EXECUTION COPY
RESIDENTIAL ASSET SECURITIES CORPORATION,
Depositor,
RESIDENTIAL FUNDING COMPANY, LLC,
Master Servicer,
and
U.S. BANK NATIONAL ASSOCIATION
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of October 27, 2006
Home Equity Mortgage Asset-Backed Pass-Through Certificates
Series 2006-EMX9
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................................5
Section 1.01. Definitions.............................................5
Section 1.02. Determination of LIBOR.................................58
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES....................................................60
Section 2.01. Conveyance of Mortgage Loans...........................60
Section 2.02. Acceptance by Trustee..................................63
Section 2.03. Representations, Warranties and Covenants of the
Master Servicer and the Depositor......................64
Section 2.04. Representations and Warranties of Sellers..............66
Section 2.05. Execution and Authentication of Certificates;
Conveyance of REMIC-I Regular Interests................68
Section 2.06. Purposes and Powers of the Trust.......................68
Section 2.07. Agreement Regarding Ability to Disclose................69
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..................70
Section 3.01. Master Servicer to Act as Servicer.....................70
Section 3.02. Subservicing Agreements Between Master Servicer
and Subservicers; Enforcement of Subservicers'
Obligations............................................72
Section 3.03. Successor Subservicers.................................73
Section 3.04. Liability of the Master Servicer.......................73
Section 3.05. No Contractual Relationship Between Subservicer
and Trustee or Certificateholders......................74
Section 3.06. Assumption or Termination of Subservicing
Agreements by Trustee..................................74
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to Custodial Account..........................74
Section 3.08. Subservicing Accounts; Servicing Accounts..............77
Section 3.09. Access to Certain Documentation and Information
Regarding the Mortgage Loans...........................78
Section 3.10. Permitted Withdrawals from the Custodial Account.......78
Section 3.11. Maintenance of Primary Insurance Coverage..............80
Section 3.12. Maintenance of Fire Insurance and Omissions and
Fidelity Coverage......................................80
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments...........81
Section 3.14. Realization Upon Defaulted Mortgage Loans..............83
Section 3.15. Trustee to Cooperate; Release of Custodial Files.......85
Section 3.16. Servicing and Other Compensation; Compensating
Interest...............................................86
Section 3.17. Reports to the Trustee and the Depositor...............87
Section 3.18. Annual Statement as to Compliance and Servicing
Assessment.............................................88
Section 3.19. Annual Independent Public Accountants' Servicing
Report.................................................88
Section 3.20. Right of the Depositor in Respect of the Master
Servicer...............................................88
Section 3.21. [Reserved].............................................89
Section 3.22. Advance Facility.......................................89
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...................................93
Section 4.01. Certificate Account....................................93
Section 4.02. Distributions..........................................93
Section 4.03. Statements to Certificateholders; Statements to
Rating Agencies; Exchange Act Reporting................97
Section 4.04. Distribution of Reports to the Trustee and the
Depositor; Advances by the Master Servicer............101
Section 4.05. Allocation of Realized Losses.........................102
Section 4.06. Reports of Foreclosures and Abandonment of
Mortgaged Property....................................104
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.........104
Section 4.08. Limited Mortgage Loan Repurchase Right................104
Section 4.09. Derivative Contracts..................................105
Section 4.10. Yield Maintenance Agreement...........................105
ARTICLE V THE CERTIFICATES.................................................107
Section 5.01. The Certificates......................................107
Section 5.02. Registration of Transfer and Exchange of
Certificates..........................................109
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.....113
Section 5.04. Persons Deemed Owners.................................113
Section 5.05. Appointment of Paying Agent...........................114
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER...........................115
Section 6.01. Respective Liabilities of the Depositor and the
Master Servicer.......................................115
Section 6.02. Merger or Consolidation of the Depositor or the
Master Servicer; Assignment of Rights and
Delegation of Duties by Master Servicer...............115
Section 6.03. Limitation on Liability of the Depositor, the
Master Servicer and Others............................116
Section 6.04. Depositor and Master Servicer Not to Resign...........116
ARTICLE VII DEFAULT........................................................117
Section 7.01. Events of Default.....................................117
Section 7.02. Trustee or Depositor to Act; Appointment of
Successor.............................................118
Section 7.03. Notification to Certificateholders....................119
Section 7.04. Waiver of Events of Default...........................120
ARTICLE VIII CONCERNING THE TRUSTEE........................................121
Section 8.01. Duties of Trustee.....................................121
Section 8.02. Certain Matters Affecting the Trustee.................122
Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loans.................................................123
Section 8.04. Trustee May Own Certificates..........................124
Section 8.05. Master Servicer to Pay Trustee's Fees and
Expenses; Indemnification.............................124
Section 8.06. Eligibility Requirements for Trustee..................124
Section 8.07. Resignation and Removal of the Trustee................125
Section 8.08. Successor Trustee.....................................126
Section 8.09. Merger or Consolidation of Trustee....................126
Section 8.10. Appointment of Co-Trustee or Separate Trustee.........126
Section 8.11. Appointment of the Custodian..........................127
Section 8.12. Appointment of Office or Agency.......................128
Section 8.13. DTC Letter of Representations.........................128
Section 8.14. Yield Maintenance Agreement...........................128
ARTICLE IX TERMINATION.....................................................129
Section 9.01. Termination Upon Purchase or Liquidation of All
Mortgage Loans........................................129
Section 9.02. Additional Termination Requirements...................132
ARTICLE X REMIC PROVISIONS.................................................134
Section 10.01. REMIC Administration..................................134
Section 10.02. Master Servicer, REMIC Administrator and Trustee
Indemnification.......................................137
ARTICLE XI MISCELLANEOUS PROVISIONS........................................138
Section 11.01. Amendment.............................................138
Section 11.02. Recordation of Agreement; Counterparts................140
Section 11.03. Limitation on Rights of Certificateholders............140
Section 11.04. Governing Law.........................................141
Section 11.05. Notices...............................................141
Section 11.06. Notices to Rating Agencies............................142
Section 11.07. Severability of Provisions............................142
Section 11.08. Supplemental Provisions for Resecuritization..........142
Section 11.09. Third-Party Beneficiary...............................143
ARTICLE XII COMPLIANCE WITH REGULATION AB..................................143
Section 12.01. Intent of Parties; Reasonableness.....................143
Section 12.02. Additional Representations and Warranties of the
Trustee...............................................144
Section 12.03. Information to be Provided by the Trustee.............144
Section 12.04. Report on Assessment of Compliance and Attestation....145
Section 12.05. Indemnification; Remedies.............................145
EXHIBIT A FORM OF CLASS A CERTIFICATE....................................A-1
EXHIBIT B FORM OF CLASS M CERTIFICATE....................................B-1
EXHIBIT C FORM OF CLASS SB CERTIFICATE...................................C-1
EXHIBIT D FORM OF CLASS R CERTIFICATE....................................D-1
EXHIBIT E FORM OF CUSTODIAL AGREEMENT....................................E-1
EXHIBIT F-1 GROUP I LOAN SCHEDULE..........................................F-1
EXHIBIT F-2 GROUP II LOAN SCHEDULE.........................................F-2
EXHIBIT G FORM OF REQUEST FOR RELEASE....................................G-1
EXHIBIT H-1 FORM OF TRANSFER AFFIDAVIT AND AGREEMENT.....................H-1-1
EXHIBIT H-2 FORM OF TRANSFEROR CERTIFICATE...............................H-2-1
EXHIBIT I FORM OF INVESTOR REPRESENTATION LETTER.........................I-1
EXHIBIT J FORM OF TRANSFEROR REPRESENTATION LETTER.......................J-1
EXHIBIT K TEXT OF AMENDMENT TO POOLING AND SERVICING AGREEMENT
PURSUANT TO SECTION 11.01(E) FOR A LIMITED GUARANTY............K-1
EXHIBIT L FORM OF LIMITED GUARANTY.......................................L-1
EXHIBIT M FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE
LOAN...........................................................M-1
EXHIBIT N FORM OF RULE 144A INVESTMENT REPRESENTATION....................N-1
EXHIBIT O [RESERVED].....................................................O-1
EXHIBIT P FORM OF ERISA LETTER...........................................P-1
EXHIBIT Q [RESERVED].....................................................Q-1
EXHIBIT R ASSIGNMENT AGREEMENT..........................................R-1
EXHIBIT S SERVICING CRITERIA.............................................S-1
EXHIBIT T-1 FORM OF 10-K CERTIFICATION...................................T-1-1
EXHIBIT T-2 FORM OF BACK-UP CERTIFICATION................................T-2-1
EXHIBIT U INFORMATION TO BE PROVIDED BY THE MASTER SERVICER TO THE
RATING AGENCIES RELATING TO REPORTABLE MODIFIED MORTGAGE
LOANS..........................................................U-1
This Pooling and Servicing Agreement, effective as of October 27, 2006,
among RESIDENTIAL ASSET SECURITIES CORPORATION, as the depositor (together
with its permitted successors and assigns, the "Depositor"), RESIDENTIAL
FUNDING COMPANY, LLC, as master servicer (together with its permitted
successors and assigns, the "Master Servicer"), and U.S. BANK NATIONAL
ASSOCIATION, a banking association organized under the laws of the United
States, as trustee (together with its permitted successors and assigns, the
"Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
seventeen Classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein) and certain
other related assets.
REMIC I
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Mortgage Loans and
certain other related assets (exclusive of the Yield Maintenance Agreement)
subject to this Agreement as a real estate mortgage investment conduit
(a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC I." Component I of the Class R
Certificates will represent the sole Class of "residual interests" in REMIC I
for purposes of the REMIC Provisions (as defined herein) under federal income
tax law. The following table irrevocably sets forth the designation,
remittance rate (the "Uncertificated REMIC I Pass-Through Rate") and initial
Uncertificated Principal Balance for each of the "regular interests" in
REMIC I (the "REMIC I Regular Interests"). The "latest possible maturity
date" (determined solely for purposes of satisfying Treasury Regulation
Section 1.860G-1(a)(4)(iii)) for each REMIC I Regular Interest shall be the
Maturity Date. None of the REMIC I Regular Interests will be certificated.
Uncertificated REMIC I Initial Uncertificated REMIC I Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date
Y-1 Variable(1) $ 243,520.28 November 25, 2036
Y-2 Variable(1) $ 136,478.95 November 25, 2036
Z-1 Variable(1) $ 486,797,032.00 November 25, 2036
Z-2 Variable(1) $ 272,823,164.24 November 25, 2036
_______________
(1) Calculated as provided in the definition of Uncertificated REMIC I
Pass-Through Rate.
REMIC II
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC I Regular
Interests as a REMIC for federal income tax purposes, and such segregated
pool of assets will be designated as "REMIC II." Component II of the Class R
Certificates will represent the sole Class of "residual interests" in
REMIC II for purposes of the REMIC Provisions (as defined herein) under
federal income tax law. The following table irrevocably sets forth the
designation, remittance rate (the "Uncertificated REMIC II Pass-Through
Rate") and initial Uncertificated Principal Balance for each of the "regular
interests" in REMIC II (the "REMIC II Regular Interests"). The "latest
possible maturity date" (determined solely for purposes of satisfying
Treasury Regulation Section 1.860G-1(a)(4)(iii)) for each REMIC II Regular
Interest shall be the Maturity Date. None of the REMIC II Regular Interests
will be certificated.
Uncertificated REMIC I Initial/Uncertificated REMIC I Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date
LT-1 Variable(1) $ 486,715,359.32 November 25, 2036
LT-2 Variable(1) $ 15,735.41 November 25, 2036
LT-3 0.00% $ 32,968.64 November 25, 2036
LT-4 Variable(1) $ 32,968.64 November 25, 2036
LT-5 Variable(1) $ 272,777,281.23 November 25, 2036
LT-6 Variable(1) $ 8,704.92 November 25, 2036
LT-7 0.00% $ 18,591.04 November 25, 2036
LT-8 Variable(1) $ 18,591.04 November 25, 2036
LT-Y1(2) Variable(1) $ 243,520.28 November 25, 2036
LT-Y2(2) Variable(1) $ 136,478.95 November 25, 2036
_______________
(1) Calculated as provided in the definition of Uncertificated REMIC II
Pass-Through Rate.
(2) LT-Y1 will have the same interest rate, principal balance, Principal
Reduction Amount and allocation of Realized Losses as the REMIC I Regular
Interest Y-1. LT-Y2 will have the same interest rate, principal balance,
Principal Reduction Amount and allocation of Realized Losses as the REMIC I
Regular Interest Y-2.
REMIC III
As provided herein, the REMIC Administrator will elect to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC III." Component III of the Class R Certificates
will represent the sole Class of "residual interests" in REMIC III for
purposes of the REMIC Provisions under federal income tax law. The following
table irrevocably sets forth the designation, Pass-Through Rate, aggregate
Initial Certificate Principal Balance, certain features, month of Final
Scheduled Distribution Date and initial ratings for each Class of
Certificates comprising the interests representing "regular interests" in
REMIC III. The "latest possible maturity date" (determined solely for
purposes of satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii)) for
each Class of REMIC III Regular Interests shall be the Maturity Date.
Month of
Final
Aggregate Initial Scheduled
Pass-Through Certificate Distribution
Designation Type Rate Principal Balance Features Date Ratings
S&P Moody's
Class A-I-1 Regular(1) Adjustable(2)(3)$ 179,342,000.00 Senior/Adjustable May 2031 AAA Aaa
Rate
Class A-I-2 Regular(1) Adjustable(2)(3)$ 82,329,000.00 Senior/Adjustable February 2036 AAA Aaa
Rate
Class A-I-3 Regular(1) Adjustable(2)(3)$ 68,601,000.00 Senior/Adjustable September 2036 AAA Aaa
Rate
Class A-I-4 Regular(1) Adjustable(2)(3)$ 22,832,000.00 Senior/Adjustable November 2036 AAA Aaa
Rate
Class A-II Regular(1) Adjustable $ 197,896,000.00 Senior/Adjustable November 2036 AAA Aaa
(2)(3) Rate
Class M-1 Regular(1) Adjustable(2)(3)$ 35,340,000.00 Mezzanine/Adjustable November 2036 AA+ Aa1
Rate
Class M-2 Regular(1) Adjustable(2)(3)$ 40,660,000.00 Mezzanine/Adjustable November 2036 AA Aa2
Rate
Class M-3 Regular(1) Adjustable(2)(3)$ 15,580,000.00 Mezzanine/Adjustable November 2036 AA- Aa3
Rate
Class M-4 Regular(1) Adjustable(2)(3)$ 14,820,000.00 Mezzanine/Adjustable November 2036 A+ A1
Rate
Class M-5 Regular(1) Adjustable(2)(3)$ 14,440,000.00 Mezzanine/Adjustable November 2036 A A2
Rate
Class M-6 Regular(1) Adjustable(2)(3)$ 11,020,000.00 Mezzanine/Adjustable November 2036 A- A2
Rate
Class M-7 Regular(1) Adjustable(2)(3)$ 10,260,000.00 Mezzanine/Adjustable November 2036 BBB+ A3
Rate
Class M-8 Regular(1) Adjustable(2)(3)$ 8,740,000.00 Mezzanine/Adjustable November 2036 BBB Baa1
Rate
Class M-9 Regular(1) Adjustable(2)(3)$ 12,160,000.00 Mezzanine/Adjustable November 2036 BBB- Baa2
Rate
Class M-10 Regular(1) Adjustable(2)(3)$ 14,820,000.00 Mezzanine/Adjustable November 2036 BB+ Baa3
Rate
Class SB Regular (4) $ 31,160,199.47 Subordinate N/A N/A N/A
(4)
___________________________
(1) The Class A-I, Class A-II and Class M Certificates will represent
ownership of REMIC III Regular Interests together with certain rights to
payments to be made from amounts received under the Yield Maintenance
Agreement which will be deemed made for federal income tax purposes
outside of REMIC III by the holder of the Class SB Certificates as the
owner of the Yield Maintenance Agreement.
(2) The REMIC III Regular Interests, ownership of which is represented by
the Class A-I, Class A-II and Class M Certificates, will accrue interest
at a per annum rate equal to LIBOR plus the applicable Margin, each
subject to a payment cap as described in the definition of "Pass-Through
Rate" and the provisions for the payment of Basis Risk Shortfalls herein,
which payments will not be part of the entitlement of the REMIC III
Regular Interests related to such Certificates.
(3) The Class A-I, Class A-II and Class M Certificates will also entitle
their holders to certain payments from the Holder of the Class SB
Certificates from amounts to which the related REMIC III Regular Interest
is entitled and from amounts received under the Yield Maintenance
Agreement, which will not be a part of their ownership of the REMIC III
Regular Interests.
(4) 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
Class SB Certificates will be comprised of two REMIC III Regular
Interests, a principal only regular interest designated REMIC III Regular
Interest SB-PO and an interest only regular interest designated REMIC III
Regular Interest SB-IO, which will be entitled to distributions as set
forth herein. The rights of the Holder of the Class SB Certificates to
payments from the Yield Maintenance Agreement shall be outside and apart
from its rights under the REMIC III Regular Interests SB-IO and SB-PO.
In consideration of the mutual agreements herein contained, the
Depositor, 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, an amount
equal to the interest accrued during the related Interest Accrual Period on
the Certificate Principal Balance thereof immediately prior to such
Distribution Date at the related Pass-Through Rate for that Distribution Date.
The amount of Accrued Certificate Interest on each Class of
Certificates shall be reduced by the amount of Prepayment Interest Shortfalls
on the related 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 related Mortgage Loans during the related Due Period.
The portion of any Prepayment Interest Shortfalls or Relief Act Shortfalls
allocated to the Class A Certificates will be based upon the related Senior
Percentage of all such reductions with respect to the related Mortgage Loans,
such reductions will be allocated among the related Class A Certificates, pro
rata, on the basis of Accrued Certificate Interest payable on such
Distribution Date absent such reductions, with the remainder of such
reductions allocated among the Holders of all Classes of Class M
Certificates, pro rata, on the basis of Accrued Certificate Interest payable
on such Distribution Date absent such reductions.
Accrued Certificate Interest for any Distribution Date shall further be
reduced by the interest portion of Realized Losses allocated to any Class of
Certificates pursuant to Section 4.05.
Accrued Certificate Interest shall accrue on the basis of a 360-day
year and the actual number of days in the related Interest Accrual Period.
With respect to each Distribution Date and the Class SB Certificates,
interest accrued during the preceding Interest Accrual Period at the related
Pass-Through Rate on the Uncertificated 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)(iv) and (v). 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.
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.
Adjustment Date: With respect to each adjustable-rate Mortgage Loan,
each date set forth in the related Mortgage Note on which an adjustment to
the interest rate on such Mortgage Loan becomes effective.
Advance: With respect to any Mortgage Loan, any advance made by the
Master Servicer, pursuant to Section 4.04.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For 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.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Amount Held for Future Distribution: With respect to any Distribution
Date, 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, REO Proceeds, Principal
Prepayments, 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, Subsequent Recoveries, Insurance Proceeds, REO 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
(ii) payments which represent early receipt of scheduled payments of
principal and interest due on a date or dates subsequent to the Due Date in
the related Due Period.
Appraised Value: With respect 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 based upon the
appraisal made at the time of origination of the loan which was refinanced or
modified or the appraised value determined in an appraisal at the time of
refinancing or modification, as the case may be.
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 Depositor relating to
the transfer and assignment of the Mortgage Loans, attached hereto as
Exhibit R.
Available Distribution Amount: With respect 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 with respect to the Mortgage Loans, (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) in respect of the Mortgage Loans,
(iv) any amount that the Master Servicer is not permitted to withdraw from
the Custodial Account pursuant to Section 3.16(e) in respect of the Mortgage
Loans, and (v) any amount deposited in the Certificate Account pursuant to
Section 4.07 or 9.01 in respect of the Mortgage Loans, reduced by (b) the sum
as of the close of business on the immediately preceding Determination Date
of (x) the Amount Held for Future Distribution with respect to the Mortgage
Loans, 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).
Balloon Loan: Each of the Mortgage Loans having an original term to
maturity that is shorter than the related amortization term.
Balloon Payment: With respect to any Balloon Loan, the related Monthly
Payment payable on the stated maturity date of such Balloon Loan.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basis Risk Shortfalls: Group I Basis Risk Shortfalls, Group II Basis
Risk Shortfalls or Class M Basis Risk Shortfalls, as applicable.
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the State of California, the State of
Minnesota, the State of Texas, the State of New York or the State of Illinois
(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.
Capitalization Reimbursement Amount: With respect 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).
Cash Liquidation: With respect 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: Any Class A Certificate, Class M Certificate, Class SB
Certificate or Class R Certificate.
Certificate Account: The account or accounts created and maintained
pursuant to Section 4.01, which shall be entitled "U.S. Bank National
Association, as trustee, in trust for the registered holders of Residential
Asset Securities Corporation, Home Equity Mortgage Asset-Backed Pass-Through
Certificates, Series 2006-EMX9" and which account shall be held for the
benefit of the Certificateholders and which must be an Eligible Account.
Certificate Account Deposit Date: With respect 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, except that neither a Disqualified
Organization nor a Non-United States Person shall be a holder of a Class R
Certificate for any purpose hereof. 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 Depositor, 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 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 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) the aggregate of all reductions in
Certificate Principal Balance deemed to have occurred in connection with
Realized Losses which were previously allocated to such Certificate (or any
predecessor Certificate) pursuant to Section 4.05; provided, that with
respect to any Distribution Date, the Certificate Principal Balances of: (i)
the Class A-I Certificates and Class M Certificates will be increased, in
each case to the extent to which a Realized Loss was previously allocated
thereto and remaining unreimbursed, by the Subsequent Recovery Allocation
Amount for Loan Group I in the following order of priority: first to the
Class A-I Certificates, pro rata, based on the amount of Realized Losses
previously allocated thereto and remaining unreimbursed, and then to the
Class M-1 Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates, Class M-5 Certificates, Class M-6 Certificates,
Class M-7 Certificates, Class M-8 Certificates, Class M-9 Certificates and
Class M-10 Certificates, in that order, and (ii) the Class A-II Certificates
and Class M Certificates will be increased, in each case, to the extent of
Realized Losses previously allocated thereto and remaining unreimbursed, by
the Subsequent Recovery Allocation Amount for Loan Group II in the following
order of priority: to the Class A-II Certificates, Class M-1 Certificates,
Class M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates,
Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates,
Class M-8 Certificates, Class M-9 Certificates and Class M-10 Certificates,
in that order.
With respect to any 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 III 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 III Regular Interest SB-IO, as
reduced by Realized Losses allocated thereto. The Class R Certificates will
not have a Certificate Principal Balance.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates or uncertificated
interests bearing the same designation.
Class A Certificates: Collectively, the Class A-I-1 Certificates,
Class A-I-2 Certificates, Class A-I-3 Certificates, Class A-I-4 Certificates
and Class A-II Certificates.
Class A Interest Distribution Priority: With respect to each Class of
Class A Certificates and any Distribution Date, the amount available for
payment of Accrued Certificate Interest thereon for that Distribution Date
plus Accrued Certificate Interest thereon remaining unpaid from any prior
Distribution Date, in the amounts and priority as follows:
(i) first, concurrently, to the Class A-I Certificates, pro rata, from the
Class A-I Interest Remittance Amount, and to the Class A-II
Certificates, from the Class A-II Interest Remittance Amount;
(ii) second, to the Class A-I Certificates, pro rata, from the
remaining Class A-II Interest Remittance Amount, or to the
Class A-II Certificates, from the remaining Class A-I Interest
Remittance Amount, as needed after taking into account any
distributions in respect of interest on the Class A Certificates
made in first above;
(iii) third, concurrently, to the Class A-I Certificates, pro rata,
from the Principal Remittance Amount related to Loan Group I, and
to the Class A-II Certificates, from the Principal Remittance
Amount related to Loan Group II, as needed after taking into
account any distributions in respect of interest on the Class A
Certificates made in first and second above; and
(iv) fourth, to the Class A-I Certificates, pro rata, from the
remaining Principal Remittance Amount related to Loan Group II,
or to the Class A-II Certificates, from the remaining Principal
Remittance Amount related to Loan Group I, as needed after taking
into account any distributions in respect of interest on the
Class A Certificates made in first, second and third above.
Class A Principal Distribution Amount: With respect to any
Distribution Date (a) 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 (b) 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-I-1 Certificate: Any one of the Class A-I-1 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto 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 in respect of Group I
Loans as set forth in Section 4.05, and evidencing (i) an interest designated
as a "regular interest" in REMIC III for purposes of the REMIC Provisions and
(ii) the right to receive payments under the Yield Maintenance Agreement.
Class A-I-1 Margin: 0.0700% per annum.
Class A-I-2 Certificate: Any one of the Class A-I-2 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto 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 in respect of Group I
Loans as set forth in Section 4.05, and evidencing (i) an interest designated
as a "regular interest" in REMIC III for purposes of the REMIC Provisions and
(ii) the right to receive payments under the Yield Maintenance Agreement.
Class A-I-2 Margin: 0.1300% per annum.
Class A-I-3 Certificate: Any one of the Class A-I-3 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto 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 in respect of Group I
Loans as set forth in Section 4.05, and evidencing (i) an interest designated
as a "regular interest" in REMIC III for purposes of the REMIC Provisions and
(ii) the right to receive payments under the Yield Maintenance Agreement.
Class A-I-3 Margin: Initially, 0.1700% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 0.3400% per annum.
Class A-I-4 Certificate: Any one of the Class A-I-4 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto 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 in respect of Group I
Loans as set forth in Section 4.05, and evidencing (i) an interest designated
as a "regular interest" in REMIC III for purposes of the REMIC Provisions and
(ii) the right to receive payments under the Yield Maintenance Agreement.
Class A-I-4 Margin: Initially, 0.2400% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 0.4800% per annum.
Class A-I Certificates: Collectively, the Class A-I-1 Certificates,
Class A-I-2 Certificates, Class A-I-3 Certificates and Class A-I-4
Certificates.
Class A-I Interest Remittance Amount: With respect to any Distribution
Date, the portion of the Available Distribution Amount for that Distribution
Date attributable to interest received or advanced with respect to the
Group I Loans.
Class A-II Certificate: Any one of the Class A-II Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto 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 in respect of Group II
Loans as set forth in Section 4.05, and evidencing (i) an interest designated
as a "regular interest" in REMIC III for purposes of the REMIC Provisions and
(ii) the right to receive payments under the Yield Maintenance Agreement.
Class A-II Interest Remittance Amount: With respect to any
Distribution Date, the portion of the Available Distribution Amount for that
Distribution Date attributable to interest received or advanced with respect
to the Group II Loans.
Class A-II Margin: Initially, 0.1300% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 0.2600% per annum.
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 hereto as Exhibit B, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Yield Maintenance
Agreement.
Class M-1 Margin: Initially, 0.3100% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 0.4650% per annum.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date (a) 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 (b) on or after
the Stepdown Date if a Trigger Event is not in effect for that Distribution
Date, the lesser of:
(iii) the remaining Principal Distribution Amount for that Distribution Date
after distribution of the Class A Principal Distribution Amount;
and
(iv) 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 hereto as Exhibit B, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Yield Maintenance
Agreement.
Class M-2 Margin: Initially, 0.3300% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 0.4950% per annum.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date (a) 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 the Class M-1
Principal Distribution Amount or (b) 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, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Yield Maintenance
Agreement.
Class M-3 Margin: Initially, 0.3500% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 0.5250% per annum.
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date (a) 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, the Class M-1
Principal Distribution Amount and the Class M-2 Principal Distribution Amount
or (b) 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,
the Class M-1 Principal Distribution Amount and the 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 Certificates, Class M-1
Certificates 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, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Yield Maintenance
Agreement.
Class M-4 Margin: Initially, 0.4000% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 0.6000% per annum.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date (a) 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, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount
and the Class M-3 Principal Distribution Amount or (b) 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,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount and the 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 Certificates, Class M-1
Certificates, Class M-2 Certificates 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, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Yield Maintenance
Agreement.
Class M-5 Margin: Initially, 0.4200% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 0.6300% per annum.
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date (a) 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, 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 or (b) 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,
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; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates 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 M-6 Certificate: Any one of the Class M-6 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially
in the form annexed hereto as Exhibit B, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Yield Maintenance
Agreement.
Class M-6 Margin: Initially, 0.4800% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 0.7200% per annum.
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date (a) 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, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
the Class M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount and the Class M-5 Principal Distribution Amount or (b) on
or after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
(iii) the remaining Principal Distribution Amount for that Distribution Date
after distribution 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, the Class M-4 Principal Distribution Amount and the
Class M-5 Principal Distribution Amount; and
(iv) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates and Class M-5 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, the Class M-4 Principal Distribution Amount and the
Class M-5 Principal Distribution Amount for that Distribution Date)
and (2) the Certificate Principal Balance of the Class M-6
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-7 Certificate: Any one of the Class M-7 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially
in the form annexed hereto as Exhibit B, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Yield Maintenance
Agreement.
Class M-7 Margin: Initially, 0.7700% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 1.1550% per annum.
Class M-7 Principal Distribution Amount: With respect to any
Distribution Date (a) 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, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
the Class M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount, the Class M-5 Principal Distribution Amount and the
Class M-6 Principal Distribution Amount or (b) 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,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount and the Class M-6 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, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates, Class M-5 Certificates and Class M-6
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, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount and the
Class M-6 Principal Distribution Amount for that Distribution Date)
and (2) the Certificate Principal Balance of the Class M-7
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-8 Certificate: Any one of the Class M-8 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially
in the form annexed hereto as Exhibit B, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Yield Maintenance
Agreement.
Class M-8 Margin: Initially, 1.0000% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 1.5000% per annum.
Class M-8 Principal Distribution Amount: With respect to any
Distribution Date (a) 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, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
the Class M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount, the Class M-5 Principal Distribution Amount, the
Class M-6 Principal Distribution Amount and the Class M-7 Principal
Distribution Amount or (b) 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,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class M-6 Principal Distribution
Amount and the Class M-7 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, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates and Class M-7 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,
the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class M-6 Principal Distribution
Amount and the Class M-7 Principal Distribution Amount for that
Distribution Date) and (2) the Certificate Principal Balance of the
Class M-8 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-9 Certificate: Any one of the Class M-9 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially
in the form annexed hereto as Exhibit B, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii) the right to receive payments under the Yield Maintenance
Agreement.
Class M-9 Margin: Initially, 2.0500% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 3.0750% per annum.
Class M-9 Principal Distribution Amount: With respect to any
Distribution Date (a) 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, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
the Class M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount, the Class M-5 Principal Distribution Amount, the
Class M-6 Principal Distribution Amount, the Class M-7 Principal Distribution
Amount and the Class M-8 Principal Distribution Amount or (b) 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,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, Class M-6 Principal Distribution
Amount, the Class M-7 Principal Distribution Amount and the
Class M-8 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, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates,
Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class M-7 Certificates and Class M-8 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, the Class M-4 Principal Distribution
Amount, the Class M-5 Principal Distribution Amount, the Class M-6
Principal Distribution Amount, the Class M-7 Principal Distribution
Amount and the Class M-8 Principal Distribution Amount for that
Distribution Date) and (2) the Certificate Principal Balance of the
Class M-9 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-10 Certificate: Any one of the Class M-10 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B, and evidencing (i) an
interest designated as a "regular interest" in REMIC III for purposes of the
REMIC Provisions and (ii) the right to receive payments under the Yield
Maintenance Agreement.
Class M-10 Margin: Initially, 2.5000% per annum, and on any
Distribution Date on and after the second Distribution Date after the first
possible Optional Termination Date, 3.7500% per annum.
Class M-10 Principal Distribution Amount: With respect to any
Distribution Date (a) 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, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
the Class M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount, the Class M-5 Principal Distribution Amount, the
Class M-6 Principal Distribution Amount, the Class M-7 Principal Distribution
Amount, the Class M-8 Principal Distribution Amount and the Class M-9
Principal Distribution Amount or (b) 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,
the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, Class M-6 Principal Distribution
Amount, the Class M-7 Principal Distribution Amount, the Class M-8
Principal Distribution Amount and the Class M-9 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,
Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class M-4 Certificates, Class M-5 Certificates,
Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates and Class M-9 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,
the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, the Class M-6 Principal Distribution
Amount, the Class M-7 Principal Distribution Amount, the Class M-8
Principal Distribution Amount and the Class M-9 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-10 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 Basis Risk Shortfall: With respect to any Class of Class M
Certificates and any Distribution Date, an amount equal to the excess of (i)
Accrued Certificate Interest for that Class calculated at a per annum rate
(which shall not exceed 14.000% per annum) equal to LIBOR plus the related
Margin for that Distribution Date, over (ii) Accrued Certificate Interest for
that Class if the Pass-Through Rate for that Distribution Date is calculated
using the Class M Net WAC Cap Rate for that Distribution Date; plus any
unpaid Class M Basis Risk Shortfall from prior Distribution Dates, plus
interest thereon, to the extent not previously paid from Excess Cash Flow, at
a per annum rate (which shall not exceed 14.000% per annum) equal to LIBOR
plus the related Margin for that Distribution Date.
Class M Certificates: Collectively, the Class M-1 Certificates,
Class M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates,
Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates,
Class M-8 Certificates, Class M-9 Certificates and Class M-10 Certificates.
Class M Net WAC Cap Rate: With respect to any Distribution Date and
the Class M Certificates, a per annum rate equal to the weighted average of
(i) the Group I Net WAC Cap Rate for that Distribution Date and (ii) the
Group II Net WAC Cap Rate for that Distribution Date, weighted on the basis
of the related Subordinate Component, which for tax purposes is equal to the
weighted average of the interest rates on the REMIC I Regular Interests Y-1
and Y-2.
Class R Certificate: Any one of the Class R Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit D and evidencing an interest designated as
a "residual interest" in a REMIC 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 C, 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 an interest
comprised of "regular interests" in REMIC III together with certain rights to
payments under the Yield Maintenance Agreement for purposes of the REMIC
Provisions.
Closing Date: October 27, 2006.
Code: The Internal Revenue Code of 1986.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date, any
amount paid by the Master Servicer in accordance with Section 3.16(f).
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 U.S. Bank National Association, EP-MN-WS3D,
00 Xxxxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attn: Structured
Finance/RASC 2006-EMX9.
Credit Repository: Equifax, Transunion and Experian, or their
successors in interest.
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
Depositor, the Master Servicer, the Trustee and a Custodian in substantially
the form of Exhibit E hereto.
Custodial File: Any mortgage loan document in the Mortgage File that
is required to be delivered to the Trustee or the Custodian pursuant to
Section 2.01(b) of this Agreement.
Custodian: Xxxxx Fargo Bank, N.A., or any successor custodian
appointed pursuant to a Custodial Agreement.
Cut-off Date: October 1, 2006.
Cut-off Date Balance: $760,000,199.47.
Cut-off Date Principal Balance: With respect 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 in 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 definitive, fully registered 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 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 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 August 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.
Depositor: As defined in the preamble hereto.
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 Exchange Act.
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.
Derivative Contract: Any ISDA Master Agreement, together with the
related Schedule and Confirmation, entered into by the Trustee and a
Derivative Counterparty in accordance with Section 4.09.
Derivative Counterparty: Any counterparty to a Derivative Contract as
provided in Section 4.09.
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Determination Date: With respect to any Distribution Date, the 20th
day (or if such 20th day is not a Business Day, the Business Day immediately
following such 20th day) of the month of the related Distribution Date.
Disqualified Organization: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, including, 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) and (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code. A Disqualified
Organization also includes any "electing large partnership," as defined in
Section 775(a) of the Code and 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 any REMIC 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 November
2006 or, if such 25th day is not a Business Day, the Business Day immediately
following such 25th day.
DTC Letter: The Letter of Representations, dated October 26, 2006,
among the Trustee on behalf of the Trust Fund, U.S. Bank National
Association, in its individual capacity as agent thereunder and the
Depository.
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 calendar month
of such Distribution Date.
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 U.S. Bank National Association, or (iv) in the
case of the Certificate Account, a trust account or accounts maintained in
the corporate trust department of U.S. Bank National Association, 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 by such Rating Agency).
Eligible Master Servicing Compensation: With respect to any
Distribution Date and each Loan Group, the lesser of (a) one-twelfth of
0.125% of the Stated Principal Balance of the related 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, in each case with respect to the related Loan Group;
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.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: As defined in Section 7.01.
Excess Cash Flow: With respect to any Distribution Date, an amount
equal to the sum of (A) the excess of (i) the Available Distribution Amount
for that Distribution Date over (ii) the sum of (a) the Interest Distribution
Amount for that Distribution Date and (b) the lesser of (1) the aggregate
Certificate Principal Balance of Class A Certificates and Class M
Certificates immediately prior to such Distribution Date and (2) the
Principal Remittance Amount for that Distribution Date to the extent not
applied to pay interest on the Class A Certificates and Class M Certificates
on such Distribution Date, (B) the Overcollateralization Reduction Amount, if
any, for that Distribution Date and (C) any Yield Maintenance Agreement
Payment received by the Trustee for that Distribution Date.
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 for such
Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: With respect to any Mortgage Loan as of any date of
determination, the sum of the applicable Servicing Fee Rate and the per annum
rate at which the applicable Subservicing Fee accrues.
Xxxxxx Xxx: Xxxxxx Xxx, 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.
Final Scheduled Distribution Date: Solely for purposes of the face of
the Certificates, as follows: with respect to the Class A-I-1 Certificates,
the Distribution Date occurring in May 2031; with respect to the Class A-I-2
Certificates, the Distribution Date occurring in February 2036; with respect
to the Class A-I-3 Certificates, the Distribution Date occurring in September
2036; and with respect to the Class A-I-4 Certificates, Class A-II
Certificates and each Class of Class M Certificates, the Distribution Date
occurring in November 2036. No event of default under this Agreement will
arise or become applicable solely by reason of the failure to retire the
entire Certificate Principal Balance of any Class of Class A Certificates or
Class M Certificates on or before its Final Scheduled Distribution Date.
Fitch: Fitch Ratings, or its successors in interest.
Foreclosure Profits: With respect 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(f)(i).
Xxxxxxx Mac: Xxxxxxx Mac, a corporate instrumentality of the United
States created and existing under Title III of the Emergency Home Finance Act
of 1970, as amended, or any successor thereto.
Group I Basis Risk Shortfall: With respect to any Class of Class A-I
Certificates and any Distribution Date, an amount equal to the excess of (x)
Accrued Certificate Interest for that Class calculated at a per annum rate
(which shall not exceed 14.000% per annum) equal to LIBOR plus the related
Margin for that Distribution Date over (y) Accrued Certificate Interest for
that Class if the Pass-Through Rate for that Distribution Date is calculated
using the Group I Net WAC Cap Rate for that Distribution Date; plus any
unpaid Group I Basis Risk Shortfall from prior Distribution Dates, plus
interest thereon to the extent previously unreimbursed by Excess Cash Flow
calculated at a per annum rate (which shall not exceed 14.000% per annum)
equal to LIBOR plus the related Margin for that Distribution Date.
Group I Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule attached hereto as Exhibit F-1. The Group I Loans relate to the
Class A-I Certificates, Class M Certificates and Class SB Certificates.
Group I Net WAC Cap Rate: With respect to any Distribution Date, a per
annum rate equal to the product of (i) the weighted average of the Net
Mortgage Rates (or, if applicable, the Modified Net Mortgage Rates) on the
Group I Loans using the Net Mortgage Rates (or, if applicable, the Modified
Net Mortgage Rates) in effect for the Monthly Payments due on such Mortgage
Loans during the related Due Period, weighted on the basis of the respective
Stated Principal Balances thereof for that Distribution Date and (ii) a
fraction equal to 30 divided by the actual number of days in the related
Interest Accrual Period.
Group I Principal Distribution Amount: For any Distribution Date, the
product of (x) the Class A Principal Distribution Amount for that
Distribution Date and (y) a fraction, the numerator of which is the portion
of the Principal Allocation Amount related to Loan Group I for that
Distribution Date and the denominator of which is the Principal Allocation
Amount for all of the Mortgage Loans for that Distribution Date.
Group II Basis Risk Shortfall: With respect to any Class of Class A-II
Certificates and any Distribution Date, an amount equal to the excess of (x)
Accrued Certificate Interest for that Class calculated at a per annum rate
(which shall not exceed 14.000% per annum) equal to LIBOR plus the related
Margin for that Distribution Date over (y) Accrued Certificate Interest for
that Class if the Pass-Through Rate for such Distribution Date is calculated
using the Group II Net WAC Cap Rate for that Distribution Date; plus any
unpaid Group II Basis Risk Shortfall from prior Distribution Dates, plus
interest thereon to the extent previously unreimbursed by Excess Cash Flow
calculated at a per annum rate (which shall not exceed 14.000% per annum)
equal to LIBOR plus the related Margin for that Distribution Date.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule attached hereto as Exhibit F-2. The Group II Loans relate to the
Class A-II Certificates, Class M Certificates and Class SB Certificates.
Group II Net WAC Cap Rate: With respect to any Distribution Date, a
per annum rate equal to the product of (i) the weighted average of the Net
Mortgage Rates (or, if applicable, the Modified Net Mortgage Rates) on the
Group II Loans using the Net Mortgage Rates (or, if applicable, the Modified
Net Mortgage Rates) in effect for the Monthly Payments due on such Mortgage
Loans during the related Due Period, weighted on the basis of the respective
Stated Principal Balances thereof for that Distribution Date and (ii) a
fraction equal to 30 divided by the actual number of days in the related
Interest Accrual Period.
Group II Principal Distribution Amount: For any Distribution Date, the
product of (x) the Class A Principal Distribution Amount for that
Distribution Date and (y) a fraction, the numerator of which is the portion
of the Principal Allocation Amount related to Loan Group II for that
Distribution Date and the denominator of which is the Principal Allocation
Amount for all of the Mortgage Loans for that Distribution Date.
HUD: The United States Department of Housing and Urban Development.
Independent: When used with respect to any specified Person, means
such a Person who (i) is in fact independent of the Depositor, 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
Depositor, the Master Servicer or the Trustee or in an Affiliate thereof, and
(iii) is not connected with the Depositor, the Master Servicer or the Trustee
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Index: With respect to any adjustable-rate Mortgage Loan and as to any
Adjustment Date therefor, the related index as stated in the related Mortgage
Note.
Initial Certificate Principal Balance: With respect to each Class of
Certificates (other than the Class R Certificates), the Certificate Principal
Balance of such Class of Certificates as of the Closing Date as set forth in
the Preliminary Statement hereto.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Insurance Policy or any other related insurance
policy covering a Mortgage Loan, to the extent such proceeds are payable to
the mortgagee under the Mortgage, any Subservicer, the Master Servicer or the
Trustee and are not applied to the restoration of the related Mortgaged
Property 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.
Interest Accrual Period: With respect to the Distribution Date in
November 2006, the period commencing the Closing Date and ending on the day
preceding the Distribution Date in November 2006, and with respect to any
Distribution Date after the Distribution Date in November 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 preceding
such Distribution Date.
Interest Distribution Amount: For any Distribution Date, the amounts
payable pursuant to Section 4.02(c)(i) and (ii).
Interim Certification: As defined in Section 2.02.
Late Collections: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments
or as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent
late payments or collections of Monthly Payments due but delinquent for a
previous Due Period and not previously recovered.
LIBOR: With respect to any Distribution Date, the arithmetic mean of
the London interbank offered rate quotations for one-month U.S. Dollar
deposits, expressed on a per annum basis, determined in accordance with
Section 1.02.
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 by law to be closed.
LIBOR Certificates: Collectively, 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.
Limited Repurchase Right Holder: RFC Asset Holdings II, Inc., or its
successor.
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 and
Subsequent Recoveries.
Loan Group: Loan Group I or Loan Group II, as applicable.
Loan Group I: The Mortgage Loans designated on the Mortgage Loan
Schedule attached hereto as Exhibit F-1.
Loan Group II: The Mortgage Loans designated on the Mortgage Loan
Schedule attached hereto as Exhibit F-2.
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.
Margin: The Class A-I-1 Margin, Class A-I-2 Margin, Class A-I-3
Margin, Class A-I-4 Margin, Class A-II Margin, Class M-1 Margin, Class M-2
Margin, Class M-3 Margin, Class M-4 Margin, Class M-5 Margin, Class M-6
Margin, Class M-7 Margin, Class M-8 Margin, Class M-9 Margin or Class M-10
Margin, as applicable.
Marker Rate: With respect to the Class SB Certificates or the SB-IO
REMIC III Regular Interest and any Distribution Date, in relation to the
REMIC II Regular Interests LT1, LT2, LT3, LT4 and LT-Y1, a per annum rate
equal to two (2) times the weighted average of the Uncertificated REMIC II
Pass-Through Rates for REMIC II Regular Interest LT2 and REMIC II Regular
Interest LT3. With respect to the Class SB Certificates or the SB-IO
REMIC III Regular Interest and any Distribution Date, in relation to the
REMIC II Regular Interests LT5, LT6, LT7, LT8 and LT-Y2, a per annum rate
equal to two (2) times the weighted average of the Uncertificated REMIC II
Pass-Through Rates for REMIC II Regular Interest LT6 and REMIC II Regular
Interest LT7.
Master Servicer: As defined in the preamble hereto.
Maturity Date: With respect to each Class of Certificates representing
ownership of REMIC I, REMIC II or REMIC III Regular Interests or
Uncertificated Regular Interests issued by each of REMIC I, REMIC II and
REMIC III 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 such Class of Certificates representing
a regular interest in the Trust Fund would be reduced to zero, which is, for
each such regular interest, November 25, 2036, which is the Distribution Date
occurring in the month following the last scheduled monthly payment of the
Mortgage Loans.
Maximum Mortgage Rate: With respect to any adjustable-rate Mortgage
Loan, the per annum rate indicated on the Mortgage Loan Schedule 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.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R)System.
Minimum Mortgage Rate: With respect to any adjustable-rate Mortgage
Loan, a per annum rate equal to the greater of (i) the Note Margin and (ii)
the rate indicated on the Mortgage Loan Schedule as the "NOTE FLOOR," which
rate may be applicable to such Mortgage Loan at any time during the life of
such Mortgage Loan.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject of
a Servicing Modification.
Modified Net Mortgage Rate: With respect 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 the Due Date in any Due Period, 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 successors in
interest.
Mortgage: With respect to each Mortgage Note, the mortgage, deed of
trust or other comparable instrument creating a first or junior lien on an
estate in fee simple or leasehold interest in real property securing a
Mortgage Note.
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 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, each related Mortgage Note, Mortgage and
Mortgage File and all rights appertaining thereto.
Mortgage Loan Schedule: The lists of the Mortgage Loans attached
hereto as Exhibit F-1 and Exhibit F-2 (as amended from time to time to
reflect the addition of Qualified Substitute Mortgage Loans), which lists
shall set forth at a minimum the following information as to each Mortgage
Loan:
(ii) the Mortgage Loan identifying number ("RFC LOAN #");
(iii) [reserved];
(iv) the maturity of the Mortgage Note ("MATURITY DATE," or "MATURITY DT");
(v) for the adjustable-rate Mortgage Loans, the Mortgage Rate as of
origination ("ORIG RATE");
(vi) the Mortgage Rate as of the Cut-off Date ("CURR RATE");
(vii) the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
(viii) the scheduled monthly payment of principal, if any, and interest
as of the Cut-off Date ("ORIGINAL P & I" or "CURRENT P & I");
(ix) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(x) the Loan-to-Value Ratio at origination ("LTV");
(xi) a code "T," "BT" or "CT" under the column "LN FEATURE," indicating that
the Mortgage Loan is secured by a second or vacation residence
(the absence of any such code means the Mortgage Loan is secured
by a primary residence);
(xii) a code "N" under the column "OCCP CODE," indicating that the Mortgage
Loan is secured by a non-owner occupied residence (the absence of
any such code means the Mortgage Loan is secured by an owner
occupied residence);
(xiii) for the adjustable-rate Mortgage Loans, the Maximum Mortgage Rate
("NOTE CEILING");
(xiv) for the adjustable-rate Mortgage Loans, the maximum Net Mortgage Rate
("NET CEILING");
(xv) for the adjustable-rate Mortgage Loans, the Note Margin ("NOTE
MARGIN");
(xvi) for the adjustable-rate Mortgage Loans, the first Adjustment Date after
the Cut-off Date ("NXT INT CHG DT");
(xvii) for the adjustable-rate Mortgage Loans, the Periodic Cap
("PERIODIC DECR" or "PERIODIC INCR");
(xviii) [reserved]; and
(xix) for the adjustable-rate Mortgage Loans, the rounding of the semi-annual
or annual adjustment to the Mortgage Rate ("NOTE METHOD").
Such schedules may consist of multiple reports that collectively set
forth all of the information required.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan, together with any modification thereto.
Mortgage 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 the adjustable-rate Mortgage
Loans 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 adjustable-rate 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.
Mortgaged Property: The underlying real property securing a Mortgage
Loan.
Mortgagor: The obligor on a Mortgage Note.
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 WAC Cap Rate: The Group I Net WAC Cap Rate, Group II Net WAC Cap
Rate or Class M Net WAC Cap Rate, as applicable.
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 or REO Proceeds. 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 shall be evidenced
by a certificate of a Servicing Officer, Responsible Officer or Vice
President or its equivalent or senior officer of the Master Servicer,
delivered to the Depositor, the Trustee, and the Master Servicer setting
forth such determination, which shall include any other information or
reports obtained by the Master Servicer such as property operating
statements, rent rolls, property inspection reports and engineering reports,
which may support such determinations. Notwithstanding the above, the
Trustee shall be entitled to rely upon any determination by the Master
Servicer that any Advance previously made is a Nonrecoverable Advance or that
any proposed Advance, if made, would constitute a Nonrecoverable Advance.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is not subject to a Subservicing Agreement.
Note Margin: With respect to each adjustable-rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note and indicated on the
Mortgage Loan Schedule as the "NOTE MARGIN," which percentage is added to the
Index on each Adjustment Date to determine (subject to rounding in accordance
with the related Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate
and the Minimum Mortgage Rate) the interest rate to be borne by such
adjustable-rate 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,
the aggregate of the Uncertificated Principal Balances of the REMIC I Regular
Interests.
Officers' Certificate: A certificate signed by the Chairman of the
Board, the President, a Vice President, Assistant Vice President, Director,
Managing Director, the Treasurer, the Secretary, an Assistant Treasurer or an
Assistant Secretary of the Depositor 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 and which counsel may be counsel for the
Depositor 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 hereunder as a REMIC or compliance with the
REMIC Provisions must, unless otherwise specified, be an opinion of
Independent counsel.
Optional Termination Date: Any Distribution Date on or after which the
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.
Outstanding Mortgage Loan: With respect to the Due Date in any Due
Period, a Mortgage Loan (including an REO Property) that was not the subject
of a Principal Prepayment in Full, Cash Liquidation or REO Disposition and
that was not purchased, deleted or substituted for prior to such Due Date
pursuant to Section 2.02, 2.03, 2.04 or 4.07.
Overcollateralization Amount: With respect to any Distribution Date,
the excess, if any, of (a) the aggregate Stated Principal Balance of the
Mortgage Loans before giving effect to distributions of principal to be made
on such Distribution Date over (b) the aggregate Certificate Principal
Balance of the Class A Certificates and Class M Certificates immediately
prior to such 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 (iv)
and (v) of the definition of Principal Distribution Amount as of such
Distribution Date) and (b) the excess of (1) the Required
Overcollateralization Amount for such Distribution Date over (2) the
Overcollateralization Amount for such Distribution Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date on which the Excess Overcollateralization Amount is, after
taking into account all other distributions to be made on such Distribution
Date, greater than zero, the Overcollateralization Reduction Amount shall be
equal to the lesser of (i) the Excess Overcollateralization Amount for that
Distribution Date and (ii) the Principal Remittance Amount on such
Distribution Date.
Ownership Interest: With respect to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Rate: With respect to each Class of Class A Certificates
and Class M Certificates and any Distribution Date, the least of (i) a per
annum rate equal to LIBOR plus the related Margin for such Distribution Date,
(ii) 14.000% per annum and (iii) the related Net WAC Cap Rate for such
Distribution Date.
With respect to the Class SB Certificates and any Distribution Date or
the REMIC III Regular Interest SB-IO, a per annum rate equal to the
percentage equivalent of a fraction, the numerator of which is the sum of the
amounts calculated pursuant to clauses (i) through (viii) below, and the
denominator of which is the aggregate principal balance of the REMIC II
Regular Interests. For purposes of calculating the Pass-Through Rate for the
Class SB Certificates or the SB-IO REMIC III Regular Interest, the numerator
is equal to the sum of the following components:
(i) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT1 minus the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT2 minus the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest LT2;
(iii) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT4 minus twice the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest LT4;
(iv) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT5 minus the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest LT5;
(v) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT6 minus the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest LT6;
(vi) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT8 minus twice the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest LT8;
(vii) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT Y1 minus the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest LT-Y1; and
(viii) the Uncertificated Pass-Through Rate for REMIC II
Regular Interest LT Y2 minus the related Marker Rate, applied to a
notional amount equal to the Uncertificated Principal Balance of
REMIC II Regular Interest LT-Y2.
Paying Agent: U.S. Bank National Association or any successor Paying
Agent appointed by the Trustee.
Percentage Interest: With respect to any Class A Certificate or
Class M 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
divided by the aggregate Initial Certificate Principal Balance of all of the
Certificates of the same Class. The Percentage Interest with respect to a
Class SB Certificate or Class R Certificate shall be stated on the face
thereof.
Periodic Cap: With respect to each adjustable-rate Mortgage Loan, the
periodic rate cap that limits the increase or the decrease of the related
Mortgage Rate on any Adjustment Date pursuant to the terms of the related
Mortgage Note.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to 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 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 and demand notes shall have a remaining maturity
of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by each
Rating Agency in its highest long-term rating available (which
may be managed by the Trustee or one of its Affiliates); and
(vi) other obligations or securities that are acceptable to each
Rating Agency as a Permitted Investment hereunder and will not
reduce the rating assigned to any Class of Certificates by such
Rating Agency below the then-current rating assigned to such
Certificates by such Rating Agency, as evidenced in writing;
provided, however, that 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 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 and P-1 in the case of
Moody's; 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 purchased
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.
Prepayment Assumption: With respect to the Class A Certificates and
Class M Certificates, the prepayment assumption to be used for determining
the accrual of original issue discount and premium and market discount on
such Certificates for federal income tax purposes, which (a) with respect to
the fixed-rate Mortgage Loans, assumes a constant prepayment rate of
one-tenth of 23% per annum of the then outstanding Stated Principal Balance
of the fixed-rate Mortgage Loans in the first month of the life of such
Mortgage Loans and an additional one-tenth of 23% per annum in each month
thereafter until the tenth month, and beginning in the tenth month and in
each month thereafter during the life of the fixed-rate Mortgage Loans, a
constant prepayment rate of 23% per annum each month ("23% HEP") and (b) with
respect to the adjustable-rate Mortgage Loans assumes a prepayment assumption
of 2% of the constant prepayment rate in month one, increasing by
approximately 2.545% from month 2 until month 12, a constant prepayment rate
of 30% from month 12 to month 22, a constant prepayment rate of 50% from
month 23 to month 27, and a constant prepayment rate of 35% thereafter, used
for determining the accrual of original issue discount and premium and market
discount on the Class A Certificates and Class M Certificates for federal
income tax purposes. The constant prepayment rate assumes that the stated
percentage of the outstanding Stated Principal Balance of the adjustable-rate
Mortgage Loans is prepaid over the course of a year.
Prepayment Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan (other than a Mortgage Loan relating to an REO
Property) that was the subject of (a) a Principal Prepayment in Full during
the related Prepayment Period, an amount equal to the excess of one month's
interest at the related 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 related Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan)) paid by the Mortgagor for such Prepayment Period 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 related Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan) on the amount of such Curtailment.
Prepayment Period: With respect to any Distribution Date, the calendar
month preceding the month of distribution.
Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance as indicated by a numeric code on the Mortgage Loan Schedule with
the exception of code "A23," "A34" or "A96" under the column "MI CO CODE."
Principal Allocation Amount: With respect to any Distribution Date,
the sum of (a) the Principal Remittance Amount for that Distribution Date,
(b) any Realized Losses covered by amounts included in clause (iv) of the
definition of Principal Distribution Amount and (c) the aggregate amount of
the principal portion of Realized Losses on the Mortgage Loans in the
calendar month preceding that Distribution Date, to the extent covered by
Excess Cash Flow included in clause (v) of the definition of Principal
Distribution Amount; provided, however, that on any Distribution Date on
which there is (i) insufficient Subsequent Recoveries to cover all unpaid
Realized Losses on the Mortgage Loans described in clause (b) above, in
determining the Group I Principal Distribution Amount and the Group II
Principal Distribution Amount, Subsequent Recoveries will be allocated to the
Class A-I Certificates and Class A-II Certificates, pro rata, based on the
principal portion of unpaid Realized Losses from prior Distribution Dates on
the Group I Loans and Group II Loans, respectively, and (ii) insufficient
Excess Cash Flow to cover all Realized Losses on the Mortgage Loans described
in clause (c) above, in determining the Group I Principal Distribution Amount
and the Group II Principal Distribution Amount, the Excess Cash Flow
remaining after the allocation described in clause (b) above or (i) of this
proviso, as applicable, will be allocated to the Class A-I Certificates and
Class A-II Certificates, pro rata, based on the principal portion of Realized
Losses incurred during the calendar month preceding that Distribution Date on
the Group I Loans and Group II Loans, respectively.
Principal Distribution Amount: With respect to any Distribution Date,
the lesser of (a) the excess of (x) the sum of (A) the Available Distribution
Amount and (B) with respect to clauses (b)(v) and (vi) below, the Yield
Maintenance Agreement Payment for that Distribution Date, over (y) the
Interest Distribution Amount, and (b) the sum of:
(i) the principal portion of each Monthly Payment received or Advanced with
respect to the related Due Period on each Outstanding Mortgage Loan;
(ii) the Stated Principal Balance of any Mortgage Loan repurchased during
the related Prepayment Period (or deemed to have been so
repurchased in accordance with Section 3.07(b)) pursuant to
Section 2.02, 2.03, 2.04 or 4.07 and the amount of any shortfall
deposited in the Custodial Account in connection with the
substitution of a Deleted Mortgage Loan pursuant to Section 2.03 or
2.04 during the related Prepayment Period;
(iii) the principal portion of all other unscheduled collections, other than
Subsequent Recoveries, on the Mortgage Loans (including, without
limitation, Principal Prepayments in Full, Curtailments, Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received during
the related Prepayment Period (or deemed to have been so received)
to the extent applied by the Master Servicer as recoveries of
principal of the Mortgage Loans pursuant to Section 3.14;
(iv) the lesser of (1) Subsequent Recoveries for such Distribution Date and
(2) the principal portion of any Realized Losses allocated to any
Class of Certificates on a prior Distribution Date and remaining
unpaid;
(v) the lesser of (1) the Excess Cash Flow for such Distribution Date (to
the extent not used pursuant to clause (iv) of this definition on
such Distribution Date) and (2) the principal portion of any
Realized Losses incurred (or deemed to have been incurred) on any
Mortgage Loans in the calendar month preceding such Distribution
Date; and
(vi) the lesser of (1) the Excess Cash Flow for that Distribution Date (to
the extent not used pursuant to clauses (iv) and (v) of this
definition on such Distribution Date) and (2) the
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 Prepayment: Any payment of principal or other recovery on a
Mortgage Loan, including a recovery that takes the form of Liquidation
Proceeds or Insurance Proceeds, which is received in advance of its scheduled
Due Date and is not accompanied by an amount as to interest representing
scheduled interest on such payment due on any date or dates in any month or
months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
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.
Program Guide: The AlterNet Seller Guide as incorporated into the
Residential Funding Seller Guide for mortgage collateral sellers that
participate in Residential Funding's AlterNet Mortgage Program, and
Residential Funding's Servicing Guide and any other subservicing arrangements
which Residential Funding has arranged to accommodate the servicing of the
Mortgage Loans and in each case all supplements and amendments thereto
published by Residential Funding.
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 either (a) the
Adjusted Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan) plus the rate per annum at which the Servicing Fee is
calculated, or (b) in the case of a purchase made by the Master Servicer, at
the Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan), in each case on the Stated Principal Balance thereof
to the first day of the month following the month of purchase from the Due
Date to which interest was last paid by the Mortgagor. With respect to any
Mortgage Loan (or REO Property) required to be or otherwise purchased on any
date pursuant to Section 4.08, an amount equal to the greater of (i) the sum
of (a) 100% of the Stated Principal Balance thereof plus the principal
portion of any related unreimbursed Advances of such Mortgage Loan (or REO
Property) and (b) unpaid accrued interest at either (1) the Adjusted Mortgage
Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan)
plus the rate per annum at which the Servicing Fee is calculated, or (2) in
the case of a purchase made by the Master Servicer, at the Net Mortgage Rate
(or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan), in
each case on the Stated Principal Balance thereof to the first day of the
month following the month of purchase from the Due Date to which interest was
last paid by the Mortgagor, and (ii) the fair market value of such Mortgage
Loan (or REO Property).
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by
Residential Funding or the Depositor for a Deleted Mortgage Loan which must,
on the date of such substitution, as confirmed in an Officers' Certificate
delivered to the Trustee, (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, (other than the representations and
warranties set forth therein with respect to the number of loans (including
the related percentage) in excess of zero which meet or do not meet a
specified criteria); (vi) not be 30 days or more Delinquent; (vii) not be
subject to the requirements of HOEPA (as defined in the Assignment
Agreement); (viii) have a policy of title insurance, in the form and amount
that is in material compliance with the Program Guide, that was effective as
of the closing of such Mortgage Loan, is valid and binding, and remains in
full force and effect, unless the Mortgage Property is located in the State
of Iowa where an attorney's certificate has been provided as described in the
Program Guide; (ix) if the Deleted Loan is not a Balloon Loan, not be a
Balloon Loan; (x) with respect to adjustable rate Mortgage Loans, have a
Mortgage Rate that adjusts with the same frequency and based upon the same
Index as that of the Deleted Mortgage Loan; (xi) with respect to adjustable
rate Mortgage Loans, have a Note Margin not less than that of the Deleted
Mortgage Loan; (xii) with respect to adjustable rate Mortgage Loans, have a
Periodic Rate Cap that is equal to that of the Deleted Mortgage Loan; (xiii)
with respect to adjustable rate Mortgage Loans, have a next Adjustment Date
no later than that of the Deleted Mortgage Loan, and (xiv) be secured by a
lien with the same lien priority as the Deleted Loan.
Rating Agency: Each of Standard & Poor's and Moody's. If any agency
or a successor is no longer in existence, "Rating Agency" shall be such
statistical credit rating agency, or other comparable Person, designated by
the Depositor, 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) 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 last day of the month in which the Cash
Liquidation (or REO Disposition) occurred 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. With respect to each Mortgage Loan
which is the subject of a Servicing Modification, (a) (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 (b) 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. With respect to each Mortgage Loan 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. With respect to each Mortgage Loan 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.
Realized Losses allocated to the Class SB Certificates shall be
allocated first to the REMIC III Regular Interest SB-IO in reduction of the
accrued but unpaid interest thereon until such accrued and unpaid interest
shall have been reduced to zero and then to the REMIC III Regular Interest
SB-PO in reduction of the Principal Balance thereof.
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 and the LIBOR
Certificates, the Business Day immediately preceding such Distribution Date.
With respect to each Distribution Date and the Certificates (other than the
LIBOR 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.
Reference Bank Rate: As defined in Section 1.02.
Regular Certificates: The Class A Certificates, Class M Certificates
and Class SB Certificates.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R.ss.ss.229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by
the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
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: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code. As used herein, the term "REMIC" shall mean
REMIC I, REMIC II or REMIC III.
REMIC I: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
exclusive of the Yield Maintenance Agreement, which is not an asset of any
REMIC, with respect to which a separate REMIC election is to be made,
consisting of:
(i) the Mortgage Loans and the related Mortgage Files;
(ii) all payments on and collections in respect of the Mortgage
Loans due after the Cut-off Date (other than Monthly Payments due in
the month of the Cut-off Date) as shall be on deposit in the Custodial
Account or in the Certificate Account and identified as belonging to
the Trust Fund;
(iii) property which secured a Mortgage Loan and which has been
acquired for the benefit of the Certificateholders by foreclosure or
deed in lieu of foreclosure;
(iv) the hazard insurance policies and Primary Insurance
Policies pertaining to the Mortgage Loans, if any; and
(v) all proceeds of clauses (i) through (iv) above.
REMIC I Available Distribution Amount: The Available Distribution
Amount.
REMIC I Distribution Amount: For any Distribution Date, the REMIC I
Available Distribution Amount shall be distributed to the REMIC I Regular
Interests and Component I of the Class R Certificates in the following
amounts and priority:
(a) To the extent of the portion of the REMIC I Available
Distribution Amount related to Loan Group I:
(i) first, to REMIC I Y-1 and REMIC I Z-1 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Regular Interests
remaining unpaid from previous Distribution Dates, pro rata according to
their respective shares of such unpaid amounts;
(ii) second, to the REMIC I Y-1 and REMIC I Z-1 Regular
Interests, concurrently, the Uncertificated Accrued Interest for such Classes
for the current Distribution Date, pro rata according to their respective
Uncertificated Accrued Interest; and
(iii) third, to the REMIC I Y-1 and REMIC I Z-1 Regular
Interests, the REMIC I Y-1 Principal Distribution Amount and the REMIC I Z-1
Principal Distribution Amount, respectively.
(b) To the extent of the portion of the REMIC I Available
Distribution Amount related to Loan Group II:
(i) first, to the REMIC I Y-2 and REMIC I Z-2 Regular
Interests, concurrently, the Uncertificated Accrued Interest for such Classes
remaining unpaid from previous Distribution Dates, pro rata according to
their respective shares of such unpaid amounts;
(ii) second, to the REMIC I Y-2 and REMIC I Z-2 Regular
Interests, concurrently, the Uncertificated Accrued Interest for such Classes
for the current Distribution Date, pro rata according to their respective
Uncertificated Accrued Interest; and
(iii) third, to the REMIC I Y-2 and REMIC I Z-2 Regular
Interests, the REMIC I Y-2 Principal Distribution Amount and the REMIC I Z-2
Principal Distribution Amount, respectively.
(c) To the extent of the REMIC I Available Distribution Amounts for
Group I and Group II for such Distribution Date remaining after payment of
the amounts pursuant to paragraphs (a) and (b) of this definition of "REMIC I
Distribution Amount:"
(i) first, to each Class of REMIC I Y and REMIC I Z Regular
Interests, pro rata according to the amount of unreimbursed Realized Losses
allocable to principal previously allocated to each such Regular Interest,
the aggregate amount of any distributions to the Certificates as
reimbursement of such Realized Losses on such Distribution Date pursuant to
clause (xiii) in Section 4.02(c); provided, however, that any amounts
distributed pursuant to this paragraph (c)(i) of this definition of "REMIC I
Distribution Amount" shall not cause a reduction in the Uncertificated
Principal Balances of any of the REMIC I Y and REMIC I Z Regular Interests;
and
(ii) second, to Component I of the Class R Certificates, any
remaining amount.
REMIC I Interests: The REMIC I Regular Interests and the Class R I
Certificates.
REMIC I Y Principal Reduction Amounts: For any Distribution Date the
amounts by which the Uncertificated Principal Balances of the REMIC I Y-1
Regular Interest and REMIC I Y-2 Regular Interest respectively will be
reduced on such Distribution Date by the allocation of Realized Losses and
the distribution of principal, determined as follows:
First, for each of Loan Group I and Loan Group II determine the related
Net WAC Cap Rate for distributions of interest that will be made on the next
succeeding Distribution Date (the "Group Interest Rate"). The REMIC I
Principal Reduction Amount for each of the REMIC I Y Regular Interests will
be determined pursuant to the "Generic solution for the REMIC I Y Regular
Interests" set forth below (the "Generic Solution") by making the following
identifications among the Loan Groups and their related REMIC I Y Regular
Interests and REMIC I Z Regular Interests:
A. Determine which Loan Group has the lower Net WAC Cap Rate.
That Loan Group will be identified with Loan Group AA and the REMIC I Y
Regular Interests and REMIC I Z Regular Interests related to that Loan Group
will be respectively identified with the REMIC I YAA and REMIC I ZAA Regular
Interests. The Group Interest Rate for that Loan Group will be identified
with J%. If the two Loan Groups have the same Group Interest Rate pick one
for this purpose, subject to the restriction that each Loan Group may be
picked only once in the course of any such selections pursuant to paragraphs
A and B of this definition.
B. Determine which Loan Group has the higher Net WAC Cap
Rate. That Loan Group will be identified with Loan Group BB and the REMIC I
Y Regular Interests and REMIC I Z Regular Interests related to that Group
will be respectively identified with the REMIC I YBB and REMIC I ZBB Regular
Interests. The Group Interest Rate for that Loan Group will be identified
with K%. If the two Loan Groups have the same Group Interest Rate the Loan
Group not selected pursuant to paragraph A, above, will be selected for
purposes of this paragraph B.
Second, apply the Generic Solution set forth below to determine the
REMIC I Y Principal Reduction Amounts for the Distribution Date using the
identifications made above.
GENERIC SOLUTION FOR THE REMIC I Y PRINCIPAL REDUCTION AMOUNTS: For
any Distribution Date, the amounts by which the Uncertificated Principal
Balances of REMIC I YAA and REMIC I ZAA Regular Interests respectively will
be reduced on such Distribution Date by the allocation of Realized Losses and
the distribution of principal, determined as follows:
J% and K% represent the interest rates on Loan Group AA and Loan
Group BB respectively. J% less than K%.
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
PJB = the Loan Group AA Subordinate Balance after the
allocation of Realized Losses and distributions of principal on such
Distribution Date.
PKB = the Loan Group BB Subordinate Balance after the allocation
of Realized Losses and distributions of principal on such Distribution Date.
R = the Class CB Pass-Through Rate = (J%PJB + K%PKB)/(PJB + PKB)
Yj = the REMIC I YAA Principal Balance after distributions on
the prior Distribution Date.
Yk = the REMIC I YBB Principal Balance after distributions on
the prior Distribution Date.
(DELTA)Yj = the REMIC I YAA Principal Reduction Amount.
(DELTA)Yk = the REMIC I YBB Principal Reduction Amount.
Zj = the REMIC I ZAA Principal Balance after distributions on
the prior Distribution Date.
Zk = the REMIC I ZBB Principal Balance after distributions on
the prior Distribution Date.
(DELTA)Zj = the REMIC I ZAA Principal Reduction Amount.
= (DELTA)Pj - (DELTA)Yj
(DELTA)Zk = the REMIC I ZBB Principal Reduction Amount.
= (DELTA)Pk - (DELTA)Yk
Pj = the aggregate Uncertificated Principal Balance of the
REMIC I YAA and REMIC I ZAA Regular Interests after distributions on the
prior Distribution Date, which is equal to the aggregate principal balance of
the Group AA Loans.
Pk = the aggregate Uncertificated Principal Balance of the
REMIC I YBB and REMIC I ZBB Regular Interests after distributions on the
prior Distribution Date, which is equal to the aggregate principal balance of
the Loan Group BB Mortgage Loans.
(DELTA)Pj = the aggregate principal reduction resulting on such
Distribution Date on the Loan Group AA Mortgage Loans as a result of
principal distributions (exclusive of any amounts distributed pursuant to
clauses (c)(i) or (c)(ii) of the definition of REMIC I Distribution Amount)
to be made and Realized Losses to be allocated on such Distribution Date, if
applicable, which is equal to the aggregate of the REMIC I YAA and REMIC I
ZAA Principal Reduction Amounts.
(DELTA)Pk= the aggregate principal reduction resulting on such
Distribution Date on the Loan Group BB Mortgage Loans as a result of
principal distributions (exclusive of any amounts distributed pursuant to
clauses (c)(i) or (c)(ii) of the definition of REMIC I Distribution Amount)
to be made and realized losses to be allocated on such Distribution Date,
which is equal to the aggregate of the REMIC I YBB and REMIC I ZBB Principal
Reduction Amounts.
(alpha) = .0005
(gamma) = (R - J%)/(K% - R). (gamma) is a non-negative number
unless its denominator is zero, in which event it is undefined.
If (gamma) is zero, (DELTA)Yk = Yk and (DELTA)Yj =
(Yj/Pj)(DELTA)Pj.
If (gamma) is undefined, (DELTA)Yj = Yj, (DELTA)Yk =
(Yk/Pk)(DELTA)Pk. if denominator
In the remaining situations, (DELTA)Yk and (DELTA)Yj shall be
defined as follows:
1. If Yk - (alpha)(Pk - (DELTA)Pk) => 0, Yj- (alpha)(Pj - (DELTA)Pj) => 0,
and (gamma) (Pj - (DELTA)Pj) < (Pk - (DELTA)Pk),
(DELTA)Yk = Yk - (alpha)(gamma) (Pj - (DELTA)Pj) and
(DELTA)Yj = Yj - (alpha)(Pj - (DELTA)Pj).
2. If Yk - (alpha)(Pk - (DELTA)Pk) => 0, Yj - (alpha)(Pj - (DELTA)Pj) =>
0, and (gamma) (Pj - (DELTA)Pj) => (Pk - (DELTA)Pk),
(DELTA)Yk = Yk - (alpha)(Pk - (DELTA)Pk) and
(DELTA)Yj = Yj - ((alpha)/(gamma))(Pk - (DELTA)Pk).
3. If Yk - (alpha)(Pk - (DELTA)Pk) < 0, Yj - (alpha)(Pj - (DELTA)Pj) => 0,
and Yj - (alpha)(Pj - (DELTA)Pj) => Yj - (Yk/(gamma)),
(DELTA)Yk = Yk - (alpha)(gamma) (Pj - (DELTA)Pj) and
(DELTA)Yj = Yj - (alpha)(Pj - (DELTA)Pj).
4. If Yk - (alpha)(Pk - (DELTA)Pk) < 0, Yj - (Yk/(gamma)) => 0, and
Yj - (alpha)(Pj - (DELTA)Pj) <= Yj - (Yk/(gamma)), (DELTA)Yk = 0 and
(DELTA)Yj = Yj - (Yk/(gamma)).
5. If Yj - (alpha)(Pj - (DELTA)Pj) < 0, Yj - (Yk/(gamma)) < 0, and
Yk - (alpha)(Pk - (DELTA)Pk) <= Yk - ((gamma)Yj),
(DELTA)Yk = Yk - ((gamma)Yj) and (DELTA)Yj = 0.
6. If Yj - (alpha)(Pj - (DELTA)Pj) < 0, Yk - (alpha)(Pk - (DELTA)Pk) => 0,
and Yk - (alpha)(Pk - (DELTA)Pk) => Yk - ((gamma)Yj),
(DELTA)Yk = Yk - (alpha)(Pk - (DELTA)Pk) and
(DELTA)Yj = Yj - ((alpha)/(gamma))(Pk - (DELTA)Pk).
The purpose of the foregoing definitional provisions together with the
related provisions allocating Realized Losses and defining the REMIC I Y and
REMIC I Z Principal Distribution Amounts is to accomplish the following goals
in the following order of priority:
1. Making the ratio of Yk to Yj equal to (gamma) after taking account of
the allocation Realized Losses and the distributions that will be made
through end of the Distribution Date to which such provisions relate and
assuring that the Principal Reduction Amount for each of the REMIC I YAA,
REMIC I YBB, REMIC I ZAA and REMIC I ZBB Regular Interests is greater than
or equal to zero for such Distribution Date;
2. Making (i) the REMIC I YAA Principal Balance less than or equal to
0.0005 of the sum of the REMIC I YAA and REMIC I ZAA principal balances
and (ii) the REMIC I YBB principal balances less than or equal to 0.0005
of the sum of the REMIC I YBB and REMIC I ZBB Principal Balances in each
case after giving effect to allocations of Realized Losses and
distributions to be made through the end of the Distribution Date to which
such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Yk and whose
denominator is the sum of Yk and Zk and (b) the fraction whose numerator
is Yj and whose denominator is the sum of Yj, and Zj as large as possible
while remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the
definition of REMIC I Y Principal Reduction Amount to accomplish both of
goals 1 and 2 above, the amounts thereof should be adjusted so as to
accomplish such goals within the requirement that each REMIC I Y Principal
Reduction Amount must be less than or equal to the sum of (a) the principal
Realized Losses to be allocated on the related Distribution Date for the
related Pool and (b) the remainder of the Available Distribution Amount for
the related Pool or after reduction thereof by the distributions to be made
on such Distribution in respect of interest on the related REMIC I Y and
REMIC I Z Regular Interests, or, if both of such goals cannot be accomplished
within such requirement, such adjustment as is necessary shall be made to
accomplish goal 1 within such requirement. In the event of any conflict
among the provisions of the definition of the REMIC I Y Principal Reduction
Amounts, such conflict shall be resolved on the basis of the goals and their
priorities set forth above within the requirement set forth in the preceding
sentence.
REMIC I Realized Losses: Realized Losses on Group I Loans and Group II
Loans shall be allocated to the REMIC I Regular Interests as follows: (1) The
interest portion of Realized Losses on Group I Loans, if any, shall be
allocated among the REMIC I Y-1 and REMIC I Z-1 Regular Interests pro rata
according to the amount of interest accrued but unpaid thereon, in reduction
thereof; and (2) the interest portion of Realized Losses on Group II Loans,
if any, shall be allocated among the REMIC I Y-2 and REMIC I Z-2 Regular
Interests pro rata according to the amount of interest accrued but unpaid
thereon, in reduction thereof. Any interest portion of such Realized Losses
in excess of the amount allocated pursuant to the preceding sentence shall be
treated as a principal portion of Realized Losses not attributable to any
specific Mortgage Loan in such Loan Group and allocated pursuant to the
succeeding sentences. The principal portion of Realized Losses with respect
to Loan Group I and Loan Group II shall be allocated to the REMIC I Regular
Interests as follows: (1) The principal portion of Realized Losses on Group I
Loans shall be allocated, first, to the REMIC I Y-1 Regular Interest to the
extent of the REMIC I Y-1 Principal Reduction Amount in reduction of the
Uncertificated Principal Balance of such REMIC I Regular Interest and,
second, the remainder, if any, of such principal portion of such Realized
Losses shall be allocated to the REMIC I Z-1 Regular Interest in reduction of
the Uncertificated Principal Balance thereof; and (2) the principal portion
of Realized Losses on Group II Loans shall be allocated, first, to the
REMIC I Y-2 Regular Interest to the extent of the REMIC I Y-2 Principal
Reduction Amount in reduction of the Uncertificated Principal Balance of such
Regular Interest and, second, the remainder, if any, of such principal
portion of such Realized Losses shall be allocated to the REMIC I Z-2 Regular
Interest in reduction of the Uncertificated Principal Balance thereof.
REMIC I Regular Interests: REMIC I Regular Interest Y-1, Y-2, Z-1 and
Z-2.
REMIC I Regular Interest Y-1: 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 Y-1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC I Regular Interest Y-1
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC I Regular Interest Y-1 on such Distribution
Date.
REMIC I Regular Interest Y-2: 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 Y-2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC I Regular Interest Y-2
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC I Regular Interest Y-2 on such Distribution
Date.
REMIC I Regular Interest Z-1: 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 Z-1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC I Regular Interest Z-1
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC I Regular Interest Z-1 on such Distribution
Date.
REMIC I Regular Interest Z-2: 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 Z-2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC I Regular Interest Z-2
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC I Regular Interest Z-2 on such Distribution
Date.
REMIC I Z Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of the REMIC I Z-1 and
REMIC I Z-2 Regular Interests, respectively, will be reduced on such
Distribution Date by the allocation of Realized Losses and the distribution
of principal, which shall be in each case the excess of (A) the sum of (x)
the excess of the REMIC I Available Distribution Amount for the related Loan
Group (i.e. the "related Group" for the REMIC I Z-1 Regular Interest is
Group I and the "related Loan Group" for the REMIC I Z-2 Regular Interest is
Loan Group II) exclusive of any amount in respect of Subsequent Recoveries
included therein over the amount thereof distributable in respect of interest
on such REMIC I Z Regular Interest and the related REMIC I Y Regular Interest
and (iv) to such REMIC I Z Regular Interest and the related REMIC I Y Regular
Interest pursuant to the definition of "REMIC I Distribution Amount" and (y)
the amount of Realized Losses allocable to principal for the related Loan
Group over (B) the REMIC I Y Principal Reduction Amount for the related Loan
Group.
REMIC II: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of
the REMIC I Regular Interests.
REMIC II Available Distribution Amount: For any Distribution Date, the
amount distributed from REMIC I to REMIC II on such Distribution Date in
respect of the REMIC I Regular Interests.
REMIC II Distribution Amount:
(a) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC II to REMIC III on
account of the REMIC II Regular Interests related to Loan Group I:
(i) to the extent of the portion of the REMIC II Available
Distribution Amount related to Group I, to REMIC III as the holder of
REMIC II Regular Interests LT1, LT2, LT3, LT4 and LT-Y1, 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; and
(ii) on each Distribution Date, to REMIC III as the holder of
the REMIC II Regular Interests, in an amount equal to the remainder of such
portion of the REMIC II Available Distribution Amount after the distributions
made pursuant to clause (i) above, allocated as follows (except as provided
below):
(A) in respect of the REMIC II Regular Interests LT2,
LT3, LT4 and LT-Y1, their respective Principal Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT1 any
remainder until the Uncertificated Principal Balance thereof is reduced to
zero;
(C) any remainder in respect of the REMIC II Regular
Interests LT2, LT3 and LT4, pro rata according to their respective
Uncertificated Principal Balances as reduced by the distributions deemed made
pursuant to (A) above, until their respective Uncertificated Principal
Balances are reduced to zero; and
(D) any remaining amounts to the Holders of Component II
of the Class R Certificates.
(b) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC II to REMIC III on
account of the REMIC II Regular Interests related to Loan Group II:
(i) to the extent of the portion of the REMIC II Available
Distribution Amount related to Group II, to REMIC III as the holder of
REMIC II Regular Interests LT5, LT6, LT7, LT8 and LT-Y2, 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; and
(ii) on each Distribution Date, to REMIC III as the holder of
the REMIC II Regular Interests, in an amount equal to the remainder of such
portion of the REMIC II Available Distribution Amount after the distributions
made pursuant to clause (i) above, allocated as follows (except as provided
below):
(A) in respect of the REMIC II Regular Interests LT6,
LT7, LT8 and LT-Y2, their respective Principal Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT5 any
remainder until the Uncertificated Principal Balance thereof is reduced to
zero;
(C) any remainder in respect of the REMIC II Regular
Interests LT6, LT7 and LT8, 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
(D) any remaining amounts to the Holders of Component II
of the Class R Certificates.
REMIC II Principal Reduction Amounts: For any Distribution Date, the
amounts by which the principal balances of the REMIC II Regular Interests
LT1, LT2, LT3, LT4, LT5, LT6, LT7, LT8, LT-Y1 and LT-Y2, 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 the REMIC II Regular Interests
LT1 and LT-Y1 after distributions on the prior Distribution Date.
Y2 = the principal balance of the REMIC II Regular Interest LT2 after
distributions on the prior Distribution Date.
Y3 = the principal balance of the REMIC II Regular Interest LT3 after
distributions on the prior Distribution Date.
Y4 = the principal balance of the REMIC II Regular Interest LT4 after
distributions on the prior Distribution Date (note: Y3 = Y4).
AY1 = the combined REMIC II Regular Interest LT1 and LT-Y1 Principal
Reduction Amount. Such amount shall be allocated first to LT-Y1 up to the
Class Y1 Principal Reduction Amount and thereafter the remainder shall be
allocated to LT1.
AY2 = the REMIC II Regular Interest LT2 Principal Reduction Amount.
AY3 = the REMIC II Regular Interest LT3 Principal Reduction Amount.
AY4 = the REMIC II Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate principal balance of the REMIC II Regular Interests
LT1, LT2, LT3, LT4 and LT-Y1 after distributions and the allocation of
Realized Losses on the prior Distribution Date.
P1 = the aggregate principal balance of the REMIC II Regular Interests
LT1, LT2, LT3, LT4 and LT-Y1 after distributions and the allocation of
Realized Losses to be made on such Distribution Date.
AP = P0 - P1 = the aggregate of the REMIC II Regular Interests LT1,
LT2, LT3, LT4 and LT-Y1 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
Group I Certificates on such Distribution Date (including distributions of
accrued and unpaid interest on the Class SB Certificates for prior
Distribution Dates).
R0 = the Group I 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 Group I 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.
a = (Y2 + Y3)/P0. The initial value of a on the Closing Date for use
on the first Distribution Date shall be 0.0001.
a0 = the lesser of (A) the sum of (1) for all Classes of Class A-I
Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the Group I 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, (2) for all Classes of Class M Certificates of the product for each
Class of (i) the monthly interest rate (as limited by the Class M 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 multiplied by a fraction whose numerator is the
principal balance of the REMIC I Regular Interest Y-1 and whose denominator
is the sum of the principal balances of the REMIC I Regular Interests Y-1 and
Y-2 after distributions and the allocation of Realized Losses on the prior
Distribution Date and (3) the amount, if any, by which the sum of the amounts
in clauses (A)(1), (2) and (3) of the definition of A0 exceeds S0*Q0 and (B)
R0*P0.
a1 = the lesser of (A) the sum of (1) for all Classes of Class A-I
Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the Group I 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, (2) for all Classes of Class M Certificates
of the product for each Class of (i) the monthly interest rate (as limited by
the Class M 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 multiplied by a
fraction whose numerator is the principal balance of the REMIC I Regular
Interest Y-1 and whose denominator is the sum of the principal balances of
the REMIC I Regular Interests Y-1 and Y-2 after distributions and the
allocation of Realized Losses to be made on such Distribution Date and (3)
the amount, if any, by which the sum of the amounts in clauses (A)(1), (2)
and (3) of the definition of A1 exceeds S1*Q1 and (B) R1*P1.
Then, based on the foregoing definitions:
AY1 = AP - AY2 - AY3 - AY4;
AY2 = (a/2){( a0R1 - a1R0)/R0R1};
AY3 = aAP - AY2; and
AY4 = AY3.
if both AY2 and AY3, as so determined, are non-negative numbers.
Otherwise:
(1) If AY2, as so determined, is negative, then
AY2 = 0;
AY3 = a{a1R0P0 - a0R1P1}/{a1R0};
AY4 = AY3; and
AY1 = XX - XX0 - XX0 - XX0.
(2) If AY3, as so determined, is negative, then
AY3 = 0;
AY2 = a{a0R1P1 - a1R0P0}/{2R1R0P1 - a1R0};
AY4 = AY3; and
AY1 = XX - XX0 - XX0 - XX0.
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
Y5 = the aggregate principal balance of the REMIC II Regular Interests
LT5 and LT-Y2 after distributions on the prior Distribution Date.
Y6 = the principal balance of the REMIC II Regular Interest LT6 after
distributions on the prior Distribution Date.
Y7 = the principal balance of the REMIC II Regular Interest LT7 after
distributions on the prior Distribution Date.
Y8 = the principal balance of the REMIC II Regular Interest LT8 after
distributions on the prior Distribution Date (note: Y7 = Y8).
AY5 = the aggregate of the REMIC II Regular Interest LT5 and LT-Y2
Principal Reduction Amounts. Such amount shall be allocated first to LT-Y2
up to the Class Y2 Principal Reduction Amount and thereafter the remainder
shall be allocated to LT5.
AY6 = the REMIC II Regular Interest LT6 Principal Reduction Amount.
AY7 = the REMIC II Regular Interest LT7 Principal Reduction Amount.
AY8 = the REMIC II Regular Interest LT8 Principal Reduction Amount.
Q0 = the aggregate principal balance of the REMIC II Regular Interests
LT5, LT6, LT7, LT8 and LT-Y2 after distributions and the allocation of
Realized Losses on the prior Distribution Date.
Q1 = the aggregate principal balance of the REMIC II Regular Xxxxxxxxx
XX0, XX0, XX0, XX0, XX-X0 and LT-Y2 after distributions and the allocation of
Realized Losses to be made on such Distribution Date.
AQ = Q0 - Q1 = the aggregate of the REMIC II Regular Interests LT5,
LT6, LT7, LT8 and LT-Y2 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
Group II Certificates on such Distribution Date (including distributions of
accrued and unpaid interest on the Class SB Certificates for prior
Distribution Dates).
S0 = the Group II Net WAC Cap Rate (stated as a monthly rate) after
giving effect to amounts distributed and Realized Losses allocated on the
prior Distribution Date.
S1 = the Group II 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.
a = (Y6 + Y7)/Q0. The initial value of a on the Closing Date for use
on the first Distribution Date shall be 0.0001.
A0 = the lesser of (A) the sum of (1) for all Classes of Class A-II
Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the Group II 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, (2) for all Classes of Class M Certificates of the product for each
Class of (i) the monthly interest rate (as limited by the Class M 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 multiplied by a fraction whose numerator is the
principal balance of the REMIC I Regular Interest Y-2 and whose denominator
is the sum of the principal balances of the REMIC I Regular Interests Y-1 and
Y-2 after distributions and the allocation of Realized Losses on the prior
Distribution Date and (3) the amount, if any, by which the sum of the amounts
in clauses (A)(1), (2) and (3) of the definition of a0 exceeds R0*P0 and (B)
S0*Q0.
A1 = the lesser of (A) the sum of (1) for all Classes of Class A-II
Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the Group II 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, (2) for all Classes of Class M Certificates
of the product for each Class of (i) the monthly interest rate (as limited by
the Class M 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 multiplied by a
fraction whose numerator is the principal balance of the REMIC I Regular
Interest Y-2 and whose denominator is the sum of the principal balances of
the REMIC I Regular Interests Y-1 and Y-2 after distributions and the
allocation of Realized Losses to be made on such Distribution Date and (3)
the amount, if any, by which the sum of the amounts in clauses (A)(1), (2)
and (3) of the definition of a1 exceeds R1*P1 and (B) S1*Q1.
Then, based on the foregoing definitions:
AY5 = AQ - AY6 - AY7 - AY8;
AY6 = (a/2){(A0S1 - A1S0)/S0S1};
AY7 = aAQ - AY6; and
AY8 = AY7.
if both AY6 and AY7, as so determined, are non-negative numbers.
Otherwise:
(1) If AY6, as so determined, is negative, then
AY6 = 0;
AY7 = a{A1S0Q0 - A0S1Q1}/{A1S0};
AY8 = AY7; and
AY5 = AQ - AY6 - AY7 - AY8.
(2) If AY7, as so determined, is negative, then
AY7 = 0;
AY6 = a{A0S1Q1 - A1S0Q0}/{2S1S0Q1 - A1S0};
AY8 = AY7; and
AY5 = AQ - AY6 - AY7 - AY8.
REMIC II Realized Losses: Realized Losses on Group I Loans and
Group II Loans shall be allocated to the REMIC II Regular Interests as
follows: (1) The interest portion of Realized Losses on Group I Loans, if
any, shall be allocated among the LT1, LT2, LT4 and LT-Y1 REMIC II Regular
Interests pro rata according to the amount of interest accrued but unpaid
thereon, in reduction thereof; and (2) the interest portion of Realized
Losses on Group II Loans, if any, shall be allocated among the LT5, LT6, LT8
and LT-Y2 REMIC II Regular Interests pro rata according to the amount of
interest accrued but unpaid thereon, in reduction thereof. Any interest
portion of such Realized Losses in excess of the amount allocated pursuant to
the preceding sentence shall be treated as a principal portion of Realized
Losses not attributable to any specific Mortgage Loan in such Loan Group and
allocated pursuant to the succeeding sentences. The principal portion of
Realized Losses with respect to Loan Group I and Loan Group II shall be
allocated to the REMIC I Regular Interests as follows: (1) The principal
portion of Realized Losses on Group I Loans shall be allocated, first, to the
LT-Y1 REMIC II Regular Interest to the extent that such losses were allocated
to the Y-1 REMIC I Regular Interest in reduction of the Uncertificated
Principal Balance thereof, second, to the LT 2, LT3 and LT4 REMIC II Regular
Interests pro rata according to their respective REMIC II Principal Reduction
Amounts to the extent thereof in reduction of the Uncertificated Principal
Balance of such REMIC II Regular Interests and, third, the remainder, if any,
of such principal portion of such Realized Losses shall be allocated to the
LT1 REMIC II Regular Interest in reduction of the Uncertificated Principal
Balance thereof; and (2) the principal portion of Realized Losses on Group II
Loans shall be allocated, first, to the LT-Y2 REMIC II Regular Interest to
the extent that such losses were allocated to the Y-2 REMIC I Regular
Interest in reduction of the Uncertificated Principal Balance thereof,
second, to the LT 6, LT7 and LT8 REMIC II Regular Interests pro rata
according to their respective REMIC II Principal Reduction Amounts to the
extent thereof in reduction of the Uncertificated Principal Balance of such
REMIC II Regular Interests and, third, the remainder, if any, of such
principal portion of such Realized Losses shall be allocated to the LT5
REMIC II Regular Interest in reduction of the Uncertificated Principal
Balance thereof.
REMIC II Regular Interests: REMIC II Regular Interest LT1, REMIC II
Regular Interest LT2, REMIC II Regular Interest LT3, REMIC II Regular
Interest LT4, REMIC II Regular Interest LT5, REMIC II Regular Interest LT6,
REMIC II Regular Interest LT7, REMIC II Regular Interest LT8, REMIC II
Regular Interest LT-Y1 and REMIC II Regular Interest LT-Y2.
REMIC II Regular Interest LT1: A regular interest in REMIC II 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 II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT1
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT1 on such Distribution
Date.
REMIC II Regular Interest LT2: A regular interest in REMIC II that is
held as an asset of REMIC II, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT2
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT2 on such Distribution
Date.
REMIC II Regular Interest LT3: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT3 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT3
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT3 on such Distribution
Date.
REMIC II Regular Interest LT4: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT4 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT4
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT4 on such Distribution
Date.
REMIC II Regular Interest LT5: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT5 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT5
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT5 on such Distribution
Date.
REMIC II Regular Interest LT6: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT6 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT6
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT6 on such Distribution
Date.
REMIC II Regular Interest LT7: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT7 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT7
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT7 on such Distribution
Date.
REMIC II Regular Interest LT8: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT8 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT8
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT8 on such Distribution
Date.
REMIC II Regular Interest LT-Y1: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT-Y1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT-Y1
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT-Y1 on such Distribution
Date.
REMIC II Regular Interest LT-Y2: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT-Y2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT-Y2
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT-Y2 on such Distribution
Date.
REMIC III: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of
the REMIC II Regular Interests.
REMIC III Regular Interest SB-PO: A separate non-certificated
beneficial ownership interests in REMIC III issued hereunder and designated
as a Regular Interest in REMIC III. REMIC III Regular Interest SB-PO shall
have no entitlement to interest, and shall be entitled to distributions of
principal subject to the terms and conditions hereof, in aggregate amount
equal to the initial Certificate Principal Balance of the Class SB
Certificates as set forth in the Preliminary Statement hereto.
REMIC III Regular Interest SB-IO: A separate non-certificated
beneficial ownership interests in REMIC III issued hereunder and designated
as a Regular Interest in REMIC III. REMIC III Regular Interest SB-IO shall
have no entitlement to principal, and shall be entitled to distributions of
interest subject to the terms and conditions hereof, in aggregate amount
equal to the interest distributable with respect to the Class SB Certificates
pursuant to the terms and conditions hereof.
REMIC III Regular Interests: REMIC III Regular Interests SB-IO and
SB-PO, together with the regular interests in REMIC III represented by the
Class A Certificates and Class M Certificates, exclusive of the rights of
such Certificates to payments of Basis Risk Shortfalls and to payments
derived from the Yield Maintenance Agreement.
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 successor 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: With respect to any REO Property, a determination by
the Master Servicer that it has received substantially 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: With respect to any REO Property, for any
period, an amount equivalent to interest (at a rate equal to 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) 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 on
behalf of the Trust Fund for the benefit of the Certificateholders through
foreclosure or deed in lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (a) has been
subject to an interest rate reduction, (b) has been subject to a term
extension or (c) 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 (a) 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.
Repurchase Event: As defined in the Assignment Agreement.
Request for Release: A request for release, the form of which is
attached as Exhibit G 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 Overcollateralization Amount: With respect to any
Distribution Date, (a) prior to the Stepdown Date, an amount equal to 4.10%
of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date, (b) on or after the Stepdown Date if a Trigger Event is not in
effect, the greater of (i) an amount equal to 8.20% of the aggregate
outstanding Stated Principal Balance of the Mortgage Loans after giving
effect to distributions made on that Distribution Date and (ii) the
Overcollateralization Floor and (c) on or after the Stepdown Date if a
Trigger Event is in effect, an amount equal to the Required
Overcollateralization Amount from the immediately preceding Distribution
Date. The Required Overcollateralization Amount may be reduced so long as
written confirmation is obtained from each Rating Agency that such reduction
shall not reduce the ratings assigned to any Class of Certificates by such
Rating Agency below the lower of the then-current rating or the rating
assigned to such Certificates as of the Closing Date by such Rating Agency.
Residential Funding: Residential Funding Company, LLC, a Delaware
limited liability company, in its capacity as seller of the Mortgage Loans to
the Depositor 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, in each case with direct responsibility for the
administration of this Agreement.
RFC Exemption: As defined in Section 5.02(e)(ii).
Rule 144A: Rule 144A under the Securities Act of 1933, as in effect
from time to time.
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.
Seller: With respect 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 Depositor.
Senior Enhancement Percentage: For any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is 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 and the
denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date.
Senior Percentage: With respect to each Loan Group and any
Distribution Date, the percentage equal to the lesser of (x) the aggregate
Certificate Principal Balance of the related Class A Certificates immediately
prior to that Distribution Date divided by the aggregate Stated Principal
Balance of the Mortgage Loans in that Loan Group immediately prior to that
Distribution Date and (y) 100%.
Servicing Accounts: The account or accounts created and maintained
pursuant to Section 3.08.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency
or other unanticipated event by the 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(R)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 Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
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 equal to the Servicing
Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as
of the related Due Date in the related Due Period, as may be adjusted
pursuant to Section 3.16(e).
Servicing Fee Rate: With respect to any Mortgage Loan, the per annum
rate designated on the Mortgage Loan Schedule as the "MSTR SERV FEE," as may
be adjusted with respect to successor Master Servicers as provided in
Section 7.02, which rate shall never be greater than the Mortgage Rate of
such Mortgage Loan.
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 Stated 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 on the Closing Date, as such list may
from time to time be amended.
Sixty-Plus Delinquency Percentage: With respect to any Distribution
Date and the Mortgage Loans, the arithmetic average, for each of the three
Distribution Dates ending with such Distribution Date, of the fraction,
expressed as a percentage, equal to (x) the aggregate Stated Principal
Balance of the Mortgage Loans that are 60 or more days delinquent in payment
of principal and interest for that Distribution Date, including Mortgage
Loans in foreclosure and REO, over (y) the aggregate Stated Principal Balance
of all of the Mortgage Loans immediately preceding that Distribution Date.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. or its successors in interest.
Startup Date: The day designated as such pursuant to Article X
hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property, as of any date of determination, (i) the sum of (a) the Cut-off
Date Principal Balance of the Mortgage Loan and (b) any amount by which the
Stated Principal Balance of the Mortgage Loan has been increased pursuant to
a Servicing Modification, minus (ii) the sum of (a) the principal portion of
the Monthly Payments due with respect to such Mortgage Loan or REO Property
during each Due Period ending with the Due Period relating to the most recent
Distribution Date which were received or with respect to which an Advance was
made, (b) all Principal Prepayments with respect to such Mortgage Loan or REO
Property, and all Insurance Proceeds, Liquidation Proceeds and REO Proceeds,
to the extent applied by the Master Servicer as recoveries of principal in
accordance with Section 3.14 with respect to such Mortgage Loan or REO
Property, in each case which were distributed pursuant to Section 4.02 on any
previous Distribution Date, and (c) any Realized Loss incurred with respect
to such Mortgage Loan allocated to Certificateholders with respect thereto
for any previous Distribution Date.
Stepdown Date: That Distribution Date which is the earlier to occur of
(a) the Distribution Date immediately succeeding the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (b) the later to occur of (i) the Distribution
Date in November 2009 and (ii) the first Distribution Date on which the
Senior Enhancement Percentage is equal to or greater than 55.00%.
Subordinate Component: With respect to each Loan Group and any
Distribution Date, the positive excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans in that Loan Group, over the
aggregate Certificate Principal Balance of the related Class A Certificates,
in each case immediately prior to that Distribution Date.
Subordination: The provisions described in Section 4.05 relating to
the allocation of Realized Losses.
Subordination Percentage: With respect to the Class A Certificates and
any Class of Class M Certificates, the respective percentage set forth below.
Class Percentage
A 45.00%
M-1 54.30%
M-2 65.00%
M-3 69.10%
M-4 73.00%
M-5 76.80%
M-6 79.70%
M-7 82.40%
M-8 84.70%
M-9 87.90%
M-10 91.80%
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 and that resulted in a Realized Loss.
Subsequent Recovery Allocation Amount: With respect to a Loan Group,
that portion of the Principal Allocation Amount in respect of that Loan Group
attributable to the amounts described in clause (iv) of the definition of
Principal Distribution Amount.
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 Depositor.
Subservicing Fee: With respect 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 with respect to each Distribution Date at an annual
rate designated as "SUBSERV FEE" on the Mortgage Loan Schedule.
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 hereunder due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information,
reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal,
state or local tax laws.
Telerate Screen Page 3750: As defined in Section 1.02.
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
Transfer Affidavit and Agreement: As defined in Section 5.02(f).
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.
Trigger Event: A Trigger Event is in effect with respect to any
Distribution Date on or after the Stepdown Date if either (a) the related
Sixty-Plus Delinquency Percentage, as determined on that Distribution Date,
equals or exceeds 29.09% of the Senior Enhancement Percentage for that
Distribution Date or (b) on or after the Distribution Date in November 2008,
the aggregate amount of Realized Losses on the Mortgage Loans as a percentage
of the Cut-off Date Balance exceeds the applicable amount set forth below:
November 2008 to October 2009: 1.90% with respect to November
2008, plus an additional 1/12th of
2.40% for each month thereafter.
November 2009 to October 2010: 4.30% with respect to November
2009, plus an additional 1/12th of
2.40% for each month thereafter.
November 2010 to October 2011: 6.70% with respect to November
2010, plus an additional 1/12th of
1.90% for each month thereafter.
November 2011 to October 2012: 8.60% with respect to November
2011, plus an additional 1/12th of
1.05% for each month thereafter.
November 2012 and thereafter: 9.65%.
Trustee: As defined in the preamble hereto.
Trust Fund: The segregated pool of assets subject hereto, consisting
of: (i) the Mortgage Loans and the related Mortgage Files; (ii) all payments
on and collections in respect of the Mortgage Loans due after the Cut-off
Date (other than Monthly Payments due in the month of the Cut-off Date) as
shall be on deposit in the Custodial Account or in the Certificate Account
and identified as belonging to the Trust Fund; (iii) property which secured a
Mortgage Loan and which has been acquired for the benefit of the
Certificateholders by foreclosure or deed in lieu of foreclosure; (iv) the
hazard insurance policies and Primary Insurance Policies pertaining to the
Mortgage Loans, if any; (v) the Yield Maintenance Agreement; and (vi) all
proceeds of clauses (i) through (v) above.
Uncertificated Accrued Interest: With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's interest at the
related Uncertificated Pass-Through Rate for such Distribution Date, accrued
on the Uncertificated Principal Balance or Uncertificated Notional Amount, as
applicable, immediately prior to such Distribution Date. Uncertificated
Accrued Interest for the Uncertificated 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) (i) relating to the Loan Group I Loans for any
Distribution Date shall be allocated among REMIC I Regular Interests Y-1 and
Z-1 and (ii) relating to the Loan Group II Loans shall be allocated among the
REMIC I Regular Interests Y-2 and Z-2, pro rata, based on, and to the extent
of, Uncertificated Accrued Interest, as calculated without application of
this sentence. For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC II Regular Interest for any Distribution Date,
any Prepayment Interest Shortfalls and Relief Act Shortfalls (to the extent
not covered by Compensating Interest) (i) relating to the Loan Group I Loans
for any Distribution Date shall be allocated among REMIC II Regular Interests
LT1, LT2, LT3, LT4 and LT-Y1 and (ii) relating to the Loan Group II Loans for
any Distribution Date shall be allocated among REMIC II Regular Interests
LT5, LT6, LT7, LT8 and LT-Y2, pro rata, based on, and to the extent of,
Uncertificated Accrued Interest, as calculated without application of this
sentence. Uncertificated Interest on REMIC III Regular Interest SB-PO shall
be zero. Uncertificated Interest on the REMIC III Regular Interest SB-IO for
each Distribution Date shall equal Accrued Certificate Interest for the
Class SB Certificates.
Uncertificated Notional Amount: With respect to REMIC III Regular
Interest SB-IO, the Notional Amount for such Class.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I
Pass-Through Rate or the Uncertificated REMIC II Pass-Through Rate, as
applicable.
Uncertificated Principal Balance: The principal amount of any
Uncertificated Regular Interest outstanding as of any date of determination.
The Uncertificated Principal Balance of each REMIC Regular Interest shall
never be less than zero. With respect to the REMIC III Regular Interest
SB-PO the initial amount set forth with respect thereto in the Preliminary
Statement as reduced by distributions deemed made in respect thereof pursuant
to Section 4.02 and Realized Losses allocated thereto pursuant to
Section 4.05.
Uncertificated Regular Interests: The REMIC I Regular Interests and the
REMIC II Regular Interests.
Uncertificated REMIC I Pass-Through Rate: With respect to any
Distribution Date, the REMIC I Regular Interest Y-1 and the REMIC I Regular
Interest Z-1, the weighted average of the Net Mortgage Rates of the Mortgage
Loans in Loan Group I. With respect to any Distribution Date the REMIC I
Regular Interest Y-2 and the REMIC I Regular Interest Z-2, the weighted
average of the Net Mortgage Rates of the Mortgage Loans in Loan Group II.
Uncertificated REMIC II Pass-Through Rate: With respect to any
Distribution Date and (i) REMIC II Regular Interests LT1, LT2 and LT-Y1, the
weighted average of the Net Mortgage Rates of the Mortgage Loans in Loan
Group I, (ii) REMIC II Regular Interests LT5, LT6 and LT-Y2, the weighted
average of the Net Mortgage Rates of the Mortgage Loans in Loan Group II,
(iii) REMIC II Regular Interests LT3 and LT7, zero (0.00%), (iv) REMIC II
Regular Interest LT4, twice the weighted average of the Net Mortgage Rates of
the Mortgage Loans in Loan Group I and (v) REMIC II Regular Interest LT8,
twice the weighted average of the Net Mortgage Rates of the Mortgage Loans in
Loan Group II.
Uniform Single Attestation Program for Mortgage Bankers: The Uniform
Single Attestation Program for Mortgage Bankers, as published by the Mortgage
Bankers Association of America and effective with respect to fiscal periods
ending on or after December 15, 1995.
Uninsured Cause: Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable
by the hazard insurance policies.
United States Person: A citizen or resident of the United States, a
corporation, partnership or other entity (treated as a corporation or
partnership for United States federal income tax purposes) created or
organized in, or under the laws of, the United States, any state thereof, or
the District of Columbia (except in the case of a partnership, to the extent
provided in Treasury regulations) provided that, for purposes solely of the
restrictions on the transfer of Class R Certificates, no partnership or other
entity treated as a partnership for United States federal income tax purposes
shall be treated as a United States Person unless all persons that own an
interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required
by the applicable operative agreement to be United States Persons, or an
estate that is described in Section 7701(a)(30)(D) of the Code, or a trust
that is described in Section 7701(a)(30)(E) of the Code.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. 98.00% of all of the
Voting Rights shall be allocated among the Holders of the Class A
Certificates and Class M Certificates, in proportion to the outstanding
Certificate Principal Balances of their respective Certificates, 1% of all of
the Voting Rights shall be allocated to the Holders of the Class SB
Certificates, and 1% of all of the Voting Rights shall be allocated to the
Holders of the Class R Certificates, in each case to be allocated among the
Certificates of such Class in accordance with their respective Percentage
Interests.
Yield Maintenance Agreement: The confirmation, dated as of the Closing
Date, between the Trustee, on behalf of the Trust Fund, and the Yield
Maintenance Agreement Provider, relating to the Class A Certificates and
Class M Certificates or any replacement, substitute, collateral or other
arrangement in lieu thereof.
Yield Maintenance Agreement Payment: For any Distribution Date, the
payment, if any, due under the Yield Maintenance Agreement in respect of such
Distribution Date.
Yield Maintenance Agreement Provider: HSBC Bank USA, National
Association and its successors and assigns or any party to any replacement,
substitute, collateral or other arrangement in lieu thereof.
Yield Maintenance Agreement Shortfall Amount: For any Distribution
Date, the amount, if any, by which the payment on the Class A Certificates
and Class M Certificates pursuant to Section 4.02(c) is paid from the Yield
Maintenance Agreement Payment for such Distribution Date pursuant to the
provisions thereof or would have been so paid but for the failure of the
Yield Maintenance Agreement Provider to make a payment required under the
Yield Maintenance Agreement.
Yield Maintenance Agreement Shortfall Carry-Forward Amount: For any
Distribution Date, the aggregate Yield Maintenance Agreement Shortfall
Amounts for prior Distribution Dates to the extent not reimbursed to the
Class SB Certificates pursuant to Section 4.02(c)(ix).
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 Telerate Screen Page 3750 as of 11:00
a.m., London time, on such LIBOR Rate Adjustment Date. "Telerate Screen Page
3750" means the display designated as page 3750 on the Bridge Telerate
Service (or such other page as may replace page 3750 on that service for the
purpose of displaying London interbank offered rates of major banks). If
such rate does not appear on such page (or such other page as may replace
that page on that service, or if such service is no longer offered, LIBOR
shall be so established by use of such other service for displaying LIBOR or
comparable rates as may be selected by the Trustee after consultation with
the Master Servicer), the rate will be the Reference Bank Rate. The
"Reference Bank Rate" will be determined on the basis of the rates at which
deposits in U.S. Dollars are offered by the reference banks (which shall be
any three major banks that are engaged in transactions in the London
interbank market, selected by the Trustee after consultation with the Master
Servicer) as of 11:00 a.m., London time, on the LIBOR Rate Adjustment Date to
prime banks in the London interbank market for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of
the LIBOR Certificates then outstanding. The Trustee shall 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, shall select an alternative
comparable index (over which the Trustee has no control), used for
determining one-month Eurodollar lending rates that is calculated and
published (or otherwise made available) by an independent party. The
establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment Date and
the Trustee's subsequent calculation of the Pass-Through Rates 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 shall supply to any Certificateholder so requesting by calling
1-800-934-6802, the Pass-Through Rate on the LIBOR Certificates for the
current and the immediately preceding Interest Accrual Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby assign to the Trustee in respect of the Trust Fund without
recourse all the right, title and interest of the Depositor in and to (i) the
Mortgage Loans, including all interest and principal on or with respect to
the Mortgage Loans due on or after the Cut-off Date (other than Monthly
Payments due in the month of the Cut-off Date); and (ii) all proceeds of the
foregoing.
(b) In connection with such assignment, and contemporaneously with the
delivery of this Agreement, except as set forth in Section 2.01(c) below and
subject to Section 2.01(d) below, the Depositor does hereby (1) with respect
to each Mortgage Loan, deliver to the Master Servicer (or an Affiliate of the
Master Servicer) each of the documents or instruments described in clause
(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, as the duly
appointed agent of the Trustee for such purpose, the documents or instruments
described in clauses (i) and (v) below, (3) with respect to each Mortgage
Loan that is not a MOM Loan but is registered on the MERS(R)System, deliver
to, and deposit with, the Trustee, or the Custodian, as the duly appointed
agent of the Trustee for such purpose, the documents or instruments described
in clauses (i), (iv) and (v) below and (4) with respect to each Mortgage Loan
that is not a MOM Loan and is not registered on the MERS(R)System, deliver to,
and deposit with, the Trustee, or the Custodian, as the duly appointed agent
of the Trustee for such purpose, the documents or instruments described in
clauses (i), (iii), (iv) and (v) below.
(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) 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 original Mortgage with evidence of recording indicated thereon.
(iii) The assignment (which may be included in one or more blanket
assignments if permitted by applicable law) 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 to the Person assigning it to
the Trustee (or to MERS, if the Mortgage Loan is registered on the MERS(R)
System and noting the presence of a MIN) with evidence of recordation noted
thereon or attached thereto, or a copy of such assignment or assignments of
the Mortgage with evidence of recording indicated thereon.
(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.
The Depositor may, in lieu of delivering the original of the documents
set forth in Section 2.01(b)(iii), (iv) and (v) (or copies thereof) to the
Trustee or the Custodian, 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 Section 2.01(b)(iii), (iv) and (v) (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 the Custodian, as duly
appointed agent of the Trustee.
(c) Notwithstanding the provisions of Section 2.01(b), in the event that in
connection with any Mortgage Loan, if the Depositor 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 Depositor shall deliver or
cause to be delivered to the Trustee or the respective Custodian a copy of
such Mortgage, assignment, modification, assumption agreement or preferred
loan agreement.
The Depositor shall promptly cause to be recorded in the appropriate
public office for real property records the Assignment referred to in clause
(iii) of Section 2.01(b), except (a) in states where, in an Opinion of
Counsel acceptable to the Master Servicer, such recording is not required to
protect the Trustee's interests in the Mortgage Loan or (b) if MERS is
identified on the Mortgage or on a properly recorded assignment of the
Mortgage, as applicable, as the mortgagee of record solely as nominee for
Residential Funding and its successors and assigns. If any Assignment is
lost or returned unrecorded to the Depositor because of any defect therein,
the Depositor shall prepare a substitute Assignment or cure such defect, as
the case may be, and cause such Assignment to be recorded in accordance with
this paragraph. The Depositor shall promptly deliver or cause to be
delivered to the applicable person described in Section 2.01(b), any
Assignment or substitute Assignment (or copy thereof) recorded in connection
with this paragraph, with evidence of recording indicated thereon upon
receipt thereof from the public recording office or from the related
Subservicer or Seller.
If the Depositor delivers to the Trustee or Custodian any Mortgage Note
or Assignment of Mortgage in blank, the Depositor shall, or shall cause the
Custodian to, complete the endorsement of the Mortgage Note and the
Assignment of Mortgage in the name of the Trustee in conjunction with the
Interim Certification issued by the Custodian, as contemplated by
Section 2.02.
In connection with the assignment of any Mortgage Loan registered on
the MERS(R)System, the Depositor further agrees that it will cause, at the
Depositor's own expense, within 30 Business Days after the Closing Date, the
MERS(R)System to indicate that such Mortgage Loans have been assigned by the
Depositor 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 Depositor 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.
(d) It is intended that the conveyances by the Depositor to the Trustee of
the Mortgage Loans as provided for in this Section 2.01 and the
Uncertificated Regular Interests be construed as a sale by the Depositor to
the Trustee of the Mortgage Loans and the Uncertificated Regular Interests
for the benefit of the Certificateholders. Further, it is not intended that
any such conveyance be deemed to be a pledge of the Mortgage Loans and the
Uncertificated Regular Interests by the Depositor to the Trustee to secure a
debt or other obligation of the Depositor. 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 conveyances
provided for in this Section 2.01 shall be deemed to be (1) a grant by the
Depositor to the Trustee of a security interest in all of the Depositor's
right (including the power to convey title thereto), title and interest,
whether now owned or hereafter acquired, in and to (A) the Mortgage Loans,
including the related Mortgage Note, the Mortgage, 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 Regular Interests and 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 foregoing, 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 Depositor 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 Depositor pursuant to the Assignment
Agreement; (c) the possession by the Trustee, the Custodian 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 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 Depositor and, at the Depositor'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 deemed to create a security interest in the Mortgage Loans and the
Uncertificated Regular Interests and the other property described above, such
security interest would be deemed 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 Depositor 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 Depositor, 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 the Uncertificated Regular Interests, as evidenced by an Officers'
Certificate of the Depositor, 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 Depositor or the Trustee (such
preparation and filing shall be at the expense of the Trustee, if occasioned
by a change in the Trustee's name), (2) any change of location of the place
of business or the chief executive office of Residential Funding or the
Depositor, (3) any transfer of any interest of Residential Funding or the
Depositor in any Mortgage Loan or (4) any transfer of any interest of
Residential Funding or the Depositor in any Uncertificated Regular Interests.
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 an Assignment of Mortgage
may be 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 the Custodian as its agent, 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 90 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 Depositor 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(b) 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,
upon receipt of notification from the Custodian as specified in the
succeeding sentence, the Trustee shall promptly so notify or cause the
Custodian to notify the Master Servicer and the Depositor. Pursuant to
Section 2.3 of the Custodial Agreement, the Custodian will notify the Master
Servicer, the Depositor 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
received by it pursuant to the Custodial Agreement. If such omission or
defect materially and adversely affects the interests in the related Mortgage
Loan of the Certificateholders, the Master Servicer shall promptly notify the
related Subservicer or Seller of such omission or defect and request that
such Subservicer or Seller 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 such Subservicer or Seller does not correct or cure such
omission or defect within such period, that such Subservicer or Seller
purchase such Mortgage Loan from the Trust Fund at its Purchase Price, in
either case 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 or caused to 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, 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 owner's
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 the Subservicer or Seller or its
designee, as the case may be, any Mortgage Loan released pursuant hereto and
thereafter such Mortgage Loan shall not be part of the Trust Fund. In
furtherance of the foregoing and Section 2.04, if the Subservicer or Seller
or Residential Funding that repurchases the Mortgage Loan is not a member of
MERS and the Mortgage is registered on the MERS(R)System, the Master Servicer,
at its own expense and without any right of reimbursement, shall cause MERS
to execute and deliver an assignment of the Mortgage in recordable form to
transfer the Mortgage from MERS to such Subservicer or Seller or Residential
Funding and shall cause such Mortgage to be removed from registration on the
MERS(R)System in accordance with MERS' rules and regulations. It is
understood and agreed that the obligation of the Subservicer or Seller, 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 Certificateholders.
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Depositor.
(a) The Master Servicer hereby represents and warrants to the Trustee for
the benefit of the Certificateholders that:
(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 Depositor, 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 shall 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 Depositor, any Affiliate of the Depositor
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;
(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; and
(x) The Servicing Guide of the Master Servicer requires that the
Subservicer for each Mortgage Loan accurately and fully reports its borrower
credit files to each of the Credit Repositories in a timely manner.
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
Depositor, 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 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 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) The Depositor hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that as of the Closing Date (or, if
otherwise specified below, as of the date so specified): (i) immediately
prior to the conveyance of the Mortgage Loans to the Trustee, the Depositor
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 conveyance validly
transfers ownership of the Mortgage Loans to the Trustee free and clear of
any pledge, lien, encumbrance or security interest; and (ii) each Mortgage
Loan constitutes a qualified mortgage under Section 860G(a)(3)(A) of the Code
and Treasury Regulations Section 1.860G-2(a)(1).
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(b) shall survive delivery of the respective
Custodial Files to the Trustee or the Custodian.
Upon discovery by any of the Depositor, the Master Servicer, the
Trustee or the Custodian of a breach of any of the representations and
warranties set forth in this Section 2.03(b) 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);
provided, however, that in the event of a breach of the representation and
warranty set forth in Section 2.03(b)(ii), 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 Depositor 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 Depositor 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, substitution or repurchase must occur within 90 days from the date such
breach was discovered. Any such substitution shall be effected by the
Depositor 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 Depositor 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. Notwithstanding the foregoing, the Depositor shall not
be required to cure breaches or purchase or substitute for Mortgage Loans as
provided in this Section 2.03(b) if the substance of the breach of a
representation set forth above also constitutes fraud in the origination of
the Mortgage Loan.
Section 2.04. Representations and Warranties of Sellers.
The Depositor, as assignee of Residential Funding under the Assignment
Agreement, hereby assigns to the Trustee for the benefit of the
Certificateholders all of its right, title and interest in respect of the
Assignment Agreement applicable to a Mortgage Loan as and to the extent set
forth in the Assignment Agreement. 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 Depositor, the Master
Servicer, the Trustee or the Custodian of a breach of any of the
representations and warranties made in the Assignment Agreement in respect of
any Mortgage Loan or of any Repurchase Event 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 or
Repurchase Event and request that Residential Funding either (i) cure such
breach or Repurchase Event in all material respects within 90 days from the
date the Master Servicer was notified of such breach or Repurchase Event or
(ii) purchase such Mortgage Loan from the Trust Fund at the Purchase Price
and in the manner set forth in Section 2.02.
Upon the discovery by the Depositor, the Master Servicer, the Trustee
or the Custodian of a breach of any of such representations and warranties
set forth in 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 of a representation or warranty set forth in the
Assignment Agreement 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 within 90 days of the date of such written notice of such
breach 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 or substitution must occur within 90 days from the date the breach was
discovered. If the breach of representation and warranty that gave rise to
the obligation to repurchase or substitute a Mortgage Loan pursuant to
Section 4 of the Assignment Agreement was the representation and warranty set
forth in clause (xliii) of Section 4 thereof, 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 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, 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 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 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 (other than those of a statistical nature) contained
in the Assignment Agreement as of the date of substitution, and the
covenants, representations and warranties set forth in this Section 2.04, and
in Section 2.03(b) hereof.
In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer
shall 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 or cause the related Seller to 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 created hereunder to fail to qualify as
a REMIC 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 (and in the case of Residential Funding to
substitute for) such 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 representation and
warranty in clause (xlvii) of Section 4 thereof shall constitute the sole
remedy respecting such breach available to the Certificateholders or the
Trustee on behalf of the 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; Conveyance of
REMIC-I Regular Interests.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery of the Custodial Files to it, or the Custodian on its behalf,
subject to any exceptions noted, together with the assignment to it of all
other assets included in the Trust Fund, receipt of which is hereby
acknowledged. Concurrently with such delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an
officer of the Depositor, has executed and caused to be authenticated and
delivered to or upon the order of the Depositor the Certificates in
authorized denominations which evidence ownership of the entire Trust Fund.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC I Regular Interests and the REMIC II Regular Interests
for the benefit of the holders of the Regular Certificates and Component III
of the Class R Certificates. The Trustee acknowledges receipt of the REMIC I
Regular Interests and REMIC II Regular Interests (each of which are
uncertificated) and declares that it holds and will hold the same in trust
for the exclusive use and benefit of the holders of the Regular Certificates
and Component III of the Class R Certificates. The interests evidenced by
Component III of the Class R Certificates, together with the Regular
Certificates, constitute the entire beneficial ownership interest in
REMIC III.
Section 2.06. 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 Depositor 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 2.06 may not be amended, without the consent
of the Certificateholders evidencing a majority of the aggregate Voting
Rights of the Certificates.
Section 2.07. Agreement Regarding Ability to Disclose.
The Depositor, the Master Servicer and the Trustee hereby agree that,
notwithstanding any other express or implied agreement to the contrary, 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," "tax treatment," "tax structure," and "tax benefit" are defined
under Treasury Regulationss.1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer.
(a) The Master Servicer shall service and administer the Mortgage Loans in
accordance with the terms of this Agreement and the respective Mortgage
Loans, following such procedures as it would employ in its good faith
business judgment and which are normal and usual in its general mortgage
servicing activities, and shall have full power and authority, acting alone
or through Subservicers as provided in Section 3.02, to do any and all things
which it may deem necessary or desirable in connection with such servicing
and administration. Without limiting the generality of the foregoing, the
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 is appropriate in its best judgment to register any Mortgage Loan
on the MERS(R)System, or cause the removal from the registration of any
Mortgage Loan on the MERS(R)System, to execute and deliver, on behalf of the
Trustee and the Certificateholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such assignment
or re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns. Any expenses incurred in connection
with the actions described in the preceding sentence shall be borne by the
Master Servicer in accordance with Section 3.16(c), with no right of
reimbursement; provided, that if, as a result of MERS discontinuing or
becoming unable to continue operations in connection with the MERS(R)System,
it becomes necessary to remove any Mortgage Loan from registration on the
MERS(R)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 as set forth in Section 3.10(a)(ii). 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 created hereunder 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 or
other documents. 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.
If the Mortgage relating to a Mortgage Loan did not have a lien senior
to the Mortgage Loan on the related Mortgaged Property as of the Cut-off
Date, then the Master Servicer, in such capacity, may not consent to the
placing of a lien senior to that of the Mortgage on the related Mortgaged
Property. If the Mortgage relating to a Mortgage Loan had a lien senior to
the Mortgage Loan on the related Mortgaged Property as of the Cut-off Date,
then the Master Servicer, in such capacity, may consent to the refinancing of
the prior senior lien, provided that the following requirements are met:
(i) (A) the Mortgagor's debt-to-income ratio resulting from
such refinancing is less than the original debt-to-income ratio as set forth
on the Mortgage Loan Schedule; provided, however, that in no instance shall
the resulting Combined Loan-to-Value Ratio ("Combined Loan-to-Value Ratio")
of such Mortgage Loan be higher than that permitted by the Program Guide; or
(B) the resulting Combined Loan-to-Value Ratio of such
Mortgage Loan is no higher than the Combined Loan-to-Value Ratio prior to
such refinancing; provided, however, if such refinanced mortgage loan is a
"rate and term" mortgage loan (meaning, the Mortgagor does not receive any
cash from the refinancing), the Combined Loan-to-Value Ratio may increase to
the extent of either (x) the reasonable closing costs of such refinancing or
(y) any decrease in the value of the related Mortgaged Property, if the
Mortgagor is in good standing as defined by the Program Guide;
(ii) the interest rate, or, in the case of an adjustable rate
existing senior lien, the maximum interest rate, for the loan evidencing the
refinanced senior lien is no more than 2.0% higher than the interest rate or
the maximum interest rate, as the case may be, on the loan evidencing the
existing senior lien immediately prior to the date of such refinancing;
provided, however (A) if the loan evidencing the existing senior lien prior
to the date of refinancing has an adjustable rate and the loan evidencing the
refinanced senior lien has a fixed rate, then the current interest rate on
the loan evidencing the refinanced senior lien may be up to 2.0% higher than
the then-current loan rate of the loan evidencing the existing senior lien
and (B) if the loan evidencing the existing senior lien prior to the date of
refinancing has a fixed rate and the loan evidencing the refinanced senior
lien has an adjustable rate, then the maximum interest rate on the loan
evidencing the refinanced senior lien shall be less than or equal to (x) the
interest rate on the loan evidencing the existing senior lien prior to the
date of refinancing plus (y) 2.0%; and
(iii) the loan evidencing the refinanced senior lien is not
subject to negative amortization.
(b) The Master Servicer shall, to the extent consistent with the servicing
standards set forth herein, take whatever actions as may be necessary to file
a claim under or enforce or allow the Trustee to file a claim under or
enforce any title insurance policy with respect to any Mortgage Loan
including, without limitation, joining in or causing any Seller or
Subservicer (or any other party in possession of any title insurance policy)
to join in any claims process, negotiations, actions or proceedings necessary
to make a claim under or enforce any title insurance policy. Notwithstanding
anything in this Agreement to the contrary, the Master Servicer shall not
(unless the Mortgagor is in default with respect to the Mortgage Loan or such
default is, in the judgment of the Master Servicer, reasonably foreseeable)
make or permit any modification, waiver, or amendment of any term of any
Mortgage Loan that would both (i) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Treasury 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 (ii)
cause any REMIC formed hereunder to fail to qualify as a REMIC under the Code
or the imposition of any tax on "prohibited transactions" or "contributions"
after the startup date under the REMIC Provisions.
(c) 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 customarily
provided by Persons other than 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.
(d) 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).
(e) 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.
(f) The relationship of the Master Servicer (and of any successor to the
Master Servicer) to the Depositor under this Agreement is intended by the
parties to be that of an independent contractor and not that of a joint
venturer, partner or agent.
(g) The Master Servicer shall comply with the terms of Section 9 of the
Assignment Agreement.
Section 3.02. Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' 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 shall be either (i) an
institution the accounts of which are insured by the FDIC or (ii) another
entity that engages in the business of originating or servicing mortgage
loans, and in either case shall be authorized to transact business in the
state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, and in either case shall be a Xxxxxxx Mac, Xxxxxx Mae or HUD
approved mortgage servicer. 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
by, permitted by or consistent with the Program Guide and are not
inconsistent with this Agreement and as the Master Servicer and the
Subservicer have agreed. 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, to the extent that the non-performance of any such 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 and are
reimbursable pursuant to Section 3.10(a)(vii).
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 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 Depositor 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 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) In the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of an Event of Default), the Trustee, as
successor Master Servicer, 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 or a
Subservicer may in its discretion (subject to the terms and conditions of the
Assignment Agreement) (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 or any Subservicer 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 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. No such
modification shall reduce the Mortgage Rate on a Mortgage Loan below the
greater of (A) one-half of the Mortgage Rate as in effect on the Cut-off Date
and (B) one-half of the Mortgage Rate as in effect on the date of such
modification, but not less than the sum of the Servicing Fee Rate and the per
annum rate at which the Subservicing Fee accrues. The final maturity date
for any Mortgage Loan shall not be extended beyond the Maturity Date. Also,
the aggregate 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, provided, that such limit may be increased from
time to time if each Rating Agency provides written confirmation that an
increase in excess of that limit will not reduce the rating assigned to any
Class of Certificates by such Rating Agency below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency. 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 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 purposes. 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 re-amortized such that the
Monthly Payment is recalculated as an amount that will fully amortize the
remaining principal balance thereof by the original maturity date based on
the original Mortgage Rate; provided, that such reamortization shall not be
permitted if it would constitute a reissuance of the Mortgage Loan for
federal income tax purposes.
(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 Monthly Payments due before or in the month of 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 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 representation and warranty set forth in clause (xlvii) of Section 4 of
the Assignment Agreement) 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; and
(v) Any amounts required to be deposited pursuant to Section 3.07(c) and
any payments or collections received in the nature of prepayment charges.
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 Monthly Payments due before or in the
month of the Cut-off Date) and payments or collections consisting 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, Subsequent
Recoveries 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.
(d) The Master Servicer shall give written notice to the Trustee and the
Depositor 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 late charges or assumption fees, or payments or collections
received in the nature of prepayment charges to the extent that the
Subservicer is entitled to retain such amounts pursuant to the Subservicing
Agreement. 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.
In the event that 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 a rate per annum equal to 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, and any amounts remitted by Subservicers as interest in respect of
Curtailments pursuant to Section 3.08(b);
(vi) to pay to itself, a Subservicer, a Seller, Residential Funding, the
Depositor 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
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;
(viii) to reimburse itself or the Depositor for expenses incurred by and
reimbursable to it or the Depositor pursuant to Section 3.01(a), 3.11, 3.13,
3.14(c), 6.03, 10.01 or otherwise, or in connection with enforcing any
repurchase, substitution or indemnification obligation of any Seller (other
than the Depositor or an Affiliate of the Depositor) pursuant to the related
Seller's Agreement;
(ix) to reimburse itself for amounts 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, including any
payoff fees or penalties or any other additional amounts payable to the
Master Servicer or Subservicer pursuant to the terms of the Mortgage Note.
(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 made 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 Primary Insurance Coverage.
(a) The Master Servicer shall not take, or permit any Subservicer to take,
any action which would result in noncoverage 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 at origination 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 Master Servicer had knowledge of such Primary Insurance
Policy. 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 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
fire insurance with extended coverage in an amount which is equal to the
lesser of the principal balance owing on such Mortgage Loan (together with
the principal balance of any mortgage loan secured by a lien that is senior
to the Mortgage Loan) or 100% 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, 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 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 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).
In the event that 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 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 Depositor. 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 or related Subservicer'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 both constitute a "significant modification" effecting an
exchange or reissuance of such Mortgage Loan under the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder) and cause
any REMIC created hereunder to fail to qualify as a REMIC under the Code or
the imposition of any tax on "prohibited transactions" or "contributions"
after the Startup 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 (or, with respect to any junior lien, a junior lien of
the same priority in relation to any senior lien on such Mortgage Loan)
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, the buyer/transferee of the
Mortgaged Property would be qualified to assume the Mortgage Loan based on
generally comparable credit quality and such release will not (based on the
Master Servicer's or related 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 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 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 related 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 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 REMIC created hereunder 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 Date would be imposed on any REMIC created
hereunder 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 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) that the substance of the assignment is, and is
intended to be, a refinancing of such Mortgage Loan and that the form of the
transaction is solely to comply with, or facilitate the transaction under,
such local laws; (iii) that the Mortgage Loan following the proposed
assignment will have a rate of interest more than the greater of (A) 3% and
(B) 5% of the annual yield of the unmodified Mortgage Loan, below or above
the rate of interest on such Mortgage Loan prior to such proposed assignment;
and (iv) 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 or action, 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 or action 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 correction of any default
on a related senior mortgage loan, 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 and 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 its funds so expended
pursuant to Section 3.10. In addition, 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 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) In the event that 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) In the event that 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 each REMIC created hereunder 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 created hereunder 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 any REMIC created
hereunder 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 (other than Subsequent Recoveries) 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 in the related Due Period
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 shall 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 shall 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 the form attached hereto as
Exhibit G, or, in the case of a Custodian, an electronic request in a form
acceptable to the Custodian, requesting delivery to it of the Custodial
File. Upon receipt of such certification and request, the Trustee shall
promptly release, or cause the Custodian to release, the related Custodial
File to the Master Servicer. The Master Servicer is authorized to execute
and deliver to the Mortgagor the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage, together with the Mortgage Note with, as
appropriate, written evidence of cancellation thereon and to cause the
removal from the registration on the MERS(R)System of such Mortgage and to
execute and deliver, on behalf of the Trustee and the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation or of
partial or full release, including any applicable UCC termination
statements. 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
the form attached as Exhibit G hereto, or, in the case of a 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 the Trustee's receipt of
notification from the Master Servicer of the 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 shall 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 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.
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) 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 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 clauses (a) and (b) above, 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 the amount of Compensating Interest (if any)
for such Distribution Date used to cover Prepayment Interest Shortfalls as
provided in Section 3.16(f) below. 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 shall 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 shall 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).
(f) With respect to any Distribution Date, Prepayment Interest Shortfalls
on the Mortgage Loans will be covered first, by the Master Servicer, but only
to the extent such Prepayment Interest Shortfalls do not exceed Eligible
Master Servicing Compensation.
(g) With respect to any Distribution Date, Compensating Interest derived
from a particular Loan Group shall be used on such Distribution Date to cover
any Prepayment Interest Shortfalls in such Loan Group and then to cover any
Prepayment Interest Shortfalls on the other Loan Group, in the same manner
and priority as Excess Cash Flow would cover such shortfalls pursuant to
Section 4.02.
Section 3.17. Reports to the Trustee and the Depositor.
Not later than fifteen days after it receives a written request from
the Trustee or the Depositor, the Master Servicer shall forward to the
Trustee and the Depositor a statement, certified by a Servicing Officer,
setting forth the status of the Custodial Account as of the close of business
on such 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 shall deliver to the Depositor 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 Depositor'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 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 Depositor'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
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
Depositor 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. Right of the Depositor in Respect of the Master Servicer.
The Master Servicer shall afford the Depositor and the Trustee, 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 Depositor
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 Depositor or
Residential Funding. The Depositor may enforce the obligation of the Master
Servicer hereunder and may, but it 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 Depositor or its designee.
Neither the Depositor nor the Trustee shall have the responsibility or
liability for any action or failure to act by the Master Servicer and they
are not obligated to supervise the performance of the Master Servicer under
this Agreement or otherwise.
Section 3.21. [Reserved].
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 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).
(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 Depositor nor the Trustee shall have
any duty or liability with respect to the calculation of any Reimbursement
Amount, nor shall the Depositor or the Trustee have any responsibility to
track or monitor the administration of the Advance Facility and the Depositor
shall not 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 and reasonably satisfactory to the Trustee 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, and such other documents in
connection with such Advance Facility as may be reasonably requested from
time to time by any Advancing Person or Advance Facility Trustee and
reasonably satisfactory to the Trustee.
(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 Depositor 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 delivery of an Opinion of
Counsel as required under 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
Depositor, 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 acting as agent 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) 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 not later than the Business Day next preceding the Distribution
Date next following the date of such investment (except that (i) if such
Permitted Investment is an obligation of the institution that maintains such
account or fund for which such institution serves as custodian, then such
Permitted Investment may mature on such Distribution Date and (ii) any other
investment may mature 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. 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.
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, if any, for such date to the interests issued in respect of REMIC I,
REMIC II and REMIC III as specified in this Section.
(b) (1) On each Distribution Date, the REMIC I Distribution Amount shall
be distributed by REMIC I to REMIC II on account of the REMIC I Regular
Interests and to the Holders of the Class R Certificates in the amounts
and with the priorities set forth in the definition thereof.
(2) On each Distribution Date, the REMIC II Distribution Amount
shall be distributed by REMIC II to REMIC III on account of the REMIC II
Regular Interests in the amounts and with the priorities set forth in the
definition thereof.
(3) Notwithstanding the distributions on the REMIC 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 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder has so notified the Master
Servicer or the Paying Agent, as the case may be, or, if such
Certificateholder has not so notified the Master Servicer or the Paying Agent
by the Record Date, by check mailed to such Certificateholder at the address
of such Holder appearing in the Certificate Register such Certificateholder's
share (which share with respect to each Class of Certificates, shall be based
on the aggregate of the Percentage Interests represented by Certificates of
the applicable Class held by such Holder of the following amounts), in the
following order of priority, in each case to the extent of the Available
Distribution Amount on deposit in the Certificate Account (except, with
respect to clause (i) below, to the extent of and in the priority of the
Class A Interest Distribution Priority, with respect to clauses (iii) through
(x) below, to the extent of the remaining Available Distribution Amount plus
the remaining Yield Maintenance Agreement Payment available for that purpose
or, with respect to clause (ix)(B) below, to the extent of prepayment charges
on deposit in the Certificate Account):
(i) to the Class A Certificateholders, the Accrued Certificate Interest
payable on the Class A Certificates with respect to such Distribution Date,
plus any related amounts accrued pursuant to this clause (i) but remaining
unpaid from any prior Distribution Date, which amount shall be allocated
pursuant to the Class A Interest Distribution Priority, being paid from and
in reduction of the Available Distribution Amount for such Distribution Date;
(ii) to the Class M Certificateholders, from the amount, if any, of the
Available Distribution Amount remaining after the foregoing distributions,
the Accrued Certificate Interest payable on the Class M Certificates with
respect to such Distribution Date, plus any related amounts accrued pursuant
to this clause (ii) but remaining unpaid from any prior Distribution Date,
sequentially, to the Class M-1 Certificateholders, Class M-2
Certificateholders, Class M-3 Certificateholders, Class M-4
Certificateholders, Class M-5 Certificateholders, Class M-6
Certificateholders, Class M-7 Certificateholders, Class M-8
Certificateholders, Class M-9 Certificateholders and Class M-10
Certificateholders, in that order, being paid from and in reduction of the
Available Distribution Amount for such Distribution Date;
(iii) the Principal Distribution Amount shall be distributed as follows, to
be applied to reduce the Certificate Principal Balance of the applicable
Certificates in each case to the extent of the remaining Principal
Distribution Amount:
(A) first, concurrently, the Group I Principal
Distribution Amount, sequentially to the Class A-I-1
Certificateholders, Class A-I-2 Certificateholders, Class A-I-3
Certificateholders and Class A-I-4 Certificateholders, in that
order, in each case until the Certificate Principal Balance
thereof has been reduced to zero, and the Group II Principal
Distribution Amount, to the Class A-II Certificateholders, until
the Certificate Principal Balance thereof has been reduced to
zero;
(B) second, after application of payments pursuant to
clause (A) above, the Group II Principal Distribution Amount,
sequentially, to the Class A-I-1 Certificateholders, Class A-I-2
Certificateholders, Class A-I-3 Certificateholders and
Class A-I-4 Certificateholders, in that order, in each case until
the Certificate Principal Balance thereof has been reduced to
zero, or the Group I Principal Distribution Amount, to the
Class A-II Certificateholders, until the Certificate Principal
Balance thereof has been reduced to zero;
(C) third, to the Class M-1 Certificateholders, the
Class M-1 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-1 Certificates has been reduced
to zero;
(D) fourth, to the Class M-2 Certificateholders, the
Class M-2 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-2 Certificates has been reduced
to zero;
(E) fifth, to the Class M-3 Certificateholders, the
Class M-3 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-3 Certificates has been reduced
to zero;
(F) sixth, to the Class M-4 Certificateholders, the
Class M-4 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-4 Certificates has been reduced
to zero;
(G) seventh, to the Class M-5 Certificateholders, the
Class M-5 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-5 Certificates has been reduced
to zero;
(H) eighth, to the Class M-6 Certificateholders, the
Class M-6 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-6 Certificates has been reduced
to zero;
(I) ninth, to the Class M-7 Certificateholders, the
Class M-7 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-7 Certificates has been reduced
to zero;
(J) tenth, to the Class M-8 Certificateholders, the
Class M-8 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-8 Certificates has been reduced
to zero;
(K) eleventh, to the Class M-9 Certificateholders, the
Class M-9 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-9 Certificates has been reduced
to zero; and
(L) twelfth, to the Class M-10 Certificateholders, the
Class M-10 Principal Distribution Amount, until the Certificate
Principal Balance of the Class M-10 Certificates has been reduced
to zero;
(iv) to the Class A Certificateholders and Class M Certificateholders, the
amount of any Prepayment Interest Shortfalls allocated thereto for such
Distribution Date, on a pro rata basis based on Prepayment Interest
Shortfalls allocated thereto to the extent not offset by Eligible Master
Servicing Compensation on such Distribution Date;
(v) to the Class A Certificateholders and Class M Certificateholders, the
amount of any Prepayment Interest Shortfalls previously allocated thereto
remaining unpaid from prior Distribution Dates together with interest thereon
at the related Pass-Through Rate, on a pro rata basis based on unpaid
Prepayment Interest Shortfalls previously allocated thereto;
(vi) (A) concurrently, (1) to the Class A-I Certificateholders, the amount
of any unpaid Group I Basis Risk Shortfalls allocated thereto, on a pro rata
basis based on the amount of unpaid Group I Basis Risk Shortfalls allocated
thereto, and (2) to the Class A-II Certificateholders, the amount of any
unpaid Group II Basis Risk Shortfalls allocated thereto, and (B)
sequentially, to the Class M-1 Certificateholders, Class M-2
Certificateholders, Class M-3 Certificateholders, Class M-4
Certificateholders, Class M-5 Certificateholders, Class M-6
Certificateholders, Class M-7 Certificateholders, Class M-8
Certificateholders, Class M-9 Certificateholders and Class M-10
Certificateholders, in that order, the related Class M Basis Risk Shortfall
for such Class and that Distribution Date;
(vii) to the Class A Certificateholders and Class M Certificateholders,
Relief Act Shortfalls allocated thereto for such Distribution Date, on a pro
rata basis based on Relief Act Shortfalls allocated thereto for such
Distribution Date;
(viii) first, to the Class A Certificateholders, the principal portion
of any Realized Losses previously allocated to those Certificates and
remaining unreimbursed, on a pro rata basis based on their respective
principal portion of any Realized Losses previously allocated to those
Certificates and remaining unreimbursed, and then, sequentially, to the
Class M-1 Certificateholders, Class M-2 Certificateholders, Class M-3
Certificateholders, Class M-4 Certificateholders, Class M-5
Certificateholders, Class M-6 Certificateholders, Class M-7
Certificateholders, Class M-8 Certificateholders, Class M-9
Certificateholders and Class M-10 Certificateholders, in that order, the
principal portion of any Realized Losses previously allocated to such
Class and remaining unreimbursed;
(ix) to the Class SB Certificates, (A) from the amount, if any, of the
Excess Cash Flow 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, (III) the
amount of any Yield Maintenance Agreement Shortfall Amount for such
Distribution Date, (IV) the amount of any Yield Maintenance Agreement
Shortfall Carry-Forward Amount for such Distribution Date and (V) for any
Distribution Date after the Certificate Principal Balance of each Class of
Class A Certificates and Class M Certificates has been reduced to zero, the
Overcollateralization Amount and (B) from prepayment charges on deposit in
the Certificate Account, any prepayment charges received on the Mortgage
Loans during the related Prepayment Period; and
(x) to the Class R Certificateholders, the balance, if any, of the Excess
Cash Flow.
(d) Notwithstanding the foregoing clause (c), 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.
(e) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
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" or "indirect participating
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 Depositor or the Master Servicer
shall have any responsibility therefor except as otherwise provided by this
Agreement or applicable law.
(f) Except as otherwise provided in Section 9.01, if the Master Servicer
anticipates that a final distribution with respect to any Class of
Certificates will be made on a Distribution Date, the Master Servicer shall,
no later than 40 days' prior to such 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 preceding such Distribution Date, distribute, or cause
to be distributed, on such date to each Holder of such Class of Certificates
a notice to the effect that: (i) the Trustee anticipates that the final
distribution with respect to such Class of Certificates 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 prior calendar month. In the event that Certificateholders required
to surrender their Certificates pursuant to Section 9.01(c) do not surrender
their Certificates for final cancellation, the Trustee shall cause funds
distributable with respect to such Certificates to be withdrawn from the
Certificate Account and credited to a separate escrow account for the benefit
of such Certificateholders as provided in Section 9.01(d).
Section 4.03. Statements to Certificateholders; 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 forward by mail or otherwise make
available electronically on its website (which may be obtained by any
Certificateholder by telephoning the Trustee at (000) 000-0000) to each
Holder and the Depositor a statement setting forth the following information
as to each Class of Certificates, in each case to the extent applicable:
(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 (including amounts payable as a portion of
the Excess Cash Flow);
(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 amount of any Advance by the Master Servicer with respect to
the Group I Loans and Group II Loans pursuant to Section 4.04;
(ix) the number and Stated Principal Balance of the Group I Loans, the
Group II Loans and the Mortgage Loans in the aggregate after giving effect to
the distribution of principal on such Distribution Date;
(x) the Certificate Principal Balance of each Class of the Certificates,
before and after giving effect to the amounts distributed on such
Distribution Date;
(xi) the Certificate Principal Balance of each Class of Class A Certificates
as of the Closing Date;
(xii) the Certificate Principal Balance of each Class of Class M Certificates
as of the Closing Date;
(xiii) the number and 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;
(xiv) on the basis of the most recent reports furnished to it by
Subservicers, (A) the number and Stated Principal Balances of Group I Loans
and Group II Loans that are Delinquent (1) 30-59 days, (2) 60-89 days and (3)
90 or more days and the number and Stated Principal Balances of Group I Loans
and Group II Loans that are in foreclosure, (B) the number and aggregate
principal balances of the Group I Loans, Group II Loans and the Mortgage
Loans in the aggregate that are Reportable Modified Mortgage Loans that are
in foreclosure and are REO Property, indicating in each case capitalized
Mortgage Loans, other Servicing Modifications and totals, and (C) for all
Reportable Modified Mortgage Loans, the number and aggregate principal
balances of the Group I Loans, Group II Loans and the Mortgage Loans in the
aggregate that have been liquidated, the subject of pay-offs and that have
been repurchased by the Master Servicer or Seller;
(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 amount, if any, of the Yield Maintenance Agreement Payment
for such Distribution Date and any shortfall in amounts previously required
to be paid under the Yield Maintenance Agreement for prior Distribution Dates;
(xix) the number, aggregate principal balance and Stated Principal Balance of
any REO Properties with respect to the Group I Loans and Group II Loans;
(xx) 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;
(xxi) the aggregate amount of Realized Losses with respect to the Group I
Loans and Group II Loans for such Distribution Date and the aggregate amount
of Realized Losses with respect to the Group I Loans and Group II Loans
incurred since the Cut-off Date;
(xxii) the Pass-Through Rate on each Class of Certificates, the Group I
Net WAC Cap Rate and the Group II Net WAC Cap Rate;
(xxiii) the Group I Basis Risk Shortfalls, Group II Basis Risk
Shortfalls, Class M Basis Risk Shortfalls and Prepayment Interest Shortfalls;
(xxiv) the Overcollateralization Amount and the Required
Overcollateralization Amount following such Distribution Date;
(xxv) the number and aggregate principal balance of the Group I Loans and
Group II Loans repurchased under Section 4.07;
(xxvi) the aggregate amount of any recoveries with respect to the
Group I Loans and Group II Loans on previously foreclosed loans from
Residential Funding;
(xxvii) the weighted average remaining term to maturity of the Group I
Loans and Group II Loans after giving effect to the amounts distributed on
such Distribution Date;
(xxviii) the weighted average Mortgage Rates of the Group I Loans and
Group II Loans after giving effect to the amounts distributed on such
Distribution Date;
(xxix) the occurrence of the Stepdown Date; and
(xxx) the amount, if any, required to be paid under any Derivative Contract
entered into pursuant to Section 4.09 hereof.
In the case of information furnished pursuant to clauses (i) and (ii)
above, the amounts shall be expressed as a dollar amount per Certificate with
a $1,000 denomination. In addition to the statement provided to the Trustee
as set forth in this Section 4.03(a), 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 U 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 (iv) and (v) of 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 the Master Servicer receives a
written request from any 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 Depositor 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 Depositor or the Master
Servicer, and (IV) notice of any failure of the Trustee to make any
distribution to the Certificateholders as required pursuant to this
Agreement. Neither the 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
T-1 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 T-2.
(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 Depositor
under the Exchange Act, as soon as reasonably practicable upon delivery of
such report to the Trustee.
Section 4.04. Distribution of Reports to the Trustee and the Depositor;
Advances by the Master Servicer.
(a) Prior to the close of business on the Business Day next succeeding each
Determination Date, the Master Servicer shall furnish a written statement
(which may be in a mutually agreeable electronic format) to the Trustee, any
Paying Agent and the Depositor (the information in such statement to be made
available to Certificateholders by the Master Servicer on request) (provided
that the Master Servicer shall use its best efforts to deliver such written
statement not later than 12:00 p.m. New York time on the second Business Day
prior to the Distribution Date) 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 amount of Prepayment Interest Shortfalls, Group I Basis Risk
Shortfalls, Group II Basis Risk Shortfalls and Class M Basis Risk Shortfalls,
(iv) the Yield Maintenance Agreement Payment, if any, for such Distribution
Date and (v) the amount, if any, payable to the Trustee by a Derivative
Counterparty. 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) remit to the Trustee for
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 sum of (A) the aggregate amount of
Monthly Payments other than Balloon Payments (with each interest portion
thereof adjusted to a per annum rate equal to the Net Mortgage Rate), less
the amount of any related Servicing Modifications, Debt Service Reductions or
Relief Act Shortfalls, on the Outstanding Mortgage Loans as of the related
Due Date in the related Due Period, which Monthly Payments were due during
the related Due Period and 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 (B) with respect to each Balloon Loan
delinquent in respect of its Balloon Payment as of the close of business on
the related Determination Date, an amount equal to the assumed Monthly
Payment (with each interest portion thereof adjusted to a per annum rate
equal to the Net Mortgage Rate) that would have been due on the related Due
Date based on the original amortization schedule for such Balloon Loan until
such Balloon Loan is finally liquidated, over any payments of interest or
principal (with each interest portion thereof adjusted to a per annum rate
equal to the Net Mortgage Rate) received from the related Mortgagor as of the
close of business on the related Determination Date and allocable to the Due
Date during the related Due Period for each month until such Balloon Loan is
finally liquidated, (ii) withdraw from amounts on deposit in the Custodial
Account and remit to the Trustee for 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
clauses (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 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 a
certificate of a Servicing Officer delivered to the Depositor and the
Trustee. In the event that 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(b)
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.
(b) All Realized Losses on the Mortgage Loans shall be allocated as
follows:
(i) first, to Excess Cash Flow in the amounts and priority as provided in
Section 4.02;
(ii) second, in reduction of the Overcollateralization Amount, until such
amount has been reduced to zero;
(iii) third, to the Class M-10 Certificates, until the aggregate Certificate
Principal Balance thereof has been reduced to zero;
(iv) fourth, to the Class M-9 Certificates, until the aggregate Certificate
Principal Balance thereof has been reduced to zero;
(v) fifth, to the Class M-8 Certificates, until the aggregate Certificate
Principal Balance thereof has been reduced to zero;
(vi) sixth, to the Class M-7 Certificates, until the aggregate Certificate
Principal Balance thereof has been reduced to zero;
(vii) seventh, to the Class M-6 Certificates, until the aggregate Certificate
Principal Balance thereof has been reduced to zero;
(viii)eighth, to the Class M-5 Certificates, until the aggregate
Certificate Principal Balance thereof has been reduced to
zero;
(ix) ninth, to the Class M-4 Certificates, until the aggregate Certificate
Principal Balance thereof has been reduced to zero;
(x) tenth, to the Class M-3 Certificates, until the aggregate Certificate
Principal Balance thereof has been reduced to zero;
(xi) eleventh, to the Class M-2 Certificates, until the aggregate
Certificate Principal Balance thereof has been reduced to
zero;
(xii) twelfth, to the Class M-1 Certificates, until the aggregate Certificate
Principal Balance thereof has been reduced to zero; and
(xiii)thirteenth, for losses on the Group I Loans, to the Class A-I-1
Certificates, Class A-I-2 Certificates, Class A-I-3
Certificates and Class A-I-4 Certificates on a pro rata
basis, based on their then outstanding Certificate
Principal Balances prior to giving effect to distributions
to be made on such Distribution Date, until the aggregate
Certificate Principal Balance of each such Class has been
reduced to zero and for losses on the Group II Loans, to
the Class A-II Certificates, until the Certificate
Principal Balance thereof has been reduced to zero.
(c) An allocation of a Realized Loss on a "pro rata basis" among two or
more specified Classes of Certificates means an allocation on a pro rata
basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such
Distribution Date in the case of the principal portion of a Realized Loss or
based on the Accrued Certificate Interest thereon payable on such
Distribution Date in the case of an interest portion of a Realized Loss. Any
allocation of the principal portion of Realized Losses (other than Debt
Service Reductions) to the Class A Certificates or Class M Certificates shall
be made by reducing the Certificate Principal Balance thereof by the amount
so allocated, which allocation shall be deemed to have occurred on such
Distribution Date; 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) 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). Allocations of the principal portion of Debt Service
Reductions 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.
(d) All Realized Losses on the Mortgage Loans shall be allocated on each
Distribution Date to the REMIC I Regular Interests as provided in the
definition of REMIC I Realized Losses.
(e) All Realized Losses on the Mortgage Loans shall be allocated on each
Distribution Date to the REMIC II Regular Interests as provided in the
definition of REMIC II Realized Losses.
(f) 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 the REMIC III Regular Interest SB-IO. Realized Losses allocated
to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be
deemed to reduce Accrued Certificate Interest on the REMIC III Regular
Interest SB-IO. Realized Losses allocated to the Overcollateralization
Amount pursuant to paragraph (b) of this Section shall be deemed first to
reduce the principal balance of the REMIC III Regular Interest SB-PO until
such principal balance shall have been reduced to zero and thereafter to
reduce accrued and unpaid interest on the REMIC III Regular Interest SB-IO.
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 interest received in a trade or
business, the reports of foreclosures and abandonments of any Mortgaged
Property and the informational returns relating to cancellation of
indebtedness income with respect to any Mortgaged Property required by
Sections 6050H, 6050J and 6050P of the Code, respectively, and deliver to the
Trustee an Officers' Certificate on or before March 31 of each year,
beginning with the first March 31 that occurs at least six months after the
Cut-off Date, stating that such reports have been filed. Such reports shall
be in form and substance sufficient to meet the reporting requirements
imposed by such Sections 6050H, 6050J and 6050P of the Code.
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.
(a) With respect to any Mortgage Loan which 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 is 90 days or more delinquent at the time of repurchase.
(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.
Section 4.08. Limited Mortgage Loan Repurchase Right.
The Limited Repurchase Right Holder will have the option at any time to
purchase any of the Mortgage Loans from the Trustee at the Purchase Price, up
to a maximum of five Mortgage Loans. In the event that this option is
exercised as to any five Mortgage Loans in the aggregate, this option will
thereupon terminate. If at any time the Limited Repurchase Right Holder
makes a payment to the Certificate Account covering the amount of the
Purchase Price for such a Mortgage Loan, and the Limited Repurchase Right
Holder 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 Limited Repurchase Right Holder without recourse to the
Limited Repurchase Right Holder 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 Limited Repurchase Right Holder 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.
Any tax on "prohibited transactions" (as defined in Section 860F(a)(2) of the
Code) imposed on any REMIC resulting from the exercise of the optional
repurchase in this Section 4.08 shall in no event be payable by the Trustee.
Section 4.09. Derivative Contracts.
(a) The Trustee shall, at the written direction of the Master Servicer, on
behalf of the Trust Fund, enter into Derivative Contracts, solely for the
benefit of the Class SB Certificates. Any such Derivative Contract shall
constitute a fully prepaid agreement. The Master Servicer shall determine,
in its sole discretion, whether any Derivative Contract conforms to the
requirements of clauses (b) and (c) of this Section 4.09. Any acquisition of
a Derivative Contract shall be accompanied by an appropriate amendment to
this Agreement, including an Opinion of Counsel, as provided in
Section 11.01, and either (i) an Opinion of Counsel to the effect that the
existence of the Derivative Contract will not adversely affect the
availability of the exemptive relief afforded under ERISA by U.S. Department
of Labor Prohibited Transaction Exemption ("PTE") 94-29, as most recently
amended, 67 Fed. Reg. 54487 (Aug. 22, 2002), to the Holders of the Class A
Certificates or the Class M Certificates, as of the date the Derivative
Contract is acquired by the Trustee; or (ii) the consent of each holder of a
Class A Certificate or Class M Certificate to the acquisition of such
Derivative Contract. All collections, proceeds and other amounts in respect
of the Derivative Contracts payable by the Derivative Counterparty shall be
distributed to the Class SB Certificates on the Distribution Date following
receipt thereof by the Trustee. In no event shall such an instrument
constitute a part of any REMIC created hereunder. In addition, in the event
any such instrument is deposited, the Trust Fund shall be deemed to be
divided into two separate and discrete sub-trusts. The assets of one such
sub-trust shall consist of all the assets of the Trust Fund other than such
instrument and the assets of the other sub-trust shall consist solely of such
instrument.
(b) Any Derivative Contract that provides for any payment obligation on the
part of the Trust Fund must (i) be without recourse to the assets of the
Trust Fund, (ii) contain a non-petition covenant provision from the
Derivative Counterparty, (iii) limit payment dates thereunder to Distribution
Dates and (iv) contain a provision limiting any cash payments due to the
Derivative Counterparty on any day under such Derivative Contract solely to
funds available therefor in the Certificate Account to make payments to the
Holders of the Class SB Certificates on such Distribution Date.
(c) Each Derivative Contract must (i) provide for the direct payment of any
amounts by the Derivative Counterparty thereunder to the Certificate Account
at least one Business Day prior to the related Distribution Date, (ii)
contain an assignment of all of the Trust Fund's rights (but none of its
obligations) under such Derivative Contract to the Trustee on behalf the
Class SB Certificates and shall include an express consent of the Derivative
Counterparty to such assignment, (iii) provide that in the event of the
occurrence of an Event of Default, such Derivative Contract shall terminate
upon the direction of a majority Percentage Interest of the Class SB
Certificates, and (iv) prohibit the Derivative Counterparty from
"setting-off" or "netting" other obligations of the Trust Fund and its
Affiliates against such Derivative Counterparty's payment obligations
thereunder.
Section 4.10. Yield Maintenance Agreement.
(a) In the event that the Trustee does not receive by the Business Day
preceding a Distribution Date the amount as specified by the Master Servicer
pursuant to Section 4.04(a)(iv) hereof as the amount to be paid with respect
to such Distribution Date by the Yield Maintenance Agreement Provider under
the Yield Maintenance Agreement, the Trustee shall enforce the obligation of
the Yield Maintenance Agreement Provider thereunder. The parties hereto
acknowledge that the Yield Maintenance Agreement Provider shall be making all
calculations, and determine the amounts to be paid, under the Yield
Maintenance Agreement. Absent manifest error, the Trustee may conclusively
rely on such calculations and determination and any notice received by it
from the Master Servicer pursuant to Section 4.04(a)(iv) hereof.
(b) The Trustee shall deposit or cause to be deposited any amount received
under the Yield Maintenance Agreement into the Certificate Account on the
date such amount is received from the Yield Maintenance Agreement Provider
under the Yield Maintenance Agreement (including termination payments, if
any). All payments received under the Yield Maintenance Agreement shall be
distributed in accordance with the priorities set forth in Section 4.02(c)
hereof.
(c) In the event that the Yield Maintenance Agreement, or any replacement
thereof, terminates prior to the Distribution Date in October 2011, 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
Agreement is sufficient therefor and only to the extent of the termination
payment received from the Yield Maintenance Agreement Provider, shall
(i) cause a new yield maintenance agreement provider to assume the
obligations of such terminated yield maintenance agreement provider or
(ii) cause a new yield maintenance agreement provider to enter into a new
yield maintenance agreement with the Trust Fund having substantially similar
terms as those set forth in the Yield Maintenance Agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Class A Certificates, Class M Certificates, Class SB Certificates
and Class R Certificates shall be substantially in the forms set forth
in Exhibits A, B, C and D, respectively, and shall, on original issue,
be executed and delivered by the Trustee to the Certificate Registrar
for authentication and delivery to or upon the order of the Depositor
upon receipt by the Trustee or the Custodian of the documents specified
in Section 2.01. Each Class of Class A Certificates and the Class M-1
Certificates, Class M-2 Certificates and Class M-3 Certificates shall
be issuable in minimum dollar denominations of $100,000 and integral
multiples of $1 in excess thereof. The Class M-4 Certificates,
Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates,
Class M-8 Certificates, Class M-9 Certificates and Class M-10
Certificates shall be issuable in minimum dollar denominations of
$250,000 and integral multiples of $1 in excess thereof. The Class SB
Certificates shall be issuable in registered, certificated form in
minimum percentage interests of 5.00% and integral multiples of 0.01%
in excess thereof. The Class R Certificates shall be issued in
registered, certificated form in minimum percentage interests of 20.00%
and integral multiples of 0.01% in excess thereof; provided, however,
that one Class R Certificate of each Class will be issuable to the
REMIC Administrator as "tax matters person" pursuant to
Section 10.01(c) in a minimum denomination representing a Percentage
Interest of not less than 0.01%. 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) The Class A Certificates and Class M Certificates shall initially be
issued as one or more Certificates registered in the name of the Depository
or its nominee and, except as provided below, registration of such
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 Certificate Owners
shall hold their respective Ownership Interests in and to each Class A
Certificate and Class M Certificate 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 Depositor 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 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 with respect to any Book-Entry Certificate (i)(A) the Depositor
advises the Trustee in writing that the Depository is no longer willing or
able to properly discharge its responsibilities as Depository with respect to
such Book-Entry Certificate and (B) the Depositor is unable to locate a
qualified successor, or (ii) (A) the Depositor at its option advises the
Trustee in writing that it elects to terminate the book-entry system for such
Book-Entry Certificate through the Depository and (B) upon receipt of notice
from the Depository of the Depositor's election to terminate the book-entry
system for such Book-Entry Certificate, the Depository Participants holding
beneficial interests in such Book-Entry Certificates agree to initiate such
termination, the Trustee shall notify all Certificate Owners of such
Book-Entry Certificate, through the Depository, of the occurrence of any such
event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration of transfer, the Trustee shall issue the
Definitive Certificates.
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 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 to 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 amount of the Definitive
Certificates.
None of the Depositor, 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
this 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) Each of the Certificates is intended to be a "security" governed by
Article 8 of the Uniform Commercial Code as in effect in the State of New
York and any other applicable jurisdiction, to the extent that any of such
laws may be applicable.
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 SB Certificate or Class R
Certificate, upon satisfaction of the conditions set forth below, the Trustee
shall execute and the Certificate Registrar shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new
Certificates of a like Class and aggregate Percentage Interest.
(c) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of a like Class and
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and the Certificate
Registrar shall authenticate and deliver the Certificates of such Class which
the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee or the Certificate Registrar) be duly endorsed by, or
be accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class SB
Certificate or Class R 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 (the "1933 Act"), and any applicable
state securities laws or is made in accordance with said Act and laws.
Except as otherwise provided in this Section 5.02(d), in the event that a
transfer of a Class SB Certificate or Class R Certificate is to be made, (i)
unless the Depositor directs the Trustee otherwise, the Trustee shall require
a written Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee and the Depositor that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from said Act and laws or is being made pursuant to said Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee, the
Trust Fund, the Depositor or the Master Servicer, and (ii) the Trustee shall
require the transferee to execute a representation letter, substantially in
the form of Exhibit I hereto, and the Trustee shall require the transferor to
execute a representation letter, substantially in the form of Exhibit J
hereto, each acceptable to and in form and substance satisfactory to the
Depositor and the Trustee certifying to the Depositor and the Trustee the
facts surrounding such transfer, which representation letters shall not be an
expense of the Trustee, the Trust Fund, the Depositor or the Master
SERVICER. In lieu of the requirements set forth in the preceding sentence,
transfers of Class SB Certificates or Class R Certificates may be made in
accordance with this Section 5.02(d) if the prospective transferee of such a
Certificate provides the Trustee and the Master Servicer with an investment
letter substantially in the form of Exhibit N attached hereto, which
investment letter shall not be an expense of the Trustee, the Depositor, or
the Master Servicer, and which investment letter states that, among other
things, such transferee (i) 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 (ii) is
aware that the proposed transferor intends to rely on the exemption from
registration requirements under the 1933 Act provided by Rule 144A. The
Holder of a Class SB Certificate or Class R Certificate desiring to effect
any transfer, sale, pledge or other disposition shall, and does hereby agree
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 this Agreement.
(e) (i) In the case of any Class SB Certificate or Class R Certificate
presented for registration in the name of any Person, either (A) the Trustee
shall require an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee, the Depositor and the Master Servicer to the
effect that the purchase or holding of such Class SB Certificate or Class R
Certificate is permissible under applicable law, will not constitute or
result in any non-exempt prohibited transaction under Section 406 of 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
this Agreement, which Opinion of Counsel shall not be an expense of the
Trustee, the Depositor or the Master Servicer, or (B) the prospective
transferee shall be required to provide the Trustee, the Depositor and the
Master Servicer with a certification to the effect set forth in Exhibit P
(with respect to a Class SB Certificate) or in paragraph fifteen of
Exhibit H-1 (with respect to a Class R Certificate), which the Trustee may
rely upon without further inquiry or investigation, or such other
certifications as the Trustee may deem desirable or necessary in order to
establish that such transferee or the Person in whose name such registration
is requested 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
accounts, 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 of the foregoing, a "Plan Investor").
(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 U.S.
Department of Labor Prohibited Transaction Exemption ("PTE") 94-29, as most
recently amended by PTE 2002-41, 67 Fed. Reg. 54487 (Aug. 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
Fitch, Standard & Poor's or Xxxxx'x or (c) (x) such Transferee is an
insurance company, (y) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account"
(as defined in Prohibited Transaction Class Exemption ("PTCE") 95-60), and
(z) 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").
(iii) 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 (x)
is not a Plan Investor, (y) acquired such Certificate in compliance with the
RFC Exemption or (z) 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.
(iv) Any purported Certificate Owner whose acquisition or
holding of any Class SB Certificate or 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 Depositor, the Trustee,
the Master Servicer, any Subservicer, any underwriter 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 H-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 H-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 H-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 H-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.
(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, will 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.
(iii) 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.
(iv) The provisions of this Section 5.02(f) set forth prior to this clause
(iv) 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 the
Class A Certificates or Class M 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) a 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 REMIC created hereunder to cease to
qualify as a REMIC and will not cause (x) any REMIC created hereunder 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 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 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 Depositor, the Master Servicer, the
Trustee, the Certificate Registrar nor any agent of the Depositor, the Master
Servicer, the Trustee or the Certificate Registrar shall be affected by
notice to the contrary except as provided in Section 5.02(f).
Section 5.05. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making
distributions to 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 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 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
will hold all sums held by it for the payment to Certificateholders in trust
for the benefit of the Certificateholders entitled thereto until such sums
shall be paid 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.
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the Master
Servicer.
The Depositor 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 Depositor and the Master
Servicer herein. By way of illustration and not limitation, the Depositor 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 Depositor or the Master
Servicer; Assignment of Rights and Delegation of Duties by
Master Servicer.
(a) The Depositor 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 will 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 Depositor 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 Depositor
or the Master Servicer shall be a party, or any Person succeeding to the
business of the Depositor or the Master Servicer, shall be the successor of
the Depositor 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 Depositor, 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 Depositor, is willing to
service the Mortgage Loans and executes and delivers to the Depositor and the
Trustee an agreement, in form and substance reasonably satisfactory to the
Depositor 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 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 Depositor, the Master
Servicer and Others.
None of the Depositor, the Master Servicer or any of the directors,
officers, employees or agents of the Depositor 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 Depositor, the Master Servicer or
any such Person against any breach of warranties, representations or
covenants 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 Depositor, the Master Servicer and any director,
officer, employee or agent of the Depositor 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
Depositor, the Master Servicer and any director, officer, employee or agent
of the Depositor 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
Depositor 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 Depositor 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 Depositor 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. Depositor and Master Servicer Not to Resign.
Subject to the provisions of Section 6.02, neither the Depositor 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 Depositor or the Master Servicer shall be
evidenced by an Opinion of Counsel (at the expense of the resigning party) 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 distribute or cause to be distributed
to 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 either case, such failure shall continue unremedied
for a period of 5 days after the date upon which written notice of such
failure, requiring such failure to be remedied, shall have been given
to the Master Servicer by the Trustee or the Depositor or to the Master
Servicer, the Depositor 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 Depositor, or to the Master Servicer, the Depositor and the
Trustee by the Holders of Certificates of any Class evidencing, as to
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 Depositor or the
Trustee shall at the direction of Holders of Certificates entitled to at
least 51% of the Voting Rights by notice in writing to the Master Servicer
(and to the Depositor if given by the Trustee or to the Trustee if given by
the Depositor), 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;
provided, however, that a successor to the Master Servicer is appointed
pursuant to Section 7.02 and such successor Master Servicer shall have
accepted the duties of Master Servicer effective upon the resignation of the
Master Servicer. If an Event of Default described in clause (vi) hereof
shall occur, the Trustee shall, by notice to the Master Servicer and the
Depositor, 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 (or its designee) as successor Master Servicer 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 Depositor shall deliver to the
Trustee, as successor Master Servicer, a copy of the Program Guide.
Section 7.02. Trustee or Depositor 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 Depositor and with the
Depositor'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 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 successor
Master Servicer. As compensation therefor, the Trustee as successor Master
Servicer 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 Depositor, the Trustee, the Custodian and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Any successor Master Servicer
appointed pursuant to this Section 7.02 shall not receive a Servicing Fee
with respect any Mortgage Loan not directly serviced by the Master Servicer
on which the Subservicing Fee (i) accrues at a rate of less than 0.50% per
annum and (ii) has to be increased to a rate of 0.50% per annum in order to
hire a Subservicer. The Master Servicer shall pay the reasonable expenses of
the Trustee in connection with any servicing transfer hereunder.
(b) In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall
represent and warrant that it is a member of MERS in good standing and shall
agree to comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans that are
registered with MERS, in which case the predecessor Master Servicer shall
cooperate with the successor Master Servicer in causing MERS to revise its
records to reflect the transfer of servicing to the successor Master Servicer
as necessary under MERS' rules and regulations, or (ii) the predecessor
Master Servicer shall cooperate with the successor Master Servicer in causing
MERS to execute and deliver an assignment of Mortgage in recordable form to
transfer the Mortgage from MERS to the Trustee and to execute and deliver
such other notices, documents and other instruments as may be necessary or
desirable to effect a transfer of such Mortgage Loan or servicing of such
Mortgage Loan on the MERS(R)System to the successor Master Servicer. The
predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The predecessor Master
Servicer shall bear any and all fees of MERS, costs of preparing any
assignments of Mortgage, and fees and costs of filing any assignments of
Mortgage that may be required under this subsection (b). The successor
Master Servicer shall cause such assignment to be delivered to the Trustee or
the Custodian promptly upon receipt of the original with evidence of
recording thereon or a copy certified by the public recording office in which
such assignment was recorded.
Section 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
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 as provided in Section 7.04 hereof.
Section 7.04. Waiver of Events of Default.
The Holders representing at least 66% of the Voting Rights of
Certificates affected by a default or Event of Default hereunder may waive
any 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), (ii) or (iii).
Upon any such waiver of a default or Event of Default by the Holders
representing the requisite percentage of Voting Rights of Certificates
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 of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in
this Agreement. In case an Event of Default has occurred (which has not been
cured or waived), the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise as a prudent investor would exercise or use under the
circumstances in the conduct of such investor's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. The Trustee shall notify the
Certificateholders of any such documents which do not materially conform to
the requirements of this Agreement in the event that the Trustee, after so
requesting, does not receive satisfactorily corrected documents. The Trustee
shall forward or cause to be forwarded in a timely fashion the notices,
reports and statements required to be forwarded by the Trustee pursuant to
Sections 4.03, 7.03, and 10.01. The Trustee shall furnish in a timely
fashion to the 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 each REMIC created hereunder 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 Depositor 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 the Certificateholders holding
Certificates which evidence, Percentage Interests aggregating not less
than 25% of the affected Classes 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 Depositor 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), 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 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 to do so by the 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 provided that the Trustee shall remain liable for any acts of
such 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 (and except as provided for
in Section 2.04), 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 REMIC created hereunder 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 Depositor or the
Master Servicer as the case may be, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (except that
the Certificates shall be duly and validly executed and authenticated by it
as Certificate Registrar) or of any Mortgage Loan or related document, or of
MERS or the MERS(R)System. Except as otherwise provided herein, the Trustee
shall not be accountable for the use or application by the Depositor 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
Depositor 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 Depositor 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 shall 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 its part, arising out of, or in
connection with, the acceptance and administration of the Trust Fund,
including its obligation to execute the DTC Letter in its individual
capacity, and 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 Yield Maintenance Agreement, 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 pertain to any loss,
liability or expense of the Trustee, including the costs and expenses of
defending itself against any claim, incurred in connection with any actions
taken by the Trustee at the direction of Certificateholders pursuant to the
terms of this Agreement.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a national banking
association or a New York banking corporation having its principal office in
a state and city acceptable to the Depositor and organized and doing business
under the laws of such state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination
by federal or state authority. If such corporation or national banking
association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for 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 Depositor and the
Master Servicer. Upon receiving such notice of resignation, the Depositor
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, then 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 Depositor, 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 Depositor 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 Depositor determines that the Trustee has
failed (i) to distribute or cause to be distributed to 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 Depositor)
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 Depositor, then the Depositor 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 Depositor 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 Depositor, 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 Depositor 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 Depositor, 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 Depositor 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 Depositor 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
Depositor.
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
Depositor, or shall, at the direction of the Master Servicer and the
Depositor, appoint custodians who are not Affiliates of the Depositor or the
Master Servicer to hold all or a portion of the Custodial Files as agent for
the Trustee, by entering into a Custodial Agreement. The Trustee is hereby
directed to enter into a Custodial Agreement with Xxxxx Fargo Bank, N.A.
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 shall maintain an office or agency in the City of St. Xxxx,
Minnesota where Certificates may be surrendered for registration of transfer
or exchange. The Trustee initially designates its offices located at the
Corporate Trust Office for the purpose of keeping the Certificate Register.
The Trustee shall maintain an office at the address stated in
Section 11.05(c) hereof where notices and demands to or upon the Trustee in
respect of this Agreement may be served.
Section 8.13. DTC Letter of Representations.
The Trustee is hereby authorized and directed to, and agrees that it
shall, enter into the DTC Letter on behalf of the Trust Fund and in its
individual capacity as agent thereunder.
Section 8.14. Yield Maintenance Agreement.
The Trustee is hereby authorized and directed to, and agrees that it
shall, enter into the Yield Maintenance Agreement on behalf of the Trust Fund.
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase or Liquidation of All Mortgage
Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities of the Depositor, 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 Depositor to send certain
notices as hereinafter set forth) shall terminate upon the last action
required to be taken by the Trustee on the Final Distribution Date pursuant
to this Article IX following the earlier of:
(i) the later of the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan, or
(ii) at the option of the Master Servicer, the purchase of all Mortgage
Loans and all property acquired in respect of any Mortgage Loan
remaining in the Trust Fund, at a price equal to 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) (and if such purchase is made by the
Master Servicer only, 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 REMIC
created hereunder as a REMIC.
The purchase price paid by the Master Servicer pursuant to
Section 9.01(a)(ii) shall also include any amounts owed by Residential
Funding pursuant to the last paragraph of Section 4 of the Assignment
Agreement in respect of any liability, penalty or expense that resulted from
a breach of the representation and warranty set forth in clause (xlvii) of
Section 4 of the Assignment Agreement that remain unpaid on the date of such
purchase.
The right of the Master Servicer to purchase all of the Mortgage Loans
pursuant to clause (ii) above is conditioned upon the date of such purchase
occurring on or after the Optional Termination Date. 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 being purchased. In addition,
the Master Servicer shall provide to the Trustee the certification required
by Section 3.15, and the Trustee and the Custodian shall, promptly following
payment of the purchase price, release to the Master Servicer the Custodial
Files pertaining to the Mortgage Loans being purchased.
In addition to the foregoing, on any Distribution Date on or after the
Optional Termination Date, the Master Servicer shall have the right, at its
option, to purchase the Class A Certificates, Class M Certificates and
Class SB Certificates in whole, but not in part, at a price equal to the sum
of the outstanding Certificate Principal Balance of such Certificates plus
the sum of one month's Accrued Certificate Interest thereon, any previously
unpaid Accrued Certificate Interest, and any unpaid Prepayment Interest
Shortfalls previously allocated thereto and, in the case of Prepayment
Interest Shortfalls, accrued interest thereon at the applicable Pass-Through
Rate through the date of such optional termination. If the Master Servicer
exercises this right to purchase the outstanding Class A Certificates,
Class M Certificates and Class SB Certificates, the Master Servicer will
promptly terminate the respective obligations and responsibilities created
hereby in respect of these Certificates pursuant to this Article IX.
(b) The Master Servicer shall give the Trustee not less than 40 days' prior
notice of the Distribution Date on which (1) the Master Servicer anticipates
that the final distribution will be made to Certificateholders as a result of
the exercise by the Master Servicer of its right to purchase the Mortgage
Loans or on which (2) the Master Servicer anticipates that the Certificates
will be purchased as a result of the exercise by the Master Servicer to
purchase the outstanding Certificates. Notice of any termination, specifying
the anticipated Final Distribution Date (which shall be a date that would
otherwise be a Distribution Date) upon which the Certificateholders may
surrender their Certificates to the Trustee (if so required by the terms
hereof) for payment of the final distribution and cancellation or notice of
any purchase of the outstanding Certificates, specifying the Distribution
Date upon which the Holders may surrender their Certificates to the Trustee
for payment, shall be given promptly by the Master Servicer (if it is
exercising the right to purchase the Mortgage Loans or to purchase the
outstanding Certificates), or by the Trustee (in any other case) by letter to
the Certificateholders (with a copy to the Certificate Registrar) mailed 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 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 that payment will be made only upon presentation and
surrender of the Certificates at the office or agency of the Trustee therein
specified.
If the Master Servicer or the Trustee is obligated to give notice to
Certificateholders as required above, it shall give such notice to the
Certificate Registrar at the time such notice is given to
Certificateholders. In the event of a purchase of the Mortgage Loans by the
Master Servicer, the Master Servicer shall deposit in the Certificate Account
before the Final Distribution Date in immediately available funds an amount
equal to the purchase price computed as provided above. As a result of the
exercise by the Master Servicer of its right to purchase the outstanding
Certificates, the Master Servicer shall deposit in the Certificate Account,
before the Distribution Date on which such purchase is to occur, in
immediately available funds, an amount equal to the purchase price for the
Certificates computed as provided above, and provide notice of such deposit
to the Trustee. The Trustee shall withdraw from such account the amount
specified in subsection (c) below and distribute such amount to the
Certificateholders as specified in subsection (c) below. The Master Servicer
shall provide to the Trustee written notification of any change to the
anticipated Final Distribution Date as soon as practicable. If the Trust
Fund is not terminated on the anticipated Final Distribution Date, for any
reason, the Trustee shall promptly mail notice thereof to each affected
Certificateholder.
(c) Upon presentation and surrender of the Class A Certificates, Class M
Certificates and Class SB Certificates by the Certificateholders thereof, the
Trustee shall distribute to such Certificateholders (i) the amount otherwise
distributable on such Distribution Date, if not in connection with the Master
Servicer's election to repurchase the Mortgage Loans or the outstanding
Class A Certificates, Class M Certificates and Class SB Certificates, or (ii)
if the Master Servicer elected to so repurchase the Mortgage Loans or the
outstanding Class A Certificates, Class M Certificates and Class SB
Certificates, an amount equal to the price paid pursuant to Section 9.01(a)
as follows: first, with respect to the Class A Certificates, pari passu, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest, second, with respect to the Class M-1
Certificates, the outstanding Certificate Principal Balance thereof, plus
Accrued Certificate Interest thereon for the related Interest Accrual Period
and any previously unpaid Accrued Certificate Interest, third, with respect
to the Class M-2 Certificates, the outstanding Certificate Principal Balance
thereof, plus Accrued Certificate Interest thereon for the related Interest
Accrual Period and any previously unpaid Accrued Certificate Interest,
fourth, with respect to the Class M-3 Certificates, the outstanding
Certificate Principal Balance thereof, plus Accrued Certificate Interest
thereon for the related Interest Accrual Period and any previously unpaid
Accrued Certificate Interest, fifth, with respect to the Class M-4
Certificates, the outstanding Certificate Principal Balance thereof, plus
Accrued Certificate Interest thereon for the related Interest Accrual Period
and any previously unpaid Accrued Certificate Interest, sixth, with respect
to the Class M-5 Certificates, the outstanding Certificate Principal Balance
thereof, plus Accrued Certificate Interest thereon for the related Interest
Accrual Period and any previously unpaid Accrued Certificate Interest,
seventh, with respect to the Class M-6 Certificates, the outstanding
Certificate Principal Balance thereof, plus Accrued Certificate Interest
thereon for the related Interest Accrual Period and any previously unpaid
Accrued Certificate Interest, eighth, with respect to the Class M-7
Certificates, the outstanding Certificate Principal Balance thereof, plus
Accrued Certificate Interest thereon for the related Interest Accrual Period
and any previously unpaid Accrued Certificate Interest, ninth, with respect
to the Class M-8 Certificates, the outstanding Certificate Principal Balance
thereof, plus Accrued Certificate Interest thereon for the related Interest
Accrual Period and any previously unpaid Accrued Certificate Interest, tenth,
with respect to the Class M-9 Certificates, the outstanding Certificate
Principal Balance thereof, plus Accrued Certificate Interest thereon for the
related Interest Accrual Period and any previously unpaid Accrued Certificate
Interest, eleventh, with respect to the Class M-10 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest, twelfth, with respect to the Class A
Certificates and Class M Certificates, the amount of any Prepayment Interest
Shortfalls allocated thereto for such Distribution Date or remaining unpaid
from prior Distribution Dates and accrued interest thereon at the applicable
Pass-Through Rate, on a pro rata basis based on Prepayment Interest
Shortfalls allocated thereto for such Distribution Date or remaining unpaid
from prior Distribution Dates, and thirteenth, with respect to the Class SB
Certificates, all remaining amounts.
(d) In the event that any Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before the Final
Distribution Date, the Master Servicer (if it exercised its right to purchase
the Mortgage Loans) or the Trustee (in any other case), shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice any Certificate shall
not have been surrendered for cancellation, the Trustee shall take
appropriate steps as directed by the Master Servicer to contact the remaining
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining the Certificate Account and of contacting
Certificateholders shall be paid out of the assets which remain in the
Certificate Account. If within nine months after the second notice any
Certificates shall not have been surrendered for cancellation, the Trustee
shall pay to the Master Servicer all amounts distributable to the holders
thereof and the Master Servicer shall thereafter hold such amounts until
distributed to such Holders. No interest shall accrue or be payable to any
Certificateholder on any amount held in the Certificate Account or by the
Master Servicer as a result of such Certificateholder's failure to surrender
its Certificate(s) for final payment thereof in accordance with this
Section 9.01 and the Certificateholders shall look only to the Master
Servicer for such payment.
(e) If any Certificateholders do not surrender their Certificates on or
before the Distribution Date on which a purchase of the outstanding
Certificates is to be made, the Master Servicer shall give a second written
notice to such Certificateholders to surrender their Certificates for payment
of the purchase price therefor. If within six months after the second notice
any Certificate shall not have been surrendered for cancellation, the Trustee
shall take appropriate steps as directed by the Master Servicer to contact
the Holders of such Certificates concerning surrender of their Certificates.
The costs and expenses of maintaining the Certificate Account and of
contacting Certificateholders shall be paid out of the assets which remain in
the Certificate Account. If within nine months after the second notice any
Certificates shall not have been surrendered for cancellation in accordance
with this Section 9.01, the Trustee shall pay to the Master Servicer all
amounts distributable to the Holders thereof and shall have no further
obligation or liability therefor and the Master Servicer shall thereafter
hold such amounts until distributed to such Holders. No interest shall
accrue or be payable to any Certificateholder on any amount held in the
Certificate Account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for payment in
accordance with this Section 9.01. Any Certificate that is not surrendered
on the Distribution Date on which a purchase pursuant to this Section 9.01
occurs as provided above will be deemed to have been purchased and the Holder
as of such date will have no rights with respect thereto except to receive
the purchase price therefor minus any costs and expenses associated with such
Certificate Account and notices allocated thereto. Any Certificates so
purchased or deemed to have been purchased on such Distribution Date shall
remain outstanding hereunder. The Master Servicer shall be for all purposes
the Holder thereof as of such date.
Section 9.02. Additional Termination Requirements.
(a) Each of REMIC I, REMIC II and REMIC III as the case may be, shall be
terminated in accordance with the following additional requirements, unless
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 any REMIC created hereunder to comply with the
requirements of this Section 9.02 will not (i) result in the imposition on
the Trust Fund of taxes on "prohibited transactions," as described in
Section 860F of the Code, or (ii) cause any REMIC created hereunder 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 of REMIC I, REMIC II and REMIC III, and specify the first day of
such period in a statement attached to the Trust Fund's final Tax
Return pursuant to Treasury Regulationsss.1.860F-1. The Master Servicer
also shall satisfy all of the requirements of a qualified liquidation
for each of REMIC I, REMIC II and REMIC III, under Section 860F of the
Code and the 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 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 of REMIC I, REMIC II and REMIC III at
the expense of the Trust Fund in accordance with the terms and conditions of
this Agreement.
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The REMIC Administrator shall make an election to treat each of
REMIC I, REMIC II and REMIC III as a REMIC under the Code and, if necessary,
under applicable state law. 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. The REMIC I Regular
Interests shall be designated as the "regular interests" and Component I of
the Class R Certificates shall be designated as the sole Class of "residual
interests" in REMIC I. The REMIC II Regular Interests shall be designated as
the "regular interests" and Component II of the Class R Certificates shall be
designated as the sole Class of "residual interests" in REMIC II. The
Class A, Class M and Class SB Certificates shall be designated as the
"regular interests" in REMIC III and Component III of the Class R
Certificates shall be designated the sole class of "residual interests" in
REMIC III. The REMIC Administrator and the Trustee shall not permit the
creation of any "interests" (within the meaning of Section 860G of the Code)
in the REMIC other than the Certificates.
(b) The Closing Date is hereby designated as the "startup day" of each of
REMIC I, REMIC II and REMIC III within the meaning of Section 860G(a)(9) of
the Code (the "Startup Date").
(c) The REMIC Administrator shall hold a Class R Certificate in each REMIC
representing a 0.01% Percentage Interest of the Class R Certificates in each
REMIC and shall be designated as the "tax matters person" with respect to
each of REMIC I, REMIC II and REMIC III 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 of REMIC I, REMIC II and REMIC III 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 the REMICs
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, if any, 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 created hereunder.
(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 thereof 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). In performing their duties
as more specifically set forth herein, 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 and the scope of duties
more specifically set forth herein, that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of any
REMIC created hereunder as a REMIC or (ii) result in the imposition of a tax
upon any REMIC created hereunder (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code (except
as provided in Section 2.04) 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
the Trust Fund created hereunder, endanger such status or, unless the Master
Servicer or 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 or inaction, as the case may be. In addition, prior to taking
any action with respect to the Trust Fund or its assets, or causing the Trust
Fund to take any action, which is not expressly permitted under the terms of
this Agreement, the Trustee shall 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 the Trust Fund and the Trustee shall not take any such action or
cause the Trust Fund 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 or the REMIC Administrator,
as applicable, 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 the REMIC as "qualified mortgages" as defined in Section 860G(a)(3)
of the Code and "permitted investments" as defined in Section 860G(a)(5) of
the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of
any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of any REMIC as defined in
Section 860G(c) of the Code, on any contributions to any REMIC after the
Startup Date therefor pursuant to Section 860G(d) of the Code, or any other
tax 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 in its role as
Master Servicer or REMIC Administrator 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 on a calendar
year and on an accrual basis or as otherwise may be required by the REMIC
Provisions.
(i) Following the Startup Date, neither the Master Servicer nor the Trustee
shall accept any contributions of assets to any REMIC 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 any REMIC
will not cause any REMIC created hereunder to fail to qualify as a REMIC at
any time that any Certificates are outstanding or subject any such 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 REMIC created hereunder 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 purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the principal
balance of each regular interest in each REMIC would be reduced to zero is
November 25, 2036, which is the Distribution Date in the month following the
last scheduled payment on any Mortgage Loan.
(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 the Trust Fund.
(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 the Trust Fund, (iii) the
termination of any REMIC pursuant to Article IX of this Agreement or (iv) a
purchase of Mortgage Loans pursuant to Article II or III of this Agreement)
or acquire any assets for any REMIC or sell or dispose of any investments in
the Custodial Account or the Certificate Account for gain, or accept any
contributions to any REMIC after the Closing Date unless it has received an
Opinion of Counsel that such sale, disposition, substitution or acquisition
will not (a) affect adversely the status of any REMIC created hereunder as a
REMIC or (b) unless the Master Servicer has determined in its sole discretion
to indemnify the Trust Fund against such tax, cause any REMIC to be subject
to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions.
Section 10.02. Master Servicer, REMIC Administrator and Trustee
Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Depositor, 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 Depositor or the Master Servicer, as a result
of a breach of the Trustee's covenants set forth in Article VIII or this
Article X. In the event that Residential Funding is no longer the Master
Servicer, the Trustee shall indemnify Residential Funding for any taxes and
costs including, without limitation, any reasonable attorneys fees imposed on
or incurred by Residential Funding 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
Depositor, 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 Depositor, 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 Depositor,
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 Depositor, 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.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
(a) This Agreement or any Custodial Agreement may be amended from time to
time by the Depositor, 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 any
REMIC created hereunder as a REMIC at all times that any Certificate is
outstanding or to avoid or minimize the risk of the imposition of any
tax on the Trust Fund pursuant to the Code that would be a claim
against the Trust Fund, provided that the Trustee has received an
Opinion of Counsel to the effect that (A) such action is necessary or
desirable to maintain such qualification or to avoid or minimize the
risk of the imposition of any such tax and (B) such action will not
adversely affect in any material respect the interests of any
Certificateholder,
(iv) to change the timing and/or nature of deposits into the Custodial
Account or the 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, 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 the Trust Fund
provided that (A) such change shall not result in reduction of the
rating assigned to any such Class of Certificates below the lower of
the then-current rating or the rating assigned to such Certificates as
of the Closing Date, as evidenced by a letter from each Rating Agency
to such effect, and (B) such change shall not (subject to
Section 10.01(f)), as evidenced by an Opinion of Counsel (at the
expense of the party seeking so to modify, eliminate or add such
provisions), cause the Trust Fund 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, or
(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 and is authorized or permitted under Section 11.01.
(b) This Agreement or any Custodial Agreement may also be amended from time
to time by the Depositor, the Master Servicer, the Trustee and 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) adversely affect in any material respect the interest of the Holders of
Certificates of any Class in a manner other than as described in clause (i)
hereof without the consent of Holders of Certificates of such
Class evidencing, as to such Class, Percentage Interests aggregating not less
than 66%, or
(iii) 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 (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 Depositor or the Trustee in
accordance with such amendment will not result in the imposition of a federal
tax on the Trust Fund or cause any REMIC created hereunder to fail to qualify
as a REMIC at any time that any Certificate is outstanding; provided, that if
the indemnity described in Section 10.01(f) with respect to any taxes that
might be imposed on the Trust Fund has been given, the Trustee shall not
require the delivery to it of the Opinion of Counsel described in this
Section 11.01(c). The Trustee may but shall not be obligated to enter into
any amendment pursuant to this Section that affects its rights, duties and
immunities and this Agreement or otherwise; provided, however, such consent
shall not be unreasonably withheld.
(d) Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 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 Depositor 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 SB 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 SB Certificateholders,
but shall not be and shall not be deemed to be under any circumstances
included in any REMIC. 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 such
REMIC, (ii) any such reserve fund shall be owned by the Depositor, and (iii)
amounts transferred by such REMIC to any such reserve fund shall be treated
as amounts distributed by such REMIC to the Depositor or any successor, all
within the meaning of Treasury Regulations Section 1.860G-2(h) in effect 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
Depositor and such related insurer 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
Certificateholders, the Master Servicer or the Trustee, as applicable;
provided that the Depositor obtains 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 Depositor elects to provide such coverage
in the form of a limited guaranty provided by GMAC LLC, the Depositor 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 Depositor 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.
(f) In addition to the foregoing, any amendment of Section 4.08 of this
Agreement shall require the consent of the Limited Repurchase Right Holder as
a third-party beneficiary of Section 4.08 of this Agreement.
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 the 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, without regard to the
conflict of law principles thereof, other than Sections 5-1401 and 5-1402 of
the New York General Obligations Law, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
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 (a) in the
case of the Depositor, 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: President (RASC), or such other
address as may hereafter be furnished to the Master Servicer and the Trustee
in writing by the Depositor; (b) in the case of the Master Servicer, 0000
Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, Attention: Bond
Administration or such other address as may be hereafter furnished to the
Depositor and the Trustee by the Master Servicer in writing; (c) in the case
of the Trustee, the Corporate Trust Office or such other address as may
hereafter be furnished to the Depositor and the Master Servicer in writing by
the Trustee; (d) in the case of Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000; Attention: Mortgage Surveillance or such other address as
may be hereafter furnished to the Depositor, Trustee and Master Servicer by
Standard & Poor's; (e) in the case of Moody's, 00 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: ABS Monitoring Department, or such other address
as may be hereafter furnished to the Depositor, the Trustee and the Master
Servicer in writing by Moody's, and (f) in the case of the Yield Maintenance
Agreement Provider, HSBC Bank USA, National Association, 000 Xxxxx Xxxxxx,
Xxxxx 00, Xxx Xxxx, Xxx Xxxx 00000, or such other address as may be hereafter
furnished to the Depositor, the Trustee and the Master Servicer in writing by
the Yield Maintenance Agreement Provider. 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. Notices to Rating Agencies.
The Depositor, the Master Servicer or the Trustee, as applicable, shall
notify each Rating Agency and each Subservicer at such time as it is
otherwise required pursuant to this Agreement to give notice of the
occurrence of, any of the events described in clause (a), (b), (c), (d), (g),
(h), (i) or (j) below or provide a copy to each Rating Agency and each
Subservicer 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) the termination or appointment of a successor Master Servicer or
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) a change in the location of the Custodial Account or 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 each Subservicer 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.
(a) 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 Depositor or any
of its Affiliates (or any designee thereof) is the registered Holder (the
"Resecuritized Certificates"), the Depositor 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 Depositor, 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 to the
purposes thereof. In connection with each Supplemental Article, the
Depositor 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 any
REMIC created hereunder as a REMIC or result in the imposition of a tax upon
the Trust Fund (including but not limited to the tax on prohibited
transaction 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. Third-Party Beneficiary.
The Limited Repurchase Right Holder is an express third-party
beneficiary of Section 4.08 of this Agreement, and shall have the right to
enforce the related provisions of Section 4.08 of this Agreement as if it
were a party hereto.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01. Intent of Parties; Reasonableness.
The Depositor, the Trustee and the Master Servicer acknowledge and
agree that the purpose of this Article XII is to facilitate compliance by the
Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. The Depositor 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 requests made by the
Depositor 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 Depositor to
deliver to the Depositor (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 Depositor to permit the Depositor 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 to the Depositor as of the
date hereof and on each date on which information is provided to the
Depositor under Sections 12.01, 12.02(b) or 12.03 that, except as disclosed
in writing to the Depositor 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 relating to the Trustee with respect to the Depositor or any
sponsor, issuing entity, servicer, trustee, originator, significant obligor,
enhancement or support provider or other material transaction party (as such
terms are used in Regulation AB) relating to the Securitization Transaction
contemplated by the Agreement, as identified by the Depositor 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 of
any Transaction Party. The Depositor shall notify the Trustee of any change
in the identity of a Transaction Party after the Closing Date.
(b) If so requested by the Depositor 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 Depositor. Any such request from the
Depositor shall not be given more than once each calendar quarter, unless the
Depositor shall have a reasonable basis for a determination that any of the
representations and warranties may not be accurate.
Section 12.03. Information to be Provided by the Trustee.
For so long as the Certificates are outstanding, for the purpose of
satisfying the Depositor's reporting obligation under the Exchange Act with
respect to any Class of Certificates, the Trustee shall provide to the
Depositor 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 date
the Depositor or Master Servicer files each Report on Form 10-D and Report on
Form 10-K with respect to the Certificates, the Trustee will be deemed to
represent that any information previously provided 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 Depositor 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 Depositor 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 Depositor a report (in form and substance reasonably
satisfactory to the Depositor) 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 addressed
to the Depositor and signed by an authorized officer of the Trustee, and
shall address each of the Servicing Criteria specified on Exhibit S hereto;
and
(b) deliver to the Depositor a report of a registered public accounting
firm reasonably acceptable to the Depositor 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 Depositor, each affiliate of the
Depositor, the Master Servicer and each broker dealer acting as underwriter,
placement agent or initial purchaser of the Certificates or each Person who
controls any of such parties (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); 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; provided, by way of
clarification, that clause (B) of this paragraph shall be construed solely by
reference to the Trustee Information and not to any other information
communicated in connection with a sale or purchase of securities, without
regard to whether the Trustee Information or any portion thereof is presented
together with or separately from such other information; 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 the accountants' attestation.
(b) In the case of any failure of performance described in clause (ii) of
Section 12.05(a), the Trustee shall (i) promptly reimburse the Depositor for
all costs reasonably incurred by the Depositor in order to obtain the
information, report, certification, accountants' attestation or other
material not delivered as required by the Trustee and (ii) cooperate with the
Depositor to mitigate any damages that may result from such failure.
(c) The Depositor and the Master Servicer shall indemnify the Trustee, each
affiliate of the Trustee or each Person who controls the Trustee (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), 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 Depositor 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; provided, by way of clarification, that clause (ii) of this
paragraph shall be construed solely by reference to the RFC Information and
not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the RFC Information or any
portion thereof is presented together with or separately from such other
information.
OHS West:260112740.5
IN WITNESS WHEREOF, the Depositor, 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 ASSET SECURITIES
CORPORATION
By:_______________________________
Name:
Title: Vice President
RESIDENTIAL FUNDING COMPANY, LLC
By:_______________________________
Name:
Title: Associate
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:_____________________________
Name:
Title:
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the ____ day of October 2006 before me, a notary public in and for
said State, personally appeared _______________, known to me to be a Vice
President of Residential Asset Securities Corporation, one of the
corporations that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
________________________________________
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the ____ day of October 2006 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 limited liability
companies that executed the within instrument, and also known to me to be the
person who executed it on behalf of said limited liability company, and
acknowledged to me that such limited liability company executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
________________________________
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF XXXXXX )
On the ____ day of October 2006 before me, a notary public in and for
said State, personally appeared _____________________, known to me to be a
_____________________ of U.S. Bank National Association, 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 association and acknowledged to me that such banking
association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
____________________________________
[Notarial Seal]
EXHIBIT A
FORM OF CLASS A-[_] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 COUPLED WITH THE RIGHT TO RECEIVE PAYMENTS UNDER THE
YIELD MAINTENANCE AGREEMENT.
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO
CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
CUSIP: _______________ Certificate No. A-[__]-[__]
Date of Pooling and Servicing Adjustable Pass-Through Rate
Agreement: October 27, 2006
Cut-off Date: October 1, 2006
First Distribution Date: November 27, Aggregate Initial Certificate Principal
2006 Balance of the Class A-[_]
Certificates:
$___________________________
Master Servicer: Initial Certificate Principal Balance
Residential Funding Company, LLC of this Class A-[_] Certificate:
$___________________________
Final Scheduled Distribution Date:
__________ __, 20__
HOME EQUITY MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-EMX9
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 fixed and adjustable interest rate, first and
junior lien mortgage loans on one- to four-family
residential properties sold by RESIDENTIAL ASSET
SECURITIES CORPORATION
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Residential Asset
Securities Corporation, 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 Asset Securities
Corporation, 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 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 fixed and adjustable interest rate, first and junior lien mortgage loans
on one- to four- family residential properties (the "Mortgage Loans"), sold
by Residential Asset Securities Corporation (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 U.S. Bank National Association, 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 A-[_]
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 Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced from time to time
pursuant to the Agreement.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Home Equity 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 there upon 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, and 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
Master Servicer 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 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 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.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:_________________________________
Authorized Signatory
Dated:_____________________
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[_] Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION,
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 B
FORM OF CLASS M-[_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
CLASS M-[_] CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED
BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED 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 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") COUPLED WITH A RIGHT TO RECEIVE PAYMENTS
UNDER THE YIELD MAINTENANCE AGREEMENT.
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 (A) 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 (EACH OF THE FOREGOING, A "PLAN INVESTOR"), (B) IT
HAS ACQUIRED AND IS HOLDING THIS CERTIFICATE IN RELIANCE ON U.S. DEPARTMENT
OF LABOR PROHIBITED TRANSACTION EXEMPTION ("PTE") 94-29, 59 FED. REG. 14674
(MARCH 29, 1994), AS MOST RECENTLY AMENDED BY 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 THIS 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 USED TO
PURCHASE OR HOLD THIS CERTIFICATE 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 (C), A "COMPLYING INSURANCE COMPANY").
IF THIS CERTIFICATE (OR ANY INTEREST THEREIN) 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 THEREIN) WAS EFFECTED IN VIOLATION OF THE
RESTRICTIONS IN SECTION 5.02(E)(II) OF THE POOLING AND SERVICING AGREEMENT
SHALL INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, 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.
CUSIP: _____________________ Certificate No. M-[__]-__
Date of Pooling and Servicing Adjustable Pass-Through Rate
Agreement: October 27, 2006
Cut-off Date: October 1, 2006
First Distribution Date: November 27, Aggregate Initial Certificate Principal
2006 Balance of the Class M-[_]
Certificates:
$___________________________
Master Servicer: Initial Certificate Principal Balance
Residential Funding Company, LLC of this Class M-[_] Certificate:
$___________________________
Final Scheduled Distribution Date:
__________ __, 20__
HOME EQUITY MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-EMX9
evidencing a percentage interest in the distributions
allocable to the Class M-[_] Certificates with
respect to a Trust Fund consisting primarily of a
pool of fixed and adjustable interest rate, first and
junior lien mortgage loans on one- to four-family
residential properties sold by RESIDENTIAL ASSET
SECURITIES CORPORATION
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Residential Asset
Securities Corporation, 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 Asset Securities
Corporation, 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 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 fixed and adjustable interest rate, first and junior lien mortgage loans
on one- to four- family residential properties (the "Mortgage Loans"), sold
by Residential Asset Securities Corporation (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 U.S. Bank National Association, 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 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 in St. Xxxx, Minnesota. 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.
Any Transferee of this Certificate will be deemed to have made
representations relating to the permissibility of such transfer under ERISA
and Section 4975 of the Code, as described in Section 5.02(e)(ii) of the
Agreement. In addition, any purported Certificate Owner whose acquisition or
holding of this Certificate (or interest therein) was effected in violation
of the restrictions in Section 5.02(e)(ii) of the Agreement shall indemnify
and hold harmless the Depositor, the Trustee, the Master Servicer, any
Subservicer, any underwriter 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.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Home Equity 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 there upon 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, and 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
Master Servicer 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 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 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.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:_________________________________
Authorized Signatory
Dated:_____________________
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-[_] Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION,
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 C
FORM OF CLASS SB CERTIFICATE
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 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") COUPLED WITH THE RIGHT TO RECEIVE PAYMENTS
UNDER THE YIELD MAINTENANCE AGREEMENT.
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 THEREIN SHALL BE MADE
TO ANY 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 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 (EACH OF THE FOREGOING, A
"PLAN INVESTOR") UNLESS THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER
ARE PROVIDED WITH AN OPINION OF COUNSEL 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 NON-EXEMPT
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.
CUSIP: _____________________ Certificate No. SB-1
Date of Pooling and Servicing Percentage Interest: 100.00%
Agreement: October 27, 2006
Cut-off Date: October 1, 2006
First Distribution Date: November 27, Aggregate Initial Notional Balance
2006 of the Class SB Certificates:
$___________________________
Master Servicer: Initial Notional Balance
Residential Funding Company, LLC of this Class SB Certificate:
$___________________________
Maturity Date:
__________ __, 20__
HOME EQUITY MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-EMX9
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 and junior
lien mortgage loans on one- to four-family
residential properties sold by RESIDENTIAL ASSET
SECURITIES CORPORATION
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Residential Asset
Securities Corporation, 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 Asset Securities Corporation, 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 [__________] 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 and junior lien mortgage loans on one- to
four-family residential properties (the "Mortgage Loans"), sold by
Residential Asset Securities Corporation (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 U.S. Bank National Association, 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.
No transfer of this Certificate will be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance
with said Act and laws. In the event that such a transfer is to be made, (i)
the 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 therein shall be made
to any 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 (each of the
foregoing, a "Plan Investor") unless the Trustee, the Depositor and the
Master Servicer are provided with an Opinion of Counsel 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
non-exempt 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 is one of a duly authorized issue of Certificates
issued in several Classes designated as Home Equity 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
Master Servicer 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 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 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.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:_________________________________
Authorized Signatory
Dated:_____________________
CERTIFICATE OF AUTHENTICATION
This is one of the Class SB Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION,
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
THE CLASS R CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS CONSTITUTING
THE AVAILABLE DISTRIBUTION AMOUNT UNTIL SUCH TIME AS DESCRIBED IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN (THE "AGREEMENT").
THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS M AND
CLASS SB CERTIFICATES, TO THE EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT.
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").
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 THEREIN SHALL BE MADE
TO ANY 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 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 (EACH OF THE FOREGOING, A
"PLAN INVESTOR") UNLESS THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER
ARE PROVIDED WITH AN OPINION OF COUNSEL 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 NON-EXEMPT
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.
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. R-1 Percentage Interest: 100.00%
Date of Pooling and Servicing Master Servicer:
Agreement: October 27, 2006 Residential Funding Company, LLC
Cut-off Date: October 1, 2006
HOME EQUITY MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-EMX9
evidencing a percentage interest in the distributions
allocable to the Class R Certificates with respect to
a Trust Fund consisting primarily of a pool of fixed
and adjustable interest rate, first and junior lien
mortgage loans on one- to four-family residential
properties sold by RESIDENTIAL ASSET SECURITIES
CORPORATION
This Certificate is payable solely from the assets of the Trust Fund
and does not represent an obligation of or interest in Residential Asset
Securities Corporation, 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 Asset Securities Corporation, 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 [________________] is the registered owner of the
Percentage Interest evidenced by this Certificate in certain distributions
with respect to the Trust Fund consisting primarily of a pool of fixed and
adjustable interest rate, first and junior lien mortgage loans on one- to
four-family residential properties (the "Mortgage Loans"), sold by
Residential Asset Securities Corporation (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 U.S. Bank National Association, 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 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 the
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, (ii) 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
Master Servicer 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 Master Servicer, which purchaser may be the Master
Servicer, or any affiliate of the Master Servicer, on such terms and
conditions as the Master Servicer may choose.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose in St. Xxxx, Minnesota. The Holder
of this Certificate may have additional obligations with respect to this
Certificate, including tax liabilities.
No transfer of this Certificate will be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance
with said Act and laws. In the event that such a transfer is to be made, (i)
the 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 therein shall be made
to any 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 (each of the
foregoing, a "Plan Investor") unless the Trustee, the Depositor and the
Master Servicer are provided with an Opinion of Counsel 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
non-exempt 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 is one of a duly authorized issue of Certificates
issued in several Classes designated as Home Equity 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.
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.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:_________________________________
Authorized Signatory
Dated:_____________________
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION,
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 E
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time
to time, the "Agreement"), dated as of October 27, 2006, by and among U.S.
BANK NATIONAL ASSOCIATION, as Trustee (including its successors under the
Pooling Agreement defined below, the "Trustee"), RESIDENTIAL ASSET SECURITIES
CORPORATION (together with any successor in interest, the "Company"),
RESIDENTIAL FUNDING COMPANY, LLC, as master servicer (together with any
successor in interest or successor under the Pooling Agreement referred to
below, the "Master Servicer"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION
(together with any successor in interest or any successor appointed
hereunder, the "Custodian").
W I T N E S S E T H T H A T :
WHEREAS, the Company, the Master Servicer, and the Trustee have
entered into a Pooling and Servicing Agreement, dated as of October 27, 2006,
relating to the issuance of Residential Asset Securities Corporation, Home
Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2006-EMX9 (as
in effect on the date of this Agreement, the "Original Pooling Agreement,"
and as amended and supplemented from time to time, the "Pooling Agreement");
and
WHEREAS, the Custodian has agreed to act as agent for the Trustee
for the purposes of receiving and holding certain documents and other
instruments delivered by the Company and the Master Servicer under the
Pooling Agreement, all upon the terms and conditions and subject to the
limitations hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Trustee, the Company, the
Master Servicer and the Custodian hereby agree as follows:
ARTICLE I
Definitions
Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned in the Original Pooling Agreement, unless
otherwise required by the context herein.
ARTICLE II
Custody of Mortgage Documents
Section 2.1. Custodian to Act as Agent; Acceptance of Custodial
Files. The Company and the Master Servicer hereby direct the Trustee to
appoint Xxxxx Fargo Bank National Association as the Custodian hereunder.
The Custodian, as the duly appointed agent of the Trustee for these purposes,
acknowledges receipt of the Custodial Files relating to the Mortgage Loans
identified on the schedule attached hereto (the "Custodial Files") and
declares that it holds and will hold the Custodial Files as agent for the
Trustee, in trust, for the use and benefit of all present and future
Certificateholders.
Section 2.2. Recordation of Assignments. If any Custodial File
includes one or more assignments of the related Mortgages to the Trustee that
have not been recorded, each such assignment shall be delivered by the
Custodian to the Company for the purpose of recording it in the appropriate
public office for real property records, and the Company, at no expense to
the Custodian, shall promptly cause to be recorded in the appropriate public
office for real property records each such assignment and, upon receipt
thereof from such public office, shall return each such assignment to the
Custodian.
Section 2.3. Review of Custodial Files.
(a) On or prior to the Closing Date, the Custodian shall deliver
to the Trustee an Initial Certification in the form annexed hereto as Exhibit
One evidencing receipt of a Custodial File for each Mortgage Loan listed on
the Schedule attached hereto (the "Mortgage Loan Schedule"). The parties
hereto acknowledge that certain documents referred to in Subsection
2.01(b)(i) of the Pooling Agreement may be missing on or prior to the Closing
Date and such missing documents shall be listed as a Schedule to Exhibit One.
(b) Within 45 days after the Closing Date, the Custodian agrees,
for the benefit of Certificateholders, to review each Custodial File and to
deliver to the Trustee an Interim Certification in the form annexed hereto as
Exhibit Two to the effect that all documents required to be delivered
pursuant to Section 2.01(b) of the Pooling Agreement 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. For purposes of such review, the
Custodian shall compare the following information in each Custodial File to
the corresponding information in the Mortgage Loan Schedule: (i) the loan
number, (ii) the borrower name and (iii) the original principal balance. In
the event that any Mortgage Note or Assignment of Mortgage has been delivered
to the Custodian by the Company in blank, the Custodian, upon the direction
of the Company, shall cause each such Mortgage Note to be endorsed to the
Trustee and each such Assignment of Mortgage to be completed in the name of
the Trustee prior to the date on which such Interim Certification is
delivered to the Trustee. Within 45 days of receipt of the documents
required to be delivered pursuant to Section 2.01(c) of the Pooling
Agreement, the Custodian agrees, for the benefit of the Certificateholders,
to review each such document, and upon the written request of the Trustee to
deliver to the Trustee an updated Schedule A to the Interim Certification.
The Custodian shall be under no duty or obligation to inspect, review or
examine said documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable, or appropriate for the
represented purpose or that they have actually been recorded or that they are
other than what they purport to be on their face, or that the MIN is
accurate. If in performing the review required by this Section 2.3 the
Custodian finds any document or documents constituting a part of a Custodial
File to be missing or defective in respect of the items reviewed as described
in this Section 2.3(b), the Custodian shall promptly so notify the Company,
the Master Servicer and the Trustee.
______(c) Upon receipt of all documents required to be in the
Custodial Files the Custodian shall deliver to the Trustee a Final
Certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Custodial Files.
______Upon receipt of written request from the Trustee, the Company or
the Master Servicer, the Custodian shall as soon as practicable supply the
Trustee with a list of all of the documents relating to the Mortgage Loans
required to be delivered pursuant to Section 2.01(b) of the Pooling Agreement
not then contained in the Custodial Files.
______Section 2.4. Notification of Breaches of Representations and
Warranties. If the Custodian discovers, in the course of performing its
custodial functions, a breach of a representation or warranty made by the
Master Servicer or the Company as set forth in the Pooling Agreement with
respect to a Mortgage Loan relating to a Custodial File, the Custodian shall
give prompt written notice to the Company, the Master Servicer and the
Trustee.
______Section 2.5. Custodian to Cooperate; Release of Custodial
Files. Upon the repurchase or substitution of any Mortgage Loan pursuant to
Article II of the Pooling Agreement or payment in full of any Mortgage Loan,
or 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
shall immediately notify the Custodian by delivering to the Custodian a
Request for Release (in the form of Exhibit Four attached hereto or a
mutually acceptable electronic form) and shall request delivery to it of the
Custodial File. The Custodian agrees, upon receipt of such Request for
Release, promptly to release to the Master Servicer the related Custodial
File.
______Upon receipt of a Request for Release from the Master Servicer,
signed by a Servicing Officer, that (i) the Master Servicer or a Subservicer,
as the case may be, has made a deposit into the Certificate Account in
payment for the purchase of the related Mortgage Loan in an amount equal to
the Purchase Price for such Mortgage Loan or (ii) the Company has chosen to
substitute a Qualified Substitute Mortgage Loan for such Mortgage Loan, the
Custodian shall release to the Master Servicer the related Custodial File.
Upon written notification of a substitution, the Master Servicer
shall deliver to the Custodian and the Custodian agrees to accept the
Mortgage Note and other documents constituting the Custodial File with
respect to any Qualified Substitute Mortgage Loan, upon receiving written
notification from the Master Servicer of such substitution.
From time to time as is appropriate for the servicing or
foreclosures of any Mortgage Loan, including, for this purpose, collection
under any Primary Insurance Policy or any Mortgage Pool Insurance Policy, the
Master Servicer shall deliver to the Custodian a Request for Release
certifying as to the reason for such release. Upon receipt of the foregoing,
the Custodian shall deliver the Custodial File or such document to the Master
Servicer. All Custodial Files so released to the Master Servicer shall be
held by it in trust for the Trustee for the use and benefit of all present
and future Certificateholders. The Master Servicer shall cause each
Custodial File or any document therein so released to be returned to the
Custodian 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 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 to the Custodian an updated Request for
Release signed by 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. Immediately upon receipt of any
Custodial File returned to the Custodian by the Master Servicer, the
Custodian shall deliver a signed acknowledgement to the Master Servicer,
confirming receipt of such Custodial File.
Upon the written request of the Master Servicer, the Custodian
will send to the Master Servicer copies of any documents contained in the
Custodial File.
Section 2.6. Assumption Agreements. In the event that any
assumption agreement or substitution of liability agreement is entered into
with respect to any Mortgage Loan subject to this Agreement in accordance
with the terms and provisions of the Pooling Agreement, the Master Servicer
shall notify the Custodian that such assumption or substitution agreement has
been completed by forwarding to the Custodian the original of such assumption
or substitution agreement, which shall be added to the related Custodial File
and, for all purposes, shall be considered a part of such Custodial File to
the same extent as all other documents and instruments constituting parts
thereof.
ARTICLE III
Concerning the Custodian
Section 3.1. Custodian a Bailee and Agent of the Trustee. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Custodial File which are delivered to the Custodian, the Custodian is
exclusively the bailee and agent of the Trustee and has no instructions to
hold any Mortgage Note or Mortgage for the benefit of any person other than
the Trustee, holds such documents for the benefit of Certificateholders and
undertakes to perform such duties and only such duties as are specifically
set forth in this Agreement. Except upon compliance with the provisions of
Section 2.5 of this Agreement, no Mortgage Note, Mortgage or other document
constituting a part of a Custodial File shall be delivered by the Custodian
to the Company or the Master Servicer or otherwise released from the
possession of the Custodian.
The Master Servicer shall promptly notify the Custodian in
writing if it shall no longer be a member of MERS, or if it otherwise shall
no longer be capable of registering and recording Mortgage Loans using MERS.
In addition, the Master Servicer shall (i) promptly notify the Custodian in
writing when a MERS Mortgage Loan is no longer registered with and recorded
under MERS and (ii) concurrently with any such deregistration of a MERS
Mortgage Loan, prepare, execute and record an original assignment from MERS
to the Trustee and deliver such assignment to the Custodian.
Section 3.2. Indemnification. The Company hereby agrees to
indemnify and hold the Custodian harmless from and against all claims,
liabilities, losses, actions, suits or proceedings at law or in equity, or
any other expenses, fees or charges of any character or nature, which the
Custodian may incur or with which the Custodian may be threatened by reason
of its acting as custodian under this Agreement, including indemnification of
the Custodian against any and all expenses, including attorney's fees if
counsel for the Custodian has been approved by the Company, and the cost of
defending any action, suit or proceedings or resisting any claim.
Notwithstanding the foregoing, it is specifically understood and agreed that
in the event any such claim, liability, loss, action, suit or proceeding or
other expense, fee or charge shall have been caused by reason of any
negligent act, negligent failure to act or willful misconduct on the part of
the Custodian, or which shall constitute a willful breach of its duties
hereunder, the indemnification provisions of this Agreement shall not apply.
Section 3.3. Custodian May Own Certificates. The Custodian 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 Custodian.
Section 3.4. Master Servicer to Pay Custodian's Fees and
Expenses. The Master Servicer covenants and agrees to pay to the Custodian
from time to time, and the Custodian shall be entitled to, reasonable
compensation for all services rendered by it in the exercise and performance
of any of the powers and duties hereunder of the Custodian, and the Master
Servicer shall pay or reimburse the Custodian upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Custodian 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), except any such
expense, disbursement or advance as may arise from its negligence or bad
faith.
Section 3.5. Custodian May Resign; Trustee May Remove
Custodian. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as
Custodian of the Mortgage Loans. Upon receiving such notice of resignation,
the Trustee shall either take custody of the Custodial Files itself and give
prompt notice thereof to the Company, the Master Servicer and the Custodian,
or promptly appoint a successor Custodian by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Custodian and one copy to the successor Custodian. If the Trustee shall not
have taken custody of the Custodial Files and no successor Custodian shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Custodian may petition
any court of competent jurisdiction for the appointment of a successor
Custodian.
The Trustee, at the direction of the Master Servicer and the
Company, may remove the Custodian at any time. In such event, the Trustee
shall appoint, or petition a court of competent jurisdiction to appoint, a
successor Custodian hereunder. Any successor Custodian shall be a depository
institution subject to supervision or examination by federal or state
authority and shall be able to satisfy the other requirements contained in
Section 3.7 and shall be unaffiliated with the Master Servicer or the Company.
Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.5
shall become effective upon acceptance of appointment by the successor
Custodian. The Trustee shall give prompt notice to the Company and the
Master Servicer of the appointment of any successor Custodian. No successor
Custodian shall be appointed by the Trustee without the prior approval of the
Company and the Master Servicer.
Section 3.6. Merger or Consolidation of Custodian. Any Person
into which the Custodian 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 Custodian shall be a party, or any Person
succeeding to the business of the Custodian, shall be the successor of the
Custodian hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided that such successor is a depository
institution subject to supervision or examination by federal or state
authority and is able to satisfy the other requirements contained in Section
3.7 and is unaffiliated with the Master Servicer or the Company.
Section 3.7. Representations of the Custodian. The Custodian
hereby represents that it is a depository institution subject to supervision
or examination by a federal or state authority, has a combined capital and
surplus of at least $15,000,000 and is qualified to do business in the
jurisdictions in which it will hold any Custodial File.
ARTICLE IV
Compliance with Regulation AB
Section 4.1. Intent of the Parties; Reasonableness. The
parties hereto acknowledge and agree that the purpose of this Article IV 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 parties hereto 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 requests made by the Company
in good faith for delivery of information under these provisions on the basis
of evolving interpretations of Regulation AB. The Custodian 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 4.2. Additional Representations and Warranties of
the Custodian.
(a) The Custodian hereby represents and warrants that the
information set forth under the caption "Pooling and Servicing Agreement -
Custodial Arrangements" (the "Custodian Disclosure") does not contain any
untrue statement of a material fact or omit to state a material required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(b) The Custodian shall be deemed to represent to the Company
as of the date hereof and on each date on which information is provided to
the Company under Section 4.3 that, except as disclosed in writing to the
Company prior to such date: (i) there are no aspects of its financial
condition that could have a material adverse effect on the performance by it
of its Custodian obligations under this Agreement or any other Securitization
Transaction as to which it is the custodian; (ii) there are no material legal
or governmental proceedings pending (or known to be contemplated) against it;
and (iii) there are no affiliations, relationships or transactions relating
to the Custodian 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 such terms are used in
Regulation AB) relating to the Securitization Transaction contemplated by the
Agreement, as identified by the Company to the Custodian in writing as of the
Closing Date (each, a "Transaction Party").
(c) If so requested by the Company on any date following the
Closing Date, the Custodian 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 reasonably adequate disclosure of the pertinent facts,
in writing, to the requesting party. 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 a determination that any of the representations
and warranties may not be accurate.
Section 4.3. Additional Information to Be Provided by the
Custodian. 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 Custodian shall (a) notify the
Company in writing of any material litigation or governmental proceedings
pending against the Custodian that would be material to Certificateholders,
and (b) provide to the Company a written description of such proceedings.
Any notices and descriptions required under this Section 4.3 shall be given
no later than five Business Days prior to the Determination Date following
the month in which the Custodian has knowledge of the occurrence of the
relevant event. As of the date the Company or Master Servicer files each
Report on Form 10-D or Form 10-K with respect to the Certificates, the
Custodian will be deemed to represent that any information previously
provided under this Section 4.3, if any, is materially correct and does not
have any material omissions unless the Custodian has provided an update to
such information.
Section 4.4. Report on Assessment of Compliance and
Attestation. On or before March 15 of each calendar year, the Custodian
shall:
(a) deliver to the Company a report (in form and substance
reasonably satisfactory to the Company) regarding the Custodian's assessment
of compliance with the 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 addressed to the
Company and signed by an authorized officer of the Custodian, and shall
address each of the Servicing Criteria specified on a certification
substantially in the form of Exhibit Five hereto; and
(b) deliver to the Company a report of a registered public
accounting firm reasonably acceptable to the Company that attests to, and
reports on, the assessment of compliance made by the Custodian 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 4.5. Indemnification; Remedies.
(a) The Custodian shall indemnify the Company, each affiliate
of the Company, the Master Servicer and each broker dealer acting as
underwriter, placement agent or initial purchaser of the Certificates or each
Person who controls any of such parties (within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act); 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 the Custodian Disclosure and any information,
report, certification, accountants' attestation or other material provided
under this Article IV by or on behalf of the Custodian (collectively, the
"Custodian Information"), or (B) the omission or alleged omission to state in
the Custodian Information a material fact required to be stated in the
Custodian 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 Custodian to deliver any information, report,
certification, accountants' attestation or other material when and as
required under this Article IV.
(b) In the case of any failure of performance described in
clause (ii) of Section 4.5(a), the Custodian shall promptly reimburse the
Company for all costs reasonably incurred by the Company in order to obtain
the information, report, certification, accountants' letter or other material
not delivered as required by the Custodian.
ARTICLE V
Miscellaneous Provisions
Section 5.1. Notices. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by
telegram or telex, or by registered or certified mail, postage prepaid,
return receipt requested, at the addresses specified on the signature page
hereof (unless changed by the particular party whose address is stated herein
by similar notice in writing), in each case the notice will be deemed
delivered when received.
Section 5.2. Amendments. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is
in writing and signed by all parties hereto, and none of the Company, the
Master Servicer or the Trustee shall enter into any amendment of or
supplement to this Agreement except as permitted by the Pooling Agreement.
The Trustee shall give prompt notice to the Custodian of any amendment or
supplement to the Pooling Agreement and furnish the Custodian with written
copies thereof.
Section 5.3. Governing Law. This Agreement shall be deemed a
contract made under the laws of the State of New York and shall be construed
and enforced in accordance with and governed by the laws of the State of New
York.
Section 5.4. Recordation of Agreement. 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 evidencing undivided interests in the aggregate of
not less than 25% of the Trust Fund), but only upon direction accompanied by
an Opinion of Counsel reasonably satisfactory to the Master Servicer to the
effect that the failure to effect such recordation is likely to materially
and adversely affect the interests of the Certificateholders.
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 5.5. 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.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
Address: U.S. BANK NATIONAL ASSOCIATION, as Trustee
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X _ By:
Xx. Xxxx, XX 00000 Name:
Attention: Structured Finance, Title:
RASC 2006-EMX9
Address: RESIDENTIAL ASSET SECURITIES CORPORATION
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
By:
Name:
Title:
Address: RESIDENTIAL FUNDING COMPANY, LLC,
as Master Servicer
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
By:
Name:
Title:
Address: XXXXX FARGO BANK, NATIONAL
ASSOCIATION
Mortgage Document Custody
One Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
By:
Name:
Title:
STATE OF MINNESOTA
)
) ss.:
COUNTY OF XXXXXX )
On the ______ day of October 2006, before me, a notary public in and
for said State, personally appeared ________________, known to me to be a(n)
_____________ of U.S. Bank National Association, a national banking
association that executed the within instrument, and also known to me to be
the person who executed it on behalf of said national banking association and
acknowledged to me that such national banking association 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 October 2006, before me, a notary public in
and for said State, personally appeared ________________, known to me to be
a(n) Assistant Vice President of Xxxxx Fargo Bank, National Association, a
national banking association that executed the within instrument, and also
known to me to be the person who executed it on behalf of said national
banking association, and acknowledged to me that such national banking
association 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 October 2006, before me, a notary public in
and for said State, personally appeared [________________], known to me to be
a(n) Vice President of Residential Asset Securities Corporation, one of the
corporations that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_________________________________
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss:
COUNTY OF HENNEPIN )
On the______ day of October 2006, before me, a notary public in
and for said State, personally appeared [________________], known to me to be
a(n) Associate of Residential Funding Company, LLC, one of the 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]
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
October _____, 2006
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, XX 00000
Attention: Structured Finance, RASC 2006-EMX9
Re: Custodial Agreement, dated as of October 27, 2006, by and among
U.S. Bank National Association, Residential Asset Securities
Corporation, Residential Funding Company, LLC and Xxxxx Fargo
Bank, National Association, relating to Home Equity Mortgage
Asset-Backed Pass-Through Certificates Series 2006-EMX9
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, and subject to Section 2.02 of the Pooling Agreement, the
undersigned, as Custodian, hereby certifies that it has received a Custodial
File (which contains an original Mortgage Note or an original Lost Note
Affidavit with a copy of the related Mortgage Note) to the extent required in
Section 2.01(b) of the Pooling Agreement with respect to each Mortgage Loan
listed in the Mortgage Loan Schedule, with any exceptions listed on Schedule
A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial
Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
October _____, 2006
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, XX 00000
Attention: Structured Finance, RASC 2006-EMX9
Re: Custodial Agreement, dated as of October 27, 2006, by and among
U.S. Bank National Association, Residential Asset Securities
Corporation, Residential Funding Company, LLC and Xxxxx Fargo
Bank, National Association, relating to Home Equity Mortgage
Asset-Backed Pass-Through Certificates Series 2006-EMX9
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has
received a Custodial File to the extent required pursuant to Section 2.01(b)
of the Pooling Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Custodial File and the
Mortgage Loan Schedule and has determined that: all required documents have
been executed and received and that such documents relate to the Mortgage
Loans identified on the Mortgage Loan Schedule, with any exceptions listed on
Schedule A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial
Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: ____________________________________
Name:
Title:
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
October _____, 2006
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, XX 00000
Attention: Structured Finance, RASC 2006-EMX9
Re: Custodial Agreement, dated as of October 27, 2006, by and among
U.S. Bank National Association, Residential Asset Securities
Corporation, Residential Funding Company, LLC and Xxxxx Fargo
Bank, National Association, relating to Home Equity Mortgage
Asset-Backed Pass-Through Certificates Series 2006-EMX9
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned
Custodial Agreement, the undersigned, as Custodian, hereby certifies that it
has received a Custodial File with respect to each Mortgage Loan listed in
the Mortgage Loan Schedule and it has reviewed the Custodial File and the
Mortgage Loan Schedule and has determined that: all required documents
referred to in Section 2.01(b) of the Pooling Agreement have been executed
and received and that such documents relate to the Mortgage Loans identified
on the Mortgage Loan Schedule.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial
Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: __________________________________
Name:
Title:
EXHIBIT FOUR
FORM 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 FIVE
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Custodian shall
address, at a minimum, the criteria identified as below as "Applicable
Servicing Criteria":
------------------------------------------------------------------------------
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
------------------------------------------------------------------------------
------------------------------------------------------------------------------
REFERENCE CRITERIA
------------------------------------------------------------------------------
------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(1)(i) Policies and procedures are instituted to
monitor any performance or other triggers and
events of default in accordance with the
transaction agreements.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(1)(ii)If any material servicing activities are
outsourced to third parties, policies and
procedures are instituted to monitor the third
party's performance and compliance with such
servicing activities.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(1)(iii)Any requirements in the transaction agreements
to maintain a back-up servicer for the pool
assets are maintained.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(1)(iv)A fidelity bond and errors and omissions
policy is in effect on the party participating
in the servicing function throughout the
reporting period in the amount of coverage
required by and otherwise in accordance with
the terms of the transaction agreements.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
CASH COLLECTION AND ADMINISTRATION
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(2)(i) Payments on pool assets are deposited into the
appropriate custodial bank 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.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(2)(ii)Disbursements made via wire transfer on behalf
of an obligor or to an investor are made only
by authorized personnel.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
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 respect to commingling
of cash) as set forth in the transaction
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 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 days
1122(d)(3)(iii)specified in the transaction agreements.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Amounts remitted to investors per the investor
reports agree with cancelled checks, or other
1122(d)(3)(iv)form of payment, or custodial bank statements.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
POOL ASSET ADMINISTRATION
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on pool assets is |X|
maintained as required by the transaction
agreements or related asset pool documents.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Pool assets and related documents are
safeguarded as required by the transaction |X|
1122(d)(4)(ii)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)(vii)Records documenting collection efforts are
maintained during the period a pool asset is
delinquent in accordance with the transaction
agreements. Such records are maintained on at
least a monthly basis, or such other period
specified in the transaction agreements, and
describe the entity's activities in monitoring
delinquent pool assets including, for example,
phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed
temporary (e.g., illness or unemployment).
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(4)(ix)Adjustments to interest rates or rates of
return for pool assets with variable rates are
computed based on the related pool asset
documents.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an
obligor (such as escrow accounts): (A) such
funds are analyzed, in accordance with the
obligor's pool asset documents, on at least an
annual basis, or such other period specified
in the transaction agreements; (B) interest on
such funds is paid, or credited, to obligors
in accordance with applicable pool asset
documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar
days of full repayment of the related pool
asset, or such other number of days specified
in the transaction agreements.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(4)(xi)Payments made on behalf of an obligor (such as
tax or insurance payments) are made on or
before the related penalty or expiration
dates, as indicated on the appropriate bills
or notices for such payments, provided that
such support has been received by the servicer
at least 30 calendar days prior to these
dates, or such other number of days specified
in the transaction agreements.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(4)(xii)Any late payment penalties in connection with
any payment to be made on behalf of an obligor
are paid from the servicer's funds and not
charged to the obligor, unless the late
payment was due to the obligor's error or
omission.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are
posted within two business days to the
obligor's records maintained by the servicer,
or such other number of days specified in the
1122(d)(4)(xii)transaction agreements.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1122(d)(4)(xiv)Delinquencies, charge-offs and uncollectible
accounts are recognized and recorded in
accordance with the transaction agreements.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Any external enhancement or other support,
identified in Item 1114(a)(1) through (3) or
Item 1115 of Regulation AB, is maintained as
1122(d)(4)(xv)set forth in the transaction agreements.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
EXHIBIT F-1
GROUP I LOAN SCHEDULE
[FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY FORM 8-K]
EXHIBIT F-2
GROUP II LOAN SCHEDULE
[FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY FORM 8-K]
EXHIBIT G
FORM 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 H-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 Home Equity Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-EMX9, 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 Section 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 an
electing large partnership 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. 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.
6. 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.
7. 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.
8. The Owner's Taxpayer Identification Number is ____________________.
9. 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.
10. 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 1.860E-1(c) and recent
amendments thereto, effective as of July 19, 2002, and (ii) the preamble
describing the adoption of the amendments to such regulation, which is
attached hereto as Annex I.
11. 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.
12. 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.
13. 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.
14. 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.
15. The Owner hereby certifies, represents and warrants to, and covenants
with the Depositor, the Trustee and the Master Servicer that the following
statements in (a) or (b) are accurate:
(a) The Certificates are not being acquired by, and will not be
transferred to, any 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 Internal Revenue Code of 1986, as amended (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 (each
of the foregoing, a "Plan Investor"); or
(b) The Owner has provided the Trustee, the Depositor and the
Master Servicer with an Opinion of Counsel 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 Certificates is
permissible under applicable law, will not constitute or result in any
non-exempt 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
Pooling and Servicing Agreement, which Opinion of Counsel shall not be at
the expense of the Trustee, the Depositor or the Master Servicer.
In addition, the Owner hereby certifies, represents and warrants to,
and covenants with, the Depositor, the Trustee and the Master Servicer that
the Owner will not transfer such Certificates to any Plan Investor or person
unless either such Plan Investor or person meets the requirements set forth
in either (a) or (b) above.
Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.
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__
ANNEX I TO EXHIBIT H-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:
o 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;
o The accuracy of the estimated burden associated with the collection of
information (see below);
o How the quality, utility, and clarity of the information to be
collected may be enhanced;
o 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
o 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 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 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 H-2
FORM OF TRANSFEROR CERTIFICATE
______________, 20__
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Structured Finance/RASC, Series 2006-EMX9
Re: Mortgage Asset-Backed Pass-Through Certificates, Series
2006-EMX9
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 2006-EMX9, Class R
(the "Certificates"), pursuant to Section 5.02 of the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of October 27,
2006 among Residential Asset Securities Corporation, as depositor (the
"Depositor"), Residential Funding Company, LLC, as master servicer, and U.S.
Bank National Association, 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 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 H-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 I
FORM OF INVESTOR REPRESENTATION LETTER
______________, 20__
Residential Asset Securities Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Structured Finance/RASC 0000-XXX0
Xxxxxxxxxxx Funding Company, LLC
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Residential Funding Company, LLC Series 2006-EMX9
Re: Home Equity Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-EMX9, Class [SB] [R]
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") $_____________ Initial Certificate
Principal Balance of Home Equity Mortgage Asset-Backed Pass-Through
Certificates, Series 2006-EMX9, Class [SB] [R-[__]] (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of October 27, 2006 among Residential Asset
Securities Corporation, as depositor (the "Depositor"), Residential Funding
Company, LLC, as master servicer (the "Master Servicer"), and U.S. Bank
National Association, 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 Depositor, 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
Depositor 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 Depositor as has been requested by the Purchaser from the
Depositor 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 Depositor 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 Depositor, the Purchaser acknowledges
that such Memorandum was provided to it by the Seller, that the
Memorandum was prepared by the Depositor solely for use in
connection with the Original Sale and the Depositor 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
Depositor 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 hereby certifies, represents and warrants to, and
covenants with the Depositor, the Trustee and the Master Servicer
that the following statements in (a) or (b) are correct:
(a) The Purchaser 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 Internal Revenue Code of 1986, as amended (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
(each of the foregoing, a "Plan Investor"); or
(b) the Purchaser has provided the Trustee, the
Depositor and the Master Servicer with an Opinion of
Counsel 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
Certificates is permissible under applicable law, will not
constitute or result in any non-exempt 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 Pooling and Servicing Agreement, which
Opinion of Counsel shall not be an expense of the Trustee,
the Depositor or the Master Servicer.
In addition, the Purchaser hereby certifies, represents and warrants
to, and covenants with, the Depositor, the Trustee and the Master Servicer
that the Purchaser will not transfer such Certificates to any Plan Investor
or person unless either such Plan Investor or person meets the requirements
set forth in either (a) or (b) above.
Very truly yours,
___________________________________
(Purchaser)
By:_________________________________
Name:_______________________________
Title:______________________________
EXHIBIT J
FORM OF TRANSFEROR REPRESENTATION LETTER
______________, 20__
Residential Asset Securities Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Structured Finance/RASC 2006-EMX9
Attention: Residential Funding Company, LLC Series 2006-EMX9
Re: Home Equity Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-EMX9, Class [SB] [R]
Ladies and Gentlemen:
In connection with the sale by __________ (the "Seller") to
__________ (the "Purchaser") of $__________ Initial Certificate Principal
Balance of Home Equity Mortgage Asset- Backed Pass-Through Certificates,
Series 2006-EMX9, Class [SB] [R-[__]] (the "Certificates"), issued pursuant
to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of October 27, 2006 among Residential Asset Securities
Corporation, as depositor (the "Depositor"), Residential Funding Company,
LLC, as master servicer, and U.S. Bank National Association, as trustee (the
"Trustee"). The Seller hereby certifies, represents and warrants to, and
covenants with, the Depositor 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,
____________________________________
(Purchaser)
By:_________________________________
Name:_______________________________
Title:______________________________
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
Subservicer will be entitled to any reimbursement pursuant to Section 3.10 on
such Distribution Date for Advances or Subservicer Advances previously made,
(which will not be Advances or Subservicer 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
Subservicer Advances reimbursed pursuant to Section 3.10, to the extent such
Advances or Subservicer 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 SB Certificateholders in the same manner as if such amount were to
be distributed pursuant to Section 4.02.
(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 SB 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 SB Certificateholders in the same manner as if such amount were to be
distributed pursuant to Section 4.02; 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 SB 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 SB
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 SB 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 SB 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 SB Certificateholders.
(f) The Depositor 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
Depositor obtains (subject to the provisions of Section 10.01(f) as if the
Depositor 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) if the Class SB Certificates
have been rated, the Depositor obtains written confirmation from each Rating
Agency that rated the Class SB Certificates at the request of the Depositor
that such substitution shall not lower the rating on the Class SB
Certificates below the lesser of (a) the then-current rating assigned to the
Class SB Certificates by such Rating Agency and (b) the original rating
assigned to the Class SB 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 Depositor,
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 Depositor 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 Depositor shall
also obtain a letter from each Rating Agency that rated the Class SB
Certificates at the request of the Depositor to the effect that such
amendment, reduction, deletion or cancellation will not lower the rating on
the Class SB Certificates below the lesser of (a) the then-current rating
assigned to the Class SB Certificates by such Rating Agency and (b) the
original rating assigned to the Class SB Certificates by such Rating Agency,
unless (A) the Holder of 100% of the Class SB 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 Depositor obtains (subject to the
provisions of Section 10.01(f) as if the Depositor was substituted for the
Master Servicer solely for the purposes of such provision), in the case of a
material amendment or supersession (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 supersession
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
RESIDENTIAL ASSET SECURITIES CORPORATION
Home Equity Mortgage Asset-Backed Pass-Through Certificates
Series 2006-EMX9
__________, 20__
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Structured Finance/RASC 2006-EMX9
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 October 27, 2006 (the "Servicing
Agreement"), among Residential Asset Securities Corporation (the
"Depositor"), Residential Funding and U.S. Bank National Association (the
"Trustee") as amended by Amendment No. ___ thereto, dated as of ________,
with respect to the Home Equity Mortgage Asset-Backed Pass-Through
Certificates, Series 2006-EMX9 (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 SB
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 non-action 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. __ to the Servicing Agreement and GMAC hereby
authorizes the Depositor 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:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:_________________________________
Name:_______________________________
Title:______________________________
RESIDENTIAL ASSET SECURITIES
CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
EXHIBIT M
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
__________, 20__
Residential Asset Securities Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Structured Finance/RASC 2006-EMX9
Re: Home Equity Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-EMX9 Assignment of Mortgage Loan
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by
U.S Bank National Association (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 October 27, 2006 among Residential Asset Securities
Corporation, as depositor (the "Depositor"), 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:
(ii) 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;
(iii) 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;
(iv) 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
(v) 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 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, pursuant to Section 5.02 of the Pooling and Servicing
Agreement (the "Agreement"), dated as of October 27, 2006 among Residential
Funding Company, LLC, as master servicer (the "Master Servicer"), Residential
Asset Securities Corporation, as depositor (the "Depositor"), and U.S. Bank
National Association, as trustee (the "Trustee") warrants and represents to,
and covenants with, the Seller, the Trustee and the Master Servicer 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 I or Annex
II. 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 of Class SB Certificates or Class R Certificates
a. 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. 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
non-exempt 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.
4. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as
of the date set forth below.
______________________________ ______________________________
Print Name of Seller Print Name of Purchaser
By:___________________________________ By: ___________________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.___________________________________ No.____________________________________
Date:_________________________________ Date:__________________________________
ANNEX I TO EXHIBIT N
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.
___ 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 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 II TO EXHIBIT N
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 O
[RESERVED]
EXHIBIT P
FORM OF ERISA REPRESENTATION LETTER
__________, 20__
Residential Asset Securities Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Structured Finance/RASC 0000-XXX0
Xxxxxxxxxxx Funding Company, LLC
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Home Equity Mortgage Asset-Backed Pass-Through
Certificates,
Series 2006-EMX9, Class SB
Ladies and Gentlemen:
[____________________________________] (the "Purchaser") intends to
purchase from [______________________________] (the "Seller") $[____________]
Initial Certificate Principal Balance of Home Equity Mortgage Asset-Backed
Pass-Through Certificates, Series 2006-EMX9, Class ____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of October 27, 2006 among Residential Asset
Securities Corporation, as the depositor (the "Depositor"), Residential
Funding Company, LLC, as master servicer (the "Master Servicer") and U.S.
Bank National Association, 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 Depositor, the Trustee and the Master
Servicer that:
(a) The Purchaser 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 Internal Revenue Code of 1986, as amended (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 (each of the foregoing, a "Plan Investor"); or
(b) The Purchaser 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 Certificates is
permissible under applicable law, will not constitute or result in any
non-exempt 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 Pooling and Servicing Agreement, which Opinion
of Counsel shall not be at the expense of the Trustee, the Depositor or
the Master Servicer.
In addition, the Purchaser hereby certifies, represents and warrants
to, and covenants with, the Depositor, the Trustee and the Master Servicer
that the Purchaser will not transfer such Certificates to any Plan Investor
or person unless such Plan Investor or person meets the requirements set
forth in either (a) or (b) above.
Very truly yours,
_______________________________________
(Purchaser)
By: ____________________________________
Name: __________________________________
Title: ___________________________________
EXHIBIT Q
[RESERVED]
EXHIBIT R
ASSIGNMENT AGREEMENT
[ON FILE WITH THE TRUSTEE]
EXHIBIT S
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":
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APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
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REFERENCE CRITERIA
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GENERAL SERVICING CONSIDERATIONS
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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.
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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.
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1122(d)(1)(iiiAny requirements in the transaction agreements
to maintain a back-up servicer for the pool
assets are maintained.
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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.
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CASH COLLECTION AND ADMINISTRATION
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1122(d)(2)(i) Payments on pool assets are deposited into the |X| (as to
appropriate custodial bank accounts and accounts held
related bank clearing accounts no more than by Trustee)
two business days following receipt, or such
other number of days specified in the
transaction agreements.
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1122(d)(2)(ii)Disbursements made via wire transfer on behalf |X| (as to
of an obligor or to an investor are made only investors only)
by authorized personnel.
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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.
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The related accounts for the transaction, such
as cash reserve accounts or accounts
established as a form of |X| (as to
overcollateralization, are separately accounts held
maintained (e.g., with respect to commingling by Trustee)
of cash) as set forth in the transaction
1122(d)(2)(iv)agreements.
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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.
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1122(d)(2)(vi)Unissued checks are safeguarded so as to
prevent unauthorized access.
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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.
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INVESTOR REMITTANCES AND REPORTING
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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.
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1122(d)(3)(ii)Amounts due to investors are allocated and |X|
remitted in accordance with timeframes,
distribution priority and other terms set
forth in the transaction agreements.
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Disbursements made to an investor are posted
within two business days to the servicer's
investor records, or such other number of days |X|
1122(d)(3)(iii)specified in the transaction agreements.
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Amounts remitted to investors per the investor
reports agree with cancelled checks, or other |X|
1122(d)(3)(iv)form of payment, or custodial bank statements.
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POOL ASSET ADMINISTRATION
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1122(d)(4)(i) Collateral or security on pool assets is
maintained as required by the transaction
agreements or related asset pool documents.
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Pool assets and related documents are
safeguarded as required by the transaction
1122(d)(4)(ii)agreements
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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.
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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.
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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.
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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.
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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.
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1122(d)(4)(vii)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).
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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.
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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
1122(d)(4)(xii)transaction 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 as |X|
1122(d)(4)(xv)set forth in the transaction agreements.
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EXHIBIT T-1
FORM OF FORM 10-K CERTIFICATION
I, [identify the certifying individual], certify that:
1. I have reviewed the annual report on Form 10-K for the fiscal year
[____], and all reports on Form 8-K containing distribution or servicing
reports filed in respect of periods included in the year covered by that
annual report, of the trust (the "Trust") created pursuant to the Pooling and
Servicing Agreement dated as of October 27, 2006 (the "P&S Agreement") among
Residential Asset Securities Corporation (the "Depositor"), Residential
Funding Company, LLC (the "Master Servicer") and U.S. Bank National
Association (the "Trustee");
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required to be
provided to the Trustee by the Master Servicer under the P&S Agreement for
inclusion in these reports is included in these reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer under the P&S Agreement and based upon my knowledge and the annual
compliance review required under the P&S Agreement, and, except as disclosed
in the reports, the Master Servicer has fulfilled its obligations under the
P&S Agreement; and
5. The reports disclose all significant deficiencies relating to the
Master Servicer's compliance with the minimum servicing standards based upon
the report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for Mortgage
Bankers as set forth in the P&S Agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: [the
Trustee].
IN WITNESS WHEREOF, I have duly executed this certificate as of
_________, 20__.
____________________________
Name:
Title:
* to be signed by the senior officer in charge of the servicing functions of
the Master Servicer
EXHIBIT T-2
FORM OF BACK-UP CERTIFICATE TO FORM 10-K CERTIFICATION
The undersigned, a Responsible Officer of [______________] (the
"Trustee") certifies that:
1. 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 October 27, 2006 (the "Agreement") by and among
Residential Asset Securities Corporation, as depositor, Residential
Funding Company, LLC, as master servicer, and the Trustee in accordance
with the standards set forth therein.
2. 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 Section 4.03(e)(I) of 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 U
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
