RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.,
Depositor,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
JPMORGAN CHASE BANK
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of October 1, 2004
MORTGAGE LOAN ASSET-BACKED Certificates
Series 2004-SP3
TABLE OF CONTENTS
ARTICLE I DEFINITIONS........................................................................5
Section 1.01. Definitions..................................................................5
Accrued Certificate Interest.........................................................5
Adjusted Mortgage Rate...............................................................5
Adjustment Date......................................................................5
Advance..............................................................................6
Affiliate............................................................................6
Agreement............................................................................6
Amount Held for Future Distribution..................................................6
Appraised Value......................................................................6
Assigned Contracts...................................................................6
Assignment...........................................................................6
Assignment Agreement.................................................................7
Balloon Loan.........................................................................7
Balloon Payment......................................................................7
Bankruptcy Code......................................................................7
Book-Entry Certificate...............................................................7
Business Day.........................................................................7
Capitalization Reimbursement Amount..................................................7
Cash Liquidation.....................................................................7
Certificate..........................................................................7
Certificate Account..................................................................7
Certificate Account Deposit Date.....................................................7
Certificateholder or Holder..........................................................7
Certificate Owner....................................................................8
Certificate Principal Balance........................................................8
Certificate Register and Certificate Registrar.......................................8
Class................................................................................8
Class A Certificates.................................................................8
Class A-I Certificates...............................................................8
Class A-I Interest Distribution Amount...............................................9
Class A-I Principal Distribution Amount..............................................9
Class A-I-1 Certificate..............................................................9
Class A-I-1 Margin...................................................................9
Class A-I-2 Certificate..............................................................9
Class A-I-3 Certificate..............................................................9
Class A-I-4 Certificate.............................................................10
Class A-I-4 Certificate.............................................................10
Class A-I-6 Lockout Distribution Amount.............................................10
Class A-I-6 Lockout Percentage......................................................10
Class A-I-6 Pro Rata Distribution Amount............................................10
Class A-II Basis Risk Shortfall.....................................................11
Class A-II Basis Risk Shortfall Carry-Forward Amount................................11
Class A-II Certificate..............................................................11
Class A-II Margin...................................................................11
Class A-II Principal Distribution Amount............................................11
Class M Certificate.................................................................12
Class M-I Certificates..............................................................12
Class M-I-1 Certificate.............................................................12
Class M-I-1 Interest Distribution Amount............................................12
Class M-I-1 Principal Distribution Amount...........................................12
Class M-I-2 Certificate.............................................................12
Class M-I-2 Interest Distribution Amount............................................13
Class M-I-2 Principal Distribution Amount...........................................13
Class M-I-3 Certificate.............................................................13
Class M-I-3 Interest Distribution Amount............................................13
Class M-I-3 Principal Distribution Amount...........................................14
Class M-II Certificates.............................................................14
Class M-II-1 Certificate............................................................14
Class M-II-1 Interest Distribution Amount...........................................14
Class M-II-1 Principal Distribution Amount..........................................15
Class M-II-2 Certificate............................................................15
Class M-II-2 Interest Distribution Amount...........................................15
Class M-II-2 Principal Distribution Amount..........................................15
Class M-II-3 Certificate............................................................16
Class M-II-3 Interest Distribution Amount...........................................16
Class M-II-3 Principal Distribution Amount..........................................16
Class M-II-4 Certificate............................................................17
Class M-II-4 Interest Distribution Amount...........................................17
Class M-II-4 Principal Distribution Amount..........................................17
Class M-II Basis Risk Shortfall.....................................................17
Class M-II Basis Risk Shortfall Carry-Forward Amount................................18
Class M-II Margin...................................................................18
Class R Certificate.................................................................18
Class R-I Certificate...............................................................18
Class R-II Certificate..............................................................18
Class R-III Certificate.............................................................18
Class R-IV Certificate..............................................................18
Class SB Certificates...............................................................19
Class SB-I Certificate..............................................................19
Class SB-II Certificate.............................................................19
Closing Date........................................................................19
Code................................................................................19
Commission..........................................................................19
Corporate Trust Office..............................................................19
Corresponding Class.................................................................19
Credit Repository...................................................................19
Curtailment.........................................................................19
Custodial Account...................................................................19
Custodial Agreement.................................................................19
Custodian...........................................................................20
Cut-off Date........................................................................20
Cut-off Date Principal Balance......................................................20
Debt Service Reduction..............................................................20
Deficient Valuation.................................................................20
Definitive Certificate..............................................................20
Deleted Mortgage Loan...............................................................20
Delinquent..........................................................................20
Depository..........................................................................20
Depository Participant..............................................................20
Derivative Contract.................................................................21
Derivative Counterparty.............................................................21
Destroyed Mortgage Note.............................................................21
Determination Date..................................................................21
Disqualified Organization...........................................................21
Distribution Date...................................................................21
Due Date............................................................................21
Due Period..........................................................................21
Eligible Account....................................................................21
Eligible Master Servicing Compensation..............................................22
ERISA...............................................................................22
Event of Default....................................................................22
Exchange Act........................................................................22
Xxxxxx Xxx..........................................................................22
FASIT...............................................................................22
FDIC................................................................................22
FHA.................................................................................23
Final Certification.................................................................23
Final Distribution Date.............................................................23
Final Scheduled Distribution Date...................................................23
Fitch...............................................................................23
Foreclosure Profits.................................................................23
Xxxxxxx Mac.........................................................................23
Gross Margin........................................................................23
Group I Available Distribution Amount...............................................24
Group II Available Distribution Amount..............................................24
Group I Cut-off Date Balance........................................................24
Group II Cut-off Date Balance.......................................................24
Group I Diverted Excess Spread......................................................24
Group II Diverted Excess Spread.....................................................25
Group I Excess Cash Flow............................................................25
Group II Excess Cash Flow...........................................................25
Group I Excess Overcollateralization Amount.........................................25
Group II Excess Overcollateralization Amount........................................25
Group I Interest Distribution Amount................................................25
Group II Interest Distribution Amount...............................................25
Group I Loan........................................................................25
Group II Loan.......................................................................25
Group II Basis Risk Shortfall.......................................................26
Group I Marker Rate.................................................................26
Group II Marker Rate................................................................26
Group I Net WAC Cap Rate............................................................26
Group II Net WAC Cap Rate...........................................................26
Group I Net WAC Cap Shortfall.......................................................26
Group I Net WAC Cap Shortfall Carry-Forward Amount..................................26
Group I Optional Termination Date...................................................27
Group II Optional Termination Date..................................................27
Group I Overcollateralization Amount................................................27
Group II Overcollateralization Amount...............................................27
Group I Overcollateralization Increase Amount.......................................27
Group II Overcollateralization Increase Amount......................................27
Group I Overcollateralization Reduction Amount......................................27
Group II Overcollateralization Reduction Amount.....................................28
Group I Pool Stated Principal Balance...............................................28
Group II Pool Stated Principal Balance..............................................28
Group I Principal Distribution Amount...............................................28
Group II Principal Distribution Amount..............................................29
Group I Principal Remittance Amount.................................................29
Group II Principal Remittance Amount................................................30
Group I Required Overcollateralization Amount.......................................30
Group II Required Overcollateralization Amount......................................30
Group I Senior Enhancement Percentage...............................................30
Group II Senior Enhancement Percentage..............................................30
Group I Sixty-Plus Delinquency Percentage...........................................30
Group II Sixty-Plus Delinquency Percentage..........................................31
Group I Stepdown Date...............................................................31
Group II Stepdown Date..............................................................31
Group I Trigger Event...............................................................31
Group II Trigger Event..............................................................31
Group I Uncertificated Regular Interests............................................32
Group II Uncertificated Regular Interests...........................................32
Independent.........................................................................32
Index...............................................................................32
Initial Certificate Principal Balance...............................................32
Insurance Proceeds..................................................................32
Interest Accrual Period.............................................................32
Interim Certification...............................................................32
Interested Person...................................................................32
Late Collections....................................................................32
LIBOR...............................................................................33
LIBOR Business Day..................................................................33
LIBOR Rate Adjustment Date..........................................................33
Limited Repurchase Right Holder.....................................................33
Liquidation Proceeds................................................................33
Loan Group..........................................................................33
Loan-to-Value Ratio.................................................................33
Maturity Date.......................................................................33
Maximum Group II Rate...............................................................33
Maximum Mortgage Rate...............................................................33
Maximum Net Mortgage Rate...........................................................34
MERS................................................................................34
MERS(R) System......................................................................34
MIN.................................................................................34
Minimum Mortgage Rate...............................................................34
Modified Mortgage Loan..............................................................34
Modified Net Mortgage Rate..........................................................34
MOM Loan............................................................................34
Monthly Payment.....................................................................34
Xxxxx'x.............................................................................34
Mortgage............................................................................34
Mortgage File.......................................................................35
Mortgage Loan Schedule..............................................................35
Mortgage Loans......................................................................36
Mortgage Note.......................................................................36
Mortgage Rate.......................................................................36
Mortgaged Property..................................................................36
Mortgagor...........................................................................36
Net Mortgage Rate...................................................................36
Non-Primary Residence Loans.........................................................36
Non-United States Person............................................................36
Nonrecoverable Advance..............................................................36
Nonsubserviced Mortgage Loan........................................................37
Note Margin.........................................................................37
Notice..............................................................................37
Officers' Certificate...............................................................37
Opinion of Counsel..................................................................37
Outstanding Mortgage Loan...........................................................37
Overcollateralization Floor.........................................................38
Ownership Interest..................................................................38
Pass-Through Rate...................................................................38
Paying Agent........................................................................39
Percentage Interest.................................................................39
Periodic Cap........................................................................39
Permitted Investments...............................................................39
Permitted Transferee................................................................40
Person..............................................................................41
Pledged Amount......................................................................41
Pledged Asset Loan..................................................................41
Pledged Assets......................................................................41
Prepayment Assumption...............................................................41
Prepayment Interest Shortfall.......................................................41
Prepayment Period...................................................................41
Primary Insurance Policy............................................................41
Principal Prepayment................................................................41
Principal Prepayment in Full........................................................42
Program Guide.......................................................................42
Purchase Price......................................................................42
Qualified Insurer...................................................................42
Qualified Substitute Mortgage Loan..................................................42
Rating Agency.......................................................................43
Realized Loss.......................................................................43
Record Date.........................................................................44
Regular Certificates................................................................44
Regular Interest....................................................................44
Relief Act..........................................................................44
Relief Act Shortfalls...............................................................44
REMIC...............................................................................44
REMIC Administrator.................................................................44
REMIC I.............................................................................44
REMIC I Regular Interest............................................................44
REMIC I Regular Interest A..........................................................44
REMIC II............................................................................45
REMIC II Regular Interest...........................................................45
REMIC II Regular Interest B.........................................................45
REMIC III...........................................................................45
REMIC III Group I Diverted Excess Spread............................................45
REMIC III Group II Diverted Excess Spread...........................................45
REMIC III Group I Interest Loss Allocation Amount...................................45
REMIC III Group II Interest Loss Allocation Amount..................................45
REMIC III Group I Overcollateralized Amount.........................................45
REMIC III Group II Overcollateralized Amount........................................46
REMIC III Group I Principal Loss Allocation Amount..................................46
REMIC III Group II Principal Loss Allocation Amount.................................46
REMIC III Group I Regular Interests.................................................46
REMIC III Group II Regular Interests................................................46
REMIC III Group I Required Overcollateralization Amount.............................46
REMIC III Group II Required Overcollateralized Amount...............................46
REMIC III Regular Interests.........................................................46
REMIC III Regular Interest I-AA.....................................................46
REMIC III Regular Interest A-I-1....................................................47
REMIC III Regular Interest A-I-2....................................................47
REMIC III Regular Interest A-I-3....................................................47
REMIC III Regular Interest A-I-4....................................................47
REMIC III Regular Interest A-I-5....................................................47
REMIC III Regular Interest M-I-1....................................................47
REMIC III Regular Interest M-I-2....................................................47
REMIC III Regular Interest M-I-3....................................................47
REMIC III Regular Interest I-ZZ.....................................................47
REMIC III Regular Interest II-AA....................................................47
REMIC III Regular Interest A-II-1...................................................48
REMIC III Regular Interest M-II-1...................................................48
REMIC III Regular Interest M-II-2...................................................48
REMIC III Regular Interest M-II-3...................................................48
REMIC III Regular Interest M-II-4...................................................48
REMIC III Regular Interest II-ZZ....................................................48
REMIC III Regular Interest I-ZZ Maximum Interest Deferral Amount....................48
REMIC III Regular Interest II-ZZ Maximum Interest Deferral Amount...................48
REMIC IV............................................................................49
REMIC Provisions....................................................................49
REO Acquisition.....................................................................49
REO Disposition.....................................................................49
REO Imputed Interest................................................................49
REO Proceeds........................................................................49
REO Property........................................................................49
Reportable Modified Mortgage Loan...................................................49
Repurchase Event....................................................................50
Request for Release.................................................................50
Required Insurance Policy...........................................................50
Reserve Fund........................................................................50
Reserve Fund Residual Right.........................................................50
Residential Funding.................................................................50
Responsible Officer.................................................................50
Servicing Accounts..................................................................50
Servicing Advances..................................................................50
Servicing Fee.......................................................................50
Servicing Fee Rate..................................................................51
Servicing Modification..............................................................51
Servicing Officer...................................................................51
Standard & Poor's...................................................................51
Startup Date........................................................................51
Stated Principal Balance............................................................51
Subordination.......................................................................51
Subordination Percentage............................................................51
Subsequent Recoveries...............................................................52
Subserviced Mortgage Loan...........................................................52
Subservicer.........................................................................52
Subservicer Advance.................................................................52
Subservicing Account................................................................52
Subservicing Agreement..............................................................52
Subservicing Fee....................................................................52
Subservicing Fee Rate...............................................................52
Tax Returns.........................................................................52
Transfer............................................................................53
Transferee..........................................................................53
Transferor..........................................................................53
Trust Fund..........................................................................53
Uniform Single Attestation Program for Mortgage Bankers.............................53
Uncertificated Accrued Interest.....................................................53
Uncertificated Pass-Through Rate....................................................54
Uncertificated Principal Balance....................................................54
Uncertificated Regular Interests....................................................54
Uncertificated REMIC I Pass-Through Rate............................................54
Uncertificated REMIC II Pass-Through Rate...........................................54
Uncertificated REMIC III Pass-Through Rate..........................................54
Uninsured Cause.....................................................................54
United States Person................................................................54
VA..................................................................................54
Voting Rights.......................................................................55
Section 1.02. Determination of LIBOR......................................................55
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..................57
Section 2.01. Conveyance of Mortgage Loans................................................57
Section 2.02. Acceptance by Trustee.......................................................61
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the
Depositor...................................................................62
Section 2.04. Representations and Warranties of Residential Funding.......................65
Section 2.05. Execution and Authentication of Certificates; Conveyance of
Uncertificated REMIC Regular Interests......................................67
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..................................68
Section 3.01. Master Servicer to Act as Servicer..........................................68
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement of Subservicers' Obligations....................................69
Section 3.03. Successor Subservicers......................................................70
Section 3.04. Liability of the Master Servicer............................................71
Section 3.05. No Contractual Relationship Between Subservicer and Trustee or
Certificateholders..........................................................71
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee.............71
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to Custodial
Account.....................................................................72
Section 3.08. Subservicing Accounts; Servicing Accounts...................................74
Section 3.09. Access to Certain Documentation and Information Regarding the Mortgage
Loans.......................................................................76
Section 3.10. Permitted Withdrawals from the Custodial Account............................76
Section 3.11. Maintenance of Primary Insurance Coverage...................................78
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage...........79
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain Assignments.............................................80
Section 3.14. Realization Upon Defaulted Mortgage Loans...................................82
Section 3.15. Trustee to Cooperate; Release of Mortgage Files.............................85
Section 3.16. Servicing and Other Compensation; Eligible Master Servicing Compensation....86
Section 3.17. Reports to the Trustee and the Depositor....................................87
Section 3.18. Annual Statement as to Compliance...........................................87
Section 3.19. Annual Independent Public Accountants' Servicing Report.....................88
Section 3.20. Right of the Depositor in Respect of the Master Servicer....................89
Section 3.21. Advance Facility............................................................89
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...................................................94
Section 4.01. Certificate Account.........................................................94
Section 4.02. Distributions...............................................................94
Section 4.03. Statements to Certificateholders; Statements to Rating Agencies;
Exchange Act Reporting.....................................................106
Section 4.04. Distribution of Reports to the Trustee and the Depositor; Advances by
the Master Servicer........................................................109
Section 4.05. Allocation of Realized Losses..............................................111
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property..............114
Section 4.07. Optional Purchase of Defaulted Mortgage Loans..............................114
Section 4.08. Limited Mortgage Loan Repurchase Right.....................................115
Section 4.09. Distribution of Group I Net WAC Cap Shortfall Carry-Forward Amounts,
Class A-II Basis Risk Shortfall Carry-Forward Amounts and Class M-II
Basis Risk Shortfall Carry-Forward Amounts; Reserve Fund...................115
Section 4.10. [Reserved].................................................................117
Section 4.11. Derivative Contracts.......................................................117
ARTICLE V THE CERTIFICATES.................................................................119
Section 5.01. The Certificates...........................................................119
Section 5.02. Registration of Transfer and Exchange of Certificates......................121
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates..........................126
Section 5.04. Persons Deemed Owners......................................................127
Section 5.05. Appointment of Paying Agent................................................127
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER...........................................128
Section 6.01. Respective Liabilities of the Depositor and the Master Servicer............128
Section 6.02. Merger or Consolidation of the Depositor or the Master Servicer;
Assignment of Rights and Delegation of Duties by Master Servicer...........128
Section 6.03. Limitation on Liability of the Depositor, the Master Servicer and Others...129
Section 6.04. Depositor and Master Servicer Not to Resign................................130
ARTICLE VII DEFAULT........................................................................131
Section 7.01. Events of Default..........................................................131
Section 7.02. Trustee or Depositor to Act; Appointment of Successor......................132
Section 7.03. Notification to Certificateholders.........................................134
Section 7.04. Waiver of Events of Default................................................134
ARTICLE VIII CONCERNING THE TRUSTEE........................................................135
Section 8.01. Duties of Trustee..........................................................135
Section 8.02. Certain Matters Affecting the Trustee......................................136
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans......................138
Section 8.04. Trustee May Own Certificates...............................................138
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses; Indemnification........138
Section 8.06. Eligibility Requirements for Trustee.......................................139
Section 8.07. Resignation and Removal of the Trustee.....................................140
Section 8.08. Successor Trustee..........................................................141
Section 8.09. Merger or Consolidation of Trustee.........................................141
Section 8.10. Appointment of Co-Trustee or Separate Trustee..............................141
Section 8.11. Appointment of Custodians..................................................142
ARTICLE IX TERMINATION.....................................................................144
Section 9.01. Termination Upon Purchase by the Master Servicer or Liquidation of All
Mortgage Loans.............................................................144
Section 9.02. Additional Termination Requirements........................................147
ARTICLE X REMIC PROVISIONS.................................................................148
Section 10.01. REMIC Administration.......................................................148
Section 10.02. Master Servicer, REMIC Administrator and Trustee Indemnification...........152
ARTICLE XI MISCELLANEOUS PROVISIONS........................................................153
Section 11.01. Amendment..................................................................153
Section 11.02. Recordation of Agreement; Counterparts.....................................155
Section 11.03. Limitation on Rights of Certificateholders.................................156
Section 11.04. Governing Law..............................................................157
Section 11.05. Notices....................................................................157
Section 11.06. Notices to Rating Agencies.................................................157
Section 11.07. Severability of Provisions.................................................158
Section 11.08. Supplemental Provisions for Resecuritization...............................158
Section 11.09. [Reserved].................................................................159
Section 11.10. Third Party Beneficiary....................................................159
Exhibit A Form of Class A Certificate
Exhibit B Form of Class M Certificate
Exhibit C Form of Class SB Certificate
Exhibit D Form of Class R Certificate
Exhibit E Form of Custodial Agreement
Exhibit F-1 Group I Loan Schedule
Exhibit F-2 Group II Loan Schedule
Exhibit G Forms of Request for Release
Exhibit H-1 Form of Transfer Affidavit and Agreement
Exhibit H-2 Form of Transferor Certificate
Exhibit I Form of Investor Representation Letter
Exhibit J Form of Transferor Representation Letter
Exhibit K Text of Amendment to Pooling and Servicing Agreement Pursuant to Section
11.01(e) for a Limited Guaranty
Exhibit L Form of Limited Guaranty
Exhibit M Form of Lender Certification for Assignment of Mortgage Loan
Exhibit N Form of Rule 144A Investment Representation
Exhibit O [Reserved]
Exhibit P Form of ERISA Representation Letter (Class M Certificates)
Exhibit Q [Reserved]
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 Yield Maintenance Agreement Notional Balances
Exhibit U Schedule of Monthly Strike Rates
This Pooling and Servicing Agreement, effective as of October 1, 2004,
among RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC., as the 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 JPMORGAN CHASE BANK, a New York banking
corporation, as trustee (together with its permitted successors and assigns, the
"Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage loan asset-backed certificates
(collectively, the "Certificates"), to be issued hereunder in twenty-four
classes, which in the aggregate will evidence the entire beneficial ownership
interest in the Mortgage Loans (as defined herein).
REMIC I
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Group I Loans and certain
other related assets (exclusive of the Reserve Fund and the Yield Maintenance
Agreements) subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC I." 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 "regular interest" in REMIC I (the "REMIC I Regular Interest"). The
"latest possible maturity date" (determined solely for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii)) for the REMIC I Regular
Interest shall be the 360th Distribution Date. The REMIC I Regular Interest will
not be certificated.
UNCERTIFICATED REMIC I UNCERTIFICATED REMIC I LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE
REMIC I Regular Variable(1) $142,985,961.00 September 25, 2034
Interest A
____________________
(1) Calculated as provided in the definition of Uncertificated REMIC I
Pass-Through Rate. REMIC II
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Group II Loans and certain
other related assets (exclusive of the Reserve Fund and the Yield Maintenance
Agreements) subject to this Agreement 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, remittance
rate (the "Uncertificated REMIC II Pass-Through Rate") and initial
Uncertificated Principal Balance for the "regular interest" in REMIC II (the
"REMIC II Regular Interest"). The "latest possible maturity date" (determined
solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for the REMIC II Regular Interests shall be the 360th
Distribution Date. The REMIC II Regular Interest will not be certificated.
1
UNCERTIFICATED REMIC
II
---------------------- UNCERTIFICATED REMIC II LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE
REMIC II Regular Variable(1) $165,962,789.37 September 25 ,2034
Interest B
_______________
(1) Calculated as provided in the definition of Uncertificated REMIC II
Pass-Through Rate.
REMIC III
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC I Regular Interest
and the REMIC II Regular Interest and certain other related assets (exclusive of
the Reserve Fund and the Yield Maintenance Agreements) subject to this Agreement
as a real estate mortgage investment conduit (a "REMIC") for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC III."
The Class R-III Certificates will represent the sole class of "residual
interests" in REMIC III 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 III Pass-Through Rate")
and initial Uncertificated Principal Balance for each of the "regular interests"
in REMIC III (the "REMIC III Regular Interests"). The "latest possible maturity
date" (determined solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for each REMIC III Regular Interest shall be the 360th
Distribution Date. None of the REMIC III Regular Interests will be certificated.
UNCERTIFICATED REMIC III UNCERTIFICATED REMIC III LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE
I-AA Variable(1) $140,126,241.78 September 25, 2034
A-I-1 Variable(1) $ 590,030.00 September 25, 2034
A-I-2 Variable(1) $ 280,200.00 September 25, 2034
A-I-3 Variable(1) $ 173,850.00 September 25, 2034
A-I-4 Variable(1) $ 197,690.00 September 25, 2034
A-I-5 Variable(1) $ 137,970.00 September 25, 2034
M-I-1 Variable(1) $ 22,880.00 September 25, 2034
M-I-2 Variable(1) $ 15,730.00 September 25, 2034
M-I-3 Variable(1) $ 7,150.00 September 25, 2034
I-ZZ Variable(1) $1,434,219.22 September 25, 2034
II-AA Variable(1) $162,643,533.58 September 25, 2034
A-II Variable(1) $1,567,510.00 September 25, 2034
M-II-1 Variable(1) $ 34,850.00 September 25, 2034
M-II-2 Variable(1) $ 24,890.00 September 25, 2034
M-II-3 Variable(1) $ 12,440.00 September 25, 2034
M-II-4 Variable(1) $ 4,140.00 September 25, 2034
II-ZZ Variable(1) $1,675,425.79 September 25, 2034
_______________
(1) Calculated as provided in the definition of Uncertificated REMIC III
Pass-Through Rate.
2
REMIC IV
As provided herein, the REMIC Administrator will elect to treat the
segregated pool of assets consisting of the REMIC III Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as REMIC IV. The Class R-IV Certificates will represent the sole
class of "residual interests" in REMIC IV 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 IV and the Class R Certificates. The "latest possible maturity date"
(determined solely for purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii)) for each Class of REMIC IV Regular Certificates shall be
the 360th Distribution Date.
Aggregate Initial
Pass-Through Certificate Final Scheduled Initial
Designation Type Rate Principal Balance Features Distribution Date Ratings(4)
S&P Xxxxx'x
Class A-I-1 Senior Adjustable(1) $ 59,003,000.00 Senior March 25, 2022 AAA Aaa
Class A-I-2 Senior 4.3768% $ 28,020,000.00 Senior November 25, 2027 AAA Aaa
Class A-I-3 Senior 4.9708% $ 17,385,000.00 Senior September 25, 2034 AAA Aaa
Class A-I-4 Senior 5.6510% $ 19,769,000.00 Senior September 25, 2034 AAA Aaa
Class A-I-5 Senior 4.8902% $ 13,797,000.00 Senior December 25, 2032 AAA Aaa
Class A-II Senior Adjustable(1) $156,751,000.00 Senior September 25, 2034 AAA Aaa
Class M-I-1 Mezzanine 5.4474%(2) $ 2,288,000.00 Xxxxxxxxx Xxxxxxxxx 00, 0000 XX Aa2
Class M-I-2 Mezzanine 5.6009%(2) $ 1,573,000.00 Mezzanine September 25, 2034 A A2
Class M-I-3 Mezzanine 5.7700%(2) $ 715,000.00 Mezzanine September 25, 2034 BBB Baa2
Class M-II-1 Mezzanine Adjustable(1)(2) $ 3,485,000.00 Xxxxxxxxx Xxxxxxxxx 00, 0000 XX Aa2
Class M-II-2 Mezzanine Adjustable(1) $ 2,489,000.00 Mezzanine September 25, 2034 A A2
Class M-II-3 Mezzanine Adjustable(1)(2) $ 1,244,000.00 Mezzanine September 25, 2034 BBB Baa1
Class M-II-4 Mezzanine Adjustable(1)(2) $ 414,000.00 Mezzanine September 25, 2034 BBB- Baa3
Class SB-I Subordinate Variable(3) $ 435,961.00 Subordinate N/A N/R N/R
Class SB-II Subordinate Variable(3) $ 1,579,789.37 Subordinate N/A N/R N/R
Class R-I Residual N/A N/A Residual N/A N/R N/R
Class R-II Residual N/A N/A Residual N/A N/R N/R
Class R-III Residual N/A N/A Residual N/A N/R N/R
Class R-IV Residual N/A N/A Residual N/A N/R N/R
_______________
(1) Subject to a cap as described in the definition of "Pass-Through Rate"
herein. Calculated in accordance with the definition of "Pass-Through Rate"
herein.
(2) On and after the second Distribution Date after the first possible Group I
Optional Termination Date, the Pass-Through Rate on the Class A-I-4
Certificates will increase by a per annum rate equal to 0.50%.
(3) 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 Group I Loans have an aggregate Cut-off Date Principal Balance equal
to $142,985,961.00. The Group I Loans are fixed-rate, fully amortizing and
balloon payment, first lien mortgage loans having terms to maturity at
origination or modification of generally not more than 15 or 30 years. The Group
3
II Loans have an aggregate Cut-off Date Principal Balance equal to
$165,962,789.37. The Group II Loans are adjustable-rate, fully amortizing, first
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:
4
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 Certificates and Class M Certificates, interest accrued during the
preceding Interest Accrual Period on its Certificate Principal Balance
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 (a) 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 Relief Act
Shortfalls on Mortgage Loans during the related Due Period, in each case to the
extent allocated to that Class of Certificates pursuant to Section 4.02(h); and
(b) the interest portion of Realized Losses allocated to such Class through
Subordination as described in 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 notional amount as specified
in the definition of Pass-Through Rate, immediately prior to such Distribution
Date in each case, reduced by any interest shortfalls with respect to the
Mortgage Loans in the related Loan Group including Prepayment Interest
Shortfalls to the extent not covered by Eligible Master Servicing Compensation
pursuant to Section 3.16 or by Group I or Group II Excess Cash Flow pursuant to
clauses (x) through (xiii) of Section 4.02(c) and clauses (xi) through (xiv) of
Section 4.02(d). 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 Group I
Overcollateralization Amount or Group II Overcollateralization Amount, as
applicable, pursuant to Section 4.05 hereof. Accrued Certificate Interest on the
Class A-I Certificates (other than the Class A-I-1 Certificates), Class M-I
Certificates and Class SB Certificates shall accrue on the basis of a 360-day
year consisting of twelve 30-day months. Accrued Certificate Interest on the
Class A-I-1, Class A-II and Class M-II Certificates shall accrue on the basis of
a 360-day year and the actual number of days in the related Interest Accrual
Period.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and any date
of determination, the Mortgage Rate borne by the related Mortgage Note, less the
related Subservicing Fee Rate.
Adjustment Date: As 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.
5
Advance: As to any Mortgage Loan, any advance made by the Master
Servicer, pursuant to Section 4.04.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For 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: As 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, 4.07 or 4.08
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: As 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.
Assigned Contracts: With respect to any Pledged Asset Loan: the Credit
Support Pledge Agreement; the Funding and Pledge Agreement, among GMAC Mortgage
Corporation, National Financial Services Corporation and the Mortgagor or other
person pledging the related Pledged Assets; or the Additional Collateral
Agreement, between GMAC Mortgage Corporation and the Mortgagor or other person
pledging the related Pledged Assets.
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.
6
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.
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.
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 New York, Minnesota,
Illinois, Texas or Michigan (and such other state or states in which the
Custodial Account or the Certificate Account are at the time located) are
required or authorized by law or executive order to be closed.
Capitalization Reimbursement Amount: As to any Distribution Date and
each Loan Group, the amount of 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: As to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.
Certificate: 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 "JPMorgan Chase Bank, as
trustee, in trust for the registered holders of Residential Asset Mortgage
Products, Inc., Mortgage Loan Asset-Backed Certificates, Series 2004-SP3" and
which must be an Eligible Account.
Certificate Account Deposit Date: As to any Distribution Date, the
Business Day prior thereto.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, 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
7
the Percentage Interest or Voting Rights evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
or Voting Rights necessary to effect any such consent or direction has been
obtained. All references herein to "Holders" or "Certificateholders" shall
reflect the rights of Certificate Owners as they may indirectly exercise such
rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Certificate is registered in the Certificate Register.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate, as reflected on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent, if any, and otherwise on the books of a Depository Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to any Class A Certificate
or Class M Certificate, on any date of determination, an amount equal to (i) the
Initial Certificate Principal Balance of such Certificate as specified on the
face thereof minus (ii) the sum of (x) the aggregate of all amounts previously
distributed with respect to such Certificate (or any predecessor Certificate)
and applied to reduce the Certificate Principal Balance thereof pursuant to
Sections 4.02(c) or 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. With respect to each Class
SB-I Certificate, on any date of determination, an amount equal to the
Percentage Interest evidenced by such Certificate times an amount equal to (i)
the excess, if any, of (A) the then aggregate Stated Principal Balance of the
Group I Loans over (B) the then aggregate Certificate Principal Balance of the
Class A-I Certificates and Class M-I Certificates then outstanding, plus (ii)
any Group I Diverted Excess Spread and minus (iii) any Group II Diverted Excess
Spread. With respect to each Class SB-II Certificate, on any date of
determination, an amount equal to the Percentage Interest evidenced by such
Certificate times an amount equal to (i) the excess, if any, of (A) the then
aggregate Stated Principal Balance of the Group II Loans over (B) the then
aggregate Certificate Principal Balance of the Class A-II Certificates and Class
M-II Certificates then outstanding, plus (ii) any Group II Diverted Excess
Spread and minus (iii) any Group I Diverted Excess Spread. The Class R
Certificates will not have a Certificate Principal Balance.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates or uncertificated interests
bearing the same designation.
Class A Certificates: Any one of the Class A-I or Class A-II Certificates.
Class A-I Certificates: Any one of the Class A-I-1, Class A-I-2, Class
A-I-3, Class A-I-4 or Class A-I-5 Certificates.
8
Class A-I Interest Distribution Amount: With respect to each Class of
Class A-I Certificates and any Distribution Date, the aggregate amount of
Accrued Certificate Interest to be distributed to the holders of such Class of
Class A-I Certificates for such Distribution Date, plus any related Accrued
Certificate Interest remaining unpaid from any prior Distribution Date, less any
related Prepayment Interest Shortfalls for such Distribution Date not covered by
Eligible Master Servicing Compensation and any Relief Act Shortfalls for such
Distribution Date, allocated among the Class A-I Certificates on a pro rata
basis as described herein.
Class A-I Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the Group I Principal Distribution Amount for that
Distribution Date or (ii) on or after the Group I Stepdown Date if a Group I
Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the Group I Principal Distribution Amount for that
Distribution Date; and
(ii) the excess, if any, of (A) the aggregate Certificate
Principal Balance of the Class A-I 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 Group I Loans after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate
Stated Principal Balance of the Group I Loans after giving effect to
distributions to be made on that Distribution Date, less the related
Overcollateralization Floor.
Class A-I-1 Certificate: Any one of the Class A-I-1 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class M-I
Certificates, Class SB-I Certificates and Class R-IV Certificates with respect
to distributions and the allocation of Realized Losses in respect of Loan Group
I as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions and (ii) the
right to receive the Group I Net WAC Cap Shortfall Carry-Forward Amount from the
Reserve Fund.
Class A-I-1 Margin: With respect to the Class A-I-1 Certificates and any
Distribution Date, 0.190% per annum.
Class A-I-2 Certificate: Any one of the Class A-I-2 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class M-I
Certificates, Class SB-I Certificates and Class R-IV Certificates with respect
to distributions and the allocation of Realized Losses in respect of Loan Group
I as set forth in Section 4.05, and evidencing an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions.
Class A-I-3 Certificate: Any one of the Class A-I-3 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class M-I
Certificates, Class SB-I Certificates and Class R-IV Certificates with respect
to distributions and the allocation of Realized Losses in respect of Loan Group
I as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions and (ii) the
right to receive the Group I Net WAC Cap Shortfall Carry-Forward Amount from the
Reserve Fund.
9
Class A-I-4 Certificate: Any one of the Class A-I-4 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class M-I
Certificates, Class SB-I Certificates and Class R-IV Certificates with respect
to distributions and the allocation of Realized Losses in respect of Loan Group
I as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions and (ii) the
right to receive the Group I Net WAC Cap Shortfall Carry-Forward Amount from the
Reserve Fund.
Class A-I-5 Certificate: Any one of the Class A-I-5 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-I
Certificates, Class SB-I Certificates and Class R-IV Certificates with respect
to distributions and the allocation of Realized Losses in respect of Loan Group
I as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions and (ii) the
right to receive the Group I Net WAC Cap Shortfall Carry-Forward Amount from the
Reserve Fund.
Class A-I-5 Lockout Distribution Amount: For any Distribution Date, the
product of (x) the Class A-I-5 Lockout Percentage for that Distribution Date and
(y) the Class A-I-5 Pro Rata Distribution Amount for that Distribution Date. In
no event shall the Class A-I-5 Lockout Distribution Amount for a Distribution
Date exceed the Class A-I Principal Distribution Amount for that Distribution
Date or the Certificate Principal Balance of the Class A-I-5 Certificates
immediately prior to that Distribution Date.
Class A-I-5 Lockout Percentage: For each Distribution Date, the
applicable percentage set forth below:
(i) for any Distribution Date from November 2004 through and
including October 2007, 0%,
(ii) for any Distribution Date from November 2007 through and
including October 2009, 45%,
(iii) for any Distribution Date from November 2009 through and
including October 2010, 80%,
(iv) for any Distribution Date from November 2010 through and
including October 2011, 100%, and
(v) for any Distribution Date on or after November 2011, 300%.
Class A-I-5 Pro Rata Distribution Amount: For any Distribution Date, an
amount equal to the product of (x) a fraction, the numerator of which is the
Certificate Principal Balance of the Class A-I-5 Certificates immediately prior
to that Distribution Date and the denominator of which is the aggregate
Certificate Principal Balance of the Class A-I Certificates immediately prior to
that Distribution Date and (y) the Class A-I Principal Distribution Amount for
that Distribution Date.
10
Class A-II Basis Risk Shortfall: With respect to the Class A-II
Certificates and any Distribution Date for which the Pass-Through Rate for such
Certificates is equal to the Group II 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 A-II
Margin, as calculated for such Distribution Date, and (b) the Maximum Group II
Rate, over (y) Accrued Certificate Interest on the Class A-II Certificates for
such Distribution Date calculated at the Group II Net WAC Cap Rate.
Class A-II Basis Risk Shortfall Carry-Forward Amount: With respect to
the Class A-II Certificates and any Distribution Date, the sum of (a) the
aggregate amount of Group II Basis Risk Shortfall for such Class on such
Distribution Date plus (b) any Group II 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 Group I Excess Cash Flow pursuant to Section 4.02(c)(xv) or
Group II Excess Cash Flow pursuant to Section 4.02(d)(xv) or the Yield
Maintenance Agreement Payments, at a rate equal to the related Pass-Through
Rate.
Class A-II Certificate: Any one of the Class A-II Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit A, senior to the Class M-II Certificates,
Class SB-II Certificates and Class R-IV Certificates with respect to
distributions and the allocation of Realized Losses in respect of Loan Group II
as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions and (ii) the
right to receive the Class A-II Basis Risk Shortfall Carry-Forward Amount from
the Reserve Fund.
Class A-II Margin: With respect to the Class A-II Certificates,
initially 0.370% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Group II Optional Termination Date,
0.740% per annum.
Class A-II Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the Group II Principal Distribution Amount for that
Distribution Date or (ii) on or after the Group II Stepdown Date if a Group II
Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the Group II Principal Distribution Amount for that
Distribution Date; and
(ii) the excess, if any, of (A) the Certificate Principal Balance
of the Class A-II 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 Group II Loans after giving effect to distributions to be made on
that Distribution Date and (y) the aggregate Stated Principal Balance of
the Group II Loans after giving effect to distributions to be made on
that Distribution Date, less the related Overcollateralization Floor.
11
Class M Certificate: Any one of the Class M-I or Class M-II Certificates.
Class M-I Certificates: Any one of the Class M-I-1, Class M-I-2 or Class
M-I-3 Certificates.
Class M-I-1 Certificate: Any one of the Class M-I-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-I-2, Class M-I-3, Class SB-I and Class R-IV Certificates with respect to
distributions and the allocation of Realized Losses in respect of Loan Group I
as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions and (ii) the
right to receive the Group I Net WAC Cap Shortfall Carry-Forward Amount from the
Reserve Fund.
Class M-I-1 Interest Distribution Amount: With respect to the Class
M-I-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, less any Prepayment Interest Shortfalls
for such Distribution Date not covered by Eligible Master Servicing Compensation
and any Relief Act Shortfalls for such Distribution Date allocated as described
herein to the Class M-I-1 Certificates.
Class M-I-1 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the remaining Group I Principal Distribution Amount for that
Distribution Date after distribution of the Class A-I Principal Distribution
Amount or (ii) on or after the Group I Stepdown Date if a Group I Trigger Event
is not in effect for that Distribution Date, the lesser of:
(i) the remaining Group I Principal Distribution Amount for that
Distribution Date after distribution of the Class A-I Principal
Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A-I Certificates (after
taking into account the payment of the Class A-I Principal Distribution
Amount for that Distribution Date) and (2) the Certificate Principal
Balance of the Class M-I-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 Group I Loans after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate
Stated Principal Balance of the Group I Loans after giving effect to
distributions to be made on that Distribution Date, less the related
Overcollateralization Floor.
Class M-I-2 Certificate: Any one of the Class M-I-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-I-3, Class SB-I and Class R-IV Certificates with respect to distributions and
the allocation of Realized Losses in respect of Loan Group I as set forth in
Section 4.05, and evidencing (i) an interest designated as a "regular interest"
in REMIC IV for purposes of the REMIC Provisions and (ii) the right to receive
the Group I Net WAC Cap Shortfall Carry-Forward Amount from the Reserve Fund.
12
Class M-I-2 Interest Distribution Amount: With respect to the Class
M-I-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, less any Prepayment Interest Shortfalls
for such Distribution Date not covered by Eligible Master Servicing Compensation
and any Relief Act Shortfalls for such Distribution Date allocated as described
herein to the Class M-I-2 Certificates.
Class M-I-2 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the remaining Group I Principal Distribution Amount for that
Distribution Date after distribution of the Class A-I Principal Distribution
Amount and the Class M-I-1 Principal Distribution Amount or (ii) on or after the
Group I Stepdown Date if a Group I Trigger Event is not in effect for that
Distribution Date, the lesser of:
(i) the remaining Group I Principal Distribution Amount for that
Distribution Date after distribution of the Class A-I Principal
Distribution Amount and the Class M-I-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-I Certificates and Class
M-I-1 Certificates (after taking into account the payment of the Class
A-I Principal Distribution Amount and the Class M-I-1 Principal
Distribution Amount for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-I-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 Group I Loans after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate
Stated Principal Balance of the Group I Loans after giving effect to
distributions to be made on that Distribution Date, less the related
Overcollateralization Floor.
Class M-I-3 Certificate: Any one of the Class M-I-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 SB-I
Certificates and Class R-IV Certificates with respect to distributions and the
allocation of Realized Losses in respect of Loan Group I as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC
IV for purposes of the REMIC Provisions and (ii) the right to receive the Group
I Net WAC Cap Shortfall Carry-Forward Amount from the Reserve Fund.
Class M-I-3 Interest Distribution Amount: With respect to the Class
M-I-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
13
unpaid from any prior Distribution Date, less any Prepayment Interest Shortfalls
for such Distribution Date not covered by Eligible Master Servicing Compensation
and any Relief Act Shortfalls for such Distribution Date allocated as described
herein to the Class M-I-3 Certificates.
Class M-I-3 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group I Stepdown Date or on or after the
Group I Stepdown Date if a Group I Trigger Event is in effect for that
Distribution Date, the remaining Group I Principal Distribution Amount for that
Distribution Date after distribution of the Class A-I Principal Distribution
Amount, the Class M-I-1 Principal Distribution Amount and the Class M-I-2
Principal Distribution Amount or (ii) on or after the Group I Stepdown Date if a
Group I Trigger Event is not in effect for that Distribution Date, the lesser
of:
(i) the remaining Group I Principal Distribution Amount for that
Distribution Date after distribution of the Class A-I Principal
Distribution Amount, the Class M-I-1 Principal Distribution Amount and
the Class M-I-2 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A-I Certificates, Class M-I-1
Certificates and Class M-I-2 Certificates (after taking into account the
payment of the Class A-I Principal Distribution Amount, the Class M-I-1
Principal Distribution Amount and the Class M-I-2 Principal Distribution
Amount for that Distribution Date) and (2) the Certificate Principal
Balance of the Class M-I-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 Group I Loans after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate
Stated Principal Balance of the Group I Loans after giving effect to
distributions to be made on that Distribution Date, less the related
Overcollateralization Floor.
Class M-II Certificates: Any one of the Class M-II-1, Class M-II-2, Class
M-II-3 or Class M-II-4 Certificates.
Class M-II-1 Certificate: Any one of the Class M-II-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-II-2, Class M-II-3, Class M-II-4, Class SB-II and Class R-IV Certificates with
respect to distributions and the allocation of Realized Losses in respect of
Loan Group II as set forth in Section 4.05, and evidencing an interest
designated as a "regular interest" in REMIC IV for purposes of the REMIC
Provisions.
Class M-II-1 Interest Distribution Amount: With respect to the Class
M-II-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, less any Prepayment Interest Shortfalls
for such Distribution Date not covered by Eligible Master Servicing Compensation
and any Relief Act Shortfalls for such Distribution Date allocated as described
herein to the Class M-II-1 Certificates.
14
Class M-II-1 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Class A-II Principal Distribution
Amount or (ii) on or after the Group II Stepdown Date if a Group II Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Class A-II Principal
Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A-II Certificates (after
taking into account the payment of the Class A-II Principal Distribution
Amount for that Distribution Date) and (2) the Certificate Principal
Balance of the Class M-II-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 Group II Loans after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate
Stated Principal Balance of the Group II Loans after giving effect to
distributions to be made that Distribution Date, less the related
Overcollateralization Floor.
Class M-II-2 Certificate: Any one of the Class M-II-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-II-3, Class M-II-4, Class SB-II and Class R-IV Certificates with respect to
distributions and the allocation of Realized Losses in respect of Loan Group II
as set forth in Section 4.05, and evidencing an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions.
Class M-II-2 Interest Distribution Amount: With respect to the Class
M-II-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, less any Prepayment Interest Shortfalls
for such Distribution Date not covered by Eligible Master Servicing Compensation
and any Relief Act Shortfalls for such Distribution Date allocated as described
herein to the Class M-II-2 Certificates.
Class M-II-2 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Class A-II Principal Distribution
Amount and the Class M-II-1 Principal Distribution Amount or (ii) on or after
the Group II Stepdown Date if a Group II Trigger Event is not in effect for that
Distribution Date, the lesser of:
(i) the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Class A-II Principal
Distribution Amount and the Class M-II-1 Principal Distribution Amount;
and
15
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A-II Certificates and Class
M-II-1 Certificates (after taking into account the payment of the Class
A-II Principal Distribution Amount and the Class M-II-1 Principal
Distribution Amount for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-II-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 Group II Loans after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate
Stated Principal Balance of the Group II Loans after giving effect to
distributions to be made that Distribution Date, less the related
Overcollateralization Floor.
Class M-II-3 Certificate: Any one of the Class M-II-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-II-4, Class SB-II and Class R-IV Certificates with respect to distributions
and the allocation of Realized Losses in respect of Loan Group II as set forth
in Section 4.05, and evidencing an interest designated as a "regular interest"
in REMIC IV for purposes of the REMIC Provisions.
Class M-II-3 Interest Distribution Amount: With respect to the Class
M-II-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, less any Prepayment Interest Shortfalls
for such Distribution Date not covered by Eligible Master Servicing Compensation
and any Relief Act Shortfalls for such Distribution Date allocated as described
herein to the Class M-II-3 Certificates.
Class M-II-3 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Class A-II Principal Distribution
Amount, the Class M-II-1 Principal Distribution Amount and the Class M-II-2
Principal Distribution Amount or (ii) on or after the Group II Stepdown Date if
a Group II Trigger Event is not in effect for that Distribution Date, the lesser
of:
(i) the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Class A-II Principal
Distribution Amount, the Class M-II-1 Principal Distribution Amount and
the Class M-II-2 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A-II Certificates, Class
M-II-1 Certificates and Class M-II-2 Certificates (after taking into
account the payment of the Class A-II Principal Distribution Amount, the
Class M-II-1 Principal Distribution Amount and the Class M-II-2
Principal Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-II-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 Group II Loans after giving
effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Group II Loans after giving
effect to distributions to be made that Distribution Date, less the
related Overcollateralization Floor.
16
Class M-II-4 Certificate: Any one of the Class M-II-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 SB-II
and Class R-IV Certificates with respect to distributions and the allocation of
Realized Losses in respect of Loan Group II as set forth in Section 4.05, and
evidencing an interest designated as a "regular interest" in REMIC IV for
purposes of the REMIC Provisions.
Class M-II-4 Interest Distribution Amount: With respect to the Class
M-II-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, less any Prepayment Interest Shortfalls
for such Distribution Date not covered by Eligible Master Servicing Compensation
and any Relief Act Shortfalls for such Distribution Date allocated as described
herein to the Class M-II-4 Certificates.
Class M-II-4 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Group II Stepdown Date or on or after the
Group II Stepdown Date if a Group II Trigger Event is in effect for that
Distribution Date, the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Class A-II Principal Distribution
Amount, the Class M-II-1 Principal Distribution Amount, the Class M-II-2
Principal Distribution Amount and the Class M-II-3 Principal Distribution Amount
or (ii) on or after the Group II Stepdown Date if a Group II Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i) the remaining Group II Principal Distribution Amount for that
Distribution Date after distribution of the Class A-II Principal Distribution
Amount, the Class M-II-1 Principal Distribution Amount, the Class M-II-2
Principal Distribution Amount and the Class M-II-3 Principal Distribution
Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A-II Certificates, Class M-II-1 Certificates,
Class M-II-2 Certificates and Class M-II-3 Certificates (after taking into
account the payment of the Class A-II Principal Distribution Amount, the Class
M-II-1 Principal Distribution Amount, the Class M-II-2 Principal Distribution
Amount and the Class M-II-3 Principal Distribution Amount for that Distribution
Date) and (2) the Certificate Principal Balance of the Class M-II-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 Group II Loans after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Group II Loans after giving effect to distributions to
be made that Distribution Date, less the related Overcollateralization Floor.
Class M-II Basis Risk Shortfall: With respect to the Class M-II-1, Class
M-II-2, Class M-II-3 and Class M-II-4 Certificates and any Distribution Date for
which the Pass-Through Rate for any such Class of Certificates is equal to the
Group II 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-II Margin, as calculated for such
Distribution Date, and (b) the Maximum Group II Rate, over (y) Accrued
Certificate Interest on such Class of Class M-II Certificates for such
Distribution Date calculated at the Group II Net WAC Cap Rate.
17
Class M-II Basis Risk Shortfall Carry-Forward Amount: With respect to
the Class M-II-1, Class M-II-2, Class M-II-3 and Class M-II-4 Certificates and
any Distribution Date, the sum of (a) the aggregate amount of Class M-II Basis
Risk Shortfall for each such Class on such Distribution Date plus (b) any Class
M-II 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 Group I Excess Cash
Flow pursuant to Section 4.02(c)(xv) or Group II Excess Cash Flow pursuant to
Section 4.02(d)(xv) or the Yield Maintenance Agreement Payments, at a rate equal
to the related Pass-Through Rate.
Class M-II Margin: With respect to the Class M-II-1 Certificates,
initially 0.650% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Group II Optional Termination Date,
0.975% per annum. With respect to the Class M-II-2 Certificates, initially
1.250% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Group II Optional Termination Date,
1.875% per annum. With respect to the Class M-II-3 Certificates, initially
1.850% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Group II Optional Termination Date,
2.775% per annum. With respect to the Class M-II-4 Certificates, initially
1.850% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Group II Optional Termination Date,
2.775% per annum.
Class R Certificate: Any one of the Class R-I, Class R-II, Class R-III
or Class R-IV 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 D and evidencing an interest designated as a
"residual interest" in REMIC I for purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit D and evidencing an interest designated as a
"residual interest" in REMIC II for purposes of the REMIC Provisions.
Class R-III Certificate: Any one of the Class R-III Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit D and evidencing an interest
designated as a "residual interest" in REMIC III for purposes of the REMIC
Provisions.
Class R-IV Certificate: Any one of the Class R-IV Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit D and evidencing an interest designated as a
"residual interest" in REMIC IV for purposes of the REMIC Provisions.
18
Class SB Certificates: Any one of the Class SB-I and Class SB-II
Certificates.
Class SB-I Certificate: Any one of the Class SB-I Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit C, subordinate to the Class A-I Certificates
and Class M-I Certificates with respect to distributions and the allocation of
Realized Losses in respect of Loan Group I as set forth in Section 4.05, and
evidencing an interest designated as a "regular interest" in REMIC IV for
purposes of the REMIC Provisions.
Class SB-II Certificate: Any one of the Class SB-II Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit C, subordinate to the Class
A-II Certificates and Class M-II Certificates with respect to distributions and
the allocation of Realized Losses in respect of Loan Group II as set forth in
Section 4.05, and evidencing an interest designated as a "regular interest" in
REMIC IV for purposes of the REMIC Provisions.
Closing Date: November 10, 2004.
Code: The Internal Revenue Code of 1986.
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 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Institutional Trust Services/Global Debt, RAAC, Series 2004-SP3.
Corresponding Class: With respect to each REMIC III Regular Interest
other than REMIC III Regular Interests I-AA, I-ZZ, II-AA and II-ZZ, the
Certificate with the corresponding designation.
Credit Repository: Equifax, Transunion and Experian, or their successors in
interest.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and
maintained pursuant to Section 3.07 in the name of a depository institution, as
custodian for the holders of the Certificates, for the holders of certain other
interests in mortgage loans serviced or sold by the Master Servicer and for the
Master Servicer, into which the amounts set forth in Section 3.07 shall be
deposited directly. Any such account or accounts shall be an Eligible Account.
Custodial Agreement: An agreement that may be entered into among the
Depositor, the Master Servicer, the Trustee and a Custodian in substantially the
form of Exhibit E hereto.
19
Custodian: A custodian appointed pursuant to a Custodial Agreement.
Cut-off Date: October 1, 2004.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof at the Cut-off Date after giving effect to all
installments of principal due on or prior thereto (or due during the month of
October 2004), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificate: Any definitive, fully registered Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to
59 days" or "30 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the next following monthly
scheduled due date; "60 to 89 days" or "60 or more days" delinquent when a
payment due on any scheduled due date remains unpaid as of the close of business
on the second following monthly scheduled due date; and so on. The determination
as to whether a Mortgage Loan falls into these categories is made as of the
close of business on the last business day of each month. For example, a
Mortgage Loan with a payment due on July 1 that remained unpaid as of the close
of business on August 31 would then be considered to be 30 to 59 days
delinquent. Delinquency information as of the Cut-off Date is determined and
prepared as of the close of business on the last business day immediately prior
to the Cut-off Date.
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(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.
20
Derivative Contract: Any ISDA Master Agreement, together with the
related Schedule and Confirmation, entered into by the Trustee and a Derivative
Counterparty in accordance with Section 4.11.
Derivative Counterparty: Any counterparty to a Derivative Contract as
provided in Section 4.11.
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.
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
21
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, either (A) a trust
account or accounts maintained in the corporate trust department of JPMorgan
Chase Bank, or (B) an account or accounts maintained in the corporate asset
services department of Bank One, National Association as long as its short term
debt obligations are rated P-1 (or the equivalent) or better by each Rating
Agency, and its long term debt obligations are rated A2 (or the equivalent) or
better, by each Rating Agency, or (iv) in the case of the Certificate Account
and the Reserve Fund, a trust account or accounts maintained in the corporate
trust division of JPMorgan Chase Bank, 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 lower of the then-current rating or
the rating assigned to such Certificates as of the Closing Date 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), in each case with respect to the related Loan Group;
provided that for purposes of this definition the amount of the Servicing Fee
will not be reduced pursuant to Section 7.02 except as may be required pursuant
to the last sentence of Section 7.02(a).
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: As defined in Section 7.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: Xxxxxx Xxx, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
FASIT: A "financial asset securitization investment trust" within the
meaning of Section 860L of the Code.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
22
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-I-1 Certificates,
March 25, 2022; with respect to the Class A-I-2 Certificates, November 25, 2027;
with respect to the Class A-I-3 Certificates, September 25, 2034; with respect
to the Class A-I-4 Certificates, September 25, 2034; with respect to the Class
A-I-5 Certificates, December 25, 2032; with respect to the Class A-II
Certificates, September 25, 2034; with respect to the Class M-I-1 Certificates,
September 25, 2034; with respect to the Class M-I-2 Certificates, September 25,
2034; with respect to the Class M-I-3 Certificates, September 25, 2034; with
respect to the Class M-II-1 Certificates, September 25, 2034; with respect to
the Class M-II-2 Certificates, September 25, 2034; with respect to the Class
M-II-3 Certificates, September 25, 2034; with respect to the Class M-II-4
Certificates, September 25, 2034; with respect to the Class SB-I Certificates,
September 25, 2034; and with respect to the Class SB-II Certificates, September
25, 2034. No event of default under this Agreement will arise or become
applicable solely by reason of the failure to retire the entire Certificate
Principal Balance of any Class of Class A Certificates or Class M Certificates
on or before its Final Scheduled Distribution Date.
Fitch: Fitch, Inc.
Foreclosure Profits: As to any Distribution Date or related
Determination Date and any Mortgage Loan, the excess, if any, of Liquidation
Proceeds, Insurance Proceeds and REO Proceeds (net of all amounts reimbursable
therefrom pursuant to Section 3.10(a)(ii)) in respect of each Mortgage Loan or
REO Property for which a Cash Liquidation or REO Disposition occurred in the
related Prepayment Period over the sum of the unpaid principal balance of such
Mortgage Loan or REO Property (determined, in the case of an REO Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest at the Mortgage
Rate on such unpaid principal balance from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month in
which such Cash Liquidation or REO Disposition occurred.
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: As to each adjustable rate Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note and indicated in Exhibit F-2
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.
23
Group I Available Distribution Amount: As to any Distribution Date, an
amount equal to (a) the sum of (i) the amount relating to the Group I 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 that are Group I Loans, (ii) the amount of
any Advance made on the immediately preceding Certificate Account Deposit Date
with respect to the Group I 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 Group I 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 Group I Loans and (v) any amount deposited in
the Certificate Account pursuant to Section 4.07, 4.08 or 9.01 in respect of the
Group I Loans, (vi) the proceeds of any Pledged Asset received by the Master
Servicer, 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 Group I Loans that were received during the related
Prepayment Period, (x) the Amount Held for Future Distribution with respect to
the Group I Loans and (y) amounts permitted to be withdrawn by the Master
Servicer from the Custodial Account in respect of the Group I Loans pursuant to
clauses (ii)-(x), inclusive, of Section 3.10(a).
Group II Available Distribution Amount: As to any Distribution Date, an
amount equal to (a) the sum of (i) the amount relating to the Group II 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 that are Group II Loans, (ii) the amount of
any Advance made on the immediately preceding Certificate Account Deposit Date
with respect to the Group II 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 Group II 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 Group II Loans and (v) any amount deposited
in the Certificate Account pursuant to Section 4.07, 4.08 or 9.01 in respect of
the Group II Loans, (vi) the proceeds of any Pledged Asset received by the
Master Servicer, 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 Group II Loans that were received during
the related Prepayment Period, (x) the Amount Held for Future Distribution with
respect to the Group II Loans and (y) amounts permitted to be withdrawn by the
Master Servicer from the Custodial Account in respect of the Group II Loans
pursuant to clauses (ii)-(x), inclusive, of Section 3.10(a).
Group I Cut-off Date Balance: $142,985,961.00.
Group II Cut-off Date Balance: $165,962,789.37.
Group I Diverted Excess Spread: Any amount otherwise payable as Accrued
Certificate Interest on the Class SB-I Certificate that, pursuant to Section
4.02(c), is used to increase the Group II Overcollateralization Amount or is
used to offset Realized Losses on any Group II Loans. Any reduction in the Group
II Overcollateralization Amount shall first reduce the Group I Diverted Excess
Spread until it is reduced to zero. In the event of a distribution in respect of
a Group II Overcollateralization Reduction Amount to the Class SB-I
24
Certificates, such reduction shall be deemed to be applied to reduce any Group I
Diverted Excess Spread. No interest will accrue on the Group I Diverted Excess
Spread.
Group II Diverted Excess Spread: Any amount otherwise payable as Accrued
Certificate Interest on the Class SB-II Certificate that, pursuant to Section
4.02(d), is used to increase the Group I Overcollateralization Amount or is used
to offset Realized Losses on any Group I Loans. Any reduction in the Group I
Overcollateralization Amount shall first reduce the Group II Diverted Excess
Spread until it is reduced to zero. In the event of a distribution in respect of
a Group I Overcollateralization Reduction Amount to the Class SB-II Certificates
such reduction shall be deemed to be applied to reduce any the Group II Diverted
Excess Spread. No interest will accrue on the Group II Diverted Excess Spread.
Group I Excess Cash Flow: With respect to the Group I Loans and any
Distribution Date, an amount equal to the sum of (A) the excess of (i) the Group
I Available Distribution Amount for that Distribution Date over (ii) the sum of
(a) the Group I Interest Distribution Amount for that Distribution Date and (b)
the Group I Principal Remittance Amount for that Distribution Date and (B) the
Group I Overcollateralization Reduction Amount, if any, for that Distribution
Date.
Group II Excess Cash Flow: With respect to the Group II Loans and any
Distribution Date, an amount equal to the sum of (A) the excess of (i) the Group
II Available Distribution Amount for that Distribution Date over (ii) the sum of
(a) the Group II Interest Distribution Amount for that Distribution Date and (b)
the Group II Principal Remittance Amount for that Distribution Date and (B) the
Group II Overcollateralization Reduction Amount, if any, for that Distribution
Date.
Group I Excess Overcollateralization Amount: With respect to any
Distribution Date, the excess, if any, of (a) the Group I Overcollateralization
Amount on such Distribution Date over (b) the Group I Required
Overcollateralization Amount.
Group II Excess Overcollateralization Amount: With respect to any
Distribution Date, the excess, if any, of (a) the Group II Overcollateralization
Amount on such Distribution Date over (b) the Group II Required
Overcollateralization Amount.
Group I Interest Distribution Amount: The sum of the Class A-I, Class
M-I-1, Class M-I-2 and Class M-I-3 Interest Distribution Amounts.
Group II Interest Distribution Amount: The sum of the Class A-II, Class
M-II-1, Class M-II-2, Class M-II-3 and Class M-II-4 Interest Distribution
Amounts.
Group I Loan: The Mortgage Loans designated on the Mortgage Loan
Schedule attached hereto as Exhibit F-1.
Group II Loan: The Mortgage Loans designated on the Mortgage Loan
Schedule attached hereto as Exhibit F-2.
25
Group II Basis Risk Shortfall: Any Class M-II Basis Risk Shortfall or
Group II Basis Risk Shortfall, as applicable.
Group I Marker Rate: With respect to the Class SB-I Certificates and any
Distribution Date, a per annum rate equal to two (2) multiplied by the weighted
average of the Pass-Through Rates for each REMIC III Group I Regular Interest
(other than REMIC III Regular Interest I-AA), with the rates on each such REMIC
III Regular Interest (other than REMIC III Regular Interest I-ZZ) subject to a
cap equal to the Pass-Through Rate for the Corresponding Class for such REMIC
III Regular Interest, and the rate on REMIC III Regular Interest I-ZZ subject to
a cap of zero, in each case for purposes of this calculation.
Group II Marker Rate: With respect to the Class SB-II Certificates and
any Distribution Date, a per annum rate equal to two (2) multiplied by the
weighted average of the Pass-Through Rates for each REMIC III Group II Regular
Interest (other than REMIC III Regular Interest II-AA), with the rates on each
such REMIC III Regular Interest (other than REMIC III Regular Interest II-ZZ)
subject to a cap equal to the Pass-Through Rate for the Corresponding Class for
such REMIC III Regular Interest, and the rate on REMIC III Regular Interest
II-ZZ subject to a cap of zero, in each case for purposes of this calculation.
Group I Net WAC Cap Rate: With respect to any Distribution Date, a per
annum rate equal to the weighted average of the Net Mortgage Rates (or, if
applicable, the Modified Net Mortgage Rates) on the Group I Loans using the Net
Mortgage Rates in effect for the Monthly Payments due on such Mortgage Loans
during the related Due Period, weighted on the basis of the respective Stated
Principal Balances thereof for such Distribution Date, and in the case of the
Class A-I-1 Certificates, multiplied by a fraction equal to 30 divided by the
actual number of days in the related Interest Accrual Period.
Group II Net WAC Cap Rate: With respect to any Distribution Date, the
product of (i) a per annum rate equal to the weighted average of the Net
Mortgage Rates (or, if applicable, the Modified Net Mortgage Rates) on the Group
II Loans using the Net Mortgage Rates in effect for the Monthly Payments due on
such Mortgage Loans during the related Due Period, weighted on the basis of the
respective Stated Principal Balances thereof for such Distribution Date and (ii)
a fraction equal to 30 divided by the actual number of days in the related
Interest Accrual Period.
Group I Net WAC Cap Shortfall: With respect to the Class A-I-1, Class
A-I-3, Class A-I-4, Class A-I-5, Class M-I-1, Class M-I-2 or Class M-I-3
Certificates and any Distribution Date for which the Pass-Through Rate for such
Certificates is equal to the Group I Net WAC Cap Rate, the excess, if any, of
(x) Accrued Certificate Interest on that Class of Certificates calculated at a
rate equal to the rate determined in clause (i) of the definition of
Pass-Through Rate for such Class of Class A-I Certificates or Class M-I
Certificates over (y) Accrued Certificate Interest on such Class of Class A-I
Certificates or Class M-I Certificates for such Distribution Date calculated at
the Group I Net WAC Cap Rate.
Group I Net WAC Cap Shortfall Carry-Forward Amount: With respect to the
Class A-I-1, Class A-I-3, Class A-I-4, Class A-I-5, Class M-I-1, Class M-I-2 and
Class M-I-3 Certificates and each Distribution Date, the sum of (a) the
aggregate amount of Group I Net WAC Cap Shortfall for such Class on such
Distribution Date plus (b) any Group I Net WAC Cap 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 Group I Excess Cash Flow pursuant to Section 4.02(c)(xvi) or
Group II Excess Cash Flow pursuant to Section 4.02(d)(xiv), at a rate equal to
the related Pass-Through Rate.
26
Group I 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 Group I Loans is less than 10.00% of the
Group I Cut-off Date Balance.
Group II 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 Group II Loans is less than 10.00% of the
Group II Cut-off Date Balance.
Group I Overcollateralization Amount: With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated Principal Balance of the
Group I 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-I Certificates and Class M-I Certificates as of such date, before
taking into account distributions of principal to be made on that Distribution
Date.
Group II Overcollateralization Amount: With respect to any Distribution
Date, the excess, if any, of (a) the aggregate Stated Principal Balance of the
Group II Loans before giving effect to distributions of principal to be made on
such Distribution Date over (b) the Certificate Principal Balance of the Class
A-II Certificates and Class M-II Certificates as of such date, before taking
into account distributions of principal to be made on that Distribution Date.
Group I Overcollateralization Increase Amount: With respect to any
Distribution Date, an amount equal to the lesser of (i) the Group I Excess Cash
Flow for that Distribution Date available to make payments pursuant to Section
4.02(c)(viii) plus the Group II Excess Cash Flow for such Distribution Date
available to make payments pursuant to Section 4.02(d)(x), and (ii) the excess,
if any, of (x) the Group I Required Overcollateralization Amount for that
Distribution Date over (y) the Group I Overcollateralization Amount for that
Distribution Date.
Group II Overcollateralization Increase Amount: With respect to any
Distribution Date, an amount equal to the lesser of (i) the Group II Excess Cash
Flow for that Distribution Date available to make payments pursuant to Section
4.02(d)(ix) plus the Group I Excess Cash Flow for such Distribution Date
available to make payments pursuant to Section 4.02(c)(ix), and (ii) the excess,
if any, of (x) the Group II Required Overcollateralization Amount for that
Distribution Date over (y) the Group II Overcollateralization Amount for that
Distribution Date.
Group I Overcollateralization Reduction Amount: With respect to any
Distribution Date for which the Group I Excess Overcollateralization Amount is,
or would be, after taking into account all other distributions to be made on
that Distribution Date, greater than zero, an amount equal to the lesser of (i)
the Group I Excess Overcollateralization Amount for that Distribution Date and
(ii) the Group I Principal Remittance Amount for that Distribution Date.
27
Group II Overcollateralization Reduction Amount: With respect to any
Distribution Date for which the Group II Excess Overcollateralization Amount is,
or would be, after taking into account all other distributions to be made on
that Distribution Date, greater than zero, an amount equal to the lesser of (i)
the Group II Excess Overcollateralization Amount for that Distribution Date and
(ii) the Group II Principal Remittance Amount for that Distribution Date.
Group I Pool Stated Principal Balance: As to any date of determination,
the aggregate of the Stated Principal Balances of each Group I Loan that was an
Outstanding Mortgage Loan on the Due Date immediately preceding the Due Period
preceding such date of determination.
Group II Pool Stated Principal Balance: As to any date of determination,
the aggregate of the Stated Principal Balances of each Group II Loan that was an
Outstanding Mortgage Loan on the Due Date immediately preceding the Due Period
preceding such date of determination.
Group I Principal Distribution Amount: With respect to any Distribution
Date, the lesser of (a) the sum of (i) the excess of (x) the Group I Available
Distribution Amount over (y) the Group I Interest Distribution Amount and (ii)
any Group II Excess Cash Flow used to pay principal on the Group I Certificates
pursuant to Section 4.02(d)(viii) and (x) 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 that is a Group I Loan;
(ii) the Stated Principal Balance of any Group I 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, 4.07 or 4.08 and the amount of any shortfall deposited
in the Custodial Account in connection with the substitution of a
Deleted Mortgage Loan that is a Group I Loan pursuant to Section 2.03 or
2.04 during the related Prepayment Period;
(iii) the principal portion of all other unscheduled collections,
other than Subsequent Recoveries, on the Group I 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 Group I Loans pursuant to
Section 3.14;
(iv) the principal portion of any Realized Losses incurred (or
deemed to have been incurred) on any Group I Loans in the calendar month
preceding such Distribution Date to the extent covered by Group I Excess
Cash Flow or Group II Excess Cash Flow for such Distribution Date; and
(v) the amount of any Group I Overcollateralization Increase
Amount for such Distribution Date to the extent covered by Group I
Excess Cash Flow or Group II Excess Cash Flow;
minus
28
(vi) the amount of any related Group I Overcollateralization
Reduction Amount for such Distribution Date; and
(vii) the amount of any Capitalization Reimbursement Amount for
such Distribution Date relating to the Group I Loans.
Group II Principal Distribution Amount: With respect to any Distribution
Date, the lesser of (a) the sum of (i) the excess of (x) the Group II Available
Distribution Amount over (y) the Group II Interest Distribution Amount and (ii)
any Group I Excess Cash Flow used to pay principal on the Group II Certificates
pursuant to Section 4.02(c)(vii) and (ix) 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 that is a Group II Loan;
(ii) the Stated Principal Balance of any Group II 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, 4.07 or 4.08 and the amount of any shortfall deposited
in the Custodial Account in connection with the substitution of a
Deleted Mortgage Loan that is a Group II Loan pursuant to Section 2.03
or 2.04 during the related Prepayment Period;
(iii) the principal portion of all other unscheduled collections,
other than Subsequent Recoveries, on the Group II 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 Group II Loans pursuant to
Section 3.14;
(iv) the principal portion of any Realized Losses incurred (or
deemed to have been incurred) on any Group II Loans in the calendar
month preceding such Distribution Date to the extent covered by Group I
Excess Cash Flow or Group II Excess Cash Flow for such Distribution
Date; and
(v) the amount of any Group II Overcollateralization Increase
Amount for such Distribution Date to the extent covered by Group I
Excess Cash Flow or Group II Excess Cash Flow;
minus
(vi) the amount of any related Group II Overcollateralization
Reduction Amount for such Distribution Date; and
(vii) the amount of any Capitalization Reimbursement Amount for
such Distribution Date relating to the Group II Loans.
Group I Principal Remittance Amount: With respect to any Distribution
Date, the sum of the amounts described in clauses (i), (ii) and (iii) of the
definition of Group I Principal Distribution Amount for that Distribution Date.
29
Group II Principal Remittance Amount: With respect to any Distribution
Date, the sum of the amounts described in clauses (i), (ii) and (iii) of the
definition of Group II Principal Distribution Amount for that Distribution Date.
Group I Required Overcollateralization Amount: As of any Distribution
Date, (a) if such Distribution Date is prior to the Group I Stepdown Date, 0.35%
of the Group I Cut-off Date Balance, or (b) if such Distribution Date is on or
after the Group I Stepdown Date, the greater of (i) 0.70% of the then current
aggregate Stated Principal Balance of the Group I Loans as of the end of the
related Due Period and (ii) the related Overcollateralization Floor; provided,
however, that if a Group I Trigger Event is in effect, the Group I Required
Overcollateralization Amount shall be equal to the Group I Required
Overcollateralization Amount for the immediately preceding Distribution Date.
The Group I Required Overcollateralization Amount may be reduced from time to
time with notification to each of the Rating Agencies and without the consent of
the Certificateholders.
Group II Required Overcollateralization Amount: As of any Distribution
Date, (a) if such Distribution Date is prior to the Group II Stepdown Date,
0.95% of the Group II Cut-off Date Balance, or (b) if such Distribution Date is
on or after the Group II Stepdown Date, the greater of (i) 1.90% of the then
current aggregate Stated Principal Balance of the Group II Loans as of the end
of the related Due Period and (ii) the related Overcollateralization Floor;
provided, however, that if a Group II Trigger Event is in effect, the Group II
Required Overcollateralization Amount shall be equal to the Group II Required
Overcollateralization Amount for the immediately preceding Distribution Date.
The Group II Required Overcollateralization Amount may be reduced from time to
time with notification to each of the Rating Agencies and without the consent of
the Certificateholders.
Group I Senior Enhancement Percentage: For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class M-I-1, Class M-I-2 and Class M-I-3 Certificates
and (ii) the Group I Overcollateralization Amount, in each case prior to the
distribution of the Group I Principal Distribution Amount on such Distribution
Date, by (y) the aggregate Stated Principal Balance of the Group I Loans after
giving effect to distributions to be made on that Distribution Date.
Group II Senior Enhancement Percentage: For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class M-II-1, Class M-II-2, Class M-II-3 and Class
M-II-4 Certificates and (ii) the Group II Overcollateralization Amount, in each
case prior to the distribution of the Group II Principal Distribution Amount on
such Distribution Date, by (y) the aggregate Stated Principal Balance of the
Group II Loans after giving effect to distributions to be made on that
Distribution Date.
Group I Sixty-Plus Delinquency Percentage: With respect to any
Distribution Date, the fraction, expressed as a percentage, equal to (x) the
aggregate Stated Principal Balance of the Group I Loans that are 60 or more days
delinquent in payment of principal and interest for that Distribution Date,
including Group I 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 Group I Loans immediately preceding that Distribution Date.
30
Group II Sixty-Plus Delinquency Percentage: With respect to any
Distribution Date, the fraction, expressed as a percentage, equal to (x) the
aggregate Stated Principal Balance of the Group II Loans that are 60 or more
days delinquent in payment of principal and interest for that Distribution Date,
including Group II 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 Group II Loans immediately preceding that Distribution Date.
Group I Stepdown Date: The Distribution Date which is the later to occur
of (i) the Distribution Date occurring in November 2007 and (ii) the first
Distribution Date on which the Group I Senior Enhancement Percentage is equal to
or greater than 7.10%.
Group II Stepdown Date: The Distribution Date which is the later to
occur of (i) the Distribution Date occurring in November 2007 and (ii) the first
Distribution Date on which the Group II Senior Enhancement Percentage is equal
to or greater than 11.10%.
Group I Trigger Event: A Group I 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 Group I
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 50% of the Group I Senior Enhancement Percentage or (ii) the aggregate
amount of Realized Losses on the Group I Loans as a percentage of the Group I
Cut-off Date Balance exceeds the applicable amount set forth below:
November 2007 to October 2008......... 0.50% with respect to November 2007, plus an
additional 1/12th of 0.25% for each month
thereafter.
November 2008 and thereafter.......... 0.75%.
Group II Trigger Event: A Group II 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 Group I 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 40% of the Group II Senior Enhancement Percentage or
(ii) the aggregate amount of Realized Losses on the Group II Loans as a
percentage of the Group II Cut-off Date Balance exceeds the applicable amount
set forth below:
November 2007 to October 2008......... 0.50% with respect to November 2007, plus an
additional 1/12th of 0.25% for each month
thereafter.
November 2008 to October 2009......... 0.75% with respect to November 2008, plus an
additional 1/12th of 0.25% for each month
thereafter.
November 2009 and thereafter.......... 1.00%.
31
Group I Uncertificated Regular Interests: The REMIC I Regular Interest
and the REMIC III Group I Regular Interests.
Group II Uncertificated Regular Interests: The REMIC II Regular Interest
and the REMIC III Group II Regular Interests.
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 Cut-off 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-I Certificates
(other than the Class A-I-1 Certificates), Class M-I Certificates and Class SB
Certificates and any Distribution Date, the prior calendar month. With respect
to the Class A-I-1, Class A-II and Class M-II Certificates, (i) with respect to
the Distribution Date in November 2004, the period commencing on the Closing
Date and ending on the day preceding the Distribution Date in November 2004, and
(ii) with respect to any Distribution Date after the Distribution Date in
November 2004, 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.
Interim Certification: As defined in Section 2.02.
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.
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.
32
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.
Limited Repurchase Right Holder: RFC Asset Holdings II, Inc., or its
successor.
Liquidation Proceeds: Amounts (other than Insurance Proceeds) received
by the Master Servicer in connection with the taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or in
connection with the liquidation of a defaulted Loan through trustee's sale,
foreclosure sale or otherwise, other than REO Proceeds and Subsequent
Recoveries.
Loan Group: With respect to the Class A-I, Class M-I and Class SB-I
Certificates, the Group I Loans, and with respect to the Class A-II, Class M-II
and Class SB-II Certificates, the Group II Loans.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Appraised Value of the related Mortgaged Property.
Maturity Date: With respect to each Class of Certificates of regular
interest or Uncertificated Regular Interest issued by each of REMIC I, REMIC II,
REMIC III and REMIC IV, 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 September 25, 2034, which is the Distribution Date
following the last scheduled monthly payment of the Group I Loans and the Group
II Loans.
Maximum Group II Rate: With respect to the Class A-II Certificates and
Class M-II Certificates and any Interest Accrual Period, 14.000% per annum.
Maximum Mortgage Rate: As to any adjustable rate Mortgage Loan, the rate
indicated in Exhibit F-2 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.
33
Maximum Net Mortgage Rate: As to any Group II 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: As to any adjustable rate Mortgage Loan, the
greater of (i) the Note Margin and (ii) the rate indicated in Exhibit F-2 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 Net Mortgage Rate: As to any Mortgage Loan that is the subject
of a Servicing Modification, the Net Mortgage Rate, minus the rate per annum by
which the Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO
Property) and 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).
Monthly Strike Rate: With respect to each Yield Maintenance Agreement
and each Distribution Date, the rate set forth in Exhibit U attached hereto.
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 interest in real property securing a
Mortgage Note.
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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 F-1 and Exhibit F-2 (as amended from time to time to reflect the
addition of Qualified Substitute Mortgage Loans), which lists shall set forth at
a minimum the following information as to each Mortgage Loan:
(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, and if such Mortgage Loan is a
Balloon Loan, the amortization term thereof;
(iv) the Mortgage Rate as of the Cut-off Date ("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");
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(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: As 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 F-1 or Exhibit F-2 hereto, as
applicable, except in the case of the adjustable rate Mortgage Loans indicated
by an "X" on Exhibit F-1 or Exhibit F-2 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.
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
36
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: As to each adjustable rate Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note and indicated in Exhibit F-2
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.
Notice: As defined in Section 4.04.
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, REMIC II, REMIC III or REMIC IV as REMICs or compliance with the
REMIC Provisions must, unless otherwise specified, be an opinion of Independent
counsel.
Outstanding Mortgage Loan: As 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, 4.07 or 4.08.
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Overcollateralization Floor: As to Loan Group I, an amount equal to
0.35% of the aggregate Stated Principal Balance of the Group I Loans as of the
Cut-off Date. As to Loan Group II, an amount equal to 0.50% of the aggregate
Stated Principal Balance of the Group II Loans as of the Cut-off Date.
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: With respect to the Class A-I-1 Certificates and each
Interest Accrual Period a per annum rate equal to the lesser of (i) LIBOR plus
the Class A-I-1 Margin and (ii) the Group I Net WAC Cap Rate. With respect to
the Class A-I-2 Certificates and each Interest Accrual Period, a per annum rate
equal to 4.3768%. With respect to the Class A-I-3 Certificates and each Interest
Accrual Period, a per annum rate equal to the lesser of (i) 4.9708% per annum
and (ii) the Group I Net WAC Cap Rate. With respect to the Class A-I-4
Certificates and each Interest Accrual Period, a per annum rate equal to the
lesser of (i) 5.6510% per annum and (ii) the Group I Net WAC Cap Rate; provided
that, on or after the second Distribution Date after the first possible Group I
Optional Termination Date, the applicable per annum rate for purposes of clause
(i) shall be equal to 6.1510%. With respect to the Class A-I-5 Certificates and
each Interest Accrual Period, a per annum rate equal to the lesser of (i)
4.8902% per annum and (ii) the Group I Net WAC Cap Rate. With respect to the
Class M-I-1 Certificates and each Interest Accrual Period, a per annum rate
equal to the lesser of (i) 5.4474% per annum and (ii) the Group I Net WAC Cap
Rate. With respect to the Class M-I-2 Certificates and each Interest Accrual
Period, a per annum rate equal to the lesser of (i) 5.6009% per annum and (ii)
the Group I Net WAC Cap Rate. With respect to the Class M-I-3 Certificates and
each Interest Accrual Period, a per annum rate equal to the lesser of (i)
5.7700% per annum and (ii) the Group I Net WAC Cap Rate. For federal income tax
purposes, however, the amount determined under each clause (ii) in this
paragraph shall be the equivalent of the Group I Net WAC Cap Rate, expressed as
the weighted average of the Uncertificated REMIC III Pass-Through Rates for the
REMIC III Group I Regular Interests, weighted on the basis of the respective
Uncertificated Principal Balances thereof for such Distribution Date, and
multiplied, in the case of the Class A-I-1 Certificates, by a fraction, the
numerator of which is 30, and the denominator of which is the actual number of
days in the related Interest Accrual Period.
With respect to the Class A-II Certificates and each Interest Accrual
Period, a per annum rate equal to the least of (i) LIBOR plus the related Class
A-II Margin, (ii) the Maximum Group II Rate and (iii) the Group II Net WAC Cap
Rate. With respect to the Class M-II Certificates and each Interest Accrual
Period, a per annum rate equal to the least of (i) LIBOR plus the related Class
M-II Margin, (ii) the Maximum Group II Rate and (iii) the Group II Net WAC Cap
Rate. For federal income tax purposes, however, the amount determined under each
clause (iii) in this paragraph shall be the equivalent of the foregoing,
expressed as the weighted average of the Uncertificated REMIC III Pass-Through
Rates for REMIC III Group II Regular Interests, weighted on the basis of the
Uncertificated Principal Balance thereof for such Distribution Date, multiplied
by a fraction, the numerator of which is 30, and the denominator of which is the
actual number of days in the related Interest Accrual Period.
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With respect to the Class SB-I Certificates, a per annum rate equal to
the percentage equivalent of a fraction, (x) the numerator of which is the sum,
for each REMIC III Group I Regular Interest, of the excess of the Uncertificated
Pass-Through Rate for such REMIC III Group I Regular Interest over the Group I
Marker Rate, applied to a notional amount equal to the Uncertificated Principal
Balance of such REMIC III Group I Regular Interest and (y) the denominator of
which is the aggregate Uncertificated Principal Balance of the REMIC III Group I
Regular Interests. With respect to the Class SB-II Certificates, a per annum
rate equal to the percentage equivalent of a fraction, (x) the numerator of
which is the sum, for each REMIC III Group II Regular Interest, of the excess of
the Uncertificated Pass-Through Rate for such REMIC III Group II Regular
Interest over the Group II Marker Rate, applied to a notional amount equal to
the Uncertificated Principal Balance of such REMIC III Group II Regular Interest
and (y) the denominator of which is the aggregate Uncertificated Principal
Balance of the REMIC III Group II Regular Interests.
Paying Agent: JPMorgan Chase Bank or any successor Paying Agent
appointed by the Trustee.
Percentage Interest: With respect to any Class A Certificate or Class M
Certificate, the undivided percentage ownership interest in the related Class
evidenced by such Certificate, which percentage ownership interest shall be
equal to the Initial Certificate Principal Balance thereof divided by the
aggregate Initial Certificate Principal Balance of all of the Certificates of
the same Class. The Percentage Interest with respect to a Class SB Certificate
or Class R Certificate shall be stated on the face thereof.
Periodic Cap: With respect to each adjustable rate Mortgage Loan, the
periodic rate cap that limits the increase or the decrease of the related
Mortgage Rate on any Adjustment Date pursuant to the terms of the related
Mortgage Note.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof,
provided that the unsecured obligations of the party agreeing to
repurchase such obligations are at the time rated by each Rating Agency
in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution or
trust company; provided that the debt obligations of such depository
institution or trust company at the date of acquisition thereof have
been rated by each Rating Agency in its highest short-term rating
available; and, provided further that, if the original maturity of such
short-term obligations of a domestic branch of a foreign depository
institution or trust company shall exceed 30 days, the short-term rating
of such institution shall be A-1+ in the case of Standard & Poor's if
Standard & Poor's is a Rating Agency;
39
(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; and
(vi) other obligations or securities that are acceptable to each Rating
Agency as a Permitted Investment hereunder and will not reduce the
rating assigned to any Class of Certificates by such Rating Agency below
the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency, as evidenced
in writing; provided, however, 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 Fitch and Aaa in the case of Moody's, and for purposes of this
Agreement, any references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall mean
the following: A-1 in the case of Standard & Poor's, P-1 in the case of
Moody's and F-1 in the case of Fitch; provided, however, that any
Permitted Investment that is a short-term debt obligation rated A-1 by
Standard & Poor's must satisfy the following additional conditions: (i)
the total amount of debt from A-1 issuers must be limited to the
investment of monthly principal and interest payments (assuming fully
amortizing collateral); (ii) the total amount of A-1 investments must
not represent more than 20% of the aggregate outstanding Certificate
Principal Balance of the Certificates and each investment must not
mature beyond 30 days; (iii) investments in A-1 rated securities are not
eligible for the Reserve Fund; (iv) the terms of the debt must have a
predetermined fixed dollar amount of principal due at maturity that
cannot vary; and (v) 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.
Permitted Transferee: Any Transferee of a Class R Certificate, other
than a Disqualified Organization or Non-United States Person.
40
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pledged Amount: With respect to any Pledged Asset Loan, the amount of
money remitted to Combined Collateral LLC, at the direction of or for the
benefit of the related Mortgagor.
Pledged Asset Loan: Any Mortgage Loan supported by Pledged Assets or
such other collateral, other than the related Mortgaged Property, set forth in
the Series Supplement.
Pledged Assets: With respect to any Mortgage Loan, all money,
securities, security entitlements, accounts, general intangibles, instruments,
documents, certificates of deposit, commodities contracts and other investment
property and other property of whatever kind or description pledged by Combined
Collateral LLC as security in respect of any Realized Losses in connection with
such Mortgage Loan up to the Pledged Amount for such Mortgage Loan, and any
related collateral, or such other collateral as may be set forth in the Series
Supplement.
Prepayment Assumption: With respect to the Class A Certificates and
Class M Certificates, the prepayment assumption to be used for determining the
accrual of original issue discount and premium and market discount on such
Certificates for federal income tax purposes, which assumes a prepayment rate of
20% CPR with respect to the Group I Loans, and 25% CPR with respect to the Group
II Loans.
Prepayment Interest Shortfall: As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the 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: As to any Distribution Date, the calendar month
preceding the month of distribution.
Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance as indicated on Exhibit F-1 and Exhibit F-2 with the exception of
either code "23" or "96" under the column "MI CO CODE".
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.
41
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
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, 4.07 or 4.08, an amount equal to the sum of (i) (a) if such Mortgage
Loan (or REO Property) is being purchased pursuant to Sections 2.02, 2.03, 2.04
or 4.07 of this Agreement, 100% of the Stated Principal Balance thereof plus the
principal portion of any related unreimbursed Advances or (b) if such Mortgage
Loan (or REO Property) is being purchased pursuant to Section 4.08 of this
Agreement, the greater of (1) 100% of the Stated Principal Balance thereof plus
the principal portion of any related unreimbursed Advances on such Mortgage Loan
(or REO Property) and (2) the fair market value thereof plus the principal
portion of any related unreimbursed Advances and (ii) unpaid accrued interest at
the Adjusted Mortgage Rate (or Modified Net Mortgage Rate plus the rate per
annum at which the Servicing Fee is calculated in the case of a Modified
Mortgage Loan) (or at the Net Mortgage Rate (or Modified Net Mortgage Rate in
the case of a Modified Mortgage Loan)) in the case of a purchase made by the
Master Servicer) on the Stated Principal Balance thereof to, 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
42
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: Standard & Poor's and Moody's. If any agency or a
successor is no longer in existence, "Rating Agency" shall be such statistical
credit rating agency, or other comparable Person, designated by the Depositor,
notice of which designation shall be given to the Trustee and the Master
Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO Property) as
to which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan (or
REO Property) as of the date of Cash Liquidation or REO Disposition, plus (ii)
interest (and REO Imputed Interest, if any) at the Net Mortgage Rate (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. 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
43
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.
Record Date: With respect to each Distribution Date and each Class of
Certificates (other than the Class A-I-1, Class A-II and Class M-II Certificates
which are Book-Entry Certificates), the close of business on the last Business
Day of the month next preceding the month in which the related Distribution Date
occurs. With respect to each Distribution Date and the Class A-I-1, Class A-II
and Class M-II Certificates which are Book-Entry Certificates, the close of
business on the Business Day prior to such Distribution Date.
Regular Certificates: The Class A, Class M and Class SB Certificates.
Regular Interest: Any one of the regular interests in the Trust Fund.
Relief Act: The Servicemembers Civil Relief Act.
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.
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
Reserve Fund and the Yield Maintenance Agreements, which are not assets 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 Group I Loans and the related Mortgage Files;
(ii) all payments on and collections in respect of the Group I Loans due after
the Cut-off Date (other than Monthly Payments due in October 2004) as shall be
on deposit in the Custodial Account or in the Certificate Account and identified
as belonging to the Trust Fund including the proceeds from the liquidation of
Pledged Assets for any Pledged Asset Loan; (iii) property which secured a Group
I 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 Policy pertaining to the Group I Loans, if any and the
Pledged Assets with respect to each Pledged Asset Loan; and (v) all proceeds of
clauses (i) through (iv) above.
REMIC I Regular Interest: REMIC I Regular Interest A.
REMIC I Regular Interest A: A regular interest in REMIC I that is held
as an asset of REMIC III, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
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REMIC II: The segregated pool of assets subject hereto (exclusive of the
Reserve Fund and the Yield Maintenance Agreements, which are not assets 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 Group II Loans and the related Mortgage Files;
(ii) all payments on and collections in respect of the Group II Loans due after
the Cut-off Date (other than Monthly Payments due in October 2004) as shall be
on deposit in the Custodial Account or in the Certificate Account and identified
as belonging to the Trust Fund including the proceeds from the liquidation of
Pledged Assets for any Pledged Asset Loan; (iii) property which secured a Group
II 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 Policy pertaining to the Group II Loans, if any and the
Pledged Assets with respect to each Pledged Asset Loan; and (v) all proceeds of
clauses (i) through (iv) above.
REMIC II Regular Interest: REMIC II Regular Interest X.
XXXXX XX Regular Interest B: A regular interest in REMIC II that is held
as an asset of REMIC III, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of the
REMIC I Regular Interest and the REMIC II Regular Interest.
REMIC III Group I Diverted Excess Spread: 1% of the Group I Diverted
Excess Spread.
REMIC III Group II Diverted Excess Spread: 1% of the Group II Diverted
Excess Spread.
REMIC III Group 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 III Group I Regular Interests then
outstanding and (ii) the Uncertificated Pass-Through Rate for REMIC III Regular
Interest I-AA minus the Group I Marker Rate, divided by (b) 12.
REMIC III Group II 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 III Group II Regular Interests
then outstanding and (ii) the Uncertificated Pass-Through Rate for REMIC III
Regular Interest II-AA minus the Group II Marker Rate divided by (b) 12.
REMIC III Group I Overcollateralized Amount: With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC III Group I Regular Interests minus (ii) the aggregate Uncertificated
Principal Balances of the REMIC III Group I Regular Interests (other than REMIC
III Group I Regular Interests I-AA and I-ZZ), in each case as of such date of
determination.
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REMIC III Group II Overcollateralized Amount: With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Principal Balances of
the REMIC III Group II Regular Interests minus (ii) the aggregate Uncertificated
Principal Balances of the REMIC III Group II Regular Interests (other than REMIC
III Group II Regular Interests II-A and II-ZZ), in each case as of such date of
determination.
REMIC III Group 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 Group I 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 III Regular Interests X-X-0, X-X-0, X-X-0, X-X-0,
X-X-0, M-I-1, M-I-2 and M-I-3 and the denominator of which is the sum of the
Uncertificated Principal Balances of REMIC III Regular Interests X-X-0, X-X-0,
X-X-0, X-X-0, X-X-0, M-I-1, M-I-2, M-I-3 and I-ZZ.
REMIC III Group II 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 Group II Loans then outstanding and (ii) 1 minus a
fraction, the numerator of which is two times the Uncertificated Principal
Balances of REMIC III Regular Interests A-II, M-II-1, M-II-2, M-II-3, M-II-4 and
the denominator of which is the sum of the Uncertificated Principal Balances of
REMIC III Regular Interests A-II, M-II-1, M-II-2, M-II-3, M-II-4 and II-ZZ.
REMIC III Group I Regular Interests: REMIC III Regular Interests I-AA,
X-X-0, X-X-0, X-X-0, X-X-0, X-X-0, M-I-1, M-I-2, M-I-3 and I-ZZ.
REMIC III Group II Regular Interests: REMIC III Regular Interests II-AA,
A-II, M-II-1, M-II-2, M-II-3, M-II-4 and II-ZZ.
REMIC III Group I Required Overcollateralization Amount: 1% of the Group
I Required Overcollateralization Amount.
REMIC III Group II Required Overcollateralized Amount: 1% of the Group
II Required Overcollateralization Amount.
REMIC III Regular Interests: REMIC III Regular Interest I-AA, REMIC III
Regular Interest A-I-1, REMIC III Regular Interest A-I-2, REMIC III Regular
Interest A-I-3, REMIC III Regular Interest A-I-4, REMIC III Regular Interest
A-I-5, REMIC III Regular Interest M-I-1, REMIC III Regular Interest M-I-2, REMIC
III Regular Interest M-I-3, REMIC III Regular Interest I-ZZ, REMIC III Regular
Interest II-AA, REMIC III Regular Interest A-II, REMIC III Regular Interest
M-II-1, REMIC III Regular Interest M-II-2, REMIC III Regular Interest M-II-3,
REMIC III Regular Interest M-II-4 and REMIC III Regular Interest II-ZZ.
REMIC III Regular Interest I-AA: A regular interest in REMIC III that is
held as an asset of REMIC IV, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
46
REMIC III Regular Interest A-I-1: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest A-I-2: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest A-I-3: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest A-I-4: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest A-I-5: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest M-I-1: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest M-I-2: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest M-I-3: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest I-ZZ: A regular interest in REMIC III that is
held as an asset of REMIC IV, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest II-AA: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
47
REMIC III Regular Interest A-II: A regular interest in REMIC III that is
held as an asset of REMIC IV, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest M-II-1: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest M-II-2: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest M-II-3: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest M-II-4: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest II-ZZ: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest I-ZZ Maximum Interest Deferral Amount: With
respect to any Distribution Date, the sum of (a) the excess of (i)
Uncertificated Accrued Interest calculated with the REMIC III Regular Interest
I-ZZ Uncertificated Pass-Through Rate and an Uncertificated Principal Balance
equal to the excess of (x) the Uncertificated Principal Balance of REMIC III
Regular Interest I-ZZ over (y) the REMIC III Group I Overcollateralized Amount,
in each case for such Distribution Date, over (ii) the sum of Uncertificated
Accrued Interest on REMIC III Regular Interest A-I-1 through REMIC III Regular
Interest A-I-5 and REMIC III Regular Interest M-I-1 through REMIC III Regular
Interest M-I-3, with the rate on each such REMIC III Group I Regular Interest
subject to a cap equal to the Pass-Through Rate for the Corresponding Class for
the purpose of this calculation and (b) the REMIC III Group II Diverted Excess
Spread.
REMIC III Regular Interest II-ZZ Maximum Interest Deferral Amount: With
respect to any Distribution Date, the sum of (a) the excess of (i)
Uncertificated Accrued Interest calculated with the REMIC III Regular Interest
II-ZZ Uncertificated Pass-Through Rate and an Uncertificated Principal Balance
equal to the excess of (x) the Uncertificated Principal Balance of REMIC III
Regular Interest II-ZZ over (y) the REMIC III Group II Overcollateralized
48
Amount, in each case for such Distribution Date, over (ii) the sum of
Uncertificated Accrued Interest on REMIC III Regular Interests A-II and REMIC
III Regular Interest M-II-1 through REMIC III Regular Interest M-II-4, with the
rate on each such REMIC III Group II Regular Interest subject to a cap equal to
the Pass-Through Rate for the Corresponding Class for the purpose of this
calculation and (b) the REMIC III Group I Diverted Excess Spread.
REMIC IV: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of the
REMIC III Regular Interests.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
temporary and final regulations (or, to the extent not inconsistent with such
temporary or final regulations, proposed regulations) and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
REO Acquisition: The acquisition by the Master Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.14.
REO Disposition: As to any REO Property, a determination by the Master
Servicer that it has received 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: As 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 Trustee 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.
49
Repurchase Event: As defined in the Assignment Agreement.
Request for Release: A request for release, the forms of which are
attached as Exhibit G hereto, or an electronic request in a form acceptable to
the Custodian.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement, the Program Guide or the related Subservicing Agreement in respect of
such Mortgage Loan.
Reserve Fund: An "outside reserve fund" within the meaning of Treasury
regulation Section 1.860G-2(h), which is not an asset of any REMIC, ownership of
which is evidenced by the Class SB-I Certificates and Class SB-II Certificates,
as applicable, and which is established and maintained pursuant to Section 4.09.
Reserve Fund Residual Right: The right to distributions from the Reserve
Fund as described in Section 4.09 hereof.
Residential Funding: Residential Funding Corporation, a Delaware
corporation, in its capacity as seller of the Mortgage Loans to the Depositor
and any successor thereto.
Responsible Officer: When used with respect to the Trustee, any officer
of the Institutional Trust Services/Structured Finance Services 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 with direct
responsibility for the administration of this Agreement.
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, 3.12(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 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).
50
Servicing Fee Rate: 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.
Servicing Modification: Any reduction of the interest rate on or the
outstanding principal balance of a Mortgage Loan, any extension of the final
maturity date of a Mortgage Loan, and any increase to the Stated Principal
Balance of a Mortgage Loan by adding to the Stated Principal Balance unpaid
principal and interest and other amounts owing under the Mortgage Loan, in each
case pursuant to a modification of a Mortgage Loan that is in default or, 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.
Standard & Poor's: Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, or its successor 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 plus (b) any amount by which the Stated Principal
Balance of the Mortgage Loan has been increased pursuant to a Servicing
Modification, minus (ii) the sum of (a) the aggregate of 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 allocated to Certificateholders
with respect thereto for any previous Distribution Date.
Subordination: The provisions described in Section 4.05 relating to the
allocation of Realized Losses.
Subordination Percentage: With respect to the Class A-I Certificates,
92.90%; with respect to the Class M-I-1 Certificates, 96.10%; with respect to
the Class M-I-2 Certificates, 98.30%; with respect to the Class M-I-3
Certificates, 99.30%; with respect to the Class A-II Certificates, 88.90%; with
respect to the Class M-II-1 Certificates, 93.10%; with respect to the Class
M-II-2 Certificates, 96.10%; with respect to the Class M-II-3 Certificates,
97.60%; and with respect to the Class M-II-4 Certificates, 98.10%.
51
Subsequent Recoveries: As of any Distribution Date, amounts received by
the Master Servicer (net of any related expenses permitted to be reimbursed
pursuant to Section 3.10) or surplus amounts held by the Master Servicer to
cover estimated expenses (including, but not limited to, recoveries in respect
of the representations and warranties made by the related Seller pursuant to the
applicable Seller's Agreement and assigned to the Trustee pursuant to Section
2.04) specifically related to a Mortgage Loan that was the subject of a Cash
Liquidation or an REO Disposition prior to the related Prepayment Period that
resulted in a Realized Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement and who generally satisfied the requirements set forth in
the Program Guide in respect of the qualification of a Subservicer as of the
date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and
interest on a Mortgage Loan which is advanced by the related Subservicer (net of
its Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in
accordance with Section 3.08.
Subservicing Agreement: The written contract between the Master Servicer
and any Subservicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02, generally in the form of the servicer
contract referred to or contained in the Program Guide or in such other form as
has been approved by the Master Servicer and the Depositor. With respect to any
Pledged Asset Loan subserviced by GMAC Mortgage Corporation, the Addendum and
Assignment Agreement, dated as of November 24, 1998, between the Master Servicer
and GMAC Mortgage Corporation, as such agreement may be amended from time to
time.
Subservicing Fee: As to any Mortgage Loan, the fee payable monthly to
the related Subservicer (or, in the case of a Nonsubserviced Mortgage Loan, to
the Master Servicer) in respect of subservicing and other compensation that
accrues 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".
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 REMIC I, REMIC II, REMIC III and REMIC IV due to their
classification as REMICs 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.
52
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest
in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
Trust Fund: Collectively, the assets of REMIC I, REMIC II, REMIC III and
REMIC IV, the Reserve Fund, the Reserve Fund Deposit and the Yield Maintenance
Agreements.
Uniform Single Attestation Program for Mortgage Bankers: The Uniform
Single Attestation Program for Mortgage Bankers, as published by the Mortgage
Bankers Association of America and effective with respect to fiscal periods
ending on or after December 15, 1995.
Uncertificated Accrued Interest: With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's interest at the related
Uncertificated Pass-Through Rate for such Distribution Date, accrued on the
Uncertificated Principal Balance immediately prior to such Distribution Date.
Uncertificated Accrued Interest for the REMIC I Regular Interest, the REMIC II
Regular Interest and the REMIC III 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 III
Group I Regular Interests for any Distribution Date, any Prepayment Interest
Shortfalls (to the extent not covered by Eligible Master Servicing Compensation)
relating to the Group I Loans for any Distribution Date shall be allocated
first, to Uncertificated Accrued Interest payable to REMIC III Regular Interest
I-AA and REMIC III Regular Interest I-ZZ up to an aggregate amount equal to the
REMIC III Group 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) relating to the Group I Loans
for any Distribution Date shall be allocated among the REMIC III Group I Regular
Interests, pro rata based on, and to the extent of, Uncertificated Accrued
Interest, as calculated without application of this sentence. For purposes of
calculating the amount of Uncertificated Accrued Interest for the REMIC III
Group II Regular Interests for any Distribution Date, any Prepayment Interest
Shortfalls (to the extent not covered by Eligible Master Servicing Compensation)
relating to the Group II Loans for any Distribution Date shall be allocated
first, to Uncertificated Accrued Interest payable to REMIC III Regular Interest
II-AA and REMIC III Regular Interest II-ZZ up to an aggregate amount equal to
the REMIC III Group II 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) relating to
the Group II Loans for any Distribution Date shall be allocated among the REMIC
III Group II Regular Interests, pro rata based on, and to the extent of,
Uncertificated Accrued Interest, as calculated without application of this
sentence.
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Uncertificated Pass-Through Rate: The Uncertificated REMIC I
Pass-Through Rate, Uncertificated REMIC II Pass-Through Rate or Uncertificated
REMIC III Pass-Through Rate.
Uncertificated Principal Balance: The principal amount of any
Uncertificated Regular Interest outstanding as of any date of determination. The
Uncertificated Principal Balance of each Uncertificated Regular Interest shall
be reduced by all distributions of principal made on such Uncertificated Regular
Interest, as applicable, on such Distribution Date and, if and to the extent
necessary and appropriate, shall be further reduced in such Distribution Date by
Realized Losses. The Uncertificated Principal Balance of each Uncertificated
Regular Interest shall never be less than zero.
Uncertificated Regular Interests: The REMIC I Regular Interest, REMIC II
Regular Interest and REMIC III Regular Interests.
Uncertificated REMIC I Pass-Through Rate: With respect to any
Distribution Date, a per annum rate equal to the Group I Net WAC Cap Rate.
Uncertificated REMIC II Pass-Through Rate: With respect to any
Distribution Date, a per annum rate equal to the rate specified in clause (i) of
the definition of Group II Net WAC Cap Rate.
Uncertificated REMIC III Pass-Through Rate: With respect to any
Distribution Date, (x) with respect to the REMIC III Group I Regular Interests,
a per annum rate equal to the weighted average of the Uncertificated REMIC I
Pass-Through Rate for REMIC I Regular Interest A and (y) with respect to the
REMIC III Group II Regular Interests, a per annum rate equal to the weighted
average of the Uncertificated REMIC II Pass-Through Rate for REMIC I Regular
Interest B.
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.
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Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. 97.00% of all of the Voting
Rights shall be allocated among Holders of the Class A Certificates and the
Class M Certificates, in proportion to the outstanding Certificate Principal
Balances of their respective Certificates; 1% and 1% of all of the Voting Rights
shall be allocated among the Holders of the Class SB-I and Class SB-II
Certificates, respectively; 0.25%, 0.25%, 0.25% and 0.25% of all of the Voting
Rights shall be allocated among the Holders of the Class R-I, Class R-II, Class
R-III and Class R-IV Certificates, respectively; in each case to be allocated
among the Certificates of such Class in accordance with their respective
Percentage Interest.
Yield Maintenance Agreements: The three Yield Maintenance Agreements,
each dated as of the Closing Date between the Yield Maintenance Agreement
Provider and the Trustee.
Yield Maintenance Agreement Notional Balance: As to each Yield
Maintenance Agreement and each Distribution Date, the lesser of (x) the
Certificate Principal Balance of the related Class of Certificates immediately
prior to such Distribution Date and (y) the amount set forth on Exhibit T hereto
for such Distribution Date.
Yield Maintenance Agreement Payment: With respect to each Yield
Maintenance Agreement and any Distribution Date, the amount equal to the
interest accrued during the Interest Accrual Period at a per annum rate equal to
the excess of (i) the lesser of (x) One-Month LIBOR and (y) 9.330% in the case
of the Yield Maintenance Agreement related to the Class A-I-1 Certificates,
9.150% in the case of the Yield Maintenance Agreement related to the Class A-II
Certificates and 8.350% in the case of the Yield Maintenance Agreement related
to the Class M-II Certificates, over (ii) the related Monthly Strike Rate.
Yield Maintenance Agreement Provider: Bear Xxxxxxx Financial Products Inc.,
or its successor in interest.
Yield Maintenance Agreement Purchase Price: $1,145,000.00, to be deposited
by the Depositor in the Reserve Fund in order for the Trustee to purchase the
Yield Maintenance Agreements pursuant to Section 4.09(a) hereof.
Section 1.02. Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on the
Class A-I-1, Class A-II and Class M-II Certificates for any Interest Accrual
Period will be determined on each LIBOR Rate Adjustment Date. On each LIBOR Rate
Adjustment Date, 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 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
55
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-I-1, Class A-II and Class M-II Certificates then outstanding. The
Trustee will request the principal London office of each of the reference banks
to provide a quotation of its rate. If at least two such quotations are
provided, the rate will be the arithmetic mean of the quotations rounded up to
the next multiple of 1/16%. If on such date fewer than two quotations are
provided as requested, the rate will be the arithmetic mean of the rates quoted
by one or more major banks in New York City, selected by the Trustee after
consultation with the Master Servicer, as of 11:00 a.m., New York City time, on
such date for loans in U.S. Dollars to leading European banks for a period of
one month in amounts approximately equal to the aggregate Certificate Principal
Balance of the Class A-I-1, Class A-II and Class M-II Certificates then
outstanding. If no such quotations can be obtained, the rate will be LIBOR for
the prior Distribution Date; provided however, if, under the priorities
described above, LIBOR for a Distribution Date would be based on LIBOR for the
previous Distribution Date for the third consecutive Distribution Date, the
Trustee shall select an alternative comparable index (over which the Trustee has
no control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment Date and
the Trustee's subsequent calculation of the Pass-Through Rate applicable to the
Class A-I-1, Class A-II and Class M-II Certificates for the relevant Interest
Accrual Period, in the absence of manifest error, will be final and binding.
Promptly following each LIBOR Rate Adjustment Date the Trustee shall supply the
Master Servicer with the results of its determination of LIBOR on such date.
Furthermore, the Trustee will supply to any Certificateholder so calling the
Trustee at 0-000-000-0000 and requesting the Pass-Through Rate on the Class
A-I-1, Class A-II and Class M-II Certificates for the current and the
immediately preceding Interest Accrual Period.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The 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 received on or with respect to the Mortgage Loans after the Cut-off
Date (other than payments of principal and interest due on the Mortgage Loans in
the month of October 2004); (ii) the Reserve Fund Deposit; (iii) the Yield
Maintenance Agreement Purchase Price and (iv) all proceeds of the foregoing. In
addition, on the Closing Date, the Trustee is hereby directed to enter into the
Yield Maintenance Agreements on behalf of the Trust Fund with the Yield
Maintenance Agreement Provider.
The Depositor, the Master Servicer and the Trustee agree that it is not
intended that any mortgage loan be included in the Trust that is either (i) a
"High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003 or (ii) a "High-Cost Home Loan" as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004.
(b) In connection with such assignment, and contemporaneously with the
delivery of this Agreement, except as set forth in Section 2.01(c)
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 and language indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan, with evidence of recording 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;
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(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) 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 Trustee and 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 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.
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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 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) Residential Funding hereby assigns to the Trustee its security interest in
and to any Pledged Assets, its right to receive amounts due or to become due in
respect of any Pledged Assets pursuant to the related Subservicing Agreement.
With respect to any Pledged Asset Loan, Residential Funding shall cause to be
filed in the appropriate recording office a UCC-3 statement giving notice of the
assignment of the related security interest to the Trust Fund and shall
thereafter cause the timely filing of all necessary continuation statements with
regard to such financing statements.
(e) 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 and the Yield Maintenance
Agreement Purchase Price for the benefit of the Holders of the Class A
Certificates and Class M Certificates. It is intended that the conveyance by the
Depositor to the Trustee of the Yield Maintenance Agreement Purchase Price be
construed as partial consideration for the Class A Certificates and Class M
Certificates. 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 or the Yield Maintenance Agreements 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) (i) 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 and (ii) the Yield Maintenance
Agreement Purchase Price, (B) all amounts payable pursuant to the Mortgage Loans
or the Yield Maintenance Agreements in accordance with the terms thereof and (C)
any and all general intangibles 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
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Trustee, the Custodian or any other agent of the Trustee of Mortgage Notes or
such other items of property as constitute instruments, money, negotiable
documents 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, financial intermediaries, bailees or agents (as applicable)
of the Trustee for the purpose of perfecting such security interest under
applicable law.
(f) The Depositor agrees that the sale of each Pledged Asset Loan pursuant to
this Agreement will also constitute the assignment, sale, setting-over, transfer
and conveyance to the Trustee, without recourse (but subject to the Depositor's
covenants, representations and warranties specifically provided herein), of all
of the Depositor's obligations and all of the Depositor's right, title and
interest in, to and under, whether now existing or hereafter acquired as owner
of the Mortgage Loan with respect to all money, securities, security
entitlements, accounts, general intangibles, instruments, documents,
certificates of deposit, commodities contracts, and other investment property
and other property of whatever kind or description consisting of, arising from
or related to (i) the Assigned Contracts, (ii) all rights, powers and remedies
of the Depositor as owner of such Mortgage Loan under or in connection with the
Assigned Contracts, whether arising under the terms of such Assigned Contracts,
by statute, at law or in equity, or otherwise arising out of any default by the
Mortgagor under or in connection with the Assigned Contracts, including all
rights to exercise any election or option or to make any decision or
determination or to give or receive any notice, consent, approval or waiver
thereunder, (iii) all security interests in and lien of the Depositor as owner
of such Mortgage Loan in the Pledged Amounts and all money, securities, security
entitlements, accounts, general intangibles, instruments, documents,
certificates of deposit, commodities contracts, and other investment property
and other property of whatever kind or description and all cash and non-cash
proceeds of the sale, exchange, or redemption of, and all stock or conversion
rights, rights to subscribe, liquidation dividends or preferences, stock
dividends, rights to interest, dividends, earnings, income, rents, issues,
profits, interest payments or other distributions of cash or other property that
is credited to the Custodial Account, (iv) all documents, books and records
concerning the foregoing (including all computer programs, tapes, disks and
related items containing any such information) and (v) all insurance proceeds
(including proceeds from the Federal Deposit Insurance Corporation or the
Securities Investor Protection Corporation or any other insurance company) of
any of the foregoing or replacements thereof or substitutions therefor, proceeds
of proceeds and the conversion, voluntary or involuntary, of any thereof. The
foregoing transfer, sale, assignment and conveyance does not constitute and is
not intended to result in the creation, or an assumption by the Trustee, of any
obligation of the Depositor, or any other person in connection with the Pledged
Assets or under any agreement or instrument relating thereto, including any
obligation to the Mortgagor, other than as owner of the Mortgage Loan.
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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 acknowledgment 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, and the rights of Residential
Funding with respect to any Pledged Assets assigned to the Trustee pursuant to
Section 2.01, in trust for the use and benefit of all present and future
Certificateholders. The Trustee or Custodian (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(c)
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, the Trustee
shall promptly so 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. If such omission or defect
materially and adversely affects the interests in the related Mortgage Loan of
the Certificateholders, the Master Servicer shall promptly notify the related
Subservicer of such omission or defect and request that such Subservicer correct
or cure such omission or defect within 60 days from the date the Master Servicer
was notified of such omission or defect and, if such Subservicer does not
correct or cure such omission or defect within such period, that such
Subservicer 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
61
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 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 Subservicer or its designee, as
the case may be, any Mortgage Loan released pursuant hereto and thereafter such
Mortgage Loan shall not be part of the Trust Fund. In furtherance of the
foregoing, if the Subservicer or Residential Funding that repurchases the
Mortgage Loan is not a member of MERS and the Mortgage is registered on the
MERS(R) System, the Master Servicer, at its own expense and without any right of
reimbursement, shall cause MERS to execute and deliver an assignment of the
Mortgage in recordable form to transfer the Mortgage from MERS to such
Subservicer or Residential Funding and shall cause such Mortgage to be removed
from registration on the MERS(R) System in accordance with MERS' rules and
regulations. It is understood and agreed that the obligation of the Subservicer,
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;
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(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 will comply in all material respects in the
performance of this Agreement with all reasonable rules and requirements
of each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement furnished in
writing or report delivered to the 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.
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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
omission or defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure or
repurchase must occur within 90 days from the date such breach was discovered.
The obligation of the Master Servicer to cure such breach or to so purchase such
Mortgage Loan shall constitute the sole remedy in respect of a breach of a
representation and warranty set forth in this Section 2.03(a) available to the
Certificateholders or the Trustee on behalf of the Certificateholders.
(b) 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 F-1 and Exhibit F-2 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
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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 (x) of Section 4 thereof,
then the Master Servicer shall request that Residential Funding pay to the Trust
Fund, concurrently with and in addition to the remedies provided in the
preceding sentence, an amount equal to any liability, penalty or expense that
was actually incurred and paid out of or on behalf of the Trust Fund, and that
directly resulted from such breach, or if incurred and paid by the Trust Fund
thereafter, concurrently with such payment. In the event that Residential
Funding elects to substitute a Qualified Substitute Mortgage Loan or Loans for a
Deleted Mortgage Loan pursuant to this Section 2.04, Residential Funding shall
deliver to the Trustee for the benefit of the Certificateholders with respect to
such Qualified Substitute Mortgage Loan or Loans, the original Mortgage Note,
the Mortgage, an Assignment of the Mortgage in recordable form, and such other
documents and agreements as are required by Section 2.01, with the Mortgage Note
endorsed as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
shall not be part of the Trust Fund and will be retained by the Master Servicer
and remitted by the Master Servicer to Residential Funding on the next
succeeding Distribution Date. For the month of substitution, distributions to
the Certificateholders will include the Monthly Payment due on a Deleted
Mortgage Loan for such month and thereafter Residential Funding shall be
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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 will
determine the amount (if any) by which the aggregate principal balance of all
such Qualified Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans
(in each case after application of the principal portion of the Monthly Payments
due in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). Residential Funding shall
deposit the amount of such shortfall into the Custodial Account on the day of
substitution, without any reimbursement therefor. Residential Funding shall give
notice in writing to the Trustee of such event, which notice shall be
accompanied by an Officers' Certificate as to the calculation of such shortfall
and 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 REMIC I, REMIC II, REMIC
III or REMIC IV 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 in the case of Residential Funding to
substitute for) such Mortgage Loan as to which such a breach has occurred and is
continuing and to make any additional payments required under the Assignment
Agreement in connection with a breach of the representation and warranty in
clause (x) of Section 4 thereof shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on behalf of the
Certificateholders. If the Master Servicer is Residential Funding, then the
Trustee shall also have the right to give the notification and require the
purchase or substitution provided for in the second preceding paragraph in the
event of such a breach of a representation or warranty made by Residential
Funding in the Assignment Agreement. In connection with the purchase of or
substitution for any such Mortgage Loan by Residential Funding, the Trustee
shall assign to Residential Funding all of the right, title and interest in
respect of the Assignment Agreement applicable to such Mortgage Loan.
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Section 2.05. Execution and Authentication of Certificates; Conveyance of
Uncertificated 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, 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 Interest and the REMIC II Regular Interest for the benefit
of the holders of the REMIC III Regular Interests and the Class R-III
Certificates. The Trustee acknowledges receipt of the REMIC I Regular Interest
and the REMIC II Regular Interest (which are uncertificated) and declares that
it holds and will hold the same in trust for the exclusive use and benefit of
the holders of the REMIC III Regular Interests and the Class R-III Certificates.
The interests evidenced by the Class R-III Certificates, together with the REMIC
III Regular Interests, constitute the entire beneficial ownership interest in
REMIC III.
(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 III Regular Interests for the benefit of the holders of the Regular
Certificates and the Class R-IV Certificates. The Trustee acknowledges receipt
of the REMIC III Regular Interests (which are uncertificated) and declares that
it holds and will hold the same in trust for the exclusive use and benefit of
the holders of the Regular Certificates and the Class R-IV Certificates. The
interests evidenced by the Class R-IV Certificates, together with the Regular
Certificates, constitute the entire beneficial ownership interest in REMIC IV.
(d) In exchange for the REMIC III Regular Interests and, concurrently with the
assignment to the Trustee thereof, pursuant to the written request of the
Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Regular
Certificates in authorized denominations evidencing (together with the Class
R-IV Certificates) the entire beneficial ownership interest in REMIC IV.
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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 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 from the Trust Fund.
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 of REMIC I, REMIC II,
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REMIC III or REMIC IV to fail to qualify as a REMIC under the Code. The Trustee
shall furnish the Master Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Master Servicer to service and
administer the Mortgage Loans. The Trustee shall not be liable for any action
taken by the Master Servicer or any Subservicer pursuant to such powers of
attorney. In servicing and administering any Nonsubserviced Mortgage Loan, the
Master Servicer shall, to the extent not inconsistent with this Agreement,
comply with the Program Guide as if it were the originator of such Mortgage Loan
and had retained the servicing rights and obligations in respect thereof. In
connection with servicing and administering the Mortgage Loans, the Master
Servicer and any Affiliate of the Master Servicer (i) may perform services such
as appraisals and brokerage services that are 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.
(b) All costs incurred by the Master Servicer or by Subservicers in effecting
the timely payment of taxes and assessments on the properties subject to the
Mortgage Loans shall not, for the purpose of calculating monthly distributions
to the Certificateholders, be added to the amount owing under the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loan so permit,
and such costs shall be recoverable to the extent permitted by Section
3.10(a)(ii).
(c) The Master Servicer may enter into one or more agreements in connection with
the offering of pass-through certificates evidencing interests in one or more of
the Certificates providing for the payment by the Master Servicer of amounts
received by the Master Servicer as servicing compensation hereunder and required
to cover certain Prepayment Interest Shortfalls on the Mortgage Loans, which
payment obligation will thereafter be an obligation of the Master Servicer
hereunder.
Section 3.02. Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' 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
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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.
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
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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, 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.
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(b) The Master Servicer shall, upon request of the Trustee but at the expense of
the Master Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement and the Mortgage Loans then being
serviced and an accounting of amounts collected and held by it and otherwise use
its best efforts to effect the orderly and efficient transfer of each
Subservicing Agreement to the assuming party.
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to
Custodial Account.
(a) The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage
Loans, and shall, to the extent such procedures shall be consistent with
this Agreement and the terms and provisions of any related Primary
Insurance Policy, follow such collection procedures as it would employ
in its good faith business judgment and which are normal and usual in
its general mortgage servicing activities. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the
Due Date for payments due on a Mortgage Loan in accordance with the
Program Guide, provided, however, that the Master Servicer shall first
determine that any such waiver or extension will not impair the coverage
of any related Primary Insurance Policy or materially adversely affect
the lien of the related Mortgage. Notwithstanding anything in this
Section to the contrary, the Master Servicer 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
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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 purpose. In connection with any
Curtailment of a Mortgage Loan, the Master Servicer, to the extent not
inconsistent with the terms of the Mortgage Note and local law and
practice, may permit the Mortgage Loan to be re-amortized such that the
Monthly Payment is recalculated as an amount that will fully amortize
the remaining Stated Principal Amount 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 principal and interest on the Mortgage Loans
due on or before the Cut-off Date):
(i) All payments on account of principal, including Principal Prepayments
made by Mortgagors on the Mortgage Loans and the principal component of
any Subservicer Advance or of any REO Proceeds received in connection
with an REO Property for which an REO Disposition has occurred;
(ii) All payments on account of interest at the Adjusted Mortgage Rate on the
Mortgage Loans, including 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 4.08 and all amounts required to be deposited in
connection with the substitution of a Qualified Substitute Mortgage Loan
pursuant to Section 2.03 or 2.04;
(v) Any amounts required to be deposited pursuant to Section 3.07(c) and any
payments or collections received consisting of prepayment charges; and
(vi) Any amounts received by the Master Servicer in respect of Pledged Assets
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The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments on the Mortgage Loans which are not part of the Trust
Fund (consisting of payments in respect of principal and interest on the
Mortgage Loans due on or before the Cut-off Date) and payments or collections
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, 4.07 and 4.08 received in any calendar month, the Master Servicer may
elect to treat such amounts as included in the related Group I or Group II
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 consisting of late charges or assumption fees, or payments or
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collections received consisting 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
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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, 3.08, 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
4.08) 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;
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(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, 4.08 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.
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(b) Since, in connection with withdrawals pursuant to clauses (ii), (iii),
(v) and (vi), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Master
Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal
from the Custodial Account pursuant to such clauses.
(c) The Master Servicer shall be entitled to reimburse itself or the related
Subservicer for any advance made in respect of a Mortgage Loan that the
Master Servicer determines to be a Nonrecoverable Advance by withdrawal
from the Custodial Account of amounts on deposit therein attributable to
the Mortgage Loans on any Certificate Account Deposit Date succeeding
the date of such determination. Such right of reimbursement in respect
of a Nonrecoverable Advance relating to an Advance pursuant to Section
4.04 on any such Certificate Account Deposit Date shall be limited to an
amount not exceeding the portion of such advance previously paid to
Certificateholders (and not theretofore reimbursed to the Master
Servicer or the related Subservicer).
Section 3.11. Maintenance of 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.
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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 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.
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(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 of REMIC I, REMIC II, REMIC III or REMIC IV 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
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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 of REMIC I, REMIC II, REMIC III or
REMIC IV 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 day would be imposed on any of REMIC I, REMIC II, REMIC III or REMIC IV
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 M, 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
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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
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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.
For so long as the Master Servicer is the Master Servicer under the
Credit Support Pledge Agreement, the Master Servicer shall perform its
obligations under the Credit Support Pledge Agreement in accordance with such
Agreement and in a manner that is in the best interests of the
Certificateholders. Further, the Master Servicer shall use its best reasonable
efforts to realize upon any Pledged Assets for such of the Pledged Asset Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07; provided that the Master Servicer shall not, on behalf of the
Trustee, obtain title to any such Pledged Assets as a result of or in lieu of
the disposition thereof or otherwise; and provided further that (i) the Master
Servicer shall not proceed with respect to such Pledged Assets in any manner
that would impair the ability to recover against the related Mortgaged Property,
and (ii) the Master Servicer shall proceed with any REO Acquisition in a manner
that preserves the ability to apply the proceeds of such Pledged Assets against
amounts owed under the defaulted Mortgage Loan. Any proceeds realized from such
Pledged Assets (other than amounts to be released to the Mortgagor or the
related guarantor in accordance with procedures that the Master Servicer would
follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note and to the terms and
conditions of any security agreement, guarantee agreement, mortgage or other
agreement governing the disposition of the proceeds of such Pledged Assets)
shall be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 3.10. Any other payment received by the Master Servicer in respect of
such Pledged Assets shall be deposited in the Custodial Account subject to
withdrawal pursuant to Section 3.10.
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(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 of REMIC I, REMIC
II, REMIC III or REMIC IV 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 of REMIC I,
REMIC II, REMIC III or REMIC IV to fail to qualify as a REMIC (for federal (or
any applicable State or local) income tax purposes) at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such REO Property (subject to any conditions contained in such Opinion of
Counsel). The Master Servicer shall be entitled to be reimbursed from the
Custodial Account for any costs incurred in obtaining such Opinion of Counsel,
as provided in Section 3.10. Notwithstanding any other provision of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or (ii) subject REMIC I, REMIC II, REMIC III or
REMIC IV 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
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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) (provided that if any such
Class of Certificates to which such Realized Loss was allocated is no longer
outstanding, such subsequent recovery shall be distributed to the persons who
were the Holders of such Class of Certificates when it was retired); 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.
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 will
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 G 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 G 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
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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.
(c) The Trustee or the Master Servicer on the Trustee's behalf shall execute and
deliver to the Master Servicer, if necessary, any court pleadings, requests for
trustee's sale or other documents necessary to the foreclosure or trustee's sale
in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity. Together
with such documents or pleadings (if signed by the Trustee), the Master Servicer
shall deliver to the Trustee a certificate of a Servicing Officer requesting
that such pleadings or documents be executed by the Trustee and certifying as to
the reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate any insurance coverage under
any Required Insurance Policy or invalidate or otherwise affect the lien of the
Mortgage, except for the termination of such a lien upon completion of the
foreclosure or trustee's sale.
Section 3.16. Servicing and Other Compensation; 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.
(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.
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(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). With respect to any
Distribution Date, Eligible Master Servicing Compensation derived from Loan
Group I shall be used on such Distribution Date (i) to cover any Prepayment
Interest Shortfalls on the Group I Loans and (ii) to cover any Prepayment
Interest Shortfalls on the Group II Loans, but only to the extent not covered by
Eligible Master Servicing Compensation derived from Loan Group II. With respect
to any Distribution Date, Eligible Master Servicing Compensation derived from
Loan Group II shall be used on such Distribution Date (i) to cover any
Prepayment Interest Shortfalls on the Group II Loans and (ii) to cover any
Prepayment Interest Shortfalls on the Group I Loans, but only to the extent not
covered by Eligible Master Servicing Compensation derived from Loan Group I.
Section 3.17. Reports to the Trustee and the Depositor.
Not later than fifteen days after each Distribution Date, 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.
The Master Servicer will deliver to the Depositor and the Trustee on or
before the earlier of (a) March 31 of each year, beginning with the first March
31 that occurs at least six months after the Cut-off Date, 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 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 (or, in each case, if such day is not a
Business Day, the immediately preceding Business Day), an Officers' Certificate
stating, as to each signer thereof, that (i) a review of the activities of the
Master Servicer during the preceding calendar year related to its servicing of
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mortgage loans and of its performance under the pooling and servicing
agreements, including this Agreement, has been made under such officers'
supervision, (ii) to the best of such officers' knowledge, based on such review,
the Master Servicer has complied in all material respects with the minimum
servicing standards set forth in the Uniform Single Attestation Program for
Mortgage Bankers and has fulfilled all of its material obligations in all
material respects throughout such year, or, if there has been material
noncompliance with such servicing standards or a default in the fulfillment in
all material respects of any such obligation relating to this Agreement, such
statement shall include a description of such noncompliance or specify each such
default, as the case may be, known to such officer and the nature and status
thereof and (iii) to the best of such officers' knowledge, each Subservicer has
complied in all material respects with the minimum servicing standards set forth
in the Uniform Single Attestation Program for Mortgage Bankers and has fulfilled
all of its material obligations under its Subservicing Agreement in all material
respects throughout such year, or if there has been material noncompliance with
such servicing standards or a material default in the fulfillment of such
obligations relating to this Agreement, specifying such statement shall include
a description of such noncompliance or specify each such default, as the case
may be, known to such officer and the nature and status thereof.
Section 3.19. Annual Independent Public Accountants' Servicing Report.
On or before the earlier of (a) March 31 of each year, beginning with
the first March 31 that occurs at least six months after the Cut-off Date, 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 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 (or, in each case,
if such day is not a Business Day, the immediately preceding Business Day), 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 a report to the Depositor and the Trustee stating its
opinion that, on the basis of an examination conducted by such firm
substantially in accordance with standards established by the American Institute
of Certified Public Accountants, the assertions made pursuant to Section 3.18
regarding compliance with the minimum servicing standards set forth in the
Uniform Single Attestation Program for Mortgage Bankers during the preceding
calendar year are fairly stated in all material respects, subject to such
exceptions and other qualifications that, in the opinion of such firm, such
accounting standards require it to report. 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.
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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. The Depositor shall
not 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 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
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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 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.
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(e) Reimbursement Amounts collected with respect to each Mortgage Loan shall
be allocated to outstanding unreimbursed Advances or Servicing Advances
(as the case may be) made with respect to that Mortgage Loan on a
"first-in, first out" ("FIFO") basis, subject to the qualifications set
forth below:
(i) Any successor Master Servicer to Residential Funding (a "Successor Master
Servicer") and the Advancing Person or Advance Facility Trustee shall be
required to apply all amounts available in accordance with this Section
3.21(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.
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(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 lesser of the then current or original ratings on such Certificates,
and an opinion of counsel as required in 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.
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(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.
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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
deposited in the Certificate Account pursuant to Section 3.12(a), (iii) any
amount required to be deposited in the Certificate Account pursuant to Section
3.16(e), Section 4.07 or Section 4.08, (iv) any amount to be deposited in the
Reserve Fund pursuant to Section 4.09, (v) any amount required to be paid
pursuant to Section 9.01, (vi) any prepayment charges on the Mortgage Loans
received during the related Prepayment Period and (vii) all other amounts
constituting the Group I or Group II 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 Yield
Maintenance Agreement Provider under the Yield Maintenance Agreements and inform
the Trustee 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 Group I Principal Distribution Amount
and Group II Principal Distribution Amount to the extent on deposit in the
Certificate Account for such date to the interests issued in respect of REMIC I,
REMIC II, REMIC III and REMIC IV as specified in this Section.
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(b) (1) On each Distribution Date, the following amounts, in the following order
of priority, to the extent of the Group I Available Distribution Amount, reduced
by distributions made to the Class R-I Certificates pursuant to Section 4.02(c),
shall be deemed distributed by REMIC I to REMIC III on account of REMIC I
Regular Interest A:
(i) Uncertificated Accrued Interest on REMIC I Regular Interest A
for such Distribution Date, plus any Uncertificated Accrued Interest
thereon remaining unpaid from any previous Distribution Date; and
(ii) to the extent of amounts remaining after the distributions
made pursuant to clause (i) above, to REMIC I Regular Interest A until
the Uncertificated Principal Balance of such REMIC I Regular Interest is
reduced to zero.
(2) On each Distribution Date, the following amounts, in the following
order of priority, to the extent of the Group II Available Distribution Amount,
reduced by distributions made to the Class R-II Certificates pursuant to Section
4.02(d), shall be deemed distributed by REMIC II to REMIC III on account of
REMIC II Regular Interest B:
(i) Uncertificated Accrued Interest on REMIC II Regular Interest
B for such Distribution Date, plus any Uncertificated Accrued Interest
thereon remaining unpaid from any previous Distribution Date; and
(ii) to the extent of amounts remaining after the distributions
made pursuant to clause (i) above, allocated as follows: to REMIC II
Regular Interest B until the Uncertificated Principal Balance of such
REMIC II Regular Interest is reduced to zero.
(3)(A) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC III to REMIC IV on
account of the REMIC III Group I Regular Interests:
(i) to the extent of the Group I Available Distribution Amount,
reduced by distributions made to the Class R-I Certificates and Class
R-III Certificates pursuant to Section 4.02(c), to the Holders of the
REMIC III Group 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 III Regular Interest I-ZZ shall be reduced when the
REMIC III Group I Overcollateralization Amount is less than the REMIC
III Group I Required Overcollateralization Amount, by the lesser of (x)
the amount of such difference and (y) the REMIC III Regular Interest
I-ZZ Maximum Interest Deferral Amount, and such amount will be payable
to the Holders of REMIC III Regular Interest A-I-1, REMIC III Regular
Interest A-I-2, REMIC III Regular Interest A-I-3, REMIC III Regular
Interest A-I-4, REMIC III Regular Interest A-I-5, REMIC III Regular
Interest M-I-1, REMIC III Regular Interest M-I-2 and REMIC III Regular
Interest M-I-3 in the same proportion as the Group I
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Overcollateralization Increase Amount is allocated to the Corresponding
Class for each such REMIC III Regular Interest, respectively, and the
Uncertificated Principal Balance of REMIC III Regular Interest I-ZZ
shall be increased by such amount; and
(ii) on each Distribution Date, to the Holders of REMIC III Group
I Regular Interests in an amount equal to the remainder of the Group I
Available Distribution Amount after the distributions made pursuant to
clause (i) above, allocated as follows (except as provided below): (A)
98.00% of such remainder to the Holders of the REMIC III Regular
Interest I-AA, until the Uncertificated Principal Balance of such REMIC
III Regular Interest is reduced to zero; (B) 2.00% of such remainder,
first, to the Holders of the REMIC III Regular Interests X-X-0, X-X-0,
X-X-0, X-X-0, X-X-0, M-I-1, M-I-2 and M-I-3, in an aggregate amount
equal to 1.00% of and in the same proportion as principal payments are
allocated to the Corresponding Class for each such REMIC III Regular
Interest, respectively, until the Uncertificated Principal Balance of
each such REMIC III Regular Interest is reduced to zero; and, second, to
the Holders of the REMIC III Regular Interest I-ZZ, until the
Uncertificated Principal Balance of such REMIC III Regular Interest is
reduced to zero; and (C) any remaining amounts to the Holders of the
Class R-III Certificates.
(B) On each Distribution Date, the following amounts, in the following
order of priority, shall be distributed by REMIC III to REMIC IV on account of
the REMIC III Group II Regular Interests:
(i) to the extent of the Group II Available Distribution Amount,
reduced by distributions made to the Class R-II Certificates and Class
R-III Certificates pursuant to Section 4.02(d), to the Holders of the
REMIC III Group II 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 III Regular Interest II-ZZ shall be reduced
when the REMIC III Group II Overcollateralization Amount is less than
the REMIC III Group II Required Overcollateralization Amount, by the
lesser of (x) the amount of such difference and (y) the REMIC III
Regular Interest II-ZZ Maximum Interest Deferral Amount, and such amount
will be payable to the Holders of REMIC III Regular Interest A-II, REMIC
III Regular Interest M-II-1, REMIC III Regular Interest M-II-2, REMIC
III Regular Interest M-II-3 and REMIC III Regular Interest M-II-4 in the
same proportion as the Group II Overcollateralization Increase Amount is
allocated to the Corresponding Class for each such REMIC III Regular
Interest, respectively, and the Uncertificated Principal Balance of
REMIC III Regular Interest II-ZZ shall be increased by such amount; and
(ii) on each Distribution Date, to the Holders of REMIC III Group
II Regular Interests in an amount equal to the remainder of the Group II
Available Distribution Amount after the distributions made pursuant to
clause (i) above, allocated as follows (except as provided below): (A)
98.00% of such remainder to the Holders of the REMIC III Regular
Interest II-AA, until the Uncertificated Principal Balance of such REMIC
III Regular Interest is reduced to zero; (B) 2.00% of such remainder,
first, to the Holders of the REMIC III Regular Interest A-II, M-II-1,
M-II-2, M-II-3 and M-II-4, in an aggregate amount equal to 1.00% of and
in the same proportion as principal payments are allocated to the
Corresponding Class for each such REMIC III Regular Interest,
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respectively, until the Uncertificated Principal Balance of each such
REMIC III Regular Interest is reduced to zero; and, second, to the
Holders of the REMIC III Regular Interest II-ZZ, until the
Uncertificated Principal Balance of such REMIC III Regular Interest is
reduced to zero; and (C) any remaining amounts to the Holders of the
Class R-III Certificates.
(4) 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) and (d).
(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(e) and (f)), in each case to the extent of the Group I Available
Distribution Amount on deposit in the Certificate Account (or, with
respect to clause (xxii) below, to the extent of prepayment charges on
deposit in the Certificate Account):
(i) to the Class A-I Certificateholders, the Class A-I Interest Distribution
Amount, with such amount allocated among the Class A-I
Certificateholders on a pro rata basis;
(ii) to the Class M-I-1 Certificateholders from the amount, if any, of the
Group I Available Distribution Amount remaining after the foregoing
distributions, the Class M-I-1 Interest Distribution Amount;
(iii) to the Class M-I-2 Certificateholders from the amount, if any, of the
Group I Available Distribution Amount remaining after the foregoing
distributions, the Class M-I-2 Interest Distribution Amount;
(iv) to the Class M-I-3 Certificateholders from the amount, if any, of the
Group I Available Distribution Amount remaining after the foregoing
distributions, the Class M-I-3 Interest Distribution Amount;
(v) to the Class A-I Certificateholders and Class M-I Certificateholders,
the Group I Principal Distribution Amount (other than clauses (iv) and
(v) of the definition thereof), in the order described in Section
4.02(e), until the Certificate Principal Balances of the Class A-I
Certificates and Class M-I Certificates have been reduced to zero;
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(vi) to the Class A-I Certificateholders and Class M-I Certificateholders,
from the Group I Excess Cash Flow, an amount equal to the principal
portion of Realized Losses on the Group I Loans during the immediately
preceding Due Period, which amount shall be included in the Group I
Principal Distribution Amount and paid in accordance with Section
4.02(e) hereof, until the Certificate Principal Balances of the Class
A-I Certificates and Class M-I Certificates have been reduced to zero;
(vii)to the Class A-II Certificateholders and Class M-II Certificateholders,
from the amount, if any, of the Group I Available Distribution Amount
remaining after the foregoing distributions, an amount equal to the
principal portion of Realized Losses on the Group II Loans during the
immediately preceding Due Period to the extent not covered by the Group II
Excess Cash Flow, which amount shall be included in the Group II Principal
Distribution Amount and paid in accordance with Section 4.02(f) hereof,
until the Certificate Principal Balances of the Class A-II Certificates and
Class M-II Certificates have been reduced to zero;
(viii) to the Class A-I Certificateholders and Class M-I Certificateholders,
from the amount, if any, of the Group I Available Distribution Amount
remaining after the foregoing distributions, the Group I
Overcollateralization Increase Amount for such Distribution Date, which
amount shall be included in the Group I Principal Distribution Amount
and paid in accordance with Section 4.02(e) hereof, until the
Certificate Principal Balances of such Class A-I Certificates and Class
M-I Certificates have been reduced to zero;
(ix) to the Class A-II Certificateholders and Class M-II Certificateholders,
from the amount, if any, of the Group I Available Distribution Amount
remaining after the foregoing distributions, the Group II
Overcollateralization Increase Amount for such Distribution Date to the
extent not covered by the Group II Excess Cash Flow for such Distribution
Date, which amount shall be included in the Group II Principal Distribution
Amount and paid in accordance with Section 4.02(f) hereof, until the
Certificate Principal Balances of such Class A-II Certificates and Class
M-II Certificates have been reduced to zero;
(x) to the Class A-I Certificateholders and Class M-I Certificateholders
from the amount, if any, of the Group I Available Distribution Amount
remaining after the foregoing distributions, the amount of any
Prepayment Interest Shortfalls allocated thereto with respect to the
Group I Loans, to the extent not covered by Eligible Master Servicing
Compensation on such Distribution Date;
(xi) to the Class A-II Certificateholders and Class M-II Certificateholders
from the amount, if any, of the Group I Available Distribution Amount
remaining after the foregoing distributions, the amount of any
Prepayment Interest Shortfalls allocated thereto with respect to the
Group II Loans, to the extent not covered by Eligible Master Servicing
Compensation and any Group II Excess Cash Flow on such Distribution
Date;
(xii) to the Class A-I Certificateholders and Class M-I Certificateholders
from the amount, if any, of the Group I Available Distribution Amount
remaining after the foregoing distributions, the amount of any
Prepayment Interest Shortfalls allocated thereto remaining unpaid from
prior Distribution Dates together with interest thereon;
98
(xiii) to the Class A-II Certificateholders and Class M-II Certificateholders
from the amount, if any, of the Group I Available Distribution Amount
remaining after the foregoing distributions, the amount of any
Prepayment Interest Shortfalls allocated thereto remaining unpaid from
prior Distribution Dates together with interest thereon, to the extent
not covered by any Group II Excess Cash Flow on such Distribution Date;
(xiv)to make payments, from amounts otherwise payable to the Class SB-I
Certificates (but in no event more than the Accrued Certificate Interest on
such Class), to the Reserve Fund to pay to the Class A-I-1, Class A-I-3,
Class A-I-4, Class A-I-5, Class M-I-1, Class M-I-2 and Class M-I-3
Certificates the amount of any Group I Net WAC Cap Shortfall Carry-Forward
Amount on such Classes of Certificates in the manner and order of priority
set forth in Section 4.09(a); to the extent not covered by any Yield
Maintenance Agreement Payments pursuant to Section 4.09(a) in the case of
the Class A-I-1 Certificates;
(xv) to make payments, from amounts otherwise payable to the Class SB-I
Certificates (but in no event more than the Accrued Certificate Interest on
such Class), to the Reserve Fund to pay to the Class A-II, Class M-II-1,
Class M-II-2, Class M-II-3 and Class M-II-4 Certificates the amount of any
Class A-II Basis Risk Shortfall Carry-Forward Amount or Class M-II Basis
Risk Shortfall Carry-Forward Amount, as applicable, on such Classes of
Certificates in the manner and order of priority set forth in Section
4.09(a) to the extent not covered by payments pursuant to Section
4.02(d)(xv) and to the extent not covered by any Yield Maintenance
Agreement Payments pursuant to Section 4.09(a);
(xvi) to the Class A-I Certificateholders and the Class M-I Certificateholders
on a pro rata basis, based on the amount of Relief Act Shortfalls
allocated thereto, from the amount, if any, of the Group I 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;
(xvii) to the Class A-II Certificateholders and the Class M-II
Certificateholders on a pro rata basis, based on the amount of Relief
Act Shortfalls allocated thereto, from the amount, if any, of the Group
I 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
distributions of the Group II Excess Cash Flow on such Distribution
Date;
(xviii) to the Class A-I Certificateholders and the Class M-I
Certificateholders, from the amount, if any, of the Group I 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-I Certificateholders on a pro rata basis, based on their
respective principal portion of any Realized Losses previously allocated
to those Certificates and remaining unreimbursed, and then sequentially,
to the Class M-I-1 Certificateholders, Class M-I-2 Certificateholders
and Class M-I-3 Certificatesholders, in that order;
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(xix)to the Class A-II Certificateholders and the Class M-II
Certificateholders, from the amount, if any, of the Group I Excess Cash
Flow remaining after the foregoing distributions, the principal portion of
any Realized Losses previously allocated to those Certificates and
remaining unreimbursed, to the extent not covered by distributions of the
Group II Excess Cash Flow on such Distribution Date, which amount shall be
allocated first, to the Class A-II Certificateholders on a pro rata basis,
based on their respective principal portion of any Realized Losses
previously allocated to those Certificates and remaining unreimbursed, and
then sequentially, to the Class M-II-1 Certificateholders, Class M-II-2
Certificateholders, Class M-II-3 Certificateholders and Class M-II-4
Certificateholders, in that order;
(xx) to the Class SB-II Certificateholders, from the amount, if any, of the
Group I Available Distribution Amount remaining after the foregoing
distributions, the amount of any Group I Overcollateralization Reduction
Amount for such Distribution Date to the extent of any Group II Diverted
Excess Spread;
(xxi) to the Class SB-I Certificates, from the amount, if any, of the Group I
Available Distribution Amount remaining after the foregoing
distributions, the sum of (A) Accrued Certificate Interest thereon and
(B) the amount of any Group I Overcollateralization Reduction Amount for
such Distribution Date (to the extent not distributed to the Class SB-II
Certificates);
(xxii) to the Class SB-I Certificates, the amount of any payments or
collections consisting of prepayment charges received on the Group I
Loans (which amounts shall not be included in the Group I Available
Distribution Amount) and, from the amount, if any, of the Group I
Available Distribution Amount remaining after the foregoing
distributions, for any Distribution Date after the Certificate Principal
Balance of each Class A-I Certificate and Class M-I Certificate has been
reduced to zero, an amount up to the Group I Overcollateralization
Amount; and
(xxiii) to the Class R-IV Certificateholders, the balance, if any, of the Group
I Available Distribution Amount.
(d) 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
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following order of priority, subject to the provisions of Section
4.02(e) and (f)), in each case to the extent of the Group II Available
Distribution Amount on deposit in the Certificate Account (or, with
respect to clause (xxiii) below, to the extent of prepayment charges on
deposit in the Certificate Account):
(i) to the Class A-II Certificateholders, the Class A-II Distribution
Amount;
(ii) to the Class M-II-1 Certificateholders from the amount, if any, of the
Group I Available Distribution Amount remaining after the foregoing
distributions, the Class M-II-1 Interest Distribution Amount;
(iii) to the Class M-II-2 Certificateholders from the amount, if any, of the
Group I Available Distribution Amount remaining after the foregoing
distributions, the Class M-II-2 Interest Distribution Amount;
(iv) to the Class M-II-3 Certificateholders from the amount, if any, of the
Group I Available Distribution Amount remaining after the foregoing
distributions, the Class M-II-3 Interest Distribution Amount;
(v) to the Class M-II-4 Certificateholders from the amount, if any, of the
Group I Available Distribution Amount remaining after the foregoing
distributions, the Class M-II-4 Interest Distribution Amount;
(vi) to the Class A-II Certificateholders and Class M-II Certificateholders,
the Group II Principal Distribution Amount (other than clauses (iv) and
(v) of the definition thereof), in the order described in Section
4.02(f) hereof, until the Certificate Principal Balances of the Class
A-II Certificates and Class M-II Certificates have been reduced to zero;
(vii) to the Class A-II Certificateholders and Class M-II Certificateholders,
from the Group II Excess Cash Flow an amount equal to the principal
portion of Realized Losses on the Group II Loans during the immediately
preceding Due Period, which amount shall be included in the Group II
Principal Distribution Amount and paid in accordance with Section
4.02(f) hereof, until the Certificate Principal Balances of the Class
A-II Certificates and Class M-II Certificates have been reduced to zero;
(viii) to the Class A-I Certificateholders and Class M-I Certificateholders,
from the amount, if any, of the Group II Available Distribution Amount
remaining after the foregoing distributions an amount equal to the
principal portion of Realized Losses on the Group I Loans during the
immediately preceding Due Period to the extent not covered by the Group
I Excess Cash Flow, which amount shall be included in the Group I
Principal Distribution Amount and paid in accordance with Section
4.02(e) hereof, until the Certificate Principal Balances of the Class
A-I Certificates and Class M-I Certificates have been reduced to zero;
(ix) to the Class A-II Certificateholders and Class M-II Certificateholders,
from the amount, if any, of the Group II Available Distribution Amount
remaining after the foregoing distributions, the Group II
Overcollateralization Increase Amount for such Distribution Date, which
amount shall be included in the Group II Principal Distribution Amount
and paid in accordance with Section 4.02(f) hereof, until the
Certificate Principal Balances of the Class A-II Certificates and Class
M-II Certificates have been reduced to zero;
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(x) to the Class A-I Certificateholders and Class M-I Certificateholders, from
the amount, if any, of the Group II Available Distribution Amount remaining
after the foregoing distributions, the Group I Overcollateralization
Increase Amount for such Distribution Date to the extent not covered by the
Group I Excess Cash Flow for such Distribution Date, which amount shall be
included in the Group I Principal Distribution Amount and paid in
accordance with Section 4.02(e) hereof, until the Certificate Principal
Balances of such Class A-I Certificates and Class M-I Certificates have
been reduced to zero;
(xi) to the Class A-II Certificateholders and Class M-II Certificateholders
from the amount, if any, of the Group II Available Distribution Amount
remaining after the foregoing distributions, the amount of any
Prepayment Interest Shortfalls allocated thereto with respect to the
Group II Loans, to the extent not covered by Eligible Master Servicing
Compensation on such Distribution Date;
(xii) to the Class A-I Certificateholders and Class M-I Certificateholders
from the amount, if any, of the Group II Available Distribution Amount
remaining after the foregoing distributions, the amount of any
Prepayment Interest Shortfalls allocated thereto with respect to the
Group I Loans, to the extent not covered by Eligible Master Servicing
Compensation and any Group I Excess Cash Flow on such Distribution Date;
(xiii) to the Class A-II Certificateholders and Class M-II Certificateholders
from the amount, if any, of the Group II Available Distribution Amount
remaining after the foregoing distributions, the amount of any
Prepayment Interest Shortfalls allocated thereto remaining unpaid from
prior Distribution Dates together with interest thereon;
(xiv) to the Class A-I Certificateholders and Class M-I Certificateholders
from the amount, if any, of the Group II Available Distribution Amount
remaining after the foregoing distributions, the amount of any
Prepayment Interest Shortfalls allocated thereto remaining unpaid from
prior Distribution Dates together with interest thereon, to the extent
not covered by any Group I Excess Cash Flow on such Distribution Date;
(xv) to make payments, from amounts otherwise payable to the Class SB-II
Certificates (but in no event more than the Accrued Certificate Interest on
such Class), to the Reserve Fund to pay to the Class A-II, Class M-II-1,
Class M-II-2, Class M-II-3 and Class M-II-4 Certificates, the amount of any
Class A-II Basis Risk Shortfall Carry-Forward Amount and Class M-II Basis
Risk Shortfall Carry-Forward Amount, as applicable, on such Classes of
Certificates in the manner and order of priority set forth in Section
4.09(a) to the extent not covered by any Yield Maintenance Agreement
Payments pursuant to Section 4.09(a);
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(xvi)to make payments, from amounts otherwise payable to the Class SB-II
Certificates (but in no event more than the Accrued Certificate Interest on
such Class), to the Reserve Fund to pay to the Class A-I-1, Class A-I-3,
Class A-I-4, Class A-I-5, Class M-I-1, Class M-I-2 and Class M-I-3
Certificates, the amount of any Group I Net WAC Cap Shortfall Carry-Forward
Amount on such Classes of Certificates in the manner and order of priority
set forth in Section 4.09(a) to the extent not covered by payments pursuant
to Section 4.02(c)(xiv), and to the extent not covered by any Yield
Maintenance Agreement Payments pursuant to Section 4.09(a) in the case of
the Class A-I-1 Certificates;
(xvii) to the Class A-II Certificateholders and the Class M-II
Certificateholders on a pro rata basis, based on the amount of Relief
Act Shortfalls allocated thereto, from the amount, if any, of the Group
II 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;
(xviii) to the Class A-I Certificateholders and the Class M-I Certificateholders
on a pro rata basis, based on the amount of Relief Act Shortfalls
allocated thereto, from the amount, if any, of the Group II 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 distributions of
the Group I Excess Cash Flow on such Distribution Date;
(xix)to the Class A-II Certificateholders and the Class M-II
Certificateholders, from the amount, if any, of the Group II 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-II Certificateholders on a pro rata basis, based on their respective
principal portion of any Realized Losses previously allocated to those
Certificates and remaining unreimbursed, and then sequentially, to the
Class M-II-1 Certificateholders, Class M-II-2 Certificateholders, Class
M-II-3 Certificateholders and Class M-II-4 Certificateholders, in that
order;
(xx) to the Class A-I Certificateholders and the Class M-I Certificateholders,
from the amount, if any, of the Group II Excess Cash Flow remaining after
the foregoing distributions, the principal portion of any Realized Losses
previously allocated to those Certificates and remaining unreimbursed, to
the extent not covered by distributions of the Group I Excess Cash Flow on
such Distribution Date, which amount shall be allocated first, to the Class
A-I Certificateholders on a pro rata basis, based on their respective
principal portion of any Realized Losses previously allocated to those
Certificates and remaining unreimbursed, and then sequentially, to the
Class M-I-1 Certificateholders, Class M-I-2 Certificateholders and Class
M-I-3 Certificateholders, in that order;
(xxi) to the Class SB-I Certificateholders, from the amount, if any, of the
Group II Available Distribution Amount remaining after the foregoing
distributions, the amount of any Group II Overcollateralization
Reduction Amount for such Distribution Date to the extent of any Group I
Diverted Excess Spread;
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(xxii) to the Class SB-II Certificates, from the amount, if any, of the Group
II Available Distribution Amount remaining after the foregoing
distributions, the sum of (A) Accrued Certificate Interest thereon and
(B) the amount of any Group II Overcollateralization Reduction Amount
for such Distribution Date (to the extent not distributed to the Class
SB-I Certificates);
(xxiii) to the Class SB-II Certificates, the amount of any payments or
collections consisting of prepayment charges received on the Group II
Loans (which amounts shall not be included in the Group II Available
Distribution Amount) and, from the amount, if any, of the Group II
Available Distribution Amount remaining after the foregoing
distributions, for any Distribution Date after the Certificate Principal
Balance of each Class A-II Certificate and Class M-II Certificate has
been reduced to zero, an amount up to the Group II Overcollateralization
Amount; and
(xxiv) to the Class R-IV Certificateholders, the balance, if any, of the Group
II Available Distribution Amount.
(e) On each Distribution Date, the Group I Principal Distribution Amount
will be paid as follows:
(i) the Class A-I Principal Distribution Amount shall be distributed in the
following manner and order of priority:
(1) first, to the to the Class A-I-5 Certificates, an amount
equal to the Class A-I-5 Lockout Distribution Amount for
that Distribution Date, until the Certificate Principal
Balance of the Class A-I-5 Certificates has been reduced
to zero; and
(2) second, to the Class A-I-1, Class A-I-2, Class A-I-3,
Class A-I-4 and Class A-I-5 Certificates, in that order,
until the Certificate Principal Balance of each such Class
has been reduced to zero;
(ii) the Class M-I-1 Principal Distribution Amount shall be distributed to
the Class M-I-1 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(iii) the Class M-I-2 Principal Distribution Amount shall be distributed to
the Class M-I-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and
(iv) the Class M-I-3 Principal Distribution Amount shall be distributed to
the Class M-I-3 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero.
(f) On each Distribution Date, the Group II Principal Distribution Amount
will be paid as follows:
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(i) the Class A-II Principal Distribution Amount shall be distributed to the
Class A-II Certificates, until the Certificate Principal Balance thereof
has been reduced to zero;
(ii) the Class M-II-1 Principal Distribution Amount shall be distributed to
the Class M-II-1 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(iii) the Class M-II-2 Principal Distribution Amount shall be distributed to
the Class M-II-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(iv) the Class M-II-3 Principal Distribution Amount shall be distributed to
the Class M-II-3 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;and
(v) the Class M-II-4 Principal Distribution Amount shall be distributed to
the Class M-II-4 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero.
(g) Notwithstanding the foregoing clauses (c) and (d), upon the reduction of
the Certificate Principal Balance of a Class of Class A Certificates or
Class M Certificates to zero, such Class of Certificates will not be
entitled to further distributions pursuant to Section 4.02, including,
without limitation, the payment of current and unreimbursed Prepayment
Interest Shortfalls pursuant to clauses (c)(x) through (c)(xiii) and
(d)(xi) through (d)(xiv), the Group I Net WAC Cap Shortfall
Carry-Forward Amount pursuant to clauses (c)(xiv) and (d)(xvi) and the
Class A-II Basis Risk Shortfall Carry-Forward Amount and Class M-II
Basis Risk Shortfall Carry-Forward Amount pursuant to clauses (c)(xv)
and (d)(xv).
(h) Any Prepayment Interest Shortfalls on the Group I Loans which are not
covered by Eligible Master Servicing Compensation as described in
Section 3.16 and Relief Act Shortfalls on the Group I Loans will be
allocated among the Class A-I Certificates and Class M-I Certificates
pro rata in accordance with the amount of Accrued Certificate Interest
payable from the related Loan Group on such Distribution Date absent
such shortfalls. Any such uncovered Prepayment Interest Shortfalls will
be paid solely pursuant to Section 4.02(c)(x) and (xii) and (d)(xii) and
(xiv), to the extent funds are available therefor. Any such Relief Act
Shortfalls will be paid solely pursuant to Section 4.02(c)(xvi) and
(d)(xviii), to the extent funds are available therefor. Any Prepayment
Interest Shortfalls on the Group II Loans which are not covered by
Eligible Master Servicing Compensation as described in Section 3.16 and
Relief Act Shortfalls on the Group II Loans will be allocated among the
Class A-II Certificates and Class M-II Certificates pro rata in
accordance with the amount of Accrued Certificate Interest payable from
the related Loan Group on such Distribution Date absent such shortfalls.
Any such uncovered Prepayment Interest Shortfalls will be paid solely
pursuant to Section 4.02(c)(xi) and (xiii) and (d)(xi) and (xiii), to
the extent funds are available therefor. Any such Relief Act Shortfalls
will be paid solely pursuant to Section 4.02(c)(xvii) and (d)(xvii), to
the extent funds are available therefor.
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(i) 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).
(j) 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.
(k) 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 withdrawn from the Certificate Account and
credited to a separate escrow account for the benefit of such
Certificateholders as provided in Section 9.01(d).
Section 4.03. Statements to Certificateholders; Statements to
Rating Agencies; Exchange Act Reporting.
(a) Concurrently with each distribution charged to the Certificate Account
and with respect to each Distribution Date the Master Servicer shall
forward to the Trustee and the Trustee shall forward by mail or
otherwise make available electronically on its website (which may be
obtained by any Certificateholder by telephoning the Trustee at (877)
722-1095) 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) (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;
(ii) the amount of such distribution to Holders of such Class of Certificates
allocable to interest;
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(iii) 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;
(iv) the amount of any Advance by the Master Servicer with respect to the
Group I Loans and Group II Loans pursuant to Section 4.04;
(v) the number of Group I Loans and Group II Loans and the Stated Principal
Balance after giving effect to the distribution of principal on such
Distribution Date;
(vi) the aggregate Certificate Principal Balance of each Class of the
Certificates, 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;
(vii)on the basis of the most recent reports furnished to it by Subservicers,
(a) the number and aggregate principal balances of Group I Loans and Group
II Loans that are Delinquent (1) one month, (2) two months and (3) three or
more months and the number and aggregate principal balance of Group I Loans
and Group II Loans that are in foreclosure, (b) the number and aggregate
principal balances of Group I Loans and Group II Loans that are Reportable
Modified Mortgage Loans that are Delinquent (1) one month, (2) two months
and (3) three or more months and the number and aggregate principal balance
of Group I Loans and Group II Loans 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 Group I Loans and Group II Loans that are Reportable Modified
Mortgage Loans, the number and aggregate Stated Principal Balance of Group
I Loans and Group II Loans that are Reportable Modified Mortgage Loans that
have been liquidated, the subject of pay-offs and that have been
repurchased by the Master Servicer or a Seller;
(viii) the number, aggregate principal balance and book value of any REO
Properties;
(ix) 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;
(x) the aggregate amount of Realized Losses for such Distribution Date and
the aggregate amount of Realized Losses on the Group I Loans and Group
II Loans incurred since the Cut-off Date;
(xi) the Pass-Through Rate on each Class of Certificates, the Group I Net WAC
Cap Rate and the Group II Net WAC Cap Rate;
(xii) the weighted average of the Maximum Net Mortgage Rates on the Group I
Loans and Group II Loans;
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(xiii) the Group I Net WAC Cap Shortfall, Group I Net WAC Cap Shortfall
Carry-Forward Amount, Class A-II Basis Risk Shortfall, Class A-II Basis
Risk Shortfall Carry-Forward Amount, Class M-II Basis Risk Shortfall,
Class M-II Basis Risk Shortfall Carry-Forward Amount and Group I and
Group II Prepayment Interest Shortfalls;
(xiv) the Group I and Group II Overcollateralization Amount and the Group I
and Group II Required Overcollateralization Amount following such
Distribution Date;
(xv) the number and aggregate principal balance of Group I Loans and Group II
Loans repurchased under Section 4.07 or Section 4.08;
(xvi) the aggregate amount of any recoveries on previously foreclosed loans
from Residential Funding due to a breach of representation or warranty;
(xvii) the weighted average remaining term to maturity of the Group I Loans and
Group II Loans after giving effect to the amounts distributed on such
Distribution Date;
(xviii) the weighted average Mortgage Rates of the Group I Loans and Group II
Loans after giving effect to the amounts distributed on such
Distribution Date;
(xix) the aggregate of any deposits to and withdrawals from the Reserve Fund
for such Distribution Date and the remaining amount on deposit in the
Reserve Fund after such deposits and withdrawals; and
(xx) the amount if any, to be paid by a Derivative Counterparty under a
Derivative Contract; and
(xxi) amounts paid under each Yield Maintenance Agreement.
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 the end of each calendar year, the
Master Servicer shall prepare, or cause to be prepared, and the Trustee shall
forward, or cause to be forwarded, to each Person who at any time during the
calendar year was the Holder of a Certificate, other than a Class R Certificate,
a statement containing the information set forth in clauses (i) and (ii) of
subsection (a) above aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Master Servicer and Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Master
Servicer and Trustee pursuant to any requirements of the Code.
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(c) As soon as reasonably practicable, upon the written request of any
Certificateholder, the Master Servicer 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.
(d) 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. 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 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. Any Form 10-K filed with the Commission in connection
with this clause (d) shall include 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
Rule 13a-14 and 15d-14 under the Exchange Act and any additional directives of
the Commission. In connection with the Form 10-K Certification, the Trustee
shall provide the Master Servicer with a back-up certification substantially in
the form attached hereto as Exhibit R-2. This Section 4.03(d) may be amended in
accordance with this Agreement without the consent of the Certificateholders.
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 will 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 Group I and Group II Available
Distribution Amounts, (ii) the amounts required to be withdrawn from the
Custodial Account and deposited into the Certificate Account and Insurance
Account on the immediately succeeding Certificate Account Deposit Date pursuant
to clause (iii) of Section 4.01(a), (iii) the amounts required to be withdrawn
from and deposited into the Reserve Fund pursuant to Section 4.09, (iv) the
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amount of Prepayment Interest Shortfalls, Group I Net WAC Cap Shortfalls, Class
A-II Basis Risk Shortfall, Class M-II Basis Risk Shortfall, Group I Net WAC Cap
Shortfall Carry-Forward Amounts, Class A-II Basis Risk Shortfall Carry-Forward
Amounts and Class M-II Basis Risk Shortfall Carry-Forward Amounts and (v) the
amount payable by the Derivative Counterparties to the Trustee under the
Derivative Contracts as provided in Section 4.11. 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 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, if any, 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 excess, if any, of interest
on the unpaid principal balance thereof (with each interest portion thereof
adjusted to a per annum rate equal to the Net Mortgage Rate), over any payments
of interest (with each interest portion thereof adjusted to a per annum rate
equal to the Net Mortgage Rate) received from the related Mortgagor as of the
close of business on the related Determination Date and allocable to the Due
Date during the related Due Period for each month until such Balloon Loan is
finally liquidated, (ii) withdraw from amounts on deposit in the Custodial
Account and deposit in the Certificate Account all or a portion of the Amount
Held for Future Distribution in discharge of any such Advance, or (iii) make
advances in the form of any combination of (i) and (ii) aggregating the amount
of such Advance. Any portion of the Amount Held for Future Distribution so used
shall be replaced by the Master Servicer by deposit in the Certificate Account
on or before 11:00 A.M. New York time on any future Certificate Account Deposit
Date to the extent that funds attributable to the Mortgage Loans that are
available in the Custodial Account for deposit in the Certificate Account on
such Certificate Account Deposit Date shall be less than payments to
Certificateholders required to be made on the following Distribution Date. The
Master Servicer shall be entitled to use any Advance made by a Subservicer as
described in Section 3.07(b) that has been deposited in the Custodial Account on
or before such Distribution Date as part of the Advance made by the Master
Servicer pursuant to this Section 4.04.The 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
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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 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.
(1) All Realized Losses on the Group I Loans shall be allocated as
follows:
first, to Group I Excess Cash Flow as provided in Section
4.02(c)(vi), to the extent of the Group I Excess Cash Flow for
such Distribution Date;
second, to the Group II Excess Cash Flow as provided in Section
4.02(d)(viii), to the extent of the Group II Excess Cash Flow for
such Distribution Date remaining after distributions pursuant to
Section 4.02(d)(vii);
third, in reduction of the Group I Overcollateralization Amount
until the earlier of : (1) such amount has been reduced to zero
or (2) the aggregate Certificate Principal Balance of the Class A
Certificates and Class M Certificates equals the aggregate Stated
Principal Balance of the Group I Loans and Group II Loans;
fourth, to the Class M-I-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
fifth, to the Class M-I-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
sixth, to the Class M-I-1 Certificates, until the Certificate
Principal thereof has been reduced to zero; and
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seventh, to the Class A-I Certificates, with such amount
allocated among each Class of Class A-I Certificates on a pro
rata basis, based on the outstanding Certificate Principal
Balance of each such Class prior to giving effect to
distributions to be made on that Distribution Date, until the
Certificate Principal Balance of each such Class has been reduced
to zero.
(2) All Realized Losses on the Group II Loans shall be allocated as follows:
first, to the Group II Excess Cash Flow as provided in Section
4.02(d)(vii), to the extent of the Group II Excess Cash Flow for
such Distribution Date;
second, to the Group I Excess Cash Flow as provided in Section
4.02(c)(vii), to the extent of the Group I Excess Cash Flow for
such Distribution Date remaining after distributions pursuant to
Section 4.02(c)(vi);
third, in reduction of the Group II Overcollateralization Amount,
meaning, that no additional Realized Losses will be allocated to
any Class of Certificates until the earliest of: (1) such amount
has been reduced to zero or (2) the aggregate Certificate
Principal Balance of the Class A Certificates and Class M
Certificates equals the aggregate Stated Principal Balance of the
Group I Loans and Group II Loans;
fourth, to the Class M-II-4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
fifth, to the Class M-II-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
sixth, to the Class M-II-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
seventh, to the Class M-II-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
eighth, to the Class A-II Certificates, until the Certificate
Principal Balance thereof has been reduced to zero.
(b) If a Loan Group is undercollateralized due to the application of Section
4.05(a)(1) third or (a)(2) third above and the aggregate Certificate
Principal Balance of the Class A Certificates and Class M Certificates
exceeds the aggregate Stated Principal Balance of the Mortgage Loans
after application of all payments to be made on such Distribution Date
pursuant to Section 4.02, the Certificate Principal Balance of the
Outstanding Class of Class A Certificates and Class M Certificates with
the lowest priority in that undercollateralized Loan Group will be
reduced to the extent necessary to make the aggregate Certificate
Principal Balance of the Class A Certificates and Class M Certificates
equal to the aggregate Stated Principal Balance of the Mortgage Loans.
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(c) Any allocation of the principal portion of Realized Losses (other than
Debt Service Reductions) to the Class A Certificates or Class M
Certificates shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated, which allocation shall be deemed to
have occurred on such Distribution Date; provided that no such reduction
shall reduce the Certificate Principal Balance of the Class A-I
Certificates or Class A-II Certificates below the aggregate Stated
Principal Balance of the Group I Loans or Group II 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) and (d).
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) and (d).
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) (i) All Realized Losses on the Group I Loans shall be allocated on each
Distribution Date to REMIC I Regular Interest A, until the
Uncertificated Balance of REMIC I Regular Interest A has been reduced to
zero. All Realized Losses on the Group II Loans shall be allocated on
each Distribution Date to REMIC II Regular Interest B, until the
Uncertificated Balance of REMIC II Regular Interest B has been reduced
to zero.
(ii) All Realized Losses on the Group I Loans shall be allocated on each
Distribution Date to the following REMIC III Group I Regular Interests in
the specified percentages, as follows: first, to Uncertificated Accrued
Interest payable to the REMIC III Group I Regular Interests I-AA and I-ZZ
up to an aggregate amount equal to the excess of (a) the REMIC III Group I
Interest Loss Allocation Amount over (b) Prepayment Interest Shortfalls (to
the extent not covered by Eligible Master Servicing Compensation) relating
to the Group I Loans for such Distribution Date, 98% and 2%, respectively;
second, to the Uncertificated Principal Balances of the REMIC III Group I
Regular Interests I-AA and I-ZZ up to an aggregate amount equal to the
REMIC III Group I Principal Loss Allocation Amount, 98% and 2%,
respectively; third, to the Uncertificated Principal Balances of REMIC III
Group I Regular Interests I-AA, M-I-3 and I-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Balance of REMIC III Group I Regular
Interest M-I-3 as been reduced to zero; fourth, to the Uncertificated
Principal Balances of REMIC III Group I Regular Interests I-AA, M-I-2 and
I-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of
REMIC III Group I Regular Interest M-I-2 has been reduced to zero; fifth,
to the Uncertificated Principal Balances of REMIC III Group I Regular
Interests I-AA, M-I-1, and I-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balance of REMIC III Group I Regular Interest M-I-1 has been
reduced to zero; and sixth, to the Uncertificated Principal Balances of
REMIC III Group I Regular Interests I-AA, 98%, X-X-0, X-X-0, X-X-0, X-X-0
and A-I-5, 1% pro rata, and I-ZZ, 1%, until the Uncertificated Balance of
each of REMIC III Group I Regular Interests X-X-0, X-X-0, X-X-0, X-X-0 and
A-I-5 have been reduced to zero.
(iii)All Realized Losses on the Group II Loans shall be allocated on each
Distribution Date to the following REMIC III Group II Regular Interests in
the specified percentages, as follows: first, to Uncertificated Accrued
Interest payable to the REMIC III Group II Regular Interests II-AA and
II-ZZ up to an aggregate amount equal to the excess of (a) the REMIC III
Group II Interest Loss Allocation Amount over (b) Prepayment Interest
Shortfalls (to the extent not covered by Eligible Master Servicing
Compensation) relating to the Group II Loans for such Distribution Date,
98% and 2%, respectively; second, to the Uncertificated Principal Balances
of the REMIC III Group II Regular Interests II-AA and II-ZZ up to an
aggregate amount equal to the REMIC III Group II Principal Loss Allocation
Amount, 98% and 2%, respectively; third, to the Uncertificated Principal
Balances of REMIC III Group II Regular Interests II-AA, M-II-4 and II-ZZ,
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98%, 1% and 1% until the Uncertificated Balance of REMIC III Group II
Regular Interest M-II-4 has been reduced to zero; fourth, to the
Uncertificated Principal Balances of REMIC III Group II Regular Interests
II-AA, M-II-3 and II-ZZ, 98%, 1% and 1% until the Uncertificated Balance of
REMIC III Group II Regular Interest M-II-3 has been reduced to zero; fifth,
to the Uncertificated Principal Balances of REMIC III Group II Regular
Interests II-AA, M-II-2 and II-ZZ, 98%, 1% and 1% until the Uncertificated
Balance of REMIC III Group II Regular Interest M-II-2 has been reduced to
zero; sixth, to the Uncertificated Principal Balances of REMIC III Group II
Regular Interests II-AA, M-II-1 and II-ZZ, 98%, 1% and 1% until the
Uncertificated Balance of REMIC III Group II Regular Interest M-II-1 has
been reduced to zero; and seventh, to the Uncertificated Principal Balances
of REMIC III Group II Regular Interests II-AA, 98%, A-II-1, A-II-2, A-II-3
and A-II-4, 1% pro rata, and II-ZZ, 1%, until the Uncertificated Balance of
each of REMIC III Group II Regular Interest A-II has been reduced to zero.
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 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.
As to any Mortgage Loan which is delinquent in payment by 90 days or
more, the Master Servicer may, at its option, purchase such Mortgage Loan from
the Trustee at the Purchase Price therefor. If at any time the Master Servicer
makes a payment to the Certificate Account covering the amount of the Purchase
Price for such a Mortgage Loan, and the Master Servicer provides to the Trustee
a certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Certificate Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the request of the Master
Servicer without recourse to the Master Servicer which shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Master Servicer will thereupon own such
Mortgage, and all such security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto.
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Section 4.08. Limited Mortgage Loan Repurchase Right.
The Limited Repurchase Right Holder will have the irrevocable option at
any time to purchase any of the Mortgage Loans from the Trustee at the Purchase
Price, up to a maximum of five Mortgage Loans. In the event that this option is
exercised as to any five Mortgage Loans in the aggregate, this option will
thereupon terminate. If at any time the Limited Repurchase Right Holder makes a
payment to the Certificate Account covering the amount of the Purchase Price for
such a Mortgage Loan, and the Limited Repurchase Right Holder provides to the
Trustee a certification signed by a Servicing Officer stating that the amount of
such payment has been deposited in the Certificate Account, then the Trustee
shall execute the assignment of such Mortgage Loan at the request of the Limited
Repurchase Right Holder without recourse to the Limited Repurchase Right Holder
which shall succeed to all the Trustee's right, title and interest in and to
such Mortgage Loan, and all security and documents relative thereto. Such
assignment shall be an assignment outright and not for security. The Limited
Repurchase Right Holder will thereupon own such Mortgage, and all such security
and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto. Any tax on "prohibited transactions"
(as defined in Section 860F(a)(2) of the Code) imposed on any REMIC relating to
the exercise of the option provided in this Section 4.08 shall in no event be
payable by the Trustee.
Section 4.09. Distribution of Group I Net WAC Cap Shortfall
Carry-Forward Amounts, Class A-II Basis Risk Shortfall
Carry-Forward Amounts and Class M-II Basis Risk Shortfall
Carry-Forward Amounts; Reserve Fund.
(a) On the Closing Date, the Trustee shall (i) establish and maintain in its
name, in trust for the benefit of Class A Certificates and Class M Certificates,
the Reserve Fund and (ii) for the benefit of the Class A Certificates and Class
M Certificates, purchase the Yield Maintenance Agreements for the Yield
Maintenance Agreement Purchase Price, to the extent the Yield Maintenance
Agreement Purchase Price has been received by the Trustee from the Depositor.
The Trustee shall deposit into the Reserve Fund all amounts received by it from
the Yield Maintenance Agreement Provider. All amounts received from the Yield
Maintenance Agreement Provider shall be treated as a Yield Maintenance Agreement
Payment. On each Distribution Date, the Trustee shall make withdrawals from the
Reserve Fund and use the amounts in the Reserve Fund to make distributions to
the Class A Certificates and Class M Certificates (i) with respect of any Excess
Cash Flow on deposit in the Reserve Fund, to pay any Basis Risk Shortfall Carry
Forward Amounts with any amounts on deposit in the Reserve Fund in respect of
the Yield Maintenance Agreements, in the following order of priority:
(I) Solely from amounts deposited in the Reserve Fund, in respect
of the Yield Maintenance Agreement related to the Class A-I-1, as
follows:
(A) first, to the Class A-I-1 Certificates, in an amount
up to any Group I Net WAC Shortfall Carry-Forward Amount with
repect to such Class of Certificates; and
(B) second, to the Class SB-I Certificates; and
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(II) Solely from amounts deposited in the Reserve Fund in respect
of the Yield Maintenance Agreement related to the Class A-II
Certificates as follows:
(A) first, to the Class A-II Certificates in an amount up
to any Class A-II Basis Risk Shortfall Carry-Forward Amounts; and
(B) second, to the Class SB-II Certificates.
(III) Solely from amounts deposited in the Reserve Fund in
respect of the Yield Maintenance Agreement related to the Class M-II
Certificates, as follows:
(A) first, to the Class M-II Certificates, in an amount up
to any Class M-II Basis Risk Shortfall Carry-Forward Amounts,
first pro rata, based on the Certificate Principal Balance
thereof to the extent needed to pay any Class M-II Basis Risk
Shortfall Carry-Forward Amounts for each such Class of
Certificates and then pro rata based on the amount of any
remaining unpaid Class M-II Basis Risk Shortfall Carry-Forward
Amounts for each such Class of Certificates; and
(B) second, to the Class SB-II Certificates.
Any such amounts transferred shall be treated for federal tax purposes as
amounts distributed by REMIC IV to either the Class SB-I or Class SB-II
Certificateholders as transferee thereof.
(b) The Reserve Fund shall be an Eligible Account. Amounts held in the Reserve
Fund from time to time shall continue to constitute assets of the Trust Fund,
but not of the REMICs, until released from the Reserve Fund pursuant to this
Section 4.09. The Reserve Fund constitutes an "outside reserve fund" within the
meaning of Treasury Regulation Section 1.860G-2(h) and is not an asset of the
REMICs. The Class SB-I and Class SB-II Certificateholders shall be the owners of
the Reserve Fund, and for all federal tax purposes, amounts transferred by the
REMICs to the Reserve Fund shall be treated as amounts distributed by the REMICs
to either the Class SB-I Certificateholders or the Class SB-II
Certificateholders as designated in Section 4.02(c) and (d). The Trustee shall
keep records that accurately reflect the funds on deposit in the Reserve Fund.
The Trustee shall, at the direction of the Master Servicer, invest amounts on
deposit in the Reserve Fund in Permitted Investments. In the absence of written
direction to the Trustee from the Master Servicer, all funds in the Reserve Fund
shall remain uninvested. On each Distribution Date, the Trustee shall distribute
any interest on the Reserve Fund to the holder of the Reserve Fund Residual
Right.
(c) The holder of the Reserve Fund Residual Right with respect to the Reserve
Fund shall initially be Residential Funding as holder of the Class SB-I
Certificates and Class SB-II Certificates, and such Reserve Fund Residual Right
shall at all times be owned by and allocated to Class SB-I Certificates and
Class SB-II Certificates on a pro rata basis. So long as Residential Funding is
the holder of the Class SB-I Certificates and Class SB-II Certificates, any
amounts payable to the holder of the Reserve Fund Residual Right shall be
payable to Residential Funding. In the event of a transfer of the ownership in
any of the Class SB-I Certificates and Class SB-II Certificates by Residential
Funding, the Reserve Fund Residual Right will be transferred along with such
Class SB-I Certificates and Class SB-II Certificates.
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(d) If any Yield Maintenance Agreement is terminated prior to its scheduled
termination date, the Trustee, at the direction of Residential Funding, shall
apply any payments received by the Trustee in connection with such termination
in excess of payments under such Yield Maintenance Agreement to enter into a new
contract with a provider identified to it by Residential Funding and with
coverage substantially similar to the remaining terms of such Yield Maintenance
Agreement as determined by Residential Funding in a written notice to the
Trustee.
(e) Subject to Sections 8.01 and 8.02 hereof, the Trustee agrees to comply with
the terms of the Yield Maintenance Agreements and to enforce the terms and
provisions thereof against the Yield Maintenance Agreement Provider at the
written direction of the Holders of Class A Certificates 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.
Section 4.10. [Reserved].
Section 4.11. Derivative Contracts.
(a) The Trustee shall, at the direction of the Master Servicer, on behalf of the
Trust Fund, enter into Derivative Contracts, solely for the benefit of the Class
SB Certificates. Any such Derivative Contract shall constitute a fully prepaid
agreement. The Master Servicer shall determine, in its sole discretion, whether
any Derivative Contract conforms to the requirements of Section 4.11(b) and (c).
Any acquisition of a Derivative Contract shall be accompanied by an appropriate
amendment to this Agreement, including an Opinion of Counsel, as provided in
Section 11.01, and either (i) an Opinion of Counsel to the effect that the
existence of the Derivative Contract will not adversely affect the availability
of the exemptive relief afforded under ERISA by U.S. Department of Labor
Prohibited Transaction Exemption 94-29, as most recently amended, 67 Fed. Reg.
54487 (August 22, 2002), or Prohibited Transaction Class Exemption 95-60, 60
Fed. Reg. 35925 (July 12, 1995), to the Holders of the Class A Certificates or
the Class M Certificates, respectively, as of the date the Derivative Contract
is entered into by the Trustee or (ii) the consent of each Holder of a Class A
Certificate or a Class M Certificate to the acquisition of such Derivative
Contract. All collections, proceeds and other amounts in respect of the
Derivative Contracts payable by the Derivative Counterparty shall be distributed
to the Class SB Certificates on the Distribution Date following receipt thereof
by the Trustee. In no event shall such an instrument constitute a part of any
REMIC created hereunder. In addition, in the event any such instrument is
deposited, the Trust Fund shall be deemed to be divided into two separate and
discrete sub-Trusts. The assets of one such sub-Trust shall consist of all the
assets of the Trust other than such instrument and the assets of the other
sub-Trust shall consist solely of such instrument.
(b) Any Derivative Contract that provides for any payment obligation on the part
of the Trust Fund must (i) be without recourse to the assets of the Trust Fund,
(ii) contain a non-petition covenant provision from the Derivative Counterparty,
(iii) limit payment dates thereunder to Distribution Dates and (iv) contain a
provision limiting any cash payments due to the Derivative Counterparty on any
day under such Derivative Contract solely to funds available therefor in the
Certificate Account available to make payments to the Holders of the Class SB
Certificates on such Distribution Date.
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(c) Each Derivative Contract must (i) provide for the direct payment of any
amounts by the Derivative Counterparty thereunder to the Certificate Account at
least one Business Day prior to the related Distribution Date, (ii) contain an
assignment of all of the Trust Fund's rights (but none of its obligations) under
such Derivative Contract to the Trustee on behalf the Class SB
Certificateholders and shall include an express consent to the Derivative
Counterparty to such assignment, (iii) provide that in the event of the
occurrence of an Event of Default, such Derivative Contract shall terminate upon
the direction of a majority Percentage Interest of the Class SB Certificates,
and (iv) prohibit the Derivative Counterparty from "setting-off' or "netting"
other obligations of the Trust Fund and its Affiliates against such Derivative
Counterparty's payment obligations thereunder.
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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, C and D, respectively,
and shall, on original issue, be executed and delivered by the Trustee to the
Certificate Registrar for authentication and delivery to or upon the order of
the Depositor upon receipt by the Trustee or one or more Custodians of the
documents specified in Section 2.01. The Class A, Class M-I-1 and Class M-II-1
Certificates shall be issuable in minimum dollar denominations of $25,000 and
integral multiples of $1 in excess thereof. The Class M-I-2, Class M-I-3, Class
M-II-2, Class M-II-3 and Class M-II-4 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 Certificates and Class M Certificates shall initially be issued
as one or more Certificates registered in the name of the Depository or its
nominee and, except as provided below, registration of such Certificates may not
be transferred by the Trustee except to another Depository that agrees to hold
such Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to each such Class A Certificate and Class M Certificate through the
book-entry facilities of the Depository and, except as provided below, shall not
be entitled to Definitive Certificates in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall transfer the Ownership
Interests only in the Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
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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. If (i)(A) the Depositor, with the
consent of a majority of the Certificateholders, 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 at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall issue the Definitive Certificates.
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 reasonable 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.
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 all references herein
to obligations imposed upon or to be performed by the Depository in connection
with the issuance of the Definitive Certificates pursuant to this Section 5.01
shall be deemed to be imposed upon and performed by the Trustee, and the Trustee
and the Master Servicer shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
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(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 8.11, 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 8.11 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
I hereto, and the Trustee shall require the transferor to execute a
representation letter, substantially in the form of Exhibit J hereto,
each acceptable to and in form and substance satisfactory to the
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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 N attached
hereto, which investment letter shall not be an expense of the Trustee,
the Depositor, or the Master Servicer, and which investment letter
states that, among other things, such transferee (i) is a "qualified
institutional buyer" as defined under Rule 144A, acting for its own
account or the accounts of other "qualified institutional buyers" as
defined under Rule 144A, and (ii) is aware that the proposed transferor
intends to rely on the exemption from registration requirements under
the 1933 Act provided by Rule 144A. The Holder of a Class SB or Class R
Certificate desiring to effect any transfer, sale, pledge or other
disposition shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Master Servicer and the Certificate Registrar against any
liability that may result if the transfer, sale, pledge or other
disposition is not so exempt or is not made in accordance with such
federal and state laws and this Agreement.
(e) (i) In the case of any Class SB or Class R Certificate presented for
registration in the name of any Person, either (i) the Trustee shall
require an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee, the Depositor and the Master Servicer to
the effect that the purchase or holding of such Class SB or Class R
Certificate is permissible under applicable law, will not constitute or
result in any non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), and will not subject the Trustee, the Depositor
or the Master Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in
addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Trust Fund, the Depositor or
the Master Servicer or (ii) 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 paragraph six of Exhibit I or
paragraph three of Exhibit N (with respect to a Class SB Certificate) or
in paragraph fifteen of Exhibit H-1 (with respect to a Class R
Certificate), which the Trustee may rely upon without further inquiry or
investigation, or such other certifications as the Trustee may deem
desirable or necessary in order to establish that such transferee or the
Person in whose name such registration is requested is not an employee
benefit plan or other plan or arrangement subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code (a "Plan"),
or any Person (including an insurance company investing its general
accounts, an investment manager, a named fiduciary or a trustee of any
Plan) who is using "plan assets" of any Plan, within the meaning of the
U.S. Department of Labor regulation promulgated at 29 C.F.R. ss.
2510.3-101, to effect such acquisition (a "Plan Investor").
(ii) Any Transferee of a Class M Certificate will be deemed to have represented
by virtue of its purchase or holding of such Certificate (or interest
therein) that either (a) such Transferee is not a Plan Investor, (b) it has
acquired and is holding such Certificate in reliance on Prohibited
Transaction Exemption ("PTE") 94-29, 59 Fed. Reg. 14674 (March 29, 1994),
as amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21, 1997), PTE 2000-58,
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65 Fed. Reg. 67765 (November 13, 2000), and PTE 2002-41, 67 Fed. Reg. 54487
(August 22, 2002) (the "RFC Exemption"), and that it understands that there
are certain conditions to the availability of the RFC Exemption including
that such Certificate must be rated, at the time of purchase, not lower
than "BBB-" (or its equivalent) by Standard & Poor's, Fitch or Moody's or
(c) such Transferee is a Complying Insurance Company.
(iii) If any Class M Certificate (or any interest therein) is acquired or held
by any Person that is not described in paragraph (ii) above, then the
last preceding Transferee that either (i) is not a Plan Investor or (ii)
is a Complying Insurance Company shall be restored, to the extent
permitted by law, to all rights and obligations as Certificate Owner
thereof retroactive to the date of such Transfer of such Class M
Certificate. The Trustee shall be under no liability to any Person for
making any payments due on such Certificate to such preceding
Transferee.
(iv) Any purported Certificate Owner whose acquisition or holding of any
Class M Certificate (or interest therein) was effected in violation of
the restrictions in this Section 5.02(e) shall indemnify and hold
harmless the Depositor, the Trustee, the Master Servicer, any
Subservicer and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by such parties as a result of such
acquisition or holding.
(f) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following
provisions and to have irrevocably authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person
other than such Person and to negotiate the terms of any mandatory sale
under clause (iii)(B) below and to execute all instruments of transfer
and to do all other things necessary in connection with any such sale.
The rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a Permitted Transferee
and shall promptly notify the Trustee of any change or impending
change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Class R Certificate, the Trustee shall
require delivery to it, and shall not register the Transfer of
any Class R Certificate until its receipt of,
(I) an affidavit and agreement (a "Transfer
Affidavit and Agreement," in the form attached hereto as
Exhibit H-1) from the proposed Transferee, in form and
substance satisfactory to the Master Servicer,
representing and warranting, among other things, that it
is a Permitted Transferee, that it is not acquiring its
Ownership Interest in the Class R Certificate that is the
subject of the proposed Transfer as a nominee, trustee or
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agent for any Person who is not a Permitted Transferee,
that for so long as it retains its Ownership Interest in a
Class R Certificate, it will endeavor to remain a
Permitted Transferee, and that it has reviewed the
provisions of this Section 5.02(f) and agrees to be bound
by them, and
(II) a certificate, in the form attached hereto as
Exhibit H-2, from the Holder wishing to transfer the Class
R Certificate, in form and substance satisfactory to the
Master Servicer, representing and warranting, among other
things, that no purpose of the proposed Transfer is to
impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit
and Agreement by a proposed Transferee under clause (B) above, if
a Responsible Officer of the Trustee who is assigned to this
Agreement has actual knowledge that the proposed Transferee is
not a Permitted Transferee, no Transfer of an Ownership Interest
in a Class R Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall agree (x) to require a
Transfer Affidavit and Agreement from any other Person to whom
such Person attempts to transfer its Ownership Interest in a
Class R Certificate and (y) not to transfer its Ownership
Interest unless it provides a certificate to the Trustee in the
form attached hereto as Exhibit H-2.
(E) Each Person holding or acquiring an Ownership Interest
in a Class R Certificate, by purchasing an Ownership Interest in
such Certificate, agrees to give the Trustee written notice that
it is a "pass-through interest holder" within the meaning of
Temporary Treasury Regulations Section 1.67-3T(a)(2)(i)(A)
immediately upon acquiring an Ownership Interest in a Class R
Certificate, if it is, or is holding an Ownership Interest in a
Class R Certificate on behalf of, a "pass-through interest
holder."
(ii) The Trustee will register the Transfer of any Class R Certificate only
if it shall have received the Transfer Affidavit and Agreement, a
certificate of the Holder requesting such transfer in the form attached
hereto as Exhibit H-2 and all of such other documents as shall have been
reasonably required by the Trustee as a condition to such registration.
Transfers of the Class R Certificates to Non-United States Persons and
Disqualified Organizations (as defined in Section 860E(e)(5) of the
Code) are prohibited.
(A) If any Disqualified Organization shall become a holder
of a Class R Certificate, then the last preceding Permitted
Transferee shall be restored, to the extent permitted by law, to
all rights and obligations as Holder thereof retroactive to the
date of registration of such Transfer of such Class R
Certificate. If a Non-United States Person shall become a holder
of a Class R Certificate, then the last preceding United States
Person shall be restored, to the extent permitted by law, to all
rights and obligations as Holder thereof retroactive to the date
of registration of such Transfer of such Class R Certificate. If
a transfer of a Class R Certificate is disregarded pursuant to
the provisions of Treasury Regulations Section 1.860E-1 or
Section 1.860G-3, then the last preceding Permitted Transferee
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shall be restored, to the extent permitted by law, to all rights
and obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Class R Certificate. The
Trustee shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in fact
not permitted by this Section 5.02(f) or for making any payments
due on such Certificate to the holder thereof or for taking any
other action with respect to such holder under the provisions of
this Agreement.
(B) If any purported Transferee shall become a Holder of a
Class R Certificate in violation of the restrictions in this
Section 5.02(f) and to the extent that the retroactive
restoration of the rights of the Holder of such Class R
Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Master Servicer shall
have the right, without notice to the holder or any prior holder
of such Class R Certificate, to sell such Class R Certificate to
a purchaser selected by the Master Servicer on such terms as the
Master Servicer may choose. Such purported Transferee shall
promptly endorse and deliver each Class R Certificate in
accordance with the instructions of the Master Servicer. Such
purchaser may be the Master Servicer itself or any Affiliate of
the Master Servicer. The proceeds of such sale, net of the
commissions (which may include commissions payable to the Master
Servicer or its Affiliates), expenses and taxes due, if any, will
be remitted by the Master Servicer to such purported Transferee.
The terms and conditions of any sale under this clause (iii)(B)
shall be determined in the sole discretion of the Master
Servicer, and the Master Servicer shall not be liable to any
Person having an Ownership Interest in a Class R Certificate as a
result of its exercise of such discretion.
(iii) The Master Servicer, on behalf of the Trustee, shall make available,
upon written request from the Trustee, all information necessary to
compute any tax imposed
(A) as a result of the Transfer of an Ownership Interest in a Class R
Certificate to any Person who is a Disqualified Organization, including the
information regarding "excess inclusions" of such Class R Certificates required
to be provided to the Internal Revenue Service and certain Persons as described
in Treasury Regulations Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and
(B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code that
holds an Ownership Interest in a Class R Certificate having as
among its record holders at any time any Person who is a
Disqualified Organization. Reasonable compensation for providing
such information may be required by the Master Servicer from such
Person.
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(iv) The provisions of this Section 5.02(f) set forth prior to this clause
(v) may be modified, added to or eliminated, provided that there shall
have been delivered to the Trustee the following:
(A) Written notification from each Rating Agency to the
effect that the modification, addition to or elimination of such
provisions will not cause such Rating Agency to downgrade its
then-current ratings, if any, of 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
(B) a certificate of the Master Servicer stating that the
Master Servicer has received an Opinion of Counsel, in form and
substance satisfactory to the Master Servicer, to the effect that
such modification, addition to or absence of such provisions will
not cause any of REMIC I, REMIC II, REMIC III or REMIC IV to
cease to qualify as a REMIC and will not cause (x) any of REMIC
I, REMIC II, REMIC III or REMIC IV 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.
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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 in Section 4.09,
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.
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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 will 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 Mae 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).
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
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Servicer hereunder prior to the satisfaction of the conditions to such
assignment and delegation set forth in the next preceding sentence.
Notwithstanding the foregoing, in the event of a pledge or assignment by the
Master Servicer solely of its rights to purchase all assets of the Trust Fund
under Section 9.01(a), the provisos of the first sentence of this paragraph will
not apply.
Section 6.03. Limitation on Liability of the Depositor, the Master Servicer and
Others.
Neither the Depositor, the Master Servicer nor 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.
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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.
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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
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(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. 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
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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(d) 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.
(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
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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.
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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 of REMIC I, REMIC II, REMIC III and REMIC
IV as a REMIC under the REMIC Provisions 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;
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(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;
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(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 Yield Maintenance Agreements, 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 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.
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(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 it shall have obtained or been furnished
with an Opinion of Counsel to the effect that such contribution will not
(i) cause any of REMIC I, REMIC II, REMIC III or REMIC IV 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 will pay or reimburse the
Trustee and any co-trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee or any
co-trustee in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its
employ, and the expenses incurred by the Trustee or any co-trustee in
connection with the appointment of an office or agency pursuant to
Section 8.12) except any such expense, disbursement or advance as may
arise from its negligence or bad faith.
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(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 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 the Yield Maintenance Agreements, 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. 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.
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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) 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.
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Section 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as if
originally named as trustee herein. The predecessor trustee shall deliver to the
successor trustee all 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
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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, 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. 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. The Trustee will maintain an office or agency in the City of New
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York where Certificates may be surrendered for registration of transfer or
exchange. The Trustee initially designates its offices located at 0 Xxx Xxxx
Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, for the purpose of keeping the
Certificate Register. The Trustee will maintain an office at the address stated
in Section 11.05(c) hereof where notices and demands to or upon the Trustee in
respect of this Agreement may be served.
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ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase by the Master Servicer or Liquidation of
All Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and responsibilities
of the 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 of all Group I Loans and all property
acquired in respect of any Group I Loan remaining in the Trust Fund or the
purchase by the Master Servicer of all Group II Loans and all property
acquired in respect of any Group II Loan remaining in the Trust Fund, in
each case, at a price equal to 100% of the unpaid principal balance of each
Mortgage Loan (or, if less than such unpaid principal balance, the fair
market value of the related underlying property of such Mortgage Loan with
respect to Mortgage Loans as to which title has been acquired if such fair
market value is less than such unpaid principal balance) (net of any
unreimbursed Advances attributable to principal) on the day of repurchase,
plus accrued interest thereon at the Net Mortgage Rate (or Modified Net
Mortgage Rate in the case of any Modified Mortgage Loan) to, but not
including, the first day of the month in which such repurchase price is
distributed; provided, however, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador
of the United States to the Court of St. Xxxxx, living on the date hereof;
provided further, that, if the amount due under any Certificate shall not
have been reduced to zero prior to the Maturity Date, the Master Servicer
shall be required to terminate this Agreement in accordance with this
clause (ii); 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 of REMIC I, REMIC II, REMIC III or REMIC
IV as a REMIC. The purchase price paid by the Master Servicer shall also
include any amounts owed by Residential Funding pursuant to the last
paragraph of Section 4 of the Assignment Agreement in respect of any
liability, penalty or expense that resulted from a breach of the
representation and warranty set forth in clause (bb) of such Section, that
remain unpaid on the date of such purchase.
The right of the Master Servicer or the Company to purchase all the
assets of the Trust Fund relating to the Group I Loans, pursuant to clause (ii)
above is conditioned upon the date of such purchase occurring on or after the
Group I Optional Termination Date. The right of the Master Servicer or the
Company to purchase all the assets of the Trust Fund relating to the Group II
Loans, pursuant to clause (ii) above is conditioned upon the date of such
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purchase occurring on or after the Group II Optional Termination Date. If such
right is exercised by the Master Servicer, the Master Servicer shall be deemed
to have been reimbursed for the full amount of any unreimbursed Advances
theretofore made by it with respect to the Mortgage Loans being purchased. In
addition, the Master Servicer shall provide to the Trustee the certification
required by Section 3.15 and the Trustee and any Custodian shall, promptly
following payment of the purchase price, release to the Master Servicer the
Mortgage Files pertaining to the Mortgage Loans being purchased.
In addition to the foregoing, on any Distribution Date on or after the
Group I Optional Termination Date and after the aggregate Certificate Principal
Balance of the Class A-II Certificates and Class M-II Certificates has been
reduced to zero, the Master Servicer shall have the right, at its option, to
purchase the Class A-I Certificates and Class M-I Certificates in whole, but not
in part, at a price equal to the aggregate outstanding Certificate Principal
Balance of the Class A-I Certificates and Class M-I Certificates, plus one
month's Accrued Certificate Interest on the Class A-I Certificates and Class M-I
Certificates, any previously unpaid Accrued Certificate Interest, and any unpaid
Prepayment Interest Shortfall previously allocated thereto. On any Distribution
Date on or after the Group II Optional Termination Date and after the aggregate
Certificate Principal Balance of the Class A-I Certificates and Class M-I
Certificates has been reduced to zero, the Master Servicer shall have the right,
at its option, to purchase the Class A-II Certificates and Class M-II
Certificates in whole, but not in part, at a price equal to the aggregate
outstanding Certificate Principal Balance of the Class A-II Certificates and
Class M-II Certificates, plus one month's Accrued Certificate Interest on the
Class A-II Certificates and Class M-II Certificates, any previously unpaid
Accrued Certificate Interest, and any unpaid Prepayment Interest Shortfall
previously allocated thereto. In addition, on any Distribution Date on or after
the Group I Optional Termination Date and Group II Optional Termination Date,
the Master Servicer shall have the right, at its option, 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 Shortfall previously
allocated thereto. If the Master Servicer exercises this right to purchase the
outstanding Class A-I Certificates and Class M-I Certificates or Class A-II
Certificates and Class M-II Certificates, the Master Servicer will promptly
terminate the respective obligations and responsibilities created hereby in
respect of these Certificates pursuant to this Article IX.
(b) The Master Servicer shall give the Trustee not less than 60 days' prior
notice of the Distribution Date on which the Master Servicer anticipates
that the final distribution will be made to Certificateholders (whether
as a result of the exercise by the Master Servicer of its right to
purchase the assets of the Trust Fund or otherwise). 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 it 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:
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(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 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 shall deposit in the Certificate
Account before the Final Distribution Date in immediately available funds an
amount equal to the purchase price for the assets of the Trust Fund computed as
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 Certificates by the
Certificateholders, the Trustee shall distribute to the Certificateholders (i)
the amount otherwise distributable on such Distribution Date, if not in
connection with the Master Servicer's election to repurchase, or (ii) if the
Master Servicer elected to so repurchase, an amount equal to the outstanding
Certificate Principal Balance thereof, plus Accrued Certificate Interest thereon
for the related Interest Accrual Period, any previously unpaid Accrued
Certificate Interest and any unpaid Prepayment Interest Shortfall previously
allocated thereto.
(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 it exercised its right to
purchase the assets of the Trust Fund), or the Trustee (in any other case) shall
give a second written notice to the remaining Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice any Certificate
shall not have been surrendered for cancellation, the Trustee shall take
appropriate steps as directed by the Master Servicer to contact the remaining
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining the escrow account and of contacting Certificateholders
shall be paid out of the assets which remain in the escrow account. If within
nine months after the second notice any Certificates shall not have been
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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.
Section 9.02. Additional Termination Requirements.
(a) Each of REMIC I, REMIC II, REMIC III and REMIC IV, 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 of REMIC I, REMIC
II, REMIC III and REMIC IV, 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 of REMIC I, REMIC II, REMIC
III or REMIC IV to fail to qualify as a REMIC at any time that any
Certificate is outstanding:
(i) The Master Servicer shall establish a 90-day liquidation period for each
of REMIC I, REMIC II, REMIC III and REMIC IV, 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, REMIC II, REMIC III and REMIC IV, under
Section 860F of the Code and the regulations thereunder;
(ii) The Master Servicer shall notify the Trustee at the commencement of such
90-day liquidation period and, at or prior to the time of making of the
final payment on the Certificates, the Trustee shall sell or otherwise
dispose of all of the remaining assets of the Trust Fund in accordance
with the terms hereof; and
(iii) If the Master Servicer is exercising its right to purchase the assets of
the Trust Fund, the Master Servicer shall, during the 90-day liquidation
period and at or prior to the Final Distribution Date, purchase all of
the assets of the Trust Fund for cash.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably approves
and appoints the Master Servicer as its attorney-in-fact to adopt a plan
of complete liquidation for each of REMIC I, REMIC II, REMIC III and
REMIC IV at the expense of the Trust Fund in accordance with the terms
and conditions of this Agreement.
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ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The REMIC Administrator shall make an election to treat each of REMIC I,
REMIC II, REMIC III and REMIC IV 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 Interest
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 Interest 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 III Regular Interests shall be designated as
the "regular interests" and the Class R-III Certificates shall be designated as
the sole class of "residual interests" in REMIC III. The Class A-I, Class A-II,
Class M-I, Class M-II, Class SB-I and Class SB-II Certificates shall be
designated as the "regular interests" in REMIC IV and the Class R-IV
Certificates shall be designated the sole class of "residual interests" in REMIC
IV. The REMIC Administrator and the Trustee shall not permit the creation of any
"interests" (within the meaning of Section 860G of the Code) in the REMIC other
than the Certificates.
(b) The Closing Date is hereby designated as the "startup day" of each of REMIC
I, REMIC II, REMIC III and REMIC IV 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, REMIC II, REMIC III and REMIC IV in the manner provided under
Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1. The REMIC Administrator, as tax matters person, shall (i) act
on behalf of each of REMIC I, REMIC II, REMIC III and REMIC IV in relation to
any tax matter or controversy involving the Trust Fund and (ii) represent the
Trust Fund in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority with respect thereto.
The legal expenses, including without limitation attorneys' or accountants'
fees, and costs of any such proceeding and any liability resulting therefrom
shall be expenses of the Trust Fund and the REMIC Administrator shall be
entitled to reimbursement therefor out of amounts attributable to the Mortgage
Loans on deposit in the Custodial Account as provided by Section 3.10 unless
such legal expenses and costs are incurred by reason of the REMIC
Administrator's willful misfeasance, bad faith or gross negligence. If the REMIC
Administrator is no longer the Master Servicer hereunder, at its option the
REMIC Administrator may continue its duties as REMIC Administrator and shall be
paid reasonable compensation not to exceed $3,000 per year by any successor
Master Servicer hereunder for so acting as the REMIC Administrator.
(d) The REMIC Administrator shall prepare or cause to be prepared all of the Tax
Returns that it determines are required with respect to each REMIC created
hereunder and deliver such Tax Returns in a timely manner to the Trustee and the
Trustee shall sign and file such Tax Returns in a timely manner. The expenses of
preparing such returns shall be borne by the REMIC Administrator without any
right of reimbursement therefor. The REMIC Administrator agrees to indemnify and
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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 of REMIC I, REMIC II, REMIC
III or REMIC IV as a REMIC or (ii) with the exception of actions taken in
connection with Section 4.08 hereof, result in the imposition of a tax upon any
of REMIC I, REMIC II, REMIC III or REMIC IV (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
149
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 will consult with the Master
Servicer or the REMIC Administrator, as applicable, or its designee, in writing,
with respect to whether such action could cause an Adverse REMIC Event to occur
with respect to 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 day 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 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 day, 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 of
REMIC I, REMIC II, REMIC III or REMIC IV 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.
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(j) Neither the Master Servicer nor the Trustee shall (subject to Section
10.01(f)) enter into any arrangement by which any of REMIC I, REMIC II, REMIC
III or REMIC IV will receive a fee or other compensation for services nor permit
any of REMIC I, REMIC II, REMIC III or REMIC IV 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 September 25,
2034.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall prepare
and file with the Internal Revenue Service Form 8811, "Information Return for
Real Estate Mortgage Investment Conduits (REMIC) and Issuers of Collateralized
Debt Obligations" for the Trust Fund.
(m) Neither the Trustee nor the Master Servicer shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
default, imminent default or foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of any REMIC pursuant to Article IX of this Agreement or (iv) a
purchase of Mortgage Loans pursuant to Article II or III of this Agreement) or
acquire any assets for any REMIC or sell or dispose of any investments in the
Custodial Account or the Certificate Account for gain, or accept any
contributions to any REMIC after the Closing Date unless it has received an
Opinion of Counsel that such sale, disposition, substitution or acquisition will
not (a) affect adversely the status of any of REMIC I, REMIC II, REMIC III or
REMIC IV 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. The Trustee shall treat the Reserve Fund as an outside reserve
fund within the meaning of Treasury Regulation 1.860G-2(h). The Reserve Fund
shall be owned by the Class SB-I Certificateholders and Class SB-II
Certificateholders, and is not an asset of the REMICs. The Trustee shall treat
the rights of the Class A-I-1, Class A-I-3, Class A-I-4, Class A-I-5, Class M-I,
Class A-II and Class M-II Certificateholders to receive payments from the
Reserve Fund as rights in an interest rate cap contract written by the Class
SB-I Certificateholders and Class SB-II Certificateholders in favor of the Class
A-I-1, Class A-I-3, Class A-I-4, Class A-I-5, Class M-I, Class A-II and Class
M-II Certificateholders. Thus, each Class A-I-1, Class A-I-3, Class A-I-4, Class
A-I-5, Class M-I, Class A-II and Class M-II Certificate shall be treated as
representing ownership of not only REMIC IV regular interests, but also
ownership of an interest in an interest rate cap contract. For purposes of
determining the issue price of the REMIC IV regular interests, the Trustee shall
assume that the interest rate cap contract with respect to the Class A-I-1,
Class A-I-3, Class A-I-4, Class A-I-5, Class M-I, Class A-II and Class M-II
Certificates has a de minimis value.
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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 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.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
(a) This Agreement or any Custodial Agreement may be amended from time to
time by the Depositor, the Master Servicer and the Trustee, without the
consent of any of the Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein, which may be
inconsistent with any other provisions herein or therein or to correct
any error,
(iii)to modify, eliminate or add to any of its provisions to such extent as
shall be necessary or desirable to maintain the qualification of REMIC I,
REMIC II, REMIC III or REMIC IV as REMICs at all times that any Certificate
is outstanding or to avoid or minimize the risk of the imposition of any
tax on the Trust Fund pursuant to the Code that would be a claim against
the Trust Fund, provided that the Trustee has received an Opinion of
Counsel to the effect that (A) such action is necessary or desirable to
maintain such qualification or to avoid or minimize the risk of the
imposition of any such tax and (B) such action will not adversely affect in
any material respect the interests of any Certificateholder,
(iv) to change the timing and/or nature of deposits into the Custodial Account
or the Certificate Account or to change the name in which the Custodial
Account is maintained, provided that (A) the Certificate Account Deposit
Date shall in no event be later than the related Distribution Date, (B)
such change shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder and
(C) such change shall not result in a reduction of the rating assigned to
any Class of Certificates below the lower of the then-current rating or the
rating assigned to such Certificates as of the Closing Date, as evidenced
by a letter from each Rating Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section 5.02(f) or any
other provision hereof restricting transfer of the Class R Certificates by
virtue of their being the "residual interests" in the Trust Fund provided
that (A) such change shall not result in reduction of the rating assigned
to any such Class of Certificates below the lower of the then-current
rating or the rating assigned to such Certificates as of the Closing Date,
as evidenced by a letter from each Rating Agency to such effect, and (B)
such change shall not, 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
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(vi) to make any other provisions with respect to matters or questions
arising under this Agreement or such Custodial Agreement which shall not
be materially inconsistent with the provisions of this Agreement,
provided that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder and is authorized or permitted under Section 11.09(d).
(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 affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or such Custodial
Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment
shall:
(i) reduce in any manner the amount of, or delay the timing of, payments
which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate,
(ii) adversely affect in any material respect the interest of the Holders of
Certificates of any Class in a manner other than as described in clause
(i) hereof without the consent of Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less
than 66%, or
(iii) reduce the aforesaid percentage of Certificates of any Class the Holders
of which are required to consent to any such amendment, in any such case
without the consent of the Holders of all Certificates of such Class
then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (at the expense of the party
seeking such amendment) to the effect that such amendment 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 REMIC I, REMIC II, REMIC III or
REMIC IV to fail to qualify as REMICs 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.
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(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 the 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 the REMIC, (ii) any such reserve fund
shall be owned by the Depositor, and (iii) amounts transferred by the
REMIC to any such reserve fund shall be treated as amounts distributed
by the 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 of REMIC I, REMIC II, REMIC III or REMIC IV 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
K (in which case Residential Funding's Subordinate Certificate Loss
Obligation as described in such exhibit shall be established by
Residential Funding's consent to such amendment) and that the limited
guaranty shall be executed in the form attached hereto as Exhibit L,
with such changes as the Depositor shall deem to be appropriate; it
being understood that the Trustee has reviewed and approved the content
of such forms and that the Trustee's consent or approval to the use
thereof is not required.
(f) In addition to the foregoing, any amendment of Section 4.08 of this
Agreement shall require the consent of the Limited Repurchase Right
Holder as third-party beneficiary.
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.
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(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, 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.
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Section 11.04. Governing Law.
This agreement and the Certificates shall be governed by and construed
in accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 11.05. Notices.
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 (RAAC), 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, 0 Xxx Xxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Institutional Trust Services/Global
Debt, RAAC 2004-SP3 or such other address as may hereafter be furnished to the
Depositor and the Master Servicer in writing by the Trustee; (d) in the case of
Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Mortgage Surveillance or such other address as may be hereafter furnished to the
Depositor, the Trustee and the Master Servicer by Standard & Poor's; and (e) in
the case of Moody's, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS
Monitoring Department, or such other address as may be hereafter furnished to
the Depositor, the Trustee and the Master Servicer in writing by Moody's. 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,
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(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, FASIT or custodial arrangement (a "Restructuring Vehicle") to be
held by the Trustee pursuant to a Supplemental Article. The instrument adopting
such Supplemental Article shall be executed by the 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
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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, FASIT 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 of REMIC I, REMIC II,
REMIC III or REMIC IV 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 Beneficiary.
The Limited Repurchase Right Holder is an express third-party
beneficiary of Section 4.08 of this Agreement, and shall have the right to
enforce the related provisions of Section 4.08 of this Agreement as if it were a
party hereto.
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IN WITNESS WHEREOF, the Company, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized and their respective seals, duly attested, to be
hereunto affixed, all as of the day and year first above written.
[Seal] RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.
By: .......
Attest: ....... Name: Xxxx Xxxxxx
Name: Xxxxxx XxxXxx Title: Vice President
Title: Vice President
[Seal] RESIDENTIAL FUNDING CORPORATION
Attest: ....... By: .......
Name: Xxxx Xxxxxx Name: Xxxxxx XxxXxx
Title: Associate Title: Associate
[Seal] JPMORGAN CHASE BANK as Trustee
Attest: ....... By: .......
Name: Name: Xxxxx X. Xxxx
Title: Title: Trust Officer
000
XXXXX XX XXXXXXXXX )
) ss.:
COUNTY OF HENNEPIN )
On the 10th day of November, 2004 before me, a notary public in
and for said State, personally appeared Xxxx 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
_____________________________
[Notarial Seal]
000
XXXXX XX XXXXXXXXX )
) ss.:
COUNTY OF HENNEPIN )
On the 10th day of November, 2004 before me, a notary public in
and for said State, personally appeared Xxxxxx XxxXxx, 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]
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 10th day of November, 2004 before me, a notary public in
and for said State, personally appeared Xxxxx X. Xxxx, known to me to be a Trust
Officer of JPMorgan Chase Bank, a New York banking corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said banking corporation and acknowledged to me that such banking
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
____________________________
[Notarial Seal]
163
