RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.,
DEPOSITOR,
RESIDENTIAL FUNDING CORPORATION,
MASTER SERVICER,
AND
U.S. BANK NATIONAL ASSOCIATION,
TRUSTEE
POOLING AND SERVICING AGREEMENT
DATED AS OF MARCH 1, 2006
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-NC3
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................................3
Section 1.01. Definitions.......................................................3
Section 1.02. Determination of LIBOR...........................................50
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..........51
Section 2.01. Conveyance of Mortgage Loans.....................................51
Section 2.02. Acceptance by Trustee............................................54
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the
Depositor........................................................56
Section 2.04. Representations and Warranties of Residential Funding............58
Section 2.05. Execution and Authentication of Certificates; Conveyance of REMIC Regular
Interests........................................................60
Section 2.06. Purposes and Powers of the Trust................................61
Section 2.07. Agreement Regarding Ability to Disclose..........................61
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...........................61
Section 3.01. Master Servicer to Act as Servicer...............................61
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers; Enforcement
of Subservicers' Obligations.....................................64
Section 3.03. Successor Subservicers...........................................65
Section 3.04. Liability of the Master Servicer.................................66
Section 3.05. No Contractual Relationship Between Subservicer and Trustee or
Certificateholders...............................................66
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee..66
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to Custodial Account67
Section 3.08. Subservicing Accounts; Servicing Accounts........................69
Section 3.09. Access to Certain Documentation and Information Regarding the Mortgage Loans
71
Section 3.10. Permitted Withdrawals from the Custodial Account.................71
Section 3.11. Maintenance of Primary Insurance Coverage........................73
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage74
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements;
Certain Assignments..............................................75
Section 3.14. Realization Upon Defaulted Mortgage Loans........................77
Section 3.15. Trustee to Cooperate; Release of Mortgage Files..................79
Section 3.16. Servicing and Other Compensation; Eligible Master Servicing Compensation 81
Section 3.17. Reports to the Trustee and the Depositor.........................82
Section 3.18. Annual Statement as to Compliance and Servicing Assessment.......82
Section 3.19. Annual Independent Public Accountants' Servicing Report..........83
Section 3.20. Right of the Depositor in Respect of the Master Servicer.........83
Section 3.21. Advance Facility.................................................83
Section 3.22. Special Servicing................................................87
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...........................................88
Section 4.01. Certificate Account..............................................88
Section 4.02. Distributions....................................................89
Section 4.03. Statements to Certificateholders; Statements to Rating Agencies; Exchange Act
Reporting........................................................95
Section 4.04. Distribution of Reports to the Trustee and the Depositor; Advances by the
Master Servicer.................................................100
Section 4.05. Allocation of Realized Losses...................................101
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. [Reserved]......................................................105
Section 4.09. The Swap Agreement..............................................105
Section 4.10. [Reserved]......................................................107
Section 4.11. Premium Amounts.................................................107
Section 4.12. Tax Treatment of Swap Payments and Swap Termination Payments....108
ARTICLE V THE CERTIFICATES........................................................109
Section 5.01. The Certificates................................................109
Section 5.02. Registration of Transfer and Exchange of Certificates...........111
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates...............116
Section 5.04. Persons Deemed Owners...........................................117
Section 5.05. Appointment of Paying Agent.....................................117
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER...................................117
Section 6.01. Respective Liabilities of the Depositor and the Master Servicer.117
Section 6.02. Merger or Consolidation of the Depositor or the Master Servicer; Assignment
of Rights and Delegation of Duties by Master Servicer...........118
Section 6.03. Limitation on Liability of the Depositor, the Master Servicer and Others
118
Section 6.04. Depositor and Master Servicer Not to Resign.....................119
ARTICLE VII DEFAULT.................................................................120
Section 7.01. Events of Default...............................................120
Section 7.02. Trustee or Depositor to Act; Appointment of Successor...........121
Section 7.03. Notification to Certificateholders..............................123
Section 7.04. Waiver of Events of Default.....................................123
ARTICLE VIII CONCERNING THE TRUSTEE..................................................123
Section 8.01. Duties of Trustee...............................................123
Section 8.02. Certain Matters Affecting the Trustee...........................125
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans...........127
Section 8.04. Trustee May Own Certificates....................................127
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses; Indemnification127
Section 8.06. Eligibility Requirements for Trustee............................128
Section 8.07. Resignation and Removal of the Trustee..........................128
Section 8.08. Successor Trustee...............................................129
Section 8.09. Merger or Consolidation of Trustee..............................130
Section 8.10. Appointment of Co-Trustee or Separate Trustee...................130
Section 8.11. Appointment of Custodians.......................................131
Section 8.12. Appointment of Office or Agency.................................131
Section 8.13. DTC Letter of Representations...................................132
Section 8.14. Swap Agreement..................................................132
ARTICLE IX TERMINATION.............................................................132
Section 9.01. Termination Upon Purchase by Residential Funding or Liquidation of All
Mortgage Loans..................................................132
Section 9.02. Additional Termination Requirements.............................136
ARTICLE X REMIC PROVISIONS........................................................137
Section 10.01. REMIC Administration............................................137
Section 10.02. Master Servicer, REMIC Administrator and Trustee Indemnification141
ARTICLE XI MISCELLANEOUS PROVISIONS................................................141
Section 11.01. Amendment.......................................................141
Section 11.02. Recordation of Agreement; Counterparts..........................144
Section 11.03. Limitation on Rights of Certificateholders......................144
Section 11.04. Governing Law...................................................145
Section 11.05. Notices.........................................................145
Section 11.06. Notices to Rating Agencies......................................146
Section 11.07. Severability of Provisions......................................147
Section 11.08. Supplemental Provisions for Resecuritization....................147
Section 11.09. [Reserved]......................................................147
Section 11.10. Third Party Beneficiaries.......................................147
ARTICLE XII COMPLIANCE WITH REGULATION AB...........................................148
Section 12.01. Intent of the Parties; Reasonableness...........................148
Section 12.02. Additional Representations and Warranties of the Trustee........148
Section 12.03. Information to Be Provided by the Trustee.......................149
Section 12.04. Report on Assessment of Compliance and Attestation..............149
Section 12.05. Indemnification; Remedies.......................................150
Exhibits
Exhibit A Form of Class A Certificate
Exhibit B Form of Class M Certificate
Exhibit C [Reserved]
Exhibit D Form of Class SB Certificate
Exhibit E Form of Class R Certificate
Exhibit F Form of Custodial Agreement
Exhibit G Mortgage Loan Schedule
Exhibit H Forms of Request for Release
Exhibit I-1 Form of Transfer Affidavit and Agreement
Exhibit I-2 Form of Transferor Certificate
Exhibit J Form of Investor Representation Letter
Exhibit K Form of Transferor Representation Letter
Exhibit L Text of Amendment to Pooling and Servicing Agreement Pursuant to Section
11.01(e) for a Limited Guaranty
Exhibit M Form of Limited Guaranty
Exhibit N Form of Lender Certification for Assignment of Mortgage Loan
Exhibit O Form of Rule 144A Investment Representation
Exhibit P [Reserved]
Exhibit Q Form of ERISA Representation Letter
Exhibit R-1 Form 10-K Certification
Exhibit R-2 Form 10-K Back-up Certification
Exhibit S Information to be Provided by the Master Servicer to the Rating Agencies
Relating to Reportable Modified Mortgage Loans
Exhibit T Schedule of Swap Agreement Notional Balances
Exhibit U Swap Agreement
Exhibit V Servicing Criteria
Exhibit W Special Servicing Transfer Date Percentage
.......Exhibit X Premium Amount Percentages
This Pooling and Servicing Agreement, effective as of March 1, 2006, among RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC., as depositor (together with its permitted successors and assigns, the "Depositor"),
RESIDENTIAL FUNDING CORPORATION, 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 sixteen Classes, which in the aggregate will evidence the entire
beneficial ownership interest in the Mortgage Loans (as defined herein) and certain other related assets.
REMIC I
As provided herein, the REMIC Administrator will make an election to treat the segregated pool of
assets consisting of the Mortgage Loans and certain other related assets (exclusive of the Swap Account and
the Swap 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." The Class
R-I Certificates will represent the sole Class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The 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 for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for the REMIC I Regular Interests shall be the 360th Distribution Date. The REMIC I
Regular Interests will not be certificated.
UNCERTIFICATED
REMIC I
INITIAL UNCERTIFICATED REMIC I LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE
AA Variable(1) $509,600,015.05 March 25, 2036
A-1 Variable(1) $2,033,820 March 25, 2036
A-2 Variable(1) $1,785,600 March 25, 2036
A-3 Variable(1) $246,980 March 25, 2036
M-1 Variable(1) $195,000 March 25, 2036
M-2 Variable(1) $176,800 March 25, 2036
M-3 Variable(1) $101,400 March 25, 2036
M-4 Variable(1) $93,600 March 25, 2036
M-5 Variable(1) $85,800 March 25, 2036
M-6 Variable(1) $83,200 March 25, 2036
M-7 Variable(1) $78,000 March 25, 2036
M-8 Variable(1) $65,000 March 25, 2036
M-9 Variable(1) $52,000 March 25, 2036
M-10 Variable(1) $52,000 March 25, 2036
ZZ Variable(1) $5,350,800.31 March 25, 2036
(1)Calculated in accordance with the definition of "Uncertificated REMIC I Pass-Through Rate" herein.
REMIC II
As provided herein, the REMIC Administrator will elect to treat the segregated pool of assets
consisting of the REMIC I Regular Interests as a REMIC for federal income tax purposes, and such segregated
pool of assets will be designated as "REMIC II". The Class R-II Certificates will represent the sole class
of "residual interests" in REMIC II 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, Final Scheduled Distribution Date and initial ratings for each Class of
Certificates comprising the interests representing "regular interests" in REMIC II. The "latest possible
maturity date" (determined for purposes of satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii)) for
each Class of REMIC II Regular Interests shall be the 360th Distribution Date.
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AGGREGATE
INITIAL
CERTIFICATE
PASS-THROUGH PRINCIPAL FINAL SCHEDULED
DESIGNATION TYPE RATE BALANCE DISTRIBUTION DATE INITIAL RATINGS
-----------------------------------------------------------------------------------------
XXXXX'X S&P
-----------------------------------------------------------------------------------------
Class A-1(1) Senior Adjustable(2) $203,382,000January 25, 2029 Aaa AAA
(3)
-----------------------------------------------------------------------------------------
Class A-2(1) Senior Adjustable(2) $178,560,000January 25, 2036 Aaa AAA
(3)
-----------------------------------------------------------------------------------------
Class A-3(1) Senior Adjustable(2) $24,698,000 March 25, 2036 Aaa AAA
(3)
-----------------------------------------------------------------------------------------
Class M-1(1) Mezzanine Adjustable(2) $19,500,000 March 25, 2036 Aa1 AA+
(3)
-----------------------------------------------------------------------------------------
Class M-2(1) Mezzanine Adjustable(2) $17,680,000 Xxxxx 00, 0000 Xx0 XX
(3)
-----------------------------------------------------------------------------------------
Class M-3(1) Mezzanine Adjustable(2) $10,140,000 Xxxxx 00, 0000 Xx0 XX
(3)
-----------------------------------------------------------------------------------------
Class M-4(1) Mezzanine Adjustable(2) $9,360,000 March 25, 2036 A1 AA-
(3)
-----------------------------------------------------------------------------------------
Class M-5(1) Mezzanine Adjustable(2) $8,580,000 March 25, 2036 A2 A+
(3)
-----------------------------------------------------------------------------------------
Class M-6(1) Mezzanine Adjustable(2) $8,320,000 March 25, 2036 A3 A
(3)
-----------------------------------------------------------------------------------------
Class M-7(1) Mezzanine Adjustable(2) $7,800,000 March 25, 2036 Baa1 A-
(3)
-----------------------------------------------------------------------------------------
Class M-8(1) Mezzanine Adjustable(2) $6,500,000 March 25, 2036 Baa2 BBB+
(3)
-----------------------------------------------------------------------------------------
Class M-9(1) Mezzanine Adjustable(2) $5,200,000 March 25, 2036 Baa3 BBB
(3)
-----------------------------------------------------------------------------------------
Class M-10(1) Mezzanine Adjustable(2) $5,200,000 March 25, 2036 Ba1 BBB-
(3)
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Class SB Subordinate Variable(4) $15,080,015. N/A N/R N/R
Interest
-----------------------------------------------------------------------------------------
Class R-I Residual N/A N/A N/A N/R N/R
-----------------------------------------------------------------------------------------
Class R-II Residual N/A N/A N/A N/R N/R
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(1) The Class A and Class M Certificates will represent ownership of REMIC II
Regular Interests together with certain rights to payments to be made from amounts
received under the Swap Agreement which will be deemed made for federal income tax
purposes outside of REMIC II by the Holder of the Class SB Certificates as the
Owner of the Swap Agreement.
(2) The REMIC II Regular Interests ownership of which is represented by the
Class A and Class M Certificates, will accrue interest at a per annum rate equal
to LIBOR plus the applicable Margin, each subject to payment caps as described in
the definition of "Pass-Through Rate" and the provisions for the payment of Class
A Basis Risk Shortfall Carry-Forward Amounts, Class M Basis Risk Shortfall
Carry-Forward Amounts herein, which payments will not be part of the entitlement
of the REMIC II Regular Interests related to such Certificates.
(3) The Class A, 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 II Regular Interest is entitled and from amounts received
under the Swap Agreement, which will not be a part of their ownership of the
REMIC II 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 II regular interests, a principal only regular
interest designated SB-PO and an interest only regular interest designated 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 Swap Agreement shall be
outside and apart from its rights under the REMIC II Regular Interests SB-IO and
SB-PO.
The Mortgage Loans have an aggregate Cut-off Date Principal Balance equal to $520,000,015.36. The
Mortgage Loans are fixed-rate and adjustable-rate, fully amortizing, first and junior lien mortgage loans
having terms to maturity at origination or modification of generally not more than 30 years.
In consideration of the mutual agreements herein contained, the 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 the Class A and Class M
Certificates, interest accrued during the related Interest Accrual Period on the Certificate Principal
Balance thereof immediately prior to such Distribution Date at the related Pass-Through Rate for that
Distribution Date.
The amount of Accrued Certificate Interest on each Class of Certificates shall be reduced by the
amount of Prepayment Interest Shortfalls on the Mortgage Loans during the prior calendar month (to the extent
not covered by Eligible Master Servicing Compensation pursuant to Section 3.16) and by the amount of Relief
Act Shortfalls on the Mortgage Loans during the related Due Period, in each case to the extent allocated to
that Class of Certificates pursuant to Section 4.02(g). Accrued Certificate Interest for each Class on any
Distribution Date shall be further reduced by the interest portion of Realized Losses allocated to any Class
of Certificates pursuant to Section 4.05.
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 for that Distribution Date 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 Eligible Master Servicing Compensation pursuant
to Section 3.16 or by the Excess Cash Flow pursuant to clauses (xvi) and (xvii) of Section 4.02(c) or by the
Swap Agreement pursuant to clauses (C) and (D) of Section 4.09(c). In addition, Accrued Certificate Interest
with respect to each Distribution Date, as to the Class SB Certificates, shall be reduced by an amount equal
to the interest portion of Realized Losses allocated to the Overcollateralization Amount pursuant to Section
4.05 hereof. Accrued Certificate Interest on the Class A and Class M Certificates shall accrue on the basis
of a 360-day year and the actual number of days in the related Interest Accrual Period. Accrued Certificate
Interest on the Class SB Certificates shall accrue on the basis of a 360 day year consisting of twelve 30 day
months.
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 related Subservicing Fee Rate.
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.
Affected Party: As defined in the Swap Agreement.
Affiliate: With respect to any Person, any other Person controlling, controlled by or under common
control with such first Person. For the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
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, REO Proceeds, Insurance 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, Insurance Proceeds, REO Proceeds, Subsequent Recoveries 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, one of the following: (i) the lesser of (a)
the appraised value of such Mortgaged Property based upon the appraisal made at the time of the origination
of the related Mortgage Loan, and (b) the sales price of the Mortgaged Property at such time of origination,
(ii) in the case of a Mortgaged Property securing a refinanced or modified Mortgage Loan, one of (1) the
appraised value based upon the appraisal made at the time of origination of the loan which was refinanced or
modified, (2) the appraised value determined in an appraisal made at the time of refinancing or modification
or (3) the sales price of the Mortgaged Property, or (iii) with respect to the Mortgage Loans for which a
broker's price opinion was obtained, the value contained in such opinion.
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.
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 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, (v) any amount deposited in the Certificate Account pursuant to
Section 4.07 and any amounts deposited in the Custodial Account pursuant to Section 9.01 and (vi) any amount
described in clauses (A) and (B) of Section 4.09(c), reduced by (b) the sum as of the close of business on
the immediately preceding Determination Date of: (w) any payments or collections consisting of prepayment
charges on the Mortgage Loans that were received during the related Prepayment Period, (x) the Amount Held
for Future Distribution, (y) amounts permitted to be withdrawn by the Master Servicer from the Custodial
Account pursuant to clauses (ii)-(x), inclusive, of Section 3.10(a) and (z) any Net Swap Agreements owned to
the Swap Counterparty and Swap Termination Payments owed to the Swap Counterparty not due to Swap
Counterparty Trigger Event for such Distribution Date.
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 Shortfall: Any Class A Basis Risk Shortfall or Class M Basis Risk Shortfall.
Basis Risk Shortfall Carry-Forward Amount: Any Class A Basis Risk Shortfall Carry-Forward Amount or
Class M Basis Risk Shortfall Carry-Forward Amount.
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 States of California, New York, Minnesota or 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.
Calendar Quarter: A Calendar Quarter shall consist of one of the following time periods in any given
year: January 1 through March 31, April 1 through June 30, July 1 through September 30, and October 1
through December 31.
Call Rights: As defined in Section 9.01(e).
Capitalization Reimbursement Amount: With respect to any Distribution Date, the amount of
unreimbursed Advances or Servicing Advances that were added to the Stated Principal Balance of the related
Mortgage Loans during the preceding calendar month and reimbursed to the Master Servicer or Subservicer
pursuant to Section 3.10(a)(vii) on or prior to such Distribution Date.
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 Mortgage Products, Inc., Mortgage Asset-Backed Pass-Through Certificates, Series 2006-NC3"
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 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 4.02(d) 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 Balance of each class of Class A and
Class M Certificates to which a Realized Loss was previously allocated and remains unreimbursed will be
increased, sequentially, as follows: first, the Class A Certificates on a pro rata basis, then the Class
X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates, in that order, to the extent of Realized Losses previously allocated thereto and remaining
unreimbursed, but only to the extent of Subsequent Recoveries received during the previous calendar month and
available for distribution pursuant to Section 4.02(c)(xiii). With respect to each Class SB Certificate, on
any date of determination, an amount equal to the Percentage Interest evidenced by such Certificate times an
amount equal to 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 and Class M Certificates then
outstanding. 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 Basis Risk Shortfall: With respect to each Class of the Class A Certificates and any
Distribution Date for which the Pass-Through Rate for any such Class of Certificates is equal to the Net WAC
Cap Rate, the excess, if any, of (x) Accrued Certificate Interest on that Class of Certificates on such
Distribution Date, calculated at a rate equal to the lesser of (a) LIBOR plus the related Class A Margin, as
calculated for such Distribution Date, and (b) the Maximum Mortgage Loan Rate, over (y) Accrued Certificate
Interest on such Class of Class A Certificates for such Distribution Date calculated at the Net WAC Cap Rate.
Class A Basis Risk Shortfall Carry-Forward Amount: With respect to each Class of Class A Certificates
and any Distribution Date, the sum of (a) the aggregate amount of Class A Basis Risk Shortfall for such Class
on such Distribution Date plus (b) any Class A Basis Risk Shortfall Carry-Forward Amount for such Class
remaining unpaid from the preceding Distribution Date, plus (c) one month's interest on the amount in clause
(b) (based on the number of days in the preceding Interest Accrual Period), to the extent previously
unreimbursed by the Excess Cash Flow pursuant to Section 4.02(c)(xviii), at a rate equal to the related
Pass-Through Rate.
Class A Certificate: Any one of the Class A-1, Class A-2 or Class A-3 Certificates.
Class A Interest Distribution Amount: With respect to each Class of Class A Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class of Class A Certificates for such Distribution Date, plus any related Accrued Certificate Interest
thereon remaining unpaid from any prior Distribution Date.
Class A Margin: With respect to the Class A-1 Certificates, 0.070% per annum. With respect to the
Class A-2 Certificates, initially 0.190% per annum, and on any Distribution Date on or after the second
Distribution Date after the possible Optional Termination Date, 0.380% per annum. With respect to the Class
A-3 Certificates, initially 0.270% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.540% per annum.
Class A Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the Principal Distribution Amount for that Distribution Date or (ii) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the Principal Distribution Amount for that Distribution Date; and
(ii) the excess, if any, of (A) the aggregate Certificate Principal Balance of the
Class A Certificates immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and (2) the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to distributions to
be made on that Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to be made
on that Distribution Date, over the Overcollateralization Floor.
Class A-1 Certificate: Any one of the Class A-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, and the Swap Account, Class SB and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the right to receive the Class A
Basis Risk Shortfall Carry-Forward Amount from Excess Cash Flow and the Swap Account to the extent described
herein.
Class A-2 Certificate: Any one of the Class A-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, Class SB and Class R Certificates with respect to distributions and the allocation of Realized
Losses as set forth in Section 4.05, and evidencing (i) an interest designated as a "regular interest" in
REMIC II for purposes of the REMIC Provisions and (ii) the right to receive the Class A Basis Risk Shortfall
Carry-Forward Amount from Excess Cash Flow and the Swap Account to the extent described herein.
Class A-3 Certificate: Any one of the Class A-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, Class SB and Class R Certificates with respect to distributions and the allocation of Realized
Losses as set forth in Section 4.05, and evidencing (i) an interest designated as a "regular interest" in
REMIC II for purposes of the REMIC Provisions and (ii) the right to receive the Class A Basis Risk Shortfall
Carry-Forward Amount from Excess Cash Flow and the Swap Account to the extent described herein.
Class M Basis Risk Shortfall: With respect to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class
M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates and any Distribution Date for
which the Pass-Through Rate for any such Class of Certificates is equal to the Net WAC Cap Rate, the excess,
if any, of (x) Accrued Certificate Interest on that Class of Certificates on such Distribution Date, using
the lesser of (a) LIBOR plus the related Class M Margin, as calculated for such Distribution Date, and (b)
the Maximum Mortgage Loan Rate, over (y) Accrued Certificate Interest on such Class of Class M Certificates
for such Distribution Date calculated at the Net WAC Cap Rate.
Class M Basis Risk Shortfall Carry-Forward Amount: With respect to the Class X-0, Xxxxx X-0, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Certificates and any
Distribution Date, the sum of (a) the aggregate amount of Class M Basis Risk Shortfall for each such Class on
such Distribution Date plus (b) any Class M Basis Risk Shortfall Carry-Forward Amount for such Classes
remaining unpaid from the preceding Distribution Date, plus (c) one month's interest on the amount in clause
(b) (based on the number of days in the preceding Interest Accrual Period), to the extent previously
unreimbursed by the Excess Cash Flow or the Swap Agreement pursuant to Section [4.02(c)(xviii)], or Section
4.09(c) at a rate equal to the related Pass-Through Rate.
Class M Certificate: Any one of the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8, Class M-9 or Class M-10 Certificates.
Class M Margin: With respect to the Class M-1 Certificates, initially 0.340% per annum, and on any
Distribution Date on or after the second Distribution Date after the first possible Optional Termination
Date, 0.510% per annum. With respect to the Class M-2 Certificates, initially 0.360% per annum, and on any
Distribution Date on or after the second Distribution Date after the first possible Optional Termination
Date, 0.540% per annum. With respect to the Class M-3 Certificates, initially 0.380% per annum, and on any
Distribution Date on or after the second Distribution Date after the first possible Optional Termination
Date, 0.570% per annum. With respect to the Class M-4 Certificates, initially 0.460% per annum, and on any
Distribution Date on or after the second Distribution Date after the first possible Optional Termination
Date, 0.690% per annum. With respect to the Class M-5 Certificates, initially 0.480% per annum, and on any
Distribution Date on or after the second Distribution Date after the first possible Optional Termination
Date, 0.720% per annum. With respect to the Class M-6 Certificates, initially 0.550% per annum, and on any
Distribution Date on or after the second Distribution Date after the first possible Optional Termination
Date, 0.825% per annum. With respect to the Class M-7 Certificates, initially 1.050% per annum, and on any
Distribution Date on or after the second Distribution Date after the first possible Optional Termination
Date, 1.575% per annum. With respect to the Class M-8 Certificates, initially 1.150% per annum, and on any
Distribution Date on or after the second Distribution Date after the first possible Optional Termination
Date, 1.725% per annum. With respect to the Class M-9 Certificates, initially 2.050% per annum, and on any
Distribution Date on or after the second Distribution Date after the first possible Optional Termination
Date, 3.075% per annum. With respect to the Class M-10 Certificates, initially 2.500% per annum, and on any
Distribution Date on or after the second Distribution Date after the first possible Optional Termination
Date, 3.750% 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, senior to
the Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 Class
SB and Class R Certificates with respect to distributions and the allocation of Realized Losses as set forth
in Section 4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC II for purposes
of the REMIC Provisions and (ii) the right to receive the Class M Basis Risk Shortfall Carry-Forward Amount
from the Excess Cash Flow and the Swap Agreement to the extent described herein.
Class M-1 Interest Distribution Amount: With respect to the Class M-1 Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class for such Distribution Date, plus any related Accrued Certificate Interest remaining unpaid from
any prior Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for
that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A Certificates (after taking into account the payment of the Class
A Principal Distribution Amount for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution Date and (y) the excess,
if any, of the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-2 Certificate: Any one of the Class M-2 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to
the Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class SB and
Class R Certificates with respect to distributions and the allocation of Realized Losses as set forth in
Section 4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC II for purposes of
the REMIC Provisions and (ii) the right to receive the Class M Basis Risk Shortfall Carry-Forward Amount from
Excess Cash Flow and the Swap Agreement to the extent described herein.
Class M-2 Interest Distribution Amount: With respect to the Class M-2 Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class for such Distribution Date, plus any related Accrued Certificate Interest remaining unpaid from
any prior Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount and the Class M-1 Principal Distribution Amount or (ii) on or after the
Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount and the Class M-1 Principal
Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A Certificates and Class M-1 Certificates (after taking into
account the payment of the Class A Principal Distribution Amount and the Class M-1
Principal Distribution Amount for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution Date and (y) the excess,
if any, of the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-3 Certificate: Any one of the Class M-3 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to
the Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class SB and Class R
Certificates with respect to distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and (ii) the right to receive the Class M Basis Risk Shortfall Carry-Forward Amount from Excess
Cash Flow and the Swap Agreement to the extent described herein.
Class M-3 Interest Distribution Amount: With respect to the Class M-3 Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class for such Distribution Date, plus any related Accrued Certificate Interest remaining unpaid from
any prior Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A,
Class M-1 and Class M-2 Principal Distribution Amounts or (ii) on or after the Stepdown Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A, Class M-1 and Class M-2 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A, Class M-1 and Class M-2 Certificates (after taking into account
the payment of the Class A, Class M-1 and Class M-2 Principal Distribution Amounts for
that Distribution Date) and (2) the Certificate Principal Balance of the Class M-3
Certificates immediately prior to that Distribution Date over (B) the lesser of (x) the
product of (1) the applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to be made
on that Distribution Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be made on that
Distribution Date, over the Overcollateralization Floor.
Class M-4 Certificate: Any one of the Class M-4 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to
the Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class SB and Class R Certificates with
respect to distributions and the allocation of Realized Losses as set forth in Section 4.05, and evidencing
(i) an interest designated as a "regular interest" in REMIC II for purposes of the REMIC Provisions and (ii)
the right to receive the Class M Basis Risk Shortfall Carry-Forward Amount from the Excess Cash Flow to the
extent described herein.
Class M-4 Interest Distribution Amount: With respect to the Class M-4 Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class for such Distribution Date, plus any related Accrued Certificate Interest remaining unpaid from
any prior Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A,
Class M-1, Class M-2 and Class M-3 Principal Distribution Amounts or (ii) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A, Class M-1, Class M-2 and Class M-3 Principal Distribution
Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A, Class M-1, Class M-2 and Class M-3 Certificates (after taking
into account the payment of the Class A, Class M-1, Class M-2 and Class M-3 Principal
Distribution Amounts for that Distribution Date) and (2) the Certificate Principal
Balance of the Class M-4 Certificates immediately prior to that Distribution Date over
(B) the lesser of (x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the Overcollateralization
Floor.
Class M-5 Certificate: Any one of the Class M-5 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to
the Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class SB and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section 4.05, and evidencing (i) an
interest designated as a "regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the
right to receive the Class M Basis Risk Shortfall Carry-Forward Amount from Excess Cash Flow and the Swap
Agreement to the extent described herein.
Class M-5 Interest Distribution Amount: With respect to the Class M-5 Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class for such Distribution Date, plus any related Accrued Certificate Interest remaining unpaid from
any prior Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A,
Class M-1, Class M-2, Class M-3 and Class M-4 Principal Distribution Amounts or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A, Class M-1, Class M-2, Class M-3 and Class M-4 Principal
Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates
(after taking into account the payment of the Class A, Class M-1, Class M-2, Class M-3
and Class M-4 Principal Distribution Amounts 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, senior to
the Class M-7, Class M-8, Class M-9, Class M-10, Class SB and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section 4.05, and evidencing (i) an
interest designated as a "regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the
right to receive the Class M Basis Risk Shortfall Carry-Forward Amount from Excess Cash Flow and the Swap
Agreement to the extent described herein.
Class M-6 Interest Distribution Amount: With respect to the Class M-6 Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class for such Distribution Date, plus any related Accrued Certificate Interest remaining unpaid from
any prior Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A,
Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Principal Distribution Amounts or (ii) on or after
the Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificates (after taking into account the payment of the Class A, Class M-1, Class
M-2, Class M-3, Class M-4 and Class M-5 Principal Distribution Amounts 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, senior to
the Class M-8, Class M-9, Class M-10, Class SB and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the right to receive the Class M
Basis Risk Shortfall Carry-Forward Amount from the Excess Cash Flow and the Swap Agreement to the extent
described herein.
Class M-7 Interest Distribution Amount: With respect to the Class M-7 Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class for such Distribution Date, plus any related Accrued Certificate Interest remaining unpaid from
any prior Distribution Date.
Class M-7 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Principal Distribution Amounts or (ii) on
or after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class
M-6 Certificates (after taking into account the payment of the Class A, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Principal Distribution Amounts
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, senior to
the Class M-9, Class M-10, Class SB and Class R Certificates with respect to distributions and the allocation
of Realized Losses as set forth in Section 4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC II for purposes of the REMIC Provisions and (ii) the right to receive the Class M Basis
Risk Shortfall Carry-Forward Amount from the Excess Cash Flow and the Swap Agreement to the extent described
herein.
Class M-8 Interest Distribution Amount: With respect to the Class M-8 Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class for such Distribution Date, plus any related Accrued Certificate Interest remaining unpaid from
any prior Distribution Date.
Class M-8 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Principal Distribution Amounts
or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the
lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6 and Class M-7 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6 and Class M-7 Certificates (after taking into account the payment of the Class A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7
Principal Distribution Amounts 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, senior to
the Class M-10, Class SB Certificates and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the right to receive the Class M
Basis Risk Shortfall Carry-Forward Amount from Excess Cash Flow and the Swap Agreement to the extent
described herein.
Class M-9 Interest Distribution Amount: With respect to the Class M-9 Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class for such Distribution Date, plus any related Accrued Certificate Interest remaining unpaid from
any prior Distribution Date.
Class M-9 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class M-8 Principal
Distribution Amounts or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, (a) the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7 and Class M-8 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7 and Class M-8 Certificates (after taking into account the payment of the
Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7
and Class M-8 Principal Distribution Amounts 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, senior to
the Class SB Certificates and Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC II for purposes of the REMIC Provisions and (ii) the right to receive the Class M Basis
Risk Shortfall Carry-Forward Amount from Excess Cash Flow and the Swap Agreement to the extent described
herein.
Class M-10 Interest Distribution Amount: With respect to the Class M-10 Certificates and any
Distribution Date, the aggregate amount of Accrued Certificate Interest to be distributed to the holders of
such Class for such Distribution Date, plus any related Accrued Certificate Interest remaining unpaid from
any prior Distribution Date.
Class M-10 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A,
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Principal Distribution Amounts or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for
that Distribution Date, (a) the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution Date after
distribution of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8 and Class M-9 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal
Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7, Class M-8 and M-9 Certificates (after taking into account the payment
of the Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8 and Class M-9 Principal Distribution Amounts 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 R Certificates: Collectively, the Class R-I Certificates and the Class R II Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit E and
evidencing an interest designated as a "residual interest" in REMIC I for purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit E and
evidencing an interest designated as a "residual interest" in REMIC II 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 D, 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 II
together with certain rights to payments under the Swap Agreement for purposes of the REMIC Provisions.
Closing Date: March 28, 2006.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
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/RAMP 2006-NC3.
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 F hereto.
Custodian: A custodian appointed pursuant to a Custodial Agreement.
Cut-off Date: March 1, 2006.
Cut-off Date Balance: $520,000,015.36.
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 during the month of the Cut-off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction in the scheduled Monthly
Payment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy
Code, except such a reduction constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
Defaulting Party: As defined in the Swap Agreement.
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.
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, which includes 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 the month immediately following the month
of the initial issuance of the Certificates or, if such 25th day is not a Business Day, the Business Day
immediately following such 25th day.
DTC Letter: The Letter of Representations, dated March 28, 2006, between the Trustee, on behalf of
the Trust Fund, 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
by such Rating Agency).
Eligible Master Servicing Compensation: With respect to any Distribution Date, an amount equal to
Prepayment Interest Shortfalls resulting from Principal Prepayments in Full or Curtailments during the
related Prepayment Period, but not more than the lesser of (a) one-twelfth of 0.125% of the Stated Principal
Balance of the Mortgage Loans immediately preceding such Distribution Date and (b) the sum of the Servicing
Fee, all income and gain on amounts held in the Custodial Account and the Certificate Account and amounts
payable to the Certificateholders with respect to such Distribution Date and servicing compensation to which
the Master Servicer may be entitled pursuant to Section 3.10(a)(v) and (vi) 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 7.02(a).
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 the Mortgage Loans and any Distribution Date, an amount equal to
the sum of (A) the excess of (1) the Available Distribution Amount (other than the portion of the Available
Distribution Amount described in clause (a)(vi) of the definition of Available Distribution Agreement) for
that Distribution Date over (2) the sum of (x) the Interest Distribution Amount for that Distribution Date
and (y) the lesser of (i) the aggregate Certificate Principal Balance of the Class A and Class M Certificates
immediately prior to such Distribution Date and (ii) the Principal Remittance Amount for that Distribution
Date to the extent not used to pay interest on the Class A and Class M Certificates on such Distribution Date
and (B) the Overcollateralization Reduction Amount, if any, 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.
Xxxxxx Mae: 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: The Federal Deposit Insurance Corporation or any successor thereto.
FHA: The Federal Housing Administration, or its successor.
Final Certification: As defined in Section 2.02.
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-1 Certificates, the Distribution Date in January 2029; with respect to the Class
A-2 Certificates, the Distribution Date in January 2036; with respect to the Class A-3 Certificates, the
Distribution Date in March 2036; with respect to the Class M-1 Certificates, The Distribution Date in March;
with respect to the Class M-2 Certificates, the Distribution Date in March; with respect to the Class M-3
Certificates, the Distribution Date in March 2036; with respect to the Class M-4 Certificates, the
Distribution Date in March 2036; with respect to the Class M-5 Certificates, the Distribution Date in March
2036; with respect to the Class M-6 Certificates, the Distribution Date in March 2036; with respect to the
Class M-7 Certificates, the Distribution Date in March 2036; with respect to the Class M-8 Certificates, the
Distribution Date in March 2036; with respect to the Class M-9 Certificates, the Distribution Date in March
2036; with respect to the Class M-10 Certificates, the Distribution Date in March 2036 and with respect to
the Class SB Certificates, the Distribution Date in February 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 or Class M Certificates on or before its Final Scheduled Distribution Date.
Fixed Swap Payment: With respect to any Distribution Date on or prior to the Distribution Date in
February 2010, an amount equal to the product of (x) a fixed rate equal to 5.046% per annum, (y) the Swap
Agreement Notional Balance for that Distribution Date and (z) a fraction, the numerator of which is 30 and
the denominator of which is 360.
Floating Swap Payment: With respect to any Distribution Date on or prior to the Distribution Date in
February 2010, an amount equal to the product of (x) Swap LIBOR, (y) the Swap Agreement Notional Balance for
that Distribution Date and (z) a fraction, the numerator of which is equal to the number of days in the
related calculation period as provided in the Swap Agreement and the denominator of which is 360.
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.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a corporate instrumentality of the United
States created and existing under Title III of the Emergency Home Finance Act of 1970, as amended, or any
successor thereto.
Gross Margin: With respect to each adjustable rate Mortgage Loan, the fixed percentage set forth in
the related Mortgage Note and indicated in Exhibit G hereto as the "NOTE MARGIN," which percentage is added
to the related Index on each Adjustment Date to determine (subject to rounding in accordance with the related
Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate) the interest rate
to be borne by such Mortgage Loan until the next Adjustment Date.
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 Class A or Class M Certificates, (i) with respect to the
Distribution Date in April 2006, the period commencing on the Closing Date and ending on the day preceding
the Distribution Date in April 2006, and (ii) with respect to any Distribution Date after the Distribution
Date in April 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. With
respect to the Class SB Certificates and any Distribution Date, the prior calendar month.
Interest Distribution Amount: The sum of the Class A, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10 Interest Distribution Amounts.
Interested Person: As of any date of determination, the Depositor, the Master Servicer, the Trustee,
any Mortgagor, any Manager of a Mortgaged Property, or any Person known to a Responsible Officer of the
Trustee to be an Affiliate of any of them.
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 to by law to be closed.
LIBOR Rate Adjustment Date: With respect to each Distribution Date, the second LIBOR Business Day
immediately preceding the commencement of the related Interest Accrual Period.
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 Loan through trustee's sale, foreclosure
sale or otherwise, other than REO Proceeds and Subsequent Recoveries.
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 (plus, in the case
of a junior lien Mortgage Loan, the principal balance of the Senior Mortgage Loan on the Related Mortgaged
Property) and the denominator of which is the Appraised Value of the related Mortgaged Property.
Marker Rate: With respect to the Class SB Certificates or the REMIC II Regular Interest SB-IO and any
Distribution Date, a per annum rate equal to two (2) multiplied by the weighted average of the Uncertificated
REMIC I Pass-Through Rates for each REMIC I Regular Interest (other than the REMIC I Regular Interest AA)
with the rates on each such REMIC I Regular Interest (other than REMIC I Regular Interest ZZ) subject to a
cap equal to the Pass-Through Rate for the corresponding Class for such REMIC I Regular Interest, and the
rate on REMIC I Regular Interest ZZ subject to a cap of zero, in each case for purposes of this calculation.
Maturity Date: With respect to each Class of Certificates representing ownership of regular interest
or Uncertificated Regular Interests issued by each of REMIC I and REMIC II 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, the Distribution Date in March 2036, which is
the Distribution Date occurring in the month following the last scheduled monthly payment of the Mortgage
Loans.
Maximum Mortgage Loan Rate: With respect to the Class A and Class M Certificates and any Interest
Accrual Period, 14.00% per annum.
Maximum Mortgage Rate: With respect to any adjustable rate Mortgage Loan, the rate indicated in
Exhibit G hereto as the "NOTE CEILING," which rate is the maximum interest rate that may be applicable to
such adjustable rate Mortgage Loan at any time during the life of such Mortgage Loan.
Maximum Net Mortgage Rate: With respect to any adjustable rate Mortgage Loan and any date of
determination, the Maximum Mortgage Rate minus the sum of (i) the Subservicing Fee Rate and (ii) the
Servicing Fee Rate.
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, the greater of (i) the Note
Margin and (ii) the rate indicated in Exhibit G hereto as the "NOTE FLOOR", which rate may be applicable to
such adjustable rate Mortgage Loan at any time during the life of such adjustable rate Mortgage Loan.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject of a Servicing Modification.
Modified Mortgage Rate: With respect to any Mortgage Loan that is the subject of a Servicing
Modification, the Mortgage Rate, minus the rate per annum by which the Mortgage Rate on such Mortgage Loan
was reduced.
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 successor in interest.
Mortgage: With respect to each Mortgage Note related to a Mortgage Loan, 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 Loan Schedule: The lists of the Mortgage Loans attached hereto as Exhibit G (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:
(i) the Mortgage Loan identifying number ("RFC LOAN #");
(ii) [reserved];
(iii) the maturity of the Mortgage Note ("MATURITY DATE" or "MATURITY DT") for
Mortgage Loans;
(iv) the Mortgage Rate as of origination ("ORIG RATE");
(v) the Mortgage Rate as of the Cut-off Date for an adjustable rate Mortgage Loan
("CURR RATE");
(vi) the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
(vii) the scheduled monthly payment of principal, if any, and interest as of the
Cut-off Date ("ORIGINAL P & I" or "CURRENT P & I" for the adjustable rate Mortgage
Loans);
(viii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix) the Loan-to-Value Ratio at origination ("LTV");
(x) 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);
(xi) 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);
(xii) the Maximum Mortgage Rate for the adjustable rate Mortgage Loans ("NOTE
CEILING");
(xiii) the Maximum Net Mortgage Rate for the adjustable rate Mortgage Loans ("NET
CEILING");
(xiv) the Note Margin for the adjustable rate Mortgage Loans ("NOTE MARGIN");
(xv) the first Adjustment Date after the Cut-off Date for the adjustable rate
Mortgage Loans ("NXT INT CHG DT");
(xvi) the Periodic Cap for the adjustable rate Mortgage Loans ("PERIODIC DECR" or
"PERIODIC INCR"); and
(xvii) (the rounding of the semi-annual or annual adjustment to the Mortgage Rate with
respect to the adjustable rate Mortgage Loans ("NOTE METHOD").
Such schedules may consist of multiple reports that collectively set forth all of the information
required.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the Trustee pursuant to
Section 2.01 as from time to time are held or deemed to be held as a part of the Trust Fund, the Mortgage
Loans originally so held being identified in the initial Mortgage Loan Schedule, and Qualified Substitute
Mortgage Loans held or deemed held as part of the Trust Fund including, without limitation, each related
Mortgage Note, Mortgage and Mortgage File and all rights appertaining thereto.
Mortgage Note: The originally executed note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan, together with any modification thereto.
Mortgage 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 Exhibit G, except in the case of the adjustable rate Mortgage Loans indicated by an "X" on Exhibit G or
hereto 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 sum of (i) the related
Servicing Fee Rate and (ii) the related Subservicing Fee Rate.
Net Swap Payment: With respect to each Distribution Date, the net payment required to be made
pursuant to the terms of the Swap Agreement by either the Swap Counterparty or the Trustee, on behalf of the
Trust, which net payment shall not take into account any Swap Termination Payment.
Net WAC Cap Rate: With respect to any Distribution Date and the Class A Certificates and Class M
Certificates, a per annum rate (which will not be less than zero) equal to the excess, if any, of (I), the
product of (A) the weighted average of the Net Mortgage Rates (or, if applicable, the Modified Net Mortgage
Rates) on the Mortgage Loans using the Net Mortgage Rates in effect for the Monthly Payments due on such
Mortgage Loans during the related Due Period and (B) a fraction expressed as a percentage, the numerator of
which is 30 and the denominator of which is the actual number of days in the related Interest Accrual Period,
over (II) the product of (A) a fraction expressed as a percentage, the numerator of which is any Net Swap
Payments owed to the Swap Counterparty or Swap Termination Payment not due to a Swap Counterparty Trigger
Event owed to the Swap Counterparty and the denominator of which is the aggregate Stated Principal Balance of
the Mortgage Loans before giving effect to distributions of principal to be made on such Distribution Date
and (B) a fraction expressed as a percentage, the numerator of which is 360 and the denominator of which is
the actual number of days in the related Interest Accrual Period. [For federal income tax purposes, however,
clause (I) (A) above shall be the equivalent of that which is provided in such clause expressed as a per
annum rate equal to the weighted average of the Uncertificated REMIC I Pass-Through Rates on the REMIC I
Regular Interests, weighted on the basis of the Uncertificated Principal Balance of each such REMIC I Regular
Interest.]
Non-Primary Residence Loans: The Mortgage Loans designated as secured by second or vacation
residences, or by non-owner occupied residences, on the Mortgage Loan Schedule.
Non-United States Person: Any Person other than a United States Person.
Nonrecoverable Advance: Any Advance previously made or proposed to be made by the Master Servicer or
Subservicer in respect of a Mortgage Loan (other than a Deleted Mortgage Loan) which, in the good faith
judgment of the Master Servicer, will not, or, in the case of a proposed Advance, would not, be ultimately
recoverable by the Master Servicer from related Late Collections, Insurance Proceeds, Liquidation Proceeds 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 an Officer's Certificate 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 in Exhibit G hereto as the "NOTE MARGIN," which percentage is added
to the Index on each Adjustment Date to determine (subject to rounding in accordance with the related
Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate) the interest rate
to be borne by such 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.
Notional Principal Balance: With respect to any Mortgage Loan or related REO Property, at any given
time, the Stated Principal Balance of such Mortgage Loan or related REO Property.
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,
who 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 REMIC I
or REMIC II as REMICs 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 and
Class M Certificates as of such date, before taking into account distributions of principal to be made on
that Distribution Date.
Overcollateralization Floor: An amount equal to the product of 0.50% and the Cut-off Date Balance.
Overcollateralization Increase Amount: With respect to any Distribution Date, an amount equal to the
lesser of (i) the Excess Cash Flow for that Distribution Date available to make payments pursuant to Section
4.02(c)(xv) and (ii) the excess, if any, of (x) the Required Overcollateralization Amount for that
Distribution Date over (y) the Overcollateralization Amount for that Distribution Date.
Overcollateralization Reduction Amount: With respect to any Distribution Date for which the Excess
Overcollateralization Amount is, or would be, after taking into account all other distributions to be made on
such Distribution Date, greater than zero, an amount equal to the lesser of (i) the Excess
Overcollateralization Amount for that Distribution Date and (ii) the Principal Remittance Amount for 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 the Class A Certificates and each Interest Accrual Period, a per
annum rate equal to the least of (i) LIBOR plus the related Class A Margin, (ii) the Maximum Mortgage Loan
Rate and (iii) the Net WAC Cap Rate. With respect to the Class M Certificates and each Interest Accrual
Period, a per annum rate equal to the least of (i) LIBOR plus the related Class M Margin, (ii) the Maximum
Mortgage Loan Rate and (iii) the Net WAC Cap Rate.
With respect to the Class SB Certificates or the REMIC II Regular Interest SB-IO, a per annum rate
equal to the percentage equivalent of a fraction, the numerator of which is (x) the sum, for each REMIC I
Regular Interest, of the excess of the Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular
Interest over the Marker Rate, applied to the Uncertificated Notional Amount and the denominator of which is
(y) the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests.
Paying Agent: U.S. Bank National Association, or any successor Paying Agent appointed by the Trustee.
Percentage Interest: With respect to any Class A 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 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.
Pool Stated Principal Balance: With respect to any date of determination, the aggregate of the Stated
Principal Balances of each Mortgage Loan that was an Outstanding Mortgage Loan on the Due Date immediately
preceding the Due Period preceding such date of determination.
Premium Amount: With respect to any Mortgage Loan (or REO Property) required to be or otherwise
purchased on any date pursuant to Section 2.04, an amount equal to the product of (x) the premium amount
percentage set forth on Exhibit X for such date of purchase and (y) the Notional Principal Balance of such
Mortgage Loan (or REO Property).
Prepayment Assumption: With respect to the Class A or 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 assumes a prepayment rate of 23% HEP with respect to the
fixed-rate Mortgage Loans, and 100% PPC with respect to the adjustable-rate Mortgage Loans.
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 Exhibit G with the exception of either code "23" or "96" under the column "MI CO CODE".
Principal Distribution Amount: With respect to any Distribution Date, the lesser of (a) the excess of
(i) the Available Distribution Amount over (ii) 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, 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 and
the Stated Principal Balance of Mortgage Loans purchased pursuant to Section 9.01 in
connection with such Distribution Date, if applicable;
(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 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 (a) Subsequent Recoveries for such Distribution Date and (b) the
principal portion of any Realized Losses allocated to any Class of Certificates on a
prior Distribution Date and remaining unpaid;
(v) the sum of (I) the lesser of (a) Excess Cash Flow for that Distribution Date (to
the extent not used pursuant to clause (iv) of this definition on such Distribution
Date) and (b) the principal portion of any Realized Losses incurred (or deemed to have
been incurred) on any Mortgage Loans in the calendar month preceding such Distribution
Date to the extent covered by Excess Cash Flow for that Distribution Date and (II) any
amount described in Clause (A) of Section 4.09(c); and
(vi) the sum of (I) the lesser of (a) the Excess Cash Flow for such Distribution Date
(to the extent not used to cover Realized Losses pursuant to clause (iv) and (v) of
this definition on such Distribution Date) and (b) the Overcollateralization Increase
Amount for such Distribution Date to the extent covered by Excess Cash Flow for that
Distribution Date and (II) any amount described in clause (B) of Section 4.09(c);
minus
(vii) any Overcollateralization Reduction Amount for such Distribution Date;
(viii) any Capitalization Reimbursement Amount for such Distribution Date; and
(ix) any Net Swap Payments or Swap Termination Payment not due to a Swap Counterparty
Trigger Event due to the Swap Counterparty to the extent not previously paid from
interest or principal collections on the Mortgage Loans;
provided, however, that the Principal Distribution Amount on any Distribution Date shall not be less than
zero or greater than the aggregate Certificate Principal Balance of the Class A and Class M.
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, the sum of the amounts described
in clauses (b)(i), (b)(ii) and (b)(iii) of the definition of Principal Distribution Amount for that
Distribution Date.
Program Guide: The Residential Funding Seller Guide for mortgage collateral sellers that participate
in Residential Funding's standard mortgage programs, and Residential Funding's Servicing Guide and any other
subservicing arrangements which Residential Funding has arranged to accommodate the servicing of the Mortgage
Loans.
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 (a) 100% of
the Stated Principal Balance thereof plus the principal portion of any related unreimbursed Advances and
(b)(1) in the case of a purchase made by a Person other than the Master Servicer, the unpaid accrued interest
at the Adjusted Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) plus
the related Subservicing Fee Rate, 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, but not including, the first day of the month following the month of
purchase from the Due Date to which interest was last paid by the Mortgagor.
Qualified Insurer: A mortgage guaranty insurance company duly qualified as such under the laws of the
state of its principal place of business and each state having jurisdiction over such insurer in connection
with the insurance policy issued by such insurer, duly authorized and licensed in such states to transact a
mortgage guaranty insurance business in such states and to write the insurance provided by the insurance
policy issued by it, approved as a FNMA- or FHLMC-approved mortgage insurer or having a claims paying ability
rating of at least "AA" or equivalent rating by a nationally recognized statistical rating organization. Any
replacement insurer with respect to a Mortgage Loan must have at least as high a claims paying ability rating
as the insurer it replaces had on the Closing Date.
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; and (vi) in the case of the adjustable rate Mortgage Loans, (w) have a Mortgage Rate that adjusts
with the same frequency and based upon the same Index as that of the Deleted Mortgage Loan, (x) have a Note
Margin not less than that of the Deleted Mortgage Loan; (y) have a Periodic Rate Cap that is equal to that of
the Deleted Mortgage Loan; and (z) have a next Adjustment Date no later than that of the Deleted Mortgage
Loan.
Rating Agency: Xxxxx'x and Standard & Poor's. If any agency or a successor is no longer in existence,
"Rating Agency" shall be such statistical credit rating agency, or other comparable Person, designated by the
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 (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan) 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 (or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) 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 attributable to interest. 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 II
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 II Regular Interest SB-PO in reduction of the
Principal Balance thereof.
Record Date: With respect to each Distribution Date and the Class A Certificates and Class M
Certificates which are Book-Entry Certificates, the close of business on the Business Day prior to such
Distribution Date. With respect to each Distribution Date and the Certificates (other than the Class A and
Class M 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 Interest: Any one of the regular interests in the Trust Fund.
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 and REMIC II.
REMIC Administrator: Residential Funding Corporation. If Residential Funding Corporation is found by
a court of competent jurisdiction to no longer be able to fulfill its obligations as REMIC Administrator
under this Agreement the 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 I: The segregated pool of assets subject hereto (exclusive of the Swap Account and Swap
Agreement, each of which is not an asset of any REMIC), 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 (other
than with respect to the items in clause (v) and the proceeds thereof), 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 Regular Interest: Any of the separate non-certificated beneficial ownership interests in
REMIC I issued hereunder and designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest
shall accrue interest at the related Uncertificated REMIC I Pass-Through Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto. The designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.
REMIC I Interest Loss Allocation Amount: With respect to any Distribution Date, an amount equal to
(a) the product of (i) the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests then
outstanding and (ii) the Uncertificated Pass-Through Rate for REMIC I Regular Interest AA minus the Marker
Rate, divided by (b) 12.
REMIC I Overcollateralized Amount: With respect to any date of determination, (i) 1% of the aggregate
Uncertificated Principal Balances of the REMIC I Regular Interests minus (ii) the aggregate Uncertificated
Principal Balances of the REMIC I Regular Interests (other than REMIC I Regular Interests AA and ZZ), in each
case as of such date of determination.
REMIC I Principal Loss Allocation Amount: With respect to any Distribution Date, an amount equal to
the product of (i) the aggregate Stated Principal Balance of the Mortgage Loans then outstanding and (ii) 1
minus a fraction, the numerator of which is two times the sum of the Uncertificated Principal Balances of
REMIC I Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, M-9 and M-10 and the
denominator of which is the sum of the Uncertificated Principal Balances of X-0, X-0, X-0, X-0, X-0, X-0,
M-4, M-5, M-6, M-7, M-8, M-9, M-10 and ZZ.
REMIC I Regular Interest AA: 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 A-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 A-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 A-3: 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 M-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 M-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 M-3: 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 M-4: 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 M-5: 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 M-6: 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 M-7: 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 M-8: 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 I Regular Interest M-9: 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 M-10: 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 ZZ: 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 ZZ Maximum Interest Deferral Amount: With respect to any Distribution Date,
the excess of (i) Uncertificated Accrued Interest calculated with the REMIC I Regular Interest ZZ
Uncertificated Pass-Through Rate and an Uncertificated Principal Balance equal to the excess of (x) the
Uncertificated Principal Balance of REMIC I Regular Interest ZZ over (y) the REMIC I Overcollateralized
Amount, in each case for such Distribution Date, over (ii) the sum of Uncertificated Accrued Interest on
REMIC I Regular Interest A-1 through REMIC I Regular Interest M-10, with the rate on each such REMIC I
Regular Interest subject to a cap equal to the Pass-Through Rate for the corresponding Class for the purpose
of this calculation.
REMIC II: The segregated pool of assets described in the Preliminary Statement.
REMIC II Regular Interest: Any "regular interest" issued by REMIC II the ownership of which is
evidenced by a Class A Certificate, Class M Certificate or the Class SB Certificate.
REMIC II Regular Interest SB-IO: A separate non-certificated regular interest of REMIC II designated
as a REMIC II Regular Interest. REMIC II Regular Interest SB-IO shall have no entitlement to principal and
shall be entitled to distributions of interest subject to the terms and conditions hereof, in an aggregate
amount equal to interest distributable with respect to the Class SB Certificates pursuant to the terms and
conditions hereof.
REMIC II Regular Interest SB-PO: A separate non-certificated regular interest of REMIC II designated
as a REMIC II Regular Interest. REMIC II 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 an aggregate
amount equal to principal distributable with respect to the Class SB Certificates pursuant to the terms and
conditions hereof.
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.
REMIC Regular Interests: the REMIC I Regular Interests and REMIC II Regular Interests.
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 sum of 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 pursuant to Section 3.14, through foreclosure or deed in lieu of
foreclosure in connection with a defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i) has been subject to an interest rate
reduction, (ii) has been subject to a term extension or (iii) has had amounts owing on such Mortgage Loan
capitalized by adding such amount to the Stated Principal Balance of such Mortgage Loan; provided, however,
that a Mortgage Loan modified in accordance with clause (i) above for a temporary period shall not be a
Reportable Modified Mortgage Loan if such Mortgage Loan has not been delinquent in payments of principal and
interest for six months since the date of such modification if that interest rate reduction is not made
permanent thereafter.
Repurchase Event: As defined in the Assignment Agreement.
Request for Release: A request for release, the form of which is attached as Exhibit H 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) if such
Distribution Date is prior to the Stepdown Date, 2.90% of the Cut-off Date Balance, or (b) if such
Distribution Date is on or after the Stepdown Date, the greater of (i) 5.80% of the then current aggregate
Stated Principal Balance of the Mortgage Loans as of the end of the related Due Period and (ii) the
Overcollateralization Floor; provided, however, that if a Trigger Event is in effect, the Required
Overcollateralization Amount shall be equal to the Required Overcollateralization Amount for the immediately
preceding Distribution Date. The Required Overcollateralization Amount may be reduced from time to time with
notification to the Rating Agencies.
Residential Funding: Residential Funding Corporation, a Delaware corporation, in its capacity as
seller of the Mortgage Loans to the Depositor and not in its capacity as Master Servicer, 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.
Senior Enhancement Percentage: For any Distribution Date, the fraction, expressed as a percentage,
the numerator of which is (x) the sum of (i) the aggregate Certificate Principal Balance of the Class M
Certificates and (ii) the Overcollateralization Amount, in each case prior to the distribution of the
Principal Distribution Amount on such Distribution Date and the denominator of which is (y) the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to distributions to be made on that
Distribution Date.
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, (ii) any enforcement or judicial
proceedings, including foreclosures, including any expenses incurred in relation to any such proceedings that
result from the Mortgage Loan being registered on the MERS System, (iii) the management and liquidation of
any REO Property, (iv) any mitigation procedures implemented in accordance with Section 3.07 and (v)
compliance with the obligations under Sections 3.01, 3.08, 3.11, 3.12(a) and 3.14, including, if the Master
Servicer or any Affiliate of the Master Servicer provides services such as appraisals and brokerage services
that are customarily provided by Persons other than servicers of mortgage loans, reasonable compensation for
such services.
Servicing 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 Stated 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 on the Closing Date by the Master Servicer, 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 bankruptcy that are 60 or more days delinquent, foreclosure and REO Properties,
over (y) the aggregate Stated Principal Balance of all of the Mortgage Loans immediately preceding that
Distribution Date.
Special Servicer: As defined in Section 3.22(a).
Special Servicing Transfer Date: As defined in Section 3.22(a).
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, at any given
time, (i) the sum of (a) the Cut-off Date Principal Balance of the Mortgage Loan, (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 commencing on the first Due Period after the Cut-Off Date and ending with
the Due Period related to the most recent Distribution Date which were received or with respect to which an
Advance was made, and (b) all Principal Prepayments with respect to such Mortgage Loan or REO Property, and
all Insurance Proceeds, Liquidation Proceeds and REO Proceeds, to the extent applied by the 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 or 4.03 on any previous Distribution
Date, and (c) any Realized Loss incurred with respect to such Mortgage Loan allocated to Certificateholders
with respect thereto for any previous Distribution Date.
Stepdown Date: The Distribution Date which is the earlier to occur of (i) the Distribution Date
immediately succeeding the Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates has been reduced to zero or (ii) the later to occur of (x) the Distribution Date
occurring in April 2009 and (y) the first Distribution Date on which the Senior Enhancement Percentage is
equal to or greater than 43.60%.
Subordination: The provisions described in Section 4.05 relating to the allocation of Realized Losses.
Subordination Percentage: With respect to the Class A Certificates, 56.40%; with respect to the Class
M-1 Certificates, 63.90%; with respect to the Class M-2 Certificates, 70.70%; with respect to the Class M-3
Certificates, 74.60%; with respect to the Class M-4 Certificates, 78.20%; with respect to the Class M-5
Certificates, 8150%.with respect to the Class M-6 Certificates, 84.70%; with respect to the Class M-7
Certificates, 87.70%; with respect to the Class M-8 Certificates, 90.20%; with respect to the Class M-9
Certificates, 92.20%; and with respect to the Class M-10 Certificates, 94.20%.
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.
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
equal to the Subservicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the
related Due Date in the related Due Period.
Subservicing Fee Rate: The per annum rate designated on the Mortgage Loan Schedule as the "SUBSERV
FEE".
Swap Account: The separate trust account created and maintained by the Trustee for the benefit of the
Certificateholders.
Swap Agreement: The interest rate swap agreement between the Swap Counterparty and the Trustee, on
behalf of the Trust, which agreement provides for Net Swap Payments and Swap Termination Payments to be paid,
as provided therein, together with any schedules, confirmations or other agreements relating thereto,
attached hereto as Exhibit U.
Swap Agreement Notional Balance: As to the Swap Agreement and each Floating Rate Payer Payment Date
(as defined in the Swap Agreement), the amount set forth on Exhibit T hereto for such Floating Rate Payer
Payment Date.
Swap Counterparty: The swap counterparty under the Swap Agreement either (a) entitled to receive
payments from the Trustee from amounts payable by the Trust Fund under this Agreement or (b) required to make
payments to the Trustee for payments to the Trust Fund, in either case pursuant to the terms of the Swap
Agreement, and any successor in interest or assign. Initially, the Swap Counterparty shall be Deutsche Bank
AG, New York Branch.
Swap LIBOR: LIBOR as determined pursuant to the Swap Agreement.
Swap Counterparty Trigger Event: With respect to any Distribution Date, (i) an "Event of Default"
under the Swap Agreement with respect to which the Swap Counterparty is a Defaulting Party, (ii) a
"Termination Event" under the Swap Agreement with respect to which the Swap Counterparty is the sole Affected
Party, or (iii) an "Additional Termination Event" under the Swap Agreement with respect to which the Swap
Counterparty is the sole Affected Party.
Swap Termination Payment: Upon the designation of an "Early Termination Date" as defined in the Swap
Agreement, the payment to be made by the Trustee on behalf of the Trust to the Swap Counterparty from
payments from the Trust Fund, or by the Swap Counterparty to the Trustee for payment to the Trust Fund, as
applicable, pursuant to the terms of the Swap Agreement.
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 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.
Transaction Party: As defined in Section 12.02(a).
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation or other form of assignment of
any Ownership Interest in a Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership Interest in a Certificate.
Transferring Servicer: As defined in Section 3.22(a).
Trigger Event: A Trigger Event is in effect with respect to any Distribution Date if either (i) (A)
with respect to any Distribution Date (other than the first Distribution Date), the three-month average (or
two month-average in the case of the second Distribution Date) of the Sixty-Plus Delinquency Percentage, as
determined on that Distribution Date and the immediately preceding two Distribution Dates (or immediately
preceding Distribution Date in the case of the second Distribution Date), equals or exceeds 36.50% of the
Senior Enhancement Percentage or (B) with respect to the first Distribution Date, the Sixty-Plus Delinquency
Percentage, as determined on that Distribution Date, equals or exceeds 36.50% of the Senior Enhancement
Percentage or (ii) 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:
April 2008 to March 2009............. 1.45% with respect to April 2008, plus an
additional 1/12th of 1.85 % for each month
thereafter.
April 2009 to March 2010............. 3.30% with respect to April 2009, plus an
additional 1/12th of 1.90% for each month
thereafter.
April 2010 to March 2011............. 5.20% with respect to April 2010, plus an
additional 1/12th of 1.50% for each month
thereafter.
April 2011 to March 2012............. 6.70% with respect to April 2011, plus an
additional 1/12th of 0.85% for each month
thereafter.
April 2012 to March 2013............. 7.55% with respect to April 2012, plus an
additional 1/12th of 0.05% for each month
thereafter.
March 2013 and thereafter............ 7.60%
Trustee Information: As specified in Section 12.05(a)(i)(A).
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 Swap Account; (vi) rights under
the Swap Agreement and (vii) all proceeds of clauses (i) through (vi) above.
Uncertificated Accrued Interest: With respect to any REMIC I Regular Interest for any Distribution
Date, one month's interest at the related Uncertificated REMIC I Pass-Through Rate for such Distribution
Date, accrued on its Uncertificated Principal Balance immediately prior to such Distribution Date.
Uncertificated Accrued Interest for the REMIC I Regular Interests shall accrue on the basis of a 360-day year
consisting of twelve 30-day months. For purposes of calculating the amount of Uncertificated Accrued Interest
for the REMIC I Regular Interests for any Distribution Date, any Prepayment Interest Shortfalls and Relief
Act Shortfalls (to the extent not covered by Compensating Interest) relating to the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest payable to REMIC I Regular
Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to the REMIC I Interest Loss
Allocation Amount, 98% and 2%, respectively, and thereafter any remaining Prepayment Interest Shortfalls (to
the extent not covered by Eligible Master Servicing Compensation) for any Distribution Date shall be
allocated among REMIC I Regular Interest AA, REMIC I Regular Interest A-1, REMIC I Regular Interest A-2,
REMIC I Regular Interest A-3, REMIC I Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I Regular
Interest M-3, REMIC I Regular Interest M-1, REMIC I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC
I Regular Interest M-6, REMIC I Regular Interest M-7, REMIC I Regular Interest M-8, REMIC I Regular Interest
M-9, REMIC I Regular Interest M-10, and REMIC I Regular Interest ZZ, pro rata based on, and to the extent of,
Uncertificated Accrued Interest, as calculated without application of this sentence.
Uncertificated Notional Amount: With respect to the REMIC II Regular Interest SB-IO component of the
Class SB Certificates and any Distribution Date, an amount equal to the aggregate Uncertificated Principal
Balance of the REMIC I Regular Interests for such Distribution Date.
Uncertificated Principal Balance: As of the Closing Date, the Uncertificated Principal Balance of
each REMIC I Regular Interest shall equal the amount set forth in the Preliminary Statement hereto as its
initial Uncertificated Principal Balance. On each Distribution Date, the Uncertificated Principal Balance of
each REMIC I Regular Interest shall be reduced by all distributions of principal deemed made on such REMIC
Regular Interest on such Distribution Date pursuant to Section 4.02 and, if and to the extent necessary and
appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section
4.05, and the Uncertificated Principal Balance of REMIC I Regular Interest ZZ shall be increased by the
related interest deferrals as provided in Section 4.02. The Uncertificated Principal Balance of each REMIC I
Regular Interest shall never be less than zero. With respect to the REMIC II Regular Interest SB-PO an
initial amount equal to the amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Principal Balance. On each Distribution Date, the Uncertificated Principal Balance of each
REMIC II Regular Interest shall be reduced by all distributions of principal deemed made on such REMIC
Regular Interest on such Distribution Date pursuant to Section 4.02 and, if and to the extent necessary and
appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section
4.05.
Uncertificated REMIC I Pass-Through Rate: With respect to any Distribution Date, a per annum rate
equal to the weighted average of the Net Mortgage Rates of the Mortgage Loans in effect for the scheduled
Monthly Payments due on such Mortgage Loans during the related Due Period.
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.
VA: The Veterans Administration, or its successor.
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 Holders of the Class A 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 among the Holders of the Class SB
Certificates; 0.50% and 0.50%, of all of the Voting Rights shall be allocated to each of the Holders of the
Class R-I and Class R-II Certificates, respectively; in each case to be allocated among the Certificates of
such Class in accordance with their respective Percentage Interest.
Section 1.02. Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on the Class A and Class M Certificates
for any Interest Accrual Period will be determined on each LIBOR Rate Adjustment Date. On each LIBOR Rate
Adjustment Date, or if such LIBOR Rate Adjustment Date is not a Business Day, then on the next succeeding
Business Day, LIBOR shall be established by the Trustee and, as to any Interest Accrual Period, will equal
the rate for one month United States dollar deposits that appears on the Telerate Screen Page 3750 as of
11:00 A.M., London time, on such LIBOR Rate Adjustment Date. "Telerate Screen Page 3750" means the display
designated as page 3750 on the Bridge Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major banks). If such rate does not
appear on such page (or such other page as may replace that page on that service, or if such service is no
longer offered, LIBOR shall be so established by use of such other service for displaying LIBOR or comparable
rates as may be selected by the Trustee after consultation with the Master Servicer), the rate will be the
Reference Bank Rate. The "Reference Bank Rate" will be determined on the basis of the rates at which deposits
in U.S. Dollars are offered by the reference banks (which shall be any three major banks that are engaged in
transactions in the London interbank market, selected by the Trustee after consultation with the Master
Servicer) as of 11:00 A.M., London time, on the LIBOR Rate Adjustment Date to prime banks in the London
interbank market for a period of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of the Class A and Class M 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 Class A and Class M Certificates then outstanding. If no such
quotations can be obtained, the rate will be LIBOR for the prior Distribution Date; provided however, if,
under the priorities described above, LIBOR for a Distribution Date would be based on LIBOR for the previous
Distribution Date for the third consecutive Distribution Date, the Trustee, after consultation with the
Master Servicer, shall select an alternative comparable index (over which the Trustee has no control), used
for determining one-month Eurodollar lending rates that is calculated and published (or otherwise made
available) by an independent party. The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment
Date and the Trustee's subsequent calculation of the Pass-Through Rates applicable to the Class A and Class M
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 the Trustee at 1-800-934-6802 the Pass-Through Rate on the Class A
and Class M 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
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 on the Mortgage Loans in the month of the Cut-off Date); and (ii) all
proceeds of the foregoing. In addition, on the Closing Date, the Trustee is hereby directed to enter into the
Swap Agreement on behalf of the Trust Fund with the Swap Counterparty.
The Depositor, the Master Servicer and the Trustee agree that it is not intended that any mortgage
loan be included in the Trust Fund that is either (i) a "High-Cost Home Loan" as defined in the New Jersey
Home Ownership Security Act effective November 27, 2003, (ii) a "High-Cost Home Loan" as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004, (iii) a "High Cost Home Mortgage Loan" as defined
in the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004 or (iv) a "High-Cost Home
Loan" as defined in the Indiana Home Loan Practices Act effective as of January 1, 2005.
(b) In connection with such assignment, and contemporaneously with the delivery of this Agreement, and
except as set forth in Section 2.01(c) below and subject to Section 2.01(d) below, the Depositor does hereby
deliver to, and deposit with, the Trustee, or to and with one or more Custodians, as the duly appointed agent
or agents of the Trustee for such purpose, the following documents or instruments (or copies thereof as
permitted by this Section) with respect to each Mortgage Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to the order of the Trustee and showing an
unbroken chain of endorsements from the originator thereof to the Person endorsing it to the Trustee,
or with respect to any Destroyed Mortgage Note, an original lost note affidavit from the related
Seller or Residential Funding stating that the original Mortgage Note was lost, misplaced or
destroyed, together with a copy of the related Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of the Mortgage Loan (if the Mortgage Loan is
Registered on the MERS(R)System) and language indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan, with evidence of recording indicated thereon or, if the original Mortgage
has not yet been returned from the public recording office, a copy of the original Mortgage with
evidence of recording indicated thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R)System, 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; and
(v) The original of each modification, assumption agreement or preferred loan agreement, if any, relating
to such Mortgage Loan, or a copy of each modification, assumption agreement or preferred loan
agreement.
The Depositor may, in lieu of delivering the original of the documents set forth in Section
2.01(b)(ii), (iii), (iv) and (v) (or copies thereof as permitted by Section 2.01(b)) 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)(ii), (iii), (iv) and (v) (or copies thereof
as permitted by such Section) 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 that is the
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 the
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 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 Trustee or the respective Custodian such Mortgage or Assignment, as
applicable (or copy thereof as permitted by Section 2.01(b)), 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.
Any of the items set forth in Sections 2.01(b)(ii), (iii), (iv) and (v) that may be delivered as a
copy rather than the original may be delivered to the Trustee or the Custodian.
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 be construed as a sale by the Depositor to the Trustee of the Mortgage Loans 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 by the Depositor to the Trustee to secure a debt or other obligation of the
Depositor. However, in the event that the Mortgage Loans are held to be property of the Depositor or of
Residential Funding, or if for any reason this Agreement is held or deemed to create a security interest in
the Mortgage Loans, then it is intended that (a) this Agreement shall also be deemed to be 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 (a) the related Mortgage Note and Mortgage,
and (b) any insurance policies and all other documents in the related Mortgage File, (B) all amounts payable
pursuant to the Mortgage Loans or the Swap Agreement in accordance with the terms thereof and (C) 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 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) and (C) 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 they 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 Uniform Commercial Code as in effect in the States of New York and
Minnesota and any other applicable jurisdiction; 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 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, 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 or (3) any transfer of any interest of Residential Funding or the Depositor in any Mortgage Loan.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to a Custodial Agreement,
and based solely upon a receipt or certification executed by the Custodian, receipt by the respective
Custodian as the duly appointed agent of the Trustee) of the documents referred to in Section 2.01(b)(i)
above (except that for purposes of such acknowledgement only, a Mortgage Note may be endorsed in blank and an
Assignment of Mortgage may be in blank) and declares that it, or a Custodian as its agent, holds and will
hold such documents and the other documents constituting a part of the Mortgage Files delivered to it, or a
Custodian as its agent, in trust for the use and benefit of all present and future Certificateholders. The
Trustee or Custodian (such Custodian being so obligated under a Custodial Agreement) agrees, for the benefit
of Certificateholders, to review each Mortgage File delivered to it pursuant to Section 2.01(b) within 45
days after the Closing Date to ascertain that all required documents (specifically as set forth in Section
2.01(b)), have been executed and received, and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, as supplemented, that have been conveyed to it, and to deliver to the Trustee a
certificate (the "Interim Certification") to the effect that all documents required to be delivered pursuant
to Section 2.01(b) above have been executed and received and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, except for any exceptions listed on Schedule A attached to such
Interim Certification. Upon delivery of the Mortgage 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 (the "Final 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
Mortgage 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; provided, that if the Mortgage Loan related to such Mortgage File is listed on
Schedule A of the Assignment Agreement, no notification shall be necessary. 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 Mortgage 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
Residential Funding of such omission or defect and request that Residential Funding correct or cure such
omission or defect within 60 days from the date the Master Servicer was notified of such omission or defect
and, if Residential Funding does not correct or cure such omission or defect within such period, then
Residential Funding shall 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; and provided further, that no cure, substitution or repurchase shall be required if
such omission or defect is in respect of a Mortgage Loan listed on Schedule A of the Assignment Agreement.
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, the Trustee or any Custodian, as the
case may be, shall release to Residential Funding the related Mortgage 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 Residential Funding or its designee any Mortgage Loan released
pursuant hereto and thereafter such Mortgage Loan shall not be part of the Trust Fund. It is understood and
agreed that the obligation of Residential Funding, to so cure or purchase any Mortgage Loan as to which a
material and adverse defect in or omission of a constituent document exists shall constitute the sole remedy
respecting such defect or omission available to Certificateholders or the Trustee on behalf of
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 corporation duly organized, validly existing and in good standing under the
laws governing its creation and existence and is or will be in compliance with the laws of each state
in which any Mortgaged Property is located to the extent necessary to ensure the enforceability of
each Mortgage Loan in accordance with the terms of this Agreement;
(ii) The execution and delivery of this Agreement by the Master Servicer and its performance and compliance
with the terms of this Agreement will not violate the Master Servicer's Certificate of Incorporation
or Bylaws 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; and
(ix) The Master Servicer is a member of MERS in good standing, and will comply in all material respects
with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are
registered with MERS.
It is understood and agreed that the representations and warranties set forth in this Section 2.03(a)
shall survive delivery of the respective Mortgage Files to the Trustee or any Custodian. Upon discovery by
either the Depositor, the Master Servicer, the Trustee or any 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 (any 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) the
information set forth in Exhibit G hereto with respect to each Mortgage Loan or the Mortgage Loans, as the
case may be, is true and correct in all material respects at the respective date or dates which such
information is furnished; (ii) 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 (iii) 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 Mortgage Files to the Trustee or any Custodian.
Upon discovery by any of the Depositor, the Master Servicer, the Trustee or any Custodian of a breach
of any of the representations and warranties set forth in this Section 2.03(b) 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 (any Custodian being so obligated under a Custodial
Agreement); provided, however, that in the event of a breach of the representation and warranty set forth in
Section 2.03(b)(iii), 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 Residential Funding.
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. 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 any 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
(any 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; provided that, in the case of a breach or
Repurchase Event under the Assignment Agreement, 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 (bb) 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 or the
Custodian for the benefit of the Certificateholders with respect to such Qualified Substitute Mortgage Loan
or Loans, the original Mortgage Note, the Mortgage, an Assignment of the Mortgage in recordable form, 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 and the Custodian. Upon such substitution,
the Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement and the
related Subservicing Agreement in all respects, and Residential Funding shall be deemed to have made the
representations and warranties with respect to the Qualified Substitute Mortgage Loan contained in Section 4
of 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 hereof and in Section 4 of the Assignment
Agreement, and the Master Servicer shall be obligated to repurchase or substitute for any Qualified
Substitute Mortgage Loan as to which a Repurchase Event (as defined in the Assignment Agreement) has occurred
pursuant to Section 4 of the Assignment Agreement.
In connection with the substitution of one or more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans, the Master Servicer 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 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
(or 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 (bb) 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 (i) 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 or (ii) to give the notification and require the purchase or substitution provided for in Section 6
of 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 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 Regular Interests.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery of the Mortgage
Files to it, or any Custodian on its behalf, subject to any exceptions noted, together with the assignment to
it of all other assets included in the Trust Fund, 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, as of the Closing Date, and concurrently with the execution and delivery hereof, does
hereby assign without recourse all the right, title and interest of the Depositor in and to the
Uncertificated REMIC I Regular Interests to the Trustee for the benefit of the holders of each Class of
Certificates (other than the Class R-I Certificates). The Trustee acknowledges receipt of the Uncertificated
REMIC I Regular Interests and declares that it holds and will hold the same in trust for the exclusive use
and benefit of all present and future holders of each Class of Certificates (other than the Class R-I
Certificates).
(c) 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 other assets of REMIC II for the benefit of the
holders of the REMIC II Regular Interests and the Class R-II Certificates. The Trustee acknowledges receipt
of the REMIC I Regular Interests (which are uncertificated) and the other assets of REMIC II and declares
that it holds and will hold the same in trust for the exclusive use and benefit of the holders of the REMIC
II Regular Interests and the Class R-II Certificates.
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 and the Swap Agreement;
(c) To engage in those activities that are necessary, suitable or convenient to accomplish the foregoing
or are incidental hereto 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, notwithstanding any other express or
implied agreement to the contrary, that any and all Persons, and any of their respective employees,
representatives, and other agents may disclose, immediately upon commencement of discussions, to any and all
Persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all
materials of any kind (including opinions or other tax analyses) that are provided to any of them relating to
such tax treatment and tax structure. For purposes of this paragraph, the terms "tax treatment" and "tax
structure" are defined under Treasury Regulationss.1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer.
(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 Loan-to-Value Ratio of such Mortgage Loan be higher than that permitted by
the Program Guide; or
(B) the resulting Loan-to-Value Ratio of such Mortgage Loan is no higher than the
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
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 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 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.
(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.
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 Xxx or HUD approved mortgage servicer. In addition, any Subservicer of a Mortgage Loan insured by the
FHA must be an FHA-approved servicer, and any Subservicer of a Mortgage Loan guaranteed by the VA must be a
VA-approved 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, 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, 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)(viii).
Section 3.03. Successor Subservicers.
The Master Servicer shall be entitled to terminate any Subservicing Agreement that may exist in
accordance with the terms and conditions of such Subservicing Agreement and without any limitation by virtue
of this Agreement; provided, however, that in the event of termination of any Subservicing Agreement by the
Master Servicer or the Subservicer, the Master Servicer shall either act as servicer of the related Mortgage
Loan or enter into a Subservicing Agreement with a successor Subservicer which will be bound by the terms of
the related Subservicing Agreement. If the Master Servicer or any Affiliate of Residential Funding acts as
servicer, it will not assume liability for the representations and warranties of the Subservicer which it
replaces. If the Master Servicer enters into a Subservicing Agreement with a successor Subservicer, the
Master Servicer shall use reasonable efforts to have the successor Subservicer assume liability for the
representations and warranties made by the terminated Subservicer in respect of the related Mortgage Loans
and, in the event of any such assumption by the successor Subservicer, the Master Servicer may, in the
exercise of its business judgment, release the terminated Subservicer from liability for such representations
and warranties.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Master Servicer or a Subservicer or reference to actions taken through
a Subservicer or otherwise, the Master Servicer shall remain obligated and liable to the Trustee and
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 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 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. For purposes of delinquency calculations, any capitalized Mortgage Loan shall be
deemed to be current as of the date of the related Servicing Modification. No such modification shall reduce
the Mortgage Rate (i) with respect to a fixed rate Mortgage Loan, (A) below one-half of the Mortgage Rate as
in effect on the Cut-off Date or (B) below the sum of the rates at which the Servicing Fee and the
Subservicing Fee with respect to such Mortgage Loan accrue or (ii) with respect to an adjustable rate
Mortgage Loan, (A) below the greater of (1) one-half of the Mortgage Rate as in effect on the Cut-off Date
and (2) one-half of the Mortgage Rate as in effect on the date of the Servicing Modification or (B) below the
sum of the rates at which the Servicing Fee and the Subservicing Fee with respect to such Mortgage Loan
accrue. The final maturity date for any Mortgage Loan shall not be extended beyond the Maturity Date. Also,
the Stated Principal Balance of all Reportable Modified Mortgage Loans subject to Servicing Modifications
(measured at the time of the Servicing Modification and after giving effect to any Servicing Modification)
can be no more than five percent of the aggregate Cut-off Date Principal Balance of the Mortgage Loans,
unless such limit is increased from time to time with the consent of the Rating Agencies. 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 Stated 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, 4.07 or 9.01
(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 (bb) 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 remit to the Trustee for deposit 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, 4.07 or 9.01) 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) late recoveries of the payments for 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 deposited in 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, 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 the
preceding calendar month;
(viii) to reimburse itself or the Depositor for expenses incurred by and reimbursable to it or the Depositor
pursuant to Section 3.14(c), 6.03, 10.01 or otherwise;
(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 percent of the insurable value of the improvements; provided, however, that such coverage may
not be less than the minimum amount required to fully compensate for any loss or damage on a replacement cost
basis. To the extent it may do so without breaching the related Subservicing Agreement, the Master Servicer
shall replace any Subservicer that does not cause such insurance, to the extent it is available, to be
maintained. The Master Servicer shall also cause to be maintained on property acquired upon foreclosure, or
deed in lieu of foreclosure, of any Mortgage Loan, 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 from its own funds and 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 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 REMICs 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 junior lien of the same priority in relation to
any senior mortgage loan, with respect to any Mortgage Loan secured by a junior Mortgage) 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 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 delivered to the Trustee or the Custodian and deposited with the Mortgage File for such
Mortgage Loan. Any fee collected by the Master Servicer or such related Subservicer for entering into an
assumption or substitution of liability agreement will be retained by the Master Servicer or such Subservicer
as additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may be, shall be entitled to approve a
request from a Mortgagor for a partial release of the related Mortgaged Property, the granting of an easement
thereon in favor of another Person, any alteration or demolition of the related Mortgaged Property without
any right of reimbursement or other similar matters if it has determined, exercising its good faith business
judgment in the same manner as it would if it were the owner of the related Mortgage Loan, that the security
for, and the timely and full collectability of, such Mortgage Loan would not be adversely affected thereby
and that each REMIC created hereunder would continue to qualify as a REMIC under the Code as a result thereof
and 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 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 Master Servicer
with a "Lender Certification for Assignment of Mortgage Loan" in the form attached hereto as Exhibit N, in
form and substance satisfactory to the 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 at least 0.25 percent 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
any Custodian, as the case may be, shall release to the Master Servicer the related Mortgage 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 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 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) any subject 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 Mortgage 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 Mortgage File) or the Custodian
by a certification of a Servicing Officer (which certification shall include a statement to the effect that
all amounts received or to be received in connection with such payment which are required to be deposited in
the Custodial Account pursuant to Section 3.07 have been or will be so deposited), substantially in one of
the forms attached hereto as Exhibit H requesting delivery to it of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall promptly release, or cause the Custodian to release, the related
Mortgage 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 one of the forms attached as Exhibit H hereto, requesting that possession of all, or any
document constituting part of, the Mortgage 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 Mortgage File or any document therein to the Master Servicer.
The Master Servicer shall cause each Mortgage 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 Mortgage 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 Mortgage 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; Eligible Master Servicing Compensation.
(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 any 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 an amount equal to Eligible Master Servicing Compensation (if
any) for such Distribution Date. Such reduction shall be applied during such period as follows: first, to
any Servicing Fee or Subservicing Fee to which the Master Servicer is entitled pursuant to Section
3.10(a)(iii); 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; and third, to any amounts of servicing compensation to which the Master Servicer is
entitled pursuant to Section 3.10(a)(v) or (vi). 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); (ii) 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) and (iii)
shall not withdraw from the Custodial Account any such amount of servicing compensation to which it is
entitled pursuant to Section 3.10(a)(v) or (vi).
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:
(i) 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.
(ii) 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 and the Trustee 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, but is not obligated to perform, or cause a designee to perform, any defaulted
obligation of the Master Servicer hereunder or exercise the rights of the Master Servicer hereunder; provided
that the Master Servicer shall not be relieved of any of its obligations hereunder by virtue of such
performance by the 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 is not obligated to
supervise the performance of the Master Servicer under this Agreement or otherwise.
Section 3.21. 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 3.21 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 3.21(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
3.21(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 "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 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 3.21, 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 and the Advancing Person or Advance Facility
Trustee shall be required to apply all amounts available in accordance with this Section 3.21(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 3.21(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 3.21 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 3.21,
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 then current 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 3.21 may not be amended or otherwise modified
without the prior written consent of the related Advancing Person.
Section 3.22. Special Servicing.
(a) Subject to the conditions described in Section 3.22(b) below and provided that the Sixty-Plus
Percentage on three consecutive Distribution Dates exceeds the percentages set forth on Exhibit W for such
three consecutive Distribution Dates, the Holder of the Class SB Certificates may (but is not obligated to)
appoint a special servicer (each, a "Special Servicer") to service any Mortgage Loan which is Delinquent in
payment by 90 days or more as of the third Distribution Date of such three consecutive Distribution Dates
(the "Special Servicing Transfer Date"); provided, however, that the aggregate Stated Principal Balance of
Mortgage Loans transferred to a Special Servicer pursuant to this Section shall not equal or exceed 10% of
the Cut-off Date Balance, so long as the Trust Fund is obligated to follow the reporting requirements of the
Exchange Act. The Holder of the Class SB Certificates shall give the Trustee and the Master Servicer not
less than 40 days prior written notice of the Special Servicing Transfer Date, specifying (i) the Mortgage
Loan(s) that it intends to transfer and (ii) the related Special Servicer.
(b) Any Special Servicer appointed pursuant to Section 3.22(a) above shall (i) be rated in one of the two
highest rating categories as a special servicer by at least two of Standard & Poor's, Xxxxx'x and Xxxxx
Ratings, (ii) satisfy and be subject to all requirements and obligations of a Subservicer under this
Agreement, including but not limited to, servicing in accordance with the Program Guide and this Agreement,
(iii) be approved by the Master Servicer (which approval shall not be unreasonably withheld), (iv) be capable
of full compliance with Regulation AB and (v) sign an acknowledgement agreeing to be bound by this
Agreement. In addition, no Special Servicer may modify a Mortgage Loan without the prior written consent of
the Master Servicer and such modification shall be in compliance with Section 3.07(a) hereof.
(c) In connection with the transfer of the servicing of any Mortgage Loan to a Special Servicer, the
Master Servicer or Subservicer of such Mortgage Loan (the "Transferring Servicer") shall, at such Special
Servicer's expense (limited, in the case of the accounting of amounts collected or held by such Transferring
Servicer, only to out-of-pocket expenses and costs), deliver to such Special Servicer all documents and
records relating to such Mortgage Loan and an accounting of amounts collected or held by it and otherwise use
its best efforts to effect the orderly and efficient transfer of the servicing of such Mortgage Loan to such
Special Servicer. Such Special Servicer shall thereupon assume all of the rights and obligations of the
Transferring Servicer hereunder arising from and after the Special Servicing Transfer Date, including the
right to receive the related Subservicing Fee from payments of interest received on such Mortgage Loan (and
shall have no rights or entitlement to compensation greater than that of the Transferring Servicer with
respect to such Mortgage Loan) and the Transferring Servicer shall have no further rights or obligations
hereunder with respect to such Mortgage Loan (except that the Master Servicer shall remain obligated to
master service such Mortgage Loan pursuant to this Agreement). In connection with the transfer of the
servicing of any Mortgage Loan to a Special Servicer, the Master Servicer shall amend the Mortgage Loan
Schedule to reflect that such Mortgage Loans are subserviced by such Special Servicer.
(d) On any Special Servicing Transfer Date, the related Special Servicer shall reimburse the Transferring
Servicer for all unreimbursed Advances, Servicing Advances and Servicing Fees, as applicable, relating to the
Mortgage Loans for which the servicing is being transferred. The related Special Servicer shall be entitled
to be reimbursed pursuant to Section 3.10 or otherwise pursuant to this Agreement for all such Advances,
Servicing Advances and Servicing Fees, as applicable, paid to the Transferring Servicer pursuant to this
Section 3.22. In addition, in the event that the Transferring Servicer is a Subservicer, the Holder of the
Class SB Certificates or the related Special Servicer shall pay any termination fees due to such Transferring
Servicer pursuant to the applicable Subservicing Agreement.
(e) Each Special Servicer agrees to indemnify and hold the Master Servicer and the Transferring Servicer
harmless from and against any and all losses, claims, expenses, costs or liabilities (including attorneys
fees and court costs) incurred by the Master Servicer or Transferring Servicer, as applicable, as a result of
or in connection with the failure by such Special Servicer to perform the obligations or responsibilities
imposed upon or undertaken by such Special Servicer under this Agreement from and after the related Special
Servicing Transfer Date. The Master Servicer agrees to indemnify and hold each Special Servicer harmless
from and against any and all losses, claims, expenses, costs or liabilities (including attorneys fees and
court costs) incurred by such Special Servicer as a result of or in connection with the failure by the Master
Servicer to perform the obligations or responsibilities imposed upon or undertaken by the Master Servicer
under this Agreement.
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 deposit or 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 paid 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, (v) any prepayment charges on the Mortgage Loans received during the related Prepayment
Period and (vi) all other amounts constituting the Available Distribution Amount for the immediately
succeeding Distribution Date.
(b) On or prior to the Business Day immediately following each Determination Date, the Master Servicer
shall determine any amounts owed by the Swap Counterparty under the Swap Agreement and inform the Trustee in
writing of the amount so calculated.
(c) 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 a
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 and REMIC II as specified in this Section.
(b) (1) On each Distribution Date, the following amounts, in the following order of priority, shall be
distributed by REMIC I to REMIC II on account of the REMIC I Regular Interests:
(i) to the extent of the Available Distribution Amount (other than the portion of
the Available Distribution Amount described in clause (a)(vi) of the definition of
Available Distribution Amount), to the Holders of the REMIC I Regular Interests, pro
rata, in an amount equal to (A) the related Uncertificated Accrued Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates. Amounts payable as Uncertificated Accrued Interest in
respect of REMIC I Regular Interest ZZ shall be reduced when the REMIC I
Overcollateralization Amount is less than the REMIC I Required Overcollateralization
Amount, by the lesser of (x) the amount of such difference and (y) the REMIC I Regular
Interest ZZ Maximum Interest Deferral Amount, and such amount will be payable to the
Holders of REMIC I Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0,
X-0, M-9 and M-10 in the same proportion as the Overcollateralization Increase Amount
is allocated to the corresponding Class of Certificates, and the Uncertificated
Principal Balance of the REMIC I Regular Interest ZZ shall be increased by such amount;
and
(ii) on each Distribution Date, to the Holders of REMIC I Regular Interests, in an amount equal to the
remainder of the Available Distribution Amount (other than the portion of the Available
Distribution Amount described in clause (a)(vi) of the definition of Available
Distribution Amount) after the distributions made pursuant to clause (i) above,
allocated as follows (except as provided below): (A) to the Holders of the REMIC I
Regular Interest AA, 98.00% of such remainder until the Uncertificated Principal
Balance of such REMIC I Regular Interest is reduced to zero; (B) to the Holders of
REMIC I Regular Interests X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, X-0, M-9
and M-10, 1.00% of such remainder in the same proportion as amounts are distributed in
respect of principal on the corresponding Class of Certificates; (C) to the Holders of
the REMIC I Regular Interest ZZ, 1.00% of such remainder; and (D) any remaining amounts
to the Holders of the Class R-I Certificates; provided, however, that 98.00% and 2.00%
of any principal payments that are attributable to an Overcollateralization Reduction
Amount shall be allocated to Holders of the REMIC I Regular Interest AA and REMIC I
Regular Interest ZZ, respectively;
(2) Notwithstanding the distributions described in this Section 4.02(b), distribution of
funds from the Certificate Account shall be made only in accordance with Section 4.02(c).
(c) On each Distribution Date (x) the Master Servicer on behalf of the Trustee or (y) the Paying Agent
appointed by the Trustee, 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, subject to the provisions of Section 4.02(d)), in each case to the extent of the Available
Distribution Amount on deposit in the Certificate Account (or, with respect to clause (xxii)(B) below, to the
extent of prepayment charges on deposit in the Certificate Account and (ii) with respect to clauses (i)
through (xi) below, to the extent of the Available Distribution Amount (other than the portion of the
Available Distribution Amount described in clause (a)(vi) of the definition of Available Distribution
Amount)) and to the extent not covered by amounts on deposit in the Swap Account:
(i) to the Class A Certificateholders, the Class A Interest Distribution Amount, with such amount
allocated among the Class A Certificateholders on a pro rata basis;
(ii) to the Class M-1 Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class M-1 Interest Distribution Amount;
(iii) to the Class M-2 Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class M-2 Interest Distribution Amount;
(iv) to the Class M-3 Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class M-3 Interest Distribution Amount;
(v) to the Class M-4 Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class M-4 Interest Distribution Amount;
(vi) to the Class M-5 Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class M-5 Interest Distribution Amount;
(vii) to the Class M-6 Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class M-6 Interest Distribution Amount;
(viii) to the Class M-7 Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class M-7 Interest Distribution Amount;
(ix) to the Class M-8 Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class M-8 Interest Distribution Amount;
(x) to the Class M-9 Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class M-9 Interest Distribution Amount;
(xi) to the Class M-10 Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class M-10 Interest Distribution Amount;
(xii) to the Class A and Class M Certificateholders, from the amount, if any, of the Available Distribution
Amount remaining after the foregoing distributions, the Principal Distribution Amount (other than the
amounts set forth in clauses (b)(iv), (b)(v), and (b)(vi) of the definition thereof), in the order of
priority described in Section 4.02(d) hereof, until the Certificate Principal Balances of the Class A
and Class M Certificates have been reduced to zero;
(xiii) to the Class A and Class M Certificateholders, from the amount, if any, of Excess Cash Flow, an amount
equal to the principal portion of Realized Losses previously allocated to reduce the Certificate
Principal Balance of any Class of the Class A and Class M Certificates and remaining unreimbursed, but
only to the extent of Subsequent Recoveries for that Distribution Date, which amount shall be included
in the Principal Distribution Amount and paid in accordance with Section 4.02(d) hereof, until the
Certificate Principal Balances of the Class A and Class M Certificates have been reduced to zero;
(xiv) to the Class A and Class M Certificateholders, from the amount, if any, of Excess Cash Flow remaining
after the foregoing distributions, an amount equal to the principal portion of Realized Losses on the
Mortgage Loans during the immediately preceding Prepayment Period, which amount shall be included in
the Principal Distribution Amount and paid in accordance with Section 4.02(d) hereof, until the
Certificate Principal Balances of the Class A and Class M Certificates have been reduced to zero;
(xv) to the Class A and Class M Certificateholders, from the amount, if any, of the Excess Cash Flow
remaining after the foregoing distributions, the Overcollateralization Increase Amount for such
Distribution Date, which amount shall be included in the Principal Distribution Amount and paid in
accordance with Section 4.02(d) hereof, until the Certificate Principal Balances of the Class A and
Class M Certificates have been reduced to zero to the extent not covered by any payments under the
Swap Agreement pursuant to Section 4.09(c)(B);
(xvi) to the Class A and Class M Certificateholders from the amount, if any, of the Excess Cash Flow
remaining after the foregoing distributions, the amount of any Prepayment Interest Shortfalls
allocated thereto for such Distribution Date, on a pro rata basis based on Prepayment Interest
Shortfalls previously allocated thereto that remain unreimbursed, to the extent not covered by
Eligible Master Servicing Compensation on such Distribution Date to the extent not covered by any
payments under the Swap Agreement pursuant to Section 4.09(c)(C);
(xvii) to the Class A and Class M Certificateholders from the amount, if any, of the Excess Cash Flow
remaining after the foregoing distributions, the amount of any Prepayment Interest Shortfalls
previously allocated thereto on any prior Distribution Date that remain unreimbursed, together with
interest thereon at the applicable Pass-Through Rate, on a pro rata basis based on Prepayment Interest
Shortfalls previously allocated thereto that remain unreimbursed to the extent not covered by any
payments under the Swap Agreement pursuant to Section 4.09(c)(D);
(xviii) from the amount, if any, of the Excess Cash Flow remaining after the foregoing distributions, to pay
the Class A Certificates, on a pro rata basis, based on the amount of Class A Basis Risk Shortfall
Carry-Forward Amount previously allocated thereto that remain unreimbursed, the amount of any Class A
Basis Risk Shortfall Carry-Forward Amounts remaining unpaid as of such Distribution Date, then to the
Class M Certificates, in their order of payment priority, the amount of any Class M Basis Risk
Shortfall Carry-Forward Amounts remaining unpaid as of such Distribution Date in each case to the
extent not covered by any payments under the Swap Agreement pursuant to Section 4.09(c)(E);
(xix) to the Class A and Class M Certificates on a pro rata basis, based on the amount of Relief Act
Shortfalls allocated thereto on such Distribution Date, from the amount, if any, of the Excess Cash
Flow remaining after the foregoing distributions, the amount of any Relief Act Shortfalls allocated to
those Certificates with respect to such Distribution Date to the extent not covered by any payments
under the Swap Agreement pursuant to Section 4.09(c)(F);
(xx) to the Class A and Class M Certificateholders, from the amount, if any, of the Excess Cash Flow
remaining after the foregoing distributions, the principal portion of any Realized Losses previously
allocated to those Certificates and remaining unreimbursed, which amount shall be allocated first, to
the Class A Certificateholders on a pro rata basis, based on their respective principal portion of any
Realized Losses previously allocated thereto that remain unreimbursed, then to the Class M
Certificates, in their order of payment priority;
(xxi) from the amount, if any, of the Excess Cash Flow remaining after the foregoing distributions, to the
Swap Account for Payment to the Swap Counterparty, any Swap Termination Payment owed by the Trust Fund
due to a Swap Counterparty Trigger Event;
(xxii) 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 and (III) for any Distribution Date
after the Certificate Principal Balance of each Class of Class A Certificates and Class M Certificates
has been reduced to zero, the Overcollateralization Amount and (B) from prepayment charges on deposit
in the Certificate Account, any prepayment charges received on the Mortgage Loans during the related
Prepayment Period; and
(xxiii) to the Class R-II Certificateholders, the balance, if any, of the Excess Cash Flow.
(d) On each Distribution Date, the Principal Distribution Amount will be paid as follows:
(i) the Class A Principal Distribution Amount shall be distributed, sequentially, to the Class A-1, Class
A-2 and Class A-3 Certificates, in that order, in each case until the Certificate Principal Balances
thereof have been reduced to zero;
(ii) the Class M-1 Principal Distribution Amount shall be distributed to the Class M-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(iii) the Class M-2 Principal Distribution Amount shall be distributed to the Class M-2 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(iv) the Class M-3 Principal Distribution Amount shall be distributed to the Class M-3 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(v) the Class M-4 Principal Distribution Amount shall be distributed to the Class M-4 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(vi) the Class M-5 Principal Distribution Amount shall be distributed to the Class M-5 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(vii) the Class M-6 Principal Distribution Amount shall be distributed to the Class M-6 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(viii) the Class M-7 Principal Distribution Amount shall be distributed to the Class M-7 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(ix) the Class M-8 Principal Distribution Amount shall be distributed to the Class M-8 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; and
(x) the Class M-9 Principal Distribution Amount shall be distributed to the Class M-9 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero.
(xi) the Class M-10 Principal Distribution Amount shall be distributed to the Class M-10 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero.
(e) Notwithstanding the foregoing clauses (c) and (d), upon the reduction of the Certificate Principal
Balance of a Class of Class A or Class M Certificates to zero, such Class of Certificates will not be
entitled to further distributions pursuant to Section 4.02 (other than in respect of Subsequent Recoveries).
(f) Any Prepayment Interest Shortfalls on the Mortgage Loans which are not covered by Eligible Master
Servicing Compensation as described in Section 3.16 and Relief Act Shortfalls on the Mortgage Loans will be
allocated among the Class A and Class M Certificates pro rata in accordance with the amount of Accrued
Certificate Interest payable on such Distribution Date absent such shortfalls. Any such uncovered Prepayment
Interest Shortfalls will be paid solely pursuant to Section 4.02(c)(xvi) and (xvii) and Section 4.09(c)(C)
and (D) to the extent funds are available therefor. Any such Relief Act Shortfalls will be paid solely
pursuant to Section 4.02(c)(xix) and Section 4.09(c)(F) to the extent funds are available therefor.
(g) In addition to the foregoing distributions, with respect to any Subsequent Recoveries, the Master
Servicer shall deposit such funds into the Custodial Account pursuant to Section 3.07(b)(iii).
(h) 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.
(i) 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 the next Distribution Date, the Master
Servicer shall, no later than the Determination Date in the month of such final distribution, notify the
Trustee and the Trustee shall, no later than two (2) Business Days after such Determination Date, mail on
such date to each Holder of such Class of Certificates a notice to the effect that: (i) the Trustee
anticipates that the final distribution with respect to such Class of Certificates 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 held in the Certificate
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, Distribution Date and the date on which the Interest
Accrual Period commenced;
(ii) the aggregate amount of payments received with respect to the Mortgage Loans in the aggregate,
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 excess cash flow and the disposition 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 aggregate Certificate Principal Balance of each Class of Certificates, before and after giving
effect to the amounts distributed on such Distribution Date, separately identifying any reduction
thereof due to Realized Losses other than pursuant to an actual distribution of principal;
(ix) the Certificate Principal Balance for each Class of Certificates as of the Closing Date;
(x) the number and Stated Principal Balance of the Mortgage Loans in the aggregate after giving effect to
the distribution of principal on such Distribution Date and the number of Mortgage Loans in the
aggregate at the beginning and end of the related Due Period;
(xi) on the basis of the most recent reports furnished to it by Subservicers, (A) the number and Stated
Principal Balance of the Mortgage Loans in the aggregate that are Delinquent (1) 30-59 days, (2) 60-89
days and (3) 90 or more days and the number and Stated Principal Balance of the Mortgage Loans in the
aggregate that are in foreclosure, (B) the number and Stated Principal Balances of 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 Stated Principal Balances
of 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;
(xii) 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;
(xiii) any material modifications, extensions or waivers to the terms of the Mortgage Loans in the aggregate
during the Due Period or that have cumulatively become material over time;
(xiv) any material breaches of Mortgage Loan representations or warranties or covenants in the Agreement;
(xv) the number, aggregate principal balance and Stated Principal Balance of any REO Properties;
(xvi) 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;
(xvii) the aggregate amount of Realized Losses with respect to the Mortgage Loans in the aggregate for such
Distribution Date and the aggregate amount of Realized Losses with respect to the Mortgage Loans in
the aggregate incurred since the Cut-off Date;
(xviii) the Pass-Through Rate on each Class of Certificates and the applicable Net WAC Cap Rate;
(xix) the weighted average of the Maximum Net Mortgage Rates with respect to the Mortgage Loans in the
aggregate;
(xx) the Basis Risk Shortfall, Basis Risk Shortfall Carry Forward Amount, and Prepayment Interest
Shortfalls;
(xxi) the Overcollateralization Amount and the Required Overcollateralization Amount following such
Distribution Date;
(xxii) the number and Stated Principal Balances of the Mortgage Loans in the aggregate repurchased under
Section 4.07;
(xxiii) the aggregate amount of any recoveries on previously foreclosed loans with respect to the Mortgage
Loans in the aggregate from Residential Funding;
(xxiv) the weighted average remaining term to maturity of the Mortgage Loans in the aggregate after giving
effect to the amounts distributed on such Distribution Date;
(xxv) the weighted average Mortgage Rates of the Mortgage Loans in the aggregate after giving effect to the
amounts distributed on such Distribution Date;
(xxvi) [Reserved];
(xxvii) the amount of any Net Swap Payment payable to the Trustee on behalf of the Trust Fund, any Net Swap
Payment payable to the Swap Counterparty, any Swap Termination Payment payable to the Trustee on
behalf of the Trust Fund and any Swap Termination Payment payable to the Swap Counterparty; and
(xxviii) the occurrence of the Stepdown Date.
In addition and concurrently with each distribution charged to the Certificate Account and with
respect to each Distribution Date, the (1) Master Servicer shall report to the Trustee the amount of any
prepayment charges on the Mortgage Loans received during the related Prepayment Period and the amount of any
Premium Amounts received with respect to the immediately succeeding Distribution Date and (2) Trustee shall
forward such report 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. 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 S to such Rating Agency within a
reasonable period of time; provided, however, that the Master Servicer shall not be required to provide such
information more than four times in a calendar year to any Rating Agency.
(b) Within a reasonable period of time after it receives a written request from a Holder of a Certificate,
other than a Class R Certificate, the Master Servicer shall prepare, or cause to be prepared, and shall
forward, or cause to be forwarded, to each Person who at any time during the calendar year was the Holder of
a Certificate, other than a Class R Certificate, a statement containing the information set forth in clauses
(v) and (vi) referred to in subsection (a) above aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the Master Servicer shall be
deemed to have been satisfied to the extent that substantially comparable information shall be provided by
the Master Servicer pursuant to any requirements of the Code.
(c) Within a reasonable period of time after it receives a written request from 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 R-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 R-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, 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 Amounts, (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), and
(iii) the amount of Prepayment Interest Shortfalls, Class A Basis Risk Shortfall, Class M Basis Risk
Shortfall, Class A Basis Risk Shortfall Carry-Forward Amounts and Class M Basis Risk Shortfall Carry-Forward
Amounts. 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 reductions in the amount of interest collectable from the Mortgagor pursuant to
the Relief Act or similar legislation or regulations then in effect, 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 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 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 as successor Master Servicer hereunder, including the obligation to deposit in the Certificate
Account an amount equal to the Advance for the immediately succeeding Distribution Date. In connection with
the preceding sentence, 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 or covered as follows:
first, by any amounts available from the swap agreement for such Distribution Date
pursuant to Section 4.02(c);
second, by Excess Cash Flow as provided in clause (b)(v) of the definition of
"Principal Distribution Amount", to the extent of the Excess Cash Flow for such Distribution
Date;
third, in reduction of the Overcollateralization Amount, until such amount has been
reduced to zero;
fourth, to the Class M-10 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero;
fifth, to the Class M-9 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero;
sixth, to the Class M-8 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero;
seventh, to the Class M-7 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero;
eighth, to the Class M-6 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero;
ninth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero;
tenth, to the Class M-4 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero;
eleventh, to the Class M-3 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
twelth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero;
thirteenth, to the Class M-1 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and
fourteenth, to the Class A Certificates on a pro rata basis, until the Certificate
Principal Balances thereof have been reduced to zero.
(c) All allocations 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 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 Certificate Principal
Balance of the Class A Certificates and the Class M Certificates below the aggregate Stated Principal Balance
of the Mortgage Loans, as applicable. 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" and by operation of the provisions of Section 4.02(c). 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 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 follows: first, to Uncertificated Accrued Interest payable to the REMIC I Regular
Interests AA and ZZ up to an aggregate amount equal to the excess of (a) the REMIC I Interest Loss Allocation
Amount over (b) Prepayment Interest Shortfalls (to the extent not covered by Eligible Master Servicing
Compensation) relating to the Mortgage Loans for such Distribution Date, 98% and 2%, respectively; second, to
the Uncertificated Principal Balances of the REMIC I Regular Interests AA and ZZ up to an aggregate amount
equal to the REMIC I Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-10, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-10 has been reduced to zero; fourth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-9, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-9 has been reduced to zero; fifth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-8, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-8 has been reduced to zero; sixth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-7, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-7 has been reduced to zero; seventh, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-6, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-6 has been reduced to zero; eighth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-5, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-5 has been reduced to zero; ninth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-4, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-4 has been reduced to zero; tenth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-3, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-3 has been reduced to zero; eleventh, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-2, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-2 has been reduced to zero; twelfth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-1, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-1 has been reduced to zero; thirteenth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, A-3, 1%, and ZZ, 1%, until the Uncertificated
Principal Balances of REMIC I Regular Interest A-3 has been reduced to zero; fourteenth, to the
Uncertificated Principal Balances of REMIC I Regular Interests AA, 98%, A-2, 1%, and ZZ, 1%, until the
Uncertificated Principal Balances of REMIC I Regular Interest A-2 has been reduced to zero; and fifteenth, to
the Uncertificated Principal Balances of REMIC I Regular Interests AA, 98%, A-1, 1%, and ZZ, 1%, until the
Uncertificated Principal Balances of REMIC I Regular Interest A-1 has been reduced to zero.
(e) 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 II Regular Interest SB-IO. Realized Losses allocated to the Excess Cash
Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on the
REMIC I 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 II 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 II 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, (i) the
Holder of the Class SB Certificate may, at its option, upon twenty (20) days prior written notice to the
Master Servicer, purchase such Mortgage Loan from the Trustee at the Purchase Price therefor, except that in
no event shall the Holder of the Class SB Certificate purchase such Mortgage Loan where the aggregate value
of all such Mortgage Loans purchased by the Holder of the Class SB Certificate would be greater than three
percent (3%) of the Certificate Principal Balance of any Class of Certificates as of the Closing Date
(ii) if the Holder of the Class SB Certificate fails to provide notice pursuant to the immediately preceeding
sentence, the Master Servicer may, at its option, purchase such Mortgage Loan from the Trustee at the Purchase
Price therefor; provided, that with respect to the Master Servicer, any such Mortgage Loan that becomes 90
days or more delinquent during any given Calendar Quarter shall only be eligible for purchase pursuant to
this Section 4.07(a) during the period beginning on the first Business Day of the following Calendar
Quarter, and ending at the close of business on the second-to-last Business Day of such following Calendar
Quarter; and provided, further, that such Mortgage Loan is 90 days or more delinquent at the time of
repurchase. Such option if not exercised shall not thereafter be reinstated as to any Mortgage Loan, unless
the delinquency is cured and the Mortgage Loan thereafter again becomes delinquent in payment by 90 days or
more in any subsequent Calendar Quarter.
(b) If at any time the Master Servicer or the Holder of the Class SB Certificate, as applicable,
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 or the
Holder of the Class SB Certificate, as applicable, without recourse to the Master Servicer or the Holder of
the Class SB Certificate, as applicable, 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 or the Holder of the Class SB Certificate, as
applicable, 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. [Reserved].
Section 4.09. The Swap Agreement.
(a) On the Closing Date, the Trustee shall (i) establish and maintain in its name, in trust for the
benefit of Class A, Class M and Class SB Certificates, the Swap Account and (ii) for the benefit of the
Class A, Class M and Class SB Certificates, enter into the Swap Agreement.
(b) The Trustee shall deposit in the Swap Account all payments that are payable to the Trust Fund under
the Swap Agreement. Net Swap Payments and Swap Termination Payments (other than Swap Termination Payments
resulting from a Swap Counterparty Trigger Event) payable by the Trustee to the Swap Counterparty pursuant to
the Swap Agreement shall be excluded from the Available Distribution Amount and payable to the Swap
Counterparty prior to any distributions to the Certificateholders. On each Distribution Date, such amounts
will be remitted by the Trustee to the Swap Account for payment to the Swap Counterparty, first to make any
Net Swap Payment owed to the Swap Counterparty pursuant to the Swap Agreement for such Distribution Date, and
second to make any Swap Termination Payment (not due to a Swap Counterparty Trigger Event) owed to the Swap
Counterparty pursuant to the Swap Agreement for such Distribution Date. For federal income tax purposes,
such amounts paid to the Swap Account on each Distribution Date shall first be deemed paid to the Swap
Account in respect of REMIC II Regular Interest SB-IO to the extent of the amount distributable on such
REMIC II Regular Interest SB-IO on such Distribution Date, and any remaining amount shall be deemed paid to
the Swap Account from the Class IO Distribution Amount (as defined below). Any Swap Termination Payment
triggered by a Swap Counterparty Trigger Event owed to the Swap Counterparty pursuant to the Swap Agreement
will be subordinated to distributions to the Holders of the Class A and Class M Certificates and shall be
paid as set forth under Section 4.02.
(c) Net Swap Payments payable by the Swap Counterparty to the Trustee on behalf of the Trust Fund pursuant
to the Swap Agreement will be deposited by the Trustee into the Swap Account. On each Distribution Date, to
the extent required, the Trustee shall withdraw such amounts from the Swap Account to distribute to the
Certificates in the following order of priority:
(A) first, as part of the Principal Distribution Amount to pay the holders of the Class A Certificates and
then to the Class M Certificates in reduction of their Certificate Principal Balances, the
principal portion of any Realized Losses incurred on the Mortgage Loans for the preceding
calendar month;
(B) second, to pay any Overcollateralization Increase Amount, as part of the Principal Distribution
Amount, to the holders of the Class A and Class M Certificates;
(C) third, to pay the holders of Class A and Class M Certificates, the amount of any Prepayment Interest
Shortfalls allocated thereto on such Distribution Date, on a pro rata basis, based on the
amount of Prepayment Interest Shortfalls previously allocated thereto pursuant to
Section 4.02(f) that remain unreimbursed, to the extent not covered by the Eligible Master
Servicing Compensation on such Distribution Date;
(D) fourth, to pay to the holders of the Class A and Class M Certificates, any Prepayment Interest
Shortfalls remaining unpaid from prior Distribution Dates together with interest thereon at the
applicable Pass-Through Rate, on a pro rata basis, based on the amount of Prepayment Interest
Shortfalls previously allocated thereto that remain unreimbursed;
(E) fifth, to pay the holders of the Class A Certificates, on a pro rata basis, based on the amount of
Basis Risk Shortfall Carry-Forward Amounts previously allocated thereto remaining unpaid as of
such Distribution Date the applicable Basis Risk Shortfall Carry-Forward Amounts, and then to
the Class M Certificates, in order of their payment priority, the amount of any Basis Risk
Shortfall Carry-Forward Amounts remaining unpaid as of such Distribution Date;
(F) sixth, to pay to the holders of the Class A and Class M Certificates, the amount of any Relief Act
Shortfalls allocated thereto that remain unreimbursed, on a pro rata basis, based on the amount
of Relief Act Shortfalls previously allocated thereto;
(G) seventh, to pay to the holders of the Class A Certificates, on a pro rata basis, based on the amount
of Realized Losses previously allocated thereto that remain unreimbursed, and then to the
Class M Certificates in their order of payment priority, the principal portion of any Realized
Losses previously allocated thereto that remain unreimbursed; and
(H) eighth, to the Class SB Certificates.
(d) Subject to Sections 8.01 and 8.02 hereof, the Trustee agrees to comply with the terms of the Swap
Agreement and to enforce the terms and provisions thereof against the Swap Counterparty at the written
direction of the Holders of Class A and Class M Certificates entitled to at least 51% of the Voting Rights of
such Classes of Certificates, or if the Trustee does not receive such direction from such Certificateholders,
then at the written direction of Residential Funding.
(e) The Swap Account shall be an Eligible Account. Amounts held in the Swap Account from time to time
shall continue to constitute assets of the Trust Fund, but not of any REMIC, until released from the Swap
Account pursuant to this Section 4.09. The Swap Account constitutes an "outside reserve fund" within the
meaning of Treasury Regulation Section 1.860G-2(h) and is not an asset of any REMIC. The Class SB
Certificateholders shall be the owners of the Swap Account. The Trustee shall keep records that accurately
reflect the funds on deposit in the Swap Account. The Trustee shall, at the direction of the Master Servicer,
invest amounts on deposit in the Swap Account in Permitted Investments. In the absence of written direction
to the Trustee from the Master Servicer, all funds in the Swap Account shall remain uninvested.
(f) The Trustee and the Master Servicer shall treat the holders of each Class of Certificates (other than
the Class SB Certificates and Class R Certificates) as having entered into a notional principal contract with
the holders of the Class SB Certificates. Pursuant to each such notional principal contract, all holders of
Certificates (other than the Class SB Certificates and Class R Certificates) shall be treated as having
agreed to pay, on each Distribution Date, to the holder of the Class SB Certificates an aggregate amount
equal to the excess, if any, of (i) the amount payable on such Distribution Date on the REMIC II Regular
Interest corresponding to such Class of Certificates over (ii) the amount payable on such Class of
Certificates on such Distribution Date (such excess, a "Class IO Distribution Amount"). In addition, pursuant
to such notional principal contract, the holder of the Class SB Certificates shall be treated as having
agreed to pay the related Basis Risk Shortfall Carry Forward-Amounts to the holders of the Certificates
(other than the Class SB Certificates and Class R Certificates) in accordance with the terms of this
Agreement. Any payments to the Certificates from amounts deemed received in respect of this notional
principal contract shall not be payments with respect to a "regular interest" in a REMIC within the meaning
of Code Section 860G(a)(1). However, any payment from the Certificates (other than the Class SB Certificates
and Class R Certificates) of a Class IO Distribution Amount shall be treated for tax purposes as having been
received by the holders of such Certificates in respect of the REMIC II Regular Interest corresponding to
such Class of Certificates and as having been paid by such holders to the Swap Account pursuant to the
notional principal contract. Thus, each Certificate (other than the Class R Certificates) shall be treated as
representing not only ownership of regular interests in REMIC II, but also ownership of an interest in, and
obligations with respect to, a notional principal contract.
Section 4.10. [Reserved].
Section 4.11. Premium Amounts.
With respect to any Mortgage Loan (or REO Property) required to be or otherwise purchased on any date
pursuant to Section 2.04, Residential Funding shall pay, concurrently with the payment of the Purchase Price
with respect to such Mortgage Loan (or REO Property) pursuant to Section 2.04, the Premium Amount with
respect to such Mortgage Loan (or REO Property) to the Trustee. The Trustee shall pay any Premium Amount
received with respect to any Mortgage Loan (or REO Property) to the holders of the Class SB Certificates on
the Distribution Date on which the Purchase Price with respect to such Mortgage Loan (or REO Property) is
distributed to the Certificateholders. Any Premium Amounts held by the Trustee shall constitute assets of
the Trust Fund, but not of any REMIC, until released to the holders of the Class SB Certificates pursuant to
this Section 4.11. Premium Amounts held by the Trustee constitute an "outside reserve fund" within the
meaning of Treasury Regulation Section 1.860G-2(h) and are not an asset of any REMIC. The Class SB
Certificateholders shall be the owners of the Premium Amounts held by the Trustee. The Trustee shall keep
records that accurately reflect Premium Amounts received and held on deposit pending distribution to the
holders of the Class SB Certificates. All Premium Amounts held by the Trustee pending distribution shall be
held in a separate account established by the Trustee and remain uninvested. For federal income tax
purposes, the obligation of Residential Funding to pay Premium Amounts to the Trustee for the benefit of the
holders of the Class SB Certificates, and the right of the Trustee to receive Premium Amounts on behalf of
the holders of the Class SB Certificates from Residential Funding, shall be treated as a notional principal
contract entered into between Residential Funding and the holders of the Class SB Certificates. Accordingly,
for federal income tax purposes, Premium Amounts paid shall not be treated as a payment by any REMIC and
Premium Amounts received shall not be treated as either received by any REMIC or received by any holder of
Class SB Certificates in respect of such holder's REMIC Regular Interests.
Section 4.12. Tax Treatment of Swap Payments and Swap Termination Payments.
(a) For federal income tax purposes, each holder of a Class A or Class M Certificate is deemed to own an
undivided beneficial ownership interest in a REMIC regular interest and the right to receive payments from
the Swap Account in respect of the related Basis Risk Shortfall Carry-Forward Amount, and the obligation to
make payments to the Swap Account. For federal income tax purposes, the Trustee will account for payments to
each Class A and Class M Certificates as follows: each Class A and Class M Certificate will be treated as
receiving their entire payment from REMIC II (regardless of any Swap Termination Payment or obligation under
the Swap Agreement) and subsequently paying their portion of any Swap Termination Payment in respect of each
such Class' obligation under the Swap Agreement. In the event that any such Class is resecuritized in a
REMIC, the obligation under the Swap Agreement to pay any such Swap Termination Payment (or any Net Swap
Payment), will be made by one or more of the REMIC Regular Interests issued by the resecuritization
REMIC subsequent to such REMIC Regular Interest receiving its full payment from any such Class A or Class M
Certificate. Resecuritization of any Class A or Class M Certificate in a REMIC will be permissible only if
the Trustee hereunder is the trustee in such resecuritization.
(b) The REMIC regular interest corresponding to a Class A or Class M Certificate will be entitled to
receive interest and principal payments at the times and in the amounts equal to those made on the
certificate to which it corresponds, except that (i) the maximum interest rate of that REMIC regular interest
will equal the applicable Net WAC Cap Rate computed for this purpose by limiting the base calculation amount
of the Swap Agreement to the Stated Principal Balance of the Mortgage Loans and (ii) any Swap Termination
Payment will be treated as being payable solely from Excess Cash Flow. As a result of the foregoing, the
amount of distributions and taxable income on the REMIC regular interest corresponding to a Class A or
Class M Certificate may exceed the actual amount of distributions on the Class A or Class M Certificate.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Class A, Class M, Class SB and Class R Certificates shall be substantially in the forms set forth
in Exhibits A, B, D and E, 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 one or more Custodians of the documents specified in Section 2.01. The Class
A, Class M-1, Class M-2 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 X-0, Xxxxx X-0, Class M-6, Class M-7,
Class M-8, Class M-9 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. Each Class of 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 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 such Class A 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 the purposes of exercising the rights of Certificateholders hereunder. The rights of Certificate Owners
with respect to the respective Classes of Book-Entry Certificates shall be limited to those established by
law and agreements between such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of any Class of Book-Entry Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The Trustee may establish a
reasonable record date in connection with solicitations of consents from or voting by Certificateholders and
shall give notice to the Depository of such record date.
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 Trustee 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 Trustee of instruction from the Depository directing the
Trustee 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 Certificates and any
other information reasonably required by the Trustee), (i) the Trustee shall instruct the Depository to
reduce the related Depository Participant's account by the aggregate Certificate Principal Balance of the
Definitive Certificates, (ii) the Trustee shall execute, 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
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.
If (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 and (B) the Depositor is unable to locate a
qualified successor or (ii) the Depositor notifies the Depository of its intent to terminate the book-entry
system and, upon receipt of notice of such intent from the Depository, the Depository Participants holding
beneficial interest in the Book-Entry Certificates agree to initiate such termination, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the same. Upon surrender to the
Trustee of the Book-Entry Certificates by the Depository, accompanied by registration instructions from the
Depository for registration of transfer, the Trustee shall issue the Definitive Certificates. Neither the
Depositor, the Master Servicer nor the Trustee shall be liable for any actions taken by the Depository or its
nominee, including, without limitation, any delay in delivery of any instruction required under this section
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 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 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 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 addressed to and 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 J hereto, and the Trustee shall require
the transferor to execute a representation letter, substantially in the form of Exhibit K 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 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 O 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 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 A, Class M, Class SB or Class R Certificate presented for registration
in the name of any Person, 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 Q (with respect to a Class A
or Class M Certificate, provided, however that such certification shall have been deemed to have been given
by a Class A Certificateholder or Class M Certificateholder who acquires a Book-Entry Certificate), paragraph
six of Exhibit J or paragraph three of Exhibit O (with respect to a Class SB Certificate) or in paragraph
fifteen of Exhibit I-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 subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code (each, a "Plan"), or any Person (including, without limitation, an insurance company
investing its general accounts, an investment manager, a named fiduciary or a trustee of any Plan) who is
using "plan assets," within the meaning of the U.S. Department of Labor regulation promulgated at 29 X.X.X.xx.
2510.3-101, of any Plan (each, a "Plan Investor") to effect such acquisition.
(ii) Any Transferee of a Class A or Class M Certificate that does not deliver the certification referred to
in clause (i) above will be deemed to have represented by virtue of its purchase or holding of such
Certificate (or any interest therein) that such Transferee is not a Plan or a Plan Investor.
(A) If any Class A or 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 is
not a Plan or a Plan Investor 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 A or Class M
Certificate. The Trustee shall be under no liability to any Person for making any payments due on such
Certificate to such preceding Transferee.
(B) Any purported Certificate Owner whose acquisition or holding of any Class A or Class M Certificate (or
any 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:
(i) 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.
(ii) 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,
(1) an affidavit and agreement (a "Transfer Affidavit and Agreement," in the form attached hereto as
Exhibit I-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
(2) a certificate, in the form attached hereto as Exhibit I-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.
(iii) 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.
(iv) 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 I-2.
(v) 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 I-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.
(i) 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.
(ii) 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 (ii)(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
(i) 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
(ii) 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:
(i) 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 and 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
(ii) 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 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 will each obtain and
preserve its qualification to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the
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 consolidated, or any
corporation resulting from any merger 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 herein 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 each Rating Agency's ratings, if any, of the Class A Certificates and Class M Certificates in effect
immediately prior to such merger or consolidation will not be qualified, reduced or withdrawn as a result
thereof (as evidenced by a letter to such effect from each Rating Agency).
(c) Notwithstanding anything else in this Section 6.02 and Section 6.04 to the contrary, the 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. This Section 6.02 shall not apply to any sale, transfer, pledge or
assignment by Residential Funding of the Call Rights.
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 or representations made herein or any
liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations and duties hereunder. The
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 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(c) 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. The Servicing Fee for any successor Master Servicer
appointed pursuant to this Section 7.02 will be lowered with respect to those Mortgage Loans, if any, where
the Subservicing Fee accrues at a rate of less than 0.50% per annum in the event that the successor Master
Servicer is not servicing such Mortgage Loans directly and it is necessary to raise the related Subservicing
Fee to a rate of 0.50% per annum in order to hire a Subservicer with respect to such Mortgage Loans. The
Master Servicer shall pay the reasonable expenses of the Trustee in connection with any servicing 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 the Certificateholders at their respective addresses appearing in the
Certificate Register.
(b) Within 60 days after the occurrence of any Event of Default, the Trustee shall transmit by mail to all
Holders of Certificates notice of each such Event of Default hereunder known to the Trustee, unless such
Event of Default shall have been cured or waived 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 in a timely fashion. 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 (subject to Section 10.01(f)) and to prevent the imposition
of any federal, state or local income, prohibited transaction (except as provided in Section 2.04 herein),
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 or the Swap 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, 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 or the Swap Agreement, and the Master Servicer further agrees to
indemnify the Trustee for, and to hold the Trustee harmless against, any loss, liability or expense arising
out of, or in connection with, the provisions set forth in the second paragraph of Section 2.01(a) hereof,
including, without limitation, all costs, liabilities and expenses (including reasonable legal fees and
expenses) of investigating and defending itself against any claim, action or proceeding, pending or
threatened, relating to the provisions of such paragraph, provided that:
(i) with respect to any such claim, the Trustee shall have given the Master Servicer written notice
thereof promptly after the Trustee shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee shall cooperate and consult fully with the
Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Agreement to the contrary, the Master Servicer shall not be liable
for settlement of any claim by the Trustee entered into without the prior consent of the Master
Servicer which consent shall not be unreasonably withheld. No termination of this Agreement shall
affect the obligations created by this Section 8.05(b) of the Master Servicer to indemnify the Trustee
under the conditions and to the extent set forth herein. Notwithstanding the foregoing, the
indemnification provided by the Master Servicer in this Section 8.05(b) shall not 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 and having a sufficient rating so as to maintain the
then-current ratings of the Certificates. If such corporation or national banking association publishes
reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified
in Section 8.07.
Section 8.07. Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts hereby created by giving written
notice thereof to the 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 this Section 8.08 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 Mortgage Files and related documents and statements held by it hereunder (other than
any Mortgage Files at the time held by a Custodian, which shall become the agent of any successor trustee
hereunder), and the 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 Custodians.
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 one or more Custodians who are not Affiliates of the
Depositor or the Master Servicer to hold all or a portion of the Mortgage 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 and to enforce the terms and provisions thereof against the Custodian for the benefit of the
Certificateholders. Each Custodian shall be a depository institution subject to supervision by federal or
state authority, 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 Mortgage File. Each Custodial Agreement may be amended
only as provided in Section 11.01. The Trustee shall notify the Certificateholders of the appointment of any
Custodian (other than the Custodian appointed as of the Closing Date) pursuant to this Section 8.11.
Section 8.12. Appointment of Office or Agency.
The Trustee will 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 will
maintain an office at the address stated in Section 11.05 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. Swap Agreement.
The Trustee is hereby authorized and directed to, and agrees that it shall, enter into the Swap
Agreement on behalf of the Trust Fund.
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase by Residential Funding 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) the purchase by the Master Servicer or the Holder of the Class SB Certificates of all Mortgage Loans
and all property acquired in respect of any Mortgage Loan remaining in the Trust Fund, at a price
equal to 100% of the unpaid principal balance of each Mortgage Loan (or, if less than such unpaid
principal balance, the fair market value of the related underlying property of such Mortgage Loan with
respect to Mortgage Loans as to which title has been acquired if such fair market value is less than
such unpaid principal balance) (net of unreimbursed Advances attributable to principal) on the day of
repurchase, plus unpaid accrued interest thereon at the Mortgage Rate (or Modified Net Mortgage Rate
in the case of any Modified Mortgage Loan) from the Due Date to which interest was last paid by the
Mortgagor to, but not including, the first day of the month in which such repurchase price is
distributed plus any Swap Termination Payment payable to the Swap Counterparty then remaining unpaid
or which is due to the exercise of such option plus the amount of any accrued and unpaid Servicing
Fees, unreimbursed advances and Servicing Advances, in each case through the date of such option;
provided, however, that in no event shall the trust created hereby continue beyond the earlier of (i)
the Maturity Date or (ii) 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 or the Holder of
the Class SB Certificates shall also include any amounts owed by the Master Servicer 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 (bb) of
such Section, that remain unpaid on the date of such purchase and the Master Servicer acknowledges its
obligation to pay any remaining unpaid amounts on the date of such purchase by the Master Servicer or
the Holder of the Class SB Certificates if owed by the Master Servicer 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 (bb) of such Section.
The right of the Master Servicer or the Holder of the Class SB Certificates, as applicable, to
purchase all the assets of the Trust Fund relating to the Mortgage Loans, pursuant to clause (ii) above is
conditioned upon (1) the date of such purchase occurring on or after the Optional Termination Date and (2)
(a) with respect to any Optional Termination Date on which the balance of the Mortgage Loans is between
10.00% and 5.01% of the Cut-off Date Balance (after giving effect to distributions to be made on such
Optional Termination Date), the Holder of the Class SB Certificates will have sole option to exercise such
right and (b) with respect to any Optional Termination Date on which the balance of the Mortgage Loans is
5.00% or less of the Cut-off Date Balance (after giving effect to distributions to be made on such Optional
Termination Date), the Holder of the Class SB Certificates shall have the option to exercise such right if it
notifies the Master Servicer of its intent to do so at least three (3) Business Days prior to the date upon
which the Master Servicer is obligated to give notice to the Trustee pursuant to Section 9.01(b) below, and
if no such notice is timely provided, then the Master Servicer shall have the option to exercise such right
with respect to such Optional Termination Date. If such right is exercised by the Master Servicer or the
Holder of the Class SB Certificates, the Master Servicer shall be entitled to reimbursement for the full
amount of any unreimbursed Advances theretofore made by it with respect to the Mortgage Loans being
purchased, pursuant to Section 3.10. In addition, the Master Servicer shall provide to the Trustee the
certification required by Section 3.15 and the Trustee and any Custodian shall, promptly following payment of
the purchase price, release to the Master Servicer or the Holder of the Class SB Certificates the Mortgage
Files pertaining to the Mortgage Loans being purchased.
In addition, on any Distribution Date on or after the Optional Termination Date, the Master Servicer
or the Holder of the Class SB Certificates, as applicable, shall have the right, at its option or at the
option of its designee, respectively, to purchase all of the Certificates in whole, but not in part, at a
price equal to the aggregate outstanding Certificate Principal Balance of the Certificates, plus one month's
Accrued Certificate Interest on the Certificates, any previously unpaid Accrued Certificate Interest, and any
unpaid Prepayment Interest Shortfalls previously allocated thereto; provided that (a) with respect to any
Optional Termination Date on which the balance of the Mortgage Loans is between 10.00% and 5.01% of the
Cut-off Date Balance (after giving effect to distributions to be made on such Optional Termination Date), the
Holder of the Class SB Certificates will have sole option to exercise such right and (b) with respect to any
Optional Termination Date on which the balance of the Mortgage Loans is 5.00% or less of the Cut-off Date
Balance (after giving effect to distributions to be made on such Optional Termination Date), the Holder of
the Class SB Certificates shall have the option to exercise such right if it notifies the Master Servicer of
its intent to do so at least three (3) Business Days prior to the date upon which the Master Servicer is
obligated to give notice to the Trustee pursuant to Section 9.01(b) below, and if no such notice is timely
provided, then the Master Servicer shall have the option to exercise such right with respect to such Optional
Termination Date.
(b) The Master Servicer shall give the Trustee not less than 40 days' prior notice of the Distribution
Date on which the Master Servicer anticipates that the final distribution will be made to Certificateholders
(whether as a result of the exercise by the Master Servicer or the Holder of the Class SB Certificates of its
right to purchase the assets of the Trust Fund or otherwise). Notice of any termination, specifying the
anticipated Final Distribution Date (which shall be a date that would otherwise be a Distribution Date) upon
which the Certificateholders may surrender their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Master Servicer (if the Master Servicer or the
Holder of the Class SB Certificates is exercising its right to purchase the assets of the Trust Fund), or by
the Trustee (in any other case) by letter to Certificateholders 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,
(ii) the amount of any such final payment, if known, and
(iii) that the Record Date otherwise applicable to such Distribution Date is not applicable, and 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 aforesaid,
it shall give such notice to the Certificate Registrar at the time such notice is given to
Certificateholders. In the event such notice is given by the Master Servicer, the Master Servicer or the
Holder of the Class SB Certificates shall deposit in the Custodial Account before the Final Distribution Date
in immediately available funds an amount equal to the purchase price for the assets of the Trust Fund
computed as above provided. 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 (A)
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 (B) 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:
(i) first, payment of any accrued and unpaid Servicing Fees, unreimbursed advances and Servicing Advances,
in each case through the date of such option, to the Master Servicer
(ii) second, 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,
(iii) third, 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,
(iv) fourth, 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,
(v) fifth, 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,
(vi) sixth, with respect to the Class M-4 Certificates, the outstanding Certificate Principal Balance
thereof, plus Accrued Certificate Interest,
(vii) seventh, 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,
(viii) eighth, 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,
(ix) ninth, 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,
(x) tenth, 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,
(xi) eleventh, 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,
(xii) twelfth, 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,
(xiii) thirteenth, 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,
(xiv) fourteenth, to the Swap Counterparty (without duplication of amounts payable to the Swap Counterparty
on such date in accordance with Section 4.02) any Swap Termination Payment payable to the Swap
Counterparty then remaining unpaid or which is due to the exercise of any early termination of the
Trust Fund pursuant to this Section 9.01, and
(xv) fifteenth, to the Class SB Certificates.
(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 Trustee shall on such date cause all funds in the
Certificate Account not distributed in final distribution to Certificateholders to be withdrawn therefrom and
credited to the remaining Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the Master Servicer (if the Master Servicer or the Holder of the
Class SB Certificates 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 Escrow Account and of contacting
Certificateholders shall be paid out of the assets which remain in the Escrow Account. If within nine months
after the second notice any Certificates shall not have been surrendered for cancellation, the Trustee shall
pay to the Master Servicer all amounts distributable to the holders thereof and the Master Servicer shall
thereafter hold such amounts until distributed to such holders. No interest shall accrue or be payable to any
Certificateholder on any amount held in the Escrow Account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment thereof in accordance with this
Section 9.01 and the Certificateholders shall look only to the Master Servicer for such payment.
(e) All rights of the Master Servicer or the Holder of the Class SB Certificates to purchase the assets of
the Trust Fund, or to purchase specified classes of Certificates, as set forth in Section 9.01(a) are
referred to in this Agreement as the "Call Rights". Notwithstanding any other provision of this Agreement,
the Master Servicer or the Holder of the Class SB Certificates shall have the right to sell, transfer, pledge
or otherwise assign the Call Rights at any time to any Person. Upon written notice by the Master Servicer or
the Holder of the Class SB Certificates to the Trustee and the Master Servicer of any such assignment of the
Call Rights to any assignee, the Trustee and the Master Servicer shall be obligated to recognize such
assignee as the holder of the Call Rights. Such entity, if not the Master Servicer or the Holder of the Class
SB Certificates or an affiliate, shall be deemed to represent, at the time of such sale, transfer, pledge or
other assignment, that one of the following will be, and at the time the Call Right is exercised is, true and
correct: (i) the exercise of such Call Right shall not result in a non-exempt prohibited transaction under
section 406 of ERISA or section 4975 of the Code (including by reason of U.S. Department of Labor ("DOL")
Prohibited Transaction Class Exemption ("PTCE") 75-1 (Part I), 84-14, 90-1, 91-38, 95-60 or 96-23 or other
applicable exemption) or (ii) such entity is (A) not a party in interest under section 3(14) of ERISA or a
disqualified person under section 4975(e)(2) of the Code with respect to any employee benefit plan subject to
section 3(3) of ERISA or any plan subject to section 4975 of the Code (other than an employee benefit plan or
plan sponsored or maintained by the entity, provided that no assets of such employee benefit plan or plan are
invested or deemed to be invested in the Certificates) and (B) not a "benefit plan investor" as described in
DOL regulation section 2510.3-101(f)(2). If any such assignee of the Call Right is unable to exercise such
Call Right by reason of the preceding sentence, then the Call Right shall revert to the immediately preceding
assignor of such Call Right subject to the rights of any secured party therein.
Section 9.02. Additional Termination Requirements.
(a) Each of REMIC I and REMIC II 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, as the case may be, 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 and REMIC II, and
specify the first day of such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury regulations Section 1.860F-1. The Master Servicer also shall satisfy all of the
requirements of a qualified liquidation for each of REMIC I and REMIC II 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 and REMIC II 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 and REMIC II 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 the Class R-I 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 the Class R-II Certificates shall be designated as the sole class
of "residual interests" in REMIC II. The REMIC Administrator and the Trustee shall not permit the creation of
any "interests" (within the meaning of Section 860G of the Code) in REMIC I and REMIC II other than the REMIC
I Regular Interests, the REMIC II Regular Interests and the Certificates.
(b) The Closing Date is hereby designated as the "startup day" of each of REMIC within the meaning of
Section 860G(a)(9) of the Code.
(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 and REMIC II 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 and REMIC II 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 the 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 March 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 any REMIC
pursuant to Article IX of this Agreement or (ii) 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 (but with the consent
of the Swap Counterparty if such amendment is with respect to Section 4.09, Section 4.02(c)(xxi) or Section
11.10):
(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 then-current rating assigned to such Certificates, 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, 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.
(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 and, if such amendment is with respect to Section 4.09, Section 4.02(c)(xxi) or Section
11.10, with the consent of the Swap Counterparty, 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 is permitted under this Agreement and 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.
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 R 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 R 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 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 General Motors Acceptance Corporation, the Depositor may elect that the text of such
amendment to this Agreement shall be substantially in the form attached hereto as Exhibit L (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 M, 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.
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 and the obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws, without regard to the conflict of laws principles thereof, other than Sections
5-1401 and 5-1402 of the New York General Obligations Law.
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 (RAMP), 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, U.S. Bank Corporate Trust
Services, 00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X, Xx. Xxxx, Xxxxxxxxx 00000-0000, Attn: Structured Finance/RAMP
2006-NC3 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 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 by Moody's and (e) in the case of Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 Attention; Mortgage Surveillance. 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, (a) shall notify each Rating Agency
at such time as it is otherwise required pursuant to this Agreement to give notice of the occurrence of, any
of the events described in clause (a), (b), (c), (d), (g), (h), (i) or (j) below, (b) shall notify the
Subservicer at such time as it is otherwise required pursuant to this Agreement to give notice of the
occurrence of any of the events described in clause (a), (b), (c)(1), (g)(1) or (i) below, or (c) provide a
copy to each Rating Agency at such time as otherwise required to be delivered pursuant to this Agreement of
any of the statements described in clauses (e) and (f) below:
(a) a material change or amendment to this Agreement,
(b) the occurrence of an Event of Default,
(c) (1) the termination or appointment of a successor Master Servicer or (2) the termination or
appointment of a successor Trustee or a change in the majority ownership of the Trustee,
(d) the filing of any claim under the Master Servicer's blanket fidelity bond and the errors and omissions
insurance policy required by Section 3.12 or the cancellation or modification of coverage under 152 any such
instrument,
(e) the statement required to be delivered to the Holders of each Class of Certificates pursuant to
Section 4.03,
(f) the statements required to be delivered pursuant to Sections 3.18 and 3.19,
(g) (1) a change in the location of the Custodial Account or (2) a change in the location of the
Certificate Account,
(h) the occurrence of any monthly cash flow shortfall to the Holders of any Class of Certificates
resulting from the failure by the Master Servicer to make an Advance pursuant to Section 4.04,
(i) the occurrence of the Final Distribution Date and
(j) the repurchase of or substitution for any Mortgage Loan,
provided, however, that with respect to notice of the occurrence of the events described in clauses (d), (g)
or (h) above, the Master Servicer shall provide prompt written notice to each Rating Agency and the
Subservicer 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. [Reserved].
Section 11.10. Third Party Beneficiaries.
The Swap Counterparty is an express third-party beneficiary of the Agreement and shall have the right
to enforce the provisions of this Agreement.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01. Intent of the 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 each of 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 V 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 an 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.
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 and their respective seals, duly
attested, to be hereunto affixed, all as of the day and year first above written.
[Seal] RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.
By: /s/ Xxxxxx Xxxxxx
Attest: /s/ Xxxxxxxxxxx Xxxxxxxx Name: Xxxxxx Xxxxxx
Name: Xxxxxxxxxxx Xxxxxxxx Title: Vice President
Title: Vice President
[Seal] RESIDENTIAL FUNDING CORPORATION
Attest: /s/ Xxxxxx Xxxxxx By: Xxxxxxxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxx Name: Xxxxxxxxxxx Xxxxxxxx
Title: Associate Title: Associate
[Seal] U.S. BANK NATIONAL ASSOCIATION
as Trustee
Attest: /s/ Xxxxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxx-Xxxx
Name: Xxxxxxxx Xxxxxxx Name: Xxxxxx Xxxxxxx-Xxxx
Title: Assistant Vice President Title: Assistant Vice President
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 28th day of March, 2006 before me, a notary public in and for said State, personally
appeared Xxxxxx Xxxxxx, known to me to be a Vice President of Residential Asset Mortgage Products,
Inc., one of the corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year
in this certificate first above written.
Notary Public
/s/ Xxx Xxxxx
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 28th day of March, 2006 before me, a notary public in and for said State, personally
appeared Xxxxxxxxxxx Xxxxxxxx, known to me to be an Associate of Residential Funding 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
/s/ Xxx Xxxxx
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF XXXXXX )
On the 28th day of March, 2006 before me, a notary public in and for said State, personally
appeared Xxxxxx Xxxxxxx-Xxxx, known to me to be a Vice President 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 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
Xxxxxx X. Xxxxxxx
[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, AS AMENDED (THE "CODE") COUPLED
WITH THE RIGHT TO RECEIVE PAYMENTS UNDER THE YIELD MAINTENANCE AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
Class [A-__] Senior Certificate No. __
Date of Pooling and Servicing [Adjustable] [Variable] Pass-Through Rate
Agreement and Cut-off Date:
February 1, 2006 Percentage Interest: ___%
First Distribution Date: Aggregate Initial Certificate Principal
March 27, 2006 Balance of the Class [A-__]
Certificates: $___________
Master Servicer:
Residential Funding Corporation
Final Scheduled Distribution Date: Initial Certificate Principal
_________ __, 20__ Balance of this Class [A-__] Certificate:
$___________
Maturity Date: CUSIP ________
_________ __, 20__
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-NC2
evidencing a percentage interest in the distributions allocable
to the Class [A-__] Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to
four-family fixed and adjustable interest rate, first and junior
lien mortgage loans sold by RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Residential Asset Mortgage Products, Inc., the
Master Servicer, the Trustee referred to below or GMAC Mortgage Group, Inc. 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 Mortgage
Products, Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of
their affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, Inc. 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 conventional one- to four-family fixed and
adjustable interest rate, first and junior lien mortgage loans (the "Mortgage Loans"), sold
by Residential Asset Mortgage Products, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Depositor, the Master Servicer and 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
prior to such 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 the City of 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.
This Certificate is one of a duly authorized issue of Certificates issued in several
Classes designated as Mortgage Asset-Backed Pass-Through Certificates of the Series
specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in
the Agreement. In the event Master Servicer funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Master Servicer, to the extent provided in the
Agreement, from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or the
Certificate Account created for the benefit of Certificateholders may be made by the Master
Servicer from time to time for purposes other than distributions to Certificateholders, such
purposes including without limitation reimbursement to the Depositor and the Master Servicer
of advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the amendment of the
Agreement and the modification of the rights and obligations of the Depositor, the Master
Servicer and the Trustee and the rights of the Certificateholders under the Agreement from
time to time by the Depositor, the Master Servicer and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders
of this Certificate and of any Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain circumstances
without the consent of the Holders of any of the Certificates and, in certain additional
circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set forth,
the transfer of this Certificate is registrable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the offices or agencies appointed by the
Trustee in the City of 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, 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 neither the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of
the State of New York, without regard to the conflicts of law principles thereof, other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law.
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 Residential
Funding Corporation or its designee from the Trust Fund of all remaining Mortgage Loans and
all property acquired in respect of such Mortgage Loans, thereby effecting early retirement
of the related Certificates. The Agreement permits, but does not require, Residential
Funding Corporation or its designee (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) subject to the terms of the Agreement, to purchase in whole, but not
in part, all of the Class A, Class M and Class B-1 Certificates from the Holders thereof,
provided, that any such option may only be exercised if the aggregate Stated Principal
Balance of the Mortgage Loans, as of the Distribution Date upon which the proceeds of any
such purchase are distributed is less than ten percent of the Cut-off Date Principal Balance
of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the Certificate
Registrar, by manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Signatory
Dated: ________ __, 2006
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
funds to
for the account of
account number
or, if mailed by check, to .
Applicable statements should be mailed to:
.
This information is provided by ___________________________________, the assignee
named above, or ______________________________, as its agent.
EXHIBIT B
FORM OF CLASS [M-_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A [AND CLASS M-_]
CERTIFICATES, AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST" IN A
"REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") COUPLED
WITH THE RIGHT TO RECEIVE PAYMENTS UNDER THE YIELD MAINTENANCE AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS
PURCHASE OR HOLDING OF SUCH CERTIFICATE (OR ANY INTEREST HEREIN) THAT EITHER (A) SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE (EACH, A "PLAN"), OR ANY PERSON (INCLUDING, WITHOUT
LIMITATION, AN INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY PLAN) WHO IS USING
"PLAN ASSETS," WITHIN THE MEANING OF THE U.S. DEPARTMENT OF LABOR REGULATION PROMULGATED AT
29 X.X.X.xx. 2510.3-101, OF ANY PLAN (EACH, A "PLAN INVESTOR") TO EFFECT SUCH ACQUISITION,
(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 SUCH CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE, NOT LOWER
THAN "BBB-" (OR ITS EQUIVALENT) BY STANDARD & POOR'S OR MOODY'S OR (C)(I) THE TRANSFEREE IS
AN INSURANCE COMPANY, (II) THE SOURCE OF FUNDS USED TO PURCHASE OR HOLD THE CERTIFICATE (OR
ANY INTEREST HEREIN) 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 HEREIN) IS ACQUIRED OR HELD IN VIOLATION OF THE
PROVISIONS OF THE PRECEDING PARAGRAPH, THEN THE LAST PRECEDING TRANSFEREE THAT EITHER (A) IS
NOT A PLAN OR A PLAN INVESTOR, (B) ACQUIRED SUCH CERTIFICATE IN COMPLIANCE WITH THE RFC
EXEMPTION, OR (C) 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 ANY
INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION 5.02(e) OF THE
POOLING AND SERVICING AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE 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.
Class M-__Mezzanine Certificate No. 1
Date of Pooling and Servicing Adjustable Pass-Through Rate
Agreement and Cut-off Date:
February 1, 2006 Percentage Interest: ___%
First Distribution Date: Aggregate Initial Certificate Principal
March 27, 2006 Balance of the Class M-__
Certificates: $___________
Master Servicer:
Residential Funding Corporation
Final Scheduled Distribution Date: Initial Certificate Principal
_________ __, 20__ Balance of this Class M-__ Certificate:
$___________
Maturity Date: CUSIP ________
_________ __, 20__
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-NC2
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 conventional one- to
four-family fixed and adjustable interest rate, first and junior
lien mortgage loans sold by RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Residential Asset Mortgage Products, Inc., the
Master Servicer, the Trustee referred to below or GMAC Mortgage Group, Inc. 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 Mortgage
Products, Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of
their affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, Inc. 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 conventional one- to four-family fixed and
adjustable interest rate, first and junior lien mortgage loans (the "Mortgage Loans"), sold
by Residential Asset Mortgage Products, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Depositor, the Master Servicer and 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
prior to such 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 the City of 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.
As described above, any transferee of this Certificate will be deemed to have
represented by virtue of its purchase or holding of this Certificate (or any interest
herein) that either (a) such transferee is not a Plan or a Plan Investor, (b) it has
acquired and is holding this Certificate in reliance on 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 or Xxxxx'x or (c) the transferee is a
Complying Insurance Company. In addition, any purported Certificate Owner whose acquisition
or holding of this Certificate (or any interest herein) was effected in violation of the
restrictions in Section 5.02(e) 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 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 at any
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 the City of 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 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 neither the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of
the State of New York, without regard to the conflicts of law principles thereof, other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law.
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 Residential
Funding Corporation or its designee from the Trust Fund of all remaining Mortgage Loans and
all property acquired in respect of such Mortgage Loans, thereby effecting early retirement
of the related Certificates. The Agreement permits, but does not require, Residential
Funding Corporation or its designee (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) subject to the terms of the Agreement, to purchase in whole, but not
in part, all of the Class A, Class M and Class B-1 Certificates from the Holders thereof,
provided, that any such option may only be exercised if the aggregate Stated Principal
Balance of the Mortgage Loans, as of the Distribution Date upon which the proceeds of any
such purchase are distributed is less than ten percent of the Cut-off Date Principal Balance
of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the Certificate
Registrar, by manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: __________________________
Authorized Signatory
Dated: ________ __, 2006
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
funds to
for the account of
account number
or, if mailed by check, to .
Applicable statements should be mailed to:
.
This information is provided by ___________________________________, the assignee
named above, or ______________________________, as its agent.
EXHIBIT C
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND M
CERTIFICATES, AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
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, AS AMENDED (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 HEREIN) MAY BE MADE TO ANY PERSON,
UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER WITH
EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR (B) 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 AND HOLDING OF THIS CERTIFICATE IS
PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (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 AND 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.
------------------------------------------------ ----------------------------------------------
Class B-[_] Certificate No. 1
------------------------------------------------ ----------------------------------------------
Date of Pooling and Servicing Adjustable Pass-Through Rate
Agreement and Cut-off Date:
February 1, 2006 Percentage Interest: 100%
------------------------------------------------ ----------------------------------------------
First Distribution Date: Aggregate Initial Certificate Principal
March 27, 2006 Balance of the Class B-[__]
Certificates: $[__________]
Master Servicer:
Residential Funding Corporation
------------------------------------------------ ----------------------------------------------
Final Scheduled Distribution Date: Initial Certificate Principal
February 25, 2036 Balance of this Class B-[__] Certificate:
$[________]
CUSIP: [__________]
Maturity Date:
February 25, 2036
------------------------------------------------ ----------------------------------------------
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-NC2
evidencing a percentage interest in the distributions allocable
to the Class B-[_] Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional one- to
four-family fixed and adjustable interest rate, first and junior
lien mortgage loans sold by RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Residential Asset Mortgage Products, Inc., the
Master Servicer, the Trustee referred to below or GMAC Mortgage Group, Inc. 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 Mortgage
Products, Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of
their affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, Inc. 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 conventional one- to four-family fixed and
adjustable interest rate, first and junior lien mortgage loans (the "Mortgage Loans"), sold
by Residential Asset Mortgage Products, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Depositor, the Master Servicer and 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
prior to such 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 B-1 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 the City of 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 the distributions allocable to principal and any Realized Losses
allocable hereto.
No transfer of this Class B-[__] Certificate will be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws or is made in accordance with said Act and laws. In the
event that such a transfer is to be made, (i) the Trustee or the 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;
provided that if this Certificate is held by a Depository; the Transferee will be deemed to
have made the representations set forth on such investment letter. 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.
As described above, no transfer of this Certificate (or any interest herein) shall be
made unless the transferee provides the Trustee, the Depositor and the Master Servicer with
either (a) a certification pursuant to Section 5.02(e) of the Agreement stating that either
(i) the transferee is not an employee benefit or other plan subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code (each, a "Plan"), or any Person
(including, without limitation, an investment manager, a named fiduciary or a trustee of any
Plan) who is using "plan assets," within the meaning of the U.S. Department of Labor
regulation promulgated at 29 C.F.R.ss.2510.3-101, of any Plan (each, a "Plan Investor") to
effect such acquisition or (ii) the transferee is an insurance company, the source of funds
used to purchase or hold this Certificate (or any interest herein) is an "insurance company
general account" (as defined in U.S. Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the conditions set forth in Sections I and III of PTCE 95-60
have been satisfied or (b) 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 and holding of this Certificate is permissible under applicable law, will not
constitute or result in a 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 and 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 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 66.6% 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 the City of 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 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 neither the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of
the State of New York, without regard to the conflicts of law principles thereof, other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law.
The obligations created by the Agreement in respect of the Certificates and the Trust
Fund created thereby shall terminate upon the payment to Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the earlier of (i) the maturity or other liquidation of the last
Mortgage Loan subject thereto or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, and (ii) the purchase by the Master
Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to 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) subject to the Agreement, to purchase in
whole, but not in part, all of the Class A, Class M and Class B-1 Certificates from the
Holders thereof, provided, that any such option may only be exercised if the aggregate
Stated Principal Balance of the Mortgage Loans, as of the Distribution Date upon which the
proceeds of any such purchase are distributed is less than ten percent of the Cut-off Date
Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the Certificate
Registrar, by manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: .............................................
Authorized Signatory
Dated: __________, 2006
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-[__] 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
funds to
for the account of
account number
or, if mailed by check, to .
Applicable statements should be mailed to:
.
This information is provided by ___________________________________, the assignee
named above, or ______________________________, as its agent
EXHIBIT D
FORM OF CLASS SB CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES, CLASS M
AND CLASS B-1 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, AS AMENDED ("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 HEREIN) MAY BE MADE TO ANY PERSON, UNLESS
THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER WITH EITHER (A) A
CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR (B) 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 AND HOLDING OF THIS CERTIFICATE IS
PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (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 AND 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.
Certificate No. __ Variable Pass-Through Rate
Class SB Subordinate
Date of Pooling and Servicing Percentage Interest: ___%
and Cut-off Date:
February 1, 2006
First Distribution Date: Aggregate Initial Certificate Principal Balance
March 27, 2006 of the Class SB Certificates:
$________
Master Servicer: Initial Certificate Principal Balance
Residential Funding Corporation of this Certificate: $________
Final Scheduled Distribution Date: CUSIP: ________
_________ __, 20__
Maturity Date:
_________ __, 20__
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-NC2
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 conventional one- to
four-family fixed and adjustable interest rate, first and junior
lien mortgage loans sold by RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does not
represent an obligation of or interest in Residential Asset Mortgage Products, Inc., the
Master Servicer, the Trustee referred to below or any of their affiliates. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Asset Mortgage Products, Inc., the Master
Servicer, the Trustee or any of their affiliates. None of the Depositor, the Master Servicer
or any of their affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that ________ 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 conventional one- to four-family fixed and
adjustable interest rate first and junior lien mortgage loans (the "Mortgage Loans"), sold
by Residential Asset Mortgage Products, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Depositor, the Master Servicer and 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 next preceding the month in which the related Distribution Date occurs (the
"Record Date"), from the related Available Distribution Amount in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount of interest
and principal, if any, required to be distributed to Holders of Class SB Certificates on
such Distribution Date.
Distributions on this Certificate will be made either by the Master Servicer acting
on behalf of the Trustee or by a Paying Agent appointed by the Trustee in immediately
available funds (by wire transfer or otherwise) for the account of the Person entitled
thereto if such Person shall have so notified the Master Servicer or such Paying Agent, or
by check mailed to the address of the Person entitled thereto, as such name and address
shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be made
after due notice of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee for that
purpose in the City of St. Xxxx, Minnesota. The Notional Amount of this Class SB Certificate
as of any date of determination will be calculated as described in the Agreement. The
Notional Amount hereof will be reduced by interest shortfalls on the Mortgage Loans
including any Prepayment Interest Shortfalls not covered by Compensating Interest or related
Excess Cash Flow, and the interest portion of any Realized Losses incurred in respect
thereof. This Class SB Certificate will accrue interest at the Pass-Through Rate on the
Notional Amount as indicated in the definition of Accrued Certificate Interest in the
Agreement. This Class SB Certificate will not accrue interest on its Certificate Principal
Balance.
No transfer of this Class SB Certificate will be made unless such transfer is exempt
from the registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws or is made in accordance with said Act and laws. In the
event that such a transfer is to be made, (i) the Trustee or the Depositor may require an
opinion of counsel acceptable to and in form and substance satisfactory to the Trustee and
the Depositor that such transfer is exempt (describing the applicable exemption and the
basis therefor) from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state and (ii) the
transferee shall execute an investment letter in the form described by the Agreement. The
Holder hereof desiring to effect such transfer shall, and does hereby agree to, indemnify
the Trustee, the Depositor, the Master Servicer and the Certificate Registrar acting on
behalf of the Trustee against any liability that may result if the transfer is not so exempt
or is not made in accordance with such Federal and state laws.
As described above, no transfer of this Certificate (or any interest herein) shall be
made unless the transferee provides the Trustee, the Depositor and the Master Servicer with
either (a) a certification pursuant to Section 5.02(e) of the Agreement stating that the
transferee is not an employee benefit or other plan subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code (each, a "Plan"), or any Person (including,
without limitation, an insurance company investing its general accounts, an investment
manager, a named fiduciary or a trustee of any Plan) who is using "plan assets," within the
meaning of the U.S. Department of Labor regulation promulgated at 29 C.F.R.ss.2510.3-101, of
any Plan (each, a "Plan Investor") to effect such acquisition or (b) 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 and holding of this Certificate is
permissible under applicable law, will not constitute or result in a 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 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 the City of 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 neither the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of
the State of New York, without regard to the conflicts of law principles thereof, other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law.
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 Residential
Funding Corporation or its designee from the Trust Fund of all remaining Mortgage Loans and
all property acquired in respect of such Mortgage Loans, thereby effecting early retirement
of the related Certificates. The Agreement permits, but does not require, Residential
Funding Corporation or its designee (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) subject to the terms of the Agreement, to purchase in whole, but not
in part, all of the Class A, Class M and Class B-1 Certificates from the Holders thereof,
provided, that any such option may only be exercised if the aggregate Stated Principal
Balance of the Mortgage Loans, as of the Distribution Date upon which the proceeds of any
such purchase are distributed is less than ten percent of the Cut-off Date Principal Balance
of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the Certificate
Registrar by manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Signatory
Dated: ________ __, 2006
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
funds to
for the account of
account number
or, if mailed by check, to .
Applicable statements should be mailed to:
.
This information is provided by ___________________________________, the assignee
named above, or ______________________________, as its agent.
EXHIBIT E
FORM OF 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 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, AS AMENDED (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 HEREIN) MAY BE MADE TO ANY PERSON, UNLESS
THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER WITH EITHER (A) A
CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR (B) 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 AND HOLDING OF THIS CERTIFICATE IS
PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (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 AND 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 FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE
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,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION") OR (D) 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.
Class R-__ Certificate No. __
Date of Pooling and Servicing Percentage Interest: __%
Agreement and Cut-off Date:
February 1, 2006
First Distribution Date: Initial Certificate Principal
March 27, 2006 Balance of this Certificate: $______
Master Servicer:
Residential Funding Corporation
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-NC2
evidencing a percentage interest in any distributions allocable
to the Class R-__ Certificates with respect to the Trust Fund
consisting primarily of a pool of conventional one- to
four-family fixed and adjustable interest rate, first and junior
lien mortgage loans sold by RESIDENTIAL ASSET MORTGAGE.
PRODUCTS, INC.
This Certificate is payable solely from the assets of the Trust Fund and does not
represent an obligation of or interest in Residential Asset Mortgage Products, Inc., the
Master Servicer, the Trustee referred to below or any of their affiliates. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Asset Mortgage Products, Inc., the Master
Servicer, the Trustee or any of their affiliates. None of the Depositor, the Master Servicer
or any of their affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that ___________ 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 conventional one- to four-family fixed and adjustable
interest rate, first and junior lien mortgage loans (the "Mortgage Loans"), sold by
Residential Asset Mortgage Products, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement) among the Depositor, the Master Servicer and 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 next preceding the month in which the related Distribution Date occurs (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 R-__ Certificates on
such Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be bound by the
restrictions set forth in the Agreement to the effect that (i) each person holding or
acquiring any Ownership Interest in this Certificate must be a United States Person and a
Permitted Transferee, (ii) the transfer of any Ownership Interest in this Certificate will
be conditioned upon the delivery to the Trustee of, among other things, an affidavit to the
effect that it is a United States Person and Permitted Transferee, (iii) any attempted or
purported transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the purported
transferee, and (iv) if any person other than a United States Person and a Permitted
Transferee acquires any Ownership Interest in this Certificate in violation of such
restrictions, then the 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 the City of St. Xxxx, Minnesota. The Holder of this Certificate may have
additional obligations with respect to this Certificate, including tax liabilities.
No transfer of this Class R-__ 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.
As described above, no transfer of this Certificate (or any interest herein) shall be
made unless the transferee provides the Trustee, the Depositor and the Master Servicer with
either (a) a certification pursuant to Section 5.02(e) of the Agreement stating that the
transferee is not an employee benefit or other plan subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code (each, a "Plan"), or any Person (including,
without limitation, an insurance company investing its general accounts, an investment
manager, a named fiduciary or a trustee of any Plan) who is using "plan assets," within the
meaning of the U.S. Department of Labor regulation promulgated at 29 C.F.R.ss.2510.3-101, of
any Plan (each, a "Plan Investor") to effect such acquisition or (b) 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 and holding of this Certificate is
permissible under applicable law, will not constitute or result in a 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 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 the City of 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 neither the Depositor, the Master Servicer, the Trustee nor any such agent
shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of
the State of New York, without regard to the conflicts of law principles thereof, other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law.
The obligations created by the Agreement in respect of these 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 Residential
Funding Corporation or its designee from the Trust Fund of all remaining Mortgage Loans and
all property acquired in respect of such Mortgage Loans, thereby effecting early retirement
of the related Certificates. The Agreement permits, but does not require, Residential
Funding Corporation or its designee (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) subject to the terms of the Agreement, to purchase in whole, but not
in part, all of the related Certificates from the Holders thereof; provided, that any such
option may only be exercised if the aggregate Stated Principal Balance of the related
Mortgage Loans, as of the Distribution Date upon which the proceeds of any such purchase are
distributed is less than ten percent of the Cut-off Date Principal Balance of the related
Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the Certificate
Registrar, by manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Signatory
Dated: ________ __, 2006
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
funds to
for the account of
account number
or, if mailed by check, to .
Applicable statements should be mailed to:
.
This information is provided by ___________________________________, the assignee
named above, or ______________________________, as its agent.
EXHIBIT F
FORM OF CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time, the "Agreement"),
dated as of _________ 1, 20__, by and among U.S. BANK NATIONAL ASSOCIATION, as trustee
(including its successors under the Pooling Agreement defined below, the "Trustee"),
RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC., as company (together with any successor in
interest, the "Company"), RESIDENTIAL FUNDING CORPORATION, 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, N.A., as custodian (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 _________ 1, 20__, relating to the issuance
of Residential Asset Mortgage Products, Inc., Mortgage Asset-Backed Pass-Through
Certificates, Series 2006-NC2 (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 Mortgage Files. The Company and the
Master Servicer hereby direct the Trustee to appoint Xxxxx Fargo Bank, N.A. as Custodian.
The Custodian, as the duly appointed agent of the Trustee for these purposes, acknowledges
receipt of the Mortgage Files relating to the Mortgage Loans identified on the schedule
attached hereto (the "Mortgage Files") and declares that it holds and will hold the Mortgage
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 Mortgage File includes one or more
assignments of the related Mortgage Loans 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 Mortgage 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
Mortgage 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 Mortgage 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 Mortgage 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(b) 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 Mortgage
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 Mortgage Files the Custodian
shall deliver to the Trustee a Final Certification in the form annexed hereto as
Exhibit Three evidencing the completeness of the Mortgage 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 Mortgage 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 Mortgage 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 Mortgage 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 Mortgage File. The Custodian agrees, upon
receipt of such Request for Release, promptly to release to the Master Servicer the related
Mortgage 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 Mortgage File with respect to any Qualified Substitute Mortgage
Loan, upon receiving written notification from the Master Servicer of such substitution.
Upon receipt of a Request for Release from the Master Servicer, signed by a Servicing
Officer, stating 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 Mortgage File.
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 Mortgage File or such document to the Master Servicer. The
Master Servicer shall cause each Mortgage 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 Mortgage 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 Mortgage File or such document was delivered and the purpose or
purposes of such delivery. Immediately upon receipt of any Mortgage File returned to the
Custodian by the Master Servicer, the Custodian shall deliver a signed acknowledgment to the
Master Servicer, confirming receipt of such Mortgage File.
Upon the request of the Master Servicer, the Custodian will send to the Master
Servicer copies of any documents contained in the Mortgage 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 Mortgage File
and, for all purposes, shall be considered a part of such Mortgage 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 Mortgage 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 Mortgage 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 will 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 Mortgage 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 Mortgage 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, with or without cause. 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 Mortgage 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") in the Prospectus Supplement dated February 28, 2006 relating to the
Certificates does not contain any untrue statement of a material fact or omit to state a
material fact 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, commencing in 2007, 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
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
hereof 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 (WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
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.
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 Corporate Trust Services
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000 By: __________________________________
Attn: Structured Finance/ Name:
RAMP Series 2006-NC2 Title:
Address: RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000 By: ____________________________________
Name:
Title:
Address: RESIDENTIAL FUNDING
CORPORATION, as Master Servicer
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000 By: ___________________________________
Name:
Title:
Address: XXXXX FARGO BANK, N.A.
Document Custody
Xxx Xxxxxxxx Xxxxxxxxx - Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000 By: ____________________________________
Name:
Title:
STATE OF MINNESOTA )
)ss.:
COUNTY OF XXXXXX )
On the _______ day of _________, 20__, 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
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 _________, 20__, before me, a notary public in and for said State,
personally appeared, _________, known to me to be a Vice President of Residential Asset
Mortgage Products, Inc., one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and
year in this certificate first above written.
______________________________________
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
)ss.:
COUNTY OF HENNEPIN )
On the _______ day of _________, 20__, before me, a notary public in and for said State,
personally appeared, ________, known to me to be an Associate of Residential Funding
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 _______, 20__, before me, a notary public in and for said State,
personally appeared __________________________________________, known to me to be a
_______________________________________ of Xxxxx Fargo Bank, N.A., 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
EXHIBIT ONE
FORM OF CUSTODIAN
INITIAL CERTIFICATION
March 2, 2006
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Structured Finance/RAMP Series 2006-NC2
Attention: Residential Asset Mortgage Products, Inc., Series 2006-NC2
Re: Custodial Agreement, dated as of February 1, 2006, by and among U.S. Bank
National Association, Residential Asset Mortgage Products, Inc., Residential
Funding Corporation and Xxxxx Fargo Bank, N.A., relating to Mortgage
Asset-Backed Pass-Through Certificates, Series 2006-NC2
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 Mortgage 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, N.A.
By: _________________________________________
Name:
Title:
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
_______________, 2006
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Structured Finance/RAMP Series 2006-NC2
Attention: Residential Asset Mortgage Products, Inc., Series 2006-NC2
Re: Custodial Agreement, dated as of ________ 1, 20__, by and among U.S. Bank
National Association, Residential Asset Mortgage Products, Inc., Residential
Funding Corporation and Xxxxx Fargo Bank, N.A., relating to Mortgage
Asset-Backed Pass-Through Certificates, Series 2006-NC2
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 Mortgage 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 Mortgage 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, N.A.
By: ___________________________________________
Name:
Title:
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
______________, 2006
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Structured Finance/RAMP Series 2006-NC2
Attention: Residential Asset Mortgage Products, Inc., Series 2006-NC2
Re: Custodial Agreement, dated as of _______ 1, 20__, by and among U.S. Bank
National Association, Residential Asset Mortgage Products, Inc., Residential
Funding Corporation and Xxxxx Fargo Bank, N.A., relating to Mortgage
Asset-Backed Pass-Through Certificates, Series 2006-NC2
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 Mortgage File with
respect to each Mortgage Loan listed in the Mortgage Loan Schedule and it has reviewed
the Mortgage 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, N.A.
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 Corporation
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
[Please see Exhibit V for Servicing Criteria]
EXHIBIT G
MORTGAGE LOAN SCHEDULE
[ON FILE WITH THE TRUSTEE]
EXHIBIT H
FORMS OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you for the
referenced pool, we request the release of the Mortgage Loan File described below.
Pooling and Servicing Agreement Dated:
Series#:
Account#:
Pool#:
Loan#:
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 Corporation
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 I-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or beneficial owner
of the Mortgage Asset-Backed Pass-Through Certificates, Series _______, Class R[-__] (the
"Owner")), a [savings institution] [corporation] duly organized and existing under the laws
of [the State of ] [the United States], on behalf of which he makes this affidavit and
agreement.
2. That the Owner (i) is not and will not be a "disqualified organization" or an
electing large partnership as of [date of transfer] within the meaning of Sections
860E(e)(5) and 775, respectively, of the Internal Revenue Code of 1986, as amended (the
"Code") or an electing large partnership under Section 775(a) of the Code, (ii) will endeavor
to remain other than a disqualified organization for so long as it retains its ownership
interest in the Class R[-__] Certificates, and (iii) is acquiring the Class R[-__]
Certificates for its own account or for the account of another Owner from which it has
received an affidavit and agreement in substantially the same form as this affidavit and
agreement. (For this purpose, a "disqualified organization" means an electing large
partnership under Section 775 of the Code, the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to tax and, except for the
Federal Home Loan Mortgage Corporation, a majority of whose board of directors is not
selected by any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or organization,
any rural electric or telephone cooperative, or any organization (other than certain
farmers' cooperatives) that is generally exempt from federal income tax unless such
organization is subject to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on transfers of
Class R[-__] Certificates to disqualified organizations or electing large partnerships,
under the Code, that applies to all transfers of Class R[-__] Certificates after March 31,
1988; (ii) that such tax would be on the transferor (or, with respect to transfers to
electing large partnerships, on each such partnership), or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person (other than with respect to transfers to
electing large partnerships) otherwise liable for the tax shall be relieved of liability for
the tax if the transferee furnishes to such person an affidavit that the transferee is not a
disqualified organization and, at the time of transfer, such person does not have actual
knowledge that the affidavit is false; and (iv) that the Class R[-__] Certificates may be
"noneconomic residual interests" within the meaning of Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest will remain
liable for any taxes due with respect to the income on such residual interest, unless no
significant purpose of the transfer was to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through entity" holding
Class R[-__] Certificates if either the pass-through entity is an electing large partnership
under Section 775 of the Code or if at any time during the taxable year of the pass-through
entity a disqualified organization is the record holder of an interest in such entity. (For
this purpose, a "pass through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and certain
cooperatives.)
5. The Owner is either (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity treated as a corporation or a partnership for U.S.
federal income tax purposes and created or organized in or under the laws of the United
States, any state thereof or the District of Columbia (other than a partnership that is not
treated as a United States person under any applicable Treasury regulations), (iii) an
estate that is described in Section 7701(a)(30)(D) of the Code, or (iv) a trust that is
described in Section 7701(a)(30)(E) of the Code.
6. The Owner hereby agrees that it will not cause income from the Class R[-__]
Certificates to be attributable to a foreign permanent establishment or fixed base (within
the meaning of an applicable income tax treaty) of the Owner of another United States
taxpayer.
7. That the Owner is aware that the Trustee will not register the transfer of any
Class R[- __] Certificates unless the transferee, or the transferee's agent, delivers to it
an affidavit and agreement, among other things, in substantially the same form as this
affidavit and agreement. The Owner expressly agrees that it will not consummate any such
transfer if it knows or believes that any of the representations contained in such affidavit
and agreement are false.
8. That the Owner has reviewed the restrictions set forth on the face of the
Class R[-__] Certificates and the provisions of Section 5.02(f) of the Pooling and Servicing
Agreement under which the Class R[-__] Certificates were issued (in particular, clauses
(iii)(A) and (iii)(B) of Section 5.02(f) which authorize the Trustee to deliver payments to
a person other than the Owner and negotiate a mandatory sale by the Trustee in the event the
Owner holds such Certificates in violation of Section 5.02(f)). The Owner expressly agrees
to be bound by and to comply with such restrictions and provisions.
9. That the Owner consents to any additional restrictions or arrangements that
shall be deemed necessary upon advice of counsel to constitute a reasonable arrangement to
ensure that the Class R[-__] Certificates will only be owned, directly or indirectly, by an
Owner that is not a disqualified organization.
10. The Owner's Taxpayer Identification Number is ________________.
11. This affidavit and agreement relates only to the Class R[-__] Certificates
held by the Owner and not to any other holder of the Class R[-__] Certificates. The Owner
understands that the liabilities described herein relate only to the Class R[-__]
Certificates.
12. That no purpose of the Owner relating to the transfer of any of the Class
R[-__] Certificates by the Owner is or will be to impede the assessment or collection of any
tax; in making this representation, the Owner warrants that the Owner is familiar with (i)
Treasury Regulation Section 1.860E-1(c) and recent amendments thereto, effective as of July
19, 2002, and (ii) the preamble describing the adoption of the amendments to such
regulation, which is attached hereto as Exhibit 1.
13. That the Owner has no present knowledge or expectation that it will be unable
to pay any United States taxes owed by it so long as any of the Certificates remain
outstanding. In this regard, the Owner hereby represents to and for the benefit of the
person from whom it acquired the Class R[-__] Certificate that the Owner intends to pay
taxes associated with holding such Class R[- __] Certificate as they become due, fully
understanding that it may incur tax liabilities in excess of any cash flows generated by the
Class R[-__] Certificate.
14. That the Owner has no present knowledge or expectation that it will become
insolvent or subject to a bankruptcy proceeding for so long as any of the Class R[-__]
Certificates remain outstanding.
15. (a) The Owner is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Code (each, a "Plan"), or any Person (including,
without limitation, an insurance company investing its general accounts, an investment
manager, a named fiduciary or a trustee of any Plan) who is using "plan assets," within the
meaning of the U.S. Department of Labor regulation promulgated at 29 C.F.R.ss.2510.3-101, of
any Plan (each, a "Plan Investor") to effect such acquisition; 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, the Master Servicer to the effect that the purchase and holding of Class R-[
] 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 Owner hereby certifies, represents and warrants to, and covenants
with, the Trustee, the Depositor and the Master Servicer that the Owner will not transfer
Class R-[ ] Certificates to any transferee unless such transferee 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__ .
EXHIBIT 1
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9004]
RIN 1545-AW98
Real Estate Mortgage Investment Conduits
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
----------------------------------------------------------------------------------------------
SUMMARY:
This document contains final regulations relating to safe harbor transfers of
noneconomic residual interests in real estate mortgage investment conduits (REMICs). The
final regulations provide additional limitations on the circumstances under which
transferors may claim safe harbor treatment.
DATES: Effective Date: These regulations are effective July 19, 2002. Applicability
Date: For dates of applicability, see Sec. 1.860E-(1)(c)(10).
FOR FURTHER INFORMATION CONTACT: Xxxxxxxx Xxxxxxxxxx at (000) 000-0000 (not a
toll-free number).
SUPPLEMENTARY INFORMATION: Paperwork Reduction Act The collection of information in
this final rule has been reviewed and, pending receipt and evaluation of public comments,
approved by the Office of Management and Budget (OMB) under 44 U.S.C. 3507 and assigned
control number 1545-1675. The collection of information in this regulation is in Sec. 1.860E
-1(c)(5)(ii). This information is required to enable the IRS to verify that a taxpayer is
complying with the conditions of this regulation. The collection of information is mandatory
and is required. Otherwise, the taxpayer will not receive the benefit of safe harbor
treatment as provided in the regulation. The likely respondents are businesses and other for
profit institutions. Comments on the collection of information should be sent to the Office
of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of
Information and Regulatory Affairs, Xxxxxxxxxx, XX, 00000, with copies to the Internal
Revenue Service, Attn: IRS Reports Clearance Officer, W:CAR:MP:FP:S, Xxxxxxxxxx, XX 00000.
Comments on the collection of information should be received by September 17, 2002. Comments
are specifically requested concerning: Whether the collection of information is necessary
for the proper performance of the functions of the Internal Revenue Service, including
whether the information will have practical utility; The accuracy of the estimated burden
associated with the collection of information (see below);
How the quality, utility, and clarity of the information to be collected may be enhanced;
How the burden of complying with the collection of information may be minimized,
including through the application of automated collection techniques or other forms of
information technology; and Estimates of capital or start-up costs and costs of
operation, maintenance, and purchase of service to provide information.
An agency may not conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a valid control number assigned by the
Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on an estimated number of
respondents of 470 and an estimated average annual burden hours per respondent of one
hour.
Books or records relating to a collection of information must be retained as long as
their contents may become material in the administration of any internal revenue law.
Generally, tax returns and tax return information are confidential, as required by 26
U.S.C. 6103.
BACKGROUND
This document contains final regulations regarding the proposed amendments to 26 CFR
part 1 under section 860E of the Internal Revenue Code (Code). The regulations provide the
circumstances under which a transferor of a noneconomic REMIC residual interest meeting the
investigation and representation requirements may avail itself of the safe harbor by
satisfying either the formula test or the asset test. Final regulations governing REMICs,
issued in 1992, contain rules governing the transfer of noneconomic REMIC residual
interests. In general, a transfer of a noneconomic residual interest is disregarded for all
tax purposes if a significant purpose of the transfer is to 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. 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)(1) 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. 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 I-2
FORM OF TRANSFEROR CERTIFICATE
__________________, 200__
Residential Asset Mortgage Products, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Structured Finance/ RAMP Series 2006-NC2
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-NC2, Class R-[ ]
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_______________________________ (the "Seller") to _______________________________ (the
"Purchaser") of $_____________ Initial Certificate Principal Balance of Mortgage Asset-Backed
Pass-Through Certificates, Series 2006-NC2, Class R-[__] (the "Certificates"), pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of February 1, 2006 among Residential Asset Mortgage Products, Inc., as seller (the
"Company"), Residential Funding Corporation, 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 Company and the Trustee that:
1. No purpose of the Seller relating to the transfer of the Certificate by
the Seller to the Purchaser is or will be to impede the assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to the Trustee
and the Master Servicer a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit I-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 Purchaser is not
both a United States Person and a Permitted Transferee.
Very truly yours,
(Seller)
By: _______________________________________
Name:
Title:
EXHIBIT J
FORM OF INVESTOR REPRESENTATION LETTER
______________, 20__
Residential Asset Mortgage Products, Inc
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Structured Finance/ RAMP Series 2006-NC2
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Residential Asset Mortgage Products, Inc. Series 2006-NC2
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-NC2, [Class SB] and [Class B-1]
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") $_____________ Initial Certificate Principal
Balance of Mortgage Asset-Backed Pass-Through Certificates, Series 2006-NC2, Class SB (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of February 1, 2006 among Residential Asset Mortgage
Products, Inc., as seller (the "Company"), Residential Funding Corporation, 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 Company, the Trustee and the Master Servicer that:
1. The Purchaser understands that (a) the Certificates have not
been and will not be registered or qualified under the Securities Act of 1933,
as amended (the "Act") or any state securities law, (b) the Company is not
required to so register or qualify the Certificates, (c) the Certificates may
be resold only if registered and qualified pursuant to the provisions of the
Act or any state securities law, or if an exemption from such registration and
qualification is available, (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates and (e) the
Certificates will bear a legend to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own account
for investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any
applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business
matters, and, in particular, in such matters related to securities similar to
the Certificates, such that it is capable of evaluating the merits and risks
of investment in the Certificates, (b) able to bear the economic risks of such
an investment and (c) an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an
opportunity to review (a) [a copy of the Private Placement Memorandum, dated
___________________, 20__, relating to the Certificates (b)] a copy of the
Pooling and Servicing Agreement and [b] [c] such other information concerning
the Certificates, the Mortgage Loans and the Company as has been requested by
the Purchaser from the Company or the Seller and is relevant to the
Purchaser's decision to purchase the Certificates. The Purchaser has had any
questions arising from such review answered by the Company or the Seller to
the satisfaction of the Purchaser. [If the Purchaser did not purchase the
Certificates from the Seller in connection with the initial distribution of
the Certificates and was provided with a copy of the Private Placement
Memorandum (the "Memorandum") relating to the original sale (the "Original
Sale") of the Certificates by the Company, the Purchaser acknowledges that
such Memorandum was provided to it by the Seller, that the Memorandum was
prepared by the Company solely for use in connection with the Original Sale
and the Company did not participate in or facilitate in any way the purchase
of the Certificates by the Purchaser from the Seller, and the Purchaser agrees
that it will look solely to the Seller and not to the Company with respect to
any damage, liability, claim or expense arising out of, resulting from or in
connection with (a) error or omission, or alleged error or omission, contained
in the Memorandum, or (b) any information, development or event arising after
the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or
will it authorize any person to (a) offer, pledge, sell, dispose of or
otherwise transfer any Certificate, any interest in any Certificate or any
other similar security to any person in any manner, (b) solicit any offer to
buy or to accept a pledge, disposition of other transfer of any Certificate,
any interest in any Certificate or any other similar security from any person
in any manner, (c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other similar security
with any person in any manner, (d) make any general solicitation by means of
general advertising or in any other manner or (e) take any other action, that
(as to any of (a) through (e) above) would constitute a distribution of any
Certificate under the Act, that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law,
or that would require registration or qualification pursuant thereto. The
Purchaser will not sell or otherwise transfer any of the Certificates, except
in compliance with the provisions of the Pooling and Servicing Agreement.
6. The Purchaser hereby certifies, represents and warrants to, and
covenants with the Trustee, the Company and the Master Servicer that the
following statements in (a), (b) or (c) are correct:
(a) The Purchaser is not an employee benefit plan or other
plan subject to the prohibited transaction provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") (each, a "Plan"), or any Person (including, without limitation,
an insurance company investing its general accounts, an investment
manager, a named fiduciary or a trustee of any Plan) who is using "plan
assets," within the meaning of the U.S. Department of Labor regulation
promulgated at 29 X.X.X.xx. 2510.3-101, of any Plan (each, a "Plan
Investor") to effect such acquisition;
(b) in the case of any Class B Certificate, the following
conditions are satisfied: (i) such Purchaser is an insurance company,
(ii) the source of funds used to purchase or hold such Certificate (or
any interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (iii) the conditions set forth in
Sections I and III of PTCE 95-60 have been satisfied; or
(c) The Purchaser has provided the Trustee, the Company and
the Master Servicer with an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee, the Company and the
Master Servicer to the effect that the purchase and holding of the
Certificates is permissible under applicable law, will not constitute
or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code (or comparable provisions of any subsequent
enactments) and will not subject the Trustee, the Company or the Master
Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to
those undertaken in the Pooling and Servicing Agreement, which opinion
of counsel shall not be an expense of the Trustee, the Company or the
Master Servicer.
In addition, the Purchaser hereby certifies, represents and warrants to, and
covenants with, the Trustee, the Company and the Master Servicer that the Purchaser will not
transfer the Certificates to any transferee unless such transferee meets the requirements
set forth in either (a), (b) or (c) above.
Very truly yours,
(Purchaser)
By: _____________________________________
Name:
Title:
EXHIBIT K
FORM OF TRANSFEROR REPRESENTATION LETTER
________, 20
Residential Asset Mortgage Products, Inc
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Structured Finance/ RAMP Series 2006-NC2
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-NC2, [Class SB]
Ladies and Gentlemen:
In connection with the sale by (the "Seller") to
(the "Purchaser") of $ Initial Certificate Principal Balance of
Mortgage Asset-Backed Pass-Through Certificates, Series 2006-NC2, Class SB (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of February 1, 2006 among Residential Asset Mortgage
Products, Inc., as seller (the "Company"), Residential Funding Corporation, 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 Company and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered, pledged,
sold, disposed of or otherwise transferred any Certificate, any interest in any Certificate
or any other similar security to any person in any manner, (b) has solicited any offer to
buy or to accept a pledge, disposition or other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest in any
Certificate or any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or (e) has
taken any other action, that (as to any of (a) through (e) above) would constitute a
distribution of the Certificates under the Securities Act of 1933 (the "Act"), that would
render the disposition of any Certificate a violation of Section 5 of the Act or any state
securities law, or that would require registration or qualification pursuant thereto. The
Seller will not act, in any manner set forth in the foregoing sentence with respect to any
Certificate. The Seller has not and will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions of the Pooling and Servicing
Agreement.
Very truly yours,
(Seller)
By: _____________________________________
Name:
Title:
EXHIBIT L
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
4.02(a) 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 4.02(a), 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(a).
(b) Subject to subsection (c) below, prior to the later of the third
Business Day prior to each Distribution Date or the related Determination Date, the Master
Servicer shall determine whether any Realized Losses (other than Excess Special Hazard
Losses, Excess Bankruptcy Losses, Excess Fraud Losses and Extraordinary Losses) will be
allocated to the Class 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(a);
provided, however, that the amount of such demand in respect of any Distribution Date shall
in no event be greater than the sum of (i) the additional amount of Accrued Certificate
Interest that would have been paid for the Class 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 General Motors Acceptance Corporation
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 General
Motors Acceptance Corporation, 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 General Motors Acceptance Corporation 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 Company shall have the option, in its sole discretion, to
substitute for either or both of the Limited Guaranty or the Subordinate Certificate Loss
Obligation another instrument in the form of a corporate guaranty, an irrevocable letter of
credit, a surety bond, insurance policy or similar instrument or a reserve fund; provided
that (i) the Company obtains (subject to the provisions of Section 10.01(f) as if the
Company was substituted for the Master Servicer solely for the purposes of such provision)
an Opinion of Counsel (which need not be an opinion of Independent counsel) to the effect
that obtaining such substitute corporate guaranty, irrevocable letter of credit, surety
bond, insurance policy or similar instrument or reserve fund will not cause either (a) any
federal tax to be imposed on the Trust Fund, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860(F)(a)(1) of the Code or on
"contributions after the startup date" under Section 860(G)(d)(1) of the Code or (b) the
Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding,
and (ii) no such substitution shall be made unless (A) the substitute Limited Guaranty or
Subordinate Certificate Loss Obligation is for an initial amount not less than the then
current Amount Available and contains provisions that are in all material respects
equivalent to the original Limited Guaranty or Subordinate Certificate Loss Obligation
(including that no portion of the fees, reimbursements or other obligations under any such
instrument will be borne by the Trust Fund), (B) the long term debt obligations of any
obligor of any substitute Limited Guaranty or Subordinate Certificate Loss Obligation (if
not supported by the Limited Guaranty) shall be rated at least the lesser of (a) the rating
of the long term debt obligations of General Motors Acceptance Corporation as of the date of
issuance of the Limited Guaranty and (b) the rating of the long term debt obligations of
General Motors Acceptance Corporation at the date of such substitution and (C) the Company
obtains written confirmation from each nationally recognized credit rating agency that rated
the Class SB Certificates at the request of the Company 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 Company, the Master Servicer
nor the Trustee shall be obligated to substitute for or replace the Limited Guaranty or
Subordinate Certificate Loss Obligation under any circumstance.
Section 13.02. Amendments Relating to the Limited Guaranty. Notwithstanding
Sections 11.01 or 13.01: (i) the provisions of this Article XIII may be amended, superseded
or deleted, (ii) the Limited Guaranty or Subordinate Certificate Loss Obligation may be
amended, reduced or canceled, and (iii) any other provision of this Agreement which is
related or incidental to the matters described in this Article XIII may be amended in any
manner; in each case by written instrument executed or consented to by the Company and
Residential Funding but without the consent of any Certificateholder and without the consent
of the Master Servicer or the Trustee being required unless any such amendment would impose
any additional obligation on, or otherwise adversely affect the interests of, the Master
Servicer or the Trustee, as applicable; provided that the Company shall also obtain a letter
from each nationally recognized credit rating agency that rated the Class SB Certificates at
the request of the Company to the effect that such amendment, reduction, deletion or
cancellation will not lower the rating on the Class 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 Company obtains (subject to
the provisions of Section 10.01(f) as if the Company was substituted for the Master Servicer
solely for the purposes of such provision), in the case of a material amendment or
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 M
FORM OF LIMITED GUARANTY
RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.
Mortgage Asset-Backed Pass-Through Certificates
Series 2006-NC2
__________, 200__
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Structured Finance/ RAMP Series 2006-NC2
Ladies and Gentlemen:
WHEREAS, Residential Funding Corporation, a Delaware corporation ("Residential
Funding"), an indirect wholly-owned subsidiary of General Motors Acceptance Corporation, a
New York corporation ("GMAC"), plans to incur certain obligations as described under Section
13.01 of the Pooling and Servicing Agreement dated as of February 1, 2006 (the "Servicing
Agreement"), among Residential Asset Mortgage Products, Inc. (the "Company"), Residential
Funding and U.S. Bank National Association (the "Trustee") as amended by Amendment No. ___
thereto, dated as of ________, with respect to the Mortgage Asset-Backed Pass-Through
Certificates, Series 2006-NC2 (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 nonaction on the part of Residential Funding or the Trustee.
3. Modification, Amendment and Termination. This Limited Guaranty may be
modified, amended or terminated only by the written agreement of GMAC and the Trustee and
only if such modification, amendment or termination is permitted under Section 13.02 of the
Servicing Agreement. The obligations of GMAC under this Limited Guaranty shall continue and
remain in effect so long as the Servicing Agreement is not modified or amended in any way
that might affect the obligations of GMAC under this Limited Guaranty without the prior
written consent of GMAC.
4. Successor. Except as otherwise expressly provided herein, the
guarantee herein set forth shall be binding upon GMAC and its respective successors.
5. Governing Law. This Limited Guaranty shall be governed by the laws of
the State of New York, without regard to the conflicts of law principles thereof, other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law.
6. Authorization and Reliance. GMAC understands that a copy of this
Limited Guaranty shall be delivered to the Trustee in connection with the execution of
Amendment No. 1 to the Servicing Agreement and GMAC hereby authorizes the Company and the
Trustee to rely on the covenants and agreements set forth herein.
7. Definitions. Capitalized terms used but not otherwise defined herein
shall have the meaning given them in the Servicing Agreement.
8. Counterparts. This Limited Guaranty may be executed in any number of
counterparts, each of which shall be deemed to be an original and such counterparts shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, GMAC has caused this Limited Guaranty to be executed and
delivered by its respective officers thereunto duly authorized as of the day and year first
above written.
GENERAL MOTORS ACCEPTANCE
CORPORATION
By: ____________________________
Name:
Title:
Acknowledged by:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Name:
Title:
RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
By:
Name:
Title:
EXHIBIT N
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
__________________, 20____
Residential Asset Mortgage
Products, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Structured Finance/ RAMP Series 2006-NC2
Re: Mortgage Asset-Backed Pass-Through Certificates, Series 2006-NC2
Assignment of Mortgage Loan
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by
_________________ (the "Trustee") to _______________________ (the "Lender") of
_______________ (the "Mortgage Loan") pursuant to Section 3.13(d) of the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of February 1, 2006
among Residential Asset Mortgage Products, Inc., as seller (the "Company"), Residential
Funding Corporation, as master servicer, and the Trustee. All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and Servicing Agreement.
The Lender hereby certifies, represents and warrants to, and covenants with, the Master
Servicer and the Trustee that:
(i) the Mortgage Loan is secured by Mortgaged Property located in a jurisdiction
in which an assignment in lieu of satisfaction is required to preserve lien priority,
minimize or avoid mortgage recording taxes or otherwise comply with, or facilitate a
refinancing under, the laws of such jurisdiction;
(ii) the substance of the assignment is, and is intended to be, a refinancing of
such Mortgage Loan and the form of the transaction is solely to comply with, or facilitate
the transaction under, such local laws;
(iii) the Mortgage Loan following the proposed assignment will be modified to have a
rate of interest at least 0.25 percent below or above the rate of interest on such Mortgage
Loan prior to such proposed assignment; and
(iv) such assignment is at the request of the borrower under the related Mortgage
Loan.
Very truly yours,
(Lender)
By: _____________________________
Name:
Title:
EXHIBIT O
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller hereby certifies the
following facts: Neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security to, or solicited any offer to buy
or accept a transfer, pledge or other disposition of the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken any other
action, that would constitute a distribution of the Rule 144A Securities under the
Securities Act of 1933, as amended (the "1933 Act"), or that would render the disposition of
the Rule 144A Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Seller has not offered the Rule 144A Securities to any person
other than the Buyer or another "qualified institutional buyer" as defined in Rule 144A
under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the Seller, the
Trustee and the Master Servicer (as defined in the Pooling and Servicing Agreement (the
"Agreement"), dated as of February 1, 2006 among Residential Funding Corporation as Master
Servicer (the "Master Servicer"), Residential Asset Mortgage Products, Inc. as depositor
pursuant to Section 5.02 of the Agreement and U.S. Bank National Association, as trustee
(the "Trustee"), as follows:
a. The Buyer understands that the Rule 144A Securities have not been
registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of investment in the
Rule 144A Securities.
c. The Buyer has been furnished with all information regarding the
Rule 144A Securities that it has requested from the Seller, the Trustee or the Master
Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to the Rule 144A Securities,
any interest in the Rule 144A Securities or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that would constitute
a distribution of the Rule 144A Securities under the 1933 Act or that would render
the disposition of the Rule 144A Securities a violation of Section 5 of the 1933 Act
or require registration pursuant thereto, nor will it act, nor has it authorized or
will it authorize any person to act, in such manner with respect to the Rule 144A
Securities.
e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. The Buyer is
aware that the sale to it is being made in reliance on Rule 144A. The Buyer is
acquiring the Rule 144A Securities for its own account or the accounts of other
qualified institutional buyers, understands that such Rule 144A Securities may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the 1933 Act.
3. The Buyer
a. is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") (each, a "Plan"), or any Person (including, without limitation,
an insurance company investing its general accounts, an investment manager, a named
fiduciary or a trustee of any Plan) who is using "plan assets," within the meaning of
the U.S. Department of Labor regulation promulgated at 29 C.F.R.ss.2510.3-101, of any
Plan (each, a "Plan Investor") to effect such acquisition;
b. in the case of any Class B Certificate, the following conditions are
satisfied: (i) the Buyer is an insurance company, (ii) the source of funds used to
purchase or hold such Certificate (or any interest therein) is an "insurance company
general account" (as defined in U.S. Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (iii) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied; or
c. 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
and holding of the Certificates is permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under 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.
4. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so executed, shall be
deemed to be an original; such counterparts, together, shall constitute one and the same
document.
IN WITNESS WHEREOF, each of the parties has executed this document as of the
date set forth below.
Print Name of Seller Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. No.
Date: Date:
ANNEX 1 TO EXHIBIT O
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial Officer,
Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities Act of 1933
("Rule 144A")
because (i) the Buyer owned and/or invested on a discretionary basis $_____________________ in
securities (except for the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank, savings and loan
association or similar institution), Massachusetts or similar business trust,
partnership, or charitable organization described in Section 501(c)(3) of the
Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution organized under the
laws of any State, territory or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the State or territorial
banking commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association, building and
loan association, cooperative bank, homestead association or similar institution,
which is supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of a State or territory
or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained by a State,
its political subdivisions, or any agency or instrumentality of the State or its
political subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of Title I
of the Employee Retirement Income Security Act of 1974.
___ Investment Adviser. The Buyer is an investment adviser registered under the
Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. The Buyer is a business development company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust company
and whose participants are exclusively (a) plans established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the State
or its political subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee Retirement Income
Security Act of 1974, but is not a trust fund that includes as participants
individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an unsold
allotment to or subscription by the Buyer, if the Buyer is a dealer, (iii) bank deposit
notes and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Buyer, the Buyer used the cost of such securities
to the Buyer and did not include any of the securities referred to in the preceding
paragraph. Further, in determining such aggregate amount, the Buyer may have included
securities owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such subsidiaries are
managed under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands that
the seller to it and other parties related to the Certificates are relying and will continue
to rely on the statements made herein because one or more sales to the Buyer may be in
reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that, in
connection with any purchase of securities sold to the Buyer for the account of a third
party (including any separate account) in reliance on Rule 144A, the Buyer will only
purchase for the account of a third party that at the time is a "qualified institutional
buyer" within the meaning of Rule 144A. In addition, the Buyer agrees that the Buyer will
not purchase securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate steps contemplated by
Rule 144A to conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification is made
of any changes in the information and conclusions herein. Until such notice is given, the
Buyer's purchase of Rule 144A Securities will constitute a reaffirmation of this
certification as of the date of such purchase.
Print Name of Buyer
By: ____________________________________
Name:
Title:
Date: __________________________________
ANNEX 2 TO EXHIBIT O
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:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified institutional
buyer" 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.
2. 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).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same investment
adviser or investment advisers that are affiliated (by virtue of being majority owned
subsidiaries of the same parent or because one investment adviser is a majority owned
subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of Investment
Companies, (ii) 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.
5. 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.
6. 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 P
[RESERVED]
EXHIBIT Q
[RESERVED]
EXHIBIT R-1
FORM OF FORM 10-K CERTIFICATION
I, [identify the certifying individual], certify that:
(1) I have reviewed this report on Form 10-K and all reports on Form 10-D required to be
filed in respect of the period covered by this report on Form 10-K of the trust (the
Exchange Act periodic reports) created pursuant to the Pooling and Servicing Agreement dated
__________ (the "Agreement") among Residential Asset Mortgage Products, Inc., Residential
Funding Corporation (the "Master Servicer") and [Name of Trustee] (the "Trustee");
(2) Based on my knowledge, Exchange Act periodic reports, taken as a whole, do not
contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, all of the distribution, servicing and other information
required to be provided under Form 10-D for the period covered by this report is included in
the Exchange Act periodic reports;
(4) I am responsible for reviewing the activities performed by the Master Servicer and
based on my knowledge and the compliance review conducted in preparing the servicer
compliance statement required in this report under Item 1123 of Regulation AB and except as
disclosed in the Exchange Act periodic reports, the Master Servicer has fulfilled its
obligations under the Agreement; and
(5) All of the reports on assessment of compliance with servicing criteria for
asset-backed securities and their related attestation reports on assessment of compliance
with servicing criteria for asset-backed securities required to be included in this report
in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have
been included as an exhibit to this report, except as otherwise disclosed in this report.
Any material instances of noncompliance described in such reports have been disclosed in
this report on Form 10-K.
In giving the certifications above, I have reasonably relied on the information provided to
me by the following unaffiliated parties: [the Trustee].
Date:____________
_________________________________*
[Signature]
Name:
Title:
* - to be signed by the senior officer in charge of the servicing functions of the Master
Servicer
EXHIBIT R-2
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
The undersigned, a Responsible Officer of U.S. Bank National Association (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 ____________ (the
"Agreement") by and among Residential Asset Mortgage Products, Inc. (the "Depositor"),
Residential Funding Corporation (the "Master Servicer") and 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(f)(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 THEREOF, I have duly executed this certificate as of ____________, 20___.
Name:_________________
Title:__________________
EXHIBIT S
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 Terms (Months)
Trial Modification Start Date
Trial Modification End Date
Trial Modification Period Principal and Interest Payment
Trial Modification Interest Rate
Trial Modification Term
Rate Reduction Indicator
Interest Rate Post Modification
Rate Reduction Start Date
Rate Reduction End Date
Rate Reduction Term
Term Modified Indicator
Modified Amortization Period
Modified Final Maturity Date
Total Advances Written Off
Unpaid Principal Balance Written Off
Other Past Due Amounts Written Off
Write Off Date
Unpaid Principal Balance Post Write Off
Capitalization Indicator
Mortgagor Contribution
Total Capitalized Amount
Modification Close Date
Unpaid Principal Balance Post Capitalization Modification
Next Payment Due Date per Modification Plan
Principal and Interest Payment Post Modification
Interest Rate Post Modification
Payment Made Post Capitalization
Delinquency Status to Modification Plan
EXHIBIT T
[RESERVED]
EXHIBIT U
YIELD MAINTENANCE AGREEMENT
EXHIBIT V
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 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)(iii) Any 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 related bank
clearing accounts no more than two business days
following receipt, or such other number of days accounts held by
specified in the transaction agreements. Trustee)
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1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an |X| (as to
obligor or to an investor are made only by authorized investors only)
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 maintained accounts held by
(e.g., with respect to commingling of cash) as set Trustee)
1122(d)(2)(iv) forth in the transaction 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 remitted in |X|
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 specified in the |X|
1122(d)(3)(iii) transaction agreements.
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Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, |X|
1122(d)(3)(iv) 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
1122(d)(4)(ii) required by the transaction 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)(viii) Records documenting collection efforts are maintained
during the period a pool asset is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or
such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent pool assets including, for
example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
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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
1122(d)(4)(xiii) days specified in the 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 set forth in the |X|
1122(d)(4)(xv) transaction agreements.
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