RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING COMPANY, LLC,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
AMENDMENT NO. 2
TO
SERIES SUPPLEMENT
Dated as of March 19, 2007
Mortgage Asset-Backed Pass-Through Certificates
Series 2006-QH1
THIS AMENDMENT NO. 2 TO SERIES SUPPLEMENT dated as of March 19, 2007 (this "Amendment"), is among
RESIDENTIAL ACCREDIT LOANS, INC., a Delaware corporation, in its capacity as depositor (the "Company"),
RESIDENTIAL FUNDING COMPANY, LLC, a Delaware limited liability company, in its capacity as master servicer (the
"Master Servicer"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, in its capacity as
trustee (the "Trustee"). Capitalized terms used in this Amendment and not otherwise defined herein will have the
meanings assigned to them in the Series Supplement dated as of November 1, 2006, among the Company, the Master
Servicer and the Trustee (as amended by Amendment No. 1 to the Series Supplement dated January 2, 2007 among the
Company, the Master Servicer and the Trustee) (the "Series Supplement"), and the Standard Terms of Pooling and
Servicing Agreement dated as of November 1, 2006, among the Company, the Master Servicer and the Trustee (the
"Standard Terms," together with the Series Supplement, the "Pooling Agreement"), to the extent incorporated by
reference into the Series Supplement.
W I T N E S S E T H
WHEREAS, the Company hereby authorizes and directs the Trustee to enter into this Amendment No. 2 on the
terms provided herein and the Trustee, by execution of this Amendment No. 2, complies therewith;
WHEREAS, the Company, the Master Servicer and the Trustee entered into Amendment No. 2 to the Series
Supplement and the Series Supplement, and the Company and the Master Servicer have determined that adding certain
provisions to the Series Supplement is necessary to make the Class SB Certificates Rule 144A and Regulation S
eligible;
WHEREAS, the Company, the Master Servicer and the Trustee desire to amend the Series Supplement to make
the Class SB Certificates 144A and Regulation S eligible; and
WHEREAS, Section 11.01(b) of the Pooling Agreement provides that the Series Supplement may be amended
with the consent of the Holders of at least 66% of the Percentage Interests of the affected Class of Certificates
as follows.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Amendments.
(a) Section 1.01 of the Series Supplement is hereby amended in respect of the defined terms "Book-Entry
Certificate" and "Class SB Certificate", which are hereby amended by replacing such definitions in their entirety
with the following:
(i) Book-Entry Certificate: The Class A, Class M and Class SB Certificates.
(ii) Class SB Certificate: Any one of the Class SB Certificates executed by the Trustee
and authenticated by the Certificate Registrar substantially in the form set forth on Exhibit Eleven-A hereto,
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 III Regular Interest for
purposes of the REMIC Provisions, together with certain rights to payments under the Yield Maintenance Agreements
and certain obligations with respect to payments of Basis Risk Shortfalls.
(b) Section 1.01 of the Series Supplement is hereby amended to include the following defined terms:
(i) Clearstream: Clearstream Banking, société anonyme.
(ii) Definitive Certificate: Any definitive, fully registered Certificate.
(iii) Euroclear: Euroclear Bank, S.A./NA, as operator of The Euroclear System.
(iv) Permanent Regulation S Global Offered Certificate: Any one of the Class SB
Certificates substantially in the form of Exhibit Eleven-B hereto, and, in both cases, more fully described in
Section 5.02(g) hereof.
(v) Rule 144A: Rule 144A under the Securities Act of 1933, as in effect from time to
time.
(vi) Rule 144A Global Offered Certificate: Any one of the Class SB Certificates
substantially in the form annexed to the Standard Terms as Exhibit C-II, as more fully described in Section
5.02(g) hereof.
(vii) Temporary Regulation S Global Offered Certificate: Any one of the Class SB
Certificates substantially in the form of Exhibit Eleven-C hereto, and, in both cases, more fully described in
Section 5.02(g) hereof.
(c) Article V of the Series Supplement is hereby amended in its entirety by replacing such section with the
following:
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 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, 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 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.
With respect to any transfer of an interest in a Global Offered Certificate from a Holder of an interest
in a Global Offered Certificate, the requirements of (I)(A) and (B) above shall not apply and any
transferee of a Rule 144A Global Offered Certificate will be deemed to have represented and warranted as
to the matters set forth in Exhibit J attached to the Standard Terms and any transferee of a Temporary
Regulation S Global Offered Certificate or Permanent Regulation S Global Offered Certificate will be
deemed to have represented and warranted as to the matters set forth in Exhibit Twelve of this Series
Supplement. 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) (See Section 5.02(e) of the Standard Terms.).
(f) (See Section 5.02(f) of the Standard Terms.)
(g) Provisions Regarding Rule 144A and Regulation S Transfers. (i) Class SB
Certificates sold to "qualified institutional buyers" as defined in and in reliance on Rule 144A under
the 1933 Act shall be represented by one or more Rule 144A Global Offered Certificates. Class SB
Certificates sold in offshore transactions in reliance on Regulation S under the Securities Act shall be
represented initially by Temporary Regulation S Global Offered Certificates).
(ii) The Temporary Regulation S Global Offered Certificates shall be
exchanged on the later of (a) 40 days after the later of the Closing Date (b) the date on which the
requisite certifications are due to and provided to the Trustee (the later of clauses (a) and (b), the
"Exchange Date") for Permanent Regulation S Global Offered Certificates. Regulation S Global Offered
Certificates shall be issued in registered form, without coupons, and deposited upon the order of the
Transferor with the Trustee as custodian for and registered in the name of a nominee of the Depository
for credit to the account of the depositaries for Euroclear and Clearstream).
(iii) A Certificate Owner holding an interest in a Temporary Regulation S
Global Offered Certificate may receive payments in respect of the Certificates on the Temporary
Regulation S Global Offered Certificate only after the delivery, to Euroclear or Clearstream, as the
case may be, of a written certification substantially in the form set forth in Exhibit Six, and upon
delivery by Euroclear or Clearstream, as the case may be, to the Trustee and Certificate Registrar of a
certification or certifications substantially in the form set forth in Exhibit Seven (the "Clearing
System Certificate"). The delivery by a Certificate Owner of the certification referred to above shall
constitute its irrevocable instruction to Euroclear or Clearstream, as the case may be, to arrange for
the exchange of the Certificate Owner's interest in the Temporary Regulation S Global Offered
Certificate for a beneficial interest in the Permanent Regulation S Global Offered Certificate after the
Exchange Date in accordance with paragraph (iv) below.
(iv) After (i) the Exchange Date and (ii) receipt by the Certificate
Registrar of written instructions from Euroclear or Clearstream, as the case may be, directing the
Certificate Registrar to credit or cause to be credited to either Euroclear's or Clearstream's, as the
case may be, Depository's account a beneficial interest in the Permanent Regulation S Global Offered
Certificate in a principal amount not greater than that of the beneficial interest in the Temporary
Regulation S Global Offered Certificate, the Certificate Registrar shall instruct the Depository to
reduce the principal amount of the Temporary Regulation S Global Offered Certificate and increase the
principal amount of the Permanent Regulation S Global Offered Certificate, by the principal amount of
the beneficial interest in the Temporary Regulation S Global Offered Certificate to be so transferred,
and to credit or cause to be credited to the account of Euroclear, Clearstream or a Person who has an
account with the Depository as the case may be, a beneficial interest in the Permanent Regulation S
Global Offered Certificate having a Certificate Principal Balance of the Temporary Regulation S Global
Offered Certificate that was reduced upon the transfer. Upon return of the entire principal amount of
the Temporary Regulation S Global Offered Certificate to the Trustee in exchange for beneficial
interests in the Permanent Regulation S Global Offered Certificate, Trustee shall cancel the Temporary
Regulation S Global Offered Certificate by perforation and shall forthwith destroy it.
(v) For transfer of an interest in a Permanent Regulation S Global
Offered Certificate for an interest in the Rule 144A Global Offered Certificate, if the
Certificateholder of a beneficial interest in a Permanent Regulation S Global Offered Certificate
deposited with the Depository wishes at any time to exchange its interest in the Permanent Regulation S
Global Offered Certificate, or to transfer its interest in the Permanent Regulation S Global Offered
Certificate to a Person who wishes to take delivery thereof in the form of an interest in the Rule 144A
Global Offered Certificate, the Certificateholder may, subject to the rules and procedures of Euroclear
or Clearstream and the Depository, as the case may be, give directions for the Certificate Registrar to
exchange or cause the exchange or transfer or cause the transfer of the interest for an equivalent
beneficial interest in the Rule 144A Global Offered Certificate. Upon receipt by the Certificate
Registrar of instructions from Euroclear or Clearstream, from the Depository or from the
Certificateholder, as the case may be, directing the Certificate Registrar to credit or cause to be
credited a beneficial interest in the Rule 144A Global Offered Certificate equal to the Percentage
Interest in the Permanent Regulation S Global Offered Certificate to be exchanged or transferred (such
instructions to contain information regarding the Depository Participant account to be credited with the
increase, and, with respect to an exchange or transfer of an interest in the Permanent Regulation S
Global Offered Certificate, information regarding the Depository Participant account to be debited with
the decrease), the Certificate Registrar shall instruct the Depository to reduce the Permanent
Regulation S Global Offered Certificate by the aggregate principal amount of the beneficial interest in
the Permanent Regulation S Global Offered Certificate to be so exchanged or transferred, and the
Certificate Registrar shall instruct the Depository, concurrently with the reduction, to increase the
principal amount of the Rule 144A Global Offered Certificate by the aggregate Certificate Principal
Balance of the beneficial interest in the Permanent Regulation S Global Offered Certificate to be so
exchanged or transferred, and to credit or cause to be credited to the account of the Person specified
in the instructions a beneficial interest in the Rule 144A Global Offered Certificate equal to the
reduction in the Certificate Principal Balance of the Permanent Regulation S Global Offered Certificate.
(vi) For transfers of an interest in the Rule 144A Global Offered
Certificate for an interest in a Regulation S Global Offered Certificate, if a Certificate Owner holding
a beneficial interest in the Rule 144A Global Offered Certificate wishes at any time to exchange its
interest in the Rule 144A Global Offered Certificate for an interest in a Regulation S Global Offered
Certificate, or to transfer its interest in the 144A Book-Entry Certificate to a Person who wishes to
take delivery thereof in the form of an interest in the Regulation S Global Offered Certificate, the
Certificateholder may, subject to the rules and procedures of the Depository, give directions for the
Certificate Registrar to exchange or cause the exchange or transfer or cause the transfer of the
interest for an equivalent beneficial interest in the Regulation S Global Offered Certificate. Upon
receipt by the Certificate Registrar of (A) instructions given in accordance with the Depository's
procedures from a Depository Participant or from the Certificateholder, as the case may be, directing
the Certificate Registrar to credit or cause to be credited a beneficial interest in the Regulation S
Global Offered Certificate in an amount equal to the beneficial interest in the Rule 144A Global Offered
Certificate to be exchanged or transferred, (B) a written order given in accordance with the
Depository's procedures containing information regarding the account of the depositaries for Euroclear or
Clearstream or another Depository Participant, as the case may be, to be credited with the increase and
the name of the account and (C) certificates in the forms of Exhibits Eight and Nine, respectively,
given by the proposed transferee and the Certificate Owner of the interest, the Certificate Registrar
shall instruct the Depository to reduce the Rule 144A Global Offered Certificate by the aggregate
principal amount of the beneficial interest in the Rule 144A Global Offered Certificate to be so
exchanged or transferred and the Certificate Registrar shall instruct the Depository, concurrently with
the reduction, to increase the principal amount of the Regulation S Global Offered Certificate by the
aggregate Certificate Principal Balance of the beneficial interest in the Rule 144A Global Offered
Certificate to be so exchanged or transferred, and to credit or cause to be credited to the account of
the Person specified in the instructions a beneficial interest in the Regulation S Global Offered
Certificate equal to the reduction in the Certificate Principal Balance of the Rule 144A Global Offered
Certificate.
(vii) Notwithstanding any other provisions of this Section 5.02(g), the
Underwriter may exchange beneficial interests in the Temporary Regulation S Global Offered Certificates
held by it for interests in the Rule 144A Global Offered Certificates only after delivery by the
Underwriter of instructions for the exchange substantially in the form of Exhibit Ten. Upon receipt of
the instructions provided in the preceding sentence, the Certificate Registrar shall instruct the
Depository to reduce the principal amount of the Temporary Regulation S Global Offered Certificate to be
so transferred and shall instruct the Depository to increase the principal amount of the Rule 144A
Global Offered Certificate and credit or cause to be credited to the account of the placement agent a
beneficial interest in the Rule 144A Global Offered Certificate having a principal amount equal to the
amount by which the principal amount of the Temporary Regulation S Global Offered Certificate was
reduced upon the transfer pursuant to the instructions provided in the first sentence of this clause
(vii).
(viii) If a transfer of a Class SB Certificate which is a Definitive
Certificate is to be made, 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 the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee,
the Trust Fund, the Company or the Master Servicer.
(ix) The Holder of a Class SB Certificate desiring to effect any 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 the provisions of
this Agreement.
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 The Certificates.
The Trustee may appoint a Paying Agent for the purpose of making distributions
to the Certificateholders pursuant to Section 5.02. 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 5.02, 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. (See Section 5.06 of the Standard Terms.)
(d) The Exhibits in the Series Supplement are hereby amended to include Exhibits Six through Twelve as set
forth in Annex I.
SECTION 2. Effect of Amendment.
Upon execution of this Amendment, the Pooling Agreement shall be, and be deemed to be, modified and
amended in accordance herewith and the respective rights, limitations, obligations, duties, liabilities and
immunities of the parties thereto shall hereafter be determined, exercised and enforced subject in all respects
to such modifications and amendments, and all the terms and conditions of this Amendment shall be deemed to be
part of the terms and conditions of the Pooling Agreement (as applicable) for any and all purposes. Except as
modified and expressly amended by this Amendment, the Pooling Agreement is in all respects ratified and
confirmed, and all the terms, provisions and conditions thereof shall be and remain in full force and effect.
SECTION 3. Binding Effect.
The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto,
any Certificateholder and each of their respective successors and assigns.
SECTION 4. Governing Law.
This Amendment 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 5. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Amendment 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 Amendment and shall in no way affect the
validity or enforceability of the other provisions of this Amendment or of the Certificates or the rights of the
Certificate Insurer or the Certificateholders.
SECTION 6. Section Headings.
The section headings herein are for convenience of reference only, and shall not limit or otherwise
affect the meaning hereof.
SECTION 7. Counterparts.
This Amendment may be executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
[Signature Pages Follow]
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 as of the day and year first above written.
RESIDENTIAL ACCREDIT LOANS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
RESIDENTIAL FUNDING COMPANY, LLC
By: /s/Xxxxxxxxxxx Xxxxxxxx
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Associate
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By: /s/ Xxxxxxx Xxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxx
Title: Authorized Signer
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Vice President
Acknowledged and agreed to by:
XXXXXXX, XXXXX & CO.,
as the sole owner of the Class SB Certificates
By: /s/
Name:
Title:
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the ____ day of March 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 ____ day of March 2007 before me, a notary public in and for said State, personally appeared
_____________, known to me to be an Associate of Residential Funding Company, LLC, 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 CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the ____ day of March 2007 before me, a notary public in and for said State, personally appeared
_________________, known to me to be a __________ of Deutsche Bank Trust Company Americas, a banking association
organized under the laws of the United States that executed the within instrument, and also known to me to be the
person who executed it on behalf of said banking corporation and acknowledged to me that such banking corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
Notary Public
____________________________________
[Notarial Seal]
ANNEX I
EXHIBITS TO THE SERIES SUPPLEMENT
EXHIBIT SIX
FORM OF CERTIFICATE TO BE GIVEN BY CERTIFICATE OWNER
Euroclear Cedel, société anonyme
000 Xxxxxxxxx Xxxxxxxx 00 Xxxxxxxxx Xxxxx-Xxxxxxxx Xxxxxxxxx
X-0000 Xxxxxxxx, Xxxxxxx X-0000 Xxxxxxxxxx
Re: RESIDENTIAL ACCREDIT LOANS, INC., Mortgage Asset-Backed Pass-Through Certificates, Series
2006-QH1, Class SB, issued pursuant to the Series Supplement, dated as of November 1, 2006, to
the Standard Terms of Pooling and Servicing Agreement, dated as of November 1, 2006, among
RESIDENTIAL ACCREDIT LOANS, INC., RESIDENTIAL FUNDING COMPANY, LLC, and DEUTSCHE BANK TRUST
COMPANY AMERICAS, as Trustee
(the "Certificates")
This is to certify that as of the date hereof and except as set forth below, the beneficial interest in
the Certificates held by you for our account is owned by persons that are not U.S. persons (as defined in Rule
901 under the Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or prior to the date on which you
intend to submit your certification relating to the Certificates held by you in which the undersigned has
acquired, or intends to acquire, a beneficial interest in accordance with your operating procedures if any
applicable statement herein is not correct on such date. In the absence of any such notification, it may be
assumed that this certification applies as of such date.
[This certification excepts beneficial interests in and does not relate to U.S. $_________ principal
amount of the Certificates appearing in your books as being held for our account but that we have sold or as to
which we are not yet able to certify.]
We understand that this certification is required in connection with certain securities laws in the
United States of America. If administrative or legal proceedings are commenced or threatened in connection with
which this certification is or would be relevant, we irrevocably authorize you to produce this certification or a
copy thereof to any interested party in such proceedings.
Dated:______________________,*/ By:_____________________________________________,
Account Holder
_______________________
* Certification must be dated on or after the 15th day before the date of the Euroclear or Cedel
certificate to which this certification releases.
EXHIBIT SEVEN
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR OR CEDEL
DB Services Tennessee
000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attn: Transfer Unit
Re: RESIDENTIAL ACCREDIT LOANS, INC., Mortgage Asset-Backed Pass-Through Certificates, Series
2006-QH1, Class SB, issued pursuant to the Series Supplement, dated as of November 1, 2006, to
the Standard Terms of Pooling and Servicing Agreement, dated as of November 1, 2006, among
RESIDENTIAL ACCREDIT LOANS, INC., RESIDENTIAL FUNDING COMPANY, LLC, and DEUTSCHE BANK TRUST
COMPANY AMERICAS, as Trustee (the "Certificates").
This is to certify that, based solely on certifications we have received in writing, by tested telex or
by electronic transmission from member organizations appearing in our records as persons being entitled to a
portion of the principal amount set forth below (our "Member Organizations") as of the date hereof, $____________
principal amount of the Certificates is owned by persons (a) that are not U.S. persons (as defined in Rule 901
under the Securities Act of 1933. as amended (the "Securities Act")) or (b) who purchased their Certificates (or
interests therein) in a transaction or transactions that did not require registration under the Securities Act.
We further certify (a) that we are not making available herewith for exchange any portion of the related
Temporary Regulation S Global Class SB Certificate excepted in such certifications and (b) that as of the date
hereof we have not received any notification from any of our Member Organizations to the effect that the
statements made by them with respect to any portion of the part submitted herewith for exchange are no longer
true and cannot be relied upon as of the date hereof
We understand that this certification is required in connection with certain securities laws of the
United States of America. If administrative or legal proceedings are commenced or threatened in connection with
which this certification is or would be relevant, we irrevocably authorize you to produce this certification or a
copy hereof to any interested party in such proceedings.
Date:______________________* Yours faithfully,
* To be dated no earlier By:___________________________________
than the Effective Date. Xxxxxx Guaranty Trust Company of New York, Brussels Office, as
Operator of the Euroclear Clearance System
Cedel, société anonyme
EXHIBIT EIGHT
FORM OF
CERTIFICATE TO BE GIVEN BY TRANSFEREE
OF BENEFICIAL INTEREST IN A REGULATION S
BOOK-ENTRY CERTIFICATE
Euroclear Cedel, société anonyme
000 Xxxxxxxxx Xxxxxxxx 00 Xxxxxxxxx Xxxxx-Xxxxxxxx Xxxxxxxxx
X- 0000 Xxxxxxxx, Xxxxxxx X- 0000 Xxxxxxxxxx
Re: RESIDENTIAL ACCREDIT LOANS, INC., Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-QH1, Class SB, issued pursuant to Series Supplement, dated as of November
1, 2006, to the Standard Terms of Pooling and Servicing Agreement, dated as of
November 1, 2006, among RESIDENTIAL ACCREDIT LOANS, INC., RESIDENTIAL FUNDING COMPANY,
LLC, and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee (the "Certificates").
This is to certify that as of the date hereof, and except as set forth below, for purposes of acquiring
a beneficial interest in the Certificates, the undersigned certifies that it is not a U.S. person (as defined in
Rule 901 under the Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or prior to the date on which you
intend to submit your certification relating to the Certificates held by you in which the undersigned intends to
acquire a beneficial interest in accordance with your operating procedures if any applicable statement herein is
not correct on such date. In the absence of any such notification, it may be assumed that this certification
applies as of such date.
We understand that this certification is required in connection with certain securities laws in the
United States of America. If administrative or legal proceedings are commenced or threatened in connection with
which this certification is or would be relevant, we irrevocably authorize you to produce this certification or a
copy thereof to any interested party in such proceedings.
Dated:________________________ By:____________________________________
EXHIBIT NINE
FORM OF
TRANSFER CERTIFICATE FOR EXCHANGE OR
TRANSFER FROM 144A BOOK-ENTRY CERTIFICATE
TO REGULATION S BOOK-ENTRY CERTIFICATE
DB Services Tennessee
000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attn: Transfer Unit
Re: RESIDENTIAL ACCREDIT LOANS, INC., Mortgage Asset-Backed Pass-Through Certificates, Series
2006-QH1, Class SB, issued pursuant to the Series Supplement, dated as of November 1, 2006, to
the Standard Terms of Pooling and Servicing Agreement, dated as of November 1, 2006, among
RESIDENTIAL ACCREDIT LOANS, INC., RESIDENTIAL FUNDING COMPANY, LLC, and DEUTSCHE BANK TRUST
COMPANY AMERICAS, as Trustee (the "Certificates").
Capitalized terms used but not defined herein shall have the meanings given to them in the Agreement.
This letter relates to U.S. $____________ principal amount of Certificates that are held as a beneficial
interest in the 144A Book-Entry Certificate (CUSIP No. ________) with DTC in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or transfer of the beneficial interest
for an interest in the Permanent Regulation S Global Class SB Certificate (CUSIP No. ________) to be held with
[Euroclear] [Cedel] through DTC.
In connection with the request and in receipt of the Certificates, the Transferor does hereby certify
that the exchange or transfer has been effected in accordance with the transfer restrictions set forth in the
Agreement and the Certificates and:
(a) pursuant to and in accordance with Regulation S under the Securities Act of 1933, as
amended (the "Securities Act"), and accordingly the Transferor does hereby certify that:
(i) the offer of the Certificates was not made to a U.S. Person as defined in
Regulation S under the Securities Act that purchased the Certificates in an Offshore
Transaction as defined in Regulation S under the Securities Act and understands that the sale
of the Certificates to it is being made in reliance on the exemption from the registration
requirements of the Securities Act provided by Regulation S thereunder,
[(ii) at the time the buy order was originated, the transferee was outside the
United States of America or the Transferor and any person acting on its behalf reasonably
believed that the transferee was outside the United States of America,
(ii) the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither the Transferor nor any person acting on its behalf knows
that the transaction was pre-arranged with a buyer in the United States of America,]**/
(iii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation 5, as applicable,
(iv) the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act, and
(b) with respect to transfers made in reliance on Rule 144 under the Securities Act, the
Transferor does hereby certify that the Certificates are being transferred in a transaction permitted by
Rule 144 under the Securities Act.
This certification and the statements contained herein are made for your benefit and the benefit of the
issuer and the [placement agent].
[Insert name of Transferor]
Date:_________________________ By:__________________________________________________
Title:_______________________________________________
__________________________
** Insert one of these two provisions, which come from the definition of "offshore transactions" in
Regulation S.
EXHIBIT TEN
FORM OF
INITIAL PURCHASER EXCHANGE INSTRUCTIONS
Depository Trust Company
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: RESIDENTIAL ACCREDIT LOANS, INC., Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-QH1, Class SB, issued pursuant to the Series Supplement, dated as of
November 1, 2006, to the Standard Terms of Pooling and Servicing Agreement, dated as
of November 1, 2006, among RESIDENTIAL ACCREDIT LOANS, INC., RESIDENTIAL FUNDING
COMPANY, LLC, and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee (the "Certificates")
Pursuant to Section 5.02(g) of the Agreement, ________________________ (the "Initial Purchaser") hereby
requests that $______________ aggregate principal amount of the Certificates held by you for our account and
represented by the Temporary Regulation S Global Class SB Certificate (CUSIP No. ________) (as defined in the
Agreement) be exchanged for an equal principal amount represented by the Rule 144A Global Class SB Certificate
(CUSIP No. _______) to be held by you for our account.
Date:_________________________________ [Initial Purchaser]
By:__________________________________________
Title:________________________________
EXHIBIT ELEVEN-A
FORM OF RULE 144A GLOBAL CLASS SB-[__] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES AND CLASS M
CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS OWNERSHIP OF 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") COUPLED WITH AN INTEREST IN THE YIELD MAINTENANCE
AGREEMENTS AND AN OBLIGATION TO PAY CERTAIN BASIS RISK SHORTFALL AMOUNTS.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE OR
HOLDING OF THIS CERTIFICATE (OR INTEREST THEREIN) THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER
PLAN OR ARRANGEMENT 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 A PERSON (INCLUDING AN INSURANCE COMPANY
INVESTING ITS GENERAL ACCOUNT, 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.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE UNLESS
THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE
REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR IS MADE IN A TRANSACTION THAT DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION. FURTHERMORE, THE AGREEMENT PROVIDES THAT NO TRANSFER OF THIS
CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE EXCEPT (I) OUTSIDE THE UNITED STATES
TO ENTITIES WHICH ARE NOT U.S. PERSONS WITHIN THE MEANING OF REGULATION S UNDER THE 1933 ACT OR (II) IN RELIANCE
ON RULE 144A UNDER THE 1933 ACT ("RULE 144A") TO A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) THAT
IS ACQUIRING THIS CERTIFICATE OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND AGREED THAT (I) IT IS (A) A
QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE
ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); AND (II) IT UNDERSTANDS THAT THIS CERTIFICATE
IS BEING TRANSFERRED TO IT IN A TRANSACTION NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933 ACT,
AND THAT, IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE TRANSFER THIS CERTIFICATE, THIS CERTIFICATE
MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT (OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED
INSTITUTIONAL BUYER) AND TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION SHALL,
AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE AGREED TO, INDEMNIFY THE TRUSTEE, THE DEPOSITOR, 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 AND THE
AGREEMENT.
NO TRANSFER OF ANY CLASS SB CERTIFICATE SHALL BE MADE UNLESS THE PROPOSED TRANSFEREE OF SUCH CLASS SB
CERTIFICATE PROVIDES TO THE TRUSTEE THE APPROPRIATE TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM
W-8BEN, W-8IMY, W-8EXP OR W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND AGREES TO UPDATE SUCH FORMS
(I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS REQUIRED UNDER THEN APPLICABLE U.S. TREASURY REGULATIONS AND (III)
PROMPTLY UPON LEARNING THAT SUCH FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH TRANSFER. UNDER
THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM FROM A TRANSFEREE OF ANY CLASS SB CERTIFICATE, THE
TRUSTEE SHALL FORWARD SUCH TAX CERTIFICATION FORM PROVIDED TO IT TO THE YIELD MAINTENANCE AGREEMENTS PROVIDER.
EACH HOLDER OF A CLASS SB CERTIFICATE AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE
TRUSTEE FORWARDING TO THE YIELD MAINTENANCE AGREEMENTS PROVIDER ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED
AND UPDATED IN ACCORDANCE WITH THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF ANY CLASS SB
CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL BE DEEMED NULL AND VOID UNDER THE
AGREEMENT.
CUSIP: _____________________ Certificate No. SB-[__]-1
Date of Pooling and Servicing Agreement Percentage Interest: 100.00%
and Cut-off Date: November 1, 2006
First Distribution Date: December 26, 2006 Aggregate Initial Notional Balance
of the Class SB-[_] Certificates:
$___________________________
Master Servicer: Initial Notional Balance
RESIDENTIAL FUNDING COMPANY, LLC of this Class SB-[_] Certificate:
$___________________________
Maturity Date:
__________ __, 20__
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-QH1
evidencing a percentage interest in the distributions allocable to the
Class SB-[_] Certificates with respect to a Trust Fund consisting primarily of
a pool of fixed and adjustable interest rate, first lien mortgage loans on
one- to four-family residential properties sold by RESIDENTIAL ACCREDIT LOANS
INCORPORATED
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 INCORPORATED, the Master Servicer, the Trustee referred
to below 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 INCORPORATED, the Master
Servicer, the Trustee or any of their affiliates. None of the Depositor, the Master Servicer 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 CEDE & 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 adjustable interest rate, first lien mortgage loans on one- to four-family residential properties, sold by
RESIDENTIAL ACCREDIT LOANS INCORPORATED (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 Deutsche Bank
Trust Company Americas, as trustee (the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof, assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each month or, if
such 25th day is not a Business Day, the Business Day immediately following (the "Distribution Date"), commencing
as described in the Agreement, to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month immediately preceding the month of such distribution (the "Record
Date"), from the Available 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 in St. Xxxx, Minnesota. 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.
Any Transferee of this Certificate will be deemed to have represented by virtue of its purchase or
holding of this Certificate (or interest therein) that either such transferee is not an employee benefit plan or
other plan or arrangement 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 a person (including an insurance
company investing its general account, 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.
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 in St. Xxxx, Minnesota, 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 none of the Depositor, the Master Servicer,
the Trustee or 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 Holder of the Class
SB Certificates or the Master Servicer, as described in the Agreement, from the Trust Fund of all remaining
Mortgage Loans and all property acquired in respect of such Mortgage Loans or the Certificates, in either case
thereby effecting early retirement of the Certificates. The Agreement permits, but does not require, the Holder
of the Class SB Certificates or the Master Servicer, as described in the Agreement, (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 Balance.
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.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By: _________________________________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class SB-[_] Certificates referred to in the within-mentioned Agreement.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
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 ELEVEN -B
FORM OF PERMANENT REGULATION S GLOBAL CLASS SB-[__] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES AND CLASS M
CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS OWNERSHIP OF 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") COUPLED WITH AN INTEREST IN THE YIELD MAINTENANCE
AGREEMENTS AND AN OBLIGATION TO PAY CERTAIN BASIS RISK SHORTFALL AMOUNTS.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE OR
HOLDING OF THIS CERTIFICATE (OR INTEREST THEREIN) THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER
PLAN OR ARRANGEMENT 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 A PERSON (INCLUDING AN INSURANCE COMPANY
INVESTING ITS GENERAL ACCOUNT, 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.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE UNLESS
THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE
REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR IS MADE IN A TRANSACTION THAT DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION. FURTHERMORE, THE AGREEMENT PROVIDES THAT NO TRANSFER OF THIS
CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE EXCEPT (I) OUTSIDE THE UNITED STATES
TO ENTITIES WHICH ARE NOT U.S. PERSONS WITHIN THE MEANING OF REGULATION S UNDER THE 1933 ACT OR (II) IN RELIANCE
ON RULE 144A UNDER THE 1933 ACT ("RULE 144A") TO A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) THAT
IS ACQUIRING THIS CERTIFICATE OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND AGREED THAT (I) IT IS (A) A
QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE
ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); (II) IT UNDERSTANDS THAT THIS CERTIFICATE IS
BEING TRANSFERRED TO IT IN A TRANSACTION NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933 ACT,
AND THAT, IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE TRANSFER THIS CERTIFICATE, THIS CERTIFICATE
MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT (OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED
INSTITUTIONAL BUYER) AND TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S; AND
(III) IF THE HOLDER IS A REGULATION S PURCHASER, IT UNDERSTANDS THAT THIS CERTIFICATE HAS NOT AND WILL NOT BE
REGISTERED UNDER THE 1933 ACT, THAT ANY OFFERS, SALES OR DELIVERIES OF THIS CERTIFICATE IN THE UNITED STATES OR
TO U.S. PERSONS PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE CLOSING DATE MAY CONSTITUTE A VIOLATION OF UNITED
STATES LAW, AND THAT DISTRIBUTIONS OF PRINCIPAL AND INTEREST WILL BE MADE IN RESPECT OF SUCH CERTIFICATES ONLY
FOLLOWING THE DELIVERY BY THE HOLDER OF A CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP OR THE EXCHANGE OF
BENEFICIAL INTEREST IN TEMPORARY REGULATION S GLOBAL OFFERED CERTIFICATES FOR BENEFICIAL INTERESTS IN THE RELATED
PERMANENT REGULATION S GLOBAL OFFERED CERTIFICATES (WHICH IN EACH CASE WILL ITSELF REQUIRE A CERTIFICATION OF
NON-U.S. BENEFICIAL OWNERSHIP), AT THE TIMES AND IN THE MANNER SET FORTH IN THE AGREEMENT.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION SHALL,
AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE AGREED TO, INDEMNIFY THE TRUSTEE, THE DEPOSITOR, 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 AND THE
AGREEMENT.
NO TRANSFER OF ANY CLASS SB CERTIFICATE SHALL BE MADE UNLESS THE PROPOSED TRANSFEREE OF SUCH CLASS SB
CERTIFICATE PROVIDES TO THE TRUSTEE THE APPROPRIATE TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM
W-8BEN, W-8IMY, W-8EXP OR W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND AGREES TO UPDATE SUCH FORMS
(I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS REQUIRED UNDER THEN APPLICABLE U.S. TREASURY REGULATIONS AND (III)
PROMPTLY UPON LEARNING THAT SUCH FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH TRANSFER. UNDER
THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM FROM A TRANSFEREE OF ANY CLASS SB CERTIFICATE, THE
TRUSTEE SHALL FORWARD SUCH TAX CERTIFICATION FORM PROVIDED TO IT TO THE YIELD MAINTENANCE AGREEMENTS PROVIDER.
EACH HOLDER OF A CLASS SB CERTIFICATE AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE
TRUSTEE FORWARDING TO THE YIELD MAINTENANCE AGREEMENTS PROVIDER ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED
AND UPDATED IN ACCORDANCE WITH THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF ANY CLASS SB
CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL BE DEEMED NULL AND VOID UNDER THE
AGREEMENT.
CUSIP: _____________________ Certificate No. SB-[__]-1
Date of Pooling and Servicing Agreement Percentage Interest: [__]%
and Cut-off Date: November 1, 2006
First Distribution Date: December 26, 2006 Aggregate Initial Notional Balance
of the Class SB-[_] Certificates:
$___________________________
Master Servicer: Initial Notional Balance
RESIDENTIAL FUNDING COMPANY, LLC of this Class SB-[_] Certificate:
$___________________________
Maturity Date:
__________ __, 20__
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-QH1
evidencing a percentage interest in the distributions allocable to the
Class SB-[_] Certificates with respect to a Trust Fund consisting primarily of
a pool of fixed and adjustable interest rate, first lien mortgage loans on
one- to four-family residential properties sold by RESIDENTIAL ACCREDIT LOANS
INCORPORATED
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 INCORPORATED, the Master Servicer, the Trustee referred
to below 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 INCORPORATED, the Master
Servicer, the Trustee or any of their affiliates. None of the Depositor, the Master Servicer 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 CEDE & 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 adjustable interest rate, first lien mortgage loans on one- to four-family residential properties, sold by
RESIDENTIAL ACCREDIT LOANS INCORPORATED (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 Deutsche Bank
Trust Company Americas, as trustee (the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof, assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each month or, if
such 25th day is not a Business Day, the Business Day immediately following (the "Distribution Date"), commencing
as described in the Agreement, to the Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month immediately preceding the month of such distribution (the "Record
Date"), from the Available 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 in St. Xxxx, Minnesota. 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.
Any Transferee of this Certificate will be deemed to have represented by virtue of its purchase or
holding of this Certificate (or interest therein) that either such transferee is not an employee benefit plan or
other plan or arrangement 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 a person (including an insurance
company investing its general account, 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.
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 in St. Xxxx, Minnesota, 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 none of the Depositor, the Master Servicer,
the Trustee or 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 Holder of the Class
SB Certificates or the Master Servicer, as described in the Agreement, from the Trust Fund of all remaining
Mortgage Loans and all property acquired in respect of such Mortgage Loans or the Certificates, in either case
thereby effecting early retirement of the Certificates. The Agreement permits, but does not require, the Holder
of the Class SB Certificates or the Master Servicer, as described in the Agreement, (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 Balance.
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.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By: _________________________________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class SB-[_] Certificates referred to in the within-mentioned Agreement.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
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 ELEVEN-C
FORM OF TEMPORARY REGULATION S GLOBAL CLASS SB-[__] CERTIFICATE
THIS CERTIFICATE IS A TEMPORARY REGULATION S GLOBAL CERTIFICATE FOR PURPOSES OF REGULATION S UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS TEMPORARY REGULATION S GLOBAL
CLASS SB CERTIFICATE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED UNDER THE
POOLING AND SERVICING AGREEMENT.
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.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND CLASS M CERTIFICATES AS
DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS OWNERSHIP OF 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") COUPLED WITH AN INTEREST IN THE YIELD MAINTENANCE
AGREEMENTS AND AN OBLIGATION TO PAY CERTAIN BASIS RISK SHORTFALL AMOUNTS.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE OR
HOLDING OF THIS CERTIFICATE (OR INTEREST THEREIN) THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER
PLAN OR ARRANGEMENT 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 A PERSON (INCLUDING AN INSURANCE COMPANY
INVESTING ITS GENERAL ACCOUNT, 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.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE UNLESS
THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE
REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR IS MADE IN A TRANSACTION THAT DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION. FURTHERMORE, THE AGREEMENT PROVIDES THAT NO TRANSFER OF THIS
CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE EXCEPT (I) OUTSIDE THE UNITED STATES
TO ENTITIES WHICH ARE NOT U.S. PERSONS WITHIN THE MEANING OF REGULATION S UNDER THE 1933 ACT OR (II) IN RELIANCE
ON RULE 144A UNDER THE 1933 ACT ("RULE 144A") TO A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) THAT
IS ACQUIRING THIS CERTIFICATE OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND AGREED THAT (I) IT IS (A) A
QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE
ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); (II) IT UNDERSTANDS THAT THIS CERTIFICATE IS
BEING TRANSFERRED TO IT IN A TRANSACTION NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933 ACT,
AND THAT, IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE TRANSFER THIS CERTIFICATE, THIS CERTIFICATE
MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT (OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED
INSTITUTIONAL BUYER) AND TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S; AND
(III) IF THE HOLDER IS A REGULATION S PURCHASER, IT UNDERSTANDS THAT THIS CERTIFICATE HAS NOT AND WILL NOT BE
REGISTERED UNDER THE 1933 ACT, THAT ANY OFFERS, SALES OR DELIVERIES OF THIS CERTIFICATE IN THE UNITED STATES OR
TO U.S. PERSONS PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE CLOSING DATE MAY CONSTITUTE A VIOLATION OF UNITED
STATES LAW, AND THAT DISTRIBUTIONS OF PRINCIPAL AND INTEREST WILL BE MADE IN RESPECT OF SUCH CERTIFICATES ONLY
FOLLOWING THE DELIVERY BY THE HOLDER OF A CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP OR THE EXCHANGE OF
BENEFICIAL INTEREST IN TEMPORARY REGULATION S GLOBAL OFFERED CERTIFICATES FOR BENEFICIAL INTERESTS IN THE RELATED
PERMANENT REGULATION S GLOBAL OFFERED CERTIFICATES (WHICH IN EACH CASE WILL ITSELF REQUIRE A CERTIFICATION OF
NON-U.S. BENEFICIAL OWNERSHIP), AT THE TIMES AND IN THE MANNER SET FORTH IN THE AGREEMENT.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION SHALL,
AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE AGREED TO, INDEMNIFY THE TRUSTEE, THE DEPOSITOR, 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 AND THE
AGREEMENT.
NO TRANSFER OF ANY CLASS SB CERTIFICATE SHALL BE MADE UNLESS THE PROPOSED TRANSFEREE OF SUCH CLASS SB
CERTIFICATE PROVIDES TO THE TRUSTEE THE APPROPRIATE TAX CERTIFICATION FORM (I.E., IRS FORM W-9 OR IRS FORM
W-8BEN, W-8IMY, W-8EXP OR W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO)) AND AGREES TO UPDATE SUCH FORMS
(I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS REQUIRED UNDER THEN APPLICABLE U.S. TREASURY REGULATIONS AND (III)
PROMPTLY UPON LEARNING THAT SUCH FORM HAS BECOME OBSOLETE OR INCORRECT, AS A CONDITION TO SUCH TRANSFER. UNDER
THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX CERTIFICATION FORM FROM A TRANSFEREE OF ANY CLASS SB CERTIFICATE, THE
TRUSTEE SHALL FORWARD SUCH TAX CERTIFICATION FORM PROVIDED TO IT TO THE YIELD MAINTENANCE AGREEMENTS PROVIDER.
EACH HOLDER OF A CLASS SB CERTIFICATE AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE
TRUSTEE FORWARDING TO THE YIELD MAINTENANCE AGREEMENTS PROVIDER ANY SUCH TAX CERTIFICATION FORM IT HAS PROVIDED
AND UPDATED IN ACCORDANCE WITH THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF ANY CLASS SB
CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL BE DEEMED NULL AND VOID UNDER THE
AGREEMENT.
CUSIP: __________________ Certificate No. SB
Date of Pooling and Servicing Agreement Percentage Interest: 100.00%
and Cut-off Date: November 1, 2006
First Distribution Date: December 26, 2006 Aggregate Initial Notional Balance
of the Class SB Certificates:
$___________________________
Master Servicer: Initial Notional Balance
RESIDENTIAL FUNDING COMPANY, LLC of this Class SB Certificate:
$___________________________
Maturity Date:
__________ __, 20__
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-QH1
evidencing a percentage interest in the distributions allocable to the
Class SB Certificates with respect to a Trust Fund consisting primarily of a
pool of fixed and adjustable interest rate, first lien mortgage loans
mortgage loans on one- to four-family residential properties 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 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 any of their affiliates. None of the Depositor, the Master Servicer 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 CEDE & 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 adjustable interest rate, first lien mortgage loans on one- to four-family residential properties, 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 Deutsche Bank Trust
Company Americas, as trustee (the "Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned
in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof, assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each month or, if
such 25th day is not a Business Day, the Business Day immediately following (the "Distribution Date"), commencing
as described in the Agreement, to the Person in whose name this Certificate is registered at the close of
business on the Business Day immediately preceding that Distribution Date (the "Record Date"), from the related
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 in St. Xxxx, Minnesota. 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.
Any Transferee of this Certificate will be deemed to have represented by virtue of its purchase or
holding of this Certificate (or interest therein) that either such transferee is not an employee benefit plan or
other plan or arrangement 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 a person (including an insurance
company investing its general account, 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.
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 in St. Xxxx, Minnesota, 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 none of the Depositor, the Master Servicer,
the Trustee or 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 Holder of the Class
SB Certificates or the Master Servicer, as described in the Agreement, from the Trust Fund of all remaining
Mortgage Loans and all property acquired in respect of such Mortgage Loans or the Certificates, in either case
thereby effecting early retirement of the Certificates. The Agreement permits, but does not require the Holder
of the Class SB Certificates or the Master Servicer, as described in the Agreement, (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 Balance.
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.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By: _________________________________________________
Authorized Signatory
Dated: ____________________
Certificate of Authentication
This is one of the Class SB-[_] Certificates referred to in the within-mentioned Agreement.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
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 TWELVE
FORM OF REGULATION S TRANSFEREE CERTIFICATE
_____________________, 20__
Residential Accredit Loans, Inc. Residential Funding Company, LLC
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000 Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000 Xxxxxxxxxxx, Xxxxxxxxx 00000
DB Services Tennessee
000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Transfer Unit
Re:______Mortgage Asset-Backed Pass-Through Certificates, RALI Series 2006-QH1
Ladies and Gentlemen:
__________________________________ (the "Purchaser") intends to purchase from ___________________________ (the
"Seller") $_____________ Initial Certificate Principal Balance of Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-QH1, Class SB (the "Certificates"), issued pursuant to the Series Supplement, dated as of November 1,
2006, to the Standard Terms of Pooling and Servicing Agreement, dated as of November 1, 2006 (the "Pooling and
Servicing Agreement"), among Residential Accredit Loans, Inc., as depositor (the "Depositor"), Residential
Funding Company, LLC, as master servicer (the "Master Servicer"), and Deutsche Bank Trust Company Americas, as
trustee (the "Trustee"). All terms used herein and not otherwise defined shall have the meanings set forth in
the Pooling and Servicing Agreement. The Seller hereby certifies, represents and warrants to, and covenants
with, the Depositor, the Trustee and the Master Servicer that:
In connection with the undersigned's purchase of the Certificates, the undersigned hereby represents,
acknowledges and agrees as follows:
1. It is a Person that is not a "U.S. person" as defined in Regulation S under the Securities Act that
purchased the Certificates in an Offshore Transaction as defined in Regulation S under the Securities Act and
understands that the sale of the Certificates to it is being made in reliance on the exemption from the
registration requirements of the Securities Act provided by Regulation S thereunder; and
2. (a) It is not an employee benefit plan or other plan or arrangement subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code, or any person (including an insurance company
investing its general account, 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; or (b) it has provided the Trustee, the
Depositor and the Master Servicer with the Opinion of Counsel described in Section 5.02(e)(i) of the Agreement,
which shall be acceptable to and in form and substance satisfactory to the Trustee, the Depositor, and the Master
Servicer to the effect that the purchase or holding of this Certificate is permissible under applicable law, will
not constitute or result in any nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code (or comparable provisions of any subsequent enactments), and will not subject the Trustee, the
Depositor, 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 the Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Depositor or the Master Servicer.
This certificate and the statements contained herein are made for your benefit.
[INSERT NAME OF TRANSFEREE]
By:
Name:
Title:
Dated: ______________, 20__
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING COMPANY, LLC,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
AMENDMENT NO. 1
TO
SERIES SUPPLEMENT
Dated as of January 2, 2007
Mortgage Asset-Backed Pass-Through Certificates
Series 2006-QH1
THIS AMENDMENT NO. 1 TO SERIES SUPPLEMENT dated as of January 2, 2007 (this "Amendment"), is among
RESIDENTIAL ACCREDIT LOANS, INC., a Delaware corporation, in its capacity as depositor (the "Company"),
RESIDENTIAL FUNDING COMPANY, LLC, a Delaware limited liability company, in its capacity as master servicer (the
"Master Servicer"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a national banking association, in its capacity as
trustee (the "Trustee"). Capitalized terms used in this Amendment and not otherwise defined herein will have the
meanings assigned to them in the Series Supplement dated as of November 1, 2006, among the Company, the Master
Servicer and the Trustee (the "Series Supplement"), and the Standard Terms of Pooling and Servicing Agreement
dated as of November 1, 2006, among the Company, the Master Servicer and the Trustee (the "Standard Terms,"
together with the Series Supplement, the "Pooling Agreement"), to the extent incorporated by reference into the
Series Supplement.
W I T N E S S E T H
WHEREAS, the Company, the Master Servicer and the Trustee entered into the Series Supplement, and the
Company and the Master Servicer have determined that adding certain provisions to the Series Supplement is
necessary to address the error caused by an inconsistency between the Series Supplement and the Prospectus
Supplement pursuant to which the Offered Certificates were offered;
WHEREAS, the Company, the Master Servicer and the Trustee desire to amend the Series Supplement to
correct the error caused by such inconsistency; and
WHEREAS, Sections 11.01(a)(i), (ii) and (vii) and 11.01(b) of the Pooling Agreement provide that the
Series Supplement may be amended as follows.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Amendments.
(a) Section 1.01 of the Series Supplement is hereby amended in respect of the following
defined terms by replacing any use of the word "second" with the word "first": "Class A-1 Margin", "Class A-2
Margin", "Class A-3 Margin", "Class M-1 Margin", "Class M-2 Margin", "Class M-3 Margin", "Class M-4 Margin" and
"Class M-5 Margin".
(b) Section 4.02(c)(ix) of the Series Supplement is hereby amended by replacing such
section in its entirety with the following:
(ix) to the Class A-2, Class A-3 and Class M Certificateholders, the principal portion of
any Realized Losses previously allocated to those Certificates and remaining unreimbursed, which amount
shall be allocated sequentially, to the Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4
and Class M-5 Certificateholders, in that order;
(c) Article V of the Series Supplement is hereby amended by adding the following section
after Section 5.02(h):
(i) Notwithstanding anything to the contrary contained herein, the Trustee shall not
permit the transfer of a beneficial interest in a Class SB Certificate unless the transferee executes
and delivers to the Trustee and any Paying Agent any certification that is required pursuant to Section
10.06(c) prior to transfer.
(d) Article X is hereby amended by adding the following section after Section 10.05:
Section 10.06 Grantor Trust Provisions.
(a) It is intended that the portion of the Trust Fund consisting of the Trust
Fund's interest in the Yield Maintenance Agreements 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 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 portion of the Trust Fund classified as a
grantor trust as noted in Section 10.06(a) and deliver such Tax Returns in a timely manner to the
Trustee, and if required by applicable law the Trustee is directed to and 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
such Tax Returns that contain errors or omissions. The 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 shall provide the appropriate tax
certification to the Trustee and any Paying Agent to enable the Trustee or any Paying Agent to make
payments on the Class SB Certificates without withholding or backup withholding taxes. Each Class SB
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 Trustee or any Paying Agent to the Yield
Maintenance Agreements Provider 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 to a transferee which does not comply with these requirements
shall be deemed null and void under this Agreement. Neither the Trustee nor any Paying Agent shall be
liable for the completeness, accuracy, content or truthfulness of any such tax certification provided to
it. The Trustee or any Paying Agent shall only be required to forward any tax certification received by
it to the Yield Maintenance Agreements Provider at the last known address provided to it, and shall not
be liable for the receipt of such tax certification by the Yield Maintenance Agreements Provider, nor
any failure of the Yield Maintenance Agreements Provider to process such certification or to take any
action as required under the Yield Maintenance Agreements or under applicable law. Neither the Trustee
nor any Paying Agent shall have a duty to take action to correct any misstatement or omission in any tax
certification provided to it and forwarded to the Yield Maintenance Agreements Provider.
(d) The Trustee, on behalf of the portion of the Trust Fund classified as a
grantor trust as noted in Section 10.06(a), 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 by the Yield Maintenance
Agreements Provider under either Yield Maintenance Agreement, to the Yield Maintenance Agreements
Provider on or before the later of (A) the first payment date under the Yield Maintenance Agreements and
(B) the date the Trustee receives the tax identification number, and thereafter prior to the expiration
or obsolescence of such previously delivered form if the Trustee is notified in writing or otherwise has
actual knowledge thereof and (ii) shall, if requested by the Yield Maintenance Agreements Provider,
deliver to the Yield Maintenance Agreements Provider promptly upon receipt each certification received
from the Class SB 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.
SECTION 2. Effect of Amendment.
Upon execution of this Amendment, the Pooling Agreement shall be, and be deemed to be, modified and
amended in accordance herewith and the respective rights, limitations, obligations, duties, liabilities and
immunities of the parties thereto shall hereafter be determined, exercised and enforced subject in all respects
to such modifications and amendments, and all the terms and conditions of this Amendment shall be deemed to be
part of the terms and conditions of the Pooling Agreement (as applicable) for any and all purposes. Except as
modified and expressly amended by this Amendment, the Pooling Agreement is in all respects ratified and
confirmed, and all the terms, provisions and conditions thereof shall be and remain in full force and effect.
SECTION 3. Binding Effect.
The provisions of this Amendment shall be binding upon and inure to the benefit of the parties hereto,
any Certificateholder and each of their respective successors and assigns.
SECTION 4. Governing Law.
This Amendment 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 5. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Amendment 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 Amendment and shall in no way affect the
validity or enforceability of the other provisions of this Amendment or of the Certificates or the rights of the
Certificate Insurer or the Certificateholders.
SECTION 6. Section Headings.
The section headings herein are for convenience of reference only, and shall not limit or otherwise
affect the meaning hereof.
SECTION 7. Counterparts.
This Amendment may be executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
[Signature Pages Follow]
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 as of the day and year first above written.
RESIDENTIAL ACCREDIT LOANS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
RESIDENTIAL FUNDING COMPANY, LLC
By: /s/Xxxxxxxxxxx Xxxxxxxx
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Associate
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By: /s/ Xxxxxxx Xxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxx
Title: Authorized Signer
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Vice President
Acknowledged and agreed to by:
XXXXXXX, XXXXX & CO.,
as the sole owner of the Class SB Certificates
By: /s/
Name:
Title:
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the ____ day of January 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 ____ day of January 2007 before me, a notary public in and for said State, personally appeared
_____________, known to me to be an Associate of Residential Funding Company, LLC, 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 CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the ____ day of January 2007 before me, a notary public in and for said State, personally appeared
_________________, known to me to be a __________ of Deutsche Bank Trust Company Americas, a banking association
organized under the laws of the United States that executed the within instrument, and also known to me to be the
person who executed it on behalf of said banking corporation and acknowledged to me that such banking corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
Notary Public
____________________________________
[Notarial Seal]
EXECUTION COPY
===================================================================================================================
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING COMPANY, LLC
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
Dated as of November 1, 2006,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of November 1, 2006
Mortgage Asset-Backed Pass-Through Certificates
Series 2006-QH1
===================================================================================================================
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................................................4
Section 1.01. Definitions.......................................................................4
Section 1.02 Determination of LIBOR...........................................................29
Section 1.03 Use of Words and Phrases.........................................................30
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES...........................31
Section 2.01 Conveyance of Mortgage Loans.....................................................31
Section 2.02 Acceptance by Trustee............................................................38
Section 2.03 Representations, Warranties and Covenants of the Master Servicer.................39
Section 2.04 Representations and Warranties of Sellers........................................43
Section 2.05 Execution and Authentication of Certificates/Issuance of Certificates
Evidencing Interests if REMICs...................................................45
Section 2.06 Conveyance of REMIC I Regular Interest and REMIC II Regular Interests
SB-IO and SB-PO; Acceptance by the Trustee.......................................45
Section 2.07 Issuance of Certificates Evidencing Interest in REMIC II and REMIC III...........45
Section 2.08 Purposes and Powers of the Trust.................................................45
Section 2.09 Agreement Regarding Ability to Disclose..........................................46
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............................................47
Section 3.01 Master Servicer to Act as Servicer...............................................47
Section 3.02 Subservicing Agreements Between Master Servicer and Subservicers
Enforcement of Subservicers' and Sellers' Obligations............................47
Section 3.03 Successor Subservicers...........................................................47
Section 3.04 Liability of the Master Servicer.................................................47
Section 3.05 No Contractual Relationship Between Subservicer and Trustee or
Certificateholders...............................................................47
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee..................47
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposit to Custodial Account.......47
Section 3.08 Subservicing Accounts; Servicing Accounts........................................49
Section 3.09 Access to Certain Documentation and Information Regarding the Mortgage
Loans............................................................................49
Section 3.10 Permitted Withdrawals from the Custodial Account.................................49
Section 3.11 Maintenance of the Primary Insurance Policies; Collections Thereunder............49
Section 3.12 Maintenance of Fire Insurance and Omissions and Fidelity Coverage................49
Section 3.13 Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain Assignments..................................................49
Section 3.14 Realization Upon Defaulted Mortgage Loans........................................49
Section 3.15 Trustee to Cooperate; Release of Mortgage Files..................................49
Section 3.16 Servicing and Other Compensation; Compensating Interest..........................49
Section 3.17 Reports to the Trustee and the Company...........................................50
Section 3.18 Annual Statement as to Compliance................................................50
Section 3.19 Annual Independent Public Accountants' Servicing Report..........................50
Section 3.20 Rights of the Company in Respect of the Master Servicer..........................51
Section 3.21 Administration of Buydown Funds..................................................51
Section 3.22 Advance Facility.................................................................51
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS............................................................52
Section 4.01 Certificate Account..............................................................52
Section 4.02 Distributions....................................................................52
Section 4.03 Statements to Certificateholders; Statements to the Rating Agencies;
Exchange Act Reporting...........................................................56
Section 4.04 Distribution of Reports to the Trustee and the Company; Advances by the
Master Servicer..................................................................57
Section 4.05 Allocation of Realized Losses....................................................59
Section 4.06 Master Servicer to Act as Servicer...............................................61
Section 4.07 Optional Purchase of Defaulted Mortgage Loans....................................61
Section 4.08 Surety Bond......................................................................61
Section 4.09 Yield Maintenance Agreements.....................................................61
Section 4.10 The Certificate Policy...........................................................62
ARTICLE V THE CERTIFICATES..........................................................................65
ARTICLE VI THE COMPANY AND THE MASTER SERVICER.......................................................66
ARTICLE VII DEFAULT...................................................................................67
ARTICLE VII CONCERNING THE TRUSTEE....................................................................68
ARTICLE IX TERMINATION...............................................................................69
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........69
Section 9.02 Additional Termination Requirements..............................................70
Section 9.03 Termination of Multiple REMICs...................................................70
ARTICLE X REMIC PROVISIONS..........................................................................71
Section 3.01 REMIC Administration.............................................................71
Section 10.02 Master Servicer; REMIC Administrator and Trustee Indemnification.................71
Section 10.03 Designation of REMICs............................................................71
Section 10.04 Distributions on the REMIC I Regular Interests...................................71
Section 10.05 Compliance with Withholding Requirements.........................................71
ARTICLE XI MISCELLANEOUS.............................................................................73
Section 11.01 Amendment........................................................................73
Section 11.02 Recordation of Agreement; Counterparts...........................................73
Section 11.03 Limitation on Rights of Certificateholders.......................................73
Section 11.04 Governing Law....................................................................73
Section 11.05 Notices..........................................................................74
Section 11.06 Required Notices to Rating Agency and Subservicer................................75
Section 11.07 Severability of Provisions.......................................................75
Section 11.08 Supplemental Provisions for Resecuritization.....................................75
Section 11.09 Allocation of Voting Rights......................................................75
Section 11.10 No Petition......................................................................75
ARTICLE XII COMPLIANCE WITH REGULATION AB.............................................................76
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 November 1, 2006
This is a Series Supplement, dated as of November 1, 2006 (the "Series Supplement"), to the Standard
Terms of Pooling and Servicing Agreement, dated as of November 1, 2006 and attached as Exhibit Four 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 (together with its
permitted successors and assigns, the "Trustee").
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 subject to this Agreement (but excluding the
Yield Maintenance Agreements) 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." The Class R-I Certificates will
represent the sole Class of "residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein) under federal income tax law. The Class R-I 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 Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date
________________________________________________________________________________________________________________
LT1 Variable(1) $340,431,657.46 December 26, 2036
LT2 Variable(1) $12,116.90 December 26, 2036
LT3 0.00% $21,931.86 December 26, 2036
LT4 Variable(1) $21,931.86 December 26, 2036
____________
(1) Calculated in accordance with the definition of "Uncertificated REMIC I Pass Through Rate" herein.
REMIC II
As provided herein, the REMIC Administrator will elect 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. The Class R-II Certificates will represent ownership of the sole Class of
"residual interests" in REMIC II for purposes of the REMIC Provisions under federal income tax law. The Class
R-II Certificates will not bear interest and will not have a Certificate Principal Balance. The following table
irrevocably sets forth the designation, type, Pass-Through Rate, aggregate Initial Certificate Principal Balance,
Maturity Date, initial ratings and certain features for each Class of Certificates that evidence "regular
interests" in REMIC II and the REMIC II Regular Interests SB-IO and SB-PO (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 and the Certificates shall be the Maturity Date. The
REMIC II Regular Interests SB-IO and SB-PO will not be certificated.
Aggregate
Initial S&P/
Pass-Through Certificate Maturity Xxxxx'x/ Minimum
Designation Rate Principal Balance Features Date DBRS Denominations
______________________________________________________________________________________________________________________
Class A-1 Adjustable $192,035,000.00 Adjustable Rate December 26, AAA/Aaa/AAA $100,000.00
Rate(1)(2) 2036
Class A-2 Adjustable $80,014,000.00 Adjustable Rate December 26, AAA/Aaa/AAA $100,000.00
Rate(1)(2) 2036
Class A-3 Adjustable $48,009,000.00 Adjustable December 26, AAA/Aaa/AAA $100,000.00
Rate(1)(2) Rate/Insured 2036
Class M-1 Adjustable $8,342,000.00 Mezzanine/Adjustable December 26, AA/Aa2/AA $100,000.00
Rate(1)(2) Rate 2036
Class M-2 Adjustable $4,426,000.00 Mezzanine/Adjustable December 26, A/A2/A $100,000.00
Rate(1)(2) Rate 2036
Class M-3 Adjustable $1,703,000.00 Mezzanine/Adjustable December 26, A-/ $100,000.00
Rate(1)(2) Rate 2036 Baa1/A(low)
Class M-4 Adjustable $1,702,000.00 Mezzanine/Adjustable December 26, BBB/Baa2/BBB $100,000.00
Rate(1)(2) Rate 2036
Class M-5 Adjustable $1,702,000.00 Mezzanine/Adjustable December 26, NR/Baa3/B(low) $100,000.00
Rate(1)(2) Rate 2036
SB-PO $2,544,638.08 N/A Subordinate/Principal December 26, N/A N/A
(3) Only 2036
SB-IO (4) N/A Subordinate/Interest December 26, N/A N/A
Only 2036
(1) The REMIC II Regular Interests, ownership of which is represented by the Class A Certificates and
Class M Certificates, will accrue interest at a per annum rate equal to the lesser of (i) LIBOR plus the
applicable Margin and (ii) the Net Rate Cap.
(2) The Class A Certificates and Class M Certificates will also entitle their holders to receive certain
payments from the Holder of the Class SB Certificates from amounts to which the Holder of the Class SB
Certificates is entitled, which will not be a part of their ownership of the related REMIC II Regular Interests.
(3) The REMIC II Regular Interest SB-PO will have no entitlement to interest, and will be entitled to
distributions of principal in an aggregate amount equal to the Overcollateralization Amount pursuant to the terms
and conditions of this Agreement.
(4) The REMIC II Regular Interest SB-IO will have no entitlement to principal, and will be entitled to
distributions of interest in an aggregate amount equal to the interest distributable with respect to the Class SB
Certificates pursuant the terms and conditions of this Agreement.
REMIC III
As provided herein, the REMIC Administrator will make an election to treat the segregated pool of assets
consisting of REMIC II Regular Interests SB-IO and SB-PO as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC III." The Class R-X Certificates will represent the sole
Class of "residual interests" in REMIC III for purposes of the REMIC Provisions under federal income tax law.
The Class R-X Certificates will not bear interest or have Certificate Principal Balance. The following table
irrevocably sets forth the designation, Pass-Through Rate, aggregate Initial Certificate Principal Balance,
Maturity Date, initial ratings and certain features for the Class SB Certificates which represent the single
"regular interest" in REMIC III designated the "REMIC III Regular Interest." The "latest possible maturity date"
(determined solely for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for the REMIC III
Regular Interest shall be the Maturity Date.
Aggregate
Initial S&P/
Pass-Through Certificate Maturity Xxxxx'x/ Minimum
Designation Rate Principal Balance Features Date DBRS Denominations
_______________________________________________________________________________________________________________________
Class SB Variable(1) $2,544,638.08 Subordinate/Adjustable December 26, NR/NR/NR N/A
Rate 2036
____________
(1) The Class SB Certificates will accrue interest as described in the definition of Accrued Certificate
Interest. The Class SB Certificates will not accrue interest on their Certificate Principal Balance.
The REMIC III Regular Interest will not have a Pass-Through Rate, but will be entitled to 100% of all
amounts paid or deemed paid on REMIC II Regular Interests SB-IO and SB-PO.
The Mortgage Loans have an aggregate Cut-off Date Principal Balance equal to $340,487,638.08.
The Mortgage Loans are payment-option adjustable-rate first lien mortgage loans with a negative
amortization feature 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 at the
Pass-Through Rate on the Certificate Principal Balance thereof immediately prior to such Distribution Date at the
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-2, Class A-3 or Class M Certificates
for any Distribution Date, shall further be reduced by the interest portion of Realized Losses allocated to any
Class of 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.
If any interest portion of a Realized Loss is allocated to the Class A-3 Certificates, subject to the
terms of the Certificate Policy, the amount of the allocated shortfall will be drawn under the Certificate Policy
and distributed to the Holders of the Class A-3 Certificates. In addition, to the extent the Available
Distribution Amount with respect to the Class A-3 Certificates is less than Accrued Certificate Interest on the
Class A-3 Certificates, other than as a result of Prepayment Interest Shortfalls, Deferred Interest, the Net WAC
Cap Rate and Relief Act Shortfalls, the shortfall will be covered by the Certificate Policy, in accordance with
its terms.
With respect to each Distribution Date and the Class SB Certificates, interest accrued during the
related Interest Accrual Period at the 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.
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, 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) and (z) the Certificate Insurer
Premium paid to the Certificate Insurer.
Available Funds Rate: With respect to any Distribution Date, a per annum rate equal to (i) the product
of (x) the Interest Remittance Amount plus full and partial Principal Prepayments available to be distributed on
such Distribution Date and (y) a fraction, the numerator of which is 12 and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans as of such Distribution Date, adjusted to an actual/360
rate.
Basis Risk Shortfall: With respect to the Class A Certificates and Class M Certificates and any
Distribution Date, the sum of (a) an amount equal to the excess of (x) Accrued Certificate Interest for such
Class of Certificates calculated at a per annum rate equal to LIBOR plus the related Margin for such Distribution
Date (not to exceed 10.00% per annum with respect to any Offered Certificate other than the Class A-3
Certificates, and not to exceed 11.50% per annum with respect to the Class A-3 Certificates), over (y) Accrued
Certificate Interest for such Class calculated assuming the Net Rate Cap was equal to the Net WAC Cap Rate for
such Distribution Date, (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) to the extent not previously
paid from Excess Cash Flow or the Yield Maintenance Agreements from the Distribution Date on which such amount
was incurred at a per annum rate equal to One-Month LIBOR plus the related Margin (not to exceed 10.00% per annum
with respect to any Offered Certificate other than the Class A-3 Certificates, and not to exceed 11.50% per annum
with respect to the Class A-3 Certificates) for the current Distribution Date.
Book-Entry Certificate: The Class A Certificates and Class M Certificates.
Capitalization Reimbursement Amount: As to any Distribution Date, the amount of Advances or Servicing
Advances that were added to the Stated Principal Balance of the Mortgage Loans 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: As to any Distribution Date, the amount, if any, by
which the amount of Advances or Servicing Advances that were added to the Stated Principal Balance of the
Mortgage Loans during the preceding calendar month exceeds the amount of principal payments on the Mortgage Loans
included in the Available Distribution Amount for that Distribution Date.
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 2006-QH1" and which must be an Eligible Account.
Certificate Insurer: Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance corporation or
any successor thereto.
Certificate Insurer Account: An account of the Certificate Insurer maintained at Citibank, N.A. (ABA No.
000000000), Account No. 00000000, or such other account as may be designated by the Certificate Insurer to the
Trustee in writing not less than five Business Days prior to the related Distribution Date.
Certificate Insurer Default: As defined in Section 4.10 (h).
Certificate Insurer Premium: The premium payable to the Certificate Insurer on each Distribution Date
in an amount equal to one twelfth of the product of the Certificate Insurer Premium Rate and the Certificate
Principal Balance of the Class A-3 Certificates immediately prior to such Distribution Date.
Certificate Insurer Premium Modified Rate: With respect to any date of determination, the Certificate
Insurer Premium Rate times a fraction equal to (x) the Certificate Principal Balance of the Class A-3
Certificates as of such date over (y) the aggregate Stated Principal Balance of the Mortgage Loans as of such
date.
Certificate Insurer Premium Rate: With respect to any Distribution Date, the premium percentage set
forth in the commitment letter dated November 29, 2006 between the Certificate Insurer and Residential Funding.
Certificate Policy: The Certificate Guaranty Insurance Policy (No. AB1044BE), issued by the Certificate
Insurer in favor of the Trustee for the benefit of the Class A-3 Certificates.
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 A-2, Class A-3 or 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, other than any Insured Payment in respect of such amount that has been
paid by the Certificate Insurer and is included in clause (x) above; provided, that with respect to any
Distribution Date, the Certificate Principal Balance of the Class A-2, Class A-3, Class M-1, Class M-2, Class
M-3, Class M-4 and Class M-5 Certificates, in that order, will be increased to the extent of Realized Losses
previously allocated thereto and remaining unreimbursed, but only to the extent of Subsequent Recoveries received
during the preceding calendar month. With respect to each Class SB Certificate, on any date of determination, an
amount equal to the Percentage Interest evidenced by such Certificate, multiplied by an amount equal to (i) the
excess, if any, of (A) the then aggregate Stated Principal Balance of the Mortgage Loans over (B) the then
aggregate Certificate Principal Balance of the Class A Certificates and Class M Certificates then outstanding,
which represents the sum of (i) the Initial Principal Balance of the REMIC II Regular Interest SB-PO, as reduced
by Realized Losses allocated thereto and payments deemed made thereon, and (ii) accrued and unpaid interest on
the REMIC II Regular Interest SB-IO, as reduced by Realized Losses allocated thereto. The Class R Certificates
will not have a Certificate Principal Balance.
Class A Certificate: Any one of the Class A-1, Class A-2 or Class A-3 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 II for purposes of the REMIC Provisions and (ii) the right to receive
Basis Risk Shortfalls.
Class A-3 Yield Maintenance Agreement: The yield maintenance agreement, entered into for the benefit of
the Class A-3 Certificates, dated as of the Closing Date between the Yield Maintenance Agreements Provider and
the Trustee.
Class A/Class M Yield Maintenance Agreement: The yield maintenance agreement, entered into for the
benefit of the Class A and Class M Certificates, dated as of the Closing Date between the Yield Maintenance
Agreements Provider and the Trustee.
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 Certificate: The Class A-1 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 Margin: With respect to any Distribution Date prior to the second Distribution Date after the
first possible Optional Termination Date, 0.190% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.380% 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, 0.230% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.460% per annum.
Class A-3 Certificate: The Class A-3 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-3 Margin: With respect to any Distribution Date prior to the second Distribution Date after the
first possible Optional Termination Date, 0.200% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.400% per annum.
Class A-P Certificates: None.
Class M Certificates: Collectively, the Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
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 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 II for purposes of the REMIC Provisions and (ii) the right to receive Basis Risk
Shortfalls.
Class M-1 Margin: With respect to any Distribution Date prior to the second Distribution Date after the
first possible Optional Termination Date, 0.420% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.630% 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 II for purposes of the REMIC Provisions and (ii) the right to receive Basis Risk
Shortfalls.
Class M-2 Margin: With respect to any Distribution Date prior to the second Distribution Date after the
first possible Optional Termination Date, 0.620% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.930% 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 hereto as Exhibit B, senior to the 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 II for
purposes of the REMIC Provisions and (ii) the right to receive Basis Risk Shortfalls.
Class M-3 Margin: With respect to any Distribution Date prior to the second Distribution Date after the
first possible Optional Termination Date, 1.100% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 1.650% 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 hereto as Exhibit B, senior to the 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 II for purposes
of the REMIC Provisions and (ii) the right to receive Basis Risk Shortfalls.
Class M-4 Margin: With respect to any Distribution Date prior to the second Distribution Date after the
first possible Optional Termination Date, 1.450% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 2.175% 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 M-5 Certificate: Any one of the Class M-5 Certificates executed by the Trustee and authenticated
by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to the 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 II for purposes of the REMIC
Provisions and (ii) the right to receive Basis Risk Shortfalls.
Class M-5 Margin: With respect to any Distribution Date prior to the second Distribution Date after the
first possible Optional Termination Date, 1.50% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 2.250% per annum.
Class M-5 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, Class M-3
Principal Distribution Amount and Class M-4 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, the Class M-2 Principal
Distribution Amount, Class M-3 Principal Distribution Amount and Class M-4 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, Class M-3 and Class M-4 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, the Class M-3 Principal Distribution Amount and the Class M-4 Principal Distribution Amount
for that Distribution Date) and (2) the Certificate Principal Balance of the Class M-5 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-I Certificates, Class R-II Certificates or Class R-X
Certificates.
Class R-I Certificate: Any one of the Class R-I 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
an interest designated as a "residual interest" in REMIC I for purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II 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 an interest designated as a "residual interest" in REMIC II for purposes of the REMIC Provisions.
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
an interest designated as a "residual interest" in REMIC III 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 hereto as Exhibit R, 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 III Regular Interest, together with certain
obligations to pay Basis Risk Shortfalls.
Closing Date: November 29, 2006.
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 2006-QH1.
Cumulative Insurance Payments: As of any time of determination, (i) the aggregate amount of all Insured
Payments previously made by the Certificate Insurer under the Certificate Policy plus interest thereon from the
date such amounts became due until paid in full, at a rate of interest equal to the Late Payment Rate minus (ii)
the sum of the aggregate of all payments previously made to the Certificate Insurer pursuant to Section 4.02
hereof as reimbursement for such amounts.
Cut-off Date Balance: $340,487,638.08.
Cut-off Date: November 1, 2006.
Deferred Interest: The amount of interest which is deferred and added to the principal balance of a
Mortgage Loan due to negative amortization. For purposes of REMIC I, Deferred Interest shall be allocated to
REMIC I Regular Interest LT1 in reduction of the portion of the Uncertificated Accrued Interest thereon
distributable on the related Distribution Date and shall result in an increase in the principal balance thereof
to the extent of such reduction.
Deficiency Amount: As defined in the Certificate Policy.
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.
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, (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 and (c) reimbursements to the Certificate Insurer
for Insured Payments and (B) the Overcollateralization Reduction Amount, if any, for that Distribution Date.
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.
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.
Insured Payment: With respect to the Class A-3 Certificates, as of any Distribution Date, the Deficiency
Amount, if any, for such Distribution Date paid by the Certificate Insurer pursuant to the Certificate Policy.
Interest Accrual Period: With respect to the Distribution Date in December 2006, the period commencing
on the Closing Date and ending on the day immediately preceding the Distribution Date in December 2006, and with
respect to any Distribution Date after the Distribution Date in December 2006, 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 Carryforward Amount: With respect to any Class of Class A Certificates or Class M Certificates
and any Distribution Date, the sum of (a) on any Distribution Date on which the Pass-Through Rate is equal to the
Available Funds Rate, the excess, if any, of (i) Accrued Certificate Interest for such Class assuming the Net
Rate Cap for such Distribution Date was equal to the Net WAC Cap Rate over (ii) Accrued Certificate Interest
calculated based on such Available Funds Rate and (b) interest on the amount calculated pursuant to clause (a)
for any prior Distribution Date that remains unreimbursed at the related Pass-Through Rate for 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.
Interest Remittance Amount: With respect to any Distribution Date, the portion of the Available
Distribution Amount for such Distribution Date attributable to interest received or advanced with respect to the
Mortgage Loans, net of the Expense Fee Rate and the Certificate Insurer Premium.
Late Payment Rate: As defined in the Certificate Policy.
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 Margin, Class A-2 Margin, Class A-3 Margin, Class M-1 Margin, Class M-2 Margin,
Class M-3 Margin, Class M-4 Margin and Class M-5 Margin , as applicable.
Marker Rate: With respect to the Class SB Certificates or REMIC II Regular Interest SB-IO and any
Distribution Date, a per annum rate equal to two (2) times the weighted average of the Uncertificated REMIC I
Pass-Through Rates for REMIC I Regular Interest LT2 and REMIC I Regular Interest LT3.
Maturity Date: December 26, 2036, 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 Note Margin ("NOTE MARGIN");
(xii) the Periodic Cap ("PERIODIC DECR" or "PERIODIC INCR");
(xiii) the rounding of the semi-annual or annual adjustment to the Mortgage Rate ("NOTE METHOD");
(xiv) the Loan-to-Value Ratio at origination ("LTV");
(xv) the rate at which the Subservicing Fee accrues ("SUBSERV FEE") and at which the Servicing Fee
accrues ("MSTR SERV FEE");
(xvi) 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
(xvii) 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 Rate Cap: With respect to any Class of Class A Certificates and Class M Certificates and any
Distribution Date, the least of (i) the Net WAC Cap Rate, (ii) the Available Funds Rate, and (iii) (A) with
respect to the Class A-1, Class A-2 and Class M Certificates, 10.000% per annum and (B) with respect to the Class
A-3 Certificates 11.500% per annum.
Net WAC Cap Rate: With respect to the Offered Certificates and any Distribution Date, a per annum rate
(which will not be less than zero) equal to the weighted average of the Net Mortgage Rates of the Mortgage Loans
using the Net Mortgage Rates in effect on such Mortgage Loans during the related Due Period (minus, with respect
to the Class A-3 Certificates, the Certificate Insurer Premium Rate), multiplied by a fraction, expressed as a
percentage, the numerator of which is 30 and the denominator of which is the actual number of days in the related
Interest Accrual Period for such Certificates.
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 the Class SB Certificates or the REMIC II Regular Interest SB-IO,
immediately prior to any Distribution Date is equal to the aggregate of the Uncertificated Principal Balances of
the REMIC I Regular Interests.
Offered Certificates: The Class A Certificates and the Class M Certificates.
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 sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates and Class M Certificates before taking into account distributions of principal to be made on such
Distribution Date and (ii) any Interest Carryforward Amounts (without taking into account interest payable
thereon) payable to such Certificates 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)(v) and
(vi) 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 l 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 Certificates (other than the Class SB Certificates and
Class R Certificates), and any Distribution Date, a per annum rate equal to the lesser of (i) LIBOR plus the
related Margin for such Distribution Date and (ii) the Net Rate Cap for such Distribution Date.
With respect to the Class SB Certificates and any Distribution Date or REMIC II Regular Interest SB-IO,
a rate per annum 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 I Regular Interests. For purposes of calculating the Pass-Through Rate for the
Class SB Certificates or the REMIC II Regular Interest SB-IO, the numerator is equal to the sum of the following
components:
(i) the Uncertificated Pass-Through Rate for REMIC I Regular Interest LT1 minus the Marker Rate,
applied to a notional amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC I Regular Interest LT2 minus the Marker Rate,
applied to a notional amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LT2; and
(iii) the Uncertificated Pass-Through Rate for REMIC I Regular Interest LT4 minus twice the Marker
Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LT4.
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 25% 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 over (y) the sum of (1) the Interest Distribution Amount and (2) reimbursements
to the Certificate Insurer for the Insured Payments made with respect to interest 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, except to the extent applied to offset
Deferred Interest, Principal Prepayments, to the extent applied by the Master Servicer as recoveries of principal
pursuant to Section 3.14;
(iv) the lesser of (A) Subsequent Recoveries for such Distribution Date and (B) the principal
portion of any Realized Losses allocated to the Class M Certificates on a prior Distribution Date and remaining
unpaid;
(v) the lesser of (A) the sum 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) payments received by the
Trustee under the Class A/Class M Yield Maintenance Agreement in respect of Realized Losses to the extent
necessary to maintain the Required Overcollateralization Amount and (B) 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 clause (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.
Regular Certificates: The Class A, Class M and Class SB Certificates.
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 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, if any, and
(v) all proceeds of clauses (i) through (iv) above.
Notwithstanding the foregoing, the REMIC election with respect to REMIC I specifically excludes the
Yield Maintenance Agreements.
REMIC I Distribution Amount: For any Distribution Date, the Available Distribution Amount shall be
distributed to the REMIC I Regular Interests and the Class R-I Certificates in the following amounts and priority:
(i) to the extent of the Available Distribution Amount, to REMIC II as the holder of REMIC
I Regular Interests LT1, LT2, LT3 and LT4, pro rata, in an amount equal to (A) their Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates, in the case of REMIC I Regular Interest LT1 each such amount having first been reduced by any
Deferred Interest for the related Distribution Date; and
(ii) to the extent of the Available Distribution Amount remaining after the distributions
made pursuant to clause (i) above, to REMIC II as the holder of the REMIC I Regular Interests, in an amount equal
to:
(A) in respect of REMIC I Regular Interests LT2, LT3 and LT4, their respective
Principal Distribution Amounts;
(B) in respect of REMIC I Regular Interest LT1 any remainder until the
Uncertificated Principal Balance thereof is reduced to zero;
(C) any remainder in respect of REMIC I Regular Interests LT2, LT3 and LT4, pro
rata according to their respective Uncertificated Principal Balances as reduced by the distributions deemed made
pursuant to (A) above, until their respective Uncertificated Principal Balances are reduced to zero; and
(iii) any remaining amounts to the Holders of the Class R-I Certificates.
REMIC I Principal Reduction Amounts: For any Distribution Date, the amounts by which the principal
balances of REMIC I 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 aggregate principal balance of REMIC I Regular Interest LT1 after distributions on the
prior Distribution Date.
Y2 = the principal balance of REMIC I Regular Interest LT2 after distributions on the prior
Distribution Date.
Y3 = the principal balance of REMIC I Regular Interest LT3 after distributions on the prior
Distribution Date.
Y4 = the principal balance of REMIC I Regular Interest LT4 after distributions on the prior
Distribution Date (note: Y3 = Y4).
ΔY1 = the REMIC I Regular Interest LT1 Principal Reduction Amount.
ΔY2 = the REMIC I Regular Interest LT2 Principal Reduction Amount.
ΔY3 = the REMIC I Regular Interest LT3 Principal Reduction Amount.
ΔY4 = the REMIC I Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate principal balance of REMIC I 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 REMIC I Regular Interests LT1, LT2, LT3 and LT4 after
distributions and the allocation of Realized Losses to be made on such Distribution Date.
ΔP = P0 - P1 = the aggregate of REMIC I 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 Net WAC Cap Rate (stated as a monthly rate) after giving effect to amounts distributed and
Realized Losses allocated on the prior Distribution Date.
R1 = the Net WAC Cap Rate (stated as a monthly rate) after giving effect to amounts to be
distributed and Realized Losses to be allocated on such Distribution Date.
α = (Y2 + Y3)/P0. The initial value of α on the Closing Date for use on the first Distribution
Date shall be 0.0001.
γ0 = the lesser of (A) the sum for all Classes of Certificates, other than the Class SB
Certificates, of the product for each Class of (i) the monthly interest rate (as limited by the Net WAC Cap 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.
γ1 = the lesser of (A) the sum for all Classes of Certificates, other than the Class SB
Certificates, of the product for each Class of (i) the monthly interest rate (as limited by the Net WAC Cap 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:
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4;
ΔY2 = (α/2){( γ0R1 - γ1R0)/R0R1};
ΔY3 = αΔP - ΔY2; and
ΔY4 = ΔY3.
if both ΔY2 and ΔY3, as so determined, are non-negative numbers. Otherwise:
(1) If ΔY2, as so determined, is negative, then
ΔY2 = 0;
ΔY3 = α{γ1R0P0 - γ0R1P1}/{γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
(2) If ΔY3, as so determined, is negative, then
ΔY3 = 0;
ΔY2 = α{γ1R0P0 - γ0R1P1}/{2R1R0P1 - γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
REMIC I Realized Losses: Realized Losses on the Mortgage Loans shall be allocated to the REMIC I
Regular Interests as follows: The interest portion of Realized Losses on the Mortgage Loans, if any, shall be
allocated among REMIC I 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 on the Mortgage Loans, if any, shall be allocated first, to REMIC I Regular Interests
LT2, LT3 and LT4 pro rata according to their respective Principal Reduction Amounts to the extent thereof in
reduction of the Uncertificated Principal Balance of such REMIC I Regular Interests and, second, the remainder,
if any, of such principal portion of such Realized Losses shall be allocated to REMIC I Regular Interest LT1 in
reduction of the Uncertificated Principal Balance thereof.
REMIC I Regular Interests: REMIC I Regular Interests LT1, LT2, LT3 and LT4.
REMIC I Regular Interest LT1: 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 I Regular Interest LT1 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Regular Interest LT1 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC I Regular Interest LT1 on such Distribution Date.
REMIC I Regular Interest LT2: 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 I Regular Interest LT2 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Regular Interest LT2 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC I Regular Interest LT2 on such Distribution Date.
REMIC I Regular Interest LT3: 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 I Regular Interest LT3 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Regular Interest LT3 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC I Regular Interest LT3 on such Distribution Date.
REMIC I Regular Interest LT4: 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 I Regular Interest LT4 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Regular Interest LT4 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC I Regular Interest LT4 on such Distribution Date.
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. The REMIC election with respect to REMIC II specifically excludes
the Yield Maintenance Agreements.
REMIC II Regular Interest: Any one of REMIC II Regular Interest A-1, REMIC II Regular Interest A-2,
REMIC II Regular Interest A-3, REMIC II Regular Interest M-1, REMIC II Regular Interest M-2, REMIC II Regular
Interest M-3, REMIC II Regular Interest M-4, REMIC II Regular Interest M-5, REMIC II Regular Interest SB-IO or
REMIC II Regular Interest SB-PO.
REMIC II Regular Interest A-1: A regular interest in REMIC II which has a principal balance equal to
the principal balance of the Class A-1 Certificates and which is entitled to interest at a rate equal to the
lesser of (i) LIBOR plus the Class A-1 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding Distribution
Date without interest until paid.
REMIC II Regular Interest A-2: A regular interest in REMIC II which is has a principal balance equal to
the principal balance of the Class A-2 Certificates and which is entitled to interest at a rate equal to the
lesser of (i) LIBOR plus the Class A-2 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding Distribution
Date without interest until paid.
REMIC II Regular Interest A-3: A regular interest in REMIC II which is has a principal balance equal to
the principal balance of the Class A-3 Certificates and which is entitled to interest at a rate equal to the
lesser of (i) LIBOR plus the Class A-3 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding Distribution
Date without interest until paid.
REMIC II Regular Interest M-1: A regular interest in REMIC II which is has a principal balance equal to
the principal balance of the Class M-1 Certificates and which is entitled to interest at a rate equal to the
lesser of (i) LIBOR plus the Class M-1 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding Distribution
Date without interest until paid.
REMIC II Regular Interest M-2: A regular interest in REMIC II which is has a principal balance equal to
the principal balance of the Class M-2 Certificates and which is entitled to interest at a rate equal to the
lesser of (i) LIBOR plus the Class M-2 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding Distribution
Date without interest until paid.
REMIC II Regular Interest M-3: A regular interest in REMIC II which is has a principal balance equal to
the principal balance of the Class M-3 Certificates and which is entitled to interest at a rate equal to the
lesser of (i) LIBOR plus the Class M-3 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding Distribution
Date without interest until paid.
REMIC II Regular Interest M-4: A regular interest in REMIC II which is has a principal balance equal to
the principal balance of the Class M-4 Certificates and which is entitled to interest at a rate equal to the
lesser of (i) LIBOR plus the Class M-4 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding Distribution
Date without interest until paid.
REMIC II Regular Interest M-5: A regular interest in REMIC II which is has a principal balance equal to
the principal balance of the Class M-5 Certificates and which is entitled to interest at a rate equal to the
lesser of (i) LIBOR plus the Class M-5 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any Interest
Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding Distribution
Date without interest until paid.
REMIC II Regular Interest SB-IO: A regular interest in REMIC II that has no initial principal, that
bears interest at the related Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest SB-PO: A regular interest in REMIC II that has an initial principal balance
equal to the initial principal balance for the Class SB Certificates, as set forth in the Preliminary Statement,
that bears no interest, 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 SB-IO and SB-PO.
REMIC III Regular Interest: The separate beneficial ownership interest in REMIC III issued hereunder and
designated as a "regular interest" in REMIC III, the ownership of which is evidenced by the Class SB
Certificates. The REMIC III Regular Interest will not have a Pass-Through Rate, but will be entitled to 100% of
all amounts distributed or deemed distributed on REMIC II Regular Interests SB-IO and SB-PO.
Required Overcollateralization Amount: With respect to any Distribution Date (i) prior to the Stepdown
Date, an amount equal to 0.75% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date; (ii) on or after the Stepdown Date but prior to the Distribution Date in December 2012, provided a Trigger
Event is not in effect, the greater of (x) 1.875% 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; (iii) on or after the Stepdown Date and on or after the Distribution Date in
December 2012, provided a Trigger Event is not in effect, the greater of (x) 1.50% 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 (iv) 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 (without regard to the Certificate Policy) below the lower of the then-current
ratings or the ratings assigned to those certificates as of the closing date by that rating agency.
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 the applicable Due Date
preceding that Distribution Date, including Mortgage Loans in foreclosure, REO Properties and Mortgage Loans in
bankruptcy over (y) the aggregate Stated Principal Balance of all of the Mortgage Loans immediately preceding
that Distribution Date.
Stated Principal Balance: With respect to any Mortgage Loan or related REO Property, and 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 and (c) any amount by which the Stated Principal Balance of the Mortgage Loan has been increased for
Deferred Interest pursuant to the terms of the related Mortgage Note on or prior to the Distribution Date, 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 (1) the Distribution Date immediately following the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A Certificates has been reduced to zero
and (2) the later to occur of (x) the Distribution Date in December 2009 and (y) the first Distribution Date on
which the Senior Enhancement Percentage is greater than or equal to (a) on any Distribution Date prior to the
Distribution Date in December 2012, approximately 15.00% and (b) on any Distribution Date on or after the
Distribution Date in December 2012, 12.00%.
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 (1) Percentage (2)
___________________________________________________________
A 85.000% 88.000%
M-1 91.125% 92.900%
M-2 94.375% 95.500%
M-3 95.625% 96.500%
M-4 96.875% 97.500%
M-5 98.125% 98.500%
(1) For any Distribution Date prior to the Distribution Date in December 2012.
(2) For any Distribution Date in December 2012 or thereafter.
Trigger Event: A Trigger Event is in effect with respect to any Distribution Date if (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 December 2008 to November 2009: 0.150% with respect to December 2008, plus an additional
1/12th of 0.250% for each month through November 2009.
o December 2009 to November 2010: 0.400% with respect to December 2009, plus an additional
1/12th of 0.300% for each month through November 2010.
o December 2010 to November 2011: 0.700% with respect to December 2010, plus an additional
1/12th of 0.300% for each month through November 2011.
o December 2011 to November 2012: 1.000% with respect to July 2011, plus an additional 1/12th of
0.350% for each month through November 2012.
o December 2012 to November 2013: 1.350% with respect to December 2012, plus an additional
1/12th of 0.150% for each month through November 2013.
o July 2013 and thereafter: 1.500%.
2006-QH1 REMIC: Any of REMIC I, REMIC II or REMIC III, as the case may be.
Uncertificated Accrued Interest: With respect to the REMIC I Regular Interests for any Distribution
Date, one month's interest at the related Uncertificated REMIC I Pass-Through Rate for such Distribution Date,
accrued on its Uncertificated Principal Balance, immediately prior to such Distribution Date. Uncertificated
Accrued Interest for the REMIC I 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) relating to the Mortgage Loans for any Distribution Date shall be
allocated among REMIC I Regular Interests LT1, LT2, LT3 and LT4, pro rata, based on, and to the extent of,
Uncertificated Accrued Interest, as calculated without application of this sentence. Uncertificated Accrued
Interest on REMIC II Regular Interest SB-PO shall be zero. Uncertificated Accrued Interest on REMIC II Regular
Interest SB-IO for each Distribution Date shall equal Accrued Certificate Interest for the Class SB
Certificates.
Uncertificated Principal Balance: The principal amount of any REMIC I Regular Interest outstanding as
of any date of determination. The Uncertificated Principal Balance of each REMIC I Regular Interest shall be
reduced first by Realized Losses allocated thereto by the definition of REMIC I Realized Losses, and by all
distributions of principal deemed made on such REMIC I Regular Interest on such Distribution Date. The
Uncertificated Principal Balance of each REMIC I Regular Interest shall never be less than zero. With respect to
the REMIC II 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 I Pass-Through Rate: With respect to any Distribution Date and (i) REMIC I Regular
Interests LT1 and LT2, the Net WAC Cap Rate, (ii) REMIC I Regular Interest LT3, zero (0.00%) and (iii) REMIC I
Regular Interest LT4, twice the Net WAC Cap Rate.
Underwriter: Xxxxxxx, Xxxxx & Co.
Yield Maintenance Agreements: The Class A-3 Yield Maintenance Agreement together with the Class A/Class
M Yield Maintenance Agreement.
Yield Maintenance Agreements Provider: Bear Xxxxxxx Financial Products Inc.
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 Dow Xxxxx Telerate Screen Page 3750 as of 11:00 a.m., London time, on
such LIBOR Rate Adjustment Date. "Dow Xxxxx Telerate Screen Page 3750" means the display designated as page 3750
on the Telerate Service (or such other page as may replace page 3750 on that service for the purpose of
displaying London interbank offered rates of major banks). If such rate does not appear on such page (or such
other page as may replace that page on that service, or if such service is no longer offered, LIBOR shall be so
established by use of such other service for displaying LIBOR or comparable rates as may be selected by the
Trustee after consultation with the Master Servicer), the rate will be the Reference Bank Rate. The "Reference
Bank Rate" will be determined on the basis of the rates at which deposits in U.S. Dollars are offered by the
reference banks (which shall be any three major banks that are engaged in transactions in the London interbank
market, selected by the Trustee after consultation with the Master Servicer) as of 11:00 a.m., London time, on
the LIBOR Rate Adjustment Date to prime banks in the London interbank market for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of the 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 (000) 000-0000 the Pass-Through Rate on the LIBOR
Certificates for the current and the immediately preceding Interest Accrual Period.
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.
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 and the Certificate Insurer 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 Class A-3 Certificates.
(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® 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® 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® 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 and the Certificate Insurer 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® 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® 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 Servicer agrees that it will not, alter the
codes referenced in this paragraph with respect to any Mortgage Loan during the term of this Agreement unless and
until such Mortgage Loan is repurchased in accordance with the terms of this Agreement.
(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 and the Certificate Insurer. The Trustee or
Custodian (the Custodian being so obligated under a Custodial Agreement) agrees, for the benefit of
Certificateholders and the Certificate Insurer, 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 or the Certificate Insurer, 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 or the Certificate Insurer.
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the Company.
(a) For representations, warranties and covenants of the Master Servicer, see Section
2.03(a) of the Standard Terms.
(b) The Company hereby represents and warrants to the Trustee for the benefit of
Certificateholders and the Certificate Insurer that as of the Closing Date (or, if otherwise specified below, as
of the date so specified):
(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 payment-option adjustable-rate mortgage loans with
a negative amortization feature 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, except with respect to two
Mortgage Loans, representing no more than 4.9% of the aggregate Stated Principal Balance of the
Mortgage Loans, 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 0.9% of the Mortgage Loans by aggregate Stated Principal
Balance as of the Cut-off Date are secured by Mortgaged Properties located in any one zip code
area in California, and no more than 0.5% of the Mortgage Loans by aggregate Stated Principal
Balance as of the Cut-off Date are secured by Mortgaged Properties located in any one zip code
area outside California;
(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 88.49% of the Mortgage Loans by aggregate Stated Principal
Balance as of the Cut-off Date were underwritten under a reduced loan documentation program,
none of the Mortgage Loans as of the Cut-off Date were underwritten under a no-stated income
program, and none of the Mortgage Loans as of the Cut-off Date were underwritten under a no
income/no asset program;
(x) Except with respect to no more than 5.9% of the Mortgage Loans by
aggregate Stated Principal Balance as of the Cut-off Date, 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) No Mortgage Loan is a Cooperative Loan;
(xv) 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;
(xvi) Interest on each Mortgage Loan is calculated on the basis of a 360-day
year consisting of twelve 30-day months;
(xvii) None of the Mortgage Loans contain in the related Mortgage File a
Destroyed Mortgage Note;
(xviii) None of the Mortgage Loans have been made to International Borrowers;
(xix) No Mortgage Loan provides for payments that are subject to reduction by
withholding taxes levied by any foreign (non-United States) sovereign government; and
(xx) 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 Mortgage 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 or the Certificate Insurer 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 or
the Certificate Insurer.
Section 2.04.
Representations and Warranties of Sellers.
The Company, as assignee of Residential Funding under the Assignment Agreement, hereby assigns to the
Trustee for the benefit of Certificateholders and the Certificate Insurer 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 and the
Certificate Insurer. 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 or
the Certificate Insurer 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 and the Certificate Insurer 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 and the Certificate Insurer 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 REMICs.
The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery of the Mortgage
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-I Certificates in authorized denominations which,
together with the REMIC I Regular Interests, evidence the beneficial interest in REMIC I, and the Class R-II
Certificates in authorized denominations which, together with the REMIC II Regular Interests, evidence the
beneficial interest in REMIC II.
Section 2.06. Conveyance of REMIC I Regular Interests and REMIC II Regular Interests SB-IO and
SB-PO; 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 REMIC I Regular
Interests to the Trustee for the benefit of the Holders of each Class of Certificates (other than the Class R-I
Certificates) and the REMIC II Regular Interests SB-IO and SB-PO to the Trustee for the benefit of the Holders of
the Class SB Certificates and the Class R-X Certificates. The Trustee acknowledges receipt of the REMIC I
Regular Interests and declares that it holds and will hold the same in trust for the exclusive use and benefit of
all present and future Holders of each Class of Certificates (other than the Class R-I Certificates). The rights
of the Holders of each Class of Certificates (other than the Class R-I Certificates) to receive distributions
from the proceeds of REMIC II and the Holders of the Class SB Certificates and Class R-X Certificates to receive
distributions from the proceeds of REMIC III 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 II and REMIC III.
The Trustee acknowledges the assignment to it of the REMIC I Regular Interests and the REMIC II Regular
Interests SB-IO and SB-PO, and, concurrently therewith and in exchange therefor, pursuant to the written request
of the Company executed by an officer of the Company, the Trustee has executed and caused to be authenticated and
delivered to or upon the order of the Company, all Classes of Certificates (other than the Class R-I
Certificates, the Class R-X Certificates and Class SB Certificates) in authorized denominations, which, together
with the REMIC II Regular Interests SB-IO and SB-PO, evidence the beneficial interest in the entire REMIC II, and
the Class SB Certificates and Class R-X Certificates which evidence the beneficial interests in the entire REMIC
III.
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 Regulation § 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) 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;
(viii) Any amounts received by the Master Servicer in respect of Pledged Assets; and
(ix) Any amounts received by the Master Servicer in connection with any Prepayment Charges
on the Prepayment Charge Loans.
The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments on the Mortgage Loans which are not
part of the Trust Fund (consisting of payments in respect of principal and interest on the Mortgage Loans due on
or before the Cut-off Date) and payments or collections in the nature of 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) (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 deposit into the Custodial Account the amount of such waived Prepayment Charge at
the time that the amount prepaid on the related Mortgage Loan is required to be deposited into the Custodial
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
3.11 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 Mortgage Files (See Section 3.15 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 shall be deposited into the
Certificate Account and shall be paid on each Distribution Date to the Holders of the Class SB
Certificates.
(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
The Master Servicer will deliver to the Company, the Certificate Insurer, if any, 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, the Certificate Insurer, if any, 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 (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. (See Section 4.01 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 and REMIC III as specified in this
Section; provided, however, that on each Distribution Date, prior to making any other distributions referred to
in this Section 4.02, the Trustee shall withdraw from the Certificate Account and pay to the Certificate Insurer,
by wire transfer of immediately available funds to the Certificate Insurer Account, the Certificate Insurer
Premium for such Distribution Date.
(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) Notwithstanding the distributions on the REMIC I Regular Interests 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, 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 order of priority set
forth below, in each case to the extent of the Available Distribution Amount on deposit in the Certificate
Account (except, with respect to clause (viii)(B) below, to the extent of Prepayment Charges on deposit in the
Certificate Account). Distributions of amounts received under the Yield Maintenance Agreements will be made in
accordance with Section 4.09, and distributions of amounts received under the Certificate Policy will be made in
accordance with Section 4.10.
(i) The Interest Distribution Amount, sequentially:
(A) first, to the Class A-1, Class A-2 and Class A-3 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, on
a pro rata basis in accordance with the Accrued Certificate Interest and any interest thereon
due to each such class;
(B) second, to the Certificate Insurer, reimbursement for any Insured
Payments made with respect to interest;
(C) third, 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;
(D) fourth, 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;
(E) fifth, 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;
(F) sixth, 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;
(G) seventh, to the Class M-5 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, the 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, Class M Certificates and the applicable amounts payable to the
Certificate Insurer has been reduced to zero;
(iii) to the Certificate Insurer from the amount, if any, of Excess Cash Flow
after the foregoing distributions, the amount of any unpaid Certificate Insurer Premiums;
(iv) to the Class A Certificateholders, 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;
(v) 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;
(vi) to the Holders of the Class A Certificates, pro rata, and then
sequentially to the Class X-0, Xxxxx X-0, Class M-3, Class M-4 and Class M-5
Certificateholders, in that order, any Interest Carryforward Amounts allocated thereto that
remain unreimbursed;
(vii) 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 X-0, Xxxxx X-0, Class M-3, Class M-4
and Class M-5 Certificateholders, in that order;
(viii) to pay the Holders of the Class A 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,
(ix) to the Class M Certificateholders, the principal portion of any Realized
Losses previously allocated to those Certificates and remaining unreimbursed, which amount
shall be allocated sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4 and Class
M-5 Certificateholders, in that order;
(x) to the Class SB Certificates, (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, and (B) from prepayment charges on deposit in the Certificate
Account, any prepayment charges received on the Mortgage Loans during the related Prepayment
Period.
(xi) to the Class R Certificateholders, the balance, if any, of the Available
Distribution Amount.
All payments of amounts in respect of Basis Risk Shortfalls made pursuant to Section 4.02(c)(vii) shall,
for federal income tax purposes, be deemed to have been distributed from REMIC II to REMIC III as Holder of the
REMIC II Regular Interests SB-IO and SB-PO, and from REMIC III to the Holder 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 the
Class M Certificateholders shall be distributed as follows:
(i) first, the Class A Principal Distribution Amount shall be distributed
concurrently, on a pro rata basis in accordance with their respective Certificate Principal
Balances, to the Class A-1, Class A-2 and Class A-3 Certificates, until the Certificate
Principal Balances thereof have been reduced to zero;
(ii) second, to the Certificate Insurer, reimbursement for any Insured Payments
made with respect to principal;
(iii) third, 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;
(iv) fourth, 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;
(v) fifth, 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
(vi) sixth, 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)(vi).
(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) 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 escrow account for the benefit of such Certificateholders as provided in Section 9.01(d) of the Standard
Terms.
(h) On the initial Distribution Date, Basis Risk Shortfall amounts with respect to the
initial Distribution Date, if any, will be paid to the Holders of the Class A Certificates and Class M
Certificates, pro rata, based on the amount of Basis Risk Shortfalls for such Classes.
Section 4.03. Statements to Certificateholders; Statements to the 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, the Certificate Insurer, if any, 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 Exhibit 2 of this Agreement. 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) (See Section 4.03(b) of the Standard Terms.)
(c) (See Section 4.03(c) of the Standard Terms.)
(d) (See Section 4.03(d) of the Standard Terms.)
(e) (See Section 4.03(e) of the Standard Terms.)
(f) (See Section 4.03(f) of the Standard Terms.)
(g) (See Section 4.03(g) of the Standard Terms.)
(h) (See Section 4.03(h) of the Standard Terms.)
(i) (See Section 4.03(i) of the Standard Terms.)
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 the Certificate Insurer and Certificateholders by the Master Servicer on request) setting
forth (i) the Available Distribution Amount, (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), (iii) the Certificate Insurer Premium, if any, (iv) if the Master
Servicer determines that the Deficiency Amount for such Distribution Date is greater than zero, the amount
necessary to complete the notice in the form of Exhibit A to the Policy (the "Notice"); and (v) Cumulative
Insurance Payments. 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; and provided, further, that the Monthly Payment for purposes of this Section
4.04 shall mean the minimum monthly payment due under the Mortgage Note, net of the Servicing Fee and
Subservicing Fee, (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.
(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-5 Certificates, first, in reduction of the related Interest Carryforward Amount
(without taking into account interest payable thereon), if any, outstanding with respect to the Class M-5
Certificates, and second, to the Certificate Principal Balance of the Class M-5 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-4 Certificates, first, in reduction of the related Interest Carryforward Amount
(without taking into account interest payable thereon), if any, outstanding with respect to the Class M-4
Certificates, and second, to the Certificate Principal Balance of the Class M-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
fifth, to the Class M-3 Certificates, first, in reduction of the related Interest Carryforward Amount
(without taking into account interest payable thereon), if any, outstanding with respect to the Class M-3
Certificates, and second, to the Certificate Principal Balance of the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
sixth, to the Class M-2 Certificates, first, in reduction of the related Interest Carryforward Amount
(without taking into account interest payable thereon), if any, outstanding with respect to Class M-2
Certificates, and second, to the Certificate Principal Balance of Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
seventh, to the Class M-1 Certificates, first, in reduction of the related Interest Carryforward Amount
(without taking into account interest payable thereon), if any, outstanding with respect to Class M-1
Certificates, and second, to the Certificate Principal Balance of Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
eight, to the Class A-3 Certificates, first, in reduction of the related Interest Carryforward Amount
(without taking into account interest payable thereon), if any, outstanding with respect to Class A-3
Certificates, and second, to the Certificate Principal Balance of Class A-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
ninth, to the Class A-2 Certificates, first, in reduction of the related Interest Carryforward Amount
(without taking into account interest payable thereon), if any, outstanding with respect to Class A-2
Certificates, and second, to the Certificate Principal Balance of Class A-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero.
(b) Any allocation of the principal portion of Realized Losses (other than Debt Service
Reductions) to the Class M Certificates on any Distribution Date shall be made first, in reduction of the related
Interest Carryforward Amount (without taking into account interest payable thereon), if any, that is outstanding
with respect to such Class of Certificates, and second, 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 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.
(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. 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 II 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 II
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 II Regular Interest SB-PO until
such principal balance shall have been reduced to zero and thereafter to reduce accrued and unpaid interest on
REMIC II 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. Yield Maintenance Agreements.
(a) On the Closing Date, Trustee shall, for the benefit of the RALI Series 2006-QH1 Trust,
enter in the Class A/Class M Yield Maintenance Agreement with the Yield Maintenance Agreements Provider. On the
Business Day prior to each Distribution Date from and including the Distribution Date in January 2007 to and
including the Distribution Date in October 2011, the Trustee shall deposit any amounts received under the Class
A/Class M Yield Maintenance Agreements into the Certificate Account. On each Distribution Date from and
including the Distribution Date in January 2007 to and including the Distribution Date in October 2011, the
Trustee shall withdraw from the Certificate Account any amounts received under the Class A/Class M Yield
Maintenance Agreement and distribute such amounts as follows: (i) first, to the Holders of the Offered
Certificates in the order of priority set forth in Section 4.02(c)(i), to cover Accrued Certificate Interest
(after taking into account the distributions made pursuant to Section 4.02(c)(i) on that Distribution Date); (ii)
second, to the Holders of the Offered Certificates in the order of priority set forth in Section 4.02(d), to
cover Realized Losses to extent necessary to maintain the Required Overcollateralization Amount; (iii) third, to
the Holders of the Offered Certificates in the order of priority set forth in Sections 4.02(c)(vi) and (vii), to
cover Interest Carryforward Amounts and Basis Risk Shortfalls (after taking into account the distributions made
pursuant to Sections 4.02(c)(vi) and (vii) on that Distribution Date); and (iv) fourth, to the Holders of the
Class SB Certificates.
(b) On the Closing Date, Trustee shall, for the benefit of the RALI Series 2006-QH1 Trust,
enter in the Class A-3 Yield Maintenance Agreement with the Yield Maintenance Agreements Provider. On the
Business Day prior to each Distribution Date from and including the Distribution Date in January 2007 to and
including the Distribution Date in October 2011, the Trustee shall deposit any amounts received under the Class
A-3 Yield Maintenance Agreement into the Certificate Account. On each Distribution Date from and including the
Distribution Date in January 2007 to and including the Distribution Date in October 2011, the Trustee shall
withdraw from the Certificate Account any amounts received under the Class A-3 Yield Maintenance Agreement and
distribute such amounts as follows: (i) first, to the Holders of the Class A-3 Certificates, to cover Accrued
Certificate Interest (after taking into account the distributions made pursuant to Section 4.02(c)(i) on that
Distribution Date); (ii) second, to the Holders of the Class A-3 Certificates, to cover Interest Carryforward
Amounts and Basis Risk Shortfalls (after taking into account the distributions made pursuant to Sections
4.02(c)(vi) and (vii) on that Distribution Date); and (iii) third, to the Holders of the Class SB Certificates.
(c) In the event that the either of the Yield Maintenance Agreements, or any replacement
of them, terminates prior to the Distribution Date in December 2009, the Master Servicer, but at no expense to
the Master Servicer, on behalf of the Trustee, to the extent that the termination value under the Yield
Maintenance Agreements are sufficient therefor and only to the extent of the termination payment received from
the Yield Maintenance Agreements Provider, shall (i) cause a new yield maintenance agreement provider to assume
the obligations of the terminated Yield Maintenance Agreements Provider or (ii) cause a new yield maintenance
agreement or agreements provider to enter into a new yield maintenance agreement with RALI Series 2006-QH1 Trust,
having substantially similar terms as those set forth in the either of the applicable Yield Maintenance
Agreements.
Section 4.10. The Certificate Policy.
(a) If, pursuant to Section 4.04(a)(iv), the Master Servicer determines that the
Deficiency Amount for such Distribution Date is greater than zero, the Trustee shall complete the Notice and
submit such Notice in accordance with the Certificate Policy to the Certificate Insurer no later than 12:00 P.M.,
New York City time, on the Business Day immediately preceding each Distribution Date, as a claim for an Insured
Payment (provided that the Trustee shall submit such notice on the second Business Day immediately preceding such
Distribution Date if it is able to do so) in an amount equal to such Deficiency Amount.
(b) Upon receipt of an Insured Payment from the Certificate Insurer on behalf of the Class
A-3 Certificateholders, the Trustee shall deposit such Insured Payment in the Certificate Account. The Trustee
shall distribute on each Distribution Date the Deficiency Amount for such Distribution Date from the Certificate
Account, together with the distributions due to the Class A-3 Certificateholders on such Distribution Date, as
follows: (i) the portion of any such Deficiency Amount related to clause (i) of the definition of Deficiency
Amount shall be distributed to the Class A-3 Certificateholders in accordance with Section 4.02(c)(i), (ii) the
portion of any such Deficiency Amount related to clause (ii) of the definition of Deficiency Amount shall be
distributed to the Class A-3 Certificateholders in accordance with Section 4.02(d); and (iii) the portion of any
such Deficiency Amount related to clause (iii) of the definition of Deficiency Amount shall be distributed to the
Class A-3 Certificateholders in accordance with Section 9.01(c).
(c) The Trustee shall (i) receive as attorney-in-fact of each Class A-3 Certificateholder
any Insured Payment from the Certificate Insurer and (ii) distribute such Insured Payment to such Class A-3
Certificateholders as set forth in subsection (b) above. Insured Payments disbursed by the Trustee from proceeds
of the Certificate Policy shall not be considered payment by the Trust Fund with respect to the Class A-3
Certificates, nor shall such disbursement of such Insured Payments discharge the obligations of the Trust Fund
with respect to the amounts thereof, and the Certificate Insurer shall become owner of such amounts to the extent
covered by such Insured Payments as the deemed assignee and subrogee of such Class A-3 Certificateholders. The
Trustee hereby agrees on behalf of each Class A-3 Certificateholder (and each Class A-3 Certificateholder, by its
acceptance of its Class A-3 Certificates, hereby agrees) for the benefit of the Certificate Insurer that the
Trustee shall recognize that to the extent the Certificate Insurer makes Insured Payments, either directly or
indirectly (as by paying through the Trustee), to the Class A-3 Certificateholders, the Certificate Insurer will
be entitled to be subrogated to the rights of the Class A-3 Certificateholders to the extent of such payments.
(d) In the event the Trustee receives a certified copy of an order of the appropriate
court that any scheduled payment of principal or interest on the Class A-3 Certificates has been voided in whole
or in part as a preference payment under applicable bankruptcy law, the Trustee shall (i) promptly notify the
Certificate Insurer and (ii) comply with the provisions of the Certificate Policy, to obtain payment by the
Certificate Insurer of such voided scheduled payment. In addition, the Trustee shall mail notice to all Holders
of the Class A-3 Certificates so affected that, in the event that any such Holder's scheduled payment is so
recovered, such Holder will be entitled to payment pursuant to the terms of the Certificate Policy, a copy of
which shall be made available to such Holders by Trustee. The Trustee shall furnish to the Certificate Insurer
its records listing the payments on the Class A-3 Certificates, if any, that have been made by the Trustee and
subsequently recovered from the affected Holders, and the dates on which such payments were made by the Trustee.
(e) Upon its becoming aware of the occurrence of an Event of Default, the Trustee shall
promptly notify the Certificate Insurer of such Event of Default.
(f) The Trustee shall promptly notify the Certificate Insurer of either of the following
as to which it has knowledge: (A) the commencement of any proceeding by or against the Company commenced under
the United States bankruptcy code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or
similar law (an "Insolvency Proceeding") and (B) the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer (a "Preference Claim") of any distribution made with
respect to the Class A-3 Certificates as to which it has actual knowledge. Each Holder of a Class A-3
Certificate, by its purchase of Class A-3 Certificates, and the Trustee hereby agrees that the Certificate
Insurer (so long as no Certificate Insurer Default exists) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such Preference Claim, including,
without limitation, (i) the direction of any appeal of any order relating to any Preference Claim and (ii) the
posting of any surety, supersedes or performance bond pending any such appeal. In addition and without
limitation of the foregoing, the Certificate Insurer shall be subrogated to the rights of the Trustee and each
Holder of a Class A-3 Certificate in the conduct of any Preference Claim, including, without limitation, all
rights of any party to an adversary proceeding action with respect to any court order issued in connection with
any such Preference Claim.
(g) The Master Servicer shall provide the Certificate Insurer with reasonable access to
information regarding the Mortgage Loans.
(h) For so long as there is no continuing default by the Certificate Insurer under its
obligations under the Certificate Policy (a "Certificate Insurer Default"), each Holder of a Class A-3
Certificate agrees that the Certificate Insurer shall be treated by the Company, the Servicer and the Trustee as
if the Certificate Insurer were the Holder of all of the Class A-3 Certificates, for the purpose (and solely for
the purpose) of the giving of any consent, the making of any direction or the exercise of any voting or other
control rights otherwise given to the Holders of the Class A-3 Certificates under this Agreement.
(i) The Trustee shall keep complete and accurate records in respect of (i) all funds
remitted to it by the Certificate Insurer and deposited into the Certificate Account and (ii) the allocations of
such funds to payments of interest and principal in respect of the Class A-3 Certificates. The Certificate
Insurer shall have the right to inspect such records at reasonable times during normal business hours upon three
Business Day's prior notice to the Trustee.
(j) With respect to this Section 4.10 the terms "Receipt" and "Received" shall mean actual
delivery to the Certificate Insurer, if any, prior to 12:00 p.m., New York time, on a Business Day; delivery
either on a day that is not a Business Day or after 12:00 p.m., New York time, shall be deemed to be Received on
the next succeeding Business Day. If any notice or certificate given under the Certificate Policy by the Trustee
is not in proper form or is not properly completed, executed or delivered, it shall be deemed not to have been
Received. The Certificate Insurer shall promptly so advise the Trustee and the Trustee may submit an amended
notice.
(k) All notices, statements reports, certificates or opinions required by this Agreement
to be sent to the Rating Agencies or the Class A-3 Certificateholders shall also be sent at such time to the
Certificate Insurer at the notice address set forth in Section 11.05.
(l) The Certificate Insurer shall be an express third party beneficiary of this Agreement
for the purpose of enforcing the provisions hereof to the extent of the Certificate Insurer's rights explicitly
specified herein as if a party hereto.
(m) All references in this Agreement to the ratings assigned to the Certificates and to
the interests of any Certificateholders shall be without regard to the Certificate Policy, in the case of the
Class A-3 Certificates.
(n) Payments to the Certificate Insurer will be made by wire transfer of immediately
available funds to the Certificate Insurer Account, unless the Certificate Insurer notifies the Trustee in
writing.
(o) Upon payment in full of the Class A-3 Certificates, the Trustee shall surrender the
Certificate Policy to the Certificate Insurer.
ARTICLE V
THE CERTIFICATES
(See Article V 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
(See Article VIII of the Standard Terms.)
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) 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) plus the Certificate Insurer
Premium Modified Rate, to, but not including, the first day of the month in which such
repurchase price is distributed plus any amounts due to the Certificate Insurer under the
Certificate Policy, 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 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. No purchase pursuant to clause
(ii) of this Section 9.01(a) is permitted if (1) a net interest margin transaction with respect to the Class SB
Certificates is outstanding unless the Underwriter consents in writing and (2) it would result in a draw on the
Certificate Policy unless the Certificate Insurer consents in writing.
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) (See Section 9.01(b) of the Standard Terms)
(c) (See Section 9.01(c) of the Standard Terms)
(d) (See Section 9.01(d) of the Standard Terms)
(e) (See Section 9.01(e) of the Standard Terms)
Section 9.02. Additional Termination Requirements. (See Section 9.02 of the Standard Terms)
Section 9.03. Termination of Multiple REMICs. (See Section 9.03 of the Standard Terms)
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 Yield Maintenance
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 pool of assets comprised of REMIC II Regular Interests SB-IO and SB-PO as a REMIC (REMIC III) for
federal income tax purposes.
The REMIC I Regular Interests will be "regular interests" in REMIC I and the Class R-I Certificates will
be the sole class of "residual interests" in REMIC I for purposes of the REMIC Provisions (as defined herein)
under the federal income tax law.
The Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class M-1 Certificates,
Class M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates and REMIC II
Regular Interests SB-IO and SB-PO will be "regular interests" in REMIC II, and the Class R-II Certificates will
represent the sole class of "residual interests" in REMIC II for purposes of the REMIC Provisions (as defined
herein) under federal income tax law.
The REMIC III Regular Interest will be the "regular interest" in REMIC III, 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 III for purposes of the REMIC Provisions under federal income tax law.
Section 10.04. Distributions on the REMIC I 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.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment. (See Section 11.01 of the Standard Terms.)
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 Xxxxxx
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000,
Attention: Residential Accredit Loans, Inc. Series 2006-QH1
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 00 Xxxxx Xxxxxx
division of The XxXxxx-Xxxx Companies, Inc. 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------------- ------------------------------------------------------------------------
--------------------------------------------- ------------------------------------------------------------------------
Dominion Bond Rating Service 00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------------- ------------------------------------------------------------------------
--------------------------------------------- ------------------------------------------------------------------------
Certificate Insurer Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------------- ------------------------------------------------------------------------
Any notice required or permitted to be mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 11.06. Required Notices to Rating Agency and Subservicer. (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; and 1.0% of all of the
Voting Rights shall be allocated to the Holders of each Class of the Class R-I, Class R-II and Class R-X
Certificates; in each case to be allocated among the Certificates of such Class in accordance with their
respective Percentage Interests. Voting Rights of the Class A-3 Certificateholders may be exercised by the
Certificate Insurer without the consent of such Holders and may only be exercised by such Holders with the prior
written consent of the Certificate Insurer so long as there does not exist a failure by the Certificate Insurer
to make a required payment under the Certificate Policy.
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)
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: /s/Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title:Vice President
Attest: /s/Xxxxxxxxxxx Xxxxxxxx
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Associate
RESIDENTIAL FUNDING COMPANY, LLC
[Seal]
By: /s/Xxxxxxxxxxx Xxxxxxxx
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Associate
Attest: /s/Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Associate
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee
[Seal]
By: /s/
Name:
Title: Authorized Signer
By: /s/
Name:
Title:
Attest: /s/
Name:
Title: Authorized Signer
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 29th day of November, 2006 before me, a notary public in and for said State, personally appeared
________________ known to me to be a ___________ 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.
/s/
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 29th day of November, 2006 before me, a notary public in and for said State, personally appeared
Xxxxxxxxxxx Xxxxxxxx known to me to be a(n) Associate of Residential Funding Company, LLC, 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.
/s/
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 29th day of November, 2006 before me, a notary public in and for said State, personally appeared
__________________ known to me to be a(n) __________________ 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 banking corporation and acknowledged to me that such banking corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
/s/
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 29th day of November, 2006 before me, a notary public in and for said State, personally appeared
____________ known to me to be a(n) ___________ 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 banking corporation and acknowledged to me that such banking corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
/s/
Notary Public
[Notarial Seal]
EXHIBIT ONE
MORTGAGE LOAN SCHEDULE
[FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY FORM 8-K]
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, the Net WAC Cap Rate and the Available Funds
Rate for such Distribution Date, separately identifying LIBOR for such Distribution Date;
(xxi) the Basis Risk Shortfall and Interest Carryforward Amount, if any, for each Class of Certificates,
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 from Sellers; and
(xxvii) the amount of any Insured Payment made on such Distribution Date, the amount of any
reimbursement payment made to the Certificate Insurer on such Distribution Date pursuant to Sections
4.02(c) and (d) and the aggregate amount of prior draws not yet reimbursed.
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 NOVEMBER 1, 2006
[ON FILE WITH THE TRUSTEE]
____________________________________________________________________________________________
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2006
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................................45
Section 2.05. Execution and Authentication of Certificates/Issuance of Certificates
Evidencing Interests in REMIC I Certificates.....................................47
Section 2.06. Conveyance of Uncertificated REMIC I and REMIC II Regular Interests;
Acceptance by the Trustee........................................................47
Section 2.07. Issuance of Certificates Evidencing Interests in REMIC II............................47
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...............................................................51
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...................................................................56
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...................59
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.....................................66
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..............................69
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. ..................................................................75
Section 4.03. Statements to Certificateholders; Statements to Rating Agencies;
Exchange Act Reporting...........................................................75
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........................79
Section 4.07. Optional Purchase of Defaulted Mortgage Loans........................................79
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..........................................................89
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 11.10. No 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 12.04. Report 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 November 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 Xxxxxxx Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) a foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization (other than certain
farmers' cooperatives described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code, (v) any "electing large partnership," as defined in Section 775(a) of the Code and (vi) any
other Person so designated by the Trustee based upon an Opinion of Counsel that the holding of an
Ownership Interest in a Class R Certificate by such Person may cause the Trust Fund or any Person having
an Ownership Interest in any Class of Certificates (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for the Transfer of an
Ownership Interest in a Class R Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701 of the Code or successor
provisions.
Distribution Date: The 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.
Xxxxxxx 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® 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®
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 Moody's, 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 Moody's 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.
§§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 Class A-V REMIC Regular Interest or
Interests 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® 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® 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, 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® 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® 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® 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 Servicer agrees that it will not, alter the codes referenced in
this paragraph with respect to any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
(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 referred to in Section
2.01(b)(i) 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® System, or cause the removal from the registration of any Mortgage Loan on the MERS® 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
Xxxxxxx Mac, whichever is greater, with respect to the Master Servicer if the Master Servicer were
servicing and administering the Mortgage Loans for Xxxxxx Mae or Xxxxxxx Mac. In the event that any
such bond or policy ceases to be in effect, the 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® 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
Servicing 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
Class A-V REMIC Regular Interests 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 Class A-V REMIC Regular Interests
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 Class A-V REMIC Regular Interest 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 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 Moody's 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 Xxxxxxx 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 Mae or Xxxxxxx Mac, is reasonably satisfactory to the Trustee
and the Company, is willing to service the Mortgage Loans and executes and delivers to the Company and
the Trustee an agreement, in form and substance reasonably satisfactory to the Company and the Trustee,
which contains an assumption by such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the 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 Xxxxxxx 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® 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.
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® 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. 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.
Section 8.12. 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 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 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 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 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
First Distribution Date: Notional Amount] 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
__________ 25, ____ Certificate: $____
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 X-0, XXXXX X-0, 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. §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. §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 XXXXXXX 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,
Xxxxxxxxxx, XX, 00000, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, W:CAR:MP:FP:S, Xxxxxxxxxx, XX
00000. Comments on the collection of information should be received by
September 17, 2002. Comments are specifically requested concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including
whether the information will have practical utility;
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. §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 0000 Xxx.
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 C.F.R. §
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.
____________________________
(1) Only paragraph (a) for Class P Certificates.
(2) Class B Certificateholders may represent to either (a) or (b).
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 hereby 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 X (as to accounts
custodial bank 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 X (as to investors
an 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 separately maintained (e.g., with X (as to accounts
respect to commingling of cash) as set forth in the transaction held by Trustee)
1122(d)(2)(iv) 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 X
with 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 X
1122(d)(3)(iii) days specified in the transaction agreements.
-------------------- --------------------------------------------------------------------- ----------------------
-------------------- --------------------------------------------------------------------- ----------------------
Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank X
1122(d)(3)(iv) 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
1122(d)(4)(ii) the 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.
-------------------- --------------------------------------------------------------------- ----------------------
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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.
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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.
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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 number of days specified in the transaction
1122(d)(4)(xiii) agreements.
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1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
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Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained X
1122(d)(4)(xv) as set forth in the transaction agreements.
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