
MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT SPEED ASSUMPTION
OR AT ANY OTHER RATE.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF
ITS PURCHASE OR HOLDING OF THIS CERTIFICATE (OR INTEREST HEREIN) THAT EITHER (A) SUCH
TRANSFEREE IS NOT AN INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY PLAN, OR ANY
OTHER PERSON, ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF OR PURCHASING ANY CERTIFICATE
WITH "PLAN ASSETS" OF ANY PLAN (A "PLAN INVESTOR"), (B) IT HAS ACQUIRED AND IS HOLDING SUCH
CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION EXEMPTION ("PTE") 94-29, AS MOST RECENTLY
AMENDED, PTE 2002-41, 67 FED. REG. 54487 (AUGUST 22, 2002) (THE "RFC EXEMPTION"), AND THAT
IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE RFC EXEMPTION
INCLUDING THAT SUCH CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE, NOT LOWER THAN
"BBB-" (OR ITS EQUIVALENT) BY STANDARD & POOR'S, FITCH OR XXXXX'X OR (C) (I) THE TRANSFEREE
IS AN INSURANCE COMPANY, (II) THE SOURCE OF FUNDS TO BE USED BY IT TO PURCHASE THE
CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF 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 THIS CLAUSE (C), A "COMPLYING INSURANCE COMPANY).
IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR HELD BY ANY PERSON THAT
DOES NOT SATISFY THE CONDITIONS DESCRIBED IN THE PRECEDING PARAGRAPH, THEN THE LAST
PRECEDING TRANSFEREE THAT EITHER (I) IS NOT A PLAN INVESTOR, (II) ACQUIRED SUCH CERTIFICATE
IN COMPLIANCE WITH THE RFC 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 THIS CERTIFICATE. THE TRUSTEE SHALL BE
UNDER NO LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS DUE ON THIS CERTIFICATE TO SUCH
PRECEDING TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE (OR
INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION 5.02(e) OF THE
POOLING AND SERVICING AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE COMPANY, THE TRUSTEE,
THE MASTER 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.
Certificate No. [________]% Pass-Through Rate
Class M- Subordinate Aggregate Certificate
Principal Balance
Date of Pooling and Servicing of the Class M Certificates:
Agreement and Cut-off Date: $_______________
___________ 1, ____
Initial Certificate Principal
First Distribution Date: Balance of this Certificate:
_________ 25, ____ $_______________
Master Servicer: CUSIP: 76110F-
Residential Funding Company, LLC
Assumed Final Distribution Date:
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the Class
M- Certificates with respect to the Trust Fund consisting primarily of a
pool of [conventional one- to four-family fixed interest rate first mortgage
loans] formed and sold by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does
not represent an obligation of or interest in Residential Accredit Loans, Inc., the Master
Servicer, the Trustee referred to below or GMAC Mortgage Group, LLC or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Residential Accredit Loans,
Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, LLC or any of
their affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that is the
registered owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the Certificate Principal Balance of this Certificate by the aggregate Certificate
Principal Balance of all Class M- Certificates, both as specified above) in certain
distributions with respect to a Trust Fund consisting primarily of a pool of [conventional
one- to four-family fixed interest rate first mortgage loans] (the "Mortgage Loans"), formed
and sold by Residential Accredit Loans, Inc. (hereinafter called the "Company," which term
includes any successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Company, the Master Servicer and __________________, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing as described in the Agreement,
to the Person in whose name this Certificate is registered at the close of business on the
last day (or if such last day is not a Business Day, the Business Day immediately preceding
such last day) of the month immediately preceding the month of such distribution (the
"Record Date"), from the Available Distribution Amount in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to Holders of Class M- Certificates on
such Distribution Date.
Distributions on this Certificate will be made either by the Master Servicer
acting on behalf of the Trustee or by a Paying Agent appointed by the Trustee in immediately
available funds (by wire transfer or otherwise) for the account of the Person entitled
thereto if such Person shall have so notified the Master Servicer or such Paying Agent, or
by check mailed to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee for that
purpose. The Initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of the distributions
allocable to principal and any Realized Losses allocable hereto.
Any transferee of this Certificate will be deemed to have represented by
virtue of its purchase or holding of this Certificate (or interest herein) that either (a)
such transferee is not an investment manager, a named fiduciary or a trustee of any plan, or
any other person, acting, directly or indirectly, on behalf of or purchasing any Certificate
with "plan assets" of any plan (a "plan investor"), (b) it has acquired and is holding such
Certificate in reliance on prohibited transaction exemption ("PTE") 94-29, as most recently
amended, PTE 2002-41, 67 fed. Reg. 54487 (August 22, 2002) (the "RFC Exemption"), and that
it understands that there are certain conditions to the availability of the RFC Exemption
including that such Certificate must be rated, at the time of purchase, not lower than
"BBB-" (or its equivalent) by Standard & Poor's, Fitch or Xxxxx'x or (c) (i) the transferee
is an insurance company, (ii) the source of funds to be used by it to purchase the
Certificate is an "insurance company general account" (within the meaning of 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 this clause (c), a "complying insurance company).
If this Certificate (or any interest herein) is acquired or held by any person
that does not satisfy the conditions described in the preceding paragraph, then the last
preceding transferee that either (i) is not a plan investor, (ii) acquired such Certificate
in compliance with the RFC 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 this Certificate. The Trustee shall be
under no liability to any person for making any payments due on this Certificate to such
preceding transferee.
This Certificate is one of a duly authorized issue of Certificates issued in
several Classes designated as Mortgage Asset-Backed Pass-Through Certificates of the Series
specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in
the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the
Agreement, from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be made by the
Master Servicer from time to time for purposes other than distributions to
Certificateholders, such purposes including without limitation reimbursement to the Company
and the Master Servicer of advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the amendment
of the Agreement and the modification of the rights and obligations of the Company, the
Master Servicer and the Trustee and the rights of the Certificateholders under the Agreement
at any time by the Company, the Master 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. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders
of this Certificate and of any Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain circumstances
without the consent of the Holders of any of the Certificates and, in certain additional
circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the offices or agencies
appointed by the Trustee, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons
in Classes and in denominations specified in the Agreement. As provided in the Agreement
and subject to certain limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same Class and aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar
and any agent of the Company, the Master Servicer, the Trustee or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan and (ii) the purchase by the Master
Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to (i) purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all property
acquired in respect of any Mortgage Loan or (ii) purchase in whole, but not in part, all of
the Certificates from the Holders thereof; provided, that any such option may only be
exercised if the Pool Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: _____________________ [____________________________],
as Trustee
By: __________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class M- Certificates referred to in the
within-mentioned Agreement.
[_________________________],
as Certificate Registrar
By: _____________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _______________________________________________________________________ (Please
print or typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Asset-Backed Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such Certificate to
the following address:
Dated: ______________ _________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available
funds to ______________________________ for the account of _________________________ account
number __________________, or, if mailed by check, to ______________________________.
Applicable statements should be mailed to __________________________.
This information is provided by ____________________, the assignee named above, or
_____________________, as its agent.
EXHIBIT C
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES AND CLASS M
CERTIFICATES [AND CLASS B-1] [CLASS B-2 CERTIFICATES] DESCRIBED IN THE AGREEMENT (AS DEFINED
HEREIN).
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS
IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES
EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT
SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST" IN A
"REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE CODE. THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE
PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS ___________ __, ____. ASSUMING
THAT THE MORTGAGE LOANS PREPAY AT 100% OF THE PREPAYMENT SPEED ASSUMPTION (AS DESCRIBED IN
THE PROSPECTUS SUPPLEMENT), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $[ ] OF
OID PER $[1,000] OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS
[ ]% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN
$[ ] PER $[1,000] OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE
APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE
BASED ON THE PREPAYMENT SPEED ASSUMPTION OR AT ANY OTHER RATE.
Certificate No. [________]% Pass-Through Rate
Class B- Subordinate Aggregate Certificate
Principal Balance
Date of Pooling and Servicing of the Class B-
Agreement and Cut-off Date: Certificates as of
___________ 1, ____ the Cut-off Date:
$__________________
First Distribution Date:
_________ 25, ____ Initial Certificate Principal
Balance of this Certificate:
Master Servicer: $__________________
Residential Funding Company, LLC
Assumed Final Distribution Date:
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the Class
B- Certificates with respect to the Trust Fund consisting primarily of a
pool of [conventional one- to four-family fixed interest rate first mortgage
loans] formed and sold by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does
not represent an obligation of or interest in Residential Accredit Loans, Inc., the Master
Servicer, the Trustee referred to below or GMAC Mortgage Group, LLC or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Residential Accredit Loans,
Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, LLC or any of
their affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that Residential Accredit Loans, Inc. is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing the
Certificate Principal Balance of this Certificate by the aggregate Certificate Principal
Balance of all Class B- Certificates, both as specified above) in certain distributions
with respect to a Trust Fund consisting primarily of a pool of [conventional one- to
four-family fixed interest rate first mortgage loans] (the "Mortgage Loans"), formed and
sold by Residential Accredit Loans, Inc. (hereinafter called the "Company," which term
includes any successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Company, the Master Servicer and __________________, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate is registered at the close of
business on the last day (or if such last day is not a Business Day, the Business Day
immediately preceding such last day) of the month next preceding the month of such
distribution (the "Record Date"), from the Available Distribution Amount in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the amount (of
interest and principal, if any) required to be distributed to Holders of Class B
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master Servicer
acting on behalf of the Trustee or by a Paying Agent appointed by the Trustee in immediately
available funds (by wire transfer or otherwise) for the account of the Person entitled
thereto if such Person shall have so notified the Master Servicer or such Paying Agent, or
by check mailed to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee for that
purpose. The Initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of the distributions
allocable to principal and any Realized Losses allocable hereto.
No transfer of this Class B Certificate will be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws or is made in accordance with said Act and laws. In the
event that such a transfer is to be made, (i) the Trustee or the Company may require an
opinion of counsel acceptable to and in form and substance satisfactory to the Trustee and
the Company that such transfer is exempt (describing the applicable exemption and the basis
therefor) from or is being made pursuant to the registration requirements of the Securities
Act of 1933, as amended, and of any applicable statute of any state and (ii) the transferee
shall execute an investment letter in the form described by the Agreement. The Holder
hereof desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Company, the Master Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so exempt or is not
made in accordance with such Federal and state laws. In connection with any such transfer,
the Trustee will also require either (i) an opinion of counsel addressed to the Trustee, the
Company and the Master Servicer, acceptable to and in form and substance satisfactory to the
Trustee with respect to the permissibility of such transfer under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue
Code (the "Code") and stating, among other things, that the transferee's acquisition of a
Class B Certificate will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code or (ii) a representation letter, in
the form as described by Section 5.02(e) of the Agreement, either stating that the
transferee is not an employee benefit or other plan subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any Plan, or
stating that the transferee is an insurance company, the source of funds to be used by it to
purchase the Certificate is an "insurance company general account" (within the meaning of
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60), and the purchase
is being made in reliance upon the availability of the exemptive relief afforded under
Sections I and III of PTCE 95-60.
This Certificate is one of a duly authorized issue of Certificates issued in
several Classes designated as Mortgage Asset-Backed Pass-Through Certificates of the Series
specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in
the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the
Agreement, from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be made by the
Master Servicer from time to time for purposes other than distributions to
Certificateholders, such purposes including without limitation reimbursement to the Company
and the Master Servicer of advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the amendment
of the Agreement and the modification of the rights and obligations of the Company, the
Master Servicer and the Trustee and the rights of the Certificateholders under the Agreement
at any time by the Company, the Master 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. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders
of this Certificate and of any Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain circumstances
without the consent of the Holders of any of the Certificates and, in certain additional
circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the offices or agencies
appointed by the Trustee, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons
in Classes and in denominations specified in the Agreement. As provided in the Agreement
and subject to certain limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same Class and aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar
and any agent of the Company, the Master Servicer, the Trustee or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan and (ii) the purchase by the Master
Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to (i) purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all property
acquired in respect of any Mortgage Loan or (ii) purchase in whole, but not in part, all of
the Certificates from the Holders thereof; provided, that any such option may only be
exercised if the Pool Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: __________________ [_____________________________],
as Trustee
By:____________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B- Certificates referred to in the
within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By:____________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto _______________________________________________________________________________ (Please
print or typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Asset-Backed Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such Certificate to
the following address:
Dated: ___________________ ___________________________________________
Signature by or on behalf of assignor
___________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available
funds to ______________________________ for the account of _________________________ account
number __________________, or, if mailed by check, to ______________________________.
Applicable statements should be mailed to __________________________.
This information is provided by ____________________, the assignee named above, or
_____________________, as its agent.
EXHIBIT C-I
FORM OF CLASS P CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS
IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS
WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT).
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES
EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT
SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No. ___ Prepayment Charge
Class P - Prepayment Charge Aggregate Certificate Principal Balance
of the Class P
Date of Pooling and Servicing Certificates as of
Agreement and Cut-off Date: the Cut-off Date:
__________ 1, ____ $0.00
First Distribution Date: Initial Certificate Principal Balance of this Certificate:
__________ 25, ____ $____
Master Servicer: Percentage Interest of this Certificate:
Residential Funding Company, LLC 100%
Assumed Final Distribution Date: CUSIP: __________
__________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the Class P
Certificates with respect to the Trust Fund consisting primarily of a pool of
[one- to four-family residential, payment-option, adjustable-rate first lien
mortgage loans with a negative amortization feature] formed and sold by
RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does
not represent an obligation of or interest in Residential Accredit Loans, Inc., the Master
Servicer, the Trustee referred to below or GMAC Mortgage Group, LLC or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Residential Accredit Loans,
Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, LLC or any of
their affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that ____________________________ is the registered owner of
the Percentage Interest evidenced by this Certificate (as specified above) in certain
distributions with respect to a Trust Fund consisting primarily of a pool of [one- to
four-family residential, payment-option, adjustable-rate first lien mortgage loans with a
negative amortization feature] (the "Mortgage Loans"), formed and sold by Residential
Accredit Loans, Inc. (hereinafter called the "Company," which term includes any successor
entity under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among the
Company, the Master Servicer and ____________________, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first Distribution Date
specified above, to the Person in whose name this Certificate at the close of business on
the last day (or if such last day is not a Business Day, the Business Day immediately
preceding such last day) of the month immediately preceding the month of such distribution
(the "Record Date"), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to Holders of Class P
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master Servicer
acting on behalf of the Trustee or by a Paying Agent appointed by the Trustee in immediately
available funds (by wire transfer or otherwise) for the account of the Person entitled
thereto if such Person shall have so notified the Master Servicer or such Paying Agent, or
by check mailed to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee for that
purpose.
No transfer of this Class P Certificate will be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws or is made in accordance with said Act and laws. In the
event that such a transfer is to be made, (i) the Trustee or the Company may require an
opinion of counsel acceptable to and in form and substance satisfactory to the Trustee and
the Company that such transfer is exempt (describing the applicable exemption and the basis
therefor) from or is being made pursuant to the registration requirements of the Securities
Act of 1933, as amended, and of any applicable statute of any state and (ii) the transferee
shall execute an investment letter in the form described by the Agreement. The Holder
hereof desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Company, the Master Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so exempt or is not
made in accordance with such Federal and state laws. In connection with any such transfer,
the Trustee will also require either (i) an opinion of counsel addressed to the Trustee, the
Company and the Master Servicer, acceptable to and in form and substance satisfactory to the
Trustee with respect to the permissibility of such transfer under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue
Code (the "Code") and stating, among other things, that the transferee's acquisition of a
Class P Certificate will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code or (ii) a representation letter, in
the form as described by Section 5.02(e) of the Agreement, either stating that the
transferee is not an employee benefit or other plan subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates issued in
several Classes designated as Mortgage Asset-Backed Pass-Through Certificates of the Series
specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in
the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the
Agreement, from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be made by the
Master Servicer from time to time for purposes other than distributions to
Certificateholders, such purposes including without limitation reimbursement to the Company
and the Master Servicer of advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the amendment
of the Agreement and the modification of the rights and obligations of the Company, the
Master Servicer and the Trustee and the rights of the Certificateholders under the Agreement
at any time by the Company, the Master 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. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders
of this Certificate and of any Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain circumstances
without the consent of the Holders of any of the Certificates and, in certain additional
circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the offices or agencies
appointed by the Trustee, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons
in Classes and in denominations specified in the Agreement. As provided in the Agreement
and subject to certain limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same Class and aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar
and any agent of the Company, the Master Servicer, the Trustee or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan and (ii) the purchase by the Master
Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to (i) purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all property
acquired in respect of any Mortgage Loan or (ii) purchase in whole, but not in part, all of
the Certificates from the Holders thereof; provided, that any such option may only be
exercised if the Pool Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated: _______________ [____________________________],
as Trustee
By: ____________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class P Certificates referred to in the within-mentioned Agreement.
[____________________________],
as Certificate Registrar
By:______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto __________________________________________________________________________________(Please
print or typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Asset-Backed Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such Certificate to
the following address:
Dated: ______________ _______________________________________
Signature by or on behalf of assignor
___________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available
funds to ______________________________ for the account of _________________________ account
number __________________, or, if mailed by check, to ______________________________.
Applicable statements should be mailed to __________________________.
This information is provided by ____________________, the assignee named above, or
_____________________, as its agent.
EXHIBIT C-II
CLASS SB-[ ] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES, THE
CLASS M-1, CLASS M-2, CLASS M-3, [CLASS M-4, CLASS M-5, CLASS M-6, CLASS M-7, CLASS M-8,
CLASS M-9 AND CLASS M-10] CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST"
IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED
UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE
LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT (THE "AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN SHALL BE MADE TO ANY PLAN
SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE, ANY PERSON ACTING, DIRECTLY OR
INDIRECTLY, ON BEHALF OF ANY SUCH PLAN OR ANY PERSON ACQUIRING SUCH CERTIFICATES WITH "PLAN
ASSETS" OF A PLAN WITHIN THE MEANING OF THE DEPARTMENT OF LABOR REGULATION PROMULGATED AT 29
C.F.R.SS.2510.3-101, AS MODIFIED BY SECTION 3(42) OF ERISA ("PLAN ASSET REGULATIONS"), UNLESS
THE DEPOSITOR, THE TRUSTEE AND THE MASTER SERVICER ARE PROVIDED WITH AN OPINION OF COUNSEL
WHICH ESTABLISHES TO THE SATISFACTION OF THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE
IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN ANY PROHIBITED
TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR THE TRUST FUND TO ANY OBLIGATION OR LIABILITY
(INCLUDING OBLIGATIONS OR LIABILITIES UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE) IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF. THE DEPOSITOR, THE MASTER SERVICER, THE TRUSTEE OR THE TRUST FUND.
Class SB-[ ] Subordinate Certificate No. ___
Date of Pooling and Servicing Agreement Percentage Interest: _____%
and Cut-off Date:
___________ 1, ____
First Distribution Date: Aggregate Initial Notional Principal
___________ 25, ____ Balance of the Class SB-[ ] Certificates:
$____________
Master Servicer: Initial Notional Balance
Residential Funding Company, LLC of this Class SB-2 Certificate:
$____________
Maturity Date: CUSIP: ____________
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
Series _____-____
evidencing a percentage interest in any distributions allocable
to the Class SB-[ ] Certificates with respect to the Trust Fund
consisting primarily of a pool of [one- to four-family
residential, hybrid adjustable-rate first lien mortgage loans
with a negative amortization feature] formed and sold by
RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Residential Accredit Loans, Inc., the Master
Servicer, the Trustee referred to below or GMAC Mortgage Group, LLC or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Residential Accredit Loans,
Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, LLC or any of
their affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that PRAMWAVE & CO. is the registered owner of the Percentage Interest
evidenced by this Certificate in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a pool of [one- to four-family adjustable rate first
lien mortgage loans] (the "Mortgage Loans"), sold by Residential Accredit Loans, Inc.
(hereinafter called the "Depositor," which term includes any successor entity under the
Agreement referred to below). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as specified above (the "Agreement") among the Depositor, the Master
Servicer and _____________, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance hereof, assents
and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day
of each month or, if such 25th day is not a Business Day, the Business Day immediately
following (the "Distribution Date"), commencing as described in the Agreement, to the Person
in whose name this Certificate is registered at the close of business on the last Business
Day of the month immediately preceding the month of such distribution (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount of interest and principal, if any,
required to be distributed to Holders of Class SB-[ ] Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master Servicer acting
on behalf of the Trustee or by a Paying Agent appointed by the Trustee in immediately
available funds (by wire transfer or otherwise) for the account of the Person entitled
thereto if such Person shall have so notified the Master Servicer or such Paying Agent, or
by check mailed to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be made
after due notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee for that
purpose. The Notional Amount of this Class SB-[ ] Certificate as of any date of
determination will be calculated as described in the Agreement. This Class SB-[ ]
Certificate will accrue interest at the Pass-Through Rate on the Notional Amount as
indicated in the definition of Accrued Certificate Interest in the Agreement. This Class
SB-[ ] Certificate will not accrue interest on its Certificate Principal Balance.
No transfer of this Class SB-[ ] Certificate will be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws or is made in accordance with said Act and laws. In the
event that such a transfer is to be made, (i) the Trustee or the Depositor may require an
opinion of counsel acceptable to and in form and substance satisfactory to the Trustee and
the Depositor that such transfer is exempt (describing the applicable exemption and the
basis therefor) from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state and (ii) the
transferee shall execute an investment letter in the form described by the Agreement. The
Holder hereof desiring to effect such transfer shall, and does hereby agree to, indemnify
the Trustee, the Depositor, the Master Servicer and the Certificate Registrar acting on
behalf of the Trustee against any liability that may result if the transfer is not so exempt
or is not made in accordance with such Federal and state laws.
No transfer of this Certificate or any interest herein shall be made to any Plan
subject to Title I of ERISA or Section 4975 of the Code, any Person acting, directly or
indirectly, on behalf of any such Plan or any Person acquiring such Certificates with "plan
assets" of a Plan within the meaning of the Department of Labor regulation promulgated at 29
C.F.R.ss.2510.3-101, as modified by Section 3(42) of ERISA ("Plan Asset Regulations"), unless
the Depositor, the Trustee and the Master Servicer are provided with an Opinion of Counsel
which establishes to the satisfaction of the Trustee that the purchase of this Certificate
is permissible under applicable law, will not constitute or result in any prohibited
transaction under Title I of ERISA or Section 4975 of the Code and will not subject the
Depositor, the Master Servicer, the Trustee or the Trust Fund to any obligation or liability
(including obligations or liabilities under Title I of ERISA or Section 4975 of the Code) in
addition to those undertaken in the Agreement, which Opinion of Counsel shall not be an
expense of the Depositor, the Master Servicer, the Trustee or the Trust Fund.
This Certificate is one of a duly authorized issue of Certificates issued in several
Classes designated as Mortgage Asset-Backed Pass-Through Certificates of the Series
specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in
the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the
Agreement, from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or the
Certificate Account created for the benefit of Certificateholders may be made by the Master
Servicer from time to time for purposes other than distributions to Certificateholders, such
purposes including without limitation reimbursement to the Depositor and the Master Servicer
of advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the amendment of the
Agreement and the modification of the rights and obligations of the Depositor, the Master
Servicer and the Trustee and the rights of the Certificateholders under the Agreement from
time to time by the Depositor, the Master 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. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders
of this Certificate and of any Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain circumstances
without the consent of the Holders of any of the Certificates and, in certain additional
circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set forth,
the transfer of this Certificate is registrable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the offices or agencies appointed by the
Trustee, duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable only as registered Certificates without coupons in
Classes and in denominations specified in the Agreement. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same Class and aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange, but
the Trustee may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, the Certificate Registrar and any
agent of the Depositor, the Master Servicer, the Trustee or the Certificate Registrar may
treat the Person in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of
the State of New York.
The obligations created by the Agreement in respect of the Certificates and the Trust
Fund created thereby shall terminate upon the payment to Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, and (ii) the purchase by the Master
Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer (i) to purchase, at a price
determined as provided in the Agreement, all remaining Mortgage Loans and all property
acquired in respect of any Mortgage Loan or (ii) to purchase in whole, but not in part, all
of the Certificates from the Holders thereof, provided, that any such option may only be
exercised if the Stated Principal Balance before giving effect to the distributions to be
made on such Distribution Date of the Mortgage Loans, as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of the Cut-off
Date Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the Certificate
Registrar by manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
[Signature Page Follows]
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
__________________________,
as Trustee
By:________________________________________
Authorized Signatory
Dated: _________
CERTIFICATE OF AUTHENTICATION
This is one of the Class SB-[ ] Certificates referred to in the within-mentioned
Agreement.
___________________________,
as Certificate Registrar
By: _______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
_____________________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of assignee) the
beneficial interest evidenced by the within Trust Certificate and hereby authorizes the
transfer of registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate to the
following address:
______________________________________________________________________________________________
Dated:_____________________ ____________________________________
Signature by or on behalf of assignor
_____________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available fund
to____________________________________________________________________________
for the account of ___________________________________________________________________________
account number _______________________________________________________________________________
or, if mailed by check, to ___________________________________________________________________
Applicable statements should be mailed to:____________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
This information is provided by ___________________________________, the assignee
named above, or ______________________________, as its agent.
EXHIBIT D
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON OR A
DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL INTEREST" IN A
"REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES
EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT
SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY IF THE
PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER SERVICER AND THE TRUSTEE
THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY POSSESSION OF THE UNITED STATES, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE
SUBJECT TO TAX AND EXCEPT FOR FREDDIE MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C) ANY
ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS
SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING THE TAX IMPOSED BY SECTION
511 OF THE CODE ON UNRELATED BUSINESS TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE
COOPERATIVES DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE
PARTNERSHIP UNDER SECTION 775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF
A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY
PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE
DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
Certificate No. [______]% Pass-Through Rate
Class R Senior Aggregate Initial Certificate
Principal Balance of the
Date of Pooling and Servicing Class R Certificates:
Agreement and Cut-off Date: $100.00
___________ 1, ____
Initial Certificate Principal
First Distribution Date: Balance of this Certificate:
_________ 25, ____ $___________________
Master Servicer: Percentage Interest:
Residential Funding Company, LLC ____________%
Assumed Final Distribution Date: CUSIP 76110F-
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the Class R
Certificates with respect to the Trust Fund consisting primarily of a pool of
[conventional one- to four-family fixed interest rate first mortgage loans]
formed and sold by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does
not represent an obligation of or interest in Residential Accredit Loans, Inc., the Master
Servicer, the Trustee referred to below or GMAC Mortgage Group, LLC or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality or by Residential Accredit Loans,
Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, LLC or any of
their affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that ___________________________________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the Initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class R Certificates, both as specified above)
in certain distributions with respect to the Trust Fund consisting primarily of a pool of
[conventional one- to four-family fixed interest rate first mortgage loans] (the "Mortgage
Loans"), formed and sold by Residential Accredit Loans, Inc. (hereinafter called the
"Company," which term includes any successor entity under the Agreement referred to below).
The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as specified
above (the "Agreement") among the Company, the Master Servicer and __________________, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used herein have
the meanings assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing as described in the Agreement,
to the Person in whose name this Certificate is registered at the close of business on the
last day (or if such last day is not a Business Day, the Business Day immediately preceding
such last day) of the month immediately preceding the month of such distribution (the
"Record Date"), from the Available Distribution Amount in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount (of interest and
principal, if any) required to be distributed to Holders of Class R Certificates on such
Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be bound by
the restrictions set forth in the Agreement to the effect that (i) each person holding or
acquiring any Ownership Interest in this Certificate must be a United States Person and a
Permitted Transferee, (ii) the transfer of any Ownership Interest in this Certificate will
be conditioned upon the delivery to the Trustee of, among other things, an affidavit to the
effect that it is a United States Person and Permitted Transferee, (iii) any attempted or
purported transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the purported
transferee, and (iv) if any person other than a United States Person and a Permitted
Transferee acquires any Ownership Interest in this Certificate in violation of such
restrictions, then the Company will have the right, in its sole discretion and without
notice to the Holder of this Certificate, to sell this Certificate to a purchaser selected
by the Company, which purchaser may be the Company, or any affiliate of the Company, on such
terms and conditions as the Company may choose.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee for that
purpose. The Initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of distributions
allocable to principal and any Realized Losses allocable hereto. Notwithstanding the
reduction of the Certificate Principal Balance hereof to zero, this Certificate will remain
outstanding under the Agreement and the Holder hereof may have additional obligations with
respect to this Certificate, including tax liabilities, and may be entitled to certain
additional distributions hereon, in accordance with the terms and provisions of the
Agreement.
No transfer of this Class R Certificate will be made unless the Trustee has
received either (i) an opinion of counsel addressed to the Trustee, the Company and the
Master Servicer, acceptable to and in form and substance satisfactory to the Trustee with
respect to the permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code (the
"Code") and stating, among other things, that the transferee's acquisition of a Class R
Certificate will not constitute or result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code or (ii) a representation letter, in the
form as described by the Agreement, stating that the transferee is not an employee benefit
or other plan subject to the prohibited transaction provisions of ERISA or Section 4975 of
the Code (a "Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or purchasing any
Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates issued in
several Classes designated as Mortgage Asset-Backed Pass-Through Certificates of the Series
specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in
the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the
Agreement, from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be made by the
Master Servicer from time to time for purposes other than distributions to
Certificateholders, such purposes including without limitation reimbursement to the Company
and the Master Servicer of advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the amendment
of the Agreement and the modification of the rights and obligations of the Company, the
Master Servicer and the Trustee and the rights of the Certificateholders under the Agreement
at any time by the Company, the Master 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. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders
of this Certificate and of any Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain circumstances
without the consent of the Holders of any of the Certificates and, in certain additional
circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the offices or agencies
appointed by the Trustee, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons
in Classes and in denominations specified in the Agreement. As provided in the Agreement
and subject to certain limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same Class and aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar
and any agent of the Company, the Master Servicer, the Trustee or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan and (ii) the purchase by the Master
Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to (i) purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all property
acquired in respect of any Mortgage Loan or (ii) purchase in whole, but not in part, all of
the Certificates from the Holders thereof; provided, that any such option may only be
exercised if the Pool Stated Principal Balance of the Mortgage Loans as of the Distribution
Date upon which the proceeds of any such purchase are distributed is less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purpose have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ______________ [____________________________],
as Trustee
By: ____________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the within-mentioned
Agreement.
[____________________________],
as Certificate Registrar
By: ____________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto __________________________________________________________________________________(Please
print or typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Asset-Backed Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such Certificate to
the following address:
Dated: _________________ __________________________________________
Signature by or on behalf of assignor
___________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available
funds to ______________________________ for the account of _________________________ account
number __________________, or, if mailed by check, to ______________________________.
Applicable statements should be mailed to __________________________.
This information is provided by ____________________, the assignee named above, or
_____________________, as its agent.
EXHIBIT E
FORM OF SELLER/SERVICER CONTRACT
This Seller/Servicer Contract (as may be amended, supplemented or otherwise modified
from time to time, this "Contract") is made this day of ,
20 , by and between Residential Funding Company, LLC, its successors and assigns
("Residential Funding") and (the
"Seller/Servicer," and, together with Residential Funding, the "parties" and each,
individually, a "party").
WHEREAS, the Seller/Servicer desires to sell Loans to, and/or service Loans for,
Residential Funding, and Residential Funding desires to purchase Loans from the
Seller/Servicer and/or have the Seller/Servicer service various of its Loans, pursuant to
the terms of this Contract and the Residential Funding Seller and Servicer Guides
incorporated herein by reference, as amended, supplemented or otherwise modified, from time
to time (together, the "Guides").
NOW, THEREFORE, in consideration of the premises, and the terms, conditions and
agreements set forth below, the parties agree as follows:
1. INCORPORATION OF GUIDES BY REFERENCE.
The Seller/Servicer acknowledges that it has received and read the Guides. All
provisions of the Guides are incorporated by reference into and made a part of this
Contract, and shall be binding upon the parties; provided, however, that the Seller/Servicer
shall be entitled to sell Loans to and/or service Loans for Residential Funding only if and
for so long as it shall have been authorized to do so by Residential Funding in writing.
Specific reference in this Contract to particular provisions of the Guides and not to other
provisions does not mean that those provisions of the Guides not specifically cited in this
Contract are not applicable. All terms used herein shall have the same meanings as such
terms have in the Guides, unless the context clearly requires otherwise.
2. AMENDMENTS.
This Contract may not be amended or modified orally, and no provision of this
Contract may be waived or amended except in writing signed by the party against whom
enforcement is sought. Such a written waiver or amendment must expressly reference this
Contract. However, by their terms, the Guides may be amended or supplemented by Residential
Funding from time to time. Any such amendment(s) to the Guides shall be binding upon the
parties hereto.
3. REPRESENTATIONS AND WARRANTIES.
a. Reciprocal Representations and Warranties.
The Seller/Servicer and Residential Funding each represents and warrants to
the other that as of the date of this Contract:
(1) Each party is duly organized, validly existing, and in good standing under the laws
of its jurisdiction of organization, is qualified, if necessary, to do
business and in good standing in each jurisdiction in which it is
required to be so qualified, and has the requisite power and authority
to enter into this Contract and all other agreements which are
contemplated by this Contract and to carry out its obligations
hereunder and under the Guides and under such other agreements.
(2) This Contract has been duly authorized, executed and delivered by each party and
constitutes a valid and legally binding agreement of each party
enforceable in accordance with its terms.
(3) There is no action, proceeding or investigation pending or threatened, and no basis
therefor is known to either party, that could affect the validity or
prospective validity of this Contract.
(4) Insofar as its capacity to carry out any obligation under this Contract is concerned,
neither party is in violation of any charter, articles of
incorporation, bylaws, certificates of formation, limited liability
company agreement, mortgage, indenture, indebtedness, agreement,
instrument, judgment, decree, order, statute, rule or regulation and
none of the foregoing adversely affects its capacity to fulfill any of
its obligations under this Contract. Its execution of, and performance
pursuant to, this Contract will not result in a violation of any of the
foregoing.
b. Seller/Servicer's Representations, Warranties and Covenants.
In addition to the representations, warranties and covenants made by the
Seller/Servicer pursuant to subparagraph (a) of this paragraph 3, the
Seller/Servicer makes the representations, warranties and covenants set forth
in the Guides and, upon request, agrees to deliver to Residential Funding the
certified Resolution of Board of Directors which authorizes the execution and
delivery of this Contract.
4. REMEDIES OF RESIDENTIAL FUNDING.
If an Event of Seller Default or an Event of Servicer Default shall occur,
Residential Funding may, at its option, exercise one or more of those remedies set forth in
the Guides.
5. SELLER/SERVICER'S STATUS AS INDEPENDENT CONTRACTOR.
At no time shall the Seller/Servicer represent that it is acting as an agent of
Residential Funding. The Seller/Servicer shall, at all times, act as an independent
contractor.
6. PRIOR AGREEMENTS SUPERSEDED.
This Contract restates, amends and supersedes any and all prior Seller Contracts or
Servicer Contracts between the parties except that any subservicing agreement executed by
the Seller/Servicer in connection with any loan-security exchange transaction shall not be
affected.
7. ASSIGNMENT.
This Contract may not be assigned or transferred, in whole or in part, by the
Seller/Servicer without the prior written consent of Residential Funding. Residential
Funding may sell, assign, convey, hypothecate, pledge or in any other way transfer, in whole
or in part, without restriction, its rights under this Contract and the Guides with respect
to any Commitment or Loan.
8. NOTICES.
All notices, requests, demands or other communications that are to be given under
this Contract shall be in writing, addressed to the appropriate parties and sent by
telefacsimile or by overnight courier or by United States mail, postage prepaid, to the
addresses and telefacsimile numbers specified below. However, another name, address and/or
telefacsimile number may be substituted by the Seller/Servicer pursuant to the requirements
of this paragraph 8, or Residential Funding pursuant to an amendment to the Guides.
If to Residential Funding, notices must be sent to the appropriate address or telefacsimile
number specified in the Guides.
If to the Seller/Servicer, notice must be sent to:
Attention:
Telefacsimile Number: (____) ___-_____________________
9. JURISDICTION AND VENUE.
Each of the parties irrevocably submits to the jurisdiction of any state or federal
court located in Hennepin County, Minnesota, over any action, suit or proceeding to enforce
or defend any right under this Contract or otherwise arising from any loan sale or servicing
relationship existing in connection with this Contract, and each of the parties irrevocably
agrees that all claims in respect of any such action or proceeding may be heard or
determined in such state or federal court. Each of the parties irrevocably waives the
defense of an inconvenient forum to the maintenance of any such action or proceeding and any
other substantive or procedural rights or remedies it may have with respect to the
maintenance of any such action or proceeding in any such forum. Each of the parties agrees
that a final judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any other manner provided
by law. Each of the parties further agrees not to institute any legal actions or
proceedings against the other party or any director, officer, employee, attorney, agent or
property of the other party, arising out of or relating to this Contract in any court other
than as hereinabove specified in this paragraph 9.
10. MISCELLANEOUS.
This Contract, including all documents incorporated by reference herein, constitutes
the entire understanding between the parties hereto and supersedes all other agreements,
covenants, representations, warranties, understandings and communications between the
parties, whether written or oral, with respect to the transactions contemplated by this
Contract. All paragraph headings contained herein are for convenience only and shall not be
construed as part of this Contract. Any provision of this Contract that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any other
jurisdiction, and, to this end, the provisions hereof are severable. This Contract shall be
governed by, and construed and enforced in accordance with, applicable federal laws and the
laws of the State of Minnesota.
IN WITNESS WHEREOF, the duly authorized officers of the Seller/Servicer and
Residential Funding have executed this Seller/Servicer Contract as of the date first above
written.
ATTEST: SELLER/SERVICER
[Corporate Seal]
__________________________________________
(Name of Seller/Servicer)
By: By:
(Signature) (Signature)
By: By:
(Typed Name) (Typed Name)
Title: Title:
=================================================== =============================================================================
ATTEST: RESIDENTIAL FUNDING COMPANY, LLC
[Corporate Seal]
By: By:
(Signature) (Signature)
By: By:
(Typed Name) (Typed Name)
Title: Title:
EXHIBIT F
FORMS OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you for the
referenced pool, we request the release of the Mortgage Loan File described below.
Pooling and Servicing Agreement Dated:
Series#:
Account#:
Pool#:
Loan#:
MIN#:
Borrower Name(s):
Reason for Document Request: (circle one)
Mortgage Loan Prepaid in Full Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection with such
payments which are required to be deposited have been or will be so deposited as provided in
the Pooling and Servicing Agreement."
Residential Funding Company, LLC
Authorized Signature
******************************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off documents being
enclosed with a copy of this form. You should retain this form for your files in accordance
with the terms of the Pooling and Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other:
Name: ____________________
Title:____________________
Date: ____________________
EXHIBIT G-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or beneficial owner of the
Mortgage Asset-Backed Pass-Through Certificates, Series ____-___, Class R (the "Owner")), a
[savings institution] [corporation] duly organized and existing under the laws of [the State
of _____________________________________] [the United States], on behalf of which he makes
this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified organization" or an
electing large partnership as of [date of transfer] within the meaning of Sections
860E(e)(5) and 775, respectively, of the Internal Revenue Code of 1986, as amended (the
"Code") or an electing large partnership under Section 775(a) of the Code, (ii) will endeavor
to remain other than a disqualified organization for so long as it retains its ownership
interest in the Class R Certificates, and (iii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received an affidavit
and agreement in substantially the same form as this affidavit and agreement. (For this
purpose, a "disqualified organization" means an electing large partnership under Section 775
of the Code, the United States, any state or political subdivision thereof, any agency or
instrumentality of any of the foregoing (other than an instrumentality all of the activities
of which are subject to tax and, except for the Federal Home Loan Mortgage Corporation, a
majority of whose board of directors is not selected by any such governmental entity) or any
foreign government, international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative, or any
organization (other than certain farmers' cooperatives) that is generally exempt from
federal income tax unless such organization is subject to the tax on unrelated business
taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on transfers of Class R
Certificates to disqualified organizations or electing large partnerships, under the Code,
that applies to all transfers of Class R Certificates after March 31, 1988; (ii) that such
tax would be on the transferor (or, with respect to transfers to electing large
partnerships, on each such partnership), or, if such transfer is through an agent (which
person includes a broker, nominee or middleman) for a disqualified organization, on the
agent; (iii) that the person (other than with respect to transfers to electing large
partnerships) otherwise liable for the tax shall be relieved of liability for the tax if the
transferee furnishes to such person an affidavit that the transferee is not a disqualified
organization and, at the time of transfer, such person does not have actual knowledge that
the affidavit is false; and (iv) that the Class R Certificates may be "noneconomic residual
interests" within the meaning of Treasury regulations promulgated pursuant to the Code and
that the transferor of a noneconomic residual interest will remain liable for any taxes due
with respect to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through entity" holding Class R
Certificates if either the pass-through entity is an electing large partnership under
Section 775 of the Code or if at any time during the taxable year of the pass-through entity
a disqualified organization is the record holder of an interest in such entity. (For this
purpose, a "pass through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and certain
cooperatives.)
5. The Owner is either (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity treated as a corporation or a partnership for U.S.
federal income tax purposes and created or organized in or under the laws of the United
States, any state thereof or the District of Columbia (other than a partnership that is not
treated as a United States person under any applicable Treasury regulations), (iii) an
estate that is described in Section 7701(a)(30)(D) of the Code, or (iv) a trust that is
described in Section 7701(a)(30)(E) of the Code.
6. The Owner hereby agrees that it will not cause income from the Class R Certificates
to be attributable to a foreign permanent establishment or fixed base (within the meaning of
an applicable income tax treaty) of the Owner or another United States taxpayer.
7. That the Owner is aware that the Trustee will not register the transfer of any Class
R Certificates unless the transferee, or the transferee's agent, delivers to it an affidavit
and agreement, among other things, in substantially the same form as this affidavit and
agreement. The Owner expressly agrees that it will not consummate any such transfer if it
knows or believes that any of the representations contained in such affidavit and agreement
are false.
8. That the Owner has reviewed the restrictions set forth on the face of the Class R
Certificates and the provisions of Section 5.02(f) of the Pooling and Servicing Agreement
under which the Class R Certificates were issued (in particular, clause (iii)(A) and
(iii)(B) of Section 5.02(f) which authorize the Trustee to deliver payments to a person
other than the Owner and negotiate a mandatory sale by the Trustee in the event the Owner
holds such Certificates in violation of Section 5.02(f)). The Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
9. That the Owner consents to any additional restrictions or arrangements that shall be
deemed necessary upon advice of counsel to constitute a reasonable arrangement to ensure
that the Class R Certificates will only be owned, directly or indirectly, by an Owner that
is not a disqualified organization.
10. The Owner's Taxpayer Identification Number is ______________________________.
11. This affidavit and agreement relates only to the Class R Certificates held by the
Owner and not to any other holder of the Class R Certificates. The Owner understands that
the liabilities described herein relate only to the Class R Certificates.
12. That no purpose of the Owner relating to the transfer of any of the Class R
Certificates by the Owner is or will be to impede the assessment or collection of any tax;
in making this representation, the Owner warrants that the Owner is familiar with (i)
Treasury Regulation Section 1.860E-1(c) and recent amendments thereto, effective as of July
19, 2002, and (ii) the preamble describing the adoption of the amendments to such
regulation, which is attached hereto as Exhibit 1.
13. That the Owner has no present knowledge or expectation that it will be unable to pay
any United States taxes owed by it so long as any of the Certificates remain outstanding.
In this regard, the Owner hereby represents to and for the benefit of the person from whom
it acquired the Class R Certificate that the Owner intends to pay taxes associated with
holding such Class R Certificate as they become due, fully understanding that it may incur
tax liabilities in excess of any cash flows generated by the Class R Certificate.
14. That the Owner has no present knowledge or expectation that it will become insolvent
or subject to a bankruptcy proceeding for so long as any of the Class R Certificates remain
outstanding.
15. The Purchaser is not an employee benefit plan or other plan subject to the prohibited
transaction provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Code, or an investment manager, named fiduciary or a
trustee of any such plan, or any other Person acting, directly or indirectly, on behalf of
or purchasing any Certificate with "plan assets" of any such plan.
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on its
behalf, pursuant to the authority of its Board of Directors, by its [Title of Officer] and
its corporate seal to be hereunto attached, attested by its [Assistant] Secretary, this
__________ day of _________________ , 200 ___.
[NAME OF OWNER]
By: _________________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known or
proved to me to be the same person who executed the foregoing instrument and to be the
[Title of Officer] of the Owner, and acknowledged to me that he executed the same as his
free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this ____ day of ___________, 200___.
NOTARY PUBLIC
COUNTY OF ________________________
STATE OF _________________________
My Commission expires the ____ day of ______, 20__.
EXHIBIT 1
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9004]
RIN 1545-AW98
Real Estate Mortgage Investment Conduits
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations relating to safe
harbor transfers of noneconomic residual interests in real estate
mortgage investment conduits (REMICs). The final regulations provide
additional limitations on the circumstances under which transferors may
claim safe harbor treatment.
DATES: Effective Date: These regulations are effective July 19, 2002.
Applicability Date: For dates of applicability, see Sec. 1.860E-
(1)(c)(10).
FOR FURTHER INFORMATION CONTACT: Xxxxxxxx Xxxxxxxxxx at (000) 000-0000
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information in this final rule has been reviewed
and, pending receipt and evaluation of public comments, approved by the
Office of Management and Budget (OMB) under 44 U.S.C. 3507 and assigned
control number 1545-1675.
The collection of information in this regulation is in Sec. 1.860E-
1(c)(5)(ii). This information is required to enable the IRS to verify
that a taxpayer is complying with the conditions of this regulation.
The collection of information is mandatory and is required. Otherwise,
the taxpayer will not receive the benefit of safe harbor treatment as
provided in the regulation. The likely respondents are businesses and
other for-profit institutions.
Comments on the collection of information should be sent to the
Office of Management and Budget, Attn: Desk Officer for the Department
of the Treasury, Office of Information and Regulatory Affairs,
Washington, DC, 20503, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, W:CAR:MP:FP:S, Washington, DC
20224. Comments on the collection of information should be received by
September 17, 2002. Comments are specifically requested concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including
whether the information will have practical utility;
The accuracy of the estimated burden associated with the collection
of information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced;
How the burden of complying with the collection of information may
be minimized, including through the application of automated collection
techniques or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of service to provide information.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
control number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on
an estimated number of respondents of 470 and an estimated average
annual burden hours per respondent of one hour.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Background
This document contains final regulations regarding the proposed
amendments to 26 CFR part 1 under section 860E of the Internal Revenue
Code (Code). The regulations provide the circumstances under which a
transferor of a noneconomic REMIC residual interest meeting the
investigation and representation requirements may avail itself of the
safe harbor by satisfying either the formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules
governing the transfer of noneconomic REMIC residual interests. In
general, a transfer of a noneconomic residual interest is disregarded
for all tax purposes if a significant purpose of the transfer is to
[[Page 47452]]
enable the transferor to impede the assessment or collection of tax. A
purpose to impede the assessment or collection of tax (a wrongful
purpose) exists if the transferor, at the time of the transfer, either
knew or should have known that the transferee would be unwilling or
unable to pay taxes due on its share of the REMIC's taxable income.
Under a safe harbor, the transferor of a REMIC noneconomic residual
interest is presumed not to have a wrongful purpose if two requirements
are satisfied: (1) the transferor conducts a reasonable investigation
of the transferee's financial condition (the investigation
requirement); and (2) the transferor secures a representation from the
transferee to the effect that the transferee understands the tax
obligations associated with holding a residual interest and intends to
pay those taxes (the representation requirement).
The IRS and Treasury have been concerned that some transferors of
noneconomic residual interests claim they satisfy the safe harbor even
in situations where the economics of the transfer clearly indicate the
transferee is unwilling or unable to pay the tax associated with
holding the interest. For this reason, on February 7, 2000, the IRS
published in the Federal Register (65 FR 5807) a notice of proposed
rulemaking (REG-100276-97; REG-122450-98) designed to clarify the safe
harbor by adding the "formula test," an economic test. The proposed
regulation provides that the safe harbor is unavailable unless the
present value of the anticipated tax liabilities associated with
holding the residual interest does not exceed the sum of: (1) The
present value of any consideration given to the transferee to acquire
the interest; (2) the present value of the expected future
distributions on the interest; and (3) the present value of the
anticipated tax savings associated with holding the interest as the
REMIC generates losses.
The notice of proposed rulemaking also contained rules for FASITs.
Section 1.860H-6(g) of the proposed regulations provides requirements
for transfers of FASIT ownership interests and adopts a safe harbor by
reference to the safe harbor provisions of the REMIC regulations.
In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3
I.R.B. 335) to set forth an alternative safe harbor that taxpayers
could use while the IRS and the Treasury considered comments on the
proposed regulations. Under the alternative safe harbor, if a
transferor meets the investigation requirement and the representation
requirement but the transfer fails to meet the formula test, the
transferor may invoke the safe harbor if the transferee meets a two-
prong test (the asset test). A transferee generally meets the first
prong of this test if, at the time of the transfer, and in each of the
two years preceding the year of transfer, the transferee's gross assets
exceed $100 million and its net assets exceed $10 million. A transferee
generally meets the second prong of this test if it is a domestic,
taxable corporation and agrees in writing not to transfer the interest
to any person other than another domestic, taxable corporation that
also satisfies the requirements of the asset test. A transferor cannot
rely on the asset test if the transferor knows, or has reason to know,
that the transferee will not comply with its written agreement to limit
the restrictions on subsequent transfers of the residual interest.
Rev. Proc. 2001-12 provides that the asset test fails to be
satisfied in the case of a transfer or assignment of a noneconomic
residual interest to a foreign branch of an otherwise eligible
transferee. If such a transfer or assignment were permitted, a
corporate taxpayer might seek to claim that the provisions of an
applicable income tax treaty would resource excess inclusion income as
foreign source income, and that, as a consequence, any U.S. tax
liability attributable to the excess inclusion income could be offset
by foreign tax credits. Such a claim would impede the assessment or
collection of U.S. tax on excess inclusion income, contrary to the
congressional purpose of assuring that such income will be taxable in
all events. See, e.g., sections 860E(a)(1), (b), (e) and 860G(b) of the
Code.
The Treasury and the IRS have learned that certain taxpayers
transferring noneconomic residual interests to foreign branches have
attempted to rely on the formula test to obtain safe harbor treatment
in an effort to impede the assessment or collection of U.S. tax on
excess inclusion income. Accordingly, the final regulations provide
that if a noneconomic residual interest is transferred to a foreign
permanent establishment or fixed base of a U.S. taxpayer, the transfer
is not eligible for safe harbor treatment under either the asset test
or the formula test. The final regulations also require a transferee to
represent that it will not cause income from the noneconomic residual
interest to be attributable to a foreign permanent establishment or
fixed base.
Section 1.860E-1(c)(8) provides computational rules that a taxpayer
may use to qualify for safe harbor status under the formula test.
Section 1.860E-1(c)(8)(i) provides that the transferee is presumed to
pay tax at a rate equal to the highest rate of tax specified in section
11(b). Some commentators were concerned that this presumed rate of
taxation was too high because it does not take into consideration
taxpayers subject to the alternative minimum tax rate. In light of the
comments received, this provision has been amended in the final
regulations to allow certain transferees that compute their taxable
income using the alternative minimum tax rate to use the alternative
minimum tax rate applicable to corporations.
Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present
values in the formula test are to be computed using a discount rate
equal to the applicable Federal short-term rate prescribed by section
1274(d). This is a change from the proposed regulation and Rev. Proc.
2001-12. In those publications the provision stated that "present
values are computed using a discount rate equal to the applicable
Federal rate prescribed in section 1274(d) compounded semiannually"
and that "[a] lower discount rate may be used if the transferee can
demonstrate that it regularly borrows, in the course of its trade or
business, substantial funds at such lower rate from an unrelated third
party." The IRS and the Treasury Department have learned that, based
on this provision, certain taxpayers have been attempting to use
unrealistically low or zero interest rates to satisfy the formula test,
frustrating the intent of the test. Furthermore, the Treasury
Department and the IRS believe that a rule allowing for a rate other
than a rate based on an objective index would add unnecessary
complexity to the safe harbor. As a result, the rule in the proposed
regulations that permits a transferee to use a lower discount rate, if
the transferee can demonstrate that it regularly borrows substantial
funds at such lower rate, is not included in the final regulations; and
the Federal short-term rate has been substituted for the applicable
Federal rate. To simplify taxpayers' computations, the final
regulations allow use of any of the published short-term rates,
provided that the present values are computed with a corresponding
period of compounding. With the exception of the provisions relating to
transfers to foreign branches, these changes generally have the
proposed applicability date of February 4, 2000, but taxpayers may
choose to apply the interest rate formula set forth in the proposed
regulation and Rev. Proc. 2001-12 for transfers occurring before August
19, 2002.
It is anticipated that when final regulations are adopted with
respect to
[[Page 47453]]
FASITs, Sec. 1.860H-6(g) of the proposed regulations will be adopted in
substantially its present form, with the result that the final
regulations contained in this document will also govern transfers of
FASIT ownership interests with substantially the same applicability
date as is contained in this document.
Effect on Other Documents
Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is obsolete for transfers of
noneconomic residual interests in REMICs occurring on or after August
19, 2002.
Special Analyses
It is hereby certified that these regulations will not have a
significant economic impact on a substantial number of small entities.
This certification is based on the fact that it is unlikely that a
substantial number of small entities will hold REMIC residual
interests. Therefore, a Regulatory Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. It has
been determined that this Treasury decision is not a significant
regulatory action as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It also has been determined that
sections 553(b) and 553(d) of the Administrative Procedure Act (5
U.S.C. chapter 5) do not apply to these regulations.
Drafting Information
The principal author of these regulations is Xxxxxxxx Xxxxxxxxxx.
However, other personnel from the IRS and Treasury Department
participated in their development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record keeping requirements.
26 CFR Part 602
Reporting and record keeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602 are amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
EXHIBIT G-2
FORM OF TRANSFEROR CERTIFICATE
______________, 20___
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
__________________
__________________
__________________
Attention: Residential Funding Company, LLC Series ____-___
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___, Class R
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
__________________________________________________________________ (the "Seller") to
_________________________________________________________________ (the "Purchaser") of
$___________________________ Initial Certificate Principal Balance of Mortgage Asset-Backed
Pass-Through Certificates, Series ____-___, Class R (the "Certificates"), pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of ___________ 1, ____ among Residential Accredit Loans, Inc., as seller (the
"Company"), Residential Funding Company, LLC, as master servicer (the "Master Servicer"), and
__________________, as trustee (the "Trustee"). All terms used herein and not otherwise
defined shall have the meanings set forth in the Pooling and Servicing Agreement. The
Seller hereby certifies, represents and warrants to, and covenants with, the Company and the
Trustee that:
1. No purpose of the Seller relating to the transfer of the Certificate by the Seller to
the Purchaser is or will be to impede the assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to the Trustee and the Master
Servicer a transfer affidavit and agreement in the form attached to the Pooling and
Servicing Agreement as Exhibit G-1. The Seller does not know or believe that any
representation contained therein is false.
3. The Seller has at the time of the transfer conducted a reasonable investigation of
the financial condition of the Purchaser as contemplated by Treasury Regulations Section
1.860E-1(c)(4)(i) and, as a result of that investigation, the Seller has determined that the
Purchaser has historically paid its debts as they become due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of a Class R Certificate may
not be respected for United States income tax purposes (and the Seller may continue to be
liable for United States income taxes associated therewith) unless the Seller has conducted
such an investigation.
4. The Seller has no actual knowledge that the proposed Transferee is not both a United
States Person and a Permitted Transferee.
Very truly yours,
(Seller)
By: __________________________
Name: _________________________
Title: ________________________
EXHIBIT H
FORM OF INVESTOR REPRESENTATION LETTER
______________ , 20 ___
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
__________________
__________________
__________________
Residential Funding Company, LLC
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Residential Funding Company, LLC Series ____-___
RE: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___, [Class B-]
Ladies and Gentlemen:
______________________________________ (the "Purchaser") intends
to purchase from _________________________________________________________ (the "Seller")
$___________________________ Initial Certificate Principal Balance of Mortgage Asset-Backed
Pass-Through Certificates, Series ____-___, Class (the "Certificates"), issued pursuant
to the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
___________ 1, ____ among Residential Accredit Loans, Inc., as seller (the "Company"),
Residential Funding Company, LLC, as master servicer (the "Master Servicer"), and
__________________, as trustee (the "Trustee"). All terms used herein and not otherwise
defined shall have the meanings set forth in the Pooling and Servicing Agreement. The
Purchaser hereby certifies, represents and warrants to, and covenants with, the Company, the
Trustee and the Master Servicer that:
1. The Purchaser understands that (a) the Certificates have not been and will not be
registered or qualified under the Securities Act of 1933, as amended (the "Act") or any
state securities law, (b) the Company is not required to so register or qualify the
Certificates, (c) the Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities law, or if an exemption
from such registration and qualification is available, (d) the Pooling and Servicing
Agreement contains restrictions regarding the transfer of the Certificates and (e) the
Certificates will bear a legend to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own account for investment only and
not with a view to or for sale in connection with any distribution thereof in any manner
that would violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional investor having such
knowledge and experience in financial and business matters, and, in particular, in such
matters related to securities similar to the Certificates, such that it is capable of
evaluating the merits and risks of investment in the Certificates, (b) able to bear the
economic risks of such an investment and (c) an "accredited investor" within the meaning
of Rule 501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity to review (a) [a copy
of the Private Placement Memorandum, dated _________ , 20__, relating to the Certificates
(b)] a copy of the Pooling and Servicing Agreement and [b] [c] such other information
concerning the Certificates, the Mortgage Loans and the Company as has been requested by
the Purchaser from the Company or the Seller and is relevant to the Purchaser's decision
to purchase the Certificates. The Purchaser has had any questions arising from such
review answered by the Company or the Seller to the satisfaction of the Purchaser. [If
the Purchaser did not purchase the Certificates from the Seller in connection with the
initial distribution of the Certificates and was provided with a copy of the Private
Placement Memorandum (the "Memorandum") relating to the original sale (the "Original
Sale") of the Certificates by the Company, the Purchaser acknowledges that such
Memorandum was provided to it by the Seller, that the Memorandum was prepared by the
Company solely for use in connection with the Original Sale and the Company did not
participate in or facilitate in any way the purchase of the Certificates by the Purchaser
from the Seller, and the Purchaser agrees that it will look solely to the Seller and not
to the Company with respect to any damage, liability, claim or expense arising out of,
resulting from or in connection with (a) error or omission, or alleged error or omission,
contained in the Memorandum, or (b) any information, development or event arising after
the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will it authorize any person
to (a) offer, pledge, sell, dispose of or otherwise transfer any Certificate, any
interest in any Certificate or any other similar security to any person in any manner,
(b) solicit any offer to buy or to accept a pledge, disposition of other transfer of any
Certificate, any interest in any Certificate or any other similar security from any
person in any manner, (c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other similar security with any
person in any manner, (d) make any general solicitation by means of general advertising
or in any other manner or (e) take any other action, that (as to any of (a) through (e)
above) would constitute a distribution of any Certificate under the Act, that would
render the disposition of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or qualification pursuant
thereto. The Purchaser will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.
6. The Purchaser
(a) is not an employee benefit or other plan subject to the prohibited transaction provisions
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended (a "Plan"), or any other person
(including an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan assets" of
any Plan within the meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
ss.2510.3-101, as modified by Section 3(42) of ERISA; or
(b) is an insurance company, the source of funds to be used by it to purchase the
Certificates is an "insurance company general account" (within the meaning of DOL
Prohibited Transaction Class Exemption ("PTCE") 95-60), and the purchase is being made in
reliance upon the availability of the exemptive relief afforded under Sections I and III
of PTCE 95-60.
In addition, the Purchaser hereby certifies, represents and warrants to, and
covenants with, the Company, the Trustee and the Master Servicer that the Purchaser will not
transfer such Certificates to any Plan or person unless such Plan or person meets the
requirements set forth in either 6(a) or (b) above.
Very truly yours,
By:________________________________
Name: _____________________________
Title:_____________________________
EXHIBIT I
FORM OF TRANSFEROR REPRESENTATION LETTER
________________, 20__
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
__________________
__________________
__________________
Attention: Residential Funding Company, LLC Series ____-___
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___, [Class B-]
Ladies and Gentlemen:
In connection with the sale by _________________(the "Seller") to
___________________ (the "Purchaser") of $__________ Initial Certificate Principal Balance of
Mortgage Asset-Backed Pass-Through Certificates, Series ____-___, Class (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of ___________ 1, ____ among Residential Accredit Loans,
Inc., as seller (the "Company"), Residential Funding Company, LLC, as master servicer, and
__________________, as trustee (the "Trustee"). The Seller hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered, pledged,
sold, disposed of or otherwise transferred any Certificate, any interest in any Certificate
or any other similar security to any person in any manner, (b) has solicited any offer to
buy or to accept a pledge, disposition or other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest in any
Certificate or any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or (e) has
taken any other action, that (as to any of (a) through (e) above) would constitute a
distribution of the Certificates under the Securities Act of 1933 (the "Act"), that would
render the disposition of any Certificate a violation of Section 5 of the Act or any state
securities law, or that would require registration or qualification pursuant thereto. The
Seller will not act, in any manner set forth in the foregoing sentence with respect to any
Certificate. The Seller has not and will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions of the Pooling and Servicing
Agreement.
Very truly yours,
(Seller)
By: ____________________________
Name: ___________________________
Title: __________________________
EXHIBIT J
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the agreements pursuant to
which the Rule 144A Securities were issued, the Seller hereby certifies the following
facts: Neither the Seller nor anyone acting on its behalf has offered, transferred,
pledged, sold or otherwise disposed of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or otherwise approached or negotiated
with respect to the Rule 144A Securities, any interest in the Rule 144A Securities or any
other similar security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action, that would
constitute a distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto, and that
the Seller has not offered the Rule 144A Securities to any person other than the Buyer or
another "qualified institutional buyer" as defined in Rule 144A under the 1933 Act.
2. The Buyer warrants and represents to, and covenants with, the Seller, the Trustee and
the Master Servicer (as defined in the Pooling and Servicing Agreement (the "Agreement"),
dated as of ___________ 1, ____ among Residential Funding Company, LLC as Master Servicer,
Residential Accredit Loans, Inc. as depositor pursuant to Section 5.02 of the Agreement and
__________________, as trustee, as follows:
(a) The Buyer understands that the Rule 144A Securities have not been registered under
the 1933 Act or the securities laws of any state.
(b) The Buyer considers itself a substantial, sophisticated institutional investor having
such knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Rule 144A Securities.
(c) The Buyer has been furnished with all information regarding the Rule 144A Securities
that it has requested from the Seller, the Trustee or the Servicer.
(d) Neither the Buyer nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security to, or solicited any offer to buy or accept
a transfer, pledge or other disposition of the Rule 144A Securities, any interest in
the Rule 144A Securities or any other similar security from, or otherwise approached
or negotiated with respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Rule 144A Securities
under the 1933 Act or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto, nor
will it act, nor has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
(e) The Buyer is a "qualified institutional buyer" as that term is defined in Rule 144A
under the 1933 Act and has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Buyer is aware that the sale to it
is being made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified institutional
buyers, understands that such Rule 144A Securities may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified institutional
buyer that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer is
being made in reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the 1933 Act.
[3. The Buyer
[(a) is not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (a "Plan"), or any other person (including an investment manager, a named
fiduciary or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan within the meaning of the
Department of Labor ("DOL") regulation at 29 X.X.X.xx. 2510.3-101, as modified by
Section 3(42) of ERISA](1); or
(b) is an insurance company, the source of funds to be used by it
to purchase the Certificates is an "insurance company general account" (within the
meaning of DOL Prohibited Transaction Class Exemption ("PTCE") 95-60), and the
purchase is being made in reliance upon the availability of the exemptive relief
afforded under Sections I and III of PTCE 95-60.](2)
4. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so executed,
shall be deemed to be an original; such counterparts, together, shall constitute one
and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as of the
date set forth below.
Print Name of Seller Print Name of Buyer
By:___________________________ By:__________________________
Name:______________________ Name:______________________
Title: ____________________ Title:_____________________
Taxpayer Identification Taxpayer Identification:
No. No:
Date: Date:
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial Officer, Senior
Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified institutional buyer"
as that term is defined in Rule 144A under the Securities Act of 1933 ("Rule 144A")
because (i) the Buyer owned and/or invested on a discretionary basis $_______________ in
securities (except for the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Buyer satisfies the criteria in the category marked below.
-- Corporation, etc. The Buyer is a corporation (other than a bank, savings and loan
association or similar institution), Massachusetts or similar business trust,
partnership, or charitable organization described in Section 501(c)(3) of the
Internal Revenue Code.
-- Bank. The Buyer (a) is a national bank or banking institution organized under the
laws of any State, territory or the District of Columbia, the business of
which is substantially confined to banking and is supervised by the State or
territorial banking commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements, a copy
of which is attached hereto.
-- Savings and Loan. The Buyer (a) is a savings and loan association, building and loan
association, cooperative bank, homestead association or similar institution,
which is supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements.
-- Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934.
-- Insurance Company. The Buyer is an insurance company whose primary and predominant
business activity is the writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a State or territory
or the District of Columbia.
-- State or Local Plan. The Buyer is a plan established and maintained by a State, its
political subdivisions, or any agency or instrumentality of the State or its
political subdivisions, for the benefit of its employees.
-- ERISA Plan. The Buyer is an employee benefit plan within the meaning of Title I of
the Employee Retirement Income Security Act of 1974.
-- Investment Adviser. The Buyer is an investment adviser registered under the
Investment Advisers Act of 1940.
-- SBIC. The Buyer is a Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
-- Business Development Company. The Buyer is a business development company as defined
in Section 202(a)(22) of the Investment Advisers Act of 1940.
-- Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust company and
whose participants are exclusively (a) plans established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees, or (b)
employee benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund that includes
as participants individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of issuers that
are affiliated with the Buyer, (ii) securities that are part of an unsold allotment to or
subscription by the Buyer, if the Buyer is a dealer, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned and/or invested
on a discretionary basis by the Buyer, the Buyer used the cost of such securities to the
Buyer and did not include any of the securities referred to in the preceding paragraph.
Further, in determining such aggregate amount, the Buyer may have included securities owned
by subsidiaries of the Buyer, but only if such subsidiaries are consolidated with the
Buyer in its financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the Buyer's
direction. However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a reporting
company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands that the
seller to it and other parties related to the Certificates are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer may be in reliance
on Rule 144A.
___ _____ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that, in connection
with any purchase of securities sold to the Buyer for the account of a third party
(including any separate account) in reliance on Rule 144A, the Buyer will only purchase for
the account of a third party that at the time is a "qualified institutional buyer" within
the meaning of Rule 144A. In addition, the Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a current representation letter
from such third party or taken other appropriate steps contemplated by Rule 144A to conclude
that such third party independently meets the definition of "qualified institutional buyer"
set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given, the Buyer's
purchase of Rule 144A Securities will constitute a reaffirmation of this certification as of
the date of such purchase.
Print Name of Buyer
By: ________________________
Name:__________________
Title:_________________
Date: ______________________
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
8. As indicated below, the undersigned is the President, Chief Financial Officer or
Senior Vice President of the Buyer or, if the Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act of 1933 ("Rule 144A") because
Buyer is part of a Family of Investment Companies (as defined below), is such an officer of
the Adviser.
9. In connection with purchases by Buyer, the Buyer is a "qualified institutional buyer"
as defined in SEC Rule 144A because (i) the Buyer is an investment company registered under
the Investment Company Act of 1940, and (ii) as marked below, the Buyer alone, or the
Buyer's Family of Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer's most recent fiscal
year. For purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
-- The Buyer owned $ ______________ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
-- The Buyer is part of a Family of Investment Companies which owned in the aggregate $
________________ in securities (other than the excluded securities referred to below) as
of the end of the Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
10. The term "Family of Investment Companies" as used herein means two or more registered
investment companies (or series thereof) that have the same investment adviser or investment
advisers that are affiliated (by virtue of being majority owned subsidiaries of the same
parent or because one investment adviser is a majority owned subsidiary of the other).
11. The term "securities" as used herein does not include (i) securities of issuers that
are affiliated with the Buyer or are part of the Buyer's Family of Investment Companies,
(ii) bank deposit notes and certificates of deposit, (iii) loan participations, (iv)
repurchase agreements, (v) securities owned but subject to a repurchase agreement and (vi)
currency, interest rate and commodity swaps.
12. The Buyer is familiar with Rule 144A and understands that each of the parties to
which this certification is made are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.
13. The undersigned will notify each of the parties to which this certification is made
of any changes in the information and conclusions herein. Until such notice, the Buyer's
purchase of Rule 144A Securities will constitute a reaffirmation of this certification by
the undersigned as of the date of such purchase.
Print Name of Buyer
By: _____________________________
Name:_______________________
Title: _____________________
IF AN ADVISER:
Print Name of Buyer
Date: ___________________________
EXHIBIT K
[TEXT OF AMENDMENT TO POOLING AND SERVICING
AGREEMENT PURSUANT TO SECTION 11.01(E) FOR A
LIMITED GUARANTY]
ARTICLE XIII
Subordinate Certificate Loss Coverage; Limited Guaranty
Section 13.01. Subordinate Certificate Loss Coverage; Limited Guaranty. (a)
Subject to subsection (c) below, prior to the later of the third Business Day prior to each
Distribution Date or the related Determination Date, the Master Servicer shall determine
whether it or any Sub-Servicer will be entitled to any reimbursement pursuant to Section
4.02(a) on such Distribution Date for Advances or Sub-Servicer Advances previously made,
(which will not be Advances or Sub-Servicer Advances that were made with respect to
delinquencies which were subsequently determined to be Excess Special Hazard Losses, Excess
Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses) and, if so, the Master
Servicer shall demand payment from Residential Funding of an amount equal to the amount of
any Advances or Sub-Servicer Advances reimbursed pursuant to Section 4.02(a), to the extent
such Advances or Sub-Servicer Advances have not been included in the amount of the Realized
Loss in the related Mortgage Loan, and shall distribute the same to the Class B
Certificateholders in the same manner as if such amount were to be distributed pursuant to
Section 4.02(a).
(b) Subject to subsection (c) below, prior to the later of the third
Business Day prior to each Distribution Date or the related Determination Date, the Master
Servicer shall determine whether any Realized Losses (other than Excess Special Hazard
Losses, Excess Bankruptcy Losses, Excess Fraud Losses and Extraordinary Losses) will be
allocated to the Class B Certificates on such Distribution Date pursuant to Section 4.05,
and, if so, the Master Servicer shall demand payment from Residential Funding of the amount
of such Realized Loss and shall distribute the same to the Class B Certificateholders in the
same manner as if such amount were to be distributed pursuant to Section 4.02(a); provided,
however, that the amount of such demand in respect of any Distribution Date shall in no
event be greater than the sum of (i) the additional amount of Accrued Certificate Interest
that would have been paid for the Class B Certificateholders on such Distribution Date had
such Realized Loss or Losses not occurred plus (ii) the amount of the reduction in the
Certificate Principal Balances of the Class B Certificates on such Distribution Date due to
such Realized Loss or Losses. Notwithstanding such payment, such Realized Losses shall be
deemed to have been borne by the Certificateholders for purposes of Section 4.05. Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses and Extraordinary
Losses allocated to the Class B Certificates will not be covered by the Subordinate
Certificate Loss Obligation.
(c) Demands for payments pursuant to this Section shall be made prior to
the later of the third Business Day prior to each Distribution Date or the related
Determination Date by the Master Servicer with written notice thereof to the Trustee. The
maximum amount that Residential Funding shall be required to pay pursuant to this Section on
any Distribution Date (the "Amount Available") shall be equal to the lesser of (X)
minus the sum of (i) all previous payments made under subsections (a) and (b)
hereof and (ii) all draws under the Limited Guaranty made in lieu of such payments as
described below in subsection (d) and (Y) the then outstanding Certificate Principal
Balances of the Class B Certificates, or such lower amount as may be established pursuant to
Section 13.02. Residential Funding's obligations as described in this Section are referred
to herein as the "Subordinate Certificate Loss Obligation."
(d) The Trustee will promptly notify GMAC LLC of any failure of Residential
Funding to make any payments hereunder and shall demand payment pursuant to the limited
guaranty (the "Limited Guaranty"), executed by GMAC LLC, of Residential Funding's obligation
to make payments pursuant to this Section, in an amount equal to the lesser of (i) the
Amount Available and (ii) such required payments, by delivering to GMAC LLC a written demand
for payment by wire transfer, not later than the second Business Day prior to the
Distribution Date for such month, with a copy to the Master Servicer.
(e) All payments made by Residential Funding pursuant to this Section or
amounts paid under the Limited Guaranty shall be deposited directly in the Certificate
Account, for distribution on the Distribution Date for such month to the Class B
Certificateholders.
(f) The Company shall have the option, in its sole discretion, to
substitute for either or both of the Limited Guaranty or the Subordinate Certificate Loss
Obligation another instrument in the form of a corporate guaranty, an irrevocable letter of
credit, a surety bond, insurance policy or similar instrument or a reserve fund; provided
that (i) the Company obtains (subject to the provisions of Section 10.01(f) as if the
Company was substituted for the Master Servicer solely for the purposes of such provision)
an Opinion of Counsel (which need not be an opinion of Independent counsel) to the effect
that obtaining such substitute corporate guaranty, irrevocable letter of credit, surety
bond, insurance policy or similar instrument or reserve fund will not cause either (a) any
federal tax to be imposed on the Trust Fund, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860(F)(a)(1) of the Code or on
"contributions after the startup date" under Section 860(G)(d)(1) of the Code or (b) the
Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding,
and (ii) no such substitution shall be made unless (A) the substitute Limited Guaranty or
Subordinate Certificate Loss Obligation is for an initial amount not less than the then
current Amount Available and contains provisions that are in all material respects
equivalent to the original Limited Guaranty or Subordinate Certificate Loss Obligation
(including that no portion of the fees, reimbursements or other obligations under any such
instrument will be borne by the Trust Fund), (B) the long term debt obligations of any
obligor of any substitute Limited Guaranty or Subordinate Certificate Loss Obligation (if
not supported by the Limited Guaranty) shall be rated at least the lesser of (a) the rating
of the long term debt obligations of GMAC LLC as of the date of issuance of the Limited
Guaranty and (b) the rating of the long term debt obligations of GMAC LLC at the date of
such substitution and (C) the Company obtains written confirmation from each nationally
recognized credit rating agency that rated the Class B Certificates at the request of the
Company that such substitution shall not lower the rating on the Class B Certificates below
the lesser of (a) the then-current rating assigned to the Class B Certificates by such
rating agency and (b) the original rating assigned to the Class B Certificates by such
rating agency. Any replacement of the Limited Guaranty or Subordinate Certificate Loss
Obligation pursuant to this Section shall be accompanied by a written Opinion of Counsel to
the substitute guarantor or obligor, addressed to the Master Servicer and the Trustee, that
such substitute instrument constitutes a legal, valid and binding obligation of the
substitute guarantor or obligor, enforceable in accordance with its terms, and concerning
such other matters as the Master Servicer and the Trustee shall reasonably request. Neither
the Company, the Master Servicer nor the Trustee shall be obligated to substitute for or
replace the Limited Guaranty or Subordinate Certificate Loss Obligation under any
circumstance.
Section 13.02. Amendments Relating to the Limited Guaranty. Notwithstanding
Sections 11.01 or 13.01: (i) the provisions of this Article XIII may be amended, superseded
or deleted, (ii) the Limited Guaranty or Subordinate Certificate Loss Obligation may be
amended, reduced or canceled, and (iii) any other provision of this Agreement which is
related or incidental to the matters described in this Article XIII may be amended in any
manner; in each case by written instrument executed or consented to by the Company and
Residential Funding but without the consent of any Certificateholder and without the consent
of the Master Servicer or the Trustee being required unless any such amendment would impose
any additional obligation on, or otherwise adversely affect the interests of, the Master
Servicer or the Trustee, as applicable; provided that the Company shall also obtain a letter
from each nationally recognized credit rating agency that rated the Class B Certificates at
the request of the Company to the effect that such amendment, reduction, deletion or
cancellation will not lower the rating on the Class B Certificates below the lesser of (a)
the then-current rating assigned to the Class B Certificates by such rating agency and (b)
the original rating assigned to the Class B Certificates by such rating agency, unless (A)
the Holder of 100% of the Class B Certificates is Residential Funding or an Affiliate of
Residential Funding, or (B) such amendment, reduction, deletion or cancellation is made in
accordance with Section 11.01(e) and, provided further that the Company obtains (subject to
the provisions of Section 10.01(f) as if the Company was substituted for the Master Servicer
solely for the purposes of such provision), in the case of a material amendment or
supercession (but not a reduction, cancellation or deletion of the Limited Guaranty or the
Subordinate Certificate Loss Obligation), an Opinion of Counsel (which need not be an
opinion of Independent counsel) to the effect that any such amendment or supercession will
not cause either (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) the Trust Fund to fail to qualify as a REMIC at any time that any Certificate is
outstanding. A copy of any such instrument shall be provided to the Trustee and the Master
Servicer together with an Opinion of Counsel that such amendment complies with this Section
13.02.
EXHIBIT L
[FORM OF LIMITED GUARANTY]
LIMITED GUARANTY
RESIDENTIAL ACCREDIT LOANS, INC.
Mortgage Asset-Backed Pass-Through Certificates
Series ____-___
________, 200__
__________________
__________________
__________________
Attention: Residential Funding Company, LLC Series ____-___
Ladies and Gentlemen:
WHEREAS, Residential Funding Company, LLC, a Delaware limited liability
company ("Residential Funding"), an indirect wholly-owned subsidiary of GMAC LLC, a Delaware
limited liability company ("GMAC"), plans to incur certain obligations as described under
Section 13.01 of the Pooling and Servicing Agreement dated as of ___________ 1, ____ (the
"Servicing Agreement"), among Residential Accredit Loans, Inc. (the "Company"), Residential
Funding and __________________ (the "Trustee") as amended by Amendment No. thereto,
dated as of , with respect to the Mortgage Asset-Backed Pass-Through
Certificates, Series ____-___ (the "Certificates"); and
WHEREAS, pursuant to Section 13.01 of the Servicing Agreement, Residential
Funding agrees to make payments to the Holders of the Class B Certificates with respect to
certain losses on the Mortgage Loans as described in the Servicing Agreement; and
WHEREAS, GMAC desires to provide certain assurances with respect to the
ability of Residential Funding to secure sufficient funds and faithfully to perform its
Subordinate Certificate Loss Obligation;
NOW THEREFORE, in consideration of the premises herein contained and certain
other good and valuable consideration, the receipt of which is xxxxxx acknowledged, GMAC
agrees as follows:
1. Provision of Funds. (a) GMAC agrees to contribute and deposit in the Certificate
Account on behalf of Residential Funding (or otherwise provide to Residential Funding, or to
cause to be made available to Residential Funding), either directly or through a subsidiary,
in any case prior to the related Distribution Date, such moneys as may be required by
Residential Funding to perform its Subordinate Certificate Loss Obligation when and as the
same arises from time to time upon the demand of the Trustee in accordance with Section
13.01 of the Servicing Agreement.
(b) The agreement set forth in the preceding clause (a) shall be absolute,
irrevocable and unconditional and shall not be affected by the transfer by GMAC or any other
person of all or any part of its or their interest in Residential Funding, by any
insolvency, bankruptcy, dissolution or other proceeding affecting Residential Funding or any
other person, by any defense or right of counterclaim, set-off or recoupment that GMAC may
have against Residential Funding or any other person or by any other fact or circumstance.
Notwithstanding the foregoing, GMAC's obligations under clause (a) shall terminate upon the
earlier of (x) substitution for this Limited Guaranty pursuant to Section 13.01(f) of the
Servicing Agreement, or (y) the termination of the Trust Fund pursuant to the Servicing
Agreement.
2. Waiver. GMAC hereby waives any failure or delay on the part of Residential Funding,
the Trustee or any other person in asserting or enforcing any rights or in making any claims
or demands hereunder. Any defective or partial exercise of any such rights shall not
preclude any other or further exercise of that or any other such right. GMAC further waives
demand, presentment, notice of default, protest, notice of acceptance and any other notices
with respect to this Limited Guaranty, including, without limitation, those of action or
nonaction on the part of Residential Funding or the Trustee.
3. Modification, Amendment and Termination. This Limited Guaranty may be modified,
amended or terminated only by the written agreement of GMAC and the Trustee and only if such
modification, amendment or termination is permitted under Section 13.02 of the Servicing
Agreement. The obligations of GMAC under this Limited Guaranty shall continue and remain in
effect so long as the Servicing Agreement is not modified or amended in any way that might
affect the obligations of GMAC under this Limited Guaranty without the prior written consent
of GMAC.
4. Successor. Except as otherwise expressly provided herein, the guarantee herein set
forth shall be binding upon GMAC and its respective successors.
5. Governing Law. This Limited Guaranty shall be governed by the laws of the State of
New York.
6. Authorization and Reliance. GMAC understands that a copy of this Limited Guaranty
shall be delivered to the Trustee in connection with the execution of Amendment No. 1 to the
Servicing Agreement and GMAC hereby authorizes the Company and the Trustee to rely on the
covenants and agreements set forth herein.
7. Definitions. Capitalized terms used but not otherwise defined herein shall have the
meaning given them in the Servicing Agreement.
8. Counterparts. This Limited Guaranty may be executed in any number of counterparts,
each of which shall be deemed to be an original and such counterparts shall constitute but
one and the same instrument.
IN WITNESS WHEREOF, GMAC has caused this Limited Guaranty to be executed and
delivered by its respective officers thereunto duly authorized as of the day and year first
above written.
GMAC LLC
By: _________________________
Name: _______________________
Title:_______________________
Acknowledged by:
__________________,
as Trustee
By: _______________________
Name: _____________________
Title: ____________________
RESIDENTIAL ACCREDIT LOANS, INC.
By: ______________________
Name: _____________________
Title: ____________________
EXHIBIT M
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
___________, 20
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
__________________
__________________
__________________
Attention: Residential Funding Company, LLC Series ____-___
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___ Assignment of Mortgage Loan
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by
__________________________________ (the "Trustee") to
________________________________________(the "Lender") of (the "Mortgage Loan") pursuant to
Section 3.13(d) of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of ___________ 1, ____ among Residential Accredit Loans, Inc., as seller
(the "Company"), Residential Funding Company, LLC, as Master Servicer, and the Trustee. All
terms used herein and not otherwise defined shall have the meanings set forth in the Pooling
and Servicing Agreement. The Lender hereby certifies, represents and warrants to, and
covenants with, the Master Servicer and the Trustee that:
(i) the Mortgage Loan is secured by Mortgaged Property located in a jurisdiction in which an
assignment in lieu of satisfaction is required to preserve lien priority, minimize or avoid
mortgage recording taxes or otherwise comply with, or facilitate a refinancing under, the laws
of such jurisdiction;
(ii) the substance of the assignment is, and is intended to be, a refinancing of such Mortgage
Loan and the form of the transaction is solely to comply with, or facilitate the transaction
under, such local laws;
(iii) the Mortgage Loan following the proposed assignment will be modified to 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
(iv) such assignment is at the request of the borrower under the related Mortgage Loan.
Very truly yours,
(Lender)
By: __________________________
Name: ________________________
Title: _______________________
EXHIBIT N
FORM OF REQUEST FOR EXCHANGE
[DATE]
__________________
__________________
__________________
Re: Residential Accredit Loans, Inc.,
Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___
Residential Funding Company, LLC, as the Holder of a __________% Percentage
Interest of the [Interest Only/Class A-V][-1] Certificates, hereby requests the Trustee to
exchange the above-referenced Certificates for the Subclasses referred to below:
1. [Interest Only/Class A-V]- Certificates, corresponding to the following Uncertificated
REMIC Regular Interests: [List numbers corresponding to the related loans and Pool Strip
Rates from the Mortgage Loan Schedule]. The initial Subclass Notional Amount and the
Initial Pass-Through Rate on the [Interest Only/Class A-V]- Certificates will be $
____________ and ________%, respectively.
2. [Repeat as appropriate.]
The Subclasses requested above will represent in the aggregate all of the
Uncertificated REMIC Regular Interests represented by the [Interest Only/Class A-V][-1]
Certificates surrendered for exchange.
All capitalized terms used but not defined herein shall have the meanings set
forth in the Pooling and Servicing Agreement, dated as of ___________ 1, ____, among
Residential Accredit Loans, Inc., Residential Funding Company, LLC and __________________,
as trustee.
RESIDENTIAL FUNDING COMPANY, LLC
By: _______________________________
Name:_______________________________
Title:______________________________
EXHIBIT O
Form of Form 10-K Certification
I, [identify the certifying individual], certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D required
to be filed in respect of the period covered by this report on Form 10-K of the trust (the
"Exchange Act periodic reports") created pursuant to the Series Supplement dated
___________________ to the Standard Terms of Pooling and Servicing Agreement dated
____________________ (together, the "P&S Agreement") among Residential Accredit Loans, Inc.,
Residential Funding Company, LLC (the "Master Servicer") and [Name of Trustee] (the
"Trustee");
2. Based on my knowledge, the Exchange Act periodic reports, taken as a whole, do
not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by this report is
included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the Master Servicer
and based on my knowledge and the compliance review conducted in preparing the servicer
compliance statement required in this report under Item 1123 of Regulation AB, and except a
disclosed in the Exchange Act periodic reports, the Master Servicer has fulfilled its
obligations under the P&S Agreement; and
5. All of the reports on assessment of compliance with servicing criteria for
asset-backed securities and their related attestation reports on assessment of compliance
with servicing criteria for asset-backed securities required to be included in this report
in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have
been included as an exhibit to this report, except as otherwise disclosed in this report.
Any material instances of noncompliance described in such reports have been disclosed in
this report on Form 10-K.
In giving the certifications above, I have reasonably relied on the information
provided to me by the following unaffiliated parties: [the Trustee].
Date:_______________________
____________________________*
[Signature]
[Title:]
* to be signed by the senior officer in charge of the servicing functions of the Master
Servicer
EXHIBIT P
[FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE]
The undersigned, a Responsible Officer of [_________] (the "Trustee") certifies that:
(a) The Trustee has performed all of the duties specifically required to be
performed by it pursuant to the provisions of the Pooling and Servicing Agreement dated as
of [_________], 20[__] (the "Agreement") by and among [__________], as depositor,
Residential Funding Company, LLC, as Master Servicer, and the Trustee in accordance with the
standards set forth therein.
(b) Based on my knowledge, the list of Certificateholders as shown on the
Certificate Register as of the end of each calendar year that is provided by the Trustee
pursuant to the Agreement is accurate as of the last day of the 20[__] calendar year.
Capitalized terms used and not defined herein shall have the meanings given such terms in
the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of _________, 20__.]
Name:____________________________
Title:___________________________
EXHIBIT Q
INFORMATION TO BE PROVIDED BY THE MASTER SERVICER TO THE RATING AGENCIES RELATING TO
REPORTABLE MODIFIED MORTGAGE LOANS
Account number
Transaction Identifier
Unpaid Principal Balance prior to Modification
Next Due Date
Monthly Principal and Interest Payment
Total Servicing Advances
Current Interest Rate
Original Maturity Date
Original Term to Maturity (Months)
Remaining Term to Maturity (Months)
Trial Modification Indicator
Mortgagor Equity Contribution
Total Servicer Advances
Trial Modification Term (Months)
Trial Modification Start Date
Trial Modification End Date
Trial Modification Period Principal and Interest Payment
Trial Modification Interest Rate
Trial Modification Term
Rate Reduction Indicator
Interest Rate Post Modification
Rate Reduction Start Date
Rate Reduction End Date
Rate Reduction Term
Term Modified Indicator
Modified Amortization Period
Modified Final Maturity Date
Total Advances Written Off
Unpaid Principal Balance Written Off
Other Past Due Amounts Written Off
Write Off Date
Unpaid Principal Balance Post Write Off
Capitalization Indicator
Mortgagor Contribution
Total Capitalized Amount
Modification Close Date
Unpaid Principal Balance Post Capitalization Modification
Next Payment Due Date per Modification Plan
Principal and Interest Payment Post Modification
Interest Rate Post Modification
Payment Made Post Capitalization
Delinquency Status to Modification Plan
EXHIBIT R
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Trustee shall address, at a
minimum, the criteria identified as below as "Applicable Servicing Criteria":
-------------------------------------------------------------------------------------------------- -------------------------
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
-------------------------------------------------------------------------------------------------- -------------------------
REFERENCE CRITERIA
---------------------- --------------------------------------------------------------------------- -------------------------
GENERAL SERVICING CONSIDERATIONS
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or
other triggers and events of default in accordance with the transaction
agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party's
performance and compliance with such servicing activities.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up
servicer for the pool assets are maintained.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the party
participating in the servicing function throughout the reporting period
in the amount of coverage required by and otherwise in accordance with
the terms of the transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
CASH COLLECTION AND ADMINISTRATION
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(2)(i) Payments on pool assets are deposited into the appropriate custodial bank |X| (as to accounts
accounts and related bank clearing accounts no more than two business
days following receipt, or such other number of days specified in the
transaction agreements. held by Trustee)
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to an |X| (as to investors
investor are made only by authorized personnel. only)
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances,
are made, reviewed and approved as specified in the transaction
agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
The related accounts for the transaction, such as cash reserve accounts
or accounts established as a form of overcollateralization, are |X| (as to accounts
separately maintained (e.g., with respect to commingling of cash) as set held by Trustee)
1122(d)(2)(iv) forth in the transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes of
this criterion, "federally insured depository institution" with respect
to a foreign financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed
securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30 calendar days after the
bank statement cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain explanations
for reconciling items. These reconciling items are resolved within 90
calendar days of their original identification, or such other number of
days specified in the transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
INVESTOR REMITTANCES AND REPORTING
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the Commission,
are maintained in accordance with the transaction agreements and
applicable Commission requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms set forth in the
transaction agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and regulations; and (D)
agree with investors' or the trustee's records as to the total unpaid
principal balance and number of pool assets serviced by the servicer.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance with |X|
timeframes, distribution priority and other terms set forth in the
transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
Disbursements made to an investor are posted within two business days to
the servicer's investor records, or such other number of days specified |X|
1122(d)(3)(iii) in the transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
Amounts remitted to investors per the investor reports agree with |X|
1122(d)(3)(iv) cancelled checks, or other form of payment, or custodial bank statements.
---------------------- --------------------------------------------------------------------------- -------------------------
POOL ASSET ADMINISTRATION
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(i) Collateral or security on pool assets is maintained as required by the
transaction agreements or related asset pool documents.
---------------------- --------------------------------------------------------------------------- -------------------------
Pool assets and related documents are safeguarded as required by the
1122(d)(4)(ii) transaction agreements
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made,
reviewed and approved in accordance with any conditions or requirements
in the transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made in accordance with
the related pool asset documents are posted to the servicer's obligor
records maintained no more than two business days after receipt, or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow) in
accordance with the related pool asset documents.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(v) The servicer's records regarding the pool assets agree with the
servicer's records with respect to an obligor's unpaid principal balance.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's pool asset
(e.g., loan modifications or re-agings) are made, reviewed and approved
by authorized personnel in accordance with the transaction agreements and
related pool asset documents.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements established by the
transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during the period a
pool asset is delinquent in accordance with the transaction agreements.
Such records are maintained on at least a monthly basis, or such other
period specified in the transaction agreements, and describe the entity's
activities in monitoring delinquent pool assets including, for example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for pool assets with
variable rates are computed based on the related pool asset documents.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the obligor's
pool asset documents, on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest on such funds is
paid, or credited, to obligors in accordance with applicable pool asset
documents and state laws; and (C) such funds are returned to the obligor
within 30 calendar days of full repayment of the related pool asset, or
such other number of days specified in the transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance payments)
are made on or before the related penalty or expiration dates, as
indicated on the appropriate bills or notices for such payments, provided
that such support has been received by the servicer at least 30 calendar
days prior to these dates, or such other number of days specified in the
transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made on
behalf of an obligor are paid from the servicer's funds and not charged
to the obligor, unless the late payment was due to the obligor's error or
omission.
---------------------- --------------------------------------------------------------------------- -------------------------
Disbursements made on behalf of an obligor are posted within two business
days to the obligor's records maintained by the servicer, or such other
1122(d)(4)(xiii) number of days specified in the transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized and
recorded in accordance with the transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
Any external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth in |X|
1122(d)(4)(xv) the transaction agreements.
---------------------- --------------------------------------------------------------------------- -------------------------
(1) Only paragraph (a) for Class P Certificates.
(2) Class B Certificateholders may represent to either (a) or (b).
EXHIBIT FOUR-A
CERTIFICATE SWAP AGREEMENT
(PROVIDED UPON REQUEST)
EXHIBIT FOUR-B
CLASS A-1-A SWAP AGREEMENT
(PROVIDED UPON REQUEST)
EXHIBIT FIVE-A:
SB-AM SWAP AGREEMENT
(PROVIDED UPON REQUEST)
EXHIBIT FIVE-B:
SB-A1A SWAP AGREEMENT
(PROVIDED UPON REQUEST)
EXHIBIT SIX
FORM OF CLASS SB CERTIFICATE TRANSFEROR CERTIFICATE
(REGULATION S TO RULE 144A)
Date: _____________
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Deutsche Bank Trust Company Americas
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: Residential Funding Company, LLC Series 2007-QA4
RE: Mortgage Asset-Backed Pass-Through Certificates,
Series 2007-QA4, Class SB Certificates
Ladies and Gentlemen:
Reference is hereby made to the Series Supplement, dated as of May 1, 2007, to the
Standard Terms of Pooling and Servicing Agreement, dated as of May 1, 2007 (together, the
"Pooling Agreement") among Residential Accredit Loans, Inc., as seller (the "Company"),
Residential Funding Company, LLC, as master servicer, and Deutsche Bank Trust Company
Americas, as trustee (the "Trustee").. Capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Pooling Agreement.
This letter relates to U.S.$[____________] aggregate principal amount of Class SB
Certificates which are held in certificated form of a beneficial interest in a Regulation S
Class SB Certificate (CUSIP/CINS) No. [____________]) registered in the name of [name of
transferor] (the "Transferor") in connection with the exchange or transfer of interests in
such Class SB Certificates, in the certificated form of an equivalent beneficial interest in
a Rule 144A Class SB Certificate, to [name of transferee] (the "Transferee").
In connection with such exchange or transfer, the Transferor does hereby certify that
such exchange or transfer has been effected in accordance with the transfer restrictions set
forth in the Pooling Agreement relating to the Class SB Certificates and that: (a) the
Transferor and any person acting on its behalf reasonably believes that the Transferee is a
Qualified Institutional Buyer and is obtaining the beneficial interest in a transaction
meeting the requirements of Rule 144A and in accordance with any applicable securities laws
of any state of the Untied States or any other jurisdiction, (b) the transfer meets the
requirements of Rule 144A or is a transaction exempt from registration under the United
States Securities Act of 1933, as amended (the "Securities Act") and is in accordance with
any applicable securities laws of any state of the United States or any other applicable
jurisdiction, and (c) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
You are entitled to rely upon this letter and are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby. The Transferor
also agrees to provide, if requested, any additional information that may be required to
substantiate the Transferee's status as a Qualified Institutional Buyer or to otherwise
determine the eligibility of the Transferee to purchase Securities of the Issuer.
We acknowledge that you and other persons will rely upon our confirmation,
acknowledgments, representations, warranties, covenants and agreements set forth herein, and
we hereby irrevocably authorize you and such other persons to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.
Very truly yours,
(Transferor)
By: _______________________
Name:
Title:
EXHIBIT SEVEN
FORM OF CLASS SB CERTIFICATE TRANSFEROR CERTIFICATE
(RULE 144A TO REGULATION S)
Date: _____________
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Deutsche Bank Trust Company Americas
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: Residential Funding Company, LLC Series 2007-QA4
RE: Mortgage Asset-Backed Pass-Through Certificates,
Series 2007-QA4, Class SB Certificates
Reference is hereby made to the Series Supplement, dated as of May 1, 2007, to the
Standard Terms of Pooling and Servicing Agreement, dated as of May 1, 2007 (together, the
"Pooling Agreement") among Residential Accredit Loans, Inc., as seller (the "Company"),
Residential Funding Company, LLC, as master servicer, and Deutsche Bank Trust Company
Americas, as trustee (the "Trustee").. Capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Pooling Agreement.
This letter relates to U.S.$[______________] aggregate principal amount of Class SB
Certificates which are held in the form of a beneficial interest in a certificated Rule 144A
Certificate (CUSIP/CINS) No. [____________)] registered in the name of [name of transferor]
(the "Transferor") in connection with the exchange or transfer of interests in such
Certificates, in the form of an equivalent beneficial interest in a Regulation S Class SB
Certificate to [name of transferee] (the "Transferee").
In connection with such exchange or transfer, the Transferor does hereby certify that
such exchange or transfer has been effected in accordance with the transfer restrictions set
forth in the Pooling Agreement and that: (a) the offer of the Securities was not made to a
person in the United States, (b) at the time the buy order was originated, the Transferee
was outside the United States or the Transferor and any person acting on its behalf
reasonably believed that the Transferee was outside the United States, (c) no directed
selling efforts have been made in contravention of the requirements of Rule 903 or 904 of
Regulation S, as applicable, (d) the transaction is not part of a plan or scheme to evade
the registration requirements of the United States Securities Act of 1933, as amended (the
"Securities Act"), and (e) the Transferee is not a U.S. Person.
You are entitled to, and we acknowledge that you and other persons will, rely upon
our confirmation, acknowledgments, representations, warranties, covenants and agreements set
forth herein, and we hereby irrevocably authorize you and such other persons to produce this
letter or a copy hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
The Transferor also agrees to provide, if requested, any additional information that
may be required to substantiate the Transferee's status as a non U.S. Person or to otherwise
determine the eligibility of the Transferee to purchase the Class SB Certificates.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.
Very truly yours,
(Transferor)
By: _______________________
Name:
Title:
EXHIBIT EIGHT
FORM OF CLASS SB CERTIFICATE TRANSFEREE CERTIFICATE
Date: ________________
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Deutsche Bank Trust Company Americas
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: Residential Funding Company, LLC Series 2007-QA4
RE: Mortgage Asset-Backed Pass-Through Certificates,
Series 2007-QA4, Class SB Certificates
Reference is hereby made to the Series Supplement, dated as of May 1, 2007, to the
Standard Terms of Pooling and Servicing Agreement, dated as of May 1, 2007 (together, the
"Pooling Agreement") among Residential Accredit Loans, Inc., as seller (the "Company"),
Residential Funding Company, LLC, as master servicer, and Deutsche Bank Trust Company
Americas, as trustee (the "Trustee").. Capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Pooling Agreement.
This letter relates to U.S.$[__________] aggregate principal amount of Class SB
Certificates (the "Certificates") which are held in the form of:
[OPTION 1 USE AS APPLICABLE]
[a beneficial interest in a certificated Regulation S Class SB Certificate (CUSIP/CINS) No.
[______]) registered in the name of [name of transferor] (the "Transferor") in connection
with the exchange or transfer of interests in such Certificates, in the form of an
equivalent beneficial interest in a Rule 144A Class SB Certificate, to [name of transferee]
(the "Transferee").]
[OPTION 2 USE AS APPLICABLE]
[a beneficial interest in a certificated Rule 144A Class SB Certificate (CUSIP/CINS) No.
[________]) registered in the name of [name of transferor] (the "Transferor") in connection
with the exchange or transfer of interests in such Certificates, in the form of an
equivalent beneficial interest in a Regulation S Class SB Certificate, to [name of
transferee] (the "Transferee").]
In connection with such exchange or transfer, the Transferee does hereby certify that
such exchange or transfer has been effected in accordance with the transfer restrictions set
forth in the Pooling Agreement relating to the Certificates and that:
(a) The Transferee (A) is [not a U.S. person and is purchasing the Certificates pursuant
to Rule 903 or 904 of Regulation S (a "Regulation S Purchaser")][ a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act ("Rule
144A") and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2 (a "Qualified Institutional Buyer")], (B) is
aware that the sale of Certificates to it is being made in reliance on the exemption
from registration provided by [Rule 144A] [Regulation S] under the Securities Act and
(C) understands that the Certificates offered in reliance on [Rule 144A] [Regulation
S] under the Securities Act will bear the legend set forth the Pooling Agreement and
be represented by one or more certificated [Regulation S Class SB Certificates][Rule
144A Class SB Certificates].
(b) The Transferee has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its investment in the
Certificates, and the Transferee and any accounts for which it is acting are each able
to bear the economic risk of the Transferee's or its investment. The Transferee
understands that in the event that at any time that such Transferee was in breach, at
the time given, of any of the representations or agreements set forth in this clause
(a), the acquisition of the related Certificates shall be void.
(c) The Transferee understands that the Certificates are being offered only in
transactions not involving any public offering in the United States within the
meaning of the Securities Act. The Certificates have not been and will not be
registered under the Securities Act, and, if in the future the Transferee decides to
offer, resell, pledge or otherwise transfer the Certificates, such Certificates may
be offered, resold, pledged or otherwise transferred only in accordance with the
Pooling Agreement and legend on such Certificates set forth in Exhibit C-II to the
Pooling Agreement. The Transferee acknowledges that no representation is made by the
Trustee, the Company or the Master Servicer as to the availability of any exemption
under the Securities Act or any securities laws of any state in the United States for
resale of the Certificates.
(d) The Transferee is not purchasing the Certificate with a view to the resale,
distribution or other disposition thereof in violation of the Securities Act. The
Transferee understands that an investment in the Certificates involves certain risks,
including the risk of loss of all or a substantial part of its investment under
certain circumstances. The Transferee has had access to such financial and other
information concerning the Trust Fund and the Certificates as it deemed necessary or
appropriate in order to make an informed investment decision with respect to its
purchase of the Certificates, including an opportunity to ask questions of and make
reasonable requests for information from the Trustee and the Transferor.
(e) In connection with the purchase of the Certificates: (i) none of the Trustee, the
Company, the Master Servicer or the Certificate Registrar is acting as a fiduciary or
financial or investment advisor for the Transferee; (ii) the Transferee is not
relying (for purposes of making any investment decision or otherwise) upon any
advice, counsel or representations (whether written or oral) of the Trustee, the
Company, the Master Servicer or the Certificate Registrar other than, in the case of
the Trust Fund, in a current offering memorandum for such Certificates and any
representations expressly set forth in a written agreement with such party; (iii)
none of the Trustee, the Company or the Master Servicer has given to the Transferee
(directly or indirectly through any other person) any assurance, guarantee, or
representation whatsoever as to the expected or projected success, profitability,
return, performance, result, effect, consequence, or benefit (including legal,
regulatory, tax, financial, accounting or otherwise) of its purchase; (iv) the
Transferee has consulted with its own legal, regulatory, tax, business, investment,
financial, and accounting advisors to the extent it has deemed necessary, and it has
made its own investment decisions (including decisions regarding the suitability of
any transaction pursuant to the Pooling Agreement) based upon its own judgment and
upon any advice from such advisors as it has deemed necessary and not upon any view
expressed by the Trustee, the Company or the Master Servicer; and (v) the Transferee
is purchasing the Certificates with a full understanding of all of the terms,
conditions and risks thereof (economic and otherwise), and it is capable of assuming
and willing to assume (financially and otherwise) those risks.
(f) Neither the Transferee nor any account for which the Transferee is acquiring
Certificates was formed for the purpose of acquiring any Certificates (except when
each beneficial owner of the Transferee and each such account is a [Regulation S
Purchaser][Qualified Purchaser]). The Transferee and each such account for which the
Transferee is acquiring Certificates agrees that it will not hold such Certificates
for the benefit of any other person and will be the sole beneficial owner thereof for
all purposes and that it will not sell participations in the Certificates or enter
into any other arrangement pursuant to which any other person will be entitled to a
beneficial interest in the distributions on Certificates (except when any such other
person is a [Regulation S Purchaser][Qualified Purchaser] or unless the Trustee in
its sole discretion and with the advice of counsel in respect of U.S. securities
laws, expressly otherwise permits). The Transferee understands and agrees that any
purported transfer of the Certificates to a transferee that does not comply with the
requirements of this clause (f) will be null and void ab initio and will vest in the
transferee no rights against the Trustee, the Company, the Master Servicer and the
Certificate Registrar. The Transferee understands that in the event that at any time
that such Transferee was in breach, at the time given, of any of the representations
or agreements set forth in paragraph (a) above, the acquisition of the related
Certificates shall be void.
(g) The Transferee understands that the Certificates will bear the applicable legends set
forth in Exhibit C-II to the Pooling Agreement. The Certificates may not at any time
be resold, pledged or transferred to U.S. Persons that are not Qualified
Institutional Buyers. The Transferee must inform a prospective transferee of the
transfer restrictions. Before any interest in a Certificate may be offered, resold,
pledged or otherwise transferred to a person who takes delivery in the form of a
Certificate, the Transferee and the subsequent transferee will, in each case, be
required to provide the Trustee with a written certification in the form provided in
Exhibit Eight (in the case of the subsequent transferee) and Exhibit Six or Exhibit
Seven, as applicable, of the Pooling Agreement as to compliance with the transfer
restrictions.
(h) The Transferee will not, at any time, offer to buy or offer to sell the Certificates
by any form of general solicitation or advertising, including, but not limited to,
any advertisement, article, notice of other communication published in any newspaper,
magazine or similar medium or broadcast over television or radio or seminar or
meeting whose attendees have been invited by general solicitations or advertisings.
(i) On each day the Transferee holds the Certificates or any beneficial interest therein,
the Transferee [check either clause (1) or (2)]:
1. [_____] is not a Plan or an entity whose underlying assets include "plan assets"
(within the meaning of Section 3(42) of ERISA and 29 X.X.X.xx. 2510.3 101)
by reason of such Plan's investment in the entity; or
2. [_____] if the Transferee is an entity described in the preceding clause (i), the
purchase, holding and disposition of a Certificate, as the case may be,
will not constitute or result in a prohibited transaction under Section
406 of ERISA or Section 4975 of the Code or any similar federal, state,
local or non-U.S. law applicable to any governmental, church, non-U.S. or
other plan, as applicable, for which no exemption is available, all of the
conditions of which are satisfied.
Any purported purchase or transfer of Certificates to a Transferee that does not
comply with the requirements of this clause (i) shall be null and void ab initio and will
vest in the transferee no rights against the Trustee.
You are entitled to rely upon this letter and are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby. The Transferee
also agrees to provide, if requested, any additional information that may be required to
substantiate the Transferee's status as a Qualified Institutional Buyer or a Regulation S
Purchaser, as applicable, or to otherwise determine the eligibility of the Transferee to
purchase Certificates of the Trust Fund.
We acknowledge that you and other persons will rely upon our confirmation,
acknowledgments, representations, warranties, covenants and agreements set forth herein, and
we hereby irrevocably authorize you and such other persons to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.
Very truly yours,
(Transferee)
By: ___________________________
Name:
Title:
ANNEX 1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed in the Rule
144A Transferee Certificate to which this certification relates with respect to the
Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial Officer, Senior
Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act of 1933, as amended ("Rule
144A"), because (i) the Buyer owned and/or invested on a discretionary basis
$____________________(1) in securities (except for the excluded securities referred to
below) as of the end of the Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A and (ii) the Buyer satisfies the criteria in the category marked
below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in Section
501(c) (3) of the Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of Columbia,
the business of which is substantially confined to banking and is supervised
by the State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
___ Broker dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934, as amended.
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision
by the insurance commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as amended.
___ Investment Advisor. The Buyer is an investment advisor registered under
the Investment Advisors Act of 1940, as amended.
___ Small Business Investment Company. The Buyer is a small business
investment company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisors Act of
1940, as amended.
___ Other. The Buyer is an entity all of the equity holders of which are
qualified institutional buyers.
__________________________
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is 1 a dealer, and, in that case, Buyer must own and/or invest on a
discretionary basis at least $10,000,000 in securities.
3. The term "securities" as used herein does not include (i) securities of issuers that
are affiliated with the Buyer; (ii) securities that are part of an unsold allotment to or
subscription by the Buyer, if the Buyer is a dealer; (iii) securities issued or guaranteed
by the U.S. or any instrumentality thereof (iv); bank deposit notes and certificates of
deposit; (v) loan participations; (vi) repurchase agreements; (vii) securities owned but
subject to a repurchase agreement; and (viii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned and/or invested
on a discretionary basis by the Buyer, the Buyer used the cost of such securities to the
Buyer and did not include any of the securities referred to in the preceding paragraph,
except (i) where the Buyer reports its securities holdings in its financial statements on
the basis of their market value, and (ii) no current information with respect to the cost of
those securities has been published. If clause (ii) in the preceding sentence applies, the
securities may be valued at market. Further, in determining such aggregate amount, the Buyer
may have included securities owned by subsidiaries of the Buyer, but only if such
subsidiaries are consolidated with the Buyer in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities were not
included if the Buyer is a majority owned, consolidated subsidiary of another enterprise and
the Buyer is not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands that the
seller to it and other parties related to the Certificates are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer may be in reliance
on Rule 144A.
6. Until the date of purchase of the Certificates, the Buyer will notify each of the
parties to which this certification is made of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification as of the date of such purchase. In
addition, if the Buyer is a bank or savings and loan as provided above, the Buyer agrees
that it will furnish to such parties updated annual financial statements promptly after they
become available.
Print Name of the Buyer
By:_________________________
Name:
Title:
Date:
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed in the Rule
144A Transferee Certificate to which this certification relates with respect to the
Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial Officer or
Senior Vice President of the Buyer or, if the Buyer is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended ("Rule 144A"),
because the Buyer is part of a Family of Investment Companies (as defined below), is such an
officer of the Adviser.
2. In connection with purchases by the Buyer, the Buyer is a "qualified institutional
buyer" within the meaning of Rule 144A because (i) the Buyer is an investment company
registered under the Investment Company Act of 1940, as amended, and (ii) as marked below,
the Buyer alone, or the Buyer's Family of Investment Companies, owned at least $100,000,000
in securities (other than the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such securities was
used, except (i) where the Buyer or the Buyer's Family of Investment Companies reports its
securities holdings in its financial statements on the basis of their market value, and (ii)
no current information with respect to the cost of those securities has been published. If
clause (ii) in the preceding sentence applies, the securities may be valued at market.
___ The Buyer owned $_________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $_______ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or more registered
investment companies (or series thereof) that have the same investment adviser or investment
advisers that are affiliated (by virtue of being majority owned subsidiaries of the same
parent or because one investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of issuers that
are affiliated with the Buyer or are part of the Buyer's Family of Investment Companies;
(ii) securities issued or guaranteed by the U.S. or any instrumentality thereof; (iii) bank
deposit notes and certificates of deposit; (iv) loan participations; (v) repurchase
agreements; (vi) securities owned but subject to a repurchase agreement; and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties listed in the
Rule 144A Transferee Certificate to which this certification relates are relying and will
continue to rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the Buyer's own
account.
6. Until the date of purchase of the Certificates, the undersigned will notify the
parties listed in the Rule 144A Transferee Certificate to which this certification relates
of any changes in the information and conclusions herein. Until such notice is given, the
Buyer's purchase of the Certificates will constitute a reaffirmation of this certification
by the undersigned as of the date of such purchase.
Print Name of the Buyer
By: ____________________
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
