Execution Copy
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
SERIES SUPPLEMENT,
Dated as of February 1, 2006,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of February 1, 2006
Mortgage Asset-Backed Pass-Through Certificates
Series 2006-QO2
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...............................................................4
Section 1.01. Definitions.......................................................4
Section 1.02. Determination of LIBOR...........................................29
Section 1.03. Use of Words and Phrases.........................................30
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..........30
Section 2.01. Conveyance of Mortgage Loans.....................................30
Section 2.02. Acceptance by Trustee............................................30
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the
Company..........................................................30
Section 2.04. Representations and Warranties of Sellers........................34
Section 2.05. Execution and Authentication of Certificates/Issuance of Certificates
Evidencing Interests in REMIC I Certificates.....................34
Section 2.06. Conveyance of REMIC I Regular Interests; Acceptance by the Trustee34
Section 2.07. Issuance of Certificates Evidencing Interest in REMIC II.........34
Section 2.08. Purposes and Powers of the Trust.................................34
Section 2.09. Agreement Regarding Ability to Disclose..........................34
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...........................36
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...........................................40
Section 4.01. Certificate Account..............................................40
Section 4.02. Distributions....................................................40
Section 4.03. Statements to Certificateholders; Statements to the Rating Agencies; Exchange
Act Reporting....................................................45
Section 4.04. Distribution of Reports to the Trustee and the Company; Advances by the
Master Servicer..................................................45
Section 4.05. Allocation of Realized Losses....................................45
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property....47
Section 4.07. Optional Purchase of Defaulted Mortgage Loans....................47
Section 4.08. Surety Bond......................................................47
Section 4.09. Basis Risk Shortfall Reserve Fund................................47
ARTICLE V THE CERTIFICATES.........................................................48
ARTICLE VI THE COMPANY AND THE MASTER SERVICER......................................49
ARTICLE VII DEFAULT..................................................................50
ARTICLE VIII CONCERNING THE TRUSTEE...................................................51
ARTICLE IX TERMINATION..............................................................52
ARTICLE X REMIC PROVISIONS.........................................................53
Section 10.01. REMIC Administration.............................................53
Section 10.02. Master Servicer; REMIC Administrator and Trustee Indemnification.53
Section 10.03. Designation of REMIC.............................................53
Section 10.04. Distributions on the REMIC I Regular Interests...................53
Section 10.05. Compliance with Withholding Requirements.........................53
ARTICLE XI MISCELLANEOUS PROVISIONS.................................................54
Section 11.01. Amendment........................................................54
Section 11.02. Recordation of Agreement; Counterparts...........................54
Section 11.03. Limitation on Rights of Certificateholders.......................54
Section 11.04. Governing Laws...................................................54
Section 11.05. Notices..........................................................54
Section 11.06. Required Notices to Rating Agency and Subservicer................55
Section 11.07. Severability of Provisions.......................................55
Section 11.08. Supplemental Provisions for Resecuritization.....................55
Section 11.09. Allocation of Voting Rights......................................55
Section 11.10. No Petition......................................................55
ARTICLE XII COMPLIANCE WITH REGULATION AB............................................56
EXHIBITS
Exhibit One: Mortgage Loan Schedule
Exhibit Two: Information to be Included in Monthly Distribution Date Statement
Exhibit Three:Standard Terms of Pooling and Servicing Agreement, dated as of February 1, 2006
This is a Series Supplement, dated as of February 1, 2006 (the "Series Supplement"), to the Standard
Terms of Pooling and Servicing Agreement, dated as of February 1, 2006 and attached as Exhibit Four hereto
(the "Standard Terms" and, together with this Series Supplement, the "Pooling and Servicing Agreement" or
"Agreement"), among RESIDENTIAL ACCREDIT LOANS, INC., as the company (together with its permitted successors
and assigns, the "Company"), RESIDENTIAL FUNDING CORPORATION, as master servicer (together with its permitted
successors and assigns, the "Master Servicer"), and U.S. BANK NATIONAL ASSOCIATION, as Trustee (together with
its permitted successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell mortgage asset-backed pass-through certificates (collectively, the
"Certificates"), to be issued hereunder in multiple classes, which in the aggregate will evidence the entire
beneficial ownership interest in the Mortgage Loans.
The terms and provisions of the Standard Terms are hereby incorporated by reference herein as though
set forth in full herein. If any term or provision contained herein shall conflict with or be inconsistent
with any provision contained in the Standard Terms, the terms and provisions of this Series Supplement shall
govern. All capitalized terms not otherwise defined herein shall have the meanings set forth in the Standard
Terms. The Pooling and Servicing Agreement shall be dated as of the date of this Series Supplement.
REMIC I
As provided herein, the REMIC Administrator will make an election to treat the segregated pool of
assets consisting of the Mortgage Loans and certain other related assets subject to this Agreement (but
excluding the Basis Risk Shortfall Reserve Fund) as a real estate mortgage investment conduit (a "REMIC") for
federal income tax purposes, and such segregated pool of assets will be designated as "REMIC I." The Class
R-I Certificates will represent the sole Class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table irrevocably sets forth the
designation, remittance rate (the "Uncertificated REMIC I Pass-Through Rate") and initial Uncertificated
Principal Balance for each of the "regular interests" in REMIC I (the "REMIC I Regular Interests"). The
"latest possible maturity date" (determined solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for each REMIC I Regular Interest shall be the Maturity Date. None of the REMIC I
Regular Interests will be certificated.
Uncertificated
REMIC I Initial Uncertificated Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date
LT1 Variable(1) $670,078,567.62 February 25, 2046
LT2 Variable(1) $33,274.30 February 25, 2046
LT3 0.00% $33,743.63 February 25, 2046
LT4 Variable(1) $33,743.63 February 25, 2046
____________
(1) Calculated in accordance with the definition of "Uncertificated REMIC I Pass Through Rate" herein.
REMIC II
As provided herein, the REMIC Administrator will elect to treat the segregated pool of assets
consisting of the Uncertificated REMIC I Regular Interests as a REMIC for federal income tax purposes, and
such segregated pool of assets will be designated as REMIC II. Each Class of Certificates (other than the
Class R Certificates and exclusive of any rights to receive Basis Risk Shortfalls) will represent ownership
of "regular interests" in REMIC II and the Class R-II Certificates will represent ownership of the sole Class
of "residual interests" in REMIC II for purposes of the REMIC Provisions under federal income tax law. The
following table sets forth the designation, type, Pass-Through Rate, aggregate Initial Certificate Principal
Balance, Maturity Date, initial ratings and certain features for each Class of Certificates comprising the
interests in the Trust Fund created hereunder. 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 II Regular
Interests and the Certificates shall be the Maturity Date.
Aggregate
Initial
Certificate
Pass-Through Principal Maturity S&P/ Minimum
Designation Rate Balance Features Date Xxxxx'x Denominations
Class A-1 Adjustable $370,542,000.00 Senior/ Adjustable Rate February 25, AAA/Aaa $100,000.00
Rate(1)(2) 2046
Class A-2 Adjustable $154,392,000.00 Senior/ Adjustable Rate February 25, AAA/Aaa $100,000.00
Rate(1)(2) 2046
Class A-3 Adjustable $92,636,000.00 Senior/ Adjustable Rate February 25, AAA/Aaa $100,000.00
Rate(1)(2) 2046
Class M-1 Adjustable $18,765,000.00 Mezzanine/Adjustable February 25, AA+/Aa1 $100,000.00
Rate(1)(2) Rate 2046
Class M-2 Adjustable $8,042,000.00 Mezzanine/Adjustable February 25, AA/Aa2 $100,000.00
Rate(1)(2) Rate 2046
Class M-3 Adjustable $4,356,000.00 Mezzanine/Adjustable February 25, AA-/Aa3 $100,000.00
Rate(1)(2) Rate 2046
Class M-4 Adjustable $3,351,000.00 Mezzanine/Adjustable February 25, A+/A1 $250,000.00
Rate(1)(2) Rate 2046
Class M-5 Adjustable $3,350,000.00 Mezzanine/Adjustable February 25, A/A2 $250,000.00
Rate(1)(2) Rate 2046
Class M-6 Adjustable $3,351,000.00 Mezzanine/Adjustable February 25, A-/A3 $250,000.00
Rate(1)(2) Rate 2046
Class M-7 Adjustable $3,350,000.00 Mezzanine/Adjustable February 25, BBB/Baa2 $250,000.00
Rate(1)(2) Rate 2046
Class M-8 Adjustable $3,351,000.00 Mezzanine/Adjustable February 25, BBB-/Baa3 $250,000.00
Rate(1)(2) Rate 2046
Class SB (3) (3) $4,693,329.19 Subordinate February 25, N/R N/A
2046
(1) The REMIC II Regular Interests, ownership of which is represented by the Class A and Class M
Certificates, will accrue interest at a per annum rate equal to the lesser of (i) LIBOR plus the applicable
Margin and (ii) the Net WAC Cap Rate.
(2) The Class A and Class M Certificates will also entitle their holders to receive certain payments from
the Holder of the Class SB Certificates from amounts to which the Holder of the Class SB Certificates is
entitled, which will not be a part of their ownership of the related REMIC II Regular Interests.
(3) The Class SB Certificates will accrue interest as described in the definition of Accrued Certificate
Interest. The Class SB Certificates will not accrue interest on their Certificate Principal Balance. The
Class SB Certificates will represent ownership of two REMIC II Regular Interests, a principal only regular
interest designated REMIC II Regular Interest SB-PO and an interest only regular interest designated REMIC II
Regular Interest SB-IO, which will be entitled to distributions as set forth herein.
The Mortgage Loans have an aggregate Cut-off Date Principal Balance equal to $670,179,329.19. The
Mortgage Loans are payment-option adjustable-rate first lien mortgage loans with a negative amortization
feature having terms to maturity at origination or modification of generally not more than 40 years.
In consideration of the mutual agreements herein contained, the Company, the Master Servicer and the
Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01...Definitions.
Whenever used in this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article.
Accrued Certificate Interest: With respect to each Distribution Date and each Class of Class A
Certificates and Class M Certificates, interest accrued during the related Interest Accrual Period on the
Certificate Principal Balance thereof immediately prior to such Distribution Date at the Pass-Through Rate
for that Distribution Date.
The amount of Accrued Certificate Interest on each Class of Class A Certificates and Class M
Certificates shall be reduced by the amount of Prepayment Interest Shortfalls on the Mortgage Loans during
the prior calendar month to the extent not covered by Compensating Interest pursuant to Section 3.16, by
Relief Act Shortfalls on the Mortgage Loans during the related Due Period, and by any Net Deferred Interest
on the Mortgage Loans allocable to such Class of Certificates for that Distribution Date. All such
reductions with respect to the Mortgage Loans will be allocated among the Class A Certificates and Class M
Certificates in proportion to the amount of Accrued Certificate Interest payable on such Certificates on such
Distribution Date absent such reductions.
Accrued Certificate Interest with respect to any Class of Class M Certificates for any Distribution
Date shall further be reduced by the interest portion of Realized Losses allocated to any Class of Class M
Certificates pursuant to Section 4.05.
Accrued Certificate Interest with respect to the Class A Certificates and Class M Certificates shall
accrue on the basis of a 360-day year and the actual number of days in the related Interest Accrual Period.
With respect to each Distribution Date and the Class SB Certificates, interest accrued during the
preceding Interest Accrual Period at the Pass-Through Rate on the Notional Amount as specified in the
definition of Pass-Through Rate, immediately prior to such Distribution Date, reduced by any interest
shortfalls with respect to the Mortgage Loans, including Prepayment Interest Shortfalls to the extent not
covered by Compensating Interest pursuant to Section 3.16 or by Excess Cash Flow pursuant to
Section 4.02(c)(iii) and (iv). Accrued Certificate Interest on the Class SB Certificates shall accrue on the
basis of a 360-day year and the actual number of days in the related Interest Accrual Period.
Adjustment Date: With respect to each Mortgage Loan, each date set forth in the related Mortgage Note
on which an adjustment to the interest rate on such Mortgage Loan becomes effective.
Available Distribution Amount: As to any Distribution Date, an amount equal to (a) the sum of (i) the
amount relating to the Mortgage Loans on deposit in the Custodial Account as of the close of business on the
immediately preceding Determination Date, including any Subsequent Recoveries, and amounts deposited in the
Custodial Account in connection with the substitution of Qualified Substitute Mortgage Loans, (ii) the amount
of any Advance made on the immediately preceding Certificate Account Deposit Date, (iii) any amount deposited
in the Certificate Account on the related Certificate Account Deposit Date pursuant to the second paragraph
of Section 3.12(a), (iv) any amount deposited in the Certificate Account pursuant to Section 4.07 or Section
9.01, (v) any amount that the Master Servicer is not permitted to withdraw from the Custodial Account or the
Certificate Account pursuant to Section 3.16(e), (vi) any amount received by the Trustee pursuant to the
Surety Bond in respect of such Distribution Date and (vii) the proceeds of any Pledged Assets received by the
Master Servicer, reduced by (b) the sum as of the close of business on the immediately preceding
Determination Date of (v) any payments or collections consisting of Prepayment Charges on the Mortgage Loans
that were received during the related Prepayment Period; (w) aggregate Foreclosure Profits, (x) the Amount
Held for Future Distribution, and (y) amounts permitted to be withdrawn by the Master Servicer from the
Custodial Account in respect of the Mortgage Loans pursuant to clauses (ii)-(x), inclusive, of Section
3.10(a).
Basis Risk Shortfall: With respect to each Class of the Class A Certificates and Class M
Certificates, and any Distribution Date, the sum of (a) with respect to any Distribution Date on which the
Net WAC Cap Rate is used to determine the Pass-Through Rate of such Class, an amount equal to the excess of
(x) Accrued Certificate Interest for such Class calculated at a per annum rate equal to LIBOR plus the
related Margin for such Distribution Date, over (y) Accrued Certificate Interest for such Class calculated
using the Net WAC Cap Rate, (b) any shortfalls for such Class calculated pursuant to clause (a) above
remaining unpaid from prior Distribution Dates, and (c) interest on the amount in clause (b) from the
Distribution Date on which such amount was incurred at a per annum rate equal to the related Pass-Through
Rate.
Basis Risk Shortfall Reserve Fund: The reserve fund created pursuant to Section 4.09.
Basis Risk Shortfall Reserve Fund Amount: $299,131.00.
Book-Entry Certificate: The Class A and Class M Certificates.
Capitalization Reimbursement Amount: As to any Distribution Date, the amount of Advances or Servicing
Advances that were added to the Stated Principal Balance of the Mortgage Loans during the prior calendar
month and reimbursed to the Master Servicer or Subservicer on or prior to such Distribution Date pursuant to
Section 3.10(a)(vii), plus the Capitalization Reimbursement Shortfall Amount remaining unreimbursed from any
prior Distribution Date and reimbursed to the Master Servicer or Subservicer on or prior to such Distribution
Date.
Capitalization Reimbursement Shortfall Amount: As to any Distribution Date, the amount, if any, by
which the amount of Advances or Servicing Advances that were added to the Stated Principal Balance of the
Mortgage Loans during the preceding calendar month exceeds the amount of principal payments on the Mortgage
Loans included in the Available Distribution Amount for that Distribution Date.
Certificate: Any Class A, Class M, Class SB or Class R Certificate.
Certificate Account: The separate account or accounts created and maintained pursuant to Section 4.01
of the Standard Terms, which shall be entitled "U.S. BANK NATIONAL ASSOCIATION, as trustee, in trust for the
registered holders of Residential Accredit Loans, Inc., Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-QO2" and which must be an Eligible Account.
Certificate Principal Balance: With respect to any Class A Certificate or Class M Certificate, on any
date of determination, an amount equal to (i) the Initial Certificate Principal Balance of such Certificate
as specified on the face thereof plus (ii) an amount equal to the aggregate Net Deferred Interest added to
the Certificate Principal Balance thereof prior to such date of determination, minus (iii) the sum of (x) the
aggregate of all amounts previously distributed with respect to such Certificate (or any predecessor
Certificate) and applied to reduce the Certificate Principal Balance thereof pursuant to Section 4.02(c) and
(y) in the case of any Class of Class M Certificates, the aggregate of all reductions in Certificate
Principal Balance deemed to have occurred in connection with Realized Losses which were previously allocated
to such Certificate (or any predecessor Certificate) pursuant to Section 4.05; provided, that with respect to
any Distribution Date, the Certificate Principal Balance of the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7 and Class M-8 Certificates, in that order, will be increased to the extent of
Realized Losses previously allocated thereto and remaining unreimbursed, but only to the extent of Subsequent
Recoveries received during the preceding calendar month. With respect to each Class SB Certificate, on any
date of determination, an amount equal to the Percentage Interest evidenced by such Certificate, multiplied
by an amount equal to (i) the excess, if any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans over (B) the then aggregate Certificate Principal Balance of the Class A Certificates and
Class M Certificates then outstanding, which represents the sum of (i) the Initial Principal Balance of the
REMIC II Regular Interest SB-PO, as reduced by Realized Losses allocated thereto and payments deemed made
thereon, and (ii) accrued and unpaid interest on the REMIC II Regular Interest SB-IO, as reduced by Realized
Losses allocated thereto. The Class R Certificates will not have a Certificate Principal Balance.
Certificate Policy: None.
Class A Certificate: Any one of the Class A-1, Class A-2 or Class A-3 Certificates, executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form annexed to the Standard
Terms as Exhibit A, senior to the Class M Certificates, Class SB Certificates and Class R Certificates with
respect to distributions and the allocation of Realized Losses as set forth in Section 4.05, and evidencing
(i) an interest designated as a "regular interest" in REMIC II for purposes of the REMIC Provisions and (ii)
the right to receive Basis Risk Shortfalls.
Class A Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the Principal Distribution Amount for that Distribution Date or (ii) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the Principal Distribution Amount for that Distribution Date; and
(ii) the excess, if any, of (A) the aggregate Certificate Principal Balance of the Class A
Certificates immediately prior to that Distribution Date over (B) the lesser of (x) the product of (1)
the applicable Subordination Percentage and (2) the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution Date and (y) the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the Overcollateralization Floor.
Class A-1 Certificate: The Class A-1 Certificates, executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed to the Standard Terms as Exhibit A.
Class A-1 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 0.220% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 0.440% per annum.
Class A-2 Certificate: The Class A-2 Certificates, executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed to the Standard Terms as Exhibit A.
Class A-2 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 0.270% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 0.540% per annum.
Class A-3 Certificate: The Class A-3 Certificates, executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed to the Standard Terms as Exhibit A.
Class A-3 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 0.340% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 0.680% per annum.
Class A-P Certificates: None.
Class M Certificates: Collectively, the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7 and Class M-8 Certificates.
Class M-1 Certificate: Any one of the Class M-1 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed to the Standard Terms as Exhibit
B, senior to the Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class SB and
Class R Certificates with respect to distributions and the allocation of Realized Losses as set forth in
Section 4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC II for purposes of
the REMIC Provisions and (ii) the right to receive Basis Risk Shortfalls.
Class M-1 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 0.430% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 0.645% per annum.
Class M-1 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for
that Distribution Date, the lesser of:
(i)....the remaining Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal Balance of the
Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount for
that Distribution Date) and (2) the Certificate Principal Balance of the Class M-1 Certificates immediately
prior to that Distribution Date over (B) the lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class M-2 Certificate: Any one of the Class M-2 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed to the Standard Terms as Exhibit
B, senior to the Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class SB and Class R
Certificates with respect to distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and (ii) the right to receive Basis Risk Shortfalls.
Class M-2 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 0.460% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 0.690% per annum.
Class M-2 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount and Class M-1 Principal Distribution Amount or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution Date, the lesser of:
(i)....the remaining Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount and the Class M-1 Principal Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal Balance of the
Class A Certificates and Class M-1 Certificates (after taking into account the payment of the Class A
Principal Distribution Amount and the Class M-1 Principal Distribution Amount for that Distribution Date) and
(2) the Certificate Principal Balance of the Class M-2 Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the applicable Subordination Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after giving effect to distributions to be made on
that Distribution Date and (y) the excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-3 Certificate: Any one of the Class M-3 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to
the Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class SB Certificates and Class R Certificates
with respect to distributions and the allocation of Realized Losses as set forth in Section 4.05, and
evidencing (i) an interest designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and (ii) the right to receive Basis Risk Shortfalls.
Class M-3 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 0.530% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 0.795% per annum.
Class M-3 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Class M-1 Principal Distribution Amount and Class M-2 Principal Distribution
Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date,
the lesser of:
(i)....the remaining Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution Amount and Class M-2 Principal
Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal Balance of the
Class A, Class M-1 and Class M-2 Certificates (after taking into account the payment of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount and the Class M-2 Principal Distribution
Amount for that Distribution Date) and (2) the Certificate Principal Balance of the Class M-3 Certificates
immediately prior to that Distribution Date over (B) the lesser of (x) the product of (1) the applicable
Subordination Percentage and (2) the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to distributions to be made on that
Distribution Date, over the Overcollateralization Floor.
Class M-4 Certificate: Any one of the Class M-4 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to
the Class M-5, Class M-6, Class M-7, Class M-8, Class SB Certificates and Class R Certificates with respect
to distributions and the allocation of Realized Losses as set forth in Section 4.05, and evidencing (i) an
interest designated as a "regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the
right to receive Basis Risk Shortfalls.
Class M-4 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 0.820% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 1.230% per annum.
Class M-4 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Class M-1 Principal Distribution Amount, Class M-2 Principal Distribution
Amount and Class M-3 Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event
is not in effect for that Distribution Date, the lesser of:
(i)....the remaining Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution Amount, Class M-2 Principal
Distribution Amount and Class M-3 Principal Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal Balance of the
Class A, Class M-1, Class M-2 and Class M-3 Certificates (after taking into account the payment of the
Class A Principal Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution Amount and the Class M-3 Principal Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-4 Certificates immediately prior to that Distribution Date over
(B) the lesser of (x) the product of (1) the applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the Overcollateralization Floor.
Class M-5 Certificate: Any one of the Class M-5 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to
the Class M-6, Class M-7, Class M-8, Class SB Certificates and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section 4.05, and evidencing (i) an
interest designated as a "regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the
right to receive Basis Risk Shortfalls.
Class M-5 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 0.940% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 1.410% per annum.
Class M-5 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Class M-1 Principal Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal Distribution Amount and Class M-4 Principal Distribution Amount or (ii) on or
after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the lesser of:
(i)....the remaining Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution Amount, Class M-3 Principal Distribution Amount and Class M-4 Principal Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal Balance of the
Class A, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates (after taking into account the payment of
the Class A Principal Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount and the Class M-4 Principal
Distribution Amount for that Distribution Date) and (2) the Certificate Principal Balance of the Class M-5
Certificates immediately prior to that Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization Floor.
Class M-6 Certificate: Any one of the Class M-6 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to
the Class M-7, Class M-8, Class SB Certificates and Class R Certificates with respect to distributions and
the allocation of Realized Losses as set forth in Section 4.05, and evidencing (i) an interest designated as
a "regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the right to receive Basis
Risk Shortfalls.
Class M-6 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 1.100% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 1.650% per annum.
Class M-6 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Class M-1 Principal Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal Distribution Amount, Class M-4 Principal Distribution Amount and Class M-5
Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for
that Distribution Date, the lesser of:
(i)....the remaining Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution Amount, Class M-3 Principal Distribution Amount, Class M-4 Principal Distribution Amount and
Class M-5 Principal Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal Balance of the
Class A, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates (after taking into account the
payment of the Class A Principal Distribution Amount, the Class M-1 Principal Distribution Amount, the
Class M-2 Principal Distribution Amount, the Class M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount and the Class M-5 Principal Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-6 Certificates immediately prior to that Distribution Date over
(B) the lesser of (x) the product of (1) the applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the Overcollateralization Floor.
Class M-7 Certificate: Any one of the Class M-7 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to
the Class M-8, Class SB Certificates and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the right to receive Basis Risk
Shortfalls.
Class M-7 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 1.500% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 2.250% per annum.
Class M-7 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Class M-1 Principal Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal Distribution Amount, Class M-4 Principal Distribution Amount, Class M-5 Principal
Distribution Amount and Class M-6 Principal Distribution Amount or (ii) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the lesser of:
(i)....the remaining Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution Amount, Class M-2 Principal
Distribution Amount, Class M-3 Principal Distribution Amount, Class M-4 Principal Distribution Amount,
Class M-5 Principal Distribution Amount and Class M-6 Principal Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal Balance of the
Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M 5 and Class M-6 Certificates (after taking into
account the payment of the Class A Principal Distribution Amount, Class M-1 Principal Distribution Amount,
Class M-2 Principal Distribution Amount, Class M-3 Principal Distribution Amount, Class M-4 Principal
Distribution Amount, Class M-5 Principal Distribution Amount and Class M-6 Principal Distribution Amount for
that Distribution Date) and (2) the Certificate Principal Balance of the Class M-7 Certificates immediately
prior to that Distribution Date over (B) the lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class M-8 Certificate: Any one of the Class M-8 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B, senior to
the Class SB Certificates and Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC II for purposes of the REMIC Provisions and (ii) the right to receive Basis Risk Shortfalls.
Class M-8 Margin: With respect to any Distribution Date prior to the second Distribution Date after
the first possible Optional Termination Date, 1.500% per annum, and on any Distribution Date on or after the
second Distribution Date after the first possible Optional Termination Date, 2.250% per annum.
Class M-8 Principal Distribution Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date,
the remaining Principal Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Class M-1 Principal Distribution Amount, Class M-2 Principal Distribution
Amount, Class M-3 Principal Distribution Amount, Class M-4 Principal Distribution Amount, Class M-5 Principal
Distribution Amount, Class M-6 Principal Distribution Amount and Class M-7 Principal Distribution Amount or
(ii) on or after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the lesser
of:
(i)....the remaining Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution Amount, Class M-2 Principal
Distribution Amount, Class M-3 Principal Distribution Amount, Class M-4 Principal Distribution Amount,
Class M-5 Principal Distribution Amount, Class M-6 Principal Distribution Amount and Class M-7 Principal
Distribution Amount; and
(ii)...the excess, if any, of (A) the sum of (1) the aggregate Certificate Principal Balance of the
Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M 5, Class M-6 and Class M-7 Certificates (after
taking into account the payment of the Class A Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution Amount, Class M-3 Principal Distribution Amount,
Class M-4 Principal Distribution Amount, Class M-5 Principal Distribution Amount, Class M-6 Principal
Distribution Amount and Class M-7 Principal Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-8 Certificates immediately prior to that Distribution Date over
(B) the lesser of (x) the product of (1) the applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the Overcollateralization Floor.
Class R Certificate: Any one of the Class R-I Certificates or Class R-II Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed to the Standard Terms as Exhibit
D and evidencing an interest designated as a "residual interest" in REMIC I for purposes of the REMIC
Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed to the Standard Terms as Exhibit
D and evidencing an interest designated as a "residual interest" in REMIC II for purposes of the REMIC
Provisions.
Class SB Certificate: Any one of the Class SB Certificates executed by the Trustee and authenticated
by the Certificate Registrar substantially in the form annexed hereto as Exhibit R, subordinate to the Class
A Certificates and Class M Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.05, and evidencing ownership of REMIC II Regular Interests SB-IO and SB-PO
designated as "regular interests" in REMIC II for purposes of the REMIC Provisions, together with certain
obligations with respect to payments of Basis Risk Shortfall amounts.
Closing Date: February 28, 2006.
Corporate Trust Office: The principal office of the Trustee at which at any particular time its
corporate trust business with respect to this Agreement shall be administered, which office at the date of
the execution of this instrument is located at U.S. Bank National Association, Mail Code EP-MN-WS3D, 00
Xxxxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attn: Structured Finance/RALI 2006-QO2.
Cut-off Date Balance: $670,179,329.19.
Cut-off Date: February 1, 2006.
Deferred Interest: The amount of interest which is deferred and added to the principal balance of a
Mortgage Loan due to negative amortization.
Determination Date: With respect to any Distribution Date, the second Business Day prior to each
Distribution Date.
Discount Net Mortgage Rate: Not applicable.
Due Period: With respect to each Distribution Date, the calendar month in which such Distribution
Date occurs.
Excess Bankruptcy Loss: Not applicable.
Excess Cash Flow: With respect to any Distribution Date, an amount equal to the sum of (A) the excess
of (i) the Available Distribution Amount for that Distribution Date over (ii) the sum of (a) the Interest
Distribution Amount for that Distribution Date and (b) the lesser of (1) the aggregate Certificate Principal
Balance of Class A Certificates and Class M Certificates immediately prior to such Distribution Date and
(2) the Principal Remittance Amount for that Distribution Date to the extent not applied to pay interest on
the Class A Certificates and Class M Certificates on such Distribution Date and (B) the Overcollateralization
Reduction Amount, if any, for that Distribution Date.
Excess Fraud Loss: Not applicable.
Excess Overcollateralization Amount: With respect to any Distribution Date, the excess, if any, of
(a) the Overcollateralization Amount on such Distribution Date over (b) the Required Overcollateralization
Amount.
Excess Special Hazard Loss: Not applicable.
Excess Subordinate Principal Amount: Not applicable.
Expense Fee Rate: With respect to any Mortgage Loan as of any date of determination, the sum of the
Servicing Fee Rate and the rate per annum at which the Subservicing Fee accrues.
Gross Margin: With respect to each Mortgage Loan, the fixed percentage set forth in the related
Mortgage Note and indicated on the Mortgage Loan Schedule attached hereto as the "NOTE MARGIN," which
percentage is added to the related Index on each Adjustment Date to determine (subject to rounding in
accordance with the related Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and the Minimum
Mortgage Rate) the interest rate to be borne by such Mortgage Loan until the next Adjustment Date.
Index: With respect to any Mortgage Loan and as to any Adjustment Date therefor, the related index as
stated in the related Mortgage Note.
Initial Subordinate Class Percentage: Not applicable.
Interest Accrual Period: (i) With respect to the Distribution Date in March 2006, the period
commencing on the Closing Date and ending on the day immediately preceding the Distribution Date in March
2006, and with respect to any Distribution Date after the Distribution Date in March 2006, the period
commencing on the Distribution Date in the month immediately preceding the month in which such Distribution
Date occurs and ending on the day immediately preceding such Distribution Date.
Interest Distribution Amount: For any Distribution Date, the aggregate of the amounts payable
pursuant to Section 4.02(c)(i).
Interest Only Certificates: None.
LIBOR: With respect to any Distribution Date, the arithmetic mean of the London interbank offered
rate quotations for one-month U.S. Dollar deposits, expressed on a per annum basis, determined in accordance
with Section 1.02.
LIBOR Business Day: Any day other than (i) a Saturday or Sunday or (ii) a day on which banking
institutions in London, England are required or authorized to by law to be closed.
LIBOR Certificates: The Class A Certificates and Class M Certificates.
LIBOR Rate Adjustment Date: With respect to each Distribution Date, the second LIBOR Business Day
immediately preceding the commencement of the related Interest Accrual Period.
Liquidation Proceeds: As defined in the Standard Terms but excluding Subsequent Recoveries.
Margin: The Class A-1 Margin, Class A-2 Margin, Class A-3 Margin, Class M-1 Margin, Class M-2 Margin,
Class M-3 Margin, Class M-4 Margin, Class M-5 Margin, Class M-6 Margin, Class M-7 Margin or Class M-8 Margin,
as applicable.
Marker Rate: With respect to the Class SB Certificates or REMIC II Regular Interest SB-IO and any
Distribution Date, a per annum rate equal to two (2) times the weighted average of the Uncertificated REMIC I
Pass-Through Rates for REMIC I Regular Interest LT2 and REMIC I Regular Interest LT3.
Maturity Date: February 25, 2046, the Distribution Date immediately following the latest scheduled
maturity date of any Mortgage Loan.
Maximum Mortgage Rate: As to any Mortgage Loan, the per annum rate indicated in Mortgage Loan
Schedule hereto attached hereto as the "NOTE CEILING," which rate is the maximum interest rate that may be
applicable to such Mortgage Loan at any time during the life of such Mortgage Loan.
Maximum Net Mortgage Rate: As to any Mortgage Loan and any date of determination, the Maximum
Mortgage Rate minus the Expense Fee Rate.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans attached hereto as Exhibit One ( and
as amended from time to time to reflect the addition of Qualified Substitute Mortgage Loans), which list or
lists shall set forth the following information as to each Mortgage Loan:
(i)....the Mortgage Loan identifying number ("RFC LOAN #");
(ii)...the maturity of the Mortgage Note ("MATURITY DATE");
(iii)..the Mortgage Rate as of origination ("ORIG RATE");
(iv)...the Mortgage Rate as of the Cut-off Date ("CURR RATE");
(v)....the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
(vi)...the scheduled monthly payment of principal, if any, and interest as of the Cut-off Date
("ORIGINAL P & I" or "CURRENT P & I");
(vii)..the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(viii).the Maximum Mortgage Rate ("NOTE CEILING");
(ix)...the maximum Net Mortgage Rate ("NET CEILING");
(x)....the Note Margin ("NOTE MARGIN");
(xi)...the Note Margin ("NOTE MARGIN");
(xii)..the Periodic Cap ("PERIODIC DECR" or "PERIODIC INCR");
(xiii).the rounding of the semi-annual or annual adjustment to the Mortgage Rate ("NOTE METHOD");
(xiv)..the Loan-to-Value Ratio at origination ("LTV");
(xv)...the rate at which the Subservicing Fee accrues ("SUBSERV FEE") and at which the Servicing Fee
accrues ("MSTR SERV FEE");
(xvi)..a code "T," "BT" or "CT" under the column "LN FEATURE," indicating that the Mortgage Loan is
secured by a second or vacation residence; and
(xvii).a code "N" under the column "OCCP CODE," indicating that the Mortgage Loan is secured by a
non-owner occupied residence.
Such schedule may consist of multiple reports that collectively set forth all of the information
required.
Mortgage Rate: With respect to any Mortgage Loan, the interest rate borne by the related Mortgage
Note, or any modification thereto other than a Servicing Modification. The Mortgage Rate on each Mortgage
Loan will adjust on each Adjustment Date to equal the sum (rounded to the nearest multiple of one eighth of
one percent (0.125%) or up to the nearest one-eighth of one percent, which are indicated by a "U" on the
Mortgage Loan Schedule, except in the case of the Mortgage Loans indicated by an "X" on the Mortgage Loan
Schedule under the heading "NOTE METHOD"), of the related Index plus the Note Margin, in each case subject to
the applicable Periodic Cap, Maximum Mortgage Rate and Minimum Mortgage Rate.
Net Deferred Interest: On any Distribution Date, Deferred Interest on the Mortgage Loans during
the related Due Period net of Principal Prepayments in full and partial Principal Prepayments included in the
Available Distribution Amount for such Distribution Date and available to make principal distributions on the
Certificates on that Distribution Date.
Net Mortgage Rate: With respect to any Mortgage Loan as of any date of determination, a per annum
rate equal to the Mortgage Rate for such Mortgage Loan as of such date minus the related Expense Fee Rate.
Net WAC Cap Rate: 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 Mortgage Loans
using the Net Mortgage Rates in effect for the Monthly Payments due on the Mortgage Loans during the related
Due Period, weighted on the basis of the respective Stated Principal Balances thereof for such Distribution
Date, 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.
Note Margin: With respect to each Mortgage Loan, the fixed percentage set forth in the related
Mortgage Note and indicated in Exhibit One hereto as the "NOTE MARGIN," which percentage is added to the
Index on each Adjustment Date to determine (subject to rounding in accordance with the related Mortgage Note,
the Periodic Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate) the interest rate to be borne by
such Mortgage Loan until the next Adjustment Date.
Notional Amount: With respect to the Class SB Certificates or the REMIC II Regular Interest SB-IO,
immediately prior to any Distribution Date is equal to the aggregate of the Uncertificated Principal Balances
of the REMIC I Regular Interests.
Offered Certificates: The Class A Certificates and the Class M Certificates.
Optional Termination Date: Any Distribution Date on or after which the aggregate Stated Principal
Balance (after giving effect to distributions to be made on such Distribution Date) of the Mortgage Loans is
less than 10.00% of the Cut-off Date Balance.
Overcollateralization Amount: With respect to any Distribution Date, the excess, if any, of (a) the
aggregate Stated Principal Balance of the Mortgage Loans before giving effect to distributions of principal
to be made on such Distribution Date over (b) the aggregate Certificate Principal Balance of the Class A
Certificates and Class M Certificates immediately prior to such date.
Overcollateralization Floor - An amount equal to the product of 0.50% and the Cut-off Date Balance.
Overcollateralization Increase Amount: With respect to any Distribution Date, the lesser of
(a) Excess Cash Flow for that Distribution Date (to the extent not used to cover the amounts described in
clauses (b)(iv), (v) and (vi) of the definition of Principal Distribution Amount as of such Distribution
Date) and (b) the excess of (1) the Required Overcollateralization Amount for such Distribution Date over
(2) the Overcollateralization Amount for such Distribution Date.
Overcollateralization Reduction Amount: With respect to any Distribution Date on which the Excess
Overcollateralization Amount is, after taking into account all other distributions to be made on such
Distribution Date, greater than zero, the Overcollateralization Reduction Amount shall be equal to the lesser
of (i) the Excess Overcollateralization Amount for that Distribution Date and (ii) the Principal Remittance
Amount on such Distribution Date.
Pass-Through Rate: With respect to each class of Certificates (other than the Class SB Certificates
and the Class R Certificates), and any Distribution Date, a per annum rate equal to the lesser of (i) LIBOR
plus the related Margin for such Distribution Date and (ii) the Net WAC Cap Rate for such Distribution Date.
With respect to the Class SB Certificates and any Distribution Date or REMIC II Regular Interest
SB-IO, a rate per annum equal to the percentage equivalent of a fraction, the numerator of which is the sum
of the amounts calculated pursuant to clauses (i) through (iii) below, and the denominator of which is the
aggregate principal balance of the REMIC I Regular Interests. For purposes of calculating the Pass-Through
Rate for the Class SB Certificates or the REMIC II Regular Interest SB-IO, the numerator is equal to the sum
of the following components:
(i)....the Uncertificated Pass-Through Rate for REMIC I Regular Interest LT1 minus the Marker Rate,
applied to a notional amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LT1;
(ii)...the Uncertificated Pass-Through Rate for REMIC I Regular Interest LT2 minus the Marker Rate,
applied to a notional amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LT2;
and
(iii)..the Uncertificated Pass-Through Rate for REMIC I Regular Interest LT4 minus twice the Marker
Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest
LT4.
Prepayment Assumption: The prepayment assumption to be used for determining the accrual of original
issue discount and premium and market discount on the Certificates for federal income tax purposes, which
assumes a constant prepayment rate of 20% per annum of the then outstanding principal balance of the Mortgage
Loans.
Prepayment Charge: With respect to any Mortgage Loan, the charges or premiums, if any, received in
connection with a full or partial prepayment of such Mortgage Loan in accordance with the terms thereof.
Prepayment Charge Loan: Any Mortgage Loan for which a Prepayment Charge may be assessed and to which
such Prepayment Charge the Class SB Certificates are entitled, as indicated on the Mortgage Loan Schedule.
Principal Distribution Amount: With respect to any Distribution Date, the lesser of (a) the excess of
(x) Available Distribution Amount over (y) the Interest Distribution Amount and (b) the sum of:
(i)....the principal portion of each Monthly Payment received or Advanced with respect to the related
Due Period on each Outstanding Mortgage Loan;
(ii)...the Stated Principal Balance of any Mortgage Loan repurchased during the related Prepayment
Period (or deemed to have been so repurchased in accordance with Section 3.07(b)) pursuant to Section 2.02,
2.03, 2.04 or 4.07 and the amount of any shortfall deposited in the Custodial Account in connection with the
substitution of a Deleted Mortgage Loan pursuant to Section 2.03 or 2.04 during the prior calendar month;
(iii)..the principal portion of all other unscheduled collections, other than Subsequent Recoveries,
on the Mortgage Loans received (or deemed to have been so received) during the prior calendar month or, in
the case of Principal Prepayments in Full, during the related Prepayment Period, including, without
limitation, Curtailments, Insurance Proceeds, Liquidation Proceeds, REO Proceeds and, except to the extent
applied to offset Deferred Interest, Principal Prepayments, to the extent applied by the Master Servicer as
recoveries of principal pursuant to Section 3.14;
(iv)...the lesser of (1) Subsequent Recoveries for such Distribution Date and (2) the principal
portion of any Realized Losses allocated to any Class of Certificates on a prior Distribution Date and
remaining unpaid;
(v)....the lesser of (1) the Excess Cash Flow for such Distribution Date (to the extent not used
pursuant to clause (iv) of this definition on such Distribution Date) and (2) the principal portion of any
Realized Losses incurred (or deemed to have been incurred) on any Mortgage Loans in the calendar month
preceding such Distribution Date that are allocated to any Class of Certificates; and
(vi)...the lesser of (a) the Excess Cash Flow for such Distribution Date, to the extent not used
pursuant to clauses (iv) and (v) of this definition on such Distribution Date, and (b) the amount of any
Overcollateralization Increase Amount for such Distribution Date;
minus
(vii)..(A) the amount of any Overcollateralization Reduction Amount for such Distribution Date and (B)
the amount of any Capitalization Reimbursement Amount for such Distribution Date.
Principal Only Certificates: None.
Principal Remittance Amount: With respect to any Distribution Date, all amounts described in clauses
(b)(i) through (iii) of the definition of Principal Distribution Amount for that Distribution Date.
Record Date: With respect to each Distribution Date and each Class of Book Entry Certificates, the
Business Day immediately preceding such Distribution Date. With respect to each Class of Definitive
Certificates, the close of business on the last Business Day of the month next preceding the month in which
the related Distribution Date occurs, except in the case of the first Record Date which shall be the Closing
Date.
Regular Certificates: The Class A, Class M and Class SB Certificates.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Shortfalls: Interest shortfalls on the Mortgage Loans resulting from the Relief Act or
similar legislation or regulations.
REMIC I: The segregated pool of assets with respect to which a REMIC election is to be made,
consisting of:
(i)....the Mortgage Loans and the related Mortgage Files,
(ii)...all payments and collections in respect of the Mortgage Loans due after the Cut-off Date (other
than Monthly Payments due in the month of the Cut-off Date ) as shall be on deposit in the Custodial Account
or in the Certificate Account and identified as belonging to the Trust Fund,
(iii)..property which secured a Mortgage Loan and which has been acquired for the benefit of the
Certificateholders by foreclosure or deed in lieu of foreclosure,
(iv)...the hazard insurance policies and Primary Insurance Policies, if any, and
(v)....all proceeds of clauses (i) through (iv) above.
Notwithstanding the foregoing, the REMIC election with respect to REMIC I specifically excludes the
Basis Risk Shortfall Reserve Fund.
REMIC I Distribution Amount: For any Distribution Date, the Available Distribution Amount shall be
distributed to the REMIC I Regular Interests and the Class R-I Certificates in the following amounts and
priority:
(i) to the extent of the Available Distribution Amount, to REMIC II as the holder of REMIC
I Regular Interests LT1, LT2, LT3 and LT4, pro rata, in an amount equal to (A) their Uncertificated Accrued
Interest for such Distribution Date reduced, in each case, by any Net Deferred Interest allocated to such
REMIC I Regular Interest for such Distribution Date, plus (B) any amounts in respect thereof remaining unpaid
from previous Distribution Dates; and
(ii) to the extent of the Available Distribution Amount remaining after the distributions
made pursuant to clause (i) above, to REMIC II as the holder of the REMIC I Regular Interests, in an amount
equal to:
(A) in respect of REMIC I Regular Interests LT2, LT3 and LT4, their respective
Principal Distribution Amounts;
(B) in respect of REMIC I Regular Interest LT1 any remainder until the
Uncertificated Principal Balance thereof is reduced to zero;
(C) any remainder in respect of REMIC I Regular Interests LT2, LT3 and LT4, pro rata
according to their respective Uncertificated Principal Balances as reduced by the distributions deemed made
pursuant to (A) above, until their respective Uncertificated Principal Balances are reduced to zero; and
(iii) any remaining amounts to the Holders of the Class R-I Certificates.
REMIC I Net Deferred Interest: Net Deferred Interest for any Distribution Date shall be allocated to
REMIC I Regular Interest LT1.
REMIC I Principal Reduction Amounts: For any Distribution Date, the amounts by which the principal
balances of REMIC I Regular Interests LT1, LT2, LT3 and LT4, respectively, will be reduced on such
Distribution Date by the allocation of Realized Losses and the distribution of principal, determined as
follows:
For purposes of the succeeding formulas the following symbols shall have the meanings set forth below:
Y1 =...the aggregate principal balance of REMIC I Regular Interest LT1 after distributions on the
prior Distribution Date.
Y2 =...the principal balance of REMIC I Regular Interest LT2 after distributions on the prior
Distribution Date.
Y3 =...the principal balance of REMIC I Regular Interest LT3 after distributions on the prior
Distribution Date.
Y4 =...the principal balance of REMIC I Regular Interest LT4 after distributions on the prior
Distribution Date (note: Y3 = Y4).
AY1 =..the REMIC I Regular Interest XX0 Xxxxxxxxx Xxxxxxxxx Xxxxxx.
XX0 =..the REMIC I Regular Interest XX0 Xxxxxxxxx Xxxxxxxxx Xxxxxx.
XX0 =..the REMIC I Regular Interest XX0 Xxxxxxxxx Xxxxxxxxx Xxxxxx.
XX0 =..the REMIC I Regular Interest LT4 Principal Reduction Amount.
P0 =...the aggregate principal balance of REMIC I Regular Interests LT1, LT2, LT3 and LT4 after
distributions and the allocation of Realized Losses on the prior Distribution Date.
P1 =...the aggregate principal balance of REMIC I Regular Interests LT1, LT2, LT3 and LT4 after
distributions and the allocation of Realized Losses to be made on such Distribution Date.
AP =...P0 - P1 = the aggregate of REMIC I Regular Interests LT1, LT2, LT3 and LT4 Principal Reduction
Amounts.
=the aggregate of the principal portions of Realized Losses to be allocated to, and the
principal distributions to be made on, the Certificates on such Distribution Date (including distributions of
accrued and unpaid interest on the Class SB Certificates for prior Distribution Dates).
R0 =...the Net WAC Cap Rate (stated as a monthly rate) after giving effect to amounts distributed and
Realized Losses allocated on the prior Distribution Date.
R1 =...the Net WAC Cap Rate (stated as a monthly rate) after giving effect to amounts to be
distributed and Realized Losses to be allocated on such Distribution Date.
a =....(Y2 + Y3)/P0. The initial value of a on the Closing Date for use on the first Distribution
Date shall be 0.0001.
a0 =...the lesser of (A) the sum for all Classes of Certificates, other than the Class SB
Certificates, of the product for each Class of (i) the monthly interest rate (as limited by the Net WAC Cap
Rate, if applicable) for such Class applicable for distributions to be made on such Distribution Date and
(ii) the aggregate Certificate Principal Balance for such Class after distributions and the allocation of
Realized Losses on the prior Distribution Date and (B) R0*P0.
a1 =..the lesser of (A) the sum for all Classes of Certificates, other than the Class SB
Certificates, of the product for each Class of (i) the monthly interest rate (as limited by the Net WAC Cap
Rate, if applicable) for such Class applicable for distributions to be made on the next succeeding
Distribution Date and (ii) the aggregate Certificate Principal Balance for such Class after distributions and
the allocation of Realized Losses to be made on such Distribution Date and (B) R1*P1.
Then, based on the foregoing definitions:
AY1 =..AP - AY2 - AY3 - AY4;
AY2 =..(a/2){( a0R1 - a1R0)/R0R1};
AY3 =..aAP - AY2; and
AY4 =..AY3.
if both AY2 and AY3, as so determined, are non-negative numbers. Otherwise:
(1)....If AY2, as so determined, is negative, then
AY2 = 0;
AY3 = a{a1R0P0 - a0R1P1}/{a1R0};
AY4 = AY3; and
AY1 = XX - XX0 - XX0 - XX0.
(2)....If AY3, as so determined, is negative, then
AY3 = 0;
AY2 = a{a1R0P0 - a0R1P1}/{2R1R0P1 - a1R0};
AY4 = AY3; and
AY1 = XX - XX0 - XX0 - XX0.
REMIC I Realized Losses: Realized Losses on the Mortgage Loans shall be allocated to the REMIC I
Regular Interests as follows: The interest portion of Realized Losses on the Mortgage Loans, if any, shall be
allocated among REMIC I Regular Interests LT1, LT2 and LT4 pro rata according to the amount of interest
accrued but unpaid thereon, in reduction thereof. Any interest portion of such Realized Losses in excess of
the amount allocated pursuant to the preceding sentence shall be treated as a principal portion of Realized
Losses not attributable to any specific Mortgage Loan and allocated pursuant to the succeeding sentences. The
principal portion of Realized Losses on the Mortgage Loans, if any, shall be allocated first, to REMIC I
Regular Interests LT2, LT3 and LT4 pro rata according to their respective Principal Reduction Amounts to the
extent thereof in reduction of the Uncertificated Principal Balance of such REMIC I Regular Interests and,
second, the remainder, if any, of such principal portion of such Realized Losses shall be allocated to REMIC
I Regular Interest LT1 in reduction of the Uncertificated Principal Balance thereof.
REMIC I Regular Interests: REMIC I Regular Interests LT1, LT2, LT3 and LT4.
REMIC I Regular Interest LT1: A regular interest in REMIC I that is held as an asset of REMIC II, that
has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest
at the related Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are described
herein.
REMIC I Regular Interest LT1 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Regular Interest LT1 Principal Reduction Amount for such Distribution Date over the
Realized Losses allocated to the REMIC I Regular Interest LT1 on such Distribution Date.
REMIC I Regular Interest LT2: A regular interest in REMIC I that is held as an asset of REMIC II, that
has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest
at the related Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are described
herein.
REMIC I Regular Interest LT2 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Regular Interest LT2 Principal Reduction Amount for such Distribution Date over the
Realized Losses allocated to the REMIC I Regular Interest LT2 on such Distribution Date.
REMIC I Regular Interest LT3: A regular interest in REMIC I that is held as an asset of REMIC II, that
has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest
at the related Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are described
herein.
REMIC I Regular Interest LT3 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Regular Interest LT3 Principal Reduction Amount for such Distribution Date over the
Realized Losses allocated to the REMIC I Regular Interest LT3 on such Distribution Date.
REMIC I Regular Interest LT4: A regular interest in REMIC I that is held as an asset of REMIC II, that
has an initial principal balance equal to the related Uncertificated Principal Balance, that bears interest
at the related Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are described
herein.
REMIC I Regular Interest LT4 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC I Regular Interest LT4 Principal Reduction Amount for such Distribution Date over the
Realized Losses allocated to the REMIC I Regular Interest LT4 on such Distribution Date.
REMIC II: The segregated pool of assets subject hereto, constituting a portion of the primary trust
created hereby and to be administered hereunder, with respect to which a separate REMIC election is to be
made, consisting of the REMIC I Regular Interests. The REMIC election with respect to REMIC II specifically
excludes the Basis Risk Shortfall Reserve Fund.
REMIC II Regular Interest: Any one of REMIC II Regular Interest A-1, REMIC II Regular Interest A-2,
REMIC II Regular Interest A-3, REMIC II Regular Interest M-1, REMIC II Regular Interest M-2, REMIC II Regular
Interest M-3, REMIC II Regular Interest M-4, REMIC II Regular Interest M-5, REMIC II Regular Interest M-6,
REMIC II Regular Interest M-7, REMIC II Regular Interest M-8, REMIC II Regular Interest SB-IO or REMIC II
Regular Interest SB-PO.
REMIC II Regular Interest A-1: A regular interest in REMIC II which has a principal balance equal to
the principal balance of the Class A-1 Certificates and which is entitled to interest at a rate equal to the
lesser of (i) LIBOR plus the Class A-1 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest A-2: A regular interest in REMIC II which is has a principal balance equal
to the principal balance of the Class A-2 Certificates and which is entitled to interest at a rate equal to
the lesser of (i) LIBOR plus the Class A-2 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest A-3: A regular interest in REMIC II which is has a principal balance equal
to the principal balance of the Class A-3 Certificates and which is entitled to interest at a rate equal to
the lesser of (i) LIBOR plus the Class A-3 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest M-1: A regular interest in REMIC II which is has a principal balance equal
to the principal balance of the Class M-1 Certificates and which is entitled to interest at a rate equal to
the lesser of (i) LIBOR plus the Class M-1 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest M-2: A regular interest in REMIC II which is has a principal balance equal
to the principal balance of the Class M-2 Certificates and which is entitled to interest at a rate equal to
the lesser of (i) LIBOR plus the Class M-2 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest M-3: A regular interest in REMIC II which is has a principal balance equal
to the principal balance of the Class M-3 Certificates and which is entitled to interest at a rate equal to
the lesser of (i) LIBOR plus the Class M-3 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest M-4: A regular interest in REMIC II which is has a principal balance equal
to the principal balance of the Class M-4 Certificates and which is entitled to interest at a rate equal to
the lesser of (i) LIBOR plus the Class M-4 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest M-5: A regular interest in REMIC II which is has a principal balance equal
to the principal balance of the Class M-5 Certificates and which is entitled to interest at a rate equal to
the lesser of (i) LIBOR plus the Class M-5 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest M-6: A regular interest in REMIC II which is has a principal balance equal
to the principal balance of the Class M-6 Certificates and which is entitled to interest at a rate equal to
the lesser of (i) LIBOR plus the Class M-6 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest M-7: A regular interest in REMIC II which is has a principal balance equal
to the principal balance of the Class M-7 Certificates and which is entitled to interest at a rate equal to
the lesser of (i) LIBOR plus the Class M-7 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest M-8: A regular interest in REMIC II which is has a principal balance equal
to the principal balance of the Class M-8 Certificates and which is entitled to interest at a rate equal to
the lesser of (i) LIBOR plus the Class M-8 Margin and (ii) the Net WAC Cap Rate. Interest accrued in any
Interest Accrual Period and not paid on the related Distribution Date shall carry forward to each succeeding
Distribution Date without interest until paid.
REMIC II Regular Interest SB-IO: A regular interest in REMIC II that has no initial principal, that
bears interest at the related Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest SB-PO: A regular interest in REMIC II that has an initial principal balance
equal to the initial principal balance for the Class SB Certificates, as set forth in the Preliminary
Statement, that bears no interest, and that has such other terms as are described herein.
Required Overcollateralization Amount: With respect to any Distribution Date (i) prior to the
Stepdown Date, an amount equal to 0.70% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date; (ii) on or after the Stepdown Date but prior to the Distribution Date in March 2012,
provided a Trigger Event is not in effect, the greater of (x) 1.75% of the outstanding aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions made on that Distribution Date
and (y) the Overcollateralization Floor; (iii) on or after the Distribution Date in March 2012, provided a
Trigger Event is not in effect, the greater of (x) 1.40% of the outstanding aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions made on that Distribution Date and (y) the
Overcollateralization Floor; and (iv) on or after the Stepdown Date if a Trigger Event is in effect, the
Required Overcollateralization Amount for the immediately preceding Distribution Date; provided that the
Required Overcollateralization Amount may be reduced so long as written confirmation is obtained from each
rating agency that the reduction will not reduce the ratings assigned to the Class A Certificates and Class M
Certificates by that rating agency below the lower of the then-current ratings or the ratings assigned to
those certificates as of the closing date by that rating agency.
Reserve Fund: The separate trust account created and maintained by the Trustee pursuant to Section
4.09 hereof.
Senior Certificate: Any one of the Class A Certificates.
Senior Enhancement Percentage: With respect to any Distribution Date, the percentage obtained by
dividing (x) the sum of (i) the aggregate Certificate Principal Balance of the Class M Certificates and (ii)
the Overcollateralization Amount, in each case prior to the distribution of the Principal Distribution Amount
on such Distribution Date, by (y) the aggregated Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date.
Sequential Trigger Event: A Sequential Trigger Event is in effect with respect to any Distribution
Date if (i) prior to the 37th Distribution Date, the aggregate amount of Realized Losses on the Mortgage
Loans as a percentage of the initial aggregate Stated Principal Balance as of the Cut-off Date exceeds 0.60%,
or (ii) if, on or after the 37th Distribution Date, a Trigger Event is in effect.
Sixty-Plus Delinquency Percentage: With respect to any Distribution Date on or after the Stepdown
date, the arithmetic average, for each of the three consecutive Distribution Dates ending with such
Distribution Date, of the fraction, expressed as a percentage, equal to (x) the aggregate Stated Principal
Balance of the Mortgage Loans that are 60 or more days delinquent in payment of principal and interest for
that Distribution Date, including Mortgage Loans in foreclosure, and REO Properties over (y) the aggregate
Stated Principal Balance of all of the Mortgage Loans immediately preceding that Distribution Date.
Stated Principal Balance: With respect to any Mortgage Loan or related REO Property, as of any date
of determination, (i) the sum of (a) the Cut-off Date Principal Balance of the Mortgage Loan plus (b) any
amount by which the Stated Principal Balance of the Mortgage Loan has been increased pursuant to a Servicing
Modification and (c) any amount by which the Stated Principal Balance of the Mortgage Loan has been increased
for Deferred Interest pursuant to the terms of the related Mortgage Note on or prior to the Distribution
Date, minus (ii) the sum of (a) the principal portion of the Monthly Payments due with respect to such
Mortgage Loan or REO Property during each Due Period ending with the Due Period relating to the most recent
Distribution Date which were received or with respect to which an Advance was made, (b) all Principal
Prepayments with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation
Proceeds and REO Proceeds, to the extent applied by the Master Servicer as recoveries of principal in
accordance with Section 3.14 with respect to such Mortgage Loan or REO Property, in each case which were
distributed pursuant to Section 4.02 on any previous Distribution Date, and (c) any Realized Loss incurred
with respect to such Mortgage Loan allocated to Certificateholders with respect thereto for any previous
Distribution Date.
Stepdown Date: The later to occur of (x) the Distribution Date in March 2009 and (y) the first
Distribution Date on which the Senior Enhancement Percentage is greater than or equal to (a) on any
Distribution Date prior to the Distribution Date in March 2012, 19.625% and (b) on any Distribution Date on
or after the Distribution Date in March 2012, 15.70%.
Subordination Percentage: With respect to each class of Class A Certificates and Class M
Certificates, the respective approximate percentage set forth in the table below:
Class Percentage (1) Percentage (2)
A 80.375% 84.30%
M-1 87.375% 89.90%
M-2 90.375% 92.30%
M-3 92.00% 93.60%
M-4 93.25% 94.60%
M-5 94.50% 95.60%
M-6 95.75% 96.60%
M-7 97.00% 97.60%
M-8 98.25% 98.60%
(1) For any Distribution Date prior to the Distribution Date in March 2012.
(2) For any Distribution Date in March 2012 or thereafter.
Trigger Event: A Trigger Event is in effect with respect to any Distribution Date on or after the
Stepdown Date if either (a) the Sixty-Plus Delinquency Percentage, as determined on that Distribution Date,
exceeds 35.90%, if prior to the Distribution Date in March 2011, or 40.00%, if on or after the Distribution
Date in March 2011, of the Senior Enhancement Percentage for that Distribution Date or (b) the aggregate
amount of Realized Losses on the Mortgage Loans as a percentage of the initial aggregate Stated Principal
Balance as of the Cut-off Date exceeds the applicable amount set forth below:
o March 2009 to February 2010: 0.6000% with respect to March 2009, plus an additional 1/12th of 0.500%
for each month through February 2010.
o March 2010 to February 2011: 1.100% with respect to March 2010, plus an additional 1/12th of 0.500%
for each month through February 2011.
o March 2011 to February 2012: 1.600% with respect to March 2011, plus an additional 1/12th of 0.400%
for each month through February 2012.
o March 2012 and thereafter: 2.000%.
2006-QO2 REMIC: Either of REMIC I or REMIC II, as the case may be.
Uncertificated Accrued Interest: With respect to the REMIC I Regular Interests for any Distribution
Date, one month's interest at the related Uncertificated REMIC I Pass-Through Rate for such Distribution
Date, accrued on its Uncertificated Principal Balance, immediately prior to such Distribution Date.
Uncertificated Accrued Interest for the REMIC I Regular Interests shall accrue on the basis of a 360-day year
consisting of twelve 30-day months. For purposes of calculating the amount of Uncertificated Accrued Interest
for the REMIC I Regular Interests for any Distribution Date, any Prepayment Interest Shortfalls and Relief
Act Shortfalls (to the extent not covered by Compensating Interest) relating to the Mortgage Loans for any
Distribution Date shall be allocated among REMIC I Regular Interests LT1, LT2, LT3 and LT4, pro rata, based
on, and to the extent of, Uncertificated Accrued Interest, as calculated without application of this
sentence. Uncertificated Accrued Interest on REMIC II Regular Interest SB-PO shall be zero. Uncertificated
Accrued Interest on REMIC II Regular Interest SB-IO for each Distribution Date shall equal Accrued
Certificate Interest for the Class SB Certificates.
Uncertificated Principal Balance: The principal amount of any REMIC I Regular Interest outstanding as
of any date of determination. The Uncertificated Principal Balance of each REMIC I Regular Interest shall be
reduced first by Realized Losses allocated thereto by the definition of REMIC I Realized Losses, and by all
distributions of principal deemed made on such REMIC I Regular Interest on such Distribution Date. The
Uncertificated Principal Balance of each REMIC I Regular Interest shall never be less than zero. With
respect to the REMIC II Regular Interest SB-PO the initial amount set forth with respect thereto in the
Preliminary Statement as reduced by distributions deemed made in respect thereof pursuant to Section 4.02 and
Realized Losses allocated thereto pursuant to Section 4.05.
Uncertificated REMIC I Pass-Through Rate: With respect to any Distribution Date and (i) REMIC I
Regular Interests LT1 and LT2, the Net WAC Cap Rate, (ii) REMIC I Regular Interest LT3, zero (0.00%) and
(iii) REMIC I Regular Interest LT4, twice the Net WAC Cap Rate.
Underwriter: Xxxxxxx, Xxxxx & Co.
Section 1.02. Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on the LIBOR Certificates for any
Interest Accrual Period will be determined as of each LIBOR Rate Adjustment Date. On each LIBOR Rate
Adjustment Date, or if such LIBOR Rate Adjustment Date is not a Business Day, then on the next succeeding
Business Day, LIBOR shall be established by the Trustee and, as to any Interest Accrual Period, will equal
the rate for one month United States dollar deposits that appears on the Dow Xxxxx Telerate Screen Page 3750
as of 11:00 a.m., London time, on such LIBOR Rate Adjustment Date. "Dow Xxxxx Telerate Screen Page 3750"
means the display designated as page 3750 on the Telerate Service (or such other page as may replace page
3750 on that service for the purpose of displaying London interbank offered rates of major banks). If such
rate does not appear on such page (or such other page as may replace that page on that service, or if such
service is no longer offered, LIBOR shall be so established by use of such other service for displaying LIBOR
or comparable rates as may be selected by the Trustee after consultation with the Master Servicer), the rate
will be the Reference Bank Rate. The "Reference Bank Rate" will be determined on the basis of the rates at
which deposits in U.S. Dollars are offered by the reference banks (which shall be any three major banks that
are engaged in transactions in the London interbank market, selected by the Trustee after consultation with
the Master Servicer) as of 11:00 a.m., London time, on the LIBOR Rate Adjustment Date to prime banks in the
London interbank market for a period of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of the LIBOR Certificates then outstanding. The Trustee will request the principal London
office of each of the reference banks to provide a quotation of its rate. If at least two such quotations
are provided, the rate will be the arithmetic mean of the quotations rounded up to the next multiple of
1/16%. If on such date fewer than two quotations are provided as requested, the rate will be the arithmetic
mean of the rates quoted by one or more major banks in New York City, selected by the Trustee after
consultation with the Master Servicer, as of 11:00 a.m., New York City time, on such date for loans in U.S.
Dollars to leading European banks for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the LIBOR Certificates then outstanding. If no such quotations can be
obtained, the rate will be LIBOR for the prior Distribution Date; provided however, if, under the priorities
described above, LIBOR for a Distribution Date would be based on LIBOR for the previous Distribution Date for
the third consecutive Distribution Date, the Trustee, after consultation with the Master Servicer, shall
select an alternative comparable index (over which the Trustee has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or otherwise made available) by an
independent party.
The establishment of LIBOR by the Trustee and the Master Servicer on any LIBOR Rate Adjustment Date
and the Master Servicer's subsequent calculation of the Pass-Through Rate applicable to the LIBOR
Certificates for the relevant Interest Accrual Period, in the absence of manifest error, will be final and
binding.
Promptly following each LIBOR Rate Adjustment Date the Trustee shall supply the Master Servicer with
the results of its determination of LIBOR on such date. Furthermore, the Trustee will supply to any
Certificateholder so requesting by telephone by calling (000) 000-0000 the Pass-Through Rate on the LIBOR
Certificates for the current and the immediately preceding Interest Accrual Period.
Section 1.03. Use of Words and Phrases.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore," "hereinafter" and other equivalent words
refer to the Pooling and Servicing Agreement as a whole. All references herein to Articles, Sections or
Subsections shall mean the corresponding Articles, Sections and Subsections in the Pooling and Servicing
Agreement. The definitions set forth herein include both the singular and the plural.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans. (See Section 2.01 of the Standard Terms.)
Section 2.02. Acceptance by Trustee. (See Section 2.02 of the Standard Terms.)
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the Company.
(a) For representations, warranties and covenants of the Master Servicer, see Section 2.03(a) of the
Standard Terms.
(b) The Company hereby represents and warrants to the Trustee for the benefit of Certificateholders that
as of the Closing Date (or, if otherwise specified below, as of the date so specified):
(i) No Mortgage Loan is 30 or more days Delinquent in payment of principal and interest as of the Cut-off
Date and no Mortgage Loan has been so Delinquent more than once in the 12-month period prior to
the Cut-off Date;
(ii) The information set forth in Exhibit One hereto with respect to each Mortgage Loan or the Mortgage
Loans, as the case may be, is true and correct in all material respects at the date or dates
respecting which such information is furnished;
(iii) The Mortgage Loans are payment-option adjustable-rate mortgage loans with a negative amortization
feature with Monthly Payments due, with respect to a majority of the Mortgage Loans, on the
first day of each month and terms to maturity at origination or modification of not more than
40 years;
(iv) To the best of the Company's knowledge, except with respect to one Mortgage Loan, representing no more
than 0.1% of the aggregate Stated Principal Balance of the Mortgage Loans, if a Mortgage Loan
is secured by a Mortgaged Property with a Loan-to-Value Ratio at origination in excess of 80%,
such Mortgage Loan is the subject of a Primary Insurance Policy that insures (a) at least 35%
of the Stated Principal Balance of the Mortgage Loan at origination if the Loan-to-Value Ratio
is between 100.00% and 95.01%, (b) at least 30% of the Stated Principal Balance of the Mortgage
Loan at origination if the Loan-to-Value Ratio is between 95.00% and 90.01%, (c) at least 25%
of such balance if the Loan-to-Value Ratio is between 90.00% and 85.01% and (d) at least 12% of
such balance if the Loan-to-Value Ratio is between 85.00% and 80.01%. To the best of the
Company's knowledge, each such Primary Insurance Policy is in full force and effect and the
Trustee is entitled to the benefits thereunder;
(v) The issuers of the Primary Insurance Policies are insurance companies whose claims-paying abilities
are currently acceptable to each Rating Agency;
(vi) No more than 0.6% of the Mortgage Loans by aggregate Stated Principal Balance as of the Cut-off Date
are secured by Mortgaged Properties located in any one zip code area in California, and no more
than 0.5% of the Mortgage Loans by aggregate Stated Principal Balance as of the Cut-off Date
are secured by Mortgaged Properties located in any one zip code area outside California;
(vii) The improvements upon the Mortgaged Properties are insured against loss by fire and other hazards as
required by the Program Guide, including flood insurance if required under the National Flood
Insurance Act of 1968, as amended. The Mortgage requires the Mortgagor to maintain such
casualty insurance at the Mortgagor's expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at the Mortgagor's
expense and to seek reimbursement therefor from the Mortgagor;
(viii) Immediately prior to the assignment of the Mortgage Loans to the Trustee, the Company had good title
to, and was the sole owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest (other than rights to servicing and related compensation) and
such assignment validly transfers ownership of the Mortgage Loans to the Trustee free and clear
of any pledge, lien, encumbrance or security interest;
(ix) No more than 87.14% of the Mortgage Loans by aggregate Stated Principal Balance as of the Cut-off Date
were underwritten under a reduced loan documentation program, no more than 0.86% of the
Mortgage Loans by aggregate Stated Principal Balance as of the Cut-off Date were underwritten
under a no-stated income program, and no more than 0.79% of the Mortgage Loans by aggregate
Stated Principal Balance as of the Cut-off Date were underwritten under a no income/no asset
program;
(x) Except with respect to no more than 8.75% of the Mortgage Loans by aggregate Stated Principal Balance
as of the Cut-off Date, the Mortgagor represented in its loan application with respect to the
related Mortgage Loan that the Mortgaged Property would be owner-occupied;
(xi) None of the Mortgage Loans is a Buy-Down Mortgage Loan;
(xii) Each Mortgage Loan constitutes a qualified mortgage under Section 860G(a)(3)(A) of the Code and
Treasury Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6), (7) and (9) without reliance on
the provisions of Treasury Regulation Section 1.860G-2(a)(3) or Treasury Regulation Section
1.860G-2(f)(2) or any other provision that would allow a Mortgage Loan to be treated as a
"qualified mortgage" notwithstanding its failure to meet the requirements of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6),
(7) and (9);
(xiii) A policy of title insurance was effective as of the closing of each Mortgage Loan and is valid and
binding and remains in full force and effect, unless the Mortgaged Properties are located in
the State of Iowa and an attorney's certificate has been provided as described in the Program
Guide;
(xiv) No Mortgage Loan is a Cooperative Loan;
(xv) With respect to each Mortgage Loan originated under a "streamlined" Mortgage Loan program (through
which no new or updated appraisals of Mortgaged Properties are obtained in connection with the
refinancing thereof), the related Seller has represented that either (a) the value of the
related Mortgaged Property as of the date the Mortgage Loan was originated was not less than
the appraised value of such property at the time of origination of the refinanced Mortgage Loan
or (b) the Loan-to-Value Ratio of the Mortgage Loan as of the date of origination of the
Mortgage Loan generally meets the Company's underwriting guidelines;
(xvi) Interest on each Mortgage Loan is calculated on the basis of a 360-day year consisting of twelve
30-day months;
(xvii) None of the Mortgage Loans contain in the related Mortgage File a Destroyed Mortgage Note;
(xviii) Two of the Mortgage Loans, representing no more than 0.1% of the aggregate stated principal balance of
the Mortgage Loans, have been made to International Borrowers;
(xix) No Mortgage Loan provides for payments that are subject to reduction by withholding taxes levied by
any foreign (non-United States) sovereign government; and
(xx) None of the Mortgage Loans are Additional Collateral Loans and none of the Mortgage Loans are Pledged
Asset Loans.
It is understood and agreed that the representations and warranties set forth in this Section 2.03(b) shall
survive delivery of the respective Mortgage Files to the Trustee or any Custodian.
Upon discovery by any of the Company, the Master Servicer, the Trustee or any Custodian of a breach of
any of the representations and warranties set forth in this Section 2.03(b) that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties (any Custodian being so obligated under a Custodial
Agreement); provided, however, that in the event of a breach of the representation and warranty set forth in
Section 2.03(b)(xii), the party discovering such breach shall give such notice within five days of
discovery. Within 90 days of its discovery or its receipt of notice of breach, the Company shall either (i)
cure such breach in all material respects or (ii) purchase such Mortgage Loan from the Trust Fund at the
Purchase Price and in the manner set forth in Section 2.02; provided that the Company shall have the option
to substitute a Qualified Substitute Mortgage Loan or Loans for such Mortgage Loan if such substitution
occurs within two years following the Closing Date; provided that if the omission or defect would cause the
Mortgage Loan to be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such
cure or repurchase must occur within 90 days from the date such breach was discovered. Any such substitution
shall be effected by the Company under the same terms and conditions as provided in Section 2.04 for
substitutions by Residential Funding. It is understood and agreed that the obligation of the Company to cure
such breach or to so purchase or substitute for any Mortgage Loan as to which such a breach has occurred and
is continuing shall constitute the sole remedy respecting such breach available to the Certificateholders or
the Trustee on behalf of the Certificateholders.
Section 2.04. Representations and Warranties of Sellers.(See Section 2.04 of the Standard Terms)
Section 2.05. Execution and Authentication of Certificates/Issuance of Certificates Evidencing Interests in
REMICs.
The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery of the Mortgage
Files to it, or any Custodian on its behalf, subject to any exceptions noted, together with the assignment to
it of all other assets included in the Trust Fund and/or the applicable REMIC, receipt of which is hereby
acknowledged. Concurrently with such delivery and in exchange therefor, the Trustee, pursuant to the written
request of the Company executed by an officer of the Company, has executed and caused to be authenticated and
delivered to or upon the order of the Company the Class R-I Certificates in authorized denominations which,
together with the REMIC I Regular Interests, evidence the beneficial interest in REMIC I, and the Class R-II
Certificates in authorized denominations which, together with the REMIC II Regular Interests, evidence the
beneficial interest in REMIC II.
Section 2.06. Conveyance of REMIC I Regular Interests; Acceptance by the Trustee.
The Company, as of the Closing Date, and concurrently with the execution and delivery hereof, does
hereby assign without recourse all the right, title and interest of the Company in and to the REMIC I Regular
Interests to the Trustee for the benefit of the Holders of each Class of Certificates (other than the Class
R-I Certificates). The Trustee acknowledges receipt of the REMIC I Regular Interests and declares that it
holds and will hold the same in trust for the exclusive use and benefit of all present and future Holders of
each Class of Certificates (other than the Class R-I Certificates). The rights of the Holders of each Class
of Certificates (other than the Class R-I Certificates) to receive distributions from the proceeds of REMIC
II in respect of such Classes, and all ownership interests of the Holders of such Classes in such
distributions, shall be as set forth in this Agreement.
Section 2.07. Issuance of Certificates Evidencing Interest in REMIC II.
The Trustee acknowledges the assignment to it of the REMIC I Regular Interests and, concurrently
therewith and in exchange therefor, pursuant to the written request of the Company executed by an officer of
the Company, the Trustee has executed and caused to be authenticated and delivered to or upon the order of
the Company, all Classes of Certificates (other than the Class R-I Certificates) in authorized denominations,
which evidence the beneficial interest in the entire REMIC II.
Section 2.08. Purposes and Powers of the Trust. (See Section 2.08 of the Standard Terms.)
Section 2.09. Agreement Regarding Ability to Disclose.
The Company, the Master Servicer and the Trustee hereby agree, notwithstanding any other express or
implied agreement to the contrary, that any and all Persons, and any of their respective employees,
representatives, and other agents may disclose, immediately upon commencement of discussions, to any and all
Persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all
materials of any kind (including opinions or other tax analyses) that are provided to any of them relating to
such tax treatment and tax structure. For purposes of this paragraph, the terms "tax treatment" and "tax
structure" are defined under Treasury Regulationss.1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Servicer. (See Section 3.01 of the Standard Terms)
Section 3.02 Subservicing Agreements Between Master Servicer and Subservicers; Enforcement of
Subservicers' and Sellers' Obligations. (See Section 3.02 of the Standard Terms)
Section 3.03 Successor Subservicers. (See Section 3.03 of the Standard Terms)
Section 3.04 Liability of the Master Servicer. (See Section 3.04 of the Standard Terms)
Section 3.05 No Contractual Relationship Between Subservicer and Trustee or Certificateholders.
(See Section 3.05 of the Standard Terms)
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee. (See Section 3.06 of
the Standard Terms)
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposit to Custodial Account.
(a) (See Section 3.07(a) of the Standard Terms)
(b) The Master Servicer shall establish and maintain a Custodial Account in which the Master
Servicer shall deposit or cause to be deposited on a daily basis, except as otherwise specifically provided
herein, the following payments and collections remitted by Subservicers or received by it in respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in respect of principal and interest on the
Mortgage Loans due on or before the Cut-off Date):
(i) All payments on account of principal, including Principal Prepayments made by
Mortgagors on the Mortgage Loans and the principal component of any Subservicer Advance or of any REO
Proceeds received in connection with an REO Property for which an REO Disposition has occurred;
(ii) All payments on account of interest at the Adjusted Mortgage Rate on the Mortgage
Loans, including Buydown Funds, if any, and the interest component of any Subservicer Advance or of
any REO Proceeds received in connection with an REO Property for which an REO Disposition has occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation Proceeds (net of any related
expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to Section 2.02, 2.03, 2.04 or
4.07 (including amounts received from Residential Funding pursuant to the last paragraph of Section 4
of the Assignment Agreement in respect of any liability, penalty or expense that resulted from a
breach of the Compliance With Laws Representation and all amounts required to be deposited in
connection with the substitution of a Qualified Substitute Mortgage Loan pursuant to Section 2.03 or
2.04;
(v) Any amounts required to be deposited pursuant to Section 3.07(c) or 3.21;
(vi) All amounts transferred from the Certificate Account to the Custodial Account in
accordance with Section 4.02(a);
(vii) Any amounts realized by the Subservicer and received by the Master Servicer in respect
of any Additional Collateral;
(viii) Any amounts received by the Master Servicer in respect of Pledged Assets; and
(ix) Any amounts received by the Master Servicer in connection with any Prepayment Charges
on the Prepayment Charge Loans.
The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being
understood and agreed that, without limiting the generality of the foregoing, payments on the Mortgage Loans
which are not part of the Trust Fund (consisting of payments in respect of principal and interest on the
Mortgage Loans due on or before the Cut-off Date) and payments or collections in the nature of late payment
charges or assumption fees may but need not be deposited by the Master Servicer in the Custodial Account. In
the event any amount not required to be deposited in the Custodial Account is so deposited, the Master
Servicer may at any time withdraw such amount from the Custodial Account, any provision herein to the
contrary notwithstanding. The Custodial Account may contain funds that belong to one or more trust funds
created for mortgage pass-through certificates of other series and may contain other funds respecting
payments on Mortgage Loans belonging to the Master Servicer or serviced or master serviced by it on behalf of
others. Notwithstanding such commingling of funds, the Master Servicer shall keep records that accurately
reflect the funds on deposit in the Custodial Account that have been identified by it as being attributable
to the Mortgage Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds and the proceeds of the
purchase of any Mortgage Loan pursuant to Sections 2.02, 2.03, 2.04 and 4.07 received in any calendar month,
the Master Servicer may elect to treat such amounts as included in the Available Distribution Amount for the
Distribution Date in the month of receipt, but is not obligated to do so. If the Master Servicer so elects,
such amounts will be deemed to have been received (and any related Realized Loss shall be deemed to have
occurred) on the last day of the month prior to the receipt thereof.
(c) (See Section 3.07(c) of the Standard Terms)
(d) (See Section 3.07(d) of the Standard Terms)
(e) Notwithstanding Section 3.07(a), The Master Servicer shall not waive (or permit a Subservicer
to waive) any Prepayment Charge unless: (i) the enforceability thereof shall have been limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to creditors' rights generally, (ii) the
enforcement thereof is illegal, or any local, state or federal agency has threatened legal action if the
prepayment penalty is enforced, (iii) the collectability thereof shall have been limited due to acceleration
in connection with a foreclosure or other involuntary payment or (iv) such waiver is standard and customary
in servicing similar Mortgage Loans and relates to a default or a reasonably foreseeable default and would,
in the reasonable judgment of the Master Servicer, maximize recovery of total proceeds taking into account
the value of such Prepayment Charge and the related Mortgage Loan. In no event will the Master Servicer
waive a Prepayment Charge in connection with a refinancing of a Mortgage Loan that is not related to a
default or a reasonably foreseeable default. If a Prepayment Charge is waived, but does not meet the
standards described above, then the Master Servicer is required to deposit into the Custodial Account the
amount of such waived Prepayment Charge at the time that the amount prepaid on the related Mortgage Loan is
required to be deposited into the Custodial Account. Notwithstanding any other provisions of this Agreement,
any payments made by the Master Servicer in respect of any waived Prepayment Charges pursuant to this Section
shall be deemed to be paid outside of the Trust Fund and not part of any REMIC.
Section 3.08. Subservicing Accounts; Servicing Accounts (See Section 3.08 of the Standard Terms)
Section 3.09. Access to Certain Documentation and Information Regarding the Mortgage Loans (See
Section 3.09 of the Standard Terms)
Section 3.10. Permitted Withdrawals from the Custodial Account (See Section 3.10 of the Standard
Terms)
Section 3.11. Maintenance of the Primary Insurance Policies; Collections Thereunder (See Section
3.011 of the Standard Terms)
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage (See Section 3.12 of
the Standard Terms)
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements; Certain
Assignments (See Section 3.13 of the Standard Terms)
Section 3.14. Realization Upon Defaulted Mortgage Loans (See Section 3.14 of the Standard Terms)
Section 3.15. Trustee to Cooperate; Release of Mortgage Files (See Section 3.15 of the Standard
Terms)
Section 3.16. Servicing and Other Compensation; Compensating Interest
(a) (See Section 3.16(a) of the Standard Terms)
(b) Additional servicing compensation in the form of assumption fees, late payment charges,
investment income on amounts in the Custodial Account or the Certificate Account or otherwise (but not
including Prepayment Charges) shall be retained by the Master Servicer or the Subservicer to the
extent provided herein, subject to clause (e) below. Prepayment charges shall be deposited into the
Certificate Account and shall be paid on each Distribution Date to the holders of the Class SB
Certificates.
(c) (See Section 3.16(c) of the Standard Terms)
(d) (See Section 3.16(d) of the Standard Terms)
(e) (See Section 3.16(e) of the Standard Terms)
Section 3.17. Reports to the Trustee and the Company (See Section 3.17 of the Standard Terms)
Section 3.18. Annual Statement as to Compliance (See Section 3.18 of the Standard Terms)
Section 3.19. Annual Independent Public Accountants' Servicing Report (See Section 3.19 of the
Standard Terms)
Section 3.20. Rights of the Company in Respect of the Master Servicer (See Section 3.20 of the
Standard Terms)
Section 3.21. Administration of Buydown Funds (See Section 3.21 of the Standard Terms)
Section 3.22 Advance Facility (See Section 3.22 of the Standard Terms)
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account. (See Section 4.01 of the Standard Terms.)
Section 4.02. Distributions.
(a) On each Distribution Date, the Trustee (or the Paying Agent on behalf of the Trustee) shall allocate
and distribute the Available Distribution Amount to the extent on deposit in the Certificate Account for such
date to the interests issued in respect of REMIC I and REMIC II as specified in this Section.
(b) (1) On each Distribution Date, the REMIC I Distribution Amount shall be distributed by
REMIC I to REMIC II on account of the REMIC I Regular Interests in the amounts and with the priorities set
forth in the definition thereof.
(2) Notwithstanding the distributions on the REMIC I Regular Interests described in
this Section 4.02(b), distribution of funds from the Certificate Account shall be made only in accordance
with Section 4.02(c).
(c) On each Distribution Date (x) the Master Servicer on behalf of the Trustee or (y) the Paying Agent
appointed by the Trustee, shall distribute to each Certificateholder of record on the next preceding Record
Date (other than as provided in Section 9.01 of the Standard Terms respecting the final distribution) either
in immediately available funds (by wire transfer or otherwise) to the account of such Certificateholder at a
bank or other entity having appropriate facilities therefor, if such Certificateholder has so notified the
Master Servicer or the Paying Agent, as the case may be, or, if such Certificateholder has not so notified
the Master Servicer or the Paying Agent by the Record Date, by check mailed to such Certificateholder at the
address of such Holder appearing in the Certificate Register such Certificateholder's share (which share with
respect to each Class of Certificates, shall be based on the aggregate of the Percentage Interests
represented by Certificates of the applicable Class held by such Holder of the following amounts), in the
following order of priority, in each case to the extent of the Available Distribution Amount on deposit in
the Certificate Account (except, with respect to clause (viii)(B) below, to the extent of Prepayment Charges
on deposit in the Certificate Account):
(i) The Interest Distribution Amount, sequentially:
(A) first, to the Class A-1, Class A-2 and Class A-3 Certificates, Accrued
Certificate Interest due thereon for such Distribution Date plus any Accrued Certificate
Interest due thereon remaining unpaid from any prior Distribution Date, together with interest
thereon at the related Pass-Through Rate in effect for such Distribution Date, on a pro rata
basis in accordance with the Accrued Certificate Interest and any interest thereon due to each
such class;
(B) second, to the Class M-1 Certificates, Accrued Certificate Interest due
thereon for such Distribution Date plus any Accrued Certificate Interest due thereon remaining
unpaid from any prior Distribution Date, together with interest thereon at the related
Pass-Through Rate in effect for such Distribution Date;
(C) third, to the Class M-2 Certificates Accrued Certificate Interest due
thereon for such Distribution Date plus any Accrued Certificate Interest due thereon remaining
unpaid from any prior Distribution Date, together with interest thereon at the related
Pass-Through Rate in effect for such Distribution Date;
(D) fourth, to the Class M-3 Certificates Accrued Certificate Interest due
thereon for such Distribution Date plus any related Accrued Certificate Interest due thereon
remaining unpaid from any prior Distribution Date, together with interest thereon at the
related Pass-Through Rate in effect for such Distribution Date;
(E) fifth, to the Class M-4 Certificates, Accrued Certificate Interest due
thereon for such Distribution Date plus any Accrued Certificate Interest due thereon remaining
unpaid from any prior Distribution Date, together with interest thereon at the related
Pass-Through Rate in effect for such Distribution Date;
(F) sixth, to the Class M-5 Certificates Accrued Certificate Interest due
thereon for such Distribution Date plus any Accrued Certificate Interest due thereon remaining
unpaid from any prior Distribution Date, together with interest thereon at the related
Pass-Through Rate in effect for such Distribution Date;
(G) seventh, to the Class M-6 Certificates Accrued Certificate Interest due
thereon for such Distribution Date plus any related Accrued Certificate Interest due thereon
remaining unpaid from any prior Distribution Date, together with interest thereon at the
related Pass-Through Rate in effect for such Distribution Date;
(H) eighth, to the Class M-7 Certificates, Accrued Certificate Interest due
thereon for such Distribution Date plus any Accrued Certificate Interest due thereon remaining
unpaid from any prior Distribution Date, together with interest thereon at the related
Pass-Through Rate in effect for such Distribution Date; and
(I) ninth, to the Class M-8 Certificates Accrued Certificate Interest due
thereon for such Distribution Date plus any Accrued Certificate Interest due thereon remaining
unpaid from any prior Distribution Date, together with interest thereon at the related
Pass-Through Rate in effect for such Distribution Date;
(ii) to the Class A Certificateholders and the Class M Certificateholders from the amount, if any, of
Available Distribution Amount remaining after the foregoing distributions, the Principal
Distribution Amount, which amount shall be allocated in the manner and priority set forth in
Section 4.02(d), until the aggregate Certificate Principal Balance of each Class of Class A
Certificates and Class M Certificates has been reduced to zero;
(iii) to the Class A Certificateholders and Class M Certificateholders from the amount, if any, of Excess
Cash Flow remaining after the foregoing distributions, the amount of any related Prepayment
Interest Shortfalls with respect to the Mortgage Loans for that Distribution Date, to the
extent not covered by Compensating Interest on such Distribution Date, which amount shall be
allocated to the Class A Certificateholders and Class M Certificateholders on a pro rata basis,
based on the amount of Prepayment Interest Shortfalls allocated thereto for such Distribution
Date;
(iv) to the Class A Certificateholders and Class M Certificateholders from the amount, if any, of Excess
Cash Flow remaining after the foregoing distributions, the amount of any Prepayment Interest
Shortfalls allocated thereto remaining unpaid from prior Distribution Dates together with
interest thereon at the related Pass-Through Rate in effect for such Distribution Date, which
amount shall be allocated to the Class A Certificateholders and Class M Certificateholders on a
pro rata basis, based on the amount of Prepayment Interest Shortfalls remaining unpaid;
(v) to the Class A Certificates and Class M Certificates from the amount, if any, of Excess Cash Flow
remaining after the foregoing distributions the amount of any Basis Risk Shortfall on such
Certificates (after giving effect, with respect to the initial Distribution Date, to payments
made from the Basis Risk Shortfall Reserve Fund), which amount shall be allocated first, to the
Class A Certificates on a pro rata basis, based on their respective Basis Risk Shortfall for
such Distribution Date, and then, sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7 and Class M-8 Certificateholders, in that order;
(vi) to pay the holders of the Class A and Class M Certificates, on a pro rata basis, based on Relief Act
Shortfalls allocated thereto for such Distribution Date, the amount of any Relief Act
Shortfalls allocated thereto with respect to the Mortgage Loans for such Distribution Date,
(vii) to the Class M Certificateholders, the principal portion of any Realized Losses previously allocated
to those Certificates and remaining unreimbursed, which amount shall be allocated sequentially,
to the Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class
M-8 Certificateholders, in that order;
(viii) to the Class SB Certificates, (A) from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the sum of (I) Accrued Certificate Interest
thereon, (II) the amount of any Overcollateralization Reduction Amount for such Distribution
Date and (III) for any Distribution Date after the Certificate Principal Balance of each Class
A Certificate and Class M Certificate has been reduced to zero, the Overcollateralization
Amount, and (B) from prepayment charges on deposit in the Certificate Account, any prepayment
charges received on the Mortgage Loans during the related Prepayment Period.
(ix) to the Class R Certificateholders, the balance, if any, of the Available Distribution Amount.
All payments of amounts in respect of Basis Risk Shortfall made pursuant to Section 4.02(c)(v) shall,
for federal income tax purposes, be deemed to have been distributed from REMIC II to the holder of the Class
SB Certificates and then paid outside of any REMIC to the recipients thereof pursuant to an interest rate cap
contract. By accepting their Certificates the holders of the Certificates agree to treat such payments in
the manner described in the preceding sentence for purposes of filing their income tax returns.
(d) The Principal Distribution Amount payable to the Class A Certificateholders and the Class M
Certificateholders shall be distributed as follows:
(i) first, the Class A Principal Distribution Amount shall be distributed concurrently, on a pro rata
basis in accordance with their respective Certificate Principal Balances, to the Class A-1,
Class A-2 and Class A-3 Certificates, until the Certificate Principal Balances thereof have
been reduced to zero; provided, however that if a Sequential Trigger Event is in effect, the
Class A Principal Distribution Amount will be distributed sequentially to the Class A-1
Certificates, Class A-2 Certificates and Class A-3 Certificates, in that order, in each case
until the certificate principal balance thereof has been reduced to zero;
(ii) second, the Class M-1 Principal Distribution Amount shall be distributed to the Class M-1 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
(iii) third, the Class M-2 Principal Distribution Amount shall be distributed to the Class M-2 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
(iv) fourth, the Class M-3 Principal Distribution Amount shall be distributed to the Class M-3 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
(v) fifth, the Class M-4 Principal Distribution Amount shall be distributed to the Class M-4 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
(vi) sixth, the Class M-5 Principal Distribution Amount shall be distributed to the Class M-5 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
(vii) seventh, the Class M-6 Principal Distribution Amount shall be distributed to the Class M-6
Certificates until the Certificate Principal Balance thereof has been reduced to zero;
(viii) eighth, the Class M-7 Principal Distribution Amount shall be distributed to the Class M-7 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
(ix) ninth, the Class M-8 Principal Distribution Amount shall be distributed to the Class M-8 Certificates
until the Certificate Principal Balance thereof has been reduced to zero.
(e) Notwithstanding the foregoing clauses (c) and (d), upon the reduction of the Certificate Principal
Balance of a Class of Class A Certificates or Class M Certificates to zero, such Class of Certificates will
not be entitled to further distributions pursuant to Section 4.02, including, without limitation, the payment
of current and unreimbursed Prepayment Interest Shortfalls pursuant to clauses (c)(iii) and (iv) and Basis
Risk Shortfall pursuant to clause (c)(v).
(f) Each distribution with respect to a Book-Entry Certificate shall be paid to the Depository, as Holder
thereof, and the Depository shall be solely responsible for crediting the amount of such distribution to the
accounts of its Depository Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the Certificate Owners that it
represents and to each indirect participating brokerage firm (a "brokerage firm") for which it acts as
agent. Each brokerage firm shall be responsible for disbursing funds to the Certificate Owners that it
represents. None of the Trustee, the Certificate Registrar, the Company or the Master Servicer shall have
any responsibility therefor.
(g) Except as otherwise provided in Section 9.01 of the Standard Terms, if the Master Servicer anticipates
that a final distribution with respect to any Class of Certificates will be made on a future Distribution
Date, the Master Servicer shall, no later than 40 days prior to such final Distribution Date, notify the
Trustee and the Trustee shall, not earlier than the 15th day and not later than the 25th day of the month
next preceding the month of such final distribution, distribute, or cause to be distributed, to each Holder
of such Class of Certificates a notice to the effect that: (i) the Trustee anticipates that the final
distribution with respect to such Class of Certificates will be made on such Distribution Date but only upon
presentation and surrender of such Certificates at the office of the Trustee or as otherwise specified
therein, and (ii) no interest shall accrue on such Certificates from and after the end of the related
Interest Accrual Period. In the event that Certificateholders required to surrender their Certificates
pursuant to Section 9.01(c) of the Standard Terms do not surrender their Certificates for final cancellation,
the Trustee shall cause funds distributable with respect to such Certificates to be withdrawn from the
Certificate Account and credited to a separate escrow account for the benefit of such Certificateholders as
provided in Section 9.01(d) of the Standard Terms.
(h) On the initial Distribution Date, Basis Risk Shortfall amounts with respect to the initial
Distribution Date, if any, will be paid to the Holders of the Class A Certificates and Class M Certificates,
pro rata, based on the amount of Basis Risk Shortfalls for such Classes, from amounts withdrawn from the
Basis Risk Shortfall Reserve Fund.
(i) On any Distribution Date, Net Deferred Interest for such Distribution Date, if any, will be allocated
to each Class of Class A Certificates and Class M Certificates, on a pro rata basis, in accordance with the
amount of interest accrued on such Class at its Pass-Through Rate for the Interest Accrual Period for such
Distribution Date (in each case before giving effect to any allocation of Net Deferred Interest for such
Distribution Date). Net Deferred Interest allocated to any Class of Certificates will be added as principal
to the outstanding Certificate Principal Balance of such Class of Certificates.
Section 4.03. Statements to Certificateholders; Statements to the Rating Agencies; Exchange Act Reporting.
(See Section 4.03 of the Standard Terms.)
Section 4.04. Distribution of Reports to the Trustee and the Company; Advances by the Master Servicer. .
(See Section 4.04 of the Standard Terms.)
Section 4.05. Allocation of Realized Losses.
(a) Prior to each Distribution Date, the Master Servicer shall determine the total amount of Realized
Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service Reduction,
Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the case of
a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount of
the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date
occurs. The amount of each Realized Loss shall be evidenced by an Officers' Certificate. All Realized
Losses on the Mortgage Loans shall be allocated as follows:
first, to the Excess Cash Flow as part of the Principal Distribution Amount as provided in Section
4.02(c), to the extent of the Excess Cash Flow for such Distribution Date,
second, in reduction of the Overcollateralization Amount, until such amount has been reduced to zero;
third, to the Class M-8 Certificates, until the Certificate Principal Balance thereof has been reduced
to zero;
fourth, to the Class M-7 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero;
fifth, to the Class M-6 Certificates, until the Certificate Principal Balance thereof has been reduced
to zero;
sixth, to the Class M-5 Certificates, until the Certificate Principal Balance thereof has been reduced
to zero;
seventh, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero;
eighth, to the Class M-3 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero;
ninth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; and
tenth, to the Class M-1 Certificates, until the Certificate Principal Balance thereof has been reduced
to zero.
(b) Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions) to the
Class M Certificates on any Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated, which allocation shall be deemed to have occurred on such Distribution
Date, until the Certificate Principal Balance thereof has been reduced to zero; provided, that no such
reduction shall reduce the aggregate Certificate Principal Balance of the Certificates below the aggregate
Stated Principal Balance of the Mortgage Loans. Allocations of the interest portions of Realized Losses
(other than any interest rate reduction resulting from a Servicing Modification) to any Class of Class M
Certificates on any Distribution Date shall be made by operation of the definition of "Accrued Certificate
Interest" for each Class for such Distribution Date. Allocations of the interest portion of a Realized Loss
resulting from an interest rate reduction in connection with a Servicing Modification shall be made by
operation of the priority of payment provisions of Section 4.02(c). All Realized Losses and all other losses
allocated to a Class of Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby.
(c) Realized Losses shall be allocated among the REMIC I Regular Interests pursuant to the definition of
REMIC I Realized Losses.
(d) Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant to
paragraphs (a), (b) or (c) of this Section, the definition of Accrued Certificate Interest and the operation
of Section 4.02(c) shall be deemed allocated to the Class SB Certificates. Realized Losses allocated to the
Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses on an interest
portion, be allocated to REMIC II Regular Interest SB-IO. Realized Losses allocated to the Excess Cash Flow
pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued Certificate Interest on REMIC II
Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization Amount pursuant to paragraph
(b) of this Section shall be deemed first to reduce the principal balance of REMIC II Regular Interest SB-PO
until such principal balance shall have been reduced to zero and thereafter to reduce accrued and unpaid
interest on REMIC II Regular Interest SB-IO.
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property. (See Section 4.06 of the
Standard Terms.)
Section 4.07. Optional Purchase of Defaulted Mortgage Loans. (See Section 4.07 of the Standard Terms.)
Section 4.08. Surety Bond. (See Section 4.08 of the Standard Terms.)
Section 4.09. Basis Risk Shortfall Reserve Fund.
(a) On or before the Closing Date, the Trustee shall establish a Reserve Fund on behalf of the Holders of
the Class A Certificates and Class M Certificates. The Reserve Fund must be an Eligible Account. The Reserve
Fund shall be entitled "Basis Risk Shortfall Reserve Fund, U.S. Bank National Association as Trustee for the
benefit of holders of Residential Accredit Loans, Inc., Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-QO2" (the "Basis Risk Shortfall Reserve Fund"). The Basis Risk Shortfall Reserve Fund shall be
an Eligible Account or a sub-account of an Eligible Account. On the Closing Date, the Depositor will cause,
on behalf of the Trust, the Basis Risk Shortfall Reserve Fund Amount to be deposited into the Basis Risk
Shortfall Reserve Fund. Pursuant to Section 4.02(j), on the initial Distribution Date, amounts on deposit in
the Basis Risk Shortfall Reserve Fund will be withdrawn from the Basis Risk Shortfall Reserve Fund and
deposited into the Certificate Account for payment to the Class A Certificates and Class M Certificates to
the extent of any Basis Risk Shortfall Amount on the Class A Certificates and Class M Certificates on such
initial Distribution Date. After the initial Distribution Date, all amounts remaining in the Basis Risk
Shortfall Reserve Fund will be distributed to Xxxxxxx, Xxxxx & Co. or its designee, and following such
withdrawal the Basis Risk Shortfall Reserve Fund will be closed.
(b) The Trustee will invest funds deposited in the Basis Risk Shortfall Reserve Fund as directed by the
Depositor or its designee in writing in Permitted Investments with a maturity date (i) no later than the
Business Day immediately preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee or an Affiliate of the Trustee is the
obligor for the Permitted Investment, or (ii) no later than the date on which such funds are required to be
withdrawn from such account or sub account of a trust account pursuant to this Agreement, if the Trustee or
an affiliate of the Trustee is the obligor for the Permitted Investment (or, if no written direction is
received by the Trustee from the Depositor, then funds in such account shall remain uninvested). For federal
income tax purposes, the Depositor shall be the owner of the Basis Risk Shortfall Reserve Fund and shall
report all items of income, deduction, gain or loss arising therefrom. At no time will the Basis Risk
Shortfall Reserve Fund be an asset of any REMIC created hereunder. All income and gain realized from
investment of funds deposited in the Basis Risk Shortfall Reserve Fund, which investment shall be made solely
upon the written direction of the Depositor, shall be for the sole and exclusive benefit of the Depositor and
shall be remitted by the Trustee to the Depositor within one Business Day from the closing of the Basis Risk
Shortfall Reserve Fund. The Depositor shall deposit in the Basis Risk Shortfall Reserve Fund the amount of
any net loss incurred in respect of any such Permitted Investment immediately upon realization of such loss.
ARTICLE V
THE CERTIFICATES
(See Article V of the Standard Terms)
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
(See Article VI of the Standard Terms.)
ARTICLE VII
DEFAULT
(See Article VII of the Standard Terms.)
ARTICLE VIII
CONCERNING THE TRUSTEE
(See Article VIII of the Standard Terms.)
Section 1.01.
ARTICLE IX
TERMINATION
(See Article IX of the Standard Terms)
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration. (See Section 10.01 of the Standard Terms.)
Section 10.02. Master Servicer; REMIC Administrator and Trustee Indemnification. (See Section 10.02 of the
Standard Terms.)
Section 10.03. Designation of REMICs.
The REMIC Administrator will make an election to treat the segregated pool of assets described in the
definition of REMIC I (as defined herein) (including the Mortgage Loans but excluding the Basis Risk
Shortfall Reserve Fund), and subject to this Agreement, as a REMIC (REMIC I) for federal income tax
purposes. The REMIC Administrator will make an election to treat the segregated pool of assets consisting of
the REMIC I Regular Interests as a REMIC (REMIC II) for federal income tax purposes.
The REMIC I Regular Interests will be "regular interests" in REMIC I and the Class R-I Certificates
will be the sole class of "residual interests" in REMIC I for purposes of the REMIC Provisions (as defined
herein) under the federal income tax law.
The REMIC II Regular Interests will be the "regular interests" in REMIC II, ownership of which will be
represented by the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates,
Class M-6 Certificates, Class M-7 Certificates, Class M-8 Certificates and Class SB Certificates, and the
Class R-II Certificates will represent the sole class of "residual interests" in REMIC II for purposes of the
REMIC Provisions (as defined herein) under federal income tax law.
Section 10.04. Distributions on the REMIC I Regular Interests. (See Section 4.02(c) of this Series
Supplement.)
Section 10.05. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee or any Paying Agent, as applicable,
shall comply with all federal withholding requirements respecting payments to Certificateholders, including
interest or original issue discount payments or advances thereof that the Trustee or any Paying Agent, as
applicable, reasonably believes are applicable under the Code. The consent of Certificateholders shall not
be required for such withholding. In the event the Trustee or any Paying Agent, as applicable, does withhold
any amount from interest or original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trustee or any Paying Agent, as applicable, shall indicate
the amount withheld to such Certificateholder pursuant to the terms of such requirements.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment. (See Section 11.01 of the Standard Terms.)
Section 11.02. Recordation of Agreement; Counterparts. (See Section 11.02 of the Standard Terms.)
Section 11.03. Limitation on Rights of Certificateholders. (See Section 11.03 of the Standard Terms.)
Section 11.04. Governing Law. (See Section 11.04 of the Standard Terms.)
Section 11.05. Notices. All demands and notices hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered at or mailed by registered mail, postage prepaid (except for notices
to the Trustee which shall be deemed to have been duly given only when received), to the appropriate address
for each recipient listed in the table below or, in each case, such other address as may hereafter be
furnished in writing to the Master Servicer, the Trustee and the Company, as applicable:
------------------------------------- -----------------------------------------------------------
Recipient Address
------------------------------------- -----------------------------------------------------------
------------------------------------- -----------------------------------------------------------
Company 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: President
------------------------------------- -----------------------------------------------------------
------------------------------------- -----------------------------------------------------------
Master Servicer 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Managing Director/Master Servicing
------------------------------------- -----------------------------------------------------------
------------------------------------- -----------------------------------------------------------
Trustee U.S. Bank National Association
Mail Code: EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Structured Finance/RALI 2006-QO2
------------------------------------- -----------------------------------------------------------
------------------------------------- -----------------------------------------------------------
Xxxxx'x Investors Service, Inc. 00 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
------------------------------------- -----------------------------------------------------------
------------------------------------- -----------------------------------------------------------
Standard & Poor's Ratings Services, 00 Xxxxx Xxxxxx
a division of The XxXxxx-Xxxx 41st Floor
Companies, Inc. Xxx Xxxx, Xxx Xxxx 00000
------------------------------------- -----------------------------------------------------------
Any notice required or permitted to be mailed to a Certificateholder shall be given by first class mail,
postage prepaid, at the address of such holder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether
or not the Certificateholder receives such notice.
Section 11.06. Required Notices to Rating Agency and Subservicer. (See Section 11.06 of the Standard Terms.)
Section 11.07. Severability of Provisions. (See Section 11.07 of the Standard Terms.)
Section 11.08. Supplemental Provisions for Resecuritization. (See Section 11.08 of the Standard Terms.)
Section 11.09. Allocation of Voting Rights.
98.0% of all of the Voting Rights shall be allocated among Holders of the Class A Certificates and
Class M Certificates, in proportion to the outstanding Certificate Principal Balances of their respective
Certificates; 1.0% of all Voting Rights shall be allocated among the Holders of Class SB Certificates; 0.50%
of all Voting Rights shall be allocated among the Holders of the Class R-I Certificates, in accordance with
their respective Percentage Interests; and 0.50% of all Voting Rights shall be allocated among the Holders of
the Class R-II Certificates, in accordance with their respective Percentage Interests.
Section 11.10. No Petition.
The Depositor, Master Servicer and the Trustee, by entering into this Agreement, and each
Certificateholder, by accepting a Certificate, hereby covenant and agree that they will not at any time
institute against the Trust Fund, or join in any institution against the Trust Fund of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law in connection with any
obligation with respect to the Certificates or this Agreement.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
(See Article XII of the Standard Terms)
IN WITNESS WHEREOF, the Company, the Master Servicer and the Trustee have caused their names to be
signed hereto by their respective officers thereunto duly authorized and their respective seals, duly
attested, to be hereunto affixed, all as of the day and year first above written.
RESIDENTIAL ACCREDIT LOANS, INC.
[Seal]
By:/s/Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Attest: /s/Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Vice President
RESIDENTIAL FUNDING CORPORATION
[Seal]
By: /s/Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Associate
Attest:/s/Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Associate
U.S. BANK NATIONAL ASSOCIATION, as Trustee
[Seal]
By: /s/Xxxxxx Xxxxxxx-Xxxx
Name: Xxxxxx Xxxxxxx-Xxxx
Title: Vice President
Attest: /s/Xxxx Xxxxxxxxx
Name: Xxxx Xxxxxxxxx
Title: Assistant Vice President
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 28th day of February, 2006 before me, a notary public in and for said State, personally
appeared Xxxxxxx Xxxxxxxx, known to me to be a Vice President of Residential Accredit Loans, Inc., one
of the corporations that executed the within instrument, and also known to me to be the person who executed
it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
/s/Xxx Xxx Xxxxx
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 28th day of February, 2006 before me, a notary public in and for said State, personally
appeared Xxxxxx Xxxxxx, known to me to be a(n) 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.
/s/Xxx Xxx Xxxxx
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF XXXXXX )
On the 28th day of February, 2006 before me, a notary public in and for said State, personally
appeared Xxxxxx Xxxxxxx-Xxxx, known to me to be a(n) Vice President of U.S. BANK NATIONAL
ASSOCIATION, the national banking association that executed the within instrument, and also known to me to be
the person who executed it on behalf of said national banking association and acknowledged to me that such
national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
/s/Xxxxxxx X. Xxxxxxx
Notary Public
[Notarial Seal]
EXHIBIT ONE
MORTGAGE LOAN SCHEDULE
EXHIBIT TWO
INFORMATION TO BE INCLUDED IN
MONTHLY DISTRIBUTION DATE STATEMENT
(i) the applicable Record Date, Determination Date and Distribution Date, and the date on which the
applicable interest accrual period commenced;
(ii) the aggregate amount of payments received with respect to the Mortgage Loans, including
prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the Master Servicer and the Subservicer;
(iv) the amount of any other fees or expenses paid, and the identity of the party receiving such fees
or expenses;
(v) (a) the amount of such distribution to the Certificateholders of such Class applied to reduce the
Certificate Principal Balance thereof, and (b) the aggregate amount included therein representing
Principal Prepayments;
(vi) the amount of such distribution to Holders of such Class of Certificates allocable to interest;
(vii) if the distribution to the Holders of such Class of Certificates is less than the full amount
that would be distributable to such Holders if there were sufficient funds available therefor, the
amount of the shortfall;
(viii) the aggregate Certificate Principal Balance of each Class of Certificates, before and after
giving effect to the amounts distributed on such Distribution Date, separately identifying any
reduction thereof due to Realized Losses other than pursuant to an actual distribution of principal;
(ix) the aggregate Certificate Principal Balance of each of the Class A, Class M and Class SB
Certificates as of the Closing Date.
(x) the weighted average remaining term to maturity of the Mortgage Loans after giving effect to the
amounts distributed on such Distribution Date;
(xi) the weighted average Mortgage Rates of the Mortgage Loans after giving effect to the amounts
distributed on such Distribution Date;
(xii) the number and Pool Stated Principal Balance of the Mortgage Loans after giving effect to the
distribution of principal on such Distribution Date and the number of Mortgage Loans at the beginning
and end of the related Due Period;
(xiii) on the basis of the most recent reports furnished to it by Sub-Servicers, the number and Stated
Principal Balances of Mortgage Loans that are Delinquent (A) 30-59 days, (B) 60-89 days and (C) 90 or
more days and the number and Stated Principal Balances of Mortgage Loans that are in foreclosure;
(xiv) the aggregate amount of Realized Losses for such Distribution Date;
(xv) the amount, terms and general purpose of any Advance by the Master Servicer pursuant to Section
4.04 and the amount of all Advances that have been reimbursed during the related Due Period;
(xvi) any material modifications, extensions or waivers to the terms of the Mortgage Loans during the
Due Period or that have cumulatively become material over time;
(xvii) any material breaches of Mortgage Loan representations or warranties or covenants in the
Agreement.
(xviii) the number, stated and aggregate principal balance of any REO Properties;
(xix) the aggregate Accrued Certificate Interest remaining unpaid, if any, for each Class of
Certificates, after giving effect to the distribution made on such Distribution Date;
(xx) the Pass-Through Rates on each Class of Certificates and the Net WAC Cap Rate for such
Distribution Date, separately identifying LIBOR for such Distribution Date;
(xxi) the Basis Risk Shortfall and Prepayment Interest Shortfalls;
(xxii) the related Senior Enhancement Percentage for such Distribution Date;
(xxiii) the Overcollateralization Amount and Required Overcollateralization Amount following such
Distribution Date;
(xxiv) the occurrence of the Stepdown Date, and the aggregate amount of Realized Losses since the
Cut-off Date for the Mortgage Loans;
(xxv) the occurrence of the Credit Support Depletion Date;
(xxvi) the aggregate amount of any recoveries on previously foreclosed loans from Sellers;
(xxvii) the aggregate amount of Net Deferred Interest for such Distribution Date;
(xxviii) the amount of any payment made from the Basis Risk Shortfall Reserve Fund on the initial
Distribution Date and the balance of the Basis Risk Shortfall Reserve Fund after giving effect to such
amounts.
In the case of information furnished pursuant to clauses (v)(a) and (vi) above, the amounts shall be
expressed as a dollar amount per Certificate with a $1,000 denomination.
The Trustee's internet website will initially be located at xxxx://xxx.xxxxxx.xxx/xxx. To receive
this statement via first class mail, telephone the trustee at (000) 000-0000.
EXHIBIT THREE
STANDARD TERMS OF POOLING AND SERVICING
AGREEMENT DATED AS OF FEBRUARY 1, 2006
===============================================================================================================
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2006
Residential Accredit Loans, Inc.
Mortgage Asset-Backed Pass-Through Certificates
===============================================================================================================
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...............................................................2
Section 1.01. Definitions...........................................................2
Section 1.02. Use of Words and Phrases.............................................34
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..........35
Section 2.01. Conveyance of Mortgage Loans.........................................35
Section 2.02. Acceptance by Trustee................................................41
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the Company
42
Section 2.04. Representations and Warranties of Residential Funding................44
Section 2.05. Execution and Authentication of Certificates/Issuance of Certificates Evidencing
Interests in REMIC I Certificates................................46
Section 2.06. Conveyance of Uncertificated REMIC I and REMIC II Regular Interests; Acceptance
by the Trustee...................................................46
Section 2.07. Issuance of Certificates Evidencing Interests in REMIC II............46
Section 2.08. Purposes and Powers of the Trust.....................................46
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...........................46
Section 3.01. Master Servicer to Act as Servicer...................................46
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers; Enforcement of
Subservicers' and Sellers' Obligations...........................48
Section 3.03. Successor Subservicers...............................................49
Section 3.04. Liability of the Master Servicer.....................................49
Section 3.05. No Contractual Relationship Between Subservicer and Trustee or Certificateholders
50
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee......50
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to Custodial Account 50
Section 3.08. Subservicing Accounts; Servicing Accounts............................53
Section 3.09. Access to Certain Documentation and Information Regarding the Mortgage Loans 55
Section 3.10. Permitted Withdrawals from the Custodial Account.....................55
Section 3.11. Maintenance of the Primary Insurance Policies; Collections Thereunder57
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage...58
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements;
Certain Assignments..............................................59
Section 3.14. Realization Upon Defaulted Mortgage Loans............................61
Section 3.15. Trustee to Cooperate; Release of Mortgage Files......................65
Section 3.16. Servicing and Other Compensation; Compensating Interest..............66
Section 3.17. Reports to the Trustee and the Company...............................67
Section 3.18. Annual Statement as to Compliance and Servicing Assessment...........67
Section 3.19. Annual Independent Public Accountants' Servicing Report..............68
Section 3.20. Rights of the Company in Respect of the Master Servicer..............68
Section 3.21. Administration of Buydown Funds......................................68
Section 3.22. Advance Facility.....................................................69
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...........................................73
Section 4.01. Certificate Account..................................................73
Section 4.02. Distributions. As provided in Section 4.02 of the Series Supplement74
Section 4.03. Statements to Certificateholders; Statements to Rating Agencies; Exchange Act
Reporting........................................................74
Section 4.04. Distribution of Reports to the Trustee and the Company; Advances by the Master
Servicer.........................................................76
Section 4.05. Allocation of Realized Losses........................................78
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property........78
Section 4.07. Optional Purchase of Defaulted Mortgage Loans........................78
Section 4.08. Surety Bond..........................................................79
ARTICLE V THE CERTIFICATES.........................................................79
Section 5.01. The Certificates.....................................................79
Section 5.02. Registration of Transfer and Exchange of Certificates................81
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates....................87
Section 5.04. Persons Deemed Owners................................................88
Section 5.05. Appointment of Paying Agent..........................................88
Section 5.06. U.S.A. Patriot Act Compliance........................................88
ARTICLE VI THE COMPANY AND THE MASTER SERVICER......................................89
Section 6.01. Respective Liabilities of the Company and the Master Servicer........89
Section 6.02. Merger or Consolidation of the Company or the Master Servicer; Assignment of
Rights and Delegation of Duties by Master Servicer...............89
Section 6.03. Limitation on Liability of the Company, the Master Servicer and Others90
Section 6.04. Company and Master Servicer Not to Resign............................91
ARTICLE VII DEFAULT..................................................................92
Section 7.01. Events of Default....................................................92
Section 7.02. Trustee or Company to Act; Appointment of Successor..................94
Section 7.03. Notification to Certificateholders...................................95
Section 7.04. Waiver of Events of Default..........................................95
ARTICLE VIII CONCERNING THE TRUSTEE...................................................96
Section 8.01. Duties of Trustee....................................................96
Section 8.02. Certain Matters Affecting the Trustee................................97
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans................99
Section 8.04. Trustee May Own Certificates.........................................99
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses; Indemnification.99
Section 8.06. Eligibility Requirements for Trustee................................100
Section 8.07. Resignation and Removal of the Trustee..............................101
Section 8.08. Successor Trustee...................................................102
Section 8.09. Merger or Consolidation of Trustee..................................102
Section 8.10. Appointment of Co-Trustee or Separate Trustee.......................102
Section 8.11. Appointment of Custodians...........................................103
Section 8.12. Appointment of Office or Agency.....................................104
ARTICLE IX TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES....................105
Section 9.01. Optional Purchase by the Master Servicer of All Certificates; Termination Upon
Purchase by the Master Servicer or Liquidation of All Mortgage Loans105
Section 9.02. Additional Termination Requirements.................................108
Section 9.03. Termination of Multiple REMICs......................................109
ARTICLE X REMIC PROVISIONS........................................................110
Section 10.01.REMIC Administration................................................110
Section 10.02.Master Servicer, REMIC Administrator and Trustee Indemnification....113
Section 10.03.Designation of REMIC(s). As provided in Section 10.03 of the Series Supplement
114
Section 10.04.Distributions on the Uncertificated REMIC I and REMIC II Regular Interests. As
provided in Section 10.04 of the Series Supplement..............114
Section 10.05.Compliance with Withholding Requirements. As provided in Section 10.05 of the
Series Supplement...............................................114
ARTICLE XI MISCELLANEOUS PROVISIONS................................................115
Section 11.01.Amendment...........................................................115
Section 11.02.Recordation of Agreement; Counterparts..............................117
Section 11.03.Limitation on Rights of Certificateholders..........................118
Section 11.04.Governing Law.......................................................118
Section 11.05.Notices. As provided in Section 11.05 of the Series Supplement......119
Section 11.06.Required Notices to Rating Agency and Subservicer...................119
Section 11.07.Severability of Provisions..........................................120
Section 11.08.Supplemental Provisions for Resecuritization........................120
Section 11.09.Allocation of Voting Rights.........................................120
Section 00.00.Xx Petition.........................................................120
ARTICLE XII COMPLIANCE WITH REGULATION AB...........................................121
Section 12.01.Intent of the Parties; Reasonableness...............................121
Section 12.02.Additional Representations and Warranties of the Trustee............121
Section 12.03.Information to Be Provided by the Trustee...........................122
Section 00.00.Xxxxxx on Assessment of Compliance and Attestation..................122
Section 12.05.Indemnification; Remedies...........................................123
EXHIBITS
Exhibit A: Form of Class A Certificate
Exhibit B: Form of Class M Certificate
Exhibit C: Form of Class B Certificate
Exhibit D: Form of Class R Certificate
Exhibit E: Form of Seller/Servicer Contract
Exhibit F: Forms of Request for Release
Exhibit G-1: Form of Transfer Affidavit and Agreement
Exhibit G-2: Form of Transferor Certificate
Exhibit H: Form of Investor Representation Letter
Exhibit I: Form of Transferor Representation Letter
Exhibit J: Form of Rule 144A Investment Representation Letter
Exhibit K: Text of Amendment to Pooling and Servicing Agreement Pursuant to Section 11.01(e) for a
Limited Guaranty
Exhibit L: Form of Limited Guaranty
Exhibit M: Form of Lender Certification for Assignment of Mortgage Loan
Exhibit N: Request for Exchange Form
Exhibit O: Form of Form 10-K Certification
Exhibit P: Form of Back-Up Certification to Form 10-K Certificate
Exhibit Q: Information to be Provided by the Master Servicer to the Rating Agencies
Relating to Reportable Modified Mortgage Loans
Exhibit R: Servicing Criteria
This is the Standard Terms of Pooling and Servicing Agreement, dated as of February 1, 2006 (the
"Standard Terms", and as incorporated by reference into a Series Supplement dated as of the Cut-off Date, the
"Pooling and Servicing Agreement" or "Agreement"), among RESIDENTIAL ACCREDIT LOANS, INC., as the company
(together with its permitted successors and assigns, the "Company"), RESIDENTIAL FUNDING CORPORATION, as
master servicer (together with its permitted successors and assigns, the "Master Servicer"), and the trustee
named in the applicable Series Supplement (together with its permitted successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell certain mortgage asset-backed pass-through certificates (collectively, the
"Certificates"), to be issued under the Agreement in multiple classes, which in the aggregate will evidence
the entire beneficial ownership interest in the Mortgage Loans.
In consideration of the mutual agreements herein contained, the Company, the Master Servicer and the
Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article.
Accretion Termination Date: As defined in the Series Supplement.
Accrual Certificates: As defined in the Series Supplement.
Accrued Certificate Interest: With respect to each Distribution Date, as to any Class or Subclass of
Certificates (other than any Principal Only Certificates), interest accrued during the related Interest
Accrual Period at the related Pass-Through Rate on the Certificate Principal Balance or Notional Amount
thereof immediately prior to such Distribution Date. Accrued Certificate Interest will be calculated on the
basis of a 360-day year, consisting of twelve 30-day months. In each case Accrued Certificate Interest on any
Class or Subclass of Certificates will be reduced by the amount of:
(i) Prepayment Interest Shortfalls on all Mortgage Loans or, if the Mortgage Pool is comprised of
two or more Loan Groups, on the Mortgage Loans in the related Loan Group (to the extent not
offset by the Master Servicer with a payment of Compensating Interest as provided in Section
4.01),
(ii) the interest portion (adjusted to the Net Mortgage Rate (or the Modified Net Mortgage Rate in
the case of a Modified Mortgage Loan)) of Realized Losses on all Mortgage Loans or, if the
Mortgage Pool is comprised of two or more Loan Groups, on the Mortgage Loans in the related
Loan Group (including Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
Losses and Extraordinary Losses) not allocated solely to one or more specific Classes of
Certificates pursuant to Section 4.05,
(iii) the interest portion of Advances that were (A) previously made with respect to a Mortgage Loan
or REO Property on all Mortgage Loans or, if the Mortgage Pool is comprised of two or more Loan
Groups, on the Mortgage Loans in the related Loan Group, which remained unreimbursed following
the Cash Liquidation or REO Disposition of such Mortgage Loan or REO Property and (B) made with
respect to delinquencies that were ultimately determined to be Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses, and
(iv) any other interest shortfalls not covered by the subordination provided by the Class M
Certificates and Class B Certificates, including interest that is not collectible from the
Mortgagor pursuant to the Servicemembers Civil Relief Act of 1940, as amended, or similar
legislation or regulations as in effect from time to time,
with all such reductions allocated (A) among all of the Certificates in proportion to their respective
amounts of Accrued Certificate Interest payable on such Distribution Date absent such reductions or (B) if
the Mortgage Pool is comprised of two or more Loan Groups, the related Senior Percentage of such reductions
among the related Senior Certificates in proportion to the amounts of Accrued Certificate Interest payable
from the related Loan Group on such Distribution Date absent such reductions, with the remainder of such
reductions allocated among the holders of the Class M Certificates and Class B Certificates in proportion to
their respective amounts of Accrued Certificate Interest payable on such Distribution Date absent such
reductions. In addition to that portion of the reductions described in the preceding sentence that are
allocated to any Class of Class B Certificates or any Class of Class M Certificates, Accrued Certificate
Interest on such Class of Class B Certificates or such Class of Class M Certificates will be reduced by the
interest portion (adjusted to the Net Mortgage Rate) of Realized Losses that are allocated solely to such
Class of Class B Certificates or such Class of Class M Certificates pursuant to Section 4.05.
Addendum and Assignment Agreement: The Addendum and Assignment Agreement, dated as of January 31,
1995, between MLCC and the Master Servicer.
Additional Collateral: Any of the following held, in addition to the related Mortgaged Property, as
security for a Mortgage Loan: (i) all money, securities, security entitlements, accounts, general
intangibles, payment rights, instruments, documents, deposit accounts, certificates of deposit, commodities
contracts and other investment property and other property of whatever kind or description now existing or
hereafter acquired which is pledged as security for the repayment of such Mortgage Loan, (ii) third-party
guarantees, and (A) all money, securities, security entitlements, accounts, general intangibles, payment
rights, instruments, documents, deposit accounts, certificates of deposit, commodities contracts and other
investment property and other property of whatever kind or description now existing or hereafter acquired
which is pledged as collateral for such guarantee or (B) any mortgaged property securing the performance of
such guarantee, or (iii) such other collateral as may be set forth in the Series Supplement.
Additional Collateral Loan: Each Mortgage Loan that is supported by Additional Collateral.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and any date of determination, the Mortgage
Rate borne by the related Mortgage Note, less the rate at which the related Subservicing Fee accrues.
Advance: As to any Mortgage Loan, any advance made by the Master Servicer, pursuant to Section 4.04.
Advance Facility: As defined in Section 3.22.
Advance Facility Notice: As defined in Section 3.22.
Advance Facility Trustee: As defined in Section 3.22.
Advancing Person: As defined in Section 3.22.
Advance Reimbursement Amounts: As defined in Section 3.22.
Affiliate: With respect to any Person, any other Person controlling, controlled by or under common
control with such first Person. For the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
Ambac: Ambac Assurance Corporation (formerly known as AMBAC Indemnity Corporation).
Amount Held for Future Distribution: As to any Distribution Date and, with respect to any Mortgage
Pool that is comprised of two or more Loan Groups, each Loan Group, the total of the amounts held in the
Custodial Account at the close of business on the preceding Determination Date on account of (i) Liquidation
Proceeds, Subsequent Recoveries, Insurance Proceeds, Curtailments, Mortgage Loan purchases made pursuant to
Section 2.02, 2.03, 2.04 or 4.07 and Mortgage Loan substitutions made pursuant to Section 2.03 or 2.04
received or made in the month of such Distribution Date (other than such Liquidation Proceeds, Insurance
Proceeds and purchases of Mortgage Loans that the Master Servicer has deemed to have been received in the
preceding month in accordance with Section 3.07(b)), and Principal Prepayments in Full made after the related
Prepayment Period, and (ii) payments which represent early receipt of scheduled payments of principal and
interest due on a date or dates subsequent to the related Due Date.
Appraised Value: As to any Mortgaged Property, the lesser of (i) the appraised value of such
Mortgaged Property based upon the appraisal made at the time of the origination of the related Mortgage Loan,
and (ii) the sales price of the Mortgaged Property at such time of origination, except in the case of a
Mortgaged Property securing a refinanced or modified Mortgage Loan as to which it is either the appraised
value determined above or the appraised value determined in an appraisal at the time of refinancing or
modification, as the case may be.
Assigned Contracts: With respect to any Pledged Asset Loan: the Credit Support Pledge Agreement; the
Funding and Pledge Agreement, among GMAC Mortgage Corporation, National Financial Services Corporation and
the Mortgagor or other person pledging the related Pledged Assets; the Additional Collateral Agreement,
between GMAC Mortgage Corporation and the Mortgagor or other person pledging the related Pledged Assets; or
such other contracts as may be set forth in the Series Supplement.
Assignment: An assignment of the Mortgage, notice of transfer or equivalent instrument, in recordable
form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect of record the sale of the Mortgage Loan to the Trustee for the benefit of Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages secured by Mortgaged Properties located in the same county, if permitted by law and
accompanied by an Opinion of Counsel to that effect.
Assignment Agreement: The Assignment and Assumption Agreement, dated the Closing Date, between
Residential Funding and the Company relating to the transfer and assignment of the Mortgage Loans.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, the assignment of the related
Cooperative Lease from the Mortgagor to the originator of the Cooperative Loan.
Available Distribution Amount: As to any Distribution Date and, with respect to any Mortgage Pool
comprised of two or more Loan Groups, each Loan Group, an amount equal to (a) the sum of (i) the amount
relating to the Mortgage Loans on deposit in the Custodial Account as of the close of business on the
immediately preceding Determination Date, including any Subsequent Recoveries, and amounts deposited in the
Custodial Account in connection with the substitution of Qualified Substitute Mortgage Loans, (ii) the amount
of any Advance made on the immediately preceding Certificate Account Deposit Date, (iii) any amount deposited
in the Certificate Account on the related Certificate Account Deposit Date pursuant to the second paragraph
of Section 3.12(a), (iv) any amount deposited in the Certificate Account pursuant to Section 4.07 or Section
9.01, (v) any amount that the Master Servicer is not permitted to withdraw from the Custodial Account or the
Certificate Account pursuant to Section 3.16(e), (vi) any amount received by the Trustee pursuant to the
Surety Bond in respect of such Distribution Date and (vii) the proceeds of any Pledged Assets received by the
Master Servicer, reduced by (b) the sum as of the close of business on the immediately preceding
Determination Date of (w) aggregate Foreclosure Profits, (x) the Amount Held for Future Distribution, and (y)
amounts permitted to be withdrawn by the Master Servicer from the Custodial Account in respect of the
Mortgage Loans pursuant to clauses (ii)-(x), inclusive, of Section 3.10(a). Such amount shall be determined
separately for each Loan Group. Additionally, with respect to any Mortgage Pool that is comprised of two or
more Loan Groups, if on any Distribution Date Compensating Interest provided pursuant to this Section 3.16(e)
is less than Prepayment Interest Shortfalls incurred on the Mortgage Loans in connection with Principal
Prepayments in Full and Curtailments made in the prior calendar month, such Compensating Interest shall be
allocated on such Distribution Date to the Available Distribution Amount for each Loan Group on a pro rata
basis in accordance with the respective amounts of such Prepayment Interest Shortfalls incurred on the
Mortgage Loans in such Loan Group in respect of such Distribution Date.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient Valuation or Debt Service Reduction;
provided, however, that neither a Deficient Valuation nor a Debt Service Reduction shall be deemed a
Bankruptcy Loss hereunder so long as the Master Servicer has notified the Trustee in writing that the Master
Servicer is diligently pursuing any remedies that may exist in connection with the representations and
warranties made regarding the related Mortgage Loan and either (A) the related Mortgage Loan is not in
default with regard to payments due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any premiums on any applicable primary hazard insurance policy and any related
escrow payments in respect of such Mortgage Loan are being advanced on a current basis by the Master Servicer
or a Subservicer, in either case without giving effect to any Debt Service Reduction.
Book-Entry Certificate: Any Certificate registered in the name of the Depository or its nominee, and
designated as such in the Preliminary Statement to the Series Supplement.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking
institutions in the State of New York, the State of Michigan, the State of California, the State of Illinois
or the State of Minnesota (and such other state or states in which the Custodial Account or the Certificate
Account are at the time located) are required or authorized by law or executive order to be closed.
Buydown Funds: Any amount contributed by the seller of a Mortgaged Property, the Company or other
source in order to enable the Mortgagor to reduce the payments required to be made from the Mortgagor's funds
in the early years of a Mortgage Loan. Buydown Funds are not part of the Trust Fund prior to deposit into
the Custodial or Certificate Account.
Buydown Mortgage Loan: Any Mortgage Loan as to which a specified amount of interest is paid out of
related Buydown Funds in accordance with a related buydown agreement.
Calendar Quarter: A Calendar Quarter shall consist of one of the following time periods in any given
year: January 1 through March 31, April 1 through June 30, July 1 through September 30, and October 1
through December 31.
Capitalization Reimbursement Amount: With respect to any Distribution Date and, with respect to any
Mortgage Pool comprised of two or more Loan Groups, each Loan Group, the amount of Advances or Servicing
Advances that were added to the Stated Principal Balance of all Mortgage Loans or, if the Mortgage Pool is
comprised of two or more Loan Groups, on the Mortgage Loans in the related Loan Group, during the prior
calendar month and reimbursed to the Master Servicer or Subservicer on or prior to such Distribution Date
pursuant to Section 3.10(a)(vii), plus the Capitalization Reimbursement Shortfall Amount remaining
unreimbursed from any prior Distribution Date and reimbursed to the Master Servicer or Subservicer on or
prior to such Distribution Date.
Capitalization Reimbursement Shortfall Amount: With respect to any Distribution Date and, with
respect to any Mortgage Pool comprised of two or more Loan Groups, each Loan Group, the amount, if any, by
which the amount of Advances or Servicing Advances that were added to the Stated Principal Balance of all
Mortgage Loans (or, if the Mortgage Pool is comprised of two or more Loan Groups, on the Mortgage Loans in
the related Loan Group) during the preceding calendar month exceeds the amount of principal payments on the
Mortgage Loans included in the Available Distribution Amount (or, if the Mortgage Pool is comprised of two or
more Loan Groups, Available Distribution Amount for the related Loan Group) for that Distribution Date.
Cash Liquidation: As to any defaulted Mortgage Loan other than a Mortgage Loan as to which an REO
Acquisition occurred, a determination by the Master Servicer that it has received all Insurance Proceeds,
Liquidation Proceeds and other payments or cash recoveries which the Master Servicer reasonably and in good
faith expects to be finally recoverable with respect to such Mortgage Loan.
Certificate Account Deposit Date: As to any Distribution Date, the Business Day prior thereto.
Certificateholder or Holder: The Person in whose name a Certificate is registered in the Certificate
Register, and, in respect of any Insured Certificates, the Certificate Insurer to the extent of Cumulative
Insurance Payments, except that neither a Disqualified Organization nor a Non-United States Person shall be a
holder of a Class R Certificate for purposes hereof and, solely for the purpose of giving any consent or
direction pursuant to this Agreement, any Certificate, other than a Class R Certificate, registered in the
name of the Company, the Master Servicer or any Subservicer or any Affiliate thereof shall be deemed not to
be outstanding and the Percentage Interest or Voting Rights evidenced thereby shall not be taken into account
in determining whether the requisite amount of Percentage Interests or Voting Rights necessary to effect any
such consent or direction has been obtained. All references herein to "Holders" or "Certificateholders"
shall reflect the rights of Certificate Owners as they may indirectly exercise such rights through the
Depository and participating members thereof, except as otherwise specified herein; provided, however, that
the Trustee shall be required to recognize as a "Holder" or "Certificateholder" only the Person in whose name
a Certificate is registered in the Certificate Register.
Certificate Insurer: As defined in the Series Supplement.
Certificate Owner: With respect to a Book-Entry Certificate, the Person who is the beneficial owner
of such Certificate, as reflected on the books of an indirect participating brokerage firm for which a
Depository Participant acts as agent, if any, and otherwise on the books of a Depository Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to each Certificate (other than any Interest Only
Certificate), on any date of determination, an amount equal to:
(i) the Initial Certificate Principal Balance of such Certificate as specified on the face thereof,
plus
(ii) any Subsequent Recoveries added to the Certificate Principal Balance of such Certificate
pursuant to Section 4.02, plus
(iii) in the case of each Accrual Certificate, an amount equal to the aggregate Accrued Certificate
Interest added to the Certificate Principal Balance thereof prior to such date of
determination, minus
(iv) the sum of (x) the aggregate of all amounts previously distributed with respect to such
Certificate (or any predecessor Certificate) and applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.02(a) and (y) the aggregate of all reductions in
Certificate Principal Balance deemed to have occurred in connection with Realized Losses which
were previously allocated to such Certificate (or any predecessor Certificate) pursuant to
Section 4.05;
provided, that the Certificate Principal Balance of each Certificate of the Class of Subordinate Certificates
with the Lowest Priority at any given time shall be further reduced by an amount equal to the Percentage
Interest represented by such Certificate multiplied by the excess, if any, of (A) the then aggregate
Certificate Principal Balance of all Classes of Certificates then outstanding over (B) the then aggregate
Stated Principal Balance of the Mortgage Loans.
Certificate Register and Certificate Registrar: The register maintained and the registrar appointed
pursuant to Section 5.02.
Class: Collectively, all of the Certificates bearing the same designation. The initial Class A-V
Certificates and any Subclass thereof issued pursuant to Section 5.01(c) shall be a single Class for purposes
of this Agreement.
Class A-P Certificate: Any one of the Certificates designated as a Class A-P Certificate.
Class A-P Collection Shortfall: With respect to the Cash Liquidation or REO Disposition of a Discount
Mortgage Loan, any Distribution Date and, with respect to any Mortgage Pool comprised of two or more Loan
Groups, each Loan Group, the excess of the amount described in clause (C)(1) of the definition of Class A-P
Principal Distribution Amount (for the related Loan Group, if applicable) over the amount described in clause
(C)(2) of such definition.
Class A-P Principal Distribution Amount: With respect to any Distribution Date and, with respect to
any Mortgage Pool comprised of two or more Loan Groups, each Loan Group, an amount equal to the aggregate of:
(A) the related Discount Fraction of the principal portion of each Monthly Payment on each
Discount Mortgage Loan (or, with respect to any Mortgage Pool comprised of two or more Loan Groups,
each Discount Mortgage Loan in the related Loan Group) due during the related Due Period, whether or
not received on or prior to the related Determination Date, minus the Discount Fraction of the
principal portion of any related Debt Service Reduction which together with other Bankruptcy Losses
exceeds the Bankruptcy Amount;
(B) the related Discount Fraction of the principal portion of all unscheduled collections
on each Discount Mortgage Loan (or, with respect to any Mortgage Pool comprised of two or more Loan
Groups, each Discount Mortgage Loan in the related Loan Group) received during the preceding calendar
month or, in the case of Principal Prepayments in Full, during the related Prepayment Period (other
than amounts received in connection with a Cash Liquidation or REO Disposition of a Discount Mortgage
Loan described in clause (C) below), including Principal Prepayments in Full, Curtailments, Subsequent
Recoveries and repurchases (including deemed repurchases under Section 3.07(b)) of such Discount
Mortgage Loans (or, in the case of a substitution of a Deleted Mortgage Loan, the Discount Fraction of
the amount of any shortfall deposited in the Custodial Account in connection with such substitution);
(C) in connection with the Cash Liquidation or REO Disposition of a Discount Mortgage Loan
(or, with respect to any Mortgage Pool comprised of two or more Loan Groups, each Discount Mortgage
Loan in the related Loan Group) that occurred during the preceding calendar month (or was deemed to
have occurred during such period in accordance with Section 3.07(b)) that did not result in any Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses, an
amount equal to the lesser of (1) the applicable Discount Fraction of the Stated Principal Balance of
such Discount Mortgage Loan immediately prior to such Distribution Date and (2) the aggregate amount
of the collections on such Mortgage Loan to the extent applied as recoveries of principal;
(D) any amounts allocable to principal for any previous Distribution Date (calculated
pursuant to clauses (A) through (C) above) that remain undistributed; and
(E) the amount of any Class A-P Collection Shortfalls for such Distribution Date and the
related Loan Group, if applicable, and the amount of any Class A-P Collection Shortfalls (for the
related Loan Group, if applicable) remaining unpaid for all previous Distribution Dates, but only to
the extent of the Eligible Funds for such Distribution Date; minus
(F) the related Discount Fraction of the portion of the Capitalization Reimbursement Amount
(for the related Loan Group, if applicable) for such Distribution Date, if any, related to each
Discount Mortgage Loan (in the related Loan Group, if applicable).
Notwithstanding the foregoing, with respect to any Distribution Date on and after the Credit Support
Depletion Date, the Class A-P Principal Distribution Amount (for a Loan Group, if applicable) shall equal the
excess of (i) the sum of (a) the related Discount Fraction of the principal portion of each Monthly Payment
on each Discount Mortgage Loan (in the related Loan Group, if applicable) received or advanced prior to the
related Determination Date and not previously distributed minus the Discount Fraction of the principal
portion of any related Debt Service Reduction which together with other Bankruptcy Losses exceeds the
Bankruptcy Amount and (b) the related Discount Fraction of the aggregate amount of unscheduled collections
described in clauses (B) and (C) above over (ii) the amount calculated pursuant to clause (F) above.
Class A-V Certificate: Any one of the Certificates designated as a Class A-V Certificate, including
any Subclass thereof.
Class B Certificate: Any one of the Certificates designated as a Class B-1 Certificate, Class B-2
Certificate or Class B-3 Certificate.
Class M Certificate: Any one of the Certificates designated as a Class M-1 Certificate, Class M-2
Certificate or Class M-3 Certificate.
Closing Date: As defined in the Series Supplement.
Code: The Internal Revenue Code of 1986, as amended.
Combined Collateral LLC: Combined Collateral LLC, a Delaware limited liability company.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date, an amount equal to Prepayment Interest
Shortfalls resulting from Principal Prepayments in Full during the related Prepayment Period and Curtailments
during the prior calendar month and included in the Available Distribution Amount for such Distribution Date,
but not more than the lesser of (a) one-twelfth of 0.125% of the Stated Principal Balance of the Mortgage
Loans immediately preceding such Distribution Date and (b) the sum of the Servicing Fee and all income and
gain on amounts held in the Custodial Account and the Certificate Account and payable to the
Certificateholders with respect to such Distribution Date; provided that for purposes of this definition the
amount of the Servicing Fee will not be reduced pursuant to Section 7.02(a) except as may be required
pursuant to the last sentence of such Section.
Compliance With Laws Representation: The following representation and warranty (or any representation
and warranty that is substantially similar) made by Residential Funding in Section 4 of Assignment Agreement:
"Each Mortgage Loan at the time it was made complied in all material respects with applicable local, state,
and federal laws, including, but not limited to, all applicable anti-predatory lending laws".
Cooperative: A private, cooperative housing corporation which owns or leases land and all or part of
a building or buildings, including apartments, spaces used for commercial purposes and common areas therein
and whose board of directors authorizes, among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building owned or leased by a Cooperative,
which unit the Mortgagor has an exclusive right to occupy pursuant to the terms of a proprietary lease or
occupancy agreement.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary lease or occupancy agreement
with respect to the Cooperative Apartment occupied by the Mortgagor and relating to the related Cooperative
Stock, which lease or agreement confers an exclusive right to the holder of such Cooperative Stock to occupy
such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a Cooperative Apartment, evidenced by
a Mortgage Note and secured by (i) a Security Agreement, (ii) the related Cooperative Stock Certificate,
(iii) an assignment of the Cooperative Lease, (iv) financing statements and (v) a stock power (or other
similar instrument), and ancillary thereto, a recognition agreement between the Cooperative and the
originator of the Cooperative Loan, each of which was transferred and assigned to the Trustee pursuant to
Section 2.01 and are from time to time held as part of the Trust Fund.
Cooperative Stock: With respect to a Cooperative Loan, the single outstanding class of stock,
partnership interest or other ownership instrument in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative Loan, the stock certificate or other
instrument evidencing the related Cooperative Stock.
Credit Repository: Equifax, Transunion and Experian, or their successors in interest.
Credit Support Depletion Date: The first Distribution Date on which the Certificate Principal
Balances of the Subordinate Certificates have been reduced to zero.
Credit Support Pledge Agreement: The Credit Support Pledge Agreement, dated as of November 24, 1998,
among the Master Servicer, GMAC Mortgage Corporation, Combined Collateral LLC and The First National Bank of
Chicago (now known as Bank One, National Association), as custodian.
Cumulative Insurance Payments: As defined in the Series Supplement.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and maintained pursuant to Section 3.07
in the name of a depository institution, as custodian for the holders of the Certificates, for the holders of
certain other interests in mortgage loans serviced or sold by the Master Servicer and for the Master
Servicer, into which the amounts set forth in Section 3.07 shall be deposited directly. Any such account or
accounts shall be an Eligible Account.
Custodial Agreement: An agreement that may be entered into among the Company, the Master Servicer,
the Trustee and a Custodian pursuant to which the Custodian will hold certain documents relating to the
Mortgage Loans on behalf of the Trustee.
Custodian: A custodian appointed pursuant to a Custodial Agreement.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid principal balance thereof at the
Cut-off Date after giving effect to all installments of principal due on or prior thereto (or due during the
month of the Cut-off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction in the scheduled Monthly
Payment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy
Code, except such a reduction constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a court of competent
jurisdiction of the Mortgaged Property in an amount less than the then outstanding indebtedness under the
Mortgage Loan, or any reduction in the amount of principal to be paid in connection with any scheduled
Monthly Payment that constitutes a permanent forgiveness of principal, which valuation or reduction results
from a proceeding under the Bankruptcy Code.
Definitive Certificate: Any Certificate other than a Book-Entry Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a Qualified Substitute
Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to 59 days" or "30 or more days"
delinquent when a payment due on any scheduled due date remains unpaid as of the close of business on the
last business day immediately prior to the next following monthly scheduled due date; "60 to 89 days" or "60
or more days" delinquent when a payment due on any scheduled due date remains unpaid as of the close of
business on the last business day immediately prior to the second following monthly scheduled due date; and
so on. The determination as to whether a Mortgage Loan falls into these categories is made as of the close of
business on the last business day of each month. For example, a Mortgage Loan with a payment due on July 1
that remained unpaid as of the close of business on July 31 would then be considered to be 30 to 59 days
delinquent. Delinquency information as of the Cut-off Date is determined and prepared as of the close of
business on the last business day immediately prior to the Cut-off Date.
Depository: The Depository Trust Company, or any successor Depository hereafter named. The nominee
of the initial Depository for purposes of registering those Certificates that are to be Book-Entry
Certificates is Cede & Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
Depository Participant: A broker, dealer, bank or other financial institution or other Person for
whom from time to time a Depository effects book-entry transfers and pledges of securities deposited with the
Depository.
Destroyed Mortgage Note: A Mortgage Note the original of which was permanently lost or destroyed and
has not been replaced.
Determination Date: As defined in the Series Supplement.
Discount Fraction: With respect to each Discount Mortgage Loan, the fraction expressed as a
percentage, the numerator of which is the Discount Net Mortgage Rate minus the Net Mortgage Rate (or the
initial Net Mortgage Rate with respect to any Discount Mortgage Loans as to which the Mortgage Rate is
modified pursuant to 3.07(a)) for such Mortgage Loan and the denominator of which is the Discount Net
Mortgage Rate. The Discount Fraction with respect to each Discount Mortgage Loan is set forth as an exhibit
attached to the Series Supplement.
Discount Mortgage Loan: Any Mortgage Loan having a Net Mortgage Rate (or the initial Net Mortgage
Rate) of less than the Discount Net Mortgage Rate per annum and any Mortgage Loan deemed to be a Discount
Mortgage Loan pursuant to the definition of Qualified Substitute Mortgage Loan.
Discount Net Mortgage Rate: As defined in the Series Supplement.
Disqualified Organization: Any organization defined as a "disqualified organization" under Section
860E(e)(5) of the Code, and if not otherwise included, any of the following: (i) the United States, any
State or political subdivision thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Xxxxxxx Mac, a majority of its board of directors is not selected by such
governmental unit), (ii) a foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) any "electing large
partnership," as defined in Section 775(a) of the Code and (vi) any other Person so designated by the Trustee
based upon an Opinion of Counsel that the holding of an Ownership Interest in a Class R Certificate by such
Person may cause the Trust Fund or any Person having an Ownership Interest in any Class of Certificates
(other than such Person) to incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of an Ownership Interest in a Class R Certificate to such Person.
The terms "United States", "State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
Distribution Date: The 25th day of any month beginning in the month immediately following the month
of the initial issuance of the Certificates or, if such 25th day is not a Business Day, the Business Day
immediately following such 25th day.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the day during the related Due
Period on which the Monthly Payment is due.
Due Period: With respect to any Distribution Date, the one-month period set forth in the Series
Supplement.
Eligible Account: An account that is any of the following: (i) maintained with a depository
institution the debt obligations of which have been rated by each Rating Agency in its highest rating
available, or (ii) an account or accounts in a depository institution in which such accounts are fully
insured to the limits established by the FDIC, provided that any deposits not so insured shall, to the extent
acceptable to each Rating Agency, as evidenced in writing, be maintained such that (as evidenced by an
Opinion of Counsel delivered to the Trustee and each Rating Agency) the registered Holders of Certificates
have a claim with respect to the funds in such account or a perfected first security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims
of any other depositors or creditors of the depository institution with which such account is maintained, or
(iii) in the case of the Custodial Account, a trust account or accounts maintained in the corporate trust
department of the Trustee, or (iv) in the case of the Certificate Account, a trust account or accounts
maintained in the corporate trust department of the Trustee, or (v) an account or accounts of a depository
institution acceptable to each Rating Agency (as evidenced in writing by each Rating Agency that use of any
such account as the Custodial Account or the Certificate Account will not reduce the rating assigned to any
Class of Certificates by such Rating Agency below the then-current rating assigned to such Certificates).
Event of Default: As defined in Section 7.01.
Excess Bankruptcy Loss: Any Bankruptcy Loss, or portion thereof, which exceeds the then applicable
Bankruptcy Amount.
Excess Fraud Loss: Any Fraud Loss, or portion thereof, which exceeds the then applicable Fraud Loss
Amount.
Excess Special Hazard Loss: Any Special Hazard Loss, or portion thereof, that exceeds the then
applicable Special Hazard Amount.
Excess Subordinate Principal Amount: With respect to any Distribution Date on which the aggregate
Certificate Principal Balance of the Class of Subordinate Certificates then outstanding with the Lowest
Priority is to be reduced to zero and on which Realized Losses are to be allocated to such class or classes,
the excess, if any, of (i) the amount that would otherwise be distributable in respect of principal on such
class or classes of Certificates on such Distribution Date over (ii) the excess, if any, of the aggregate
Certificate Principal Balance of such class or classes of Certificates immediately prior to such Distribution
Date over the aggregate amount of Realized Losses to be allocated to such classes of Certificates on such
Distribution Date as reduced by any amount calculated pursuant to clause (E) of the definition of Class A-P
Principal Distribution Amount. With respect to any Mortgage Pool that is comprised of two or more Loan
Groups, the Excess Subordinate Principal Amount will be allocated between each Loan Group on a pro rata basis
in accordance with the amount of Realized Losses attributable to each Loan Group and allocated to the
Certificates on such Distribution Date.
Exchange Act: The Securities and Exchange Act of 1934, as amended.
Extraordinary Events: Any of the following conditions with respect to a Mortgaged Property (or, with
respect to a Cooperative Loan, the Cooperative Apartment) or Mortgage Loan causing or resulting in a loss
which causes the liquidation of such Mortgage Loan:
(a) losses that are of the type that would be covered by the fidelity bond and the errors and omissions
insurance policy required to be maintained pursuant to Section 3.12(b) but are in excess of the
coverage maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive contamination, all whether controlled or
uncontrolled, and whether such loss be direct or indirect, proximate or remote or be in whole or in
part caused by, contributed to or aggravated by a peril covered by the definition of the term "Special
Hazard Loss";
(c) hostile or warlike action in time of peace or war, including action in hindering, combating or
defending against an actual, impending or expected attack:
1. by any government or sovereign power, de jure or de facto, or by any authority maintaining or using
military, naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or forces;
(d) any weapon of war employing atomic fission or radioactive force whether in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped power or action taken by governmental
authority in hindering, combating or defending against such an occurrence, seizure or destruction
under quarantine or customs regulations, confiscation by order of any government or public authority;
or risks of contraband or illegal transportation or trade.
Extraordinary Losses: Any loss incurred on a Mortgage Loan caused by or resulting from an
Extraordinary Event.
Xxxxxx Xxx: Federal National Mortgage Association, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage Association Charter Act, or any
successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Distribution Date: The Distribution Date on which the final distribution in respect of the
Certificates will be made pursuant to Section 9.01, which Final Distribution Date shall in no event be later
than the end of the 90-day liquidation period described in Section 9.02.
Fitch: Fitch Ratings or its successor in interest.
Foreclosure Profits: As to any Distribution Date or related Determination Date and any Mortgage Loan,
the excess, if any, of Liquidation Proceeds, Insurance Proceeds and REO Proceeds (net of all amounts
reimbursable therefrom pursuant to Section 3.10(a)(ii)) in respect of each Mortgage Loan or REO Property for
which a Cash Liquidation or REO Disposition occurred in the related Prepayment Period over the sum of the
unpaid principal balance of such Mortgage Loan or REO Property (determined, in the case of an REO
Disposition, in accordance with Section 3.14) plus accrued and unpaid interest at the Mortgage Rate on such
unpaid principal balance from the Due Date to which interest was last paid by the Mortgagor to the first day
of the month following the month in which such Cash Liquidation or REO Disposition occurred.
Form 10-K Certification: As defined in Section 4.03(e).
Fraud Losses: Realized Losses on Mortgage Loans as to which there was fraud in the origination of
such Mortgage Loan.
Xxxxxxx Mac: Federal Home Loan Mortgage Corporation, a corporate instrumentality of the United States
created and existing under Title III of the Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Highest Priority: As of any date of determination, the Class of Subordinate Certificates then
outstanding with a Certificate Principal Balance greater than zero, with the earliest priority for payments
pursuant to Section 4.02(a), in the following order: Class M-1, Class M-2, Class M-3, Class B-1, Class B-2
and Class B-3 Certificates.
Independent: When used with respect to any specified Person, means such a Person who (i) is in fact
independent of the Company, the Master Servicer and the Trustee, or any Affiliate thereof, (ii) does not have
any direct financial interest or any material indirect financial interest in the Company, the Master Servicer
or the Trustee or in an Affiliate thereof, and (iii) is not connected with the Company, the Master Servicer
or the Trustee as an officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Initial Certificate Principal Balance: With respect to each Class of Certificates, the Certificate
Principal Balance of such Class of Certificates as of the Cut-off Date, as set forth in the Series Supplement.
Initial Monthly Payment Fund: An amount representing scheduled principal amortization and interest at
the Net Mortgage Rate for the Due Date in the first Due Period commencing subsequent to the Cut-off Date for
those Mortgage Loans for which the Trustee will not be entitled to receive such payment, and as more
specifically defined in the Series Supplement.
Initial Notional Amount: With respect to any Class or Subclass of Interest Only Certificates, the
amount initially used as the principal basis for the calculation of any interest payment amount, as more
specifically defined in the Series Supplement.
Initial Subordinate Class Percentage: As defined in the Series Supplement.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans pursuant to any Primary Insurance
Policy or any other related insurance policy covering a Mortgage Loan (excluding any Certificate Policy (as
defined in the Series Supplement)), to the extent such proceeds are payable to the mortgagee under the
Mortgage, any Subservicer, the Master Servicer or the Trustee and are not applied to the restoration of the
related Mortgaged Property (or, with respect to a Cooperative Loan, the related Cooperative Apartment) or
released to the Mortgagor in accordance with the procedures that the Master Servicer would follow in
servicing mortgage loans held for its own account.
Insurer: Any named insurer under any Primary Insurance Policy or any successor thereto or the named
insurer in any replacement policy.
Interest Accrual Period: As defined in the Series Supplement.
Interest Only Certificates: A Class or Subclass of Certificates not entitled to payments of
principal, and designated as such in the Series Supplement. The Interest Only Certificates will have no
Certificate Principal Balance.
Interim Certification: As defined in Section 2.02.
International Borrower: In connection with any Mortgage Loan, a borrower who is (a) a United States
citizen employed in a foreign country, (b) a non-permanent resident alien employed in the United States or
(c) a citizen of a country other than the United States with income derived from sources outside the United
States.
Junior Certificateholder: The Holder of not less than 95% of the Percentage Interests of the Junior
Class of Certificates.
Junior Class of Certificates: The Class of Subordinate Certificates outstanding as of the date of the
repurchase of a Mortgage Loan pursuant to Section 4.07 herein that has the Lowest Priority.
Late Collections: With respect to any Mortgage Loan, all amounts received during any Due Period,
whether as late payments of Monthly Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise,
which represent late payments or collections of Monthly Payments due but delinquent for a previous Due Period
and not previously recovered.
Liquidation Proceeds: Amounts (other than Insurance Proceeds) received by the Master Servicer in
connection with the taking of an entire Mortgaged Property by exercise of the power of eminent domain or
condemnation or in connection with the liquidation of a defaulted Mortgage Loan through trustee's sale,
foreclosure sale or otherwise, other than REO Proceeds.
Loan Group: Any group of Mortgage Loans designated as a separate loan group in the Series Supplement.
The Certificates relating to each Loan Group will be designated in the Series Supplement.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a percentage, the numerator of which
is the current principal balance of the related Mortgage Loan at the date of determination and the
denominator of which is the Appraised Value of the related Mortgaged Property.
Lower Priority: As of any date of determination and any Class of Subordinate Certificates, any other
Class of Subordinate Certificates then outstanding with a later priority for payments pursuant to Section
4.02 (a).
Lowest Priority: As of any date of determination, the Class of Subordinate Certificates then
outstanding with a Certificate Principal Balance greater than zero, with the latest priority for payments
pursuant to Section 4.02(a), in the following order: Class B-3, Class B-2, Class B-1, Class M-3, Class M-2
and Class M-1 Certificates.
Maturity Date: The latest possible maturity date, solely for purposes of Section 1.860G-1(a)(4)(iii)
of the Treasury regulations, by which the Certificate Principal Balance of each Class of Certificates (other
than the Interest Only Certificates which have no Certificate Principal Balance) and each Uncertificated
REMIC Regular Interest would be reduced to zero, as designated in the Series Supplement.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the
laws of the State of Delaware, or any successor thereto.
MERS(R)System: The system of recording transfers of Mortgages electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with MERS on the MERS(R)System.
MLCC: Xxxxxxx Xxxxx Credit Corporation, or its successor in interest.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject of a Servicing Modification.
Modified Net Mortgage Rate: As to any Mortgage Loan that is the subject of a Servicing Modification,
the Net Mortgage Rate minus the rate per annum by which the Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan,
solely as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination
thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO Property) and any Due Date, the
payment of principal and interest due thereon in accordance with the amortization schedule at the time
applicable thereto (after adjustment, if any, for Curtailments and for Deficient Valuations occurring prior
to such Due Date but before any adjustment to such amortization schedule by reason of any bankruptcy, other
than a Deficient Valuation, or similar proceeding or any moratorium or similar waiver or grace period and
before any Servicing Modification that constitutes a reduction of the interest rate on such Mortgage Loan).
Moody's: Xxxxx'x Investors Service, Inc., or its successor in interest.
Mortgage: With respect to each Mortgage Note related to a Mortgage Loan which is not a Cooperative
Loan, the mortgage, deed of trust or other comparable instrument creating a first lien on an estate in fee
simple or leasehold interest in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining to a particular Mortgage Loan
and any additional documents required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the Trustee pursuant to
Section 2.01 as from time to time are held or deemed to be held as a part of the Trust Fund, the Mortgage
Loans originally so held being identified in the initial Mortgage Loan Schedule, and Qualified Substitute
Mortgage Loans held or deemed held as part of the Trust Fund including, without limitation, (i) with respect
to each Cooperative Loan, the related Mortgage Note, Security Agreement, Assignment of Proprietary Lease,
Cooperative Stock Certificate, Cooperative Lease and Mortgage File and all rights appertaining thereto, and
(ii) with respect to each Mortgage Loan other than a Cooperative Loan, each related Mortgage Note, Mortgage
and Mortgage File and all rights appertaining thereto.
Mortgage Loan Schedule: As defined in the Series Supplement.
Mortgage Note: The originally executed note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan, together with any modification thereto.
Mortgage Pool: The pool of mortgage loans, including all Loan Groups, if any, consisting of the
Mortgage Loans.
Mortgage Rate: As to any Mortgage Loan, the interest rate borne by the related Mortgage Note, or any
modification thereto other than a Servicing Modification.
Mortgaged Property: The underlying real property securing a Mortgage Loan or, with respect to a
Cooperative Loan, the related Cooperative Lease and Cooperative Stock.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, a per annum rate of interest equal to the Adjusted
Mortgage Rate less the per annum rate at which the Servicing Fee is calculated.
Non-Discount Mortgage Loan: A Mortgage Loan that is not a Discount Mortgage Loan.
Non-Primary Residence Loans: The Mortgage Loans designated as secured by second or vacation
residences, or by non-owner occupied residences, on the Mortgage Loan Schedule.
Non-United States Person: Any Person other than a United States Person.
Nonrecoverable Advance: Any Advance previously made or proposed to be made by the Master Servicer or
Subservicer in respect of a Mortgage Loan (other than a Deleted Mortgage Loan) which, in the good faith
judgment of the Master Servicer, will not, or, in the case of a proposed Advance, would not, be ultimately
recoverable by the Master Servicer from related Late Collections, Insurance Proceeds, Liquidation Proceeds,
REO Proceeds or amounts reimbursable to the Master Servicer pursuant to Section 4.02(a) hereof. To the extent
that any Mortgagor is not obligated under the related Mortgage documents to pay or reimburse any portion of
any Servicing Advances that are outstanding with respect to the related Mortgage Loan as a result of a
modification of such Mortgage Loan by the Master Servicer, which forgives amounts which the Master Servicer
or Subservicer had previously advanced, and the Master Servicer determines that no other source of payment or
reimbursement for such advances is available to it, such Servicing Advances shall be deemed to be
Nonrecoverable Advances. The determination by the Master Servicer that it has made a Nonrecoverable Advance
or that any proposed Advance would constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered to the Company, the Trustee and any Certificate Insurer.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of reference thereto, is not
subject to a Subservicing Agreement.
Notional Amount: With respect to any Class or Subclass of Interest Only Certificates, an amount used
as the principal basis for the calculation of any interest payment amount, as more specifically defined in
the Series Supplement.
Officers' Certificate: A certificate signed by the Chairman of the Board, the President or a Vice
President or Assistant Vice President, or a Director or Managing Director, and by the Treasurer, the
Secretary, or one of the Assistant Treasurers or Assistant Secretaries of the Company or the Master Servicer,
as the case may be, and delivered to the Trustee, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the Trustee and the Master Servicer,
who may be counsel for the Company or the Master Servicer, provided that any opinion of counsel (i) referred
to in the definition of "Disqualified Organization" or (ii) relating to the qualification of any REMIC formed
under the Series Supplement or compliance with the REMIC Provisions must, unless otherwise specified, be an
opinion of Independent counsel.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan (including an REO Property) which was
not the subject of a Principal Prepayment in Full, Cash Liquidation or REO Disposition and which was not
purchased, deleted or substituted for prior to such Due Date pursuant to Section 2.02, 2.03, 2.04 or 4.07.
Ownership Interest: As to any Certificate, any ownership or security interest in such Certificate,
including any interest in such Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Rate: As defined in the Series Supplement.
Paying Agent: The Trustee or any successor Paying Agent appointed by the Trustee.
Percentage Interest: With respect to any Certificate (other than a Class R Certificate), the
undivided percentage ownership interest in the related Class evidenced by such Certificate, which percentage
ownership interest shall be equal to the Initial Certificate Principal Balance thereof or Initial Notional
Amount (in the case of any Interest Only Certificate) thereof divided by the aggregate Initial Certificate
Principal Balance or the aggregate of the Initial Notional Amounts, as applicable, of all the Certificates of
the same Class. With respect to a Class R Certificate, the interest in distributions to be made with respect
to such Class evidenced thereby, expressed as a percentage, as stated on the face of each such Certificate.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to timely payment of principal and interest by the United States or
any agency or instrumentality thereof when such obligations are backed by the full faith and credit of
the United States;
(ii) repurchase agreements on obligations specified in clause (i) maturing not more than one month from the
date of acquisition thereof, provided that the unsecured short-term debt obligations of the party
agreeing to repurchase such obligations are at the time rated by each Rating Agency in its highest
short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits, time deposits and bankers' acceptances (which
shall each have an original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than 365 days or a remaining maturity
of more than 30 days) denominated in United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state thereof or of any domestic
branch of a foreign depository institution or trust company; provided that the debt obligations of
such depository institution or trust company at the date of acquisition thereof have been rated by
each Rating Agency in its highest short-term rating available; and, provided further that, if the
original maturity of such short-term obligations of a domestic branch of a foreign depository
institution or trust company shall exceed 30 days, the short-term rating of such institution shall be
A-1+ in the case of Standard & Poor's if Standard & Poor's is a Rating Agency;
(iv) commercial paper and demand notes (having original maturities of not more than 365 days) of any
corporation incorporated under the laws of the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in its highest short-term rating available; provided
that such commercial paper shall have a remaining maturity of not more than 30 days;
(v) any mutual fund, money market fund, common trust fund or other pooled investment vehicle, the assets
of which are limited to instruments that otherwise would constitute Permitted Investments hereunder
and have been rated by each Rating Agency in its highest short-term rating available (in the case of
Standard & Poor's such rating shall be either AAAm or AAAm-G), including any such fund that is managed
by the Trustee or any affiliate of the Trustee or for which the Trustee or any of its affiliates acts
as an adviser; and
(vi) other obligations or securities that are acceptable to each Rating Agency as a Permitted Investment
hereunder and will not reduce the rating assigned to any Class of Certificates by such Rating Agency
(without giving effect to any Certificate Policy (as defined in the Series Supplement) in the case of
Insured Certificates (as defined in the Series Supplement) below the lower of the then-current rating
assigned to such Certificates by such Rating Agency, as evidenced in writing;
provided, however, no instrument shall be a Permitted Investment if it represents, either (1) the right to
receive only interest payments with respect to the underlying debt instrument or (2) the right to receive
both principal and interest payments derived from obligations underlying such instrument and the principal
and interest payments with respect to such instrument provide a yield to maturity greater than 120% of the
yield to maturity at par of such underlying obligations. References herein to the highest rating available
on unsecured long-term debt shall mean AAA in the case of Standard & Poor's and Fitch and Aaa in the case of
Moody's, and for purposes of this Agreement, any references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall mean the following: A-1 in the case of
Standard & Poor's, P-1 in the case of Moody's and F-1 in the case of Fitch; provided, however, that any
Permitted Investment that is a short-term debt obligation rated A-1 by Standard & Poor's must satisfy the
following additional conditions: (i) the total amount of debt from A-1 issuers must be limited to the
investment of monthly principal and interest payments (assuming fully amortizing collateral); (ii) the total
amount of A-1 investments must not represent more than 20% of the aggregate outstanding Certificate Principal
Balance of the Certificates and each investment must not mature beyond 30 days; (iii) the terms of the debt
must have a predetermined fixed dollar amount of principal due at maturity that cannot vary; and (iv) if the
investments may be liquidated prior to their maturity or are being relied on to meet a certain yield,
interest must be tied to a single interest rate index plus a single fixed spread (if any) and must move
proportionately with that index. Any Permitted Investment may be held by or through the Trustee or its
Affiliates.
Permitted Transferee: Any Transferee of a Class R Certificate, other than a Disqualified Organization
or Non-United States Person.
Person: Any individual, corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or government or any agency or political
subdivision thereof.
Pledged Amount: With respect to any Pledged Asset Loan, the amount of money remitted to Combined
Collateral LLC, at the direction of or for the benefit of the related Mortgagor.
Pledged Asset Loan: Any Mortgage Loan supported by Pledged Assets or such other collateral, other
than the related Mortgaged Property, set forth in the Series Supplement.
Pledged Assets: With respect to any Mortgage Loan, all money, securities, security entitlements,
accounts, general intangibles, payment intangibles, instruments, documents, deposit accounts, certificates of
deposit, commodities contracts and other investment property and other property of whatever kind or
description pledged by Combined Collateral LLC as security in respect of any Realized Losses in connection
with such Mortgage Loan up to the Pledged Amount for such Mortgage Loan, and any related collateral, or such
other collateral as may be set forth in the Series Supplement.
Pledged Asset Mortgage Servicing Agreement: The Pledged Asset Mortgage Servicing Agreement, dated as
of February 28, 1996 between MLCC and the Master Servicer.
Pooling and Servicing Agreement or Agreement: With respect to any Series, this Standard Terms
together with the related Series Supplement.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate of the Stated Principal
Balances of each Mortgage Loan.
Pool Strip Rate: With respect to each Mortgage Loan, a per annum rate equal to the excess of (a) the
Net Mortgage Rate of such Mortgage Loan over (b) the Discount Net Mortgage Rate (but not less than 0.00%) per
annum.
Prepayment Distribution Trigger: With respect to any Distribution Date and any Class of Subordinate
Certificates (other than the Class M-1 Certificates), a test that shall be satisfied if the fraction
(expressed as a percentage) equal to the sum of the Certificate Principal Balances of such Class and each
Class of Subordinate Certificates with a Lower Priority than such Class immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of all of the Mortgage Loans (or related
REO Properties) immediately prior to such Distribution Date is greater than or equal to the sum of the
related Initial Subordinate Class Percentages of such Classes of Subordinate Certificates.
Prepayment Interest Shortfall: As to any Distribution Date and any Mortgage Loan (other than a
Mortgage Loan relating to an REO Property) that was the subject of (a) a Principal Prepayment in Full during
the portion of the related Prepayment Period that falls during the prior calendar month, an amount equal to
the excess of one month's interest at the Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan) on the Stated Principal Balance of such Mortgage Loan over the amount of interest
(adjusted to the Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan))
paid by the Mortgagor for such month to the date of such Principal Prepayment in Full or (b) a Curtailment
during the prior calendar month, an amount equal to one month's interest at the Net Mortgage Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) on the amount of such Curtailment.
Prepayment Period: As to any Distribution Date and Principal Prepayment in Full, the period
commencing on the 16th day of the month prior to the month in which that Distribution Date occurs and ending
on the 15th day of the month in which such Distribution Date occurs.
Primary Insurance Policy: Each primary policy of mortgage guaranty insurance or any replacement
policy therefor referred to in Section 2.03(b)(iv) and (v).
Principal Only Certificates: A Class of Certificates not entitled to payments of interest, and more
specifically designated as such in the Series Supplement.
Principal Prepayment: Any payment of principal or other recovery on a Mortgage Loan, including a
recovery that takes the form of Liquidation Proceeds or Insurance Proceeds, which is received in advance of
its scheduled Due Date and is not accompanied by an amount as to interest representing scheduled interest on
such payment due on any date or dates in any month or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment of the entire principal balance of a Mortgage
Loan that is made by the Mortgagor.
Program Guide: Collectively, the Client Guide and the Servicer Guide for Residential Funding's
Expanded Criteria Mortgage Program.
Purchase Price: With respect to any Mortgage Loan (or REO Property) required to be or otherwise
purchased on any date pursuant to Section 2.02, 2.03, 2.04 or 4.07, an amount equal to the sum of (i) 100% of
the Stated Principal Balance thereof plus the principal portion of any related unreimbursed Advances and (ii)
unpaid accrued interest at the Adjusted Mortgage Rate (or Modified Net Mortgage Rate plus the rate per annum
at which the Servicing Fee is calculated in the case of a Modified Mortgage Loan) (or at the Net Mortgage
Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) in the case of a purchase made
by the Master Servicer) on the Stated Principal Balance thereof to the Due Date in the Due Period related to
the Distribution Date occurring in the month following the month of purchase from the Due Date to which
interest was last paid by the Mortgagor.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by Residential Funding or the Company
for a Deleted Mortgage Loan which must, on the date of such substitution, as confirmed in an Officers'
Certificate delivered to the Trustee, with a copy to the Custodian,
(i) have an outstanding principal balance, after deduction of the principal portion of the monthly
payment due in the month of substitution (or in the case of a substitution of more than one
Mortgage Loan for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after
such deduction), not in excess of the Stated Principal Balance of the Deleted Mortgage Loan
(the amount of any shortfall to be deposited by Residential Funding in the Custodial Account in
the month of substitution);
(ii) have a Mortgage Rate and a Net Mortgage Rate no lower than and not more than 1% per annum
higher than the Mortgage Rate and Net Mortgage Rate, respectively, of the Deleted Mortgage Loan
as of the date of substitution;
(iii) have a Loan-to-Value Ratio at the time of substitution no higher than that of the Deleted
Mortgage Loan at the time of substitution;
(iv) have a remaining term to stated maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan;
(v) comply with each representation and warranty set forth in Sections 2.03 and 2.04 hereof and
Section 4 of the Assignment Agreement; and
(vi) have a Pool Strip Rate equal to or greater than that of the Deleted Mortgage Loan.
Notwithstanding any other provisions herein, (x) with respect to any Qualified Substitute Mortgage Loan
substituted for a Deleted Mortgage Loan which was a Discount Mortgage Loan, such Qualified Substitute
Mortgage Loan shall be deemed to be a Discount Mortgage Loan and to have a Discount Fraction equal to the
Discount Fraction of the Deleted Mortgage Loan and (y) in the event that the "Pool Strip Rate" of any
Qualified Substitute Mortgage Loan as calculated pursuant to the definition of "Pool Strip Rate" is greater
than the Pool Strip Rate of the related Deleted Mortgage Loan
(i) the Pool Strip Rate of such Qualified Substitute Mortgage Loan shall be equal to the Pool Strip
Rate of the related Deleted Mortgage Loan for purposes of calculating the Pass-Through Rate on
the Class A-V Certificates and
(ii) the excess of the Pool Strip Rate on such Qualified Substitute Mortgage Loan as calculated
pursuant to the definition of "Pool Strip Rate" over the Pool Strip Rate on the related Deleted
Mortgage Loan shall be payable to the Class R Certificates pursuant to Section 4.02 hereof.
Rating Agency: Each of the statistical credit rating agencies specified in the Preliminary Statement
of the Series Supplement. If any agency or a successor is no longer in existence, "Rating Agency" shall be
such statistical credit rating agency, or other comparable Person, designated by the Company, notice of which
designation shall be given to the Trustee and the Master Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO Property):
(a) as to which a Cash Liquidation or REO Disposition has occurred, an amount (not less than zero)
equal to (i) the Stated Principal Balance of the Mortgage Loan (or REO Property) as of the date
of Cash Liquidation or REO Disposition, plus (ii) interest (and REO Imputed Interest, if any)
at the Net Mortgage Rate from the Due Date as to which interest was last paid or advanced to
Certificateholders up to the Due Date in the Due Period related to the Distribution Date on
which such Realized Loss will be allocated pursuant to Section 4.05 on the Stated Principal
Balance of such Mortgage Loan (or REO Property) outstanding during each Due Period that such
interest was not paid or advanced, minus (iii) the proceeds, if any, received during the month
in which such Cash Liquidation (or REO Disposition) occurred, to the extent applied as
recoveries of interest at the Net Mortgage Rate and to principal of the Mortgage Loan, net of
the portion thereof reimbursable to the Master Servicer or any Subservicer with respect to
related Advances, Servicing Advances or other expenses as to which the Master Servicer or
Subservicer is entitled to reimbursement thereunder but which have not been previously
reimbursed,
(b) which is the subject of a Servicing Modification, (i) (1) the amount by which the interest
portion of a Monthly Payment or the principal balance of such Mortgage Loan was reduced or (2)
the sum of any other amounts owing under the Mortgage Loan that were forgiven and that
constitute Servicing Advances that are reimbursable to the Master Servicer or a Subservicer,
and (ii) any such amount with respect to a Monthly Payment that was or would have been due in
the month immediately following the month in which a Principal Prepayment or the Purchase Price
of such Mortgage Loan is received or is deemed to have been received,
(c) which has become the subject of a Deficient Valuation, the difference between the principal
balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation, or
(d) which has become the object of a Debt Service Reduction, the amount of such Debt Service
Reduction.
Notwithstanding the above, neither a Deficient Valuation nor a Debt Service Reduction shall be deemed a
Realized Loss hereunder so long as the Master Servicer has notified the Trustee in writing that the Master
Servicer is diligently pursuing any remedies that may exist in connection with the representations and
warranties made regarding the related Mortgage Loan and either (A) the related Mortgage Loan is not in
default with regard to payments due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any premiums on any applicable primary hazard insurance policy and any related
escrow payments in respect of such Mortgage Loan are being advanced on a current basis by the Master Servicer
or a Subservicer, in either case without giving effect to any Debt Service Reduction.
To the extent the Master Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the
amount of the Realized Loss with respect to that Mortgage Loan will be reduced to the extent such recoveries
are applied to reduce the Certificate Principal Balance of any Class of Certificates on any Distribution Date.
Record Date: With respect to each Distribution Date, the close of business on the last Business Day
of the month next preceding the month in which the related Distribution Date occurs.
Regular Certificate: Any of the Certificates other than a Class R Certificate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
ss.ss.229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and
interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time to time.
Reimbursement Amounts: As defined in Section 3.22.
REMIC: A "real estate mortgage investment conduit" within the meaning of Section 860D of the Code.
REMIC Administrator: Residential Funding 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 Master Servicer shall appoint a successor REMIC
Administrator, subject to assumption of the REMIC Administrator obligations under this Agreement.
REMIC Provisions: Provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and
related provisions, and temporary and final regulations (or, to the extent not inconsistent with such
temporary or final regulations, proposed regulations) and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.
REO Acquisition: The acquisition by the Master Servicer on behalf of the Trustee for the benefit of
the Certificateholders of any REO Property pursuant to Section 3.14.
REO Disposition: As to any REO Property, a determination by the Master Servicer that it has received
all Insurance Proceeds, Liquidation Proceeds, REO Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally recoverable from the sale or other
disposition of the REO Property.
REO Imputed Interest: As to any REO Property, for any period, an amount equivalent to interest (at
the Net Mortgage Rate that would have been applicable to the related Mortgage Loan had it been outstanding)
on the unpaid principal balance of the Mortgage Loan as of the date of acquisition thereof for such period.
REO Proceeds: Proceeds, net of expenses, received in respect of any REO Property (including, without
limitation, proceeds from the rental of the related Mortgaged Property or, with respect to a Cooperative
Loan, the related Cooperative Apartment) which proceeds are required to be deposited into the Custodial
Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master Servicer through foreclosure or deed in
lieu of foreclosure in connection with a defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i) has been subject to an interest rate
reduction, (ii) has been subject to a term extension or (iii) has had amounts owing on such Mortgage Loan
capitalized by adding such amount to the Stated Principal Balance of such Mortgage Loan; provided, however,
that a Mortgage Loan modified in accordance with clause (i) above for a temporary period shall not be a
Reportable Modified Mortgage Loan if such Mortgage Loan has not been delinquent in payments of principal and
interest for six months since the date of such modification if that interest rate reduction is not made
permanent thereafter.
Request for Release: A request for release, the forms of which are attached as Exhibit F hereto, or
an electronic request in a form acceptable to the Custodian.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance policy which is required
to be maintained from time to time under this Agreement, the Program Guide or the related Subservicing
Agreement in respect of such Mortgage Loan.
Required Surety Payment: With respect to any Additional Collateral Loan that becomes a Liquidated
Mortgage Loan, the lesser of (i) the principal portion of the Realized Loss with respect to such Mortgage
Loan and (ii) the excess, if any, of (a) the amount of Additional Collateral required at origination with
respect to such Mortgage Loan over (b) the net proceeds realized by the Subservicer from the related
Additional Collateral.
Residential Funding: Residential Funding Corporation, a Delaware corporation, in its capacity as
seller of the Mortgage Loans to the Company and any successor thereto.
Responsible Officer: When used with respect to the Trustee, any officer of the Corporate Trust
Department of the Trustee, including any Senior Vice President, any Vice President, any Assistant Vice
President, any Assistant Secretary, any Trust Officer or Assistant Trust Officer, or any other officer of the
Trustee customarily performing functions similar to those performed by any of the above designated officers
to whom, with respect to a particular matter, such matter is referred, in each case with direct
responsibility for the administration of the Agreement.
Retail Certificates: A Senior Certificate, if any, offered in smaller minimum denominations than
other Senior Certificates, and designated as such in the Series Supplement.
Schedule of Discount Fractions: The schedule setting forth the Discount Fractions with respect to the
Discount Mortgage Loans, attached as an exhibit to the Series Supplement.
Securitization Transaction: Any transaction involving a sale or other transfer of mortgage loans
directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities.
Security Agreement: With respect to a Cooperative Loan, the agreement creating a security interest in
favor of the originator in the related Cooperative Stock.
Seller: As to any Mortgage Loan, a Person, including any Subservicer, that executed a Seller's
Agreement applicable to such Mortgage Loan.
Seller's Agreement: An agreement for the origination and sale of Mortgage Loans generally in the form
of the Seller Contract referred to or contained in the Program Guide, or in such other form as has been
approved by the Master Servicer and the Company, each containing representations and warranties in respect of
one or more Mortgage Loans consistent in all material respects with those set forth in the Program Guide.
Senior Accelerated Distribution Percentage: With respect to any Distribution Date occurring on or
prior to the 60th Distribution Date and, with respect to any Mortgage Pool comprised of two or more Loan
Groups, any Loan Group, 100%. With respect to any Distribution Date thereafter and any such Loan Group, if
applicable, as follows:
(i) for any Distribution Date after the 60th Distribution Date but on or prior to the 72nd Distribution
Date, the related Senior Percentage for such Distribution Date plus 70% of the related Subordinate
Percentage for such Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date but on or prior to the 84th Distribution
Date, the related Senior Percentage for such Distribution Date plus 60% of the related Subordinate
Percentage for such Distribution Date;
(iii) for any Distribution Date after the 84th Distribution Date but on or prior to the 96th Distribution
Date, the related Senior Percentage for such Distribution Date plus 40% of the related Subordinate
Percentage for such Distribution Date;
(iv) for any Distribution Date after the 96th Distribution Date but on or prior to the 108th Distribution
Date, the related Senior Percentage for such Distribution Date plus 20% of the related Subordinate
Percentage for such Distribution Date; and
(v) for any Distribution Date thereafter, the Senior Percentage for such Distribution Date;
provided, however,
(i) that any scheduled reduction to the Senior Accelerated Distribution Percentage described above
shall not occur as of any Distribution Date unless either
(a)(1)(X) the outstanding principal balance of the Mortgage Loans delinquent 60 days or more
(including Mortgage Loans which are in foreclosure, have been foreclosed or otherwise liquidated, or
with respect to which the Mortgagor is in bankruptcy and any REO Property) averaged over the last six
months, as a percentage of the aggregate outstanding Certificate Principal Balance of the Subordinate
Certificates, is less than 50% or (Y) the outstanding principal balance of Mortgage Loans delinquent
60 days or more (including Mortgage Loans which are in foreclosure, have been foreclosed or otherwise
liquidated, or with respect to which the Mortgagor is in bankruptcy and any REO Property) averaged
over the last six months, as a percentage of the aggregate outstanding principal balance of all
Mortgage Loans averaged over the last six months, does not exceed 2% and (2) Realized Losses on the
Mortgage Loans to date for such Distribution Date if occurring during the sixth, seventh, eighth,
ninth or tenth year (or any year thereafter) after the Closing Date are less than 30%, 35%, 40%, 45%
or 50%, respectively, of the sum of the Initial Certificate Principal Balances of the Subordinate
Certificates or
(b)(1) the outstanding principal balance of Mortgage Loans delinquent 60 days or more
(including Mortgage Loans which are in foreclosure, have been foreclosed or otherwise liquidated, or
with respect to which the Mortgagor is in bankruptcy and any REO Property) averaged over the last six
months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans averaged
over the last six months, does not exceed 4% and (2) Realized Losses on the Mortgage Loans to date for
such Distribution Date, if occurring during the sixth, seventh, eighth, ninth or tenth year (or any
year thereafter) after the Closing Date are less than 10%, 15%, 20%, 25% or 30%, respectively, of the
sum of the Initial Certificate Principal Balances of the Subordinate Certificates, and
(ii) that for any Distribution Date on which the Senior Percentage is greater than the Senior
Percentage as of the Closing Date, the Senior Accelerated Distribution Percentage for such Distribution Date
shall be 100%, or, if the Mortgage Pool is comprised of two or more Loan Groups, for any Distribution Date on
which the weighted average of the Senior Percentages for each Loan Group, weighted on the basis of the Stated
Principal Balances of the Mortgage Loans in the related Loan Group (excluding the Discount Fraction of the
Discount Mortgage Loans in such Loan Group) exceeds the weighted average of the initial Senior Percentages
(calculated on such basis) for each Loan Group, each of the Senior Accelerated Distribution Percentages for
such Distribution Date will equal 100%.
Notwithstanding the foregoing, upon the reduction of the Certificate Principal Balances of the related Senior
Certificates (other than the Class A-P Certificates, if any) to zero, the related Senior Accelerated
Distribution Percentage shall thereafter be 0%.
Senior Certificate: As defined in the Series Supplement.
Senior Percentage: As defined in the Series Supplement.
Senior Support Certificate: A Senior Certificate that provides additional credit enhancement to
certain other classes of Senior Certificates and designated as such in the Preliminary Statement of the
Series Supplement.
Series: All of the Certificates issued pursuant to a Pooling and Servicing Agreement and bearing the
same series designation.
Series Supplement: The agreement into which this Standard Terms is incorporated and pursuant to
which, together with this Standard Terms, a Series of Certificates is issued.
Servicing Accounts: The account or accounts created and maintained pursuant to Section 3.08.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of Regulation AB, as such may
be amended from time to time.
Servicing Advances: All customary, reasonable and necessary "out of pocket" costs and expenses
incurred in connection with a default, delinquency or other unanticipated event by the Master Servicer or a
Subservicer in the performance of its servicing obligations, including, but not limited to, the cost of (i)
the preservation, restoration and protection of a Mortgaged Property or, with respect to a Cooperative Loan,
the related Cooperative Apartment, (ii) any enforcement or judicial proceedings, including foreclosures,
including any expenses incurred in relation to any such proceedings that result from the Mortgage Loan being
registered on the MERS System, (iii) the management and liquidation of any REO Property, (iv) any mitigation
procedures implemented in accordance with Section 3.07, and (v) compliance with the obligations under
Sections 3.01, 3.08, 3.11, 3.12(a) and 3.14, including, if the Master Servicer or any Affiliate of the Master
Servicer provides services such as appraisals and brokerage services that are customarily provided by Persons
other than servicers of mortgage loans, reasonable compensation for such services.
Servicing Advance Reimbursement Amounts: As defined in Section 3.22.
Servicing Fee: With respect to any Mortgage Loan and Distribution Date, the fee payable monthly to
the Master Servicer in respect of master servicing compensation that accrues at an annual rate designated on
the Mortgage Loan Schedule as the "MSTR SERV FEE" for such Mortgage Loan, as may be adjusted with respect to
successor Master Servicers as provided in Section 7.02.
Servicing Modification: Any reduction of the interest rate on or the outstanding principal balance of
a Mortgage Loan, any extension of the final maturity date of a Mortgage Loan, and any increase to the
outstanding principal balance of a Mortgage Loan by adding to the Stated Principal Balance unpaid principal
and interest and other amounts owing under the Mortgage Loan, in each case pursuant to a modification of a
Mortgage Loan that is in default, or for which, in the judgment of the Master Servicer, default is reasonably
foreseeable in accordance with Section 3.07(a).
Servicing Officer: Any officer of the Master Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans whose name and specimen signature appear on a list of
servicing officers furnished to the Trustee by the Master Servicer, as such list may from time to time be
amended.
Special Hazard Loss: Any Realized Loss not in excess of the cost of the lesser of repair or
replacement of a Mortgaged Property (or, with respect to a Cooperative Loan, the related Cooperative
Apartment) suffered by such Mortgaged Property (or Cooperative Apartment) on account of direct physical loss,
exclusive of (i) any loss of a type covered by a hazard policy or a flood insurance policy required to be
maintained in respect of such Mortgaged Property pursuant to Section 3.12(a), except to the extent of the
portion of such loss not covered as a result of any coinsurance provision and (ii) any Extraordinary Loss.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc.,
or its successor in interest.
Stated Principal Balance: With respect to any Mortgage Loan or related REO Property, as of any
Distribution Date, (i) the sum of (a) the Cut-off Date Principal Balance of the Mortgage Loan plus (b) any
amount by which the Stated Principal Balance of the Mortgage Loan has been increased pursuant to a Servicing
Modification, minus (ii) the sum of (a) the principal portion of the Monthly Payments due with respect to
such Mortgage Loan or REO Property during each Due Period ending with the Due Period related to the previous
Distribution Date which were received or with respect to which an Advance was made, and (b) all Principal
Prepayments with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation
Proceeds and REO Proceeds, to the extent applied by the Master Servicer as recoveries of principal in
accordance with Section 3.14 with respect to such Mortgage Loan or REO Property, in each case which were
distributed pursuant to Section 4.02 on any previous Distribution Date, and (c) any Realized Loss allocated
to Certificateholders with respect thereto for any previous Distribution Date.
Subclass: With respect to the Class A-V Certificates, any Subclass thereof issued pursuant to Section
5.01(c). Any such Subclass will represent the Uncertificated Class A-V REMIC Regular Interest or Interests
specified by the initial Holder of the Class A-V Certificates pursuant to Section 5.01(c).
Subordinate Certificate: Any one of the Class M Certificates or Class B Certificates, executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit B
and Exhibit C, respectively.
Subordinate Class Percentage: With respect to any Distribution Date and any Class of Subordinate
Certificates, a fraction, expressed as a percentage, the numerator of which is the aggregate Certificate
Principal Balance of such Class of Subordinate Certificates immediately prior to such date and the
denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage Loan) immediately prior to
such Distribution Date.
Subordinate Percentage: As of any Distribution Date and, with respect to any Mortgage Pool comprised
of two or more Loan Groups, any Loan Group, 100% minus the related Senior Percentage as of such Distribution
Date.
Subsequent Recoveries: As of any Distribution Date, amounts received by the Master Servicer (net of
any related expenses permitted to be reimbursed pursuant to Section 3.10) or surplus amounts held by the
Master Servicer to cover estimated expenses (including, but not limited to, recoveries in respect of the
representations and warranties made by the related Seller pursuant to the applicable Seller's Agreement and
assigned to the Trustee pursuant to Section 2.04) specifically related to a Mortgage Loan that was the
subject of a Cash Liquidation or an REO Disposition prior to the related Prepayment Period that resulted in a
Realized Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of reference thereto, is subject to a
Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered into a Subservicing Agreement and
who generally satisfied the requirements set forth in the Program Guide in respect of the qualification of a
Subservicer as of the date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and interest on a Mortgage Loan which is
advanced by the related Subservicer (net of its Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in accordance with Section 3.08.
Subservicing Agreement: The written contract between the Master Servicer and any Subservicer relating
to servicing and administration of certain Mortgage Loans as provided in Section 3.02, generally in the form
of the servicer contract referred to or contained in the Program Guide or in such other form as has been
approved by the Master Servicer and the Company. With respect to Additional Collateral Loans subserviced by
MLCC, the Subservicing Agreement shall also include the Addendum and Assignment Agreement and the Pledged
Asset Mortgage Servicing Agreement. With respect to any Pledged Asset Loan subserviced by GMAC Mortgage
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 at an annual rate equal to the excess of the Mortgage Rate borne by the related
Mortgage Note over the rate per annum designated on the Mortgage Loan Schedule as the "CURR NET" for such
Mortgage Loan.
Successor Master Servicer: As defined in Section 3.22.
Surety: Ambac, or its successors in interest, or such other surety as may be identified in the Series
Supplement.
Surety Bond: The Limited Purpose Surety Bond (Policy No. AB0039BE), dated February 28, 1996 in
respect to Mortgage Loans originated by MLCC, or the Surety Bond (Policy No. AB0240BE), dated March 17, 1999
in respect to Mortgage Loans originated by Novus Financial Corporation, in each case issued by Ambac for the
benefit of certain beneficiaries, including the Trustee for the benefit of the Holders of the Certificates,
but only to the extent that such Surety Bond covers any Additional Collateral Loans, or such other Surety
Bond as may be identified in the Series Supplement.
Tax Returns: The federal income tax return on Internal Revenue Service Form 1066, U.S. Real Estate
Mortgage Investment Conduit Income Tax Return, including Schedule Q thereto, Quarterly Notice to Residual
Interest Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed on
behalf of any REMIC formed under the Series Supplement and under the REMIC Provisions, together with any and
all other information, reports or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing authority under any applicable
provisions of federal, state or local tax laws.
Transaction Party: As defined in Section 12.02(a).
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation or other form of assignment of
any Ownership Interest in a Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership Interest in a Certificate.
Trust Fund: The segregated pool of assets related to a Series, with respect to which one or more
REMIC elections are to be made pursuant to this Agreement, consisting of:
(i) the Mortgage Loans and the related Mortgage Files and collateral securing such Mortgage Loans,
(ii) all payments on and collections in respect of the Mortgage Loans due after the Cut-off Date as shall
be on deposit in the Custodial Account or in the Certificate Account and identified as belonging to
the Trust Fund, including the proceeds from the liquidation of Additional Collateral for any
Additional Collateral Loan or Pledged Assets for any Pledged Asset Loan, but not including amounts on
deposit in the Initial Monthly Payment Fund,
(iii) property that secured a Mortgage Loan and that has been acquired for the benefit of the
Certificateholders by foreclosure or deed in lieu of foreclosure,
(iv) the hazard insurance policies and Primary Insurance Policies, if any, the Pledged Assets with respect
to each Pledged Asset Loan, and the interest in the Surety Bond transferred to the Trustee pursuant to
Section 2.01, and
(v) all proceeds of clauses (i) through (iv) above.
Trustee Information: As specified in Section 12.05(a)(i)(A).
Uninsured Cause: Any cause of damage to property subject to a Mortgage such that the complete
restoration of such property is not fully reimbursable by the hazard insurance policies.
United States Person or U.S. Person: (i) A citizen or resident of the United States, (ii) a
corporation, partnership or other entity treated as a corporation or partnership for United States federal
income tax purposes organized in or under the laws of the United States or any state thereof or the District
of Columbia (unless, in the case of a partnership, Treasury regulations provide otherwise), provided that,
for purposes solely of the restrictions on the transfer of residual interests, no partnership or other entity
treated as a partnership for United States federal income tax purposes shall be treated as a United States
Person or U.S. Person unless all persons that own an interest in such partnership either directly or
indirectly through any chain of entities no one of which is a corporation for United States federal income
tax purposes are required by the applicable operating agreement to be United States Persons, (iii) an estate
the income of which is includible in gross income for United States tax purposes, regardless of its source,
or (iv) a trust if a court within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority to control all substantial
decisions of the trust. Notwithstanding the preceding sentence, to the extent provided in Treasury
regulations, certain Trusts in existence on August 20, 1996, and treated as United States persons prior to
such date, that elect to continue to be treated as United States persons will also be a U.S. Person.
U.S.A. Patriot Act: Uniting and Strengthening America by Providing Appropriate Tools to Intercept and
Obstruct Terrorism Act of 2001, as amended.
Voting Rights: The portion of the voting rights of all of the Certificates which is allocated to any
Certificate, and more specifically designated in Article XI of the Series Supplement.
Section 1.02. Use of Words and Phrases.
"Herein," "hereby," "hereunder," `hereof," "hereinbefore," "hereinafter" and other equivalent words
refer to the Pooling and Servicing Agreement as a whole. All references herein to Articles, Sections or
Subsections shall mean the corresponding Articles, Sections and Subsections in the Pooling and Servicing
Agreement. The definitions set forth herein include both the singular and the plural.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Company, concurrently with the execution and delivery hereof, does hereby assign to the Trustee
for the benefit of the Certificateholders without recourse all the right, title and interest of the Company
in and to the Mortgage Loans, including all interest and principal received on or with respect to the
Mortgage Loans after the Cut-off Date (other than payments of principal and interest due on the Mortgage
Loans in the month of the Cut-off Date). In connection with such transfer and assignment, the Company does
hereby deliver to the Trustee the Certificate Policy (as defined in the Series Supplement), if any for the
benefit of the Holders of the Insured Certificates (as defined in the Series Supplement).
(b) In connection with such assignment, except as set forth in Section 2.01(c) and subject to Section
2.01(d) below, the Company does hereby 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) (I) with respect to each Mortgage Loan so
assigned (other than a Cooperative Loan):
(i) The original Mortgage Note, endorsed without recourse in blank or to the order of the Trustee, and
showing an unbroken chain of endorsements from the originator thereof to the Person endorsing it to
the Trustee, or with respect to any Destroyed Mortgage Note, an original lost note affidavit from the
related Seller or Residential Funding stating that the original Mortgage Note was lost, misplaced or
destroyed, together with a copy of the related Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of the Mortgage Loan and language indicating
that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon or a copy of the Mortgage with evidence of recording indicated thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R)System, an original Assignment of the Mortgage to
the Trustee with evidence of recording indicated thereon or a copy of such assignment with evidence of
recording indicated thereon;
(iv) The original recorded assignment or assignments of the Mortgage showing an unbroken chain of title
from the originator thereof to the Person assigning it to the Trustee (or to MERS, if the Mortgage
Loan is registered on the MERS(R)System and noting the presence of a MIN) with evidence of recordation
noted thereon or attached thereto, or a copy of such assignment or assignments of the Mortgage with
evidence of recording indicated thereon; and
(v) The original of each modification, assumption agreement or preferred loan agreement, if any, relating
to such Mortgage Loan or a copy of each modification, assumption agreement or preferred loan agreement.
and (II) with respect to each Cooperative Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to the order of the Trustee and showing an
unbroken chain of endorsements from the originator thereof to the Person endorsing it to the Trustee,
or with respect to any Destroyed Mortgage Note, an original lost note affidavit from the related
Seller or Residential Funding stating that the original Mortgage Note was lost, misplaced or
destroyed, together with a copy of the related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the Assignment of Proprietary Lease to the originator of
the Cooperative Loan with intervening assignments showing an unbroken chain of title from such
originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing the related Cooperative Stock pledged with
respect to such Cooperative Loan, together with an undated stock power (or other similar instrument)
executed in blank;
(iv) The original recognition agreement by the Cooperative of the interests of the mortgagee with respect
to the related Cooperative Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any continuation statements, filed by the
originator of such Cooperative Loan as secured party, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement and the Assignment of
Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security interest referenced in clause (vi) above showing
an unbroken chain of title from the originator to the Trustee, each with evidence of recording
thereof, evidencing the interest of the originator under the Security Agreement and the Assignment of
Proprietary Lease;
(viii) An executed assignment of the interest of the originator in the Security Agreement, Assignment of
Proprietary Lease and the recognition agreement referenced in clause (iv) above, showing an unbroken
chain of title from the originator to the Trustee;
(ix) The original of each modification, assumption agreement or preferred loan agreement, if any, relating
to such Cooperative Loan; and
(x) A duly completed UCC-1 financing statement showing the Master Servicer as debtor, the Company as
secured party and the Trustee as assignee and a duly completed UCC-1 financing statement showing the
Company as debtor and the Trustee as secured party, each in a form sufficient for filing, evidencing
the interest of such debtors in the Cooperative Loans.
(c) The Company may, in lieu of delivering the original of the documents set forth in Section
2.01(b)(I)(ii), (iii), (iv) and (v) and Section (b)(II)(ii), (iv), (vii), (ix) and (x) (or copies thereof as
permitted by Section 2.01(b)) to the Trustee or the Custodian or Custodians, 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)(I)(ii), (iii), (iv) and (v) and Section (b)(II)(ii), (iv), (vii), (ix) and (x)
(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 or Custodians that are the duly appointed agent or agents of the Trustee.
The parties hereto agree that it is not intended that any Mortgage Loan be included in the Trust Fund
that is either (i) a "High-Cost Home Loan" as defined in the New Jersey Home Ownership Act effective November
27, 2003, (ii) a "High-Cost Home Loan" as defined in the New Mexico Home Loan Protection Act effective
January 1, 2004, (iii) a "High Cost Home Mortgage Loan" as defined in the Massachusetts Predatory Home Loan
Practices Act effective November 7, 2004 or (iv) a "High-Cost Home Loan" as defined in the Indiana House
Enrolled Act No. 1229, effective as of January 1, 2005.
(d) Notwithstanding the provisions of Section 2.01(c), in connection with any Mortgage Loan, if the
Company cannot deliver the original of the Mortgage, any assignment, modification, assumption agreement or
preferred loan agreement (or copy thereof as permitted by Section 2.01(b)) with evidence of recording thereon
concurrently with the execution and delivery of this Agreement because of (i) a delay caused by the public
recording office where such Mortgage, assignment, modification, assumption agreement or preferred loan
agreement as the case may be, has been delivered for recordation, or (ii) a delay in the receipt of certain
information necessary to prepare the related assignments, the Company shall deliver or cause to be delivered
to the Trustee or the respective Custodian a copy of such Mortgage, assignment, modification, assumption
agreement or preferred loan agreement.
The Company shall promptly cause to be recorded in the appropriate public office for real property
records the Assignment referred to in clause (I)(iii) of Section 2.01(b), except (a) in states where, in the
opinion of counsel acceptable to the Trustee and the Master Servicer, such recording is not required to
protect the Trustee's interests in the Mortgage Loan against the claim of any subsequent transferee or any
successor to or creditor of the Company or the originator of such Mortgage Loan or (b) if MERS is identified
on the Mortgage or on a properly recorded assignment of the Mortgage as the mortgagee of record solely as
nominee for the Seller and its successors and assigns, and shall promptly cause to be filed the Form UCC-3
assignment and UCC-1 financing statement referred to in clause (II)(vii) and (x), respectively, of Section
2.01(b). If any Assignment, Form UCC-3 or Form UCC-1, as applicable, is lost or returned unrecorded to the
Company because of any defect therein, the Company shall prepare a substitute Assignment, Form UCC-3 or Form
UCC-1, as applicable, or cure such defect, as the case may be, and cause such Assignment to be recorded in
accordance with this paragraph. The Company shall promptly deliver or cause to be delivered to the Trustee
or the respective Custodian such Mortgage or Assignment or Form UCC-3 or Form UCC-1, as applicable, (or copy
thereof as permitted by Section 2.01(b)) with evidence of recording indicated thereon at the time specified
in Section 2.01(c). In connection with its servicing of Cooperative Loans, the Master Servicer will use its
best efforts to file timely continuation statements with regard to each financing statement and assignment
relating to Cooperative Loans as to which the related Cooperative Apartment is located outside of the State
of New York.
If the Company delivers to the Trustee or Custodian any Mortgage Note or Assignment of Mortgage in
blank, the Company 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)(I)(ii), (iii), (iv) and (v) and (II)(vi) and (vii) and
that may be delivered as a copy rather than the original may be delivered to the Trustee or the Custodian.
In connection with the assignment of any Mortgage Loan registered on the MERS(R)System, the Company
further agrees that it will cause, at the Company's own expense, within 30 Business Days after the Closing
Date, the MERS(R)System to indicate that such Mortgage Loans have been assigned by the Company to the Trustee
in accordance with this Agreement for the benefit of the Certificateholders by including (or deleting, in the
case of Mortgage Loans which are repurchased in accordance with this Agreement) in such computer files (a)
the code in the field which identifies the specific Trustee and (b) the code in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such Mortgage Loans. The Company further
agrees that it will not, and will not permit the Master Servicer to, and the Master Servicer agrees that it
will not, alter the codes referenced in this paragraph with respect to any Mortgage Loan during the term of
this Agreement unless and until such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
(e) Residential Funding hereby assigns to the Trustee its security interest in and to any Additional
Collateral or Pledged Assets, its right to receive amounts due or to become due in respect of any Additional
Collateral or Pledged Assets pursuant to the related Subservicing Agreement and its rights as beneficiary
under the Surety Bond in respect of any Additional Collateral Loans. With respect to any Additional
Collateral Loan or Pledged Asset Loan, Residential Funding shall cause to be filed in the appropriate
recording office a UCC-3 statement giving notice of the assignment of the related security interest to the
Trust Fund and shall thereafter cause the timely filing of all necessary continuation statements with regard
to such financing statements.
(f) It is intended that the conveyance by the Company to the Trustee of the Mortgage Loans as provided for
in this Section 2.01 be and the Uncertificated REMIC Regular Interests, if any (as provided for in Section
2.06), be construed as a sale by the Company to the Trustee of the Mortgage Loans and any Uncertificated
REMIC Regular Interests for the benefit of the Certificateholders. Further, it is not intended that such
conveyance be deemed to be a pledge of the Mortgage Loans and any Uncertificated REMIC Regular Interests by
the Company to the Trustee to secure a debt or other obligation of the Company. Nonetheless, (a) this
Agreement is intended to be and hereby is a security agreement within the meaning of Articles 8 and 9 of the
New York Uniform Commercial Code and the Uniform Commercial Code of any other applicable jurisdiction; (b)
the conveyance provided for in Section 2.01 shall be deemed to be, and hereby is, (1) a grant by the Company
to the Trustee of a security interest in all of the Company's right (including the power to convey title
thereto), title and interest, whether now owned or hereafter acquired, in and to any and all general
intangibles, payment intangibles, accounts, chattel paper, instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advices of credit and investment property and other
property of whatever kind or description now existing or hereafter acquired consisting of, arising from or
relating to any of the following: (A) the Mortgage Loans, including (i) with respect to each Cooperative
Loan, the related Mortgage Note, Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate and Cooperative Lease, (ii) with respect to each Mortgage Loan other than a Cooperative Loan, the
related Mortgage Note and Mortgage, and (iii) any insurance policies and all other documents in the related
Mortgage File, (B) all amounts payable pursuant to the Mortgage Loans in accordance with the terms thereof,
(C) any Uncertificated REMIC Regular Interests and (D) all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other property, including without
limitation all amounts from time to time held or invested in the Certificate Account or the Custodial
Account, whether in the form of cash, instruments, securities or other property and (2) an assignment by the
Company to the Trustee of any security interest in any and all of Residential Funding's right (including the
power to convey title thereto), title and interest, whether now owned or hereafter acquired, in and to the
property described in the foregoing clauses (1)(A), (B), (C) and (D) granted by Residential Funding to the
Company pursuant to the Assignment Agreement; (c) the possession by the Trustee, the Custodian or any other
agent of the Trustee of Mortgage Notes or such other items of property as constitute instruments, money,
payment intangibles, negotiable documents, goods, deposit accounts, letters of credit, advices of credit,
investment property, certificated securities or chattel paper shall be deemed to be "possession by the
secured party," or possession by a purchaser or a person designated by such secured party, for purposes of
perfecting the security interest pursuant to the Minnesota Uniform Commercial Code and the Uniform Commercial
Code of any other applicable jurisdiction as in effect (including, without limitation, Sections 8-106, 9-313,
9-314 and 9-106 thereof); and (d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, securities intermediaries, bailees or agents of, or persons
holding for (as applicable) the Trustee for the purpose of perfecting such security interest under applicable
law.
The Company and, at the Company's direction, Residential Funding and the Trustee shall, to the extent
consistent with this Agreement, take such reasonable actions as may be necessary to ensure that, if this
Agreement were determined to create a security interest in the Mortgage Loans, any Uncertificated REMIC
Regular Interests and the other property described above, such security interest would be determined to be a
perfected security interest of first priority under applicable law and will be maintained as such throughout
the term of this Agreement. Without limiting the generality of the foregoing, the Company shall prepare and
deliver to the Trustee not less than 15 days prior to any filing date and, the Trustee shall forward for
filing, or shall cause to be forwarded for filing, at the expense of the Company, all filings necessary to
maintain the effectiveness of any original filings necessary under the Uniform Commercial Code as in effect
in any jurisdiction to perfect the Trustee's security interest in or lien on the Mortgage Loans and any
Uncertificated REMIC Regular Interests, as evidenced by an Officers' Certificate of the Company, including
without limitation (x) continuation statements, and (y) such other statements as may be occasioned by (1) any
change of name of Residential Funding, the Company or the Trustee (such preparation and filing shall be at
the expense of the Trustee, if occasioned by a change in the Trustee's name), (2) any change of type or
jurisdiction of organization of Residential Funding or the Company, (3) any transfer of any interest of
Residential Funding or the Company in any Mortgage Loan or (4) any transfer of any interest of Residential
Funding or the Company in any Uncertificated REMIC Regular Interest.
(g) The Master Servicer hereby acknowledges the receipt by it of the Initial Monthly Payment Fund. The
Master Servicer shall hold such Initial Monthly Payment Fund in the Custodial Account and shall include such
Initial Monthly Payment Fund in the Available Distribution Amount for the initial Distribution Date.
Notwithstanding anything herein to the contrary, the Initial Monthly Payment Fund shall not be an asset of
any REMIC. To the extent that the Initial Monthly Payment Fund constitutes a reserve fund for federal income
tax purposes, (1) it shall be an outside reserve fund and not an asset of any REMIC, (2) it shall be owned by
the Seller and (3) amounts transferred by any REMIC to the Initial Monthly Payment Fund shall be treated as
transferred to the Seller or any successor, all within the meaning of Section 1.860G-2(h) of the Treasury
Regulations.
(h) The Company agrees that the sale of each Pledged Asset Loan pursuant to this Agreement will also
constitute the assignment, sale, setting-over, transfer and conveyance to the Trustee, without recourse (but
subject to the Company's covenants, representations and warranties specifically provided herein), of all of
the Company's obligations and all of the Company's right, title and interest in, to and under, whether now
existing or hereafter acquired as owner of the Mortgage Loan with respect to any and all money, securities,
security entitlements, accounts, general intangibles, payment intangibles, instruments, documents, deposit
accounts, certificates of deposit, commodities contracts, and other investment property and other property of
whatever kind or description consisting of, arising from or related to (i) the Assigned Contracts, (ii) all
rights, powers and remedies of the Company as owner of such Mortgage Loan under or in connection with the
Assigned Contracts, whether arising under the terms of such Assigned Contracts, by statute, at law or in
equity, or otherwise arising out of any default by the Mortgagor under or in connection with the Assigned
Contracts, including all rights to exercise any election or option or to make any decision or determination
or to give or receive any notice, consent, approval or waiver thereunder, (iii) the Pledged Amounts and all
money, securities, security entitlements, accounts, general intangibles, payment intangibles, instruments,
documents, deposit accounts, certificates of deposit, commodities contracts, and other investment property
and other property of whatever kind or description and all cash and non-cash proceeds of the sale, exchange,
or redemption of, and all stock or conversion rights, rights to subscribe, liquidation dividends or
preferences, stock dividends, rights to interest, dividends, earnings, income, rents, issues, profits,
interest payments or other distributions of cash or other property that secures a Pledged Asset Loan, (iv)
all documents, books and records concerning the foregoing (including all computer programs, tapes, disks and
related items containing any such information) and (v) all insurance proceeds (including proceeds from the
Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation or any other
insurance company) of any of the foregoing or replacements thereof or substitutions therefor, proceeds of
proceeds and the conversion, voluntary or involuntary, of any thereof. The foregoing transfer, sale,
assignment and conveyance does not constitute and is not intended to result in the creation, or an assumption
by the Trustee, of any obligation of the Company, or any other person in connection with the Pledged Assets
or under any agreement or instrument relating thereto, including any obligation to the Mortgagor, other than
as owner of the Mortgage Loan.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to a Custodial Agreement,
and based solely upon a receipt or certification executed by the Custodian, receipt by the respective
Custodian as the duly appointed agent of the Trustee) of the documents referred to in Section 2.01(b)(i)
above (except that for purposes of such acknowledgement only, a Mortgage Note may be endorsed in blank) and
declares that it, or 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, Additional Collateral and the Surety Bond assigned to
the Trustee pursuant to Section 2.01, in trust for the use and benefit of all present and future
Certificateholders. The Trustee or Custodian (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
Company or the Master Servicer, the Trustee shall acknowledge receipt (or, with respect to Mortgage Loans
subject to a Custodial Agreement, and based solely upon a receipt or certification executed by the Custodian,
receipt by the respective Custodian as the duly appointed agent of the Trustee) of the documents referred to
in Section 2.01(c) above.
If the Custodian, as the Trustee's agent, finds any document or documents constituting a part of a
Mortgage File to be missing or defective, the Trustee shall promptly so notify the Master Servicer and the
Company. Pursuant to Section 2.3 of the Custodial Agreement, the Custodian will notify the Master Servicer,
the Company and the Trustee of any such omission or defect found by it in respect of any Mortgage File held
by it in respect of the items reviewed by it pursuant to the Custodial Agreement. If such omission or defect
materially and adversely affects the interests of the Certificateholders, the Master Servicer shall promptly
notify Residential Funding of such omission or defect and request Residential Funding to correct or cure such
omission or defect within 60 days from the date the Master Servicer was notified of such omission or defect
and, if Residential Funding does not correct or cure such omission or defect within such period, require
Residential Funding to purchase such Mortgage Loan from the Trust Fund at its Purchase Price, within 90 days
from the date the Master Servicer was notified of such omission or defect; provided that if the omission or
defect would cause the Mortgage Loan to be other than a "qualified mortgage" as defined in Section 860G(a)(3)
of the Code, any such cure or repurchase must occur within 90 days from the date such breach was discovered.
The Purchase Price for any such Mortgage Loan shall be deposited by the Master Servicer in the Custodial
Account maintained by it pursuant to Section 3.07 and, upon receipt by the Trustee of written notification of
such deposit signed by a Servicing Officer, the Trustee or any Custodian, as the case may be, shall release
to Residential Funding the related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment prepared by the Master Servicer, in each case without recourse, as shall be
necessary to vest in Residential Funding or its designee any Mortgage Loan released pursuant hereto and
thereafter such Mortgage Loan shall not be part of the Trust Fund. It is understood and agreed that the
obligation of Residential Funding to so cure or purchase any Mortgage Loan as to which a material and adverse
defect in or omission of a constituent document exists shall constitute the sole remedy respecting such
defect or omission available to Certificateholders or the Trustee on behalf of the Certificateholders.
Section 2.03. Representations, Warranties and Covenants
of the Master Servicer and the Company.
(a) The Master Servicer hereby represents and warrants to the Trustee for the benefit of the
Certificateholders that:
(i) The Master Servicer is a corporation duly organized, validly existing and in good standing under the
laws governing its creation and existence and is or will be in compliance with the laws of each state
in which any Mortgaged Property is located to the extent necessary to ensure the enforceability of
each Mortgage Loan in accordance with the terms of this Agreement;
(ii) The execution and delivery of this Agreement by the Master Servicer and its performance and compliance
with the terms of this Agreement will not violate the Master Servicer's Certificate of Incorporation
or Bylaws or constitute a material default (or an event which, with notice or lapse of time, or both,
would constitute a material default) under, or result in the material breach of, any material
contract, agreement or other instrument to which the Master Servicer is a party or which may be
applicable to the Master Servicer or any of its assets;
(iii) This Agreement, assuming due authorization, execution and delivery by the Trustee and the Company,
constitutes a valid, legal and binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights generally and to general
principles of equity, regardless of whether such enforcement is considered in a proceeding in equity
or at law;
(iv) The Master Servicer is not in default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the condition (financial or other) or
operations of the Master Servicer or its properties or might have consequences that would materially
adversely affect its performance hereunder;
(v) No litigation is pending or, to the best of the Master Servicer's knowledge, threatened against the
Master Servicer which would prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vi) The Master Servicer will comply in all material respects in the performance of this Agreement with all
reasonable rules and requirements of each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement furnished in writing or report delivered to the
Company, any Affiliate of the Company or the Trustee by the Master Servicer will, to the knowledge of
the Master Servicer, contain any untrue statement of a material fact or omit a material fact necessary
to make the information, certificate, statement or report not misleading;
(viii) The Master Servicer has examined each existing, and will examine each new, Subservicing Agreement and
is or will be familiar with the terms thereof. The terms of each existing Subservicing Agreement and
each designated Subservicer are acceptable to the Master Servicer and any new Subservicing Agreements
will comply with the provisions of Section 3.02; and
(ix) The Master Servicer is a member of MERS in good standing, and will comply in all material respects
with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are
registered with MERS.
It is understood and agreed that the representations and warranties set forth in this Section 2.03(a) shall
survive delivery of the respective Mortgage Files to the Trustee or any Custodian.
Upon discovery by either the Company, 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) Representations and warranties relating to the Mortgage Loans are set forth in Section 2.03(b) of the
Series Supplement.
Section 2.04. Representations and Warranties of Residential Funding.
The Company, as assignee of Residential Funding under the Assignment Agreement, hereby assigns to the
Trustee for the benefit of Certificateholders all of its right, title and interest in respect of the
Assignment Agreement applicable to a Mortgage Loan. Insofar as the Assignment Agreement relates to the
representations and warranties made by Residential Funding in respect of such Mortgage Loan and any remedies
provided thereunder for any breach of such representations and warranties, such right, title and interest may
be enforced by the Master Servicer on behalf of the Trustee and the Certificateholders. Upon the discovery
by the Company, the Master Servicer, the Trustee or any Custodian of a breach of any of the representations
and warranties made in the Assignment Agreement (which, for purposes hereof, will be deemed to include any
other cause giving rise to a repurchase obligation under the Assignment Agreement) in respect of any Mortgage
Loan which materially and adversely affects the interests of the Certificateholders in such Mortgage Loan,
the party discovering such breach shall give prompt written notice to the other parties (any Custodian being
so obligated under a Custodial Agreement). The Master Servicer shall promptly notify Residential Funding of
such breach and request that Residential Funding either (i) cure such breach in all material respects within
90 days from the date the Master Servicer was notified of such breach or (ii) purchase such Mortgage Loan
from the Trust Fund at the Purchase Price and in the manner set forth in Section 2.02; provided that
Residential Funding shall have the option to substitute a Qualified Substitute Mortgage Loan or Loans for
such Mortgage Loan if such substitution occurs within two years following the Closing Date; provided that if
the breach would cause the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure, repurchase or substitution must occur within 90 days from the date the
breach was discovered. If a breach of the Compliance With Laws Representation has given rise to the
obligation to repurchase or substitute a Mortgage Loan pursuant to Section 4 of the Assignment Agreement,
then the Master Servicer shall request that Residential Funding pay to the Trust Fund, concurrently with and
in addition to the remedies provided in the preceding sentence, an amount equal to any liability, penalty or
expense that was actually incurred and paid out of or on behalf of the Trust Fund, and that directly resulted
from such breach, or if incurred and paid by the Trust Fund thereafter, concurrently with such payment. In
the event that Residential Funding elects to substitute a Qualified Substitute Mortgage Loan or Loans for a
Deleted Mortgage Loan pursuant to this Section 2.04, Residential Funding shall deliver to the Trustee or the
Custodian for the benefit of the Certificateholders with respect to such Qualified Substitute Mortgage Loan
or Loans, the original Mortgage Note, the Mortgage, an Assignment of the Mortgage in recordable form, if
required pursuant to Section 2.01, and such other documents and agreements as are required by Section 2.01,
with the Mortgage Note endorsed as required by Section 2.01. No substitution will be made in any calendar
month after the Determination Date for such month. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall not be part of the Trust Fund and will be retained by the
Master Servicer and remitted by the Master Servicer to Residential Funding on the next succeeding
Distribution Date. For the month of substitution, distributions to the Certificateholders will include the
Monthly Payment due on a Deleted Mortgage Loan for such month and thereafter Residential Funding shall be
entitled to retain all amounts received in respect of such Deleted Mortgage Loan. The Master Servicer shall
amend or cause to be amended the Mortgage Loan Schedule, and, if the Deleted Mortgage Loan was a Discount
Mortgage Loan, the Schedule of Discount Fractions, for the benefit of the Certificateholders to reflect the
removal of such Deleted Mortgage Loan and the substitution of the Qualified Substitute Mortgage Loan or Loans
and the Master Servicer shall deliver the amended Mortgage Loan Schedule, and, if the Deleted Mortgage Loan
was a Discount Mortgage Loan, the amended Schedule of Discount Fractions, to the Trustee. Upon such
substitution, the Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement
and the related Subservicing Agreement in all respects, Residential Funding shall be deemed to have made the
representations and warranties with respect to the Qualified Substitute Mortgage Loan contained in the
related Assignment Agreement, and the Company and the Master Servicer shall be deemed to have made with
respect to any Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants,
representations and warranties set forth in this Section 2.04, in Section 2.03 hereof and in Section 4 of the
Assignment Agreement, and the Master Servicer shall be obligated to repurchase or substitute for any
Qualified Substitute Mortgage Loan as to which a Repurchase Event (as defined in the Assignment Agreement)
has occurred pursuant to Section 4 of the Assignment Agreement.
In connection with the substitution of one or more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans, the Master Servicer will determine the amount (if any) by which the aggregate
principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all such Deleted Mortgage Loans (in each case after application of
the principal portion of the Monthly Payments due in the month of substitution that are to be distributed to
the Certificateholders in the month of substitution). Residential Funding shall deposit the amount of such
shortfall into the Custodial Account on the day of substitution, without any reimbursement therefor.
Residential Funding shall give notice in writing to the Trustee of such event, which notice shall be
accompanied by an Officers' Certificate as to the calculation of such shortfall and (subject to Section
10.01(f)) by an Opinion of Counsel to the effect that such substitution will not cause (a) any federal tax to
be imposed on the Trust Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after the startup date" under Section
860G(d)(1) of the Code or (b) any portion of any REMIC to fail to qualify as such at any time that any
Certificate is outstanding.
It is understood and agreed that the obligation of Residential Funding to cure such breach or
purchase, or to substitute for, a Mortgage Loan as to which such a breach has occurred and is continuing and
to make any additional payments required under the Assignment Agreement in connection with a breach of the
Compliance With Laws Representation shall constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf of Certificateholders. If the Master Servicer is Residential
Funding, then the Trustee shall also have the right to give the notification and require the purchase or
substitution provided for in the second preceding paragraph in the event of such a breach of a representation
or warranty made by Residential Funding in the Assignment Agreement. In connection with the purchase of or
substitution for any such Mortgage Loan by Residential Funding, the Trustee shall assign to Residential
Funding all of the Trustee's right, title and interest in respect of the Assignment Agreement applicable to
such Mortgage Loan.
Section 2.05. Execution and Authentication of Certificates/Issuance of Certificates Evidencing Interests in
REMIC I Certificates.
As provided in Section 2.05 of the Series Supplement.
Section 2.06. Conveyance of Uncertificated REMIC I and REMIC II Regular Interests; Acceptance by the Trustee.
As provided in Section 2.06 of the Series Supplement.
Section 2.07. Issuance of Certificates Evidencing Interests in REMIC II.
As provided in Section 2.07 of the Series Supplement.
Section 2.08. Purposes and Powers of the Trust.
The purpose of the trust, as created hereunder, is to engage in the following activities:
(a) to sell the Certificates to the Company in exchange for the Mortgage Loans;
(b) to enter into and perform its obligations under this Agreement;
(c) to engage in those activities that are necessary, suitable or convenient to accomplish the foregoing
or are incidental thereto or connected therewith; and
(d) subject to compliance with this Agreement, to engage in such other activities as may be required in
connection with conservation of the Trust Fund and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing activities. Notwithstanding the
provisions of Section 11.01, the trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement while any Certificate is
outstanding, and this Section 2.08 may not be amended, without the consent of the Certificateholders
evidencing a majority of the aggregate Voting Rights of the Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer.
(a) The Master Servicer shall service and administer the Mortgage Loans in accordance with the terms of
this Agreement and the respective Mortgage Loans and shall have full power and authority, acting alone or
through Subservicers as provided in Section 3.02, to do any and all things which it may deem necessary or
desirable in connection with such servicing and administration. Without limiting the generality of the
foregoing, the Master Servicer in its own name or in the name of a Subservicer is hereby authorized and
empowered by the Trustee when the Master Servicer or the Subservicer, as the case may be, believes it
appropriate in its best judgment, to execute and deliver, on behalf of the Certificateholders and the Trustee
or any of them, any and all instruments of satisfaction or cancellation, or of partial or full release or
discharge, or of consent to assumption or modification in connection with a proposed conveyance, or of
assignment of any Mortgage and Mortgage Note in connection with the repurchase of a Mortgage Loan and all
other comparable instruments, or with respect to the modification or re-recording of a Mortgage for the
purpose of correcting the Mortgage, the subordination of the lien of the Mortgage in favor of a public
utility company or government agency or unit with powers of eminent domain, the taking of a deed in lieu of
foreclosure, the commencement, prosecution or completion of judicial or non-judicial foreclosure, the
conveyance of a Mortgaged Property to the related Insurer, the acquisition of any property acquired by
foreclosure or deed in lieu of foreclosure, or the management, marketing and conveyance of any property
acquired by foreclosure or deed in lieu of foreclosure with respect to the Mortgage Loans and with respect to
the Mortgaged Properties. The Master Servicer further is authorized and empowered by the Trustee, on behalf
of the Certificateholders and the Trustee, in its own name or in the name of the Subservicer, when the Master
Servicer or the Subservicer, as the case may be, believes it appropriate in its best judgment to register any
Mortgage Loan on the MERS(R)System, or cause the removal from the registration of any Mortgage Loan on the
MERS(R)System, to execute and deliver, on behalf of the Trustee and the Certificateholders or any of them, any
and all instruments of assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the Trustee and its successors and
assigns. Any expenses incurred in connection with the actions described in the preceding sentence shall be
borne by the Master Servicer in accordance with Section 3.16(c), with no right of reimbursement; provided,
that if, as a result of MERS discontinuing or becoming unable to continue operations in connection with the
MERS System, it becomes necessary to remove any Mortgage Loan from registration on the MERS System and to
arrange for the assignment of the related Mortgages to the Trustee, then any related expenses shall be
reimbursable to the Master Servicer. Notwithstanding the foregoing, subject to Section 3.07(a), the Master
Servicer shall not permit any modification with respect to any Mortgage Loan that would both constitute a
sale or exchange of such Mortgage Loan within the meaning of Section 1001 of the Code and any proposed,
temporary or final regulations promulgated thereunder (other than in connection with a proposed conveyance or
assumption of such Mortgage Loan that is treated as a Principal Prepayment in Full pursuant to Section
3.13(d) hereof) and cause any REMIC formed under the Series Supplement to fail to qualify as a REMIC under
the Code. The Trustee shall furnish the Master Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Master Servicer to service and administer the Mortgage Loans. The
Trustee shall not be liable for any action taken by the Master Servicer or any Subservicer pursuant to such
powers of attorney. In servicing and administering any Nonsubserviced Mortgage Loan, the Master Servicer
shall, to the extent not inconsistent with this Agreement, comply with the Program Guide as if it were the
originator of such Mortgage Loan and had retained the servicing rights and obligations in respect thereof.
In connection with servicing and administering the Mortgage Loans, the Master Servicer and any Affiliate of
the Master Servicer (i) may perform services such as appraisals and brokerage services that are not
customarily provided by servicers of mortgage loans, and shall be entitled to reasonable compensation
therefor in accordance with Section 3.10 and (ii) may, at its own discretion and on behalf of the Trustee,
obtain credit information in the form of a "credit score" from a credit repository.
(b) All costs incurred by the Master Servicer or by Subservicers in effecting the timely payment of taxes
and assessments on the properties subject to the Mortgage Loans shall not, for the purpose of calculating
monthly distributions to the Certificateholders, be added to the amount owing under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loan so permit, and such costs shall be recoverable to
the extent permitted by Section 3.10(a)(ii).
(c) The Master Servicer may enter into one or more agreements in connection with the offering of
pass-through certificates evidencing interests in one or more of the Certificates providing for the payment
by the Master Servicer of amounts received by the Master Servicer as servicing compensation hereunder and
required to cover certain Prepayment Interest Shortfalls on the Mortgage Loans, which payment obligation will
thereafter be an obligation of the Master Servicer hereunder.
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers; Enforcement of Subservicers'
and Sellers' Obligations.
(a) The Master Servicer may continue in effect Subservicing Agreements entered into by Residential Funding
and Subservicers prior to the execution and delivery of this Agreement, and may enter into new Subservicing
Agreements with Subservicers, for the servicing and administration of all or some of the Mortgage Loans.
Each Subservicer of a Mortgage Loan shall be entitled to receive and retain, as provided in the related
Subservicing Agreement and in Section 3.07, the related Subservicing Fee from payments of interest received
on such Mortgage Loan after payment of all amounts required to be remitted to the Master Servicer in respect
of such Mortgage Loan. For any Mortgage Loan that is a Nonsubserviced Mortgage Loan, the Master Servicer
shall be entitled to receive and retain an amount equal to the Subservicing Fee from payments of interest.
Unless the context otherwise requires, references in this Agreement to actions taken or to be taken by the
Master Servicer in servicing the Mortgage Loans include actions taken or to be taken by a Subservicer on
behalf of the Master Servicer. Each Subservicing Agreement will be upon such terms and conditions as are
generally required or permitted by the Program Guide and are not inconsistent with this Agreement and as the
Master Servicer and the Subservicer have agreed. A representative form of Subservicing Agreement is attached
hereto as Exhibit E. With the approval of the Master Servicer, a Subservicer may delegate its servicing
obligations to third-party servicers, but such Subservicer will remain obligated under the related
Subservicing Agreement. The Master Servicer and a Subservicer may enter into amendments thereto or a
different form of Subservicing Agreement, and the form referred to or included in the Program Guide is merely
provided for information and shall not be deemed to limit in any respect the discretion of the Master
Servicer to modify or enter into different Subservicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not violate the provisions of either this
Agreement or the Program Guide in a manner which would materially and adversely affect the interests of the
Certificateholders. The Program Guide and any other Subservicing Agreement entered into between the Master
Servicer and any Subservicer shall require the Subservicer to accurately and fully report its borrower credit
files to each of the Credit Repositories in a timely manner.
(b) As part of its servicing activities hereunder, the Master Servicer, for the benefit of the Trustee and
the Certificateholders, shall use its best reasonable efforts to enforce the obligations of each Subservicer
under the related Subservicing Agreement and of each Seller under the related Seller's Agreement insofar as
the Company's rights with respect to Seller's obligation has been assigned to the Trustee hereunder, to the
extent that the non-performance of any such Seller's obligation would have a material and adverse effect on a
Mortgage Loan, including, without limitation, the obligation to purchase a Mortgage Loan on account of
defective documentation, as described in Section 2.02, or on account of a breach of a representation or
warranty, as described in Section 2.04. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements or Seller's Agreements, as appropriate, and the
pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such
time as the Master Servicer would employ in its good faith business judgment and which are normal and usual
in its general mortgage servicing activities. The Master Servicer shall pay the costs of such enforcement at
its own expense, and shall be reimbursed therefor only (i) from a general recovery resulting from such
enforcement to the extent, if any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loan or (ii) from a specific recovery of costs, expenses or attorneys fees against the party against
whom such enforcement is directed. For purposes of clarification only, the parties agree that the foregoing
is not intended to, and does not, limit the ability of the Master Servicer to be reimbursed for expenses that
are incurred in connection with the enforcement of a Seller's obligations (insofar as the Company's rights
with respect to such Seller's obligations have been assigned to the Trustee hereunder) and are reimbursable
pursuant to Section 3.10(a)(viii).
Section 3.03. Successor Subservicers.
The Master Servicer shall be entitled to terminate any Subservicing Agreement that may exist in
accordance with the terms and conditions of such Subservicing Agreement and without any limitation by virtue
of this Agreement; provided, however, that in the event of termination of any Subservicing Agreement by the
Master Servicer or the Subservicer, the Master Servicer shall either act as servicer of the related Mortgage
Loan or enter into a Subservicing Agreement with a successor Subservicer which will be bound by the terms of
the related Subservicing Agreement. If the Master Servicer or any Affiliate of Residential Funding acts as
servicer, it will not assume liability for the representations and warranties of the Subservicer which it
replaces. If the Master Servicer enters into a Subservicing Agreement with a successor Subservicer, the
Master Servicer shall use reasonable efforts to have the successor Subservicer assume liability for the
representations and warranties made by the terminated Subservicer in respect of the related Mortgage Loans
and, in the event of any such assumption by the successor Subservicer, the Master Servicer may, in the
exercise of its business judgment, release the terminated Subservicer from liability for such representations
and warranties.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Master Servicer or a Subservicer or reference to actions taken through
a Subservicer or otherwise, the Master Servicer shall remain obligated and liable to the Trustee and the
Certificateholders for the servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 3.01 without diminution of such obligation or liability by virtue of such Subservicing
Agreements or arrangements or by virtue of indemnification from the Subservicer or the Company and to the
same extent and under the same terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. The Master Servicer shall be entitled to enter into any agreement with a
Subservicer or Seller for indemnification of the Master Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
Section 3.05. No Contractual Relationship Between Subservicer and
Trustee or Certificateholders.
Any Subservicing Agreement that may be entered into and any other transactions or services relating to
the Mortgage Loans involving a Subservicer in its capacity as such and not as an originator shall be deemed
to be between the Subservicer and the Master Servicer alone and the Trustee and the Certificateholders shall
not be deemed parties thereto and shall have no claims, rights, obligations, duties or liabilities with
respect to the Subservicer in its capacity as such except as set forth in Section 3.06. The foregoing
provision shall not in any way limit a Subservicer's obligation to cure an omission or defect or to
repurchase a Mortgage Loan as referred to in Section 2.02 hereof.
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee.
(a) If the Master Servicer shall for any reason no longer be the master servicer (including by reason of
an Event of Default), the Trustee, its designee or its successor shall thereupon assume all of the rights and
obligations of the Master Servicer under each Subservicing Agreement that may have been entered into. The
Trustee, its designee or the successor servicer for the Trustee shall be deemed to have assumed all of the
Master Servicer's interest therein and to have replaced the Master Servicer as a party to the Subservicing
Agreement to the same extent as if the Subservicing Agreement had been assigned to the assuming party except
that the Master Servicer shall not thereby be relieved of any liability or obligations under the Subservicing
Agreement.
(b) The Master Servicer shall, upon request of the Trustee but at the expense of the Master Servicer,
deliver to the assuming party all documents and records relating to each Subservicing Agreement and the
Mortgage Loans then being serviced and an accounting of amounts collected and held by it and otherwise use
its best efforts to effect the orderly and efficient transfer of each Subservicing Agreement to the assuming
party.
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to Custodial Account.
(a) The Master Servicer shall make reasonable efforts to collect all payments called for under the terms
and provisions of the Mortgage Loans, and shall, to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Primary Insurance Policy, follow such collection
procedures as it would employ in its good faith business judgment and which are normal and usual in its
general mortgage servicing activities. Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive any late payment charge or any prepayment charge or penalty interest in connection with
the prepayment of a Mortgage Loan and (ii) extend the Due Date for payments due on a Mortgage Loan in
accordance with the Program Guide; provided, however, that the Master Servicer shall first determine that any
such waiver or extension will not impair the coverage of any related Primary Insurance Policy or materially
adversely affect the lien of the related Mortgage. Notwithstanding anything in this Section to the contrary,
the Master Servicer shall not enforce any prepayment charge to the extent that such enforcement would violate
any applicable law. In the event of any such arrangement, the Master Servicer shall make timely advances on
the related Mortgage Loan during the scheduled period in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangements unless otherwise agreed to by the
Holders of the Classes of Certificates affected thereby; provided, however, that no such extension shall be
made if any such advance would be a Nonrecoverable Advance. Consistent with the terms of this Agreement, the
Master Servicer may also waive, modify or vary any term of any Mortgage Loan or consent to the postponement
of strict compliance with any such term or in any manner grant indulgence to any Mortgagor if in the Master
Servicer's determination such waiver, modification, postponement or indulgence is not materially adverse to
the interests of the Certificateholders (taking into account any estimated Realized Loss that might result
absent such action); provided, however, that the Master Servicer may not modify materially or permit any
Subservicer to modify any Mortgage Loan, including without limitation any modification that would change the
Mortgage Rate, forgive the payment of any principal or interest (unless in connection with the liquidation of
the related Mortgage Loan or except in connection with prepayments to the extent that such reamortization is
not inconsistent with the terms of the Mortgage Loan), capitalize any amounts owing on the Mortgage Loan by
adding such amount to the outstanding principal balance of the Mortgage Loan, or extend the final maturity
date of such Mortgage Loan, unless such Mortgage Loan is in default or, in the judgment of the Master
Servicer, such default is reasonably foreseeable; provided, further, that (1) no such modification shall
reduce the interest rate on a Mortgage Loan below one-half of the Mortgage Rate as in effect on the Cut-off
Date, but not less than the sum of the rates at which the Servicing Fee and the Subservicing Fee with respect
to such Mortgage Loan accrues plus the rate at which the premium paid to the Certificate Insurer, if any,
accrues, (2) the final maturity date for any Mortgage Loan shall not be extended beyond the Maturity Date,
(3) the Stated Principal Balance of all Reportable Modified Mortgage Loans subject to Servicing Modifications
(measured at the time of the Servicing Modification and after giving effect to any Servicing Modification)
can be no more than five percent of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, unless such limit is increased from time to time with the consent of the Rating Agencies and the
Certificate Insurer, if any. In addition, any amounts owing on a Mortgage Loan added to the outstanding
principal balance of such Mortgage Loan must be fully amortized over the remaining term of such Mortgage
Loan, and such amounts may be added to the outstanding principal balance of a Mortgage Loan only once during
the life of such Mortgage Loan. Also, the addition of such amounts described in the preceding sentence shall
be implemented in accordance with the Program Guide and may be implemented only by Subservicers that have
been approved by the Master Servicer for such purpose. In connection with any Curtailment of a Mortgage Loan,
the Master Servicer, to the extent not inconsistent with the terms of the Mortgage Note and local law and
practice, may permit the Mortgage Loan to be reamortized such that the Monthly Payment is recalculated as an
amount that will fully amortize the remaining Stated Principal Balance thereof by the original Maturity Date
based on the original Mortgage Rate; provided, that such re-amortization shall not be permitted if it would
constitute a reissuance of the Mortgage Loan for federal income tax purposes, except if such reissuance is
described in Treasury Regulation Section 1.860G-2(b)(3).
(b) The Master Servicer shall establish and maintain a Custodial Account in which the Master Servicer
shall deposit or cause to be deposited on a daily basis, except as otherwise specifically provided herein,
the following payments and collections remitted by Subservicers or received by it in respect of the Mortgage
Loans subsequent to the Cut-off Date (other than in respect of principal and interest on the Mortgage Loans
due on or before the Cut-off Date):
(i) All payments on account of principal, including Principal Prepayments made by Mortgagors on the
Mortgage Loans and the principal component of any Subservicer Advance or of any REO Proceeds received
in connection with an REO Property for which an REO Disposition has occurred;
(ii) All payments on account of interest at the Adjusted Mortgage Rate on the Mortgage Loans, including
Buydown Funds, if any, and the interest component of any Subservicer Advance or of any REO Proceeds
received in connection with an REO Property for which an REO Disposition has occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation Proceeds (net of any related expenses of the
Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to Section 2.02, 2.03, 2.04 or 4.07 (including
amounts received from Residential Funding pursuant to the last paragraph of Section 4 of the
Assignment Agreement in respect of any liability, penalty or expense that resulted from a breach of
the Compliance With Laws Representation and all amounts required to be deposited in connection with
the substitution of a Qualified Substitute Mortgage Loan pursuant to Section 2.03 or 2.04;
(v) Any amounts required to be deposited pursuant to Section 3.07(c) or 3.21;
(vi) All amounts transferred from the Certificate Account to the Custodial Account in accordance with
Section 4.02(a);
(vii) Any amounts realized by the Subservicer and received by the Master Servicer in respect of any
Additional Collateral; and
(viii) Any amounts received by the Master Servicer in respect of Pledged Assets.
The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments on the Mortgage Loans which are not
part of the Trust Fund (consisting of payments in respect of principal and interest on the Mortgage Loans due
on or before the Cut-off Date) and payments or collections in the nature of prepayment charges or late
payment charges or assumption fees may but need not be deposited by the Master Servicer in the Custodial
Account. In the event any amount not required to be deposited in the Custodial Account is so deposited, the
Master Servicer may at any time withdraw such amount from the Custodial Account, any provision herein to the
contrary notwithstanding. The Custodial Account may contain funds that belong to one or more trust funds
created for mortgage pass-through certificates of other series and may contain other funds respecting
payments on mortgage loans belonging to the Master Servicer or serviced or master serviced by it on behalf of
others. Notwithstanding such commingling of funds, the Master Servicer shall keep records that accurately
reflect the funds on deposit in the Custodial Account that have been identified by it as being attributable
to the Mortgage Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds and the proceeds of the
purchase of any Mortgage Loan pursuant to Sections 2.02, 2.03, 2.04 and 4.07 received in any calendar month,
the Master Servicer may elect to treat such amounts as included in the Available Distribution Amount for the
Distribution Date in the month of receipt, but is not obligated to do so. If the Master Servicer so elects,
such amounts will be deemed to have been received (and any related Realized Loss shall be deemed to have
occurred) on the last day of the month prior to the receipt thereof.
(c) The Master Servicer shall use its best efforts to cause the institution maintaining the Custodial
Account to invest the funds in the Custodial Account attributable to the Mortgage Loans in Permitted
Investments which shall mature not later than the Certificate Account Deposit Date next following the date of
such investment (with the exception of the Amount Held for Future Distribution) and which shall not be sold
or disposed of prior to their maturities. All income and gain realized from any such investment shall be for
the benefit of the Master Servicer as additional servicing compensation and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in respect of any such investments
attributable to the investment of amounts in respect of the Mortgage Loans shall be deposited in the
Custodial Account by the Master Servicer out of its own funds immediately as realized without any right of
reimbursement.
(d) The Master Servicer shall give notice to the Trustee and the Company of any change in the location of
the Custodial Account and the location of the Certificate Account prior to the use thereof.
Section 3.08. Subservicing Accounts; Servicing Accounts.
(a) In those cases where a Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Master Servicer shall cause the Subservicer, pursuant to the Subservicing Agreement, to establish and
maintain one or more Subservicing Accounts which shall be an Eligible Account or, if such account is not an
Eligible Account, shall generally satisfy the requirements of the Program Guide and be otherwise acceptable
to the Master Servicer and each Rating Agency. The Subservicer will be required thereby to deposit into the
Subservicing Account on a daily basis all proceeds of Mortgage Loans received by the Subservicer, less its
Subservicing Fees and unreimbursed advances and expenses, to the extent permitted by the Subservicing
Agreement. If the Subservicing Account is not an Eligible Account, the Master Servicer shall be deemed to
have received such monies upon receipt thereof by the Subservicer. The Subservicer shall not be required to
deposit in the Subservicing Account payments or collections in the nature of prepayment charges or late
charges or assumption fees. On or before the date specified in the Program Guide, but in no event later than
the Determination Date, the Master Servicer shall cause the Subservicer, pursuant to the Subservicing
Agreement, to remit to the Master Servicer for deposit in the Custodial Account all funds held in the
Subservicing Account with respect to each Mortgage Loan serviced by such Subservicer that are required to be
remitted to the Master Servicer. The Subservicer will also be required, pursuant to the Subservicing
Agreement, to advance on such scheduled date of remittance amounts equal to any scheduled monthly
installments of principal and interest less its Subservicing Fees on any Mortgage Loans for which payment was
not received by the Subservicer. This obligation to advance with respect to each Mortgage Loan will continue
up to and including the first of the month following the date on which the related Mortgaged Property is sold
at a foreclosure sale or is acquired by the Trust Fund by deed in lieu of foreclosure or otherwise. All such
advances received by the Master Servicer shall be deposited promptly by it in the Custodial Account.
(b) The Subservicer may also be required, pursuant to the Subservicing Agreement, to remit to the Master
Servicer for deposit in the Custodial Account interest at the Adjusted Mortgage Rate (or Modified Net
Mortgage Rate plus the rate per annum at which the Servicing Fee accrues in the case of a Modified Mortgage
Loan) on any Curtailment received by such Subservicer in respect of a Mortgage Loan from the related
Mortgagor during any month that is to be applied by the Subservicer to reduce the unpaid principal balance of
the related Mortgage Loan as of the first day of such month, from the date of application of such Curtailment
to the first day of the following month. Any amounts paid by a Subservicer pursuant to the preceding
sentence shall be for the benefit of the Master Servicer as additional servicing compensation and shall be
subject to its withdrawal or order from time to time pursuant to Sections 3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate Account, the Master Servicer shall for any
Nonsubserviced Mortgage Loan, and shall cause the Subservicers for Subserviced Mortgage Loans to, establish
and maintain one or more Servicing Accounts and deposit and retain therein all collections from the
Mortgagors (or advances from Subservicers) for the payment of taxes, assessments, hazard insurance premiums,
Primary Insurance Policy premiums, if applicable, or comparable items for the account of the Mortgagors.
Each Servicing Account shall satisfy the requirements for a Subservicing Account and, to the extent permitted
by the Program Guide or as is otherwise acceptable to the Master Servicer, may also function as a
Subservicing Account. Withdrawals of amounts related to the Mortgage Loans from the Servicing Accounts may
be made only to effect timely payment of taxes, assessments, hazard insurance premiums, Primary Insurance
Policy premiums, if applicable, or comparable items, to reimburse the Master Servicer or Subservicer out of
related collections for any payments made pursuant to Sections 3.11 (with respect to the Primary Insurance
Policy) and 3.12(a) (with respect to hazard insurance), to refund to any Mortgagors any sums as may be
determined to be overages, to pay interest, if required, to Mortgagors on balances in the Servicing Account
or to clear and terminate the Servicing Account at the termination of this Agreement in accordance with
Section 9.01 or in accordance with the Program Guide. As part of its servicing duties, the Master Servicer
shall, and the Subservicers will, pursuant to the Subservicing Agreements, be required to pay to the
Mortgagors interest on funds in this account to the extent required by law.
(d) The Master Servicer shall advance the payments referred to in the preceding subsection that are not
timely paid by the Mortgagors or advanced by the Subservicers on the date when the tax, premium or other cost
for which such payment is intended is due, but the Master Servicer shall be required so to advance only to
the extent that such advances, in the good faith judgment of the Master Servicer, will be recoverable by the
Master Servicer out of Insurance Proceeds, Liquidation Proceeds or otherwise.
Section 3.09. Access to Certain Documentation and
Information Regarding the Mortgage Loans.
If compliance with this Section 3.09 shall make any Class of Certificates legal for investment by
federally insured savings and loan associations, the Master Servicer shall provide, or cause the Subservicers
to provide, to the Trustee, the Office of Thrift Supervision or the FDIC and the supervisory agents and
examiners thereof access to the documentation regarding the Mortgage Loans required by applicable regulations
of the Office of Thrift Supervision, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices designated by the Master Servicer. The Master
Servicer shall permit such representatives to photocopy any such documentation and shall provide equipment
for that purpose at a charge reasonably approximating the cost of such photocopying to the Master Servicer.
Section 3.10. Permitted Withdrawals from the Custodial Account.
(a) The Master Servicer may, from time to time as provided herein, make withdrawals from the Custodial
Account of amounts on deposit therein pursuant to Section 3.07 that are attributable to the Mortgage Loans
for the following purposes:
(i) to make deposits into the Certificate Account in the amounts and in the manner provided for in Section
4.01;
(ii) to reimburse itself or the related Subservicer for previously unreimbursed Advances, Servicing
Advances or other expenses made pursuant to Sections 3.01, 3.07(a), 3.08, 3.11, 3.12(a), 3.14 and 4.04
or otherwise reimbursable pursuant to the terms of this Agreement, such withdrawal right being limited
to amounts received on the related Mortgage Loans (including, for this purpose, REO Proceeds,
Insurance Proceeds, Liquidation Proceeds and proceeds from the purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03, 2.04 or 4.07) which represent (A) Late Collections of Monthly Payments for which
any such advance was made in the case of Subservicer Advances or Advances pursuant to Section 4.04 and
(B) recoveries of amounts in respect of which such advances were made in the case of Servicing
Advances;
(iii) to pay to itself or the related Subservicer (if not previously retained by such Subservicer) out of
each payment received by the Master Servicer on account of interest on a Mortgage Loan as contemplated
by Sections 3.14 and 3.16, an amount equal to that remaining portion of any such payment as to
interest (but not in excess of the Servicing Fee and the Subservicing Fee, if not previously retained)
which, when deducted, will result in the remaining amount of such interest being interest at the Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) on the amount
specified in the amortization schedule of the related Mortgage Loan as the principal balance thereof
at the beginning of the period respecting which such interest was paid after giving effect to any
previous Curtailments;
(iv) to pay to itself as additional servicing compensation any interest or investment income earned on
funds and other property deposited in or credited to the Custodial Account that it is entitled to
withdraw pursuant to Section 3.07(c);
(v) to pay to itself as additional servicing compensation any Foreclosure Profits, any amounts remitted by
Subservicers as interest in respect of Curtailments pursuant to Section 3.08(b), and any amounts paid
by a Mortgagor in connection with a Principal Prepayment in Full in respect of interest for any period
during the calendar month in which such Principal Prepayment in Full is to be distributed to the
Certificateholders;
(vi) to pay to itself, a Subservicer, a Seller, Residential Funding, the Company or any other appropriate
Person, as the case may be, with respect to each Mortgage Loan or property acquired in respect thereof
that has been purchased or otherwise transferred pursuant to Section 2.02, 2.03, 2.04, 4.07 or 9.01,
all amounts received thereon and not required to be distributed to the Certificateholders as of the
date on which the related Stated Principal Balance or Purchase Price is determined;
(vii) to reimburse itself or the related Subservicer for any Nonrecoverable Advance or Advances in the
manner and to the extent provided in subsection (c) below, and any Advance or Servicing Advance made
in connection with a modified Mortgage Loan that is in default or, in the judgment of the Master
Servicer, default is reasonably foreseeable pursuant to Section 3.07(a), to the extent the amount of
the Advance or Servicing Advance was added to the Stated Principal Balance of the Mortgage Loan in a
prior calendar month, or any Advance reimbursable to the Master Servicer pursuant to Section 4.02(a);
(viii) to reimburse itself or the Company for expenses incurred by and reimbursable to it or the Company
pursuant to Sections 3.01(a), 3.11, 3.13, 3.14(c), 6.03, 10.01 or otherwise, or in connection with
enforcing, in accordance with this Agreement, any repurchase, substitution or indemnification
obligation of any Seller (other than an Affiliate of the Company) pursuant to the related Seller's
Agreement;
(ix) to reimburse itself for Servicing Advances expended by it (a) pursuant to Section 3.14 in good faith
in connection with the restoration of property damaged by an Uninsured Cause, and (b) in connection
with the liquidation of a Mortgage Loan or disposition of an REO Property to the extent not otherwise
reimbursed pursuant to clause (ii) or (viii) above; and
(x) to withdraw any amount deposited in the Custodial Account that was not required to be deposited
therein pursuant to Section 3.07.
(b) Since, in connection with withdrawals pursuant to clauses (ii), (iii), (v) and (vi), the Master
Servicer's entitlement thereto is limited to collections or other recoveries on the related Mortgage Loan,
the Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis,
for the purpose of justifying any withdrawal from the Custodial Account pursuant to such clauses.
(c) The Master Servicer shall be entitled to reimburse itself or the related Subservicer for any advance
made in respect of a Mortgage Loan that the Master Servicer determines to be a Nonrecoverable Advance by
withdrawal from the Custodial Account of amounts on deposit therein attributable to the Mortgage Loans on any
Certificate Account Deposit Date succeeding the date of such determination. Such right of reimbursement in
respect of a Nonrecoverable Advance relating to an Advance pursuant to Section 4.04 on any such Certificate
Account Deposit Date shall be limited to an amount not exceeding the portion of such Advance previously paid
to Certificateholders (and not theretofore reimbursed to the Master Servicer or the related Subservicer).
Section 3.11. Maintenance of the Primary Insurance
Policies; Collections Thereunder.
(a) The Master Servicer shall not take, or permit any Subservicer to take, any action which would result
in non-coverage under any applicable Primary Insurance Policy of any loss which, but for the actions of the
Master Servicer or Subservicer, would have been covered thereunder. To the extent coverage is available, the
Master Servicer shall keep or cause to be kept in full force and effect each such Primary Insurance Policy
until the principal balance of the related Mortgage Loan secured by a Mortgaged Property is reduced to 80% or
less of the Appraised Value in the case of such a Mortgage Loan having a Loan-to-Value Ratio at origination
in excess of 80%, provided that such Primary Insurance Policy was in place as of the Cut-off Date and the
Company had knowledge of such Primary Insurance Policy. The Master Servicer shall be entitled to cancel or
permit the discontinuation of any Primary Insurance Policy as to any Mortgage Loan, if the Stated Principal
Balance of the Mortgage Loan is reduced below an amount equal to 80% of the appraised value of the related
Mortgaged Property as determined in any appraisal thereof after the Closing Date, or if the Loan-to-Value
Ratio is reduced below 80% as a result of principal payments on the Mortgage Loan after the Closing Date. In
the event that the Company gains knowledge that as of the Closing Date, a Mortgage Loan had a Loan-to-Value
Ratio at origination in excess of 80% and is not the subject of a Primary Insurance Policy (and was not
included in any exception to the representation in Section 2.03(b)(iv)) and that such Mortgage Loan has a
current Loan-to-Value Ratio in excess of 80% then the Master Servicer shall use its reasonable efforts to
obtain and maintain a Primary Insurance Policy to the extent that such a policy is obtainable at a reasonable
price. The Master Servicer shall not cancel or refuse to renew any such Primary Insurance Policy applicable
to a Nonsubserviced Mortgage Loan, or consent to any Subservicer canceling or refusing to renew any such
Primary Insurance Policy applicable to a Mortgage Loan subserviced by it, that is in effect at the date of
the initial issuance of the Certificates and is required to be kept in force hereunder unless the replacement
Primary Insurance Policy for such canceled or non-renewed policy is maintained with an insurer whose
claims-paying ability is acceptable to each Rating Agency for mortgage pass-through certificates having a
rating equal to or better than the lower of the then-current rating or the rating assigned to the
Certificates as of the Closing Date by such Rating Agency.
(b) In connection with its activities as administrator and servicer of the Mortgage Loans, the Master
Servicer agrees to present or to cause the related Subservicer to present, on behalf of the Master Servicer,
the Subservicer, if any, the Trustee and Certificateholders, claims to the related Insurer under any Primary
Insurance Policies, in a timely manner in accordance with such policies, and, in this regard, to take or
cause to be taken such reasonable action as shall be necessary to permit recovery under any Primary Insurance
Policies respecting defaulted Mortgage Loans. Pursuant to Section 3.07, any Insurance Proceeds collected by
or remitted to the Master Servicer under any Primary Insurance Policies shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 3.10.
Section 3.12. Maintenance of Fire Insurance and
Omissions and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each Mortgage Loan (other than a Cooperative
Loan) fire insurance with extended coverage in an amount which is equal to the lesser of the principal
balance owing on such Mortgage Loan or 100 percent of the insurable value of the improvements; provided,
however, that such coverage may not be less than the minimum amount required to fully compensate for any loss
or damage on a replacement cost basis. To the extent it may do so without breaching the related Subservicing
Agreement, the Master Servicer shall replace any Subservicer that does not cause such insurance, to the
extent it is available, to be maintained. The Master Servicer shall also cause to be maintained on property
acquired upon foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan (other than a Cooperative
Loan), fire insurance with extended coverage in an amount which is at least equal to the amount necessary to
avoid the application of any co-insurance clause contained in the related hazard insurance policy. Pursuant
to Section 3.07, any amounts collected by the Master Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the related Mortgaged Property or property thus acquired or
amounts released to the Mortgagor in accordance with the Master Servicer's normal servicing procedures) shall
be deposited in the Custodial Account, subject to withdrawal pursuant to Section 3.10. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall be recoverable by the Master
Servicer out of related late payments by the Mortgagor or out of Insurance Proceeds and Liquidation Proceeds
to the extent permitted by Section 3.10. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired in respect of a Mortgage Loan
other than pursuant to such applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. Whenever the improvements securing a Mortgage Loan (other than a
Cooperative Loan) are located at the time of origination of such Mortgage Loan in a federally designated
special flood hazard area, the Master Servicer shall cause flood insurance (to the extent available) to be
maintained in respect thereof. Such flood insurance shall be in an amount equal to the lesser of (i) the
amount required to compensate for any loss or damage to the Mortgaged Property on a replacement cost basis
and (ii) the maximum amount of such insurance available for the related Mortgaged Property under the national
flood insurance program (assuming that the area in which such Mortgaged Property is located is participating
in such program).
If the Master Servicer shall obtain and maintain a blanket fire insurance policy with extended
coverage insuring against hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first sentence of this Section 3.12(a), it being understood and
agreed that such policy may contain a deductible clause, in which case the Master Servicer shall, in the
event that there shall not have been maintained on the related Mortgaged Property a policy complying with the
first sentence of this Section 3.12(a) and there shall have been a loss which would have been covered by such
policy, deposit in the Certificate Account the amount not otherwise payable under the blanket policy because
of such deductible clause. Any such deposit by the Master Servicer shall be made on the Certificate Account
Deposit Date next preceding the Distribution Date which occurs in the month following the month in which
payments under any such policy would have been deposited in the Custodial Account. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Master Servicer agrees to present, on
behalf of itself, the Trustee and the Certificateholders, claims under any such blanket policy.
(b) The Master Servicer shall obtain and maintain at its own expense and keep in full force and effect
throughout the term of this Agreement a blanket fidelity bond and an errors and omissions insurance policy
covering the Master Servicer's officers and employees and other persons acting on behalf of the Master
Servicer in connection with its activities under this Agreement. The amount of coverage shall be at least
equal to the coverage that would be required by Xxxxxx Xxx or Xxxxxxx Mac, whichever is greater, with respect
to the Master Servicer if the Master Servicer were servicing and administering the Mortgage Loans for Xxxxxx
Mae or Xxxxxxx Mac. In the event that any such bond or policy ceases to be in effect, the Master Servicer
shall obtain a comparable replacement bond or policy from an issuer or insurer, as the case may be, meeting
the requirements, if any, of the Program Guide and acceptable to the Company. Coverage of the Master
Servicer under a policy or bond obtained by an Affiliate of the Master Servicer and providing the coverage
required by this Section 3.12(b) shall satisfy the requirements of this Section 3.12(b).
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Master Servicer or Subservicer, to the
extent it has knowledge of such conveyance, shall enforce any due-on-sale clause contained in any Mortgage
Note or Mortgage, to the extent permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage under any Required Insurance
Policy. Notwithstanding the foregoing:
(i) the Master Servicer shall not be deemed to be in default under this Section 3.13(a) by reason of any
transfer or assumption which the Master Servicer is restricted by law from preventing; and
(ii) if the Master Servicer determines that it is reasonably likely that any Mortgagor will bring, or if
any Mortgagor does bring, legal action to declare invalid or otherwise avoid enforcement of a
due-on-sale clause contained in any Mortgage Note or Mortgage, the Master Servicer shall not be
required to enforce the due-on-sale clause or to contest such action.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale clause to the extent set forth in
Section 3.13(a), in any case in which a Mortgaged Property is to be conveyed to a Person by a Mortgagor, and
such Person is to enter into an assumption or modification agreement or supplement to the Mortgage Note or
Mortgage which requires the signature of the Trustee, or if an instrument of release signed by the Trustee is
required releasing the Mortgagor from liability on the Mortgage Loan, the Master Servicer is authorized,
subject to the requirements of the sentence next following, to execute and deliver, on behalf of the Trustee,
the assumption agreement with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other instruments as are reasonable
or necessary to carry out the terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property to such Person; provided,
however, none of such terms and requirements shall either (i) both (A) constitute a "significant
modification" effecting an exchange or reissuance of such Mortgage Loan under the REMIC Provisions and (B)
cause any portion of any REMIC formed under the Series Supplement to fail to qualify as a REMIC under the
Code or (subject to Section 10.01(f)), result in the imposition of any tax on "prohibited transactions" or
(ii) constitute "contributions" after the start-up date under the REMIC Provisions. The Master Servicer
shall execute and deliver such documents only if it reasonably determines that (i) its execution and delivery
thereof will not conflict with or violate any terms of this Agreement or cause the unpaid balance and
interest on the Mortgage Loan to be uncollectible in whole or in part, (ii) any required consents of insurers
under any Required Insurance Policies have been obtained and (iii) subsequent to the closing of the
transaction involving the assumption or transfer (A) the Mortgage Loan will continue to be secured by a first
mortgage lien pursuant to the terms of the Mortgage, (B) such transaction will not adversely affect the
coverage under any Required Insurance Policies, (C) the Mortgage Loan will fully amortize over the remaining
term thereof, (D) no material term of the Mortgage Loan (including the interest rate on the Mortgage Loan)
will be altered nor will the term of the Mortgage Loan be changed and (E) if the seller/transferor of the
Mortgaged Property is to be released from liability on the Mortgage Loan, such release will not (based on the
Master Servicer's or Subservicer's good faith determination) adversely affect the collectability of the
Mortgage Loan. Upon receipt of appropriate instructions from the Master Servicer in accordance with the
foregoing, the Trustee shall execute any necessary instruments for such assumption or substitution of
liability as directed in writing by the Master Servicer. Upon the closing of the transactions contemplated
by such documents, the Master Servicer shall cause the originals or true and correct copies of the assumption
agreement, the release (if any), or the modification or supplement to the Mortgage Note or Mortgage to be
delivered to the Trustee or the Custodian and deposited with the Mortgage File for such Mortgage Loan. Any
fee collected by the Master Servicer or such related Subservicer for entering into an assumption or
substitution of liability agreement will be retained by the Master Servicer or such Subservicer as additional
servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may be, shall be entitled to approve a
request from a Mortgagor for a partial release of the related Mortgaged Property, the granting of an easement
thereon in favor of another Person, any alteration or demolition of the related Mortgaged Property (or, with
respect to a Cooperative Loan, the related Cooperative Apartment) without any right of reimbursement or other
similar matters if it has determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be adversely affected thereby and that any portion of any
REMIC formed under the Series Supplement would not fail to continue to qualify as a REMIC under the Code as a
result thereof and (subject to Section 10.01(f)) that no tax on "prohibited transactions" or "contributions"
after the startup day would be imposed on any such REMIC as a result thereof. Any fee collected by the
Master Servicer or the related Subservicer for processing such a request will be retained by the Master
Servicer or such Subservicer as additional servicing compensation.
(d) Subject to any other applicable terms and conditions of this Agreement, the Trustee and Master
Servicer shall be entitled to approve an assignment in lieu of satisfaction with respect to any Mortgage
Loan, provided the obligee with respect to such Mortgage Loan following such proposed assignment provides the
Trustee and Master Servicer with a "Lender Certification for Assignment of Mortgage Loan" in the form
attached hereto as Exhibit M, in form and substance satisfactory to the Trustee and Master Servicer,
providing the following: (i) that the substance of the assignment is, and is intended to be, a refinancing of
such Mortgage; (ii) that the Mortgage Loan following the proposed assignment will have a rate of interest at
least 0.25 percent below or above the rate of interest on such Mortgage Loan prior to such proposed
assignment; and (iii) that such assignment is at the request of the borrower under the related Mortgage
Loan. Upon approval of an assignment in lieu of satisfaction with respect to any Mortgage Loan, the Master
Servicer shall receive cash in an amount equal to the unpaid principal balance of and accrued interest on
such Mortgage Loan and the Master Servicer shall treat such amount as a Principal Prepayment in Full with
respect to such Mortgage Loan for all purposes hereof.
Section 3.14. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall foreclose upon or otherwise comparably convert (which may include an REO
Acquisition) the ownership of properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. Alternatively, the Master Servicer may take other actions in respect of a
defaulted Mortgage Loan, which may include (i) accepting a short sale (a payoff of the Mortgage Loan for an
amount less than the total amount contractually owed in order to facilitate a sale of the Mortgaged Property
by the Mortgagor) or permitting a short refinancing (a payoff of the Mortgage Loan for an amount less than
the total amount contractually owed in order to facilitate refinancing transactions by the Mortgagor not
involving a sale of the Mortgaged Property), (ii) arranging for a repayment plan or (iii) agreeing to a
modification in accordance with Section 3.07. In connection with such foreclosure or other conversion, the
Master Servicer shall, consistent with Section 3.11, follow such practices and procedures as it shall deem
necessary or advisable, as shall be normal and usual in its general mortgage servicing activities and as
shall be required or permitted by the Program Guide; provided that the Master Servicer shall not be liable in
any respect hereunder if the Master Servicer is acting in connection with any such foreclosure or other
conversion in a manner that is consistent with the provisions of this Agreement. The Master Servicer,
however, shall not be required to expend its own funds or incur other reimbursable charges in connection with
any foreclosure, or attempted foreclosure which is not completed, or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Holders of Certificates of one or more Classes after reimbursement to
itself for such expenses or charges and (ii) that such expenses or charges will be recoverable to it through
Liquidation Proceeds, Insurance Proceeds, or REO Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 3.10, whether or not such expenses and
charges are actually recoverable from related Liquidation Proceeds, Insurance Proceeds or REO Proceeds). In
the event of such a determination by the Master Servicer pursuant to this Section 3.14(a), the Master
Servicer shall be entitled to reimbursement of such amounts pursuant to Section 3.10.
In addition to the foregoing, the Master Servicer shall use its best reasonable efforts to
realize upon any Additional Collateral for such of the Additional Collateral Loans as come into and continue
in default and as to which no satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07; provided that the Master Servicer shall not, on behalf of the Trustee, obtain title
to any such Additional Collateral as a result of or in lieu of the disposition thereof or otherwise; and
provided further that (i) the Master Servicer shall not proceed with respect to such Additional Collateral in
any manner that would impair the ability to recover against the related Mortgaged Property, and (ii) the
Master Servicer shall proceed with any REO Acquisition in a manner that preserves the ability to apply the
proceeds of such Additional Collateral against amounts owed under the defaulted Mortgage Loan. Any proceeds
realized from such Additional Collateral (other than amounts to be released to the Mortgagor or the related
guarantor in accordance with procedures that the Master Servicer would follow in servicing loans held for its
own account, subject to the terms and conditions of the related Mortgage and Mortgage Note and to the terms
and conditions of any security agreement, guarantee agreement, mortgage or other agreement governing the
disposition of the proceeds of such Additional Collateral) shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 3.10. Any other payment received by the Master Servicer in respect
of such Additional Collateral shall be deposited in the Custodial Account subject to withdrawal pursuant to
Section 3.10.
For so long as the Master Servicer is the Master Servicer under the Credit Support Pledge
Agreement, the Master Servicer shall perform its obligations under the Credit Support Pledge Agreement in
accordance with such Agreement and in a manner that is in the best interests of the Certificateholders.
Further, the Master Servicer shall use its best reasonable efforts to realize upon any Pledged Assets for
such of the Pledged Asset Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to Section 3.07; provided that the
Master Servicer shall not, on behalf of the Trustee, obtain title to any such Pledged Assets as a result of
or in lieu of the disposition thereof or otherwise; and provided further that (i) the Master Servicer shall
not proceed with respect to such Pledged Assets in any manner that would impair the ability to recover
against the related Mortgaged Property, and (ii) the Master Servicer shall proceed with any REO Acquisition
in a manner that preserves the ability to apply the proceeds of such Pledged Assets against amounts owed
under the defaulted Mortgage Loan. Any proceeds realized from such Pledged Assets (other than amounts to be
released to the Mortgagor or the related guarantor in accordance with procedures that the Master Servicer
would follow in servicing loans held for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note and to the terms and conditions of any security agreement, guarantee agreement,
mortgage or other agreement governing the disposition of the proceeds of such Pledged Assets) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section 3.10. Any other payment
received by the Master Servicer in respect of such Pledged Assets shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 3.10.
Concurrently with the foregoing, the Master Servicer may pursue any remedies that may be
available in connection with a breach of a representation and warranty with respect to any such Mortgage Loan
in accordance with Sections 2.03 and 2.04. However, the Master Servicer is not required to continue to
pursue both foreclosure (or similar remedies) with respect to the Mortgage Loans and remedies in connection
with a breach of a representation and warranty if the Master Servicer determines in its reasonable discretion
that one such remedy is more likely to result in a greater recovery as to the Mortgage Loan. Upon the
occurrence of a Cash Liquidation or REO Disposition, following the deposit in the Custodial Account of all
Insurance Proceeds, Liquidation Proceeds and other payments and recoveries referred to in the definition of
"Cash Liquidation" or "REO Disposition," as applicable, upon receipt by the Trustee of written notification of
such deposit signed by a Servicing Officer, the Trustee or 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 any
other unscheduled collections or the amount of any Realized Loss, the Master Servicer may take into account
minimal amounts of additional receipts expected to be received or any estimated additional liquidation
expenses expected to be incurred in connection with the related defaulted Mortgage Loan or REO Property.
(b) If title to any Mortgaged Property is acquired by the Trust Fund as an REO Property by foreclosure or
by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Trustee or to its
nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and cancellation of
the related Mortgage Loan, such REO Property shall (except as otherwise expressly provided herein) be
considered to be an Outstanding Mortgage Loan held in the Trust Fund until such time as the REO Property
shall be sold. Consistent with the foregoing for purposes of all calculations hereunder so long as such REO
Property shall be considered to be an Outstanding Mortgage Loan it shall be assumed that, notwithstanding
that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note
and the related amortization schedule in effect at the time of any such acquisition of title (after giving
effect to any previous Curtailments and before any adjustment thereto by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace period) remain in effect.
(c) If the Trust Fund acquires any REO Property as aforesaid or otherwise in connection with a default or
imminent default on a Mortgage Loan, the Master Servicer on behalf of the Trust Fund shall dispose of such
REO Property as soon as practicable, giving due consideration to the interests of the Certificateholders, but
in all cases within three full years after the taxable year of its acquisition by the Trust Fund for purposes
of Section 860G(a)(8) of the Code (or such shorter period as may be necessary under applicable state
(including any state in which such property is located) law to maintain the status of any portion of any
REMIC formed under the Series Supplement as a REMIC under applicable state law and avoid taxes resulting from
such property failing to be foreclosure property under applicable state law) or, at the expense of the Trust
Fund, request, more than 60 days before the day on which such grace period would otherwise expire, an
extension of such grace period unless the Master Servicer (subject to Section 10.01(f)) obtains for the
Trustee an Opinion of Counsel, addressed to the Trustee and the Master Servicer, to the effect that the
holding by the Trust Fund of such REO Property subsequent to such period will not result in the imposition of
taxes on "prohibited transactions" as defined in Section 860F of the Code or cause any REMIC formed under the
Series Supplement to fail to qualify as a REMIC (for federal (or any applicable State or local) income tax
purposes) at any time that any Certificates are outstanding, in which case the Trust Fund may continue to
hold such REO Property (subject to any conditions contained in such Opinion of Counsel). The Master Servicer
shall be entitled to be reimbursed from the Custodial Account for any costs incurred in obtaining such
Opinion of Counsel, as provided in Section 3.10. Notwithstanding any other provision of this Agreement, no
REO Property acquired by the Trust Fund shall be rented (or allowed to continue to be rented) or otherwise
used by or on behalf of the Trust Fund in such a manner or pursuant to any terms that would (i) cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the
Code or (ii) subject the Trust Fund to the imposition of any federal income taxes on the income earned from
such REO Property, including any taxes imposed by reason of Section 860G(c) of the Code, unless the Master
Servicer has agreed to indemnify and hold harmless the Trust Fund with respect to the imposition of any such
taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or purchase or repurchase of any Mortgage Loan
pursuant to the terms of this Agreement, as well as any recovery resulting from a collection of Liquidation
Proceeds, Insurance Proceeds or REO Proceeds, will be applied in the following order of priority: first, to
reimburse the Master Servicer or the related Subservicer in accordance with Section 3.10(a)(ii); second, to
the Certificateholders to the extent of accrued and unpaid interest on the Mortgage Loan, and any related REO
Imputed Interest, at the Net Mortgage Rate (or the Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan) to the Due Date prior to the Distribution Date on which such amounts are to be distributed;
third, to the Certificateholders as a recovery of principal on the Mortgage Loan (or REO Property); fourth,
to all Servicing Fees and Subservicing Fees payable therefrom (and the Master Servicer and the Subservicer
shall have no claims for any deficiencies with respect to such fees which result from the foregoing
allocation); and fifth, to Foreclosure Profits.
(e) In the event of a default on a Mortgage Loan one or more of whose obligors is not a United States
Person, in connection with any foreclosure or acquisition of a deed in lieu of foreclosure (together,
"foreclosure") in respect of such Mortgage Loan, the Master Servicer will cause compliance with the provisions
of Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary to assure that no
withholding tax obligation arises with respect to the proceeds of such foreclosure except to the extent, if
any, that proceeds of such foreclosure are required to be remitted to the obligors on such Mortgage Loan.
Section 3.15. Trustee to Cooperate; Release of 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 F, or, in the case of the Custodian, an electronic request in a form
acceptable to the Custodian, requesting delivery to it of the Mortgage File. Within two Business Days of
receipt of such certification and request, the Trustee shall 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. No expenses
incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the
Custodial Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or foreclosure of any Mortgage Loan, the Master
Servicer shall deliver to the Custodian, with a copy to the Trustee, a certificate of a Servicing Officer
substantially in one of the forms attached as Exhibit F hereto, or, in the case of the Custodian, an
electronic request in a form acceptable to the Custodian, requesting that possession of all, or any document
constituting part of, the Mortgage File be released to the Master Servicer and certifying as to the reason
for such release and that such release will not invalidate any insurance coverage provided in respect of the
Mortgage Loan under any Required Insurance Policy. Upon receipt of the foregoing, the Trustee shall deliver,
or cause the Custodian to deliver, the Mortgage File or any document therein to the Master Servicer. The
Master Servicer shall cause each Mortgage File or any document therein so released to be returned to the
Trustee, or the Custodian as agent for the Trustee when the need therefor by the Master Servicer no longer
exists, unless (i) the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Custodial Account or (ii) the Mortgage File or such document has
been delivered directly or through a Subservicer to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and the Master Servicer has
delivered directly or through a Subservicer to the Trustee a certificate of a Servicing Officer certifying as
to the name and address of the Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. In the event of the liquidation of a Mortgage Loan, the Trustee shall
deliver the Request for Release with respect thereto to the Master Servicer upon deposit of the related
Liquidation Proceeds in the Custodial Account.
(c) The Trustee or the Master Servicer on the Trustee's behalf shall execute and deliver to the Master
Servicer, if necessary, any court pleadings, requests for trustee's sale or other documents necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity. Together with such documents or pleadings (if signed by the Trustee), the Master Servicer
shall deliver to the Trustee a certificate of a Servicing Officer requesting that such pleadings or documents
be executed by the Trustee and certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate any insurance coverage under any
Required Insurance Policy or invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.
Section 3.16. Servicing and Other Compensation; Compensating Interest.
(a) The Master Servicer, as compensation for its activities hereunder, shall be entitled to receive on
each Distribution Date the amounts provided for by clauses (iii), (iv), (v) and (vi) of Section 3.10(a),
subject to clause (e) below. The amount of servicing compensation provided for in such clauses shall be
accounted for on a Mortgage Loan-by-Mortgage Loan basis. In the event that Liquidation Proceeds, Insurance
Proceeds and REO Proceeds (net of amounts reimbursable therefrom pursuant to Section 3.10(a)(ii)) in respect
of a Cash Liquidation or REO Disposition exceed the unpaid principal balance of such Mortgage Loan plus
unpaid interest accrued thereon (including REO Imputed Interest) at a per annum rate equal to the related Net
Mortgage Rate (or the Modified Net Mortgage Rate in the case of a Modified Mortgage Loan), the Master
Servicer shall be entitled to retain therefrom and to pay to itself and/or the related Subservicer, any
Foreclosure Profits and any Servicing Fee or Subservicing Fee considered to be accrued but unpaid.
(b) Additional servicing compensation in the form of prepayment charges, assumption fees, late payment
charges, investment income on amounts in the Custodial Account or the Certificate Account or otherwise shall
be retained by the Master Servicer or the Subservicer to the extent provided herein, subject to clause (e)
below.
(c) The Master Servicer shall be required to pay, or cause to be paid, all expenses incurred by it in
connection with its servicing activities hereunder (including payment of premiums for the Primary Insurance
Policies, if any, to the extent such premiums are not required to be paid by the related Mortgagors, and the
fees and expenses of the Trustee and any co-trustee (as provided in Section 8.05) and the fees and expense of
any Custodian) and shall not be entitled to reimbursement therefor except as specifically provided in
Sections 3.10 and 3.14.
(d) The Master Servicer's right to receive servicing compensation may not be transferred in whole or in
part except in connection with the transfer of all of its responsibilities and obligations of the Master
Servicer under this Agreement.
(e) Notwithstanding any other provision herein, the amount of servicing compensation that the Master
Servicer shall be entitled to receive for its activities hereunder for the period ending on each Distribution
Date shall be reduced (but not below zero) by an amount equal to Compensating Interest (if any) for such
Distribution Date. Such reduction shall be applied during such period as follows: first, to any Servicing
Fee or Subservicing Fee to which the Master Servicer is entitled pursuant to Section 3.10(a)(iii), and
second, to any income or gain realized from any investment of funds held in the Custodial Account or the
Certificate Account to which the Master Servicer is entitled pursuant to Sections 3.07(c) or 4.01(b),
respectively. In making such reduction, the Master Servicer (i) will not withdraw from the Custodial Account
any such amount representing all or a portion of the Servicing Fee to which it is entitled pursuant to
Section 3.10(a)(iii), and (ii) will not withdraw from the Custodial Account or Certificate Account any such
amount to which it is entitled pursuant to Section 3.07(c) or 4.01(b).
Section 3.17. Reports to the Trustee and the Company.
Not later than fifteen days after it receives a written request from the Trustee or the Company, the
Master Servicer shall forward to the Trustee and the Company a statement, certified by a Servicing Officer,
setting forth the status of the Custodial Account as of the close of business on the immediately preceding
Distribution Date as it relates to the Mortgage Loans and showing, for the period covered by such statement,
the aggregate of deposits in or withdrawals from the Custodial Account in respect of the Mortgage Loans for
each category of deposit specified in Section 3.07 and each category of withdrawal specified in Section 3.10.
Section 3.18. Annual Statement as to Compliance and Servicing Assessment.
The Master Servicer will deliver to the Company and the Trustee on or before the earlier of (a) March
31 of each year or (b) with respect to any calendar year during which the Company's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules and regulations of the
Commission, the date on which the annual report on Form 10-K is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, (i) a servicing assessment as described in
Section 4.03(f)(ii) and (ii) a servicer compliance statement, signed by an authorized officer of the Master
Servicer, as described in Items 1122(a), 1122(b) and 1123 of Regulation AB, to the effect that:
(A) A review of the Master Servicer's activities during the reporting period and of its performance
under this Agreement has been made under such officer's supervision.
(B) To the best of such officer's knowledge, based on such review, the Master Servicer has
fulfilled all of its obligations under this Agreement in all material respects throughout the reporting
period or, if there has been a failure to fulfill any such obligation in any material respect, specifying
each such failure known to such officer and the nature and status thereof.
The Master Servicer shall use commercially reasonable efforts to obtain from all other parties
participating in the servicing function any additional certifications required under Item 1122 and Item 1123
of Regulation AB to the extent required to be included in a Report on Form 10-K; provided, however, that a
failure to obtain such certifications shall not be a breach of the Master Servicer's duties hereunder if any
such party fails to deliver such a certification.
Section 3.19. Annual Independent Public Accountants' Servicing Report.
On or before the earlier of (a) March 31 of each year or (b) with respect to any calendar year during
which the Company's annual report on Form 10-K is required to be filed in accordance with the Exchange Act
and the rules and regulations of the Commission, the date on which the annual report on Form 10-K is required
to be filed in accordance with the Exchange Act and the rules and regulations of the Commission, the Master
Servicer at its expense shall cause a firm of independent public accountants, which shall be members of the
American Institute of Certified Public Accountants, to furnish to the Company and the Trustee the attestation
required under Item 1122(b) of Regulation AB. In rendering such statement, such firm may rely, as to matters
relating to the direct servicing of mortgage loans by Subservicers, upon comparable statements for
examinations conducted by independent public accountants substantially in accordance with standards
established by the American Institute of Certified Public Accountants (rendered within one year of such
statement) with respect to such Subservicers.
Section 3.20. Rights of the Company in Respect of the Master Servicer.
The Master Servicer shall afford the Company, upon reasonable notice, during normal business hours
access to all records maintained by the Master Servicer in respect of its rights and obligations hereunder
and access to officers of the Master Servicer responsible for such obligations. Upon request, the Master
Servicer shall furnish the Company with its most recent financial statements and such other information as
the Master Servicer possesses regarding its business, affairs, property and condition, financial or
otherwise. The Master Servicer shall also cooperate with all reasonable requests for information including,
but not limited to, notices, tapes and copies of files, regarding itself, the Mortgage Loans or the
Certificates from any Person or Persons identified by the Company or Residential Funding. The Company may,
but is not obligated to, enforce the obligations of the Master Servicer hereunder and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation of the Master Servicer
hereunder or exercise the rights of the Master Servicer hereunder; provided that the Master Servicer shall
not be relieved of any of its obligations hereunder by virtue of such performance by the Company or its
designee. The Company shall not have any responsibility or liability for any action or failure to act by the
Master Servicer and is not obligated to supervise the performance of the Master Servicer under this Agreement
or otherwise.
Section 3.21. Administration of Buydown Funds
(a) With respect to any Buydown Mortgage Loan, the Subservicer has deposited Buydown Funds in an account
that satisfies the requirements for a Subservicing Account (the "Buydown Account"). The Master Servicer
shall cause the Subservicing Agreement to require that upon receipt from the Mortgagor of the amount due on a
Due Date for each Buydown Mortgage Loan, the Subservicer will withdraw from the Buydown Account the
predetermined amount that, when added to the amount due on such date from the Mortgagor, equals the full
Monthly Payment and transmit that amount in accordance with the terms of the Subservicing Agreement to the
Master Servicer together with the related payment made by the Mortgagor or advanced by the Subservicer.
(b) If the Mortgagor on a Buydown Mortgage Loan prepays such loan in its entirety during the period (the
"Buydown Period") when Buydown Funds are required to be applied to such Buydown Mortgage Loan, the Subservicer
shall be required to withdraw from the Buydown Account and remit any Buydown Funds remaining in the Buydown
Account in accordance with the related buydown agreement. The amount of Buydown Funds which may be remitted
in accordance with the related buydown agreement may reduce the amount required to be paid by the Mortgagor
to fully prepay the related Mortgage Loan. If the Mortgagor on a Buydown Mortgage Loan defaults on such
Mortgage Loan during the Buydown Period and the property securing such Buydown Mortgage Loan is sold in the
liquidation thereof (either by the Master Servicer or the insurer under any related Primary Insurance
Policy), the Subservicer shall be required to withdraw from the Buydown Account the Buydown Funds for such
Buydown Mortgage Loan still held in the Buydown Account and remit the same to the Master Servicer in
accordance with the terms of the Subservicing Agreement for deposit in the Custodial Account or, if
instructed by the Master Servicer, pay to the insurer under any related Primary Insurance Policy if the
Mortgaged Property is transferred to such insurer and such insurer pays all of the loss incurred in respect
of such default. Any amount so remitted pursuant to the preceding sentence will be deemed to reduce the
amount owed on the Mortgage Loan.
Section 3.22. Advance Facility
(a) The Master Servicer is hereby authorized to enter into a financing or other facility (any such
arrangement, an "Advance Facility") under which (1) the Master Servicer sells, assigns or pledges to another
Person (an "Advancing Person") the Master Servicer's rights under this Agreement to be reimbursed for any
Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund some or all Advances and/or
Servicing Advances required to be made by the Master Servicer pursuant to this Agreement. No consent of the
Depositor, the Trustee, the Certificateholders or any other party shall be required before the Master
Servicer may enter into an Advance Facility. Notwithstanding the existence of any Advance Facility under
which an Advancing Person agrees to fund Advances and/or Servicing Advances on the Master Servicer's behalf,
the Master Servicer shall remain obligated pursuant to this Agreement to make Advances and Servicing
Advances pursuant to and as required by this Agreement. If the Master Servicer enters into an Advance
Facility, and for so long as an Advancing Person remains entitled to receive reimbursement for any Advances
including Nonrecoverable Advances ("Advance Reimbursement Amounts") and/or Servicing Advances including
Nonrecoverable Advances ("Servicing Advance Reimbursement Amounts" and together with Advance Reimbursement
Amounts, "Reimbursement Amounts") (in each case to the extent such type of Reimbursement Amount is included
in the Advance Facility), as applicable, pursuant to this Agreement, then the Master Servicer shall identify
such Reimbursement Amounts consistent with the reimbursement rights set forth in Section 3.10(a)(ii) and
(vii) and remit such Reimbursement Amounts in accordance with this Section 3.22 or otherwise in accordance
with the documentation establishing the Advance Facility to such Advancing Person or to a trustee, agent or
custodian (an "Advance Facility Trustee") designated by such Advancing Person in an Advance Facility Notice
described below in Section 3.22(b). Notwithstanding the foregoing, if so required pursuant to the terms of
the Advance Facility, the Master Servicer may direct, and if so directed in writing the Trustee is hereby
authorized to and shall pay to the Advance Facility Trustee the Reimbursement Amounts identified pursuant to
the preceding sentence. An Advancing Person whose obligations hereunder are limited to the funding of
Advances and/or Servicing Advances shall not be required to meet the qualifications of a Master Servicer or a
Subservicer pursuant to Section 3.02(a) or 6.02(c) hereof and shall not be deemed to be a Subservicer under
this Agreement. Notwithstanding anything to the contrary herein, in no event shall Advance Reimbursement
Amounts or Servicing Advance Reimbursement Amounts be included in the Available Distribution Amount or
distributed to Certificateholders.
(b) If the Master Servicer enters into an Advance Facility and makes the election set forth in Section
3.22(a), the Master Servicer and the related Advancing Person shall deliver to the Certificate Insurer and
the Trustee a written notice and payment instruction (an "Advance Facility Notice"), providing the Trustee
with written payment instructions as to where to remit Advance Reimbursement Amounts and/or Servicing Advance
Reimbursement Amounts (each to the extent such type of Reimbursement Amount is included within the Advance
Facility) on subsequent Distribution Dates. The payment instruction shall require the applicable
Reimbursement Amounts to be distributed to the Advancing Person or to an Advance Facility Trustee designated
in the Advance Facility Notice. An Advance Facility Notice may only be terminated by the joint written
direction of the Master Servicer and the related Advancing Person (and any related Advance Facility
Trustee). The Master Servicer shall provide the Certificate Insurer, if any, with notice of any termination
of any Advance Facility pursuant to this Section 3.22(b).
(c) Reimbursement Amounts shall consist solely of amounts in respect of Advances and/or Servicing Advances
made with respect to the Mortgage Loans for which the Master Servicer would be permitted to reimburse itself
in accordance with Section 3.10(a)(ii) and (vii) hereof, assuming the Master Servicer or the Advancing Person
had made the related Advance(s) and/or Servicing Advance(s). Notwithstanding the foregoing, except with
respect to reimbursement of Nonrecoverable Advances as set forth in Section 3.10(c) of this Agreement, no
Person shall be entitled to reimbursement from funds held in the Collection Account for future distribution
to Certificateholders pursuant to this Agreement. Neither the Company nor the Trustee shall have any duty or
liability with respect to the calculation of any Reimbursement Amount, nor shall the Company or the Trustee
have any responsibility to track or monitor the administration of the Advance Facility or have any
responsibility to track, monitor or verify the payment of Reimbursement Amounts to the related Advancing
Person or Advance Facility Trustee. The Master Servicer shall maintain and provide to any Successor Master
Servicer a detailed accounting on a loan-by-loan basis as to amounts advanced by, sold, pledged or assigned
to, and reimbursed to any Advancing Person. The Successor Master Servicer shall be entitled to rely on any
such information provided by the Master Servicer and the Successor Master Servicer shall not be liable for
any errors in such information.
(d) Upon the direction of and at the expense of the Master Servicer, the Trustee agrees to execute such
acknowledgments, certificates and other documents reasonably satisfactory to the Trustee provided by the
Master Servicer recognizing the interests of any Advancing Person or Advance Facility Trustee in such
Reimbursement Amounts as the Master Servicer may cause to be made subject to Advance Facilities pursuant to
this Section 3.22.
(e) Reimbursement Amounts collected with respect to each Mortgage Loan shall be allocated to outstanding
unreimbursed Advances or Servicing Advances (as the case may be) made with respect to that Mortgage Loan on a
"first-in, first out" ("FIFO") basis, subject to the qualifications set forth below:
(i) Any successor Master Servicer to Residential Funding (a "Successor Master Servicer")
and the Advancing Person or Advance Facility Trustee shall be required to apply all amounts available
in accordance with this Section 3.22(e) to the reimbursement of Advances and Servicing Advances in the
manner provided for herein; provided, however, that after the succession of a Successor Master
Servicer, (A) to the extent that any Advances or Servicing Advances with respect to any particular
Mortgage Loan are reimbursed from payments or recoveries, if any, from the related Mortgagor, and
Liquidation Proceeds or Insurance Proceeds, if any, with respect to that Mortgage Loan, reimbursement
shall be made, first, to the Advancing Person or Advance Facility Trustee in respect of Advances
and/or Servicing Advances related to that Mortgage Loan to the extent of the interest of the Advancing
Person or Advance Facility Trustee in such Advances and/or Servicing Advances, second to the Master
Servicer in respect of Advances and/or Servicing Advances related to that Mortgage Loan in excess of
those in which the Advancing Person or Advance Facility Trustee Person has an interest, and third, to
the Successor Master Servicer in respect of any other Advances and/or Servicing Advances related to
that Mortgage Loan, from such sources as and when collected, and (B) reimbursements of Advances and
Servicing Advances that are Nonrecoverable Advances shall be made pro rata to the Advancing Person or
Advance Facility Trustee, on the one hand, and any such Successor Master Servicer, on the other hand,
on the basis of the respective aggregate outstanding unreimbursed Advances and Servicing Advances that
are Nonrecoverable Advances owed to the Advancing Person, Advance Facility Trustee or Master Servicer
pursuant to this Agreement, on the one hand, and any such Successor Master Servicer, on the other
hand, and without regard to the date on which any such Advances or Servicing Advances shall have been
made. In the event that, as a result of the FIFO allocation made pursuant to this Section 3.22(e),
some or all of a Reimbursement Amount paid to the Advancing Person or Advance Facility Trustee relates
to Advances or Servicing Advances that were made by a Person other than Residential Funding or the
Advancing Person or Advance Facility Trustee, then the Advancing Person or Advance Facility Trustee
shall be required to remit any portion of such Reimbursement Amount to the Person entitled to such
portion of such Reimbursement Amount. Without limiting the generality of the foregoing, Residential
Funding shall remain entitled to be reimbursed by the Advancing Person or Advance Facility Trustee for
all Advances and Servicing Advances funded by Residential Funding to the extent the related
Reimbursement Amount(s) have not been assigned or pledged to an Advancing Person or Advance Facility
Trustee. The documentation establishing any Advance Facility shall require Residential Funding to
provide to the related Advancing Person or Advance Facility Trustee loan by loan information with
respect to each Reimbursement Amount distributed to such Advancing Person or Advance Facility Trustee
on each date of remittance thereof to such Advancing Person or Advance Facility Trustee, to enable the
Advancing Person or Advance Facility Trustee to make the FIFO allocation of each Reimbursement Amount
with respect to each Mortgage Loan.
(ii) By way of illustration, and not by way of limiting the generality of the foregoing, if
the Master Servicer resigns or is terminated at a time when the Master Servicer is a party to an
Advance Facility, and is replaced by a Successor Master Servicer, and the Successor Master Servicer
directly funds Advances or Servicing Advances with respect to a Mortgage Loan and does not assign or
pledge the related Reimbursement Amounts to the related Advancing Person or Advance Facility Trustee,
then all payments and recoveries received from the related Mortgagor or received in the form of
Liquidation Proceeds with respect to such Mortgage Loan (including Insurance Proceeds collected in
connection with a liquidation of such Mortgage Loan) will be allocated first to the Advancing Person
or Advance Facility Trustee until the related Reimbursement Amounts attributable to such Mortgage Loan
that are owed to the Master Servicer and the Advancing Person, which were made prior to any Advances
or Servicing Advances made by the Successor Master Servicer, have been reimbursed in full, at which
point the Successor Master Servicer shall be entitled to retain all related Reimbursement Amounts
subsequently collected with respect to that Mortgage Loan pursuant to Section 3.10 of this Agreement.
To the extent that the Advances or Servicing Advances are Nonrecoverable Advances to be reimbursed on
an aggregate basis pursuant to Section 3.10 of this Agreement, the reimbursement paid in this manner
will be made pro rata to the Advancing Person or Advance Facility Trustee, on the one hand, and the
Successor Master Servicer, on the other hand, as described in clause (i)(B) above.
(f) The Master Servicer shall remain entitled to be reimbursed for all Advances and Servicing
Advances funded by the Master Servicer to the extent the related rights to be reimbursed therefor have not
been sold, assigned or pledged to an Advancing Person.
(g) Any amendment to this Section 3.22 or to any other provision of this Agreement that may be
necessary or appropriate to effect the terms of an Advance Facility as described generally in this Section
3.22, including amendments to add provisions relating to a successor Master Servicer, may be entered into by
the Trustee, the Certificate Insurer, Company and the Master Servicer without the consent of any
Certificateholder, with written confirmation from each Rating Agency that the amendment will not result in
the reduction of the ratings on any class of the Certificates below the lesser of the then current or
original ratings on such Certificates, and an opinion of counsel as required by Section 11.01(c),
notwithstanding anything to the contrary in Section 11.01 of or elsewhere in this Agreement.
(h) Any rights of set-off that the Trust Fund, the Trustee, the Company, any Successor Master
Servicer or any other Person might otherwise have against the Master Servicer under this Agreement shall not
attach to any rights to be reimbursed for Advances or Servicing Advances that have been sold, transferred,
pledged, conveyed or assigned to any Advancing Person.
(i) At any time when an Advancing Person shall have ceased funding Advances and/or Servicing
Advances (as the case may be) and the Advancing Person or related Advance Facility Trustee shall have
received Reimbursement Amounts sufficient in the aggregate to reimburse all Advances and/or Servicing
Advances (as the case may be) the right to reimbursement for which were assigned to the Advancing Person,
then upon the delivery of a written notice signed by the Advancing Person and the Master Servicer or its
successor or assign) to the Trustee terminating the Advance Facility Notice (the "Notice of Facility
Termination"), the Master Servicer or its Successor Master Servicer shall again be entitled to withdraw and
retain the related Reimbursement Amounts from the Custodial Account pursuant to Section 3.10.
(j) After delivery of any Advance Facility Notice, and until any such Advance Facility Notice has
been terminated by a Notice of Facility Termination, this Section 3.22 may not be amended or otherwise
modified without the prior written consent of the related Advancing Person.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account.
(a) The Master Servicer on behalf of the Trustee shall establish and maintain a Certificate Account in
which the Master Servicer shall cause to be deposited on behalf of the Trustee on or before 2:00 P.M. New
York time on each Certificate Account Deposit Date by wire transfer of immediately available funds an amount
equal to the sum of (i) any Advance for the immediately succeeding Distribution Date, (ii) any amount
required to be deposited in the Certificate Account pursuant to Section 3.12(a), (iii) any amount required to
be deposited in the Certificate Account pursuant to Section 3.16(e) or Section 4.07, (iv) any amount required
to be paid pursuant to Section 9.01 and (v) all other amounts constituting the Available Distribution Amount
for the immediately succeeding Distribution Date.
(b) The Trustee shall, upon written request from the Master Servicer, invest or cause the institution
maintaining the Certificate Account to invest the funds in the Certificate Account in Permitted Investments
designated in the name of the Trustee for the benefit of the Certificateholders, which shall mature or be
payable on demand not later than the Business Day next preceding the Distribution Date next following the
date of such investment (except that (i) any investment in the institution with which the Certificate Account
is maintained may mature or be payable on demand on such Distribution Date and (ii) any other investment may
mature or be payable on demand on such Distribution Date if the Trustee shall advance funds on such
Distribution Date to the Certificate Account in the amount payable on such investment on such Distribution
Date, pending receipt thereof to the extent necessary to make distributions on the Certificates) and shall
not be sold or disposed of prior to maturity. Subject to Section 3.16(e), all income and gain realized from
any such investment shall be for the benefit of the Master Servicer and shall be subject to its withdrawal or
order from time to time. The amount of any losses incurred in respect of any such investments shall be
deposited in the Certificate Account by the Master Servicer out of its own funds immediately as realized
without any right of reimbursement. The Trustee or its Affiliates are permitted to receive compensation that
could be deemed to be in the Trustee's economic self-interest for (i) serving as investment adviser (with
respect to investments made through its Affiliates), administrator, shareholder servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments, (ii) using Affiliates to effect
transactions in certain Permitted Investments and (iii) effecting transactions in certain Permitted
Investments.
Section 4.02. Distributions.
As provided in Section 4.02 of the Series Supplement.
Section 4.03. Statements to Certificateholders; Statements to Rating Agencies; Exchange Act Reporting.
(a) Concurrently with each distribution charged to the Certificate Account and with respect to each
Distribution Date the Master Servicer shall forward to the Trustee and the Trustee shall either forward by
mail or make available to each Holder and the Company, via the Trustee's internet website, a statement (and
at its option, any additional files containing the same information in an alternative format) setting forth
information as to each Class of Certificates, the Mortgage Pool and, if the Mortgage Pool is comprised of two
or more Loan Groups, each Loan Group, to the extent applicable. This statement will include the information
set forth in an exhibit to the Series Supplement. The Trustee shall mail to each Holder that requests a
paper copy by telephone a paper copy via first class mail. The Trustee may modify the distribution
procedures set forth in this Section provided that such procedures are no less convenient for the
Certificateholders. The Trustee shall provide prior notification to the Company, the Master Servicer and the
Certificateholders regarding any such modification. In addition, the Master Servicer shall provide to any
manager of a trust fund consisting of some or all of the Certificates, upon reasonable request, such
additional information as is reasonably obtainable by the Master Servicer at no additional expense to the
Master Servicer. Also, at the request of a Rating Agency, the Master Servicer shall provide the information
relating to the Reportable Modified Mortgage Loans substantially in the form attached hereto as Exhibit Q to
such Rating Agency within a reasonable period of time; provided, however, that the Master Servicer shall not
be required to provide such information more than four times in a calendar year to any Rating Agency.
(b) Within a reasonable period of time after it receives a written request from a Holder of a Certificate,
other than a Class R Certificate, the Master Servicer shall prepare, or cause to be prepared, and shall
forward, or cause to be forwarded, to each Person who at any time during the calendar year was the Holder of
a Certificate, other than a Class R Certificate, a statement containing the information set forth in clauses
(v) and (vi) of the exhibit to the Series Supplement referred to in subsection (a) above aggregated for such
calendar year or applicable portion thereof during which such Person was a Certificateholder. Such
obligation of the Master Servicer shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Master Servicer pursuant to any requirements of the Code.
(c) Within a reasonable period of time after it receives a written request from a Holder of a Class R
Certificate, the Master Servicer shall prepare, or cause to be prepared, and shall forward, or cause to be
forwarded, to each Person who at any time during the calendar year was the Holder of a Class R Certificate, a
statement containing the applicable distribution information provided pursuant to this Section 4.03
aggregated for such calendar year or applicable portion thereof during which such Person was the Holder of a
Class R Certificate. Such obligation of the Master Servicer shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the Master Servicer pursuant to any
requirements of the Code.
(d) Upon the written request of any Certificateholder, the Master Servicer, as soon as reasonably
practicable, shall provide the requesting Certificateholder with such information as is necessary and
appropriate, in the Master Servicer's sole discretion, for purposes of satisfying applicable reporting
requirements under Rule 144A.
(e) The Master Servicer shall, on behalf of the Company and in respect of the Trust Fund, sign and cause
to be filed with the Commission any periodic reports required to be filed under the provisions of the
Exchange Act, and the rules and regulations of the Commission thereunder including, without limitation,
reports on Form 10-K, Form 10-D and Form 8-K. In connection with the preparation and filing of such periodic
reports, the Trustee shall timely provide to the Master Servicer (I) a list of Certificateholders as shown on
the Certificate Register as of the end of each calendar year, (II) copies of all pleadings, other legal
process and any other documents relating to any claims, charges or complaints involving the Trustee, as
trustee hereunder, or the Trust Fund that are received by a Responsible Officer of the Trustee, (III) notice
of all matters that, to the actual knowledge of a Responsible Officer of the Trustee, have been submitted to
a vote of the Certificateholders, other than those matters that have been submitted to a vote of the
Certificateholders at the request of the Company or the Master Servicer, and (IV) notice of any failure of
the Trustee to make any distribution to the Certificateholders as required pursuant to the Series Supplement.
Neither the Master Servicer nor the Trustee shall have any liability with respect to the Master Servicer's
failure to properly prepare or file such periodic reports resulting from or relating to the Master Servicer's
inability or failure to obtain any information not resulting from the Master Servicer's own negligence or
willful misconduct.
(f) Any Form 10-K filed with the Commission in connection with this Section 4.03 shall include, with
respect to the Certificates relating to such 10-K:
(i) A certification, signed by the senior officer in charge of the servicing functions of the Master
Servicer, in the form attached as Exhibit O hereto or such other form as may be required or permitted
by the Commission (the "Form 10-K Certification"), in compliance with Rules 13a-14 and 15d-14 under
the Exchange Act and any additional directives of the Commission.
(ii) A report regarding its assessment of compliance during the preceding calendar year with all applicable
servicing criteria set forth in relevant Commission regulations with respect to mortgage-backed
securities transactions taken as a whole involving the Master Servicer that are backed by the same
types of assets as those backing the certificates, as well as similar reports on assessment of
compliance received from other parties participating in the servicing function as required by relevant
Commission regulations, as described in Item 1122(a) of Regulation AB. The Master Servicer shall
obtain from all other parties participating in the servicing function any required assessments.
(iii) With respect to each assessment report described immediately above, a report by a registered public
accounting firm that attests to, and reports on, the assessment made by the asserting party, as set
forth in relevant Commission regulations, as described in Regulation 1122(b) of Regulation AB and
Section 3.19.
(iv) The servicer compliance certificate required to be delivered pursuant Section 3.18.
(g) In connection with the Form 10-K Certification, the Trustee shall provide the Master Servicer with a
back-up certification substantially in the form attached hereto as Exhibit P.
(h) This Section 4.03 may be amended in accordance with this Agreement without the consent of the
Certificateholders.
(i) The Trustee shall make available on the Trustee's internet website each of the reports filed with the
Commission by or on behalf of the Company under the Exchange Act, as soon as reasonably practicable upon
delivery of such reports to the Trustee.
Section 4.04. Distribution of Reports to the Trustee and
the Company; Advances by the Master Servicer.
(a) Prior to the close of business on the Determination Date, the Master Servicer shall furnish a written
statement to the Trustee, any Paying Agent and the Company (the information in such statement to be made
available to any Certificate Insurer and Certificateholders by the Master Servicer on request) setting forth
(i) the Available Distribution Amount and (ii) the amounts required to be withdrawn from the Custodial
Account and deposited into the Certificate Account on the immediately succeeding Certificate Account Deposit
Date pursuant to clause (iii) of Section 4.01(a). The determination by the Master Servicer of such amounts
shall, in the absence of obvious error, be presumptively deemed to be correct for all purposes hereunder and
the Trustee shall be protected in relying upon the same without any independent check or verification.
(b) On or before 2:00 P.M. New York time on each Certificate Account Deposit Date, the Master Servicer
shall either (i) deposit in the Certificate Account from its own funds, or funds received therefor from the
Subservicers, an amount equal to the Advances to be made by the Master Servicer in respect of the related
Distribution Date, which shall be in an aggregate amount equal to the aggregate amount of Monthly Payments
(with each interest portion thereof adjusted to the Net Mortgage Rate), less the amount of any related
Servicing Modifications, Debt Service Reductions or reductions in the amount of interest collectable from the
Mortgagor pursuant to the Servicemembers Civil Relief Act, as amended, or similar legislation or regulations
then in effect, on the Outstanding Mortgage Loans as of the related Due Date, which Monthly Payments were not
received as of the close of business as of the related Determination Date; provided that no Advance shall be
made if it would be a Nonrecoverable Advance, (ii) withdraw from amounts on deposit in the Custodial Account
and deposit in the Certificate Account all or a portion of the Amount Held for Future Distribution in
discharge of any such Advance, or (iii) make advances in the form of any combination of (i) and (ii)
aggregating the amount of such Advance. Any portion of the Amount Held for Future Distribution so used shall
be replaced by the Master Servicer by deposit in the Certificate Account on or before 11:00 A.M. New York
time on any future Certificate Account Deposit Date to the extent that funds attributable to the Mortgage
Loans that are available in the Custodial Account for deposit in the Certificate Account on such Certificate
Account Deposit Date shall be less than payments to Certificateholders required to be made on the following
Distribution Date. The Master Servicer shall be entitled to use any Advance made by a Subservicer as
described in Section 3.07(b) that has been deposited in the Custodial Account on or before such Distribution
Date as part of the Advance made by the Master Servicer pursuant to this Section 4.04. The amount of any
reimbursement pursuant to Section 4.02(a) in respect of outstanding Advances on any Distribution Date shall
be allocated to specific Monthly Payments due but delinquent for previous Due Periods, which allocation shall
be made, to the extent practicable, to Monthly Payments which have been delinquent for the longest period of
time. Such allocations shall be conclusive for purposes of reimbursement to the Master Servicer from
recoveries on related Mortgage Loans pursuant to Section 3.10.
The determination by the Master Servicer that it has made a Nonrecoverable Advance or that any
proposed Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate of the Master Servicer delivered to the Company and the Trustee.
If the Master Servicer determines as of the Business Day preceding any Certificate Account Deposit
Date that it will be unable to deposit in the Certificate Account an amount equal to the Advance required to
be made for the immediately succeeding Distribution Date, it shall give notice to the Trustee of its
inability to advance (such notice may be given by telecopy), not later than 3:00 P.M., New York time, on such
Business Day, specifying the portion of such amount that it will be unable to deposit. Not later than 3:00
P.M., New York time, on the Certificate Account Deposit Date the Trustee shall, unless by 12:00 Noon, New
York time, on such day the Trustee shall have been notified in writing (by telecopy) that the Master Servicer
shall have directly or indirectly deposited in the Certificate Account such portion of the amount of the
Advance as to which the Master Servicer shall have given notice pursuant to the preceding sentence, pursuant
to Section 7.01, (a) terminate all of the rights and obligations of the Master Servicer under this Agreement
in accordance with Section 7.01 and (b) assume the rights and obligations of the Master Servicer hereunder,
including the obligation to deposit in the Certificate Account an amount equal to the Advance for the
immediately succeeding Distribution Date.
The Trustee shall deposit all funds it receives pursuant to this Section 4.04 into the Certificate
Account.
Section 4.05. Allocation of Realized Losses.
As provided in Section 4.05 of the Series Supplement.
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property.
The Master Servicer or the Subservicers shall file information returns with respect to the receipt of
mortgage interests received in a trade or business, the reports of foreclosures and abandonments of any
Mortgaged Property and the information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property required by Sections 6050H, 6050J and 6050P, respectively, of the Code, and deliver
to the Trustee an Officers' Certificate on or before March 31 of each year stating that such reports have
been filed. Such reports shall be in form and substance sufficient to meet the reporting requirements
imposed by Sections 6050H, 6050J and 6050P of the Code.
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.
(a) With respect to any Mortgage Loan that is delinquent in payment by 90 days or more, the Master
Servicer may, at its option, purchase such Mortgage Loan from the Trustee at the Purchase Price therefor;
provided, that such Mortgage Loan that becomes 90 days or more delinquent during any given Calendar Quarter
shall only be eligible for purchase pursuant to this Section during the period beginning on the first
Business Day of the following Calendar Quarter, and ending at the close of business on the second-to-last
Business Day of such following Calendar Quarter; and provided, further, that such Mortgage Loan is 90 days or
more delinquent at the time of repurchase. Such option if not exercised shall not thereafter be reinstated
as to any Mortgage Loan, unless the delinquency is cured and the Mortgage Loan thereafter again becomes
delinquent in payment by 90 days or more in a subsequent Calendar Quarter.
(b) If at any time the Master Servicer makes a payment to the Certificate Account covering the amount of
the Purchase Price for such a Mortgage Loan as provided in clause (a) above, and the Master Servicer provides
to the Trustee a certification signed by a Servicing Officer stating that the amount of such payment has been
deposited in the Certificate Account, then the Trustee shall execute the assignment of such Mortgage Loan at
the request of the Master Servicer, without recourse, to the Master Servicer, which shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan, and all security and documents relative
thereto. Such assignment shall be an assignment outright and not for security. The Master Servicer will
thereupon own such Mortgage, and all such security and documents, free of any further obligation to the
Trustee or the Certificateholders with respect thereto.
If, however, the Master Servicer shall have exercised its right to repurchase a Mortgage Loan pursuant
to this Section 4.07 upon the written request of and with funds provided by the Junior Certificateholder and
thereupon transferred such Mortgage Loan to the Junior Certificateholder, the Master Servicer shall so notify
the Trustee in writing.
Section 4.08. Surety Bond.
(a) If a Required Surety Payment is payable pursuant to the Surety Bond with respect to any Additional
Collateral Loan, the Master Servicer shall so notify the Trustee as soon as reasonably practicable and the
Trustee shall promptly complete the notice in the form of Attachment 1 to the Surety Bond and shall promptly
submit such notice to the Surety as a claim for a Required Surety. The Master Servicer shall upon request
assist the Trustee in completing such notice and shall provide any information requested by the Trustee in
connection therewith.
(b) Upon receipt of a Required Surety Payment from the Surety on behalf of the Holders of Certificates,
the Trustee shall deposit such Required Surety Payment in the Certificate Account and shall distribute such
Required Surety Payment, or the proceeds thereof, in accordance with the provisions of Section 4.02.
(c) The Trustee shall (i) receive as attorney-in-fact of each Holder of a Certificate any Required Surety
Payment from the Surety and (ii) disburse the same to the Holders of such Certificates as set forth in
Section 4.02.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Senior, Class M, Class B 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 Company upon receipt
by the Trustee or one or more Custodians of the documents specified in Section 2.01. The Certificates shall
be issuable in the minimum denominations designated in the Preliminary Statement to the Series Supplement.
The Certificates shall be executed by manual or facsimile signature on behalf of an authorized officer
of the Trustee. Certificates bearing the manual or facsimile signatures of individuals who were at any time
the proper officers of the Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery of such Certificate or did not
hold such offices at the date of such Certificates. No Certificate shall be entitled to any benefit under
this Agreement, or be valid for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the Certificate Registrar by manual
signature, and such certificate upon any Certificate shall be conclusive evidence, and the only evidence,
that such Certificate has been duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication.
(b) Except as provided below, registration of Book-Entry Certificates may not be transferred by the
Trustee except to another Depository that agrees to hold such Certificates for the respective Certificate
Owners with Ownership Interests therein. The Holders of the Book-Entry Certificates shall hold their
respective Ownership Interests in and to each of such Certificates through the book-entry facilities of the
Depository and, except as provided below, shall not be entitled to Definitive Certificates in respect of such
Ownership Interests. All transfers by Certificate Owners of their respective Ownership Interests in the
Book-Entry Certificates shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each Depository Participant shall
transfer the Ownership Interests only in the Book-Entry Certificates of Certificate Owners it represents or
of brokerage firms for which it acts as agent in accordance with the Depository's normal procedures.
The Trustee, the Master Servicer and the Company may for all purposes (including the making of
payments due on the respective Classes of Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the respective Classes of Book-Entry Certificates
for the purposes of exercising the rights of Certificateholders hereunder. The rights of Certificate Owners
with respect to the respective Classes of Book-Entry Certificates shall be limited to those established by
law and agreements between such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and votes of, the Depository as
Holder of any Class of Book-Entry Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The Trustee may establish a
reasonable record date in connection with solicitations of consents from or voting by Certificateholders and
shall give notice to the Depository of such record date.
If (i)(A) the Company advises the Trustee in writing that the Depository is no longer willing or able
to properly discharge its responsibilities as Depository and (B) the Company is unable to locate a qualified
successor or (ii) the Company notifies the Depository and the Trustee of its intent to terminate the
book-entry system and, upon receipt of notice of such intent from the Depository, the Depository Participants
holding beneficial interests in the Book-Entry Certificates agree to such termination through the Depository,
the Trustee shall notify all Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners requesting the same. Upon surrender
to the Trustee of the Book-Entry Certificates by the Depository, accompanied by registration instructions
from the Depository for registration of transfer, the Trustee shall execute, authenticate and deliver the
Definitive Certificates. In addition, if an Event of Default has occurred and is continuing, each
Certificate Owner materially adversely affected thereby may at its option request a Definitive Certificate
evidencing such Certificate Owner's Percentage Interest in the related Class of Certificates. In order to
make such a request, such Certificate Owner shall, subject to the rules and procedures of the Depository,
provide the Depository or the related Depository Participant with directions for the Certificate Registrar to
exchange or cause the exchange of the Certificate Owner's interest in such Class of Certificates for an
equivalent Percentage Interest in fully registered definitive form. Upon receipt by the Certificate
Registrar of instructions from the Depository directing the Certificate Registrar to effect such exchange
(such instructions shall contain information regarding the Class of Certificates and the Certificate
Principal Balance being exchanged, the Depository Participant account to be debited with the decrease, the
registered holder of and delivery instructions for the Definitive Certificate, and any other information
reasonably required by the Certificate Registrar), (i) the Certificate Registrar shall instruct the
Depository to reduce the related Depository Participant's account by the aggregate Certificate Principal
Balance of the Definitive Certificate, (ii) the Trustee shall execute and the Certificate Registrar shall
authenticate and deliver, in accordance with the registration and delivery instructions provided by the
Depository, a Definitive Certificate evidencing such Certificate Owner's Percentage Interest in such Class of
Certificates and (iii) the Trustee shall execute and the Certificate Registrar shall authenticate a new
Book-Entry Certificate reflecting the reduction in the aggregate Certificate Principal Balance of such Class
of Certificates by the Certificate Principal Balance of the Definitive Certificate.
None of the Company, the Master Servicer or the Trustee shall be liable for any actions taken by the
Depository or its nominee, including, without limitation, any delay in delivery of any instructions required
under Section 5.01 and may conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates, the Trustee and the Master Servicer shall recognize the Holders
of the Definitive Certificates as Certificateholders hereunder.
(c) If the Class A-V Certificates are Definitive Certificates, from time to time Residential Funding, as
the initial Holder of the Class A-V Certificates, may exchange such Holder's Class A-V Certificates for
Subclasses of Class A-V Certificates to be issued under this Agreement by delivering a "Request for Exchange"
substantially in the form attached to this Agreement as Exhibit N executed by an authorized officer, which
Subclasses, in the aggregate, will represent the Uncertificated Class A-V REMIC Regular Interests
corresponding to the Class A-V Certificates so surrendered for exchange. Any Subclass so issued shall bear a
numerical designation commencing with Class A-V-1 and continuing sequentially thereafter, and will evidence
ownership of the Uncertificated REMIC Regular Interest or Interests specified in writing by such initial
Holder to the Trustee. The Trustee may conclusively, without any independent verification, rely on, and shall
be protected in relying on, Residential Funding's determinations of the Uncertificated Class A-V REMIC
Regular Interests corresponding to any Subclass, the Initial Notional Amount and the initial Pass-Through
Rate on a Subclass as set forth in such Request for Exchange and the Trustee shall have no duty to determine
if any Uncertificated Class A-V REMIC Regular Interest designated on a Request for Exchange corresponds to a
Subclass which has previously been issued. Each Subclass so issued shall be substantially in the form set
forth in Exhibit A and shall, on original issue, be executed and delivered by the Trustee to the Certificate
Registrar for authentication and delivery in accordance with Section 5.01(a). Every Certificate presented or
surrendered for exchange by the initial Holder shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer attached to such
Certificate and shall be completed to the satisfaction of the Trustee and the Certificate Registrar duly
executed by, the initial Holder thereof or his attorney duly authorized in writing. The Certificates of any
Subclass of Class A-V Certificates may be transferred in whole, but not in part, in accordance with the
provisions of Section 5.02.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies to be appointed by the Trustee in
accordance with the provisions of Section 8.12 a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee is initially appointed Certificate
Registrar for the purpose of registering Certificates and transfers and exchanges of Certificates as herein
provided. The Certificate Registrar, or the Trustee, shall provide the Master Servicer with a certified list
of Certificateholders as of each Record Date prior to the related Determination Date.
(b) Upon surrender for registration of transfer of any Certificate at any office or agency of the Trustee
maintained for such purpose pursuant to Section 8.12 and, in the case of any Class M, Class B or Class R
Certificate, upon satisfaction of the conditions set forth below, the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like Class (or Subclass) and aggregate Percentage Interest.
(c) At the option of the Certificateholders, Certificates may be exchanged for other Certificates of
authorized denominations of a like Class (or Subclass) and aggregate Percentage Interest, upon surrender of
the Certificates to be exchanged at any such office or agency. Whenever any Certificates are so surrendered
for exchange the Trustee shall execute and the Certificate Registrar shall authenticate and deliver the
Certificates of such Class which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so required by the Trustee or the
Certificate Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class B Certificate shall be made unless such
transfer, sale, pledge or other disposition is exempt from the registration requirements of the Securities
Act of 1933, as amended, and any applicable state securities laws or is made in accordance with said Act and
laws. In the event that a transfer of a Class B Certificate is to be made either (i)(A) the Trustee shall
require a written Opinion of Counsel acceptable to and in form and substance satisfactory to the Trustee and
the Company that such transfer may be made pursuant to an exemption, describing the applicable exemption and
the basis therefor, from said Act and laws or is being made pursuant to said Act and laws, which Opinion of
Counsel shall not be an expense of the Trustee, the Company or the Master Servicer (except that, if such
transfer is made by the Company or the Master Servicer or any Affiliate thereof, the Company or the Master
Servicer shall provide such Opinion of Counsel at their own expense); provided that such Opinion of Counsel
will not be required in connection with the initial transfer of any such Certificate by the Company or any
Affiliate thereof to the Company or an Affiliate of the Company and (B) the Trustee shall require the
transferee to execute a representation letter, substantially in the form of Exhibit H hereto, and the Trustee
shall require the transferor to execute a representation letter, substantially in the form of Exhibit I
hereto, each acceptable to and in form and substance satisfactory to the Company and the Trustee certifying
to the Company and the Trustee the facts surrounding such transfer, which representation letters shall not be
an expense of the Trustee, the Company or the Master Servicer; provided, however, that such representation
letters will not be required in connection with any transfer of any such Certificate by the Company or any
Affiliate thereof to the Company or an Affiliate of the Company, and the Trustee shall be entitled to
conclusively rely upon a representation (which, upon the request of the Trustee, shall be a written
representation) from the Company, of the status of such transferee as an Affiliate of the Company or (ii) the
prospective transferee of such a Certificate shall be required to provide the Trustee, the Company and the
Master Servicer with an investment letter substantially in the form of Exhibit J attached hereto (or such
other form as the Company in its sole discretion deems acceptable), which investment letter shall not be an
expense of the Trustee, the Company or the Master Servicer, and which investment letter states that, among
other things, such transferee (A) is a "qualified institutional buyer" as defined under Rule 144A, acting for
its own account or the accounts of other "qualified institutional buyers" as defined under Rule 144A, and (B)
is aware that the proposed transferor intends to rely on the exemption from registration requirements under
the Securities Act of 1933, as amended, provided by Rule 144A. The Holder of any such Certificate desiring to
effect any such transfer, sale, pledge or other disposition shall, and does hereby agree to, indemnify the
Trustee, the Company, the Master Servicer and the Certificate Registrar against any liability that may result
if the transfer, sale, pledge or other disposition is not so exempt or is not made in accordance with such
federal and state laws.
(e) (i) In the case of any Class B or Class R Certificate presented for registration in the name of any
Person, either (A) the Trustee shall require an Opinion of Counsel acceptable to and in form
and substance satisfactory to the Trustee, the Company and the Master Servicer to the effect
that the purchase or holding of such Class B or Class R Certificate is permissible under
applicable law, will not constitute or result in any non-exempt prohibited transaction under
Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Code (or comparable provisions of any subsequent enactments), and will not
subject the Trustee, the Company or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code) in addition to
those undertaken in this Agreement, which Opinion of Counsel shall not be an expense of the
Trustee, the Company or the Master Servicer or (B) the prospective Transferee shall be required
to provide the Trustee, the Company and the Master Servicer with a certification to the effect
set forth in paragraph six of Exhibit H (with respect to any Class B Certificate) or paragraph
fifteen of Exhibit G-1 (with respect to any Class R Certificate), which the Trustee may rely
upon without further inquiry or investigation, or such other certifications as the Trustee may
deem desirable or necessary in order to establish that such Transferee or the Person in whose
name such registration is requested either (a) is not an employee benefit plan or other plan
subject to the prohibited transaction provisions of ERISA or Section 4975 of the Code, or any
Person (including an investment manager, a named fiduciary or a trustee of any such plan) who
is using "plan assets" of any such plan to effect such acquisition (each, a "Plan Investor") or
(b) in the case of any Class B Certificate, the following conditions are satisfied: (i) such
Transferee is an insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as defined in U.S.
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60, and (iii) the
conditions set forth in Sections I and III of PTCE 95-60 have been satisfied (each entity that
satisfies this clause (b), a "Complying Insurance Company").
(ii) Any Transferee of a Class M Certificate will be deemed to have represented by virtue of
its purchase or holding of such Certificate (or interest therein) that either (a) such
Transferee is not a Plan Investor, (b) it has acquired and is holding such Certificate in
reliance on Prohibited Transaction Exemption ("PTE") 94-29, as most recently amended, PTE
2002-41, 67 Fed. Reg. 54487 (August 22, 2002) (the "RFC Exemption"), and that it understands
that there are certain conditions to the availability of the RFC Exemption including that such
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or its equivalent)
by Standard & Poor's, Fitch or Moody's or (c) such Transferee is a Complying Insurance Company.
(iii) (A) If any Class M Certificate (or any interest therein) is acquired or held by any
Person that does not satisfy the conditions described in paragraph (ii) above, then the last
preceding Transferee that either (i) is not a Plan Investor, (ii) acquired such Certificate in
compliance with the RFC Exemption, or (iii) is a Complying Insurance Company shall be restored,
to the extent permitted by law, to all rights and obligations as Certificate Owner thereof
retroactive to the date of such Transfer of such Class M Certificate. The Trustee shall be
under no liability to any Person for making any payments due on such Certificate to such
preceding Transferee.
(B) Any purported Certificate Owner whose acquisition or holding of any Class M
Certificate (or interest therein) was effected in violation of the restrictions in this Section
5.02(e) shall indemnify and hold harmless the Company, the Trustee, the Master Servicer, any
Subservicer, the Underwriters and the Trust Fund from and against any and all liabilities,
claims, costs or expenses incurred by such parties as a result of such acquisition or holding.
(f) (i) Each Person who has or who acquires any Ownership Interest in a Class R Certificate shall be
deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate the terms of any mandatory sale
under clause (iii)(B) below and to execute all instruments of transfer and to do all other things necessary
in connection with any such sale. The rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a Class R Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership Interest in a Class R Certificate, the
Trustee shall require delivery to it, and shall not register the Transfer of any Class R
Certificate until its receipt of, (I) an affidavit and agreement (a "Transfer Affidavit and
Agreement," in the form attached hereto as Exhibit G-1) from the proposed Transferee, in form
and substance satisfactory to the Master Servicer, representing and warranting, among other
things, that it is a Permitted Transferee, that it is not acquiring its Ownership Interest in
the Class R Certificate that is the subject of the proposed Transfer as a nominee, trustee or
agent for any Person who is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Class R Certificate, it will endeavor to remain a Permitted Transferee,
and that it has reviewed the provisions of this Section 5.02(f) and agrees to be bound by them,
and (II) a certificate, in the form attached hereto as Exhibit G-2, from the Holder wishing to
transfer the Class R Certificate, in form and substance satisfactory to the Master Servicer,
representing and warranting, among other things, that no purpose of the proposed Transfer is to
impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and Agreement by a proposed Transferee under
clause (B) above, if a Responsible Officer of the Trustee who is assigned to this Agreement has
actual knowledge that the proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a Class R Certificate shall agree (x) to
require a Transfer Affidavit and Agreement from any other Person to whom such Person attempts
to transfer its Ownership Interest in a Class R Certificate and (y) not to transfer its
Ownership Interest unless it provides a certificate to the Trustee in the form attached hereto
as Exhibit G-2.
(E) Each Person holding or acquiring an Ownership Interest in a Class R Certificate, by purchasing an
Ownership Interest in such Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Class R Certificate,
if it is, or is holding an Ownership Interest in a Class R Certificate on behalf of, a
"pass-through interest holder."
(ii) The Trustee shall register the Transfer of any Class R Certificate only if it shall have received the
Transfer Affidavit and Agreement, a certificate of the Holder requesting such transfer in the form
attached hereto as Exhibit G-2 and all of such other documents as shall have been reasonably required
by the Trustee as a condition to such registration. Transfers of the Class R Certificates to
Non-United States Persons and Disqualified Organizations (as defined in Section 860E(e)(5) of the
Code) are prohibited.
(iii) (A) If any Disqualified Organization shall become a holder of a Class R Certificate, then
the last preceding Permitted Transferee shall be restored, to the extent permitted by law, to all
rights and obligations as Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a holder of a Class R
Certificate, then the last preceding United States Person shall be restored, to the extent permitted
by law, to all rights and obligations as Holder thereof retroactive to the date of registration of
such Transfer of such Class R Certificate. If a transfer of a Class R Certificate is disregarded
pursuant to the provisions of Treasury Regulations Section 1.860E-1 or Section 1.860G-3, then the last
preceding Permitted Transferee shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of such Transfer of such Class R
Certificate. The Trustee shall be under no liability to any Person for any registration of Transfer of
a Class R Certificate that is in fact not permitted by this Section 5.02(f) or for making any payments
due on such Certificate to the holder thereof or for taking any other action with respect to such
holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Class R Certificate in violation of the
restrictions in this Section 5.02(f) and to the extent that the retroactive restoration of the
rights of the Holder of such Class R Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Master Servicer shall have the right, without
notice to the holder or any prior holder of such Class R Certificate, to sell such Class R
Certificate to a purchaser selected by the Master Servicer on such terms as the Master Servicer
may choose. Such purported Transferee shall promptly endorse and deliver each Class R
Certificate in accordance with the instructions of the Master Servicer. Such purchaser may be
the Master Servicer itself or any Affiliate of the Master Servicer. The proceeds of such sale,
net of the commissions (which may include commissions payable to the Master Servicer or its
Affiliates), expenses and taxes due, if any, shall be remitted by the Master Servicer to such
purported Transferee. The terms and conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Master Servicer, and the Master Servicer shall not be
liable to any Person having an Ownership Interest in a Class R Certificate as a result of its
exercise of such discretion.
(iv) The Master Servicer, on behalf of the Trustee, shall make available, upon written request from the
Trustee, all information necessary to compute any tax imposed (A) as a result of the Transfer of an
Ownership Interest in a Class R Certificate to any Person who is a Disqualified Organization,
including the information regarding "excess inclusions" of such Class R Certificates required to be
provided to the Internal Revenue Service and certain Persons as described in Treasury Regulations
Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result of any regulated investment company,
real estate investment trust, common trust fund, partnership, trust, estate or organization described
in Section 1381 of the Code that holds an Ownership Interest in a Class R Certificate having as among
its record holders at any time any Person who is a Disqualified Organization. Reasonable compensation
for providing such information may be required by the Master Servicer from such Person.
(v) The provisions of this Section 5.02(f) set forth prior to this clause (v) may be modified, added to or
eliminated, provided that there shall have been delivered to the Trustee the following:
(A) written notification from each Rating Agency to the effect that the modification, addition to or
elimination of such provisions will not cause such Rating Agency to downgrade its then-current
ratings, if any, of any Class of the Senior (in the case of the Insured Certificates (as
defined in the Series Supplement), such determination shall be made without giving effect to
the Certificate Policy (as defined in the Series Supplement)), Class M or Class B Certificates
below the lower of the then-current rating or the rating assigned to such Certificates as of
the Closing Date by such Rating Agency; and
(B) subject to Section 10.01(f), an Officers' Certificate of the Master Servicer stating that the Master
Servicer has received an Opinion of Counsel, in form and substance satisfactory to the Master
Servicer, to the effect that such modification, addition to or absence of such provisions will
not cause any portion of any REMIC formed under the Series Supplement to cease to qualify as a
REMIC and will not cause (x) any portion of any REMIC formed under the Series Supplement to be
subject to an entity-level tax caused by the Transfer of any Class R Certificate to a Person
that is a Disqualified Organization or (y) a Certificateholder or another Person to be subject
to a REMIC-related tax caused by the Transfer of a Class R Certificate to a Person that is not
a Permitted Transferee.
(g) No service charge shall be made for any transfer or exchange of Certificates of any Class, but the
Trustee may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange shall be destroyed by the Certificate Registrar.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate Registrar, or the Trustee and the
Certificate Registrar receive evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the
Trustee or the Certificate Registrar that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute and the Certificate Registrar shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor, Class and
Percentage Interest but bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee and the Certificate Registrar) connected therewith. Any duplicate Certificate
issued pursuant to this Section shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 5.04. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of transfer, the Company, the Master
Servicer, the Trustee, any Certificate Insurer, the Certificate Registrar and any agent of the Company, the
Master Servicer, the Trustee, any Certificate Insurer or the Certificate Registrar may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.02 and for all other purposes whatsoever, except as and to the extent
provided in the definition of "Certificateholder," and neither the Company, the Master Servicer, the Trustee,
any Certificate Insurer, the Certificate Registrar nor any agent of the Company, the Master Servicer, the
Trustee, any Certificate Insurer or the Certificate Registrar shall be affected by notice to the contrary
except as provided in Section 5.02(f).
Section 5.05. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making distributions to the
Certificateholders pursuant to Section 4.02. In the event of any such appointment, on or prior to each
Distribution Date the Master Servicer on behalf of the Trustee shall deposit or cause to be deposited with
the Paying Agent a sum sufficient to make the payments to the Certificateholders in the amounts and in the
manner provided for in Section 4.02, such sum to be held in trust for the benefit of the Certificateholders.
The Trustee shall cause each Paying Agent to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee that such Paying Agent shall hold all sums held by it for the
payment to the Certificateholders in trust for the benefit of the Certificateholders entitled thereto until
such sums shall be distributed to such Certificateholders. Any sums so held by such Paying Agent shall be
held only in Eligible Accounts to the extent such sums are not distributed to the Certificateholders on the
date of receipt by such Paying Agent.
Section 5.06. U.S.A. Patriot Act Compliance.
In order for it to comply with its duties under the U.S.A. Patriot Act, the Trustee may obtain and
verify certain information from the other parties hereto, including but not limited to such parties' name,
address and other identifying information.
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Company and the Master Servicer.
The Company and the Master Servicer shall each be liable in accordance herewith only to the extent of
the obligations specifically and respectively imposed upon and undertaken by the Company and the Master
Servicer herein. By way of illustration and not limitation, the Company is not liable for the servicing and
administration of the Mortgage Loans, nor is it obligated by Section 7.01 or Section 10.01 to assume any
obligations of the Master Servicer or to appoint a designee to assume such obligations, nor is it liable for
any other obligation hereunder that it may, but is not obligated to, assume unless it elects to assume such
obligation in accordance herewith.
Section 6.02. Merger or Consolidation of the Company or the Master Servicer; Assignment of Rights and
Delegation of Duties by Master Servicer.
(a) The Company and the Master Servicer shall each keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation, and shall 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 Company or the Master Servicer may be merged or consolidated, or any
corporation resulting from any merger or consolidation to which the Company or the Master Servicer shall be a
party, or any Person succeeding to the business of the Company or the Master Servicer, shall be the successor
of the Company or the Master Servicer, as the case may be, hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to the Master Servicer shall be
qualified to service mortgage loans on behalf of Xxxxxx Xxx or Xxxxxxx Mac; and provided further that each
Rating Agency's ratings, if any, of the Senior (in the case of the Insured Certificates (as defined in the
Series Supplement), such determination shall be made without giving effect to the Certificate Policy (as
defined in the Series Supplement)), Class M or Class B Certificates in effect immediately prior to such
merger or consolidation will not be qualified, reduced or withdrawn as a result thereof (as evidenced by a
letter to such effect from each Rating Agency).
(c) Notwithstanding anything else in this Section 6.02 and Section 6.04 to the contrary, the Master
Servicer may assign its rights and delegate its duties and obligations under this Agreement; provided that
the Person accepting such assignment or delegation shall be a Person which is qualified to service mortgage
loans on behalf of Xxxxxx Mae or Xxxxxxx Mac, is reasonably satisfactory to the Trustee and the Company, is
willing to service the Mortgage Loans and executes and delivers to the Company and the Trustee an agreement,
in form and substance reasonably satisfactory to the Company and the Trustee, which contains an assumption by
such Person of the due and punctual performance and observance of each covenant and condition to be performed
or observed by the Master Servicer under this Agreement; provided further that each Rating Agency's rating of
the Classes of Certificates (in the case of the Insured Certificates (as defined in the Series Supplement),
such determination shall be made without giving effect to the Certificate Policy (as defined in the Series
Supplement)) that have been rated in effect immediately prior to such assignment and delegation will not be
qualified, reduced or withdrawn as a result of such assignment and delegation (as evidenced by a letter to
such effect from each Rating Agency). In the case of any such assignment and delegation, the Master Servicer
shall be released from its obligations under this Agreement, except that the Master Servicer shall remain
liable for all liabilities and obligations incurred by it as Master Servicer hereunder prior to the
satisfaction of the conditions to such assignment and delegation set forth in the next preceding sentence.
Section 6.03. Limitation on Liability of the Company,
the Master Servicer and Others.
Neither the Company, the Master Servicer nor any of the directors, officers, employees or agents of
the Company or the Master Servicer shall be under any liability to the Trust Fund or the Certificateholders
for any action taken or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Company,
the Master Servicer or any such Person against any breach of warranties or representations made herein or any
liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations and duties hereunder. The
Company, the Master Servicer and any director, officer, employee or agent of the Company or the Master
Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Company, the Master Servicer and any director,
officer, employee or agent of the Company or the Master Servicer shall be indemnified by the Trust Fund and
held harmless against any loss, liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense related to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder.
Neither the Company nor the Master Servicer shall be under any obligation to appear in, prosecute or
defend any legal or administrative action, proceeding, hearing or examination that is not incidental to its
respective duties under this Agreement and which in its opinion may involve it in any expense or liability;
provided, however, that the Company or the Master Servicer may in its discretion undertake any such action,
proceeding, hearing or examination that it may deem necessary or desirable in respect to this Agreement and
the rights and duties of the parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action, proceeding, hearing or examination and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust Fund, and the Company and the
Master Servicer shall be entitled to be reimbursed therefor out of amounts attributable to the Mortgage Loans
on deposit in the Custodial Account as provided by Section 3.10 and, on the Distribution Date(s) following
such reimbursement, the aggregate of such expenses and costs shall be allocated in reduction of the Accrued
Certificate Interest on each Class entitled thereto in the same manner as if such expenses and costs
constituted a Prepayment Interest Shortfall.
Section 6.04. Company and Master Servicer Not to Resign.
Subject to the provisions of Section 6.02, neither the Company nor the Master Servicer shall resign
from its respective obligations and duties hereby imposed on it except upon determination that its duties
hereunder are no longer permissible under applicable law. Any such determination permitting the resignation
of the Company or the Master Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee. No such resignation by the Master Servicer shall become effective until the Trustee or a
successor servicer shall have assumed the Master Servicer's responsibilities and obligations in accordance
with Section 7.02.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
Event of Default, wherever used herein, means any one of the following events (whatever reason for
such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative
or governmental body):
(i) the Master Servicer shall fail to deposit or cause to be deposited into the Certificate Account any
amounts required to be so deposited therein at the time required pursuant to Section 4.01 or otherwise
or the Master Servicer shall fail to distribute or cause to be distributed to the Holders of
Certificates of any Class any distribution required to be made under the terms of the Certificates of
such Class and this Agreement and, in each case, such failure shall continue unremedied for a period
of 5 days after the date upon which written notice of such failure, requiring such failure to be
remedied, shall have been given to the Master Servicer by the Trustee or the Company or to the Master
Servicer, the Company and the Trustee by the Holders of Certificates of such Class evidencing
Percentage Interests aggregating not less than 25%; or
(ii) the Master Servicer shall fail to observe or perform in any material respect any other of the
covenants or agreements on the part of the Master Servicer contained in the Certificates of any Class
or in this Agreement and such failure shall continue unremedied for a period of 30 days (except that
such number of days shall be 15 in the case of a failure to pay the premium for any Required Insurance
Policy) after the date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Trustee or the Company, or to the Master Servicer,
the Company and the Trustee by the Holders of Certificates of any Class evidencing, in the case of any
such Class, Percentage Interests aggregating not less than 25%; or
(iii) a decree or order of a court or agency or supervisory authority having jurisdiction in the premises in
an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law
or appointing a conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
(iv) the Master Servicer shall consent to the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities, or similar proceedings of, or
relating to, the Master Servicer or of, or relating to, all or substantially all of the property of
the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(vi) the Master Servicer shall notify the Trustee pursuant to Section 4.04(b) that it is unable to deposit
in the Certificate Account an amount equal to the Advance.
If an Event of Default described in clauses (i)-(v) of this Section shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been remedied, either the Company or the
Trustee may, and at the direction of Holders of Certificates entitled to at least 51% of the Voting Rights,
the Trustee shall, by notice in writing to the Master Servicer (and to the Company if given by the Trustee or
to the Trustee if given by the Company), terminate all of the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. If an Event of Default described in clause (vi) hereof shall occur, the Trustee
shall, by notice to the Master Servicer and the Company, immediately terminate all of the rights and
obligations of the Master Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, other than its rights as a Certificateholder hereunder as provided in Section 4.04(b). On or after
the receipt by the Master Servicer of such written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates (other than as a Holder thereof) or the
Mortgage Loans or otherwise, shall subject to Section 7.02 pass to and be vested in the Trustee or the
Trustee's designee appointed pursuant to Section 7.02; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Mortgage Loans and related documents, or otherwise. The Master
Servicer agrees to cooperate with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the transfer to the Trustee or its
designee for administration by it of all cash amounts which shall at the time be credited to the Custodial
Account or the Certificate Account or thereafter be received with respect to the Mortgage Loans. No such
termination shall release the Master Servicer for any liability that it would otherwise have hereunder for
any act or omission prior to the effective time of such termination.
Notwithstanding any termination of the activities of Residential Funding in its capacity as Master
Servicer hereunder, Residential Funding shall be entitled to receive, out of any late collection of a Monthly
Payment on a Mortgage Loan which was due prior to the notice terminating Residential Funding's rights and
obligations as Master Servicer hereunder and received after such notice, that portion to which Residential
Funding would have been entitled pursuant to Sections 3.10(a)(ii), (vi) and (vii) as well as its Servicing
Fee in respect thereof, and any other amounts payable to Residential Funding hereunder the entitlement to
which arose prior to the termination of its activities hereunder. Upon the termination of Residential
Funding as Master Servicer hereunder the Company shall deliver to the Trustee a copy of the Program Guide.
Section 7.02. Trustee or Company to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of termination pursuant to Section 7.01 or
resigns in accordance with Section 6.04, the Trustee or, upon notice to the Company and with the Company's
consent (which shall not be unreasonably withheld) a designee (which meets the standards set forth below) of
the Trustee, shall be the successor in all respects to the Master Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master Servicer (except for the
responsibilities, duties and liabilities contained in Sections 2.02 and 2.03(a), excluding the duty to notify
related Subservicers or Sellers as set forth in such Sections, and its obligations to deposit amounts in
respect of losses incurred prior to such notice or termination on the investment of funds in the Custodial
Account or the Certificate Account pursuant to Sections 3.07(c) and 4.01(b) by the terms and provisions
hereof); provided, however, that any failure to perform such duties or responsibilities caused by the
preceding Master Servicer's failure to provide information required by Section 4.04 shall not be considered a
default by the Trustee hereunder. As compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans which the Master Servicer would have been entitled to charge to the Custodial
Account or the Certificate Account if the Master Servicer had continued to act hereunder and, in addition,
shall be entitled to the income from any Permitted Investments made with amounts attributable to the Mortgage
Loans held in the Custodial Account or the Certificate Account. If the Trustee has become the successor to
the Master Servicer in accordance with Section 6.04 or Section 7.01, then notwithstanding the above, the
Trustee may, if it shall be unwilling to so act, or shall, if it is unable to so act, appoint, or petition a
court of competent jurisdiction to appoint, any established housing and home finance institution, which is
also a Xxxxxx Xxx- or Xxxxxxx Mac-approved mortgage servicing institution, having a net worth of not less
than $10,000,000 as the successor to the Master Servicer hereunder in the assumption of all or any part of
the responsibilities, duties or liabilities of the Master Servicer hereunder. Pending appointment of a
successor to the Master Servicer hereunder, the Trustee shall become successor to the Master Servicer and
shall act in such capacity as hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of payments on Mortgage Loans
as it and such successor shall agree; provided, however, that no such compensation shall be in excess of that
permitted the initial Master Servicer hereunder. The Company, the Trustee, the Custodian and such successor
shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Servicing Fee for any successor Master Servicer appointed pursuant to this Section 7.02 will
be lowered with respect to those Mortgage Loans, if any, where the Subservicing Fee accrues at a rate of less
than 0.20% per annum in the event that the successor Master Servicer is not servicing such Mortgage Loans
directly and it is necessary to raise the related Subservicing Fee to a rate of 0.20% per annum in order to
hire a Subservicer with respect to such Mortgage Loans. The Master Servicer shall pay the reasonable
expenses of the Trustee in connection with any servicing transition hereunder.
(b) In connection with the termination or resignation of the Master Servicer hereunder, either (i)
the successor Master Servicer, including the Trustee if the Trustee is acting as successor Master Servicer,
shall represent and warrant that it is a member of MERS in good standing and shall agree to comply in all
material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage
Loans that are registered with MERS, in which case the predecessor Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to revise its records to reflect the transfer of servicing to the
successor Master Servicer as necessary under MERS' rules and regulations, or (ii) the predecessor Master
Servicer shall cooperate with the successor Master Servicer in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS to the Trustee and to execute
and deliver such other notices, documents and other instruments as may be necessary or desirable to effect a
transfer of such Mortgage Loan or servicing of such Mortgage Loan on the MERS(R)System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any such assignment in the
appropriate recording office. The predecessor Master Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any assignments of Mortgage that may be
required under this subsection (b). The successor Master Servicer shall cause such assignment to be
delivered to the Trustee or the Custodian promptly upon receipt of the original with evidence of recording
thereon or a copy certified by the public recording office in which such assignment was recorded.
Section 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective addresses appearing in the
Certificate Register.
(b) Within 60 days after the occurrence of any Event of Default, the Trustee shall transmit by mail to all
Holders of Certificates notice of each such Event of Default hereunder known to the Trustee, unless such
Event of Default shall have been cured or waived.
Section 7.04. Waiver of Events of Default.
The Holders representing at least 66% of the Voting Rights affected by a default or Event of Default
hereunder may waive such default or Event of Default; provided, however, that (a) a default or Event of
Default under clause (i) of Section 7.01 may be waived only by all of the Holders of Certificates affected by
such default or Event of Default and (b) no waiver pursuant to this Section 7.04 shall affect the Holders of
Certificates in the manner set forth in Section 11.01(b)(i) or (ii). Upon any such waiver of a default or
Event of Default by the Holders representing the requisite percentage of Voting Rights affected by such
default or Event of Default, such default or Event of Default shall cease to exist and shall be deemed to
have been remedied for every purpose hereunder. No such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon except to the extent expressly so waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all
Events of Default which may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default has occurred (which has not been cured
or waived), the Trustee shall exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in their exercise as a prudent investor would exercise or use under the
circumstances in the conduct of such investor's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to the Trustee which are specifically required to be furnished pursuant
to any provision of this Agreement, shall examine them to determine whether they conform to the requirements
of this Agreement. The Trustee shall notify the Certificateholders of any such documents which do not
materially conform to the requirements of this Agreement in the event that the Trustee, after so requesting,
does not receive satisfactorily corrected documents.
The Trustee shall forward or cause to be forwarded in a timely fashion the notices, reports and
statements required to be forwarded by the Trustee pursuant to Sections 4.03, 4.06, 7.03 and 10.01. The
Trustee shall furnish in a timely fashion to the Master Servicer such information as the Master Servicer may
reasonably request from time to time for the Master Servicer to fulfill its duties as set forth in this
Agreement. The Trustee covenants and agrees that it shall perform its obligations hereunder in a manner so
as to maintain the status of any portion of any REMIC formed under the Series Supplement as a REMIC under the
REMIC Provisions and (subject to Section 10.01(f)) to prevent the imposition of any federal, state or local
income, prohibited transaction, contribution or other tax on the Trust Fund to the extent that maintaining
such status and avoiding such taxes are reasonably within the control of the Trustee and are reasonably
within the scope of its duties under this Agreement.
(c) No provision of this Agreement shall be construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the curing or waiver of all such Events of
Default which may have occurred, the duties and obligations of the Trustee shall be determined solely
by the express provisions of this Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the Trustee and, in the absence of
bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee by the Company or the Master Servicer and which on their face, do not
contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of Certificateholders of any Class holding
Certificates which evidence, as to such Class, Percentage Interests aggregating not less than 25% as
to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Agreement;
(iv) The Trustee shall not be charged with knowledge of any default (other than a default in payment to the
Trustee) specified in clauses (i) and (ii) of Section 7.01 or an Event of Default under clauses (iii),
(iv) and (v) of Section 7.01 unless a Responsible Officer of the Trustee assigned to and working in
the Corporate Trust Office obtains actual knowledge of such failure or event or the Trustee receives
written notice of such failure or event at its Corporate Trust Office from the Master Servicer, the
Company or any Certificateholder; and
(v) Except to the extent provided in Section 7.02, no provision in this Agreement shall require the
Trustee to expend or risk its own funds (including, without limitation, the making of any Advance) or
otherwise incur any personal financial liability in the performance of any of its duties as Trustee
hereunder, or in the exercise of any of its rights or powers, if the Trustee shall have reasonable
grounds for believing that repayment of funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) The Trustee shall timely pay, from its own funds, the amount of any and all federal, state and local
taxes imposed on the Trust Fund or its assets or transactions including, without limitation, (A) "prohibited
transaction" penalty taxes as defined in Section 860F of the Code, if, when and as the same shall be due and
payable, (B) any tax on contributions to a REMIC after the Closing Date imposed by Section 860G(d) of the
Code and (C) any tax on "net income from foreclosure property" as defined in Section 860G(c) of the Code, but
only if such taxes arise out of a breach by the Trustee of its obligations hereunder, which breach
constitutes negligence or willful misconduct of the Trustee.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution,
Officers' Certificate, certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed
by it to be genuine and to have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of
an Event of Default (which has not been cured or waived), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and skill in their exercise as a
prudent investor would exercise or use under the circumstances in the conduct of such investor's own
affairs;
(iv) The Trustee shall not be personally liable for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and after the curing or waiver of all Events
of Default which may have occurred, the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document, unless requested in
writing so to do by Holders of Certificates of any Class evidencing, as to such Class, Percentage
Interests, aggregating not less than 50%; provided, however, that if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Master Servicer, if an Event of Default shall have occurred and
is continuing, and otherwise by the Certificateholder requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys; and
(vii) To the extent authorized under the Code and the regulations promulgated thereunder, each Holder of a
Class R Certificate hereby irrevocably appoints and authorizes the Trustee to be its attorney-in-fact
for purposes of signing any Tax Returns required to be filed on behalf of the Trust Fund. The Trustee
shall sign on behalf of the Trust Fund and deliver to the Master Servicer in a timely manner any Tax
Returns prepared by or on behalf of the Master Servicer that the Trustee is required to sign as
determined by the Master Servicer pursuant to applicable federal, state or local tax laws, provided
that the Master Servicer shall indemnify the Trustee for signing any such Tax Returns that contain
errors or omissions.
(b) Following the issuance of the Certificates, the Trustee shall not accept any contribution of assets to
the Trust Fund unless (subject to Section 10.01(f)) it shall have obtained or been furnished with an Opinion
of Counsel to the effect that such contribution will not (i) cause any portion of any REMIC formed under the
Series Supplement to fail to qualify as a REMIC at any time that any Certificates are outstanding or (ii)
cause the Trust Fund to be subject to any federal tax as a result of such contribution (including the
imposition of any federal tax on "prohibited transactions" imposed under Section 860F(a) of the Code).
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the execution of the Certificates
and relating to the acceptance and receipt of the Mortgage Loans) shall be taken as the statements of the
Company or the Master Servicer as the case may be, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or sufficiency of this Agreement or of
the Certificates (except that the Certificates shall be duly and validly executed and authenticated by it as
Certificate Registrar) or of any Mortgage Loan or related document, or of MERS or the MERS(R)System. Except
as otherwise provided herein, the Trustee shall not be accountable for the use or application by the Company
or the Master Servicer of any of the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Company or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Custodial Account or the Certificate Account by the Company or the Master
Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Trustee.
Section 8.05. Master Servicer to Pay Trustee's Fees
and Expenses; Indemnification.
(a) The Master Servicer covenants and agrees to pay to the Trustee and any co-trustee from time to time,
and the Trustee and any co-trustee shall be entitled to, reasonable compensation (which shall not be limited
by any provision of law in regard to the compensation of a trustee of an express trust) for all services
rendered by each of them in the execution of the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee and any co-trustee, and the Master Servicer will pay or
reimburse the Trustee and any co-trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee or any co-trustee in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and disbursements of its counsel and of all persons
not regularly in its employ, and the expenses incurred by the Trustee or any co-trustee in connection with
the appointment of an office or agency pursuant to Section 8.12) except any such expense, disbursement or
advance as may arise from its negligence or bad faith.
(b) The Master Servicer agrees to indemnify the Trustee for, and to hold the Trustee harmless against, any
loss, liability or expense incurred without negligence or willful misconduct on the Trustee's part, arising
out of, or in connection with, the acceptance and administration of the Trust Fund, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself against any claim in connection
with the exercise or performance of any of its powers or duties under this Agreement and the Custodial
Agreement, and the Master Servicer further agrees to indemnify the Trustee for, and to hold the Trustee
harmless against, any loss, liability or expense arising out of, or in connection with, the provisions set
forth in the second paragraph of Section 2.01(c) hereof, including, without limitation, all costs,
liabilities and expenses (including reasonable legal fees and expenses) of investigating and defending itself
against any claim, action or proceeding, pending or threatened, relating to the provisions of this paragraph,
provided that:
(i) with respect to any such claim, the Trustee shall have given the Master Servicer written notice
thereof promptly after the Trustee shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee shall cooperate and consult fully with
the Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Agreement to the contrary, the Master Servicer shall not be liable
for settlement of any claim by the Trustee entered into without the prior consent of the Master
Servicer which consent shall not be unreasonably withheld.
No termination of this Agreement shall affect the obligations created by this Section 8.05(b) of the Master
Servicer to indemnify the Trustee under the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the Master Servicer in this Section
8.05(b) shall not be available (A) for any loss, liability or expense of the Trustee, including the costs and
expenses of defending itself against any claim, incurred in connection with any actions taken by the Trustee
at the direction of the Certificateholders pursuant to the terms of this Agreement or (B) where the Trustee
is required to indemnify the Master Servicer pursuant to Section 12.05(a).
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a national banking association having its
principal office in a state and city acceptable to the Company and organized and doing business under the
laws of such state or the United States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 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.
Section 8.07. Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts hereby created by giving written
notice thereof to the Company. Upon receiving such notice of resignation, the Company shall promptly appoint
a successor trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to
the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance with the provisions of Section
8.06 and shall fail to resign after written request therefor by the Company, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or
of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Company may
remove the Trustee and appoint a successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the successor trustee. In addition,
in the event that the Company determines that the Trustee has failed (i) to distribute or cause to be
distributed to the Certificateholders any amount required to be distributed hereunder, if such amount is held
by the Trustee or its Paying Agent (other than the Master Servicer or the Company) for distribution or (ii)
to otherwise observe or perform in any material respect any of its covenants, agreements or obligations
hereunder, and such failure shall continue unremedied for a period of 5 days (in respect of clause (i) above)
or 30 days (in respect of clause (ii) above other than any failure to comply with the provisions of Article
XII, in which case no notice or grace period shall be applicable) after the date on which written notice of
such failure, requiring that the same be remedied, shall have been given to the Trustee by the Company, then
the Company may remove the Trustee and appoint a successor trustee by written instrument delivered as
provided in the preceding sentence. In connection with the appointment of a successor trustee pursuant to
the preceding sentence, the Company shall, on or before the date on which any such appointment becomes
effective, obtain from each Rating Agency written confirmation that the appointment of any such successor
trustee will not result in the reduction of the ratings on any class of the Certificates below the lesser of
the then current or original ratings on such Certificates.
(c) The Holders of Certificates entitled to at least 51% of the Voting Rights may at any time remove the
Trustee and appoint a successor trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which instruments shall be delivered
to the Company, one complete set to the Trustee so removed and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of
the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 8.08.
Section 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 8.07 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee shall become effective and such successor trustee shall
become effective and such successor trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor hereunder, with the like effect
as if originally named as trustee herein. The predecessor trustee shall deliver to the successor trustee all
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
Company, the Master Servicer and the predecessor trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly vesting and confirming in the
successor trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this Section unless at the time of such
acceptance such successor trustee shall be eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as provided in this Section, the Company shall
mail notice of the succession of such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Company fails to mail such notice within 10 days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Company.
Section 8.09. Merger or Consolidation of Trustee.
Any corporation or national banking association into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation or national banking association resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or national
banking association succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation or national banking association shall be eligible under the provisions
of Section 8.06, without the execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. The Trustee shall mail notice of any such
merger or consolidation to the Certificateholders at their address as shown in the Certificate Register.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust Fund or property securing the same may at the
time be located, the Master Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such title to the Trust Fund, or any
part thereof, and, subject to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Master Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the receipt by it of a request so to
do, or in case an Event of Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section 8.06 hereunder and no notice to Holders of
Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
(b) In the case of any appointment of a co-trustee or separate trustee pursuant to this Section 8.10 all
rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee, and such separate trustee or co-trustee jointly, except to
the extent that under any law of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or co-trustee at the direction of the
Trustee.
(c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each
of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this
Article VIII. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the Trustee, its agent or
attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act
under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies
and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11. Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer and the Company, or shall, at the direction
of the Company and the Master Servicer, appoint one or more Custodians who are not Affiliates of the Company,
the Master Servicer or any Seller 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.
Section 8.12. Appointment of Office or Agency.
The Trustee will maintain an office or agency in the United States at the address designated in
Section 11.05 of the Series Supplement where Certificates may be surrendered for registration of transfer or
exchange. The Trustee will maintain an office at the address stated in Section 11.05 of the Series Supplement
where notices and demands to or upon the Trustee in respect of this Agreement may be served.
ARTICLE IX
TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES
Section 9.01. Optional Purchase by the Master Servicer of All Certificates; Termination Upon Purchase by the
Master Servicer or Liquidation of All Mortgage Loans
(a) Subject to Section 9.02, the respective obligations and responsibilities of the Company, the Master
Servicer and the Trustee created hereby in respect of the Certificates (other than the obligation of the
Trustee to make certain payments after the Final Distribution Date to Certificateholders and the obligation
of the Company to send certain notices as hereinafter set forth) shall terminate upon the last action
required to be taken by the Trustee on the Final Distribution Date pursuant to this Article IX following the
earlier of:
(i) the later of the final payment or other liquidation (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, or
(ii) the purchase by the Master Servicer of all Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining in the Trust Fund at a price equal to 100% of the unpaid principal balance of
each Mortgage Loan or, if less than such unpaid principal balance, the fair market value of the
related underlying property of such Mortgage Loan with respect to Mortgage Loans as to which title has
been acquired if such fair market value is less than such unpaid principal balance (net of any
unreimbursed Advances attributable to principal) on the day of repurchase plus accrued interest
thereon at the Net Mortgage Rate (or Modified Net Mortgage Rate in the case of any Modified Mortgage
Loan) to, but not including, the first day of the month in which such repurchase price is distributed,
provided, however, that in no event shall the trust created hereby continue beyond the expiration of
21 years from the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. Xxxxx, living on the date hereof and provided
further that the purchase price set forth above shall be increased as is necessary, as determined by
the Master Servicer, to avoid disqualification of any portion of any REMIC formed under the Series
Supplement as a REMIC. The purchase price paid by the Master Servicer shall also include any amounts
owed by Residential Funding pursuant to the last paragraph of Section 4 of the Assignment Agreement in
respect of any liability, penalty or expense that resulted from a breach of the Compliance With Laws
Representation, that remain unpaid on the date of such purchase.
The right of the Master Servicer to purchase all the assets of the Trust Fund pursuant to clause (ii)
above is conditioned upon the Pool Stated Principal Balance as of the Final Distribution Date, prior to
giving effect to distributions to be made on such Distribution Date, being less than ten percent of the
Cut-off Date Principal Balance of the Mortgage Loans.
If such right is exercised by the Master Servicer, the Master Servicer shall be deemed to have been
reimbursed for the full amount of any unreimbursed Advances theretofore made by it with respect to the
Mortgage Loans. In addition, the Master Servicer shall provide to the Trustee the certification required by
Section 3.15 and the Trustee and any Custodian shall, promptly following payment of the purchase price,
release to the Master Servicer the Mortgage Files pertaining to the Mortgage Loans being purchased.
In addition to the foregoing, on any Distribution Date on which the Pool Stated Principal Balance,
prior to giving effect to distributions to be made on such Distribution Date, is less than ten percent of the
Cut-off Date Principal Balance of the Mortgage Loans, the Master Servicer shall have the right, at its
option, to purchase the Certificates in whole, but not in part, at a price equal to the outstanding
Certificate Principal Balance of such Certificates plus the sum of Accrued Certificate Interest thereon for
the related Interest Accrual Period and any previously unpaid Accrued Certificate Interest. If the Master
Servicer exercises this right to purchase the outstanding Certificates, the Master Servicer will promptly
terminate the respective obligations and responsibilities created hereby in respect of the Certificates
pursuant to this Article IX.
(b) The Master Servicer shall give the Trustee not less than 40 days' prior notice of the
Distribution Date on which the Master Servicer anticipates that the final distribution will be made to
Certificateholders (whether as a result of the exercise by the Master Servicer of its right to
purchase the assets of the Trust Fund or otherwise) or on which the Master Servicer anticipates that
the Certificates will be purchased (as a result of the exercise by the Master Servicer to purchase the
outstanding Certificates). Notice of any termination specifying the anticipated Final Distribution
Date (which shall be a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee (if so required by the terms
hereof) for payment of the final distribution and cancellation or notice of any purchase of the
outstanding Certificates, specifying the Distribution Date upon which the Holders may surrender their
Certificates to the Trustee for payment, shall be given promptly by the Master Servicer (if it is
exercising its right to purchase the assets of the Trust Fund or to purchase the outstanding
Certificates), or by the Trustee (in any other case) by letter. Such notice shall be prepared by the
Master Servicer (if it is exercising its right to purchase the assets of the Trust Fund or to purchase
the outstanding Certificates), or by the Trustee (in any other case) and mailed by the Trustee to the
Certificateholders not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution specifying:
(iii) the anticipated Final Distribution Date upon which final payment of the Certificates is anticipated to
be made upon presentation and surrender of Certificates at the office or agency of the Trustee therein
designated where required pursuant to this Agreement or, in the case of the purchase by the Master
Servicer of the outstanding Certificates, the Distribution Date on which such purchase is to be made,
(iv) the amount of any such final payment, or in the case of the purchase of the outstanding Certificates,
the purchase price, in either case, if known, and
(v) that the Record Date otherwise applicable to such Distribution Date is not applicable, and in the case
of the Senior Certificates, or in the case of all of the Certificates in connection with the exercise
by the Master Servicer of its right to purchase the Certificates, that payment will be made only upon
presentation and surrender of the Certificates at the office or agency of the Trustee therein
specified.
If the Master Servicer is obligated to give notice to Certificateholders as aforesaid, it shall give such
notice to the Certificate Registrar at the time such notice is given to Certificateholders and, if the Master
Servicer is exercising its rights to purchase the outstanding Certificates, it shall give such notice to each
Rating Agency at the time such notice is given to Certificateholders. As a result of the exercise by the
Master Servicer of its right to purchase the assets of the Trust Fund, the Master Servicer shall deposit in
the Certificate Account, before the Final Distribution Date in immediately available funds an amount equal to
the purchase price for the assets of the Trust Fund, computed as provided above. As a result of the exercise
by the Master Servicer of its right to purchase the outstanding Certificates, the Master Servicer shall
deposit in an Eligible Account, established by the Master Servicer on behalf of the Trustee and separate from
the Certificate Account in the name of the Trustee in trust for the registered holders of the Certificates,
before the Distribution Date on which such purchase is to occur in immediately available funds an amount
equal to the purchase price for the Certificates, computed as above provided, and provide notice of such
deposit to the Trustee. The Trustee will withdraw from such account the amount specified in subsection (c)
below.
(b) In the case of the Senior Certificates, upon presentation and surrender of the Certificates by the
Certificateholders thereof, and in the case of the Class M and Class B Certificates, upon presentation and
surrender of the Certificates by the Certificateholders thereof in connection with the exercise by the Master
Servicer of its right to purchase the Certificates, and otherwise in accordance with Section 4.01(a), the
Trustee shall distribute to the Certificateholders (i) the amount otherwise distributable on such
Distribution Date, if not in connection with the Master Servicer's election to repurchase the assets of the
Trust Fund or the outstanding Certificates, or (ii) if the Master Servicer elected to so repurchase the
assets of the Trust Fund or the outstanding Certificates, an amount determined as follows: (A) with respect
to each Certificate the outstanding Certificate Principal Balance thereof, plus Accrued Certificate Interest
for the related Interest Accrual Period thereon and any previously unpaid Accrued Certificate Interest,
subject to the priority set forth in Section 4.02(a), and (B) with respect to the Class R Certificates, any
excess of the amounts available for distribution (including the repurchase price specified in clause (ii) of
subsection (a) of this Section) over the total amount distributed under the immediately preceding clause
(A). Notwithstanding the reduction of the Certificate Principal Balance of any Class of Subordinate
Certificates to zero, such Class will be outstanding hereunder until the termination of the respective
obligations and responsibilities of the Company, the Master Servicer and the Trustee hereunder in accordance
with Article IX.
(c) If any Certificateholders shall not surrender their Certificates for final payment and cancellation on
or before the Final Distribution Date (if so required by the terms hereof), the Trustee shall on such date
cause all funds in the Certificate Account not distributed in final distribution to Certificateholders to be
withdrawn therefrom and credited to the remaining Certificateholders by depositing such funds in a separate
escrow account for the benefit of such Certificateholders, and the Master Servicer (if it exercised its right
to purchase the assets of the Trust Fund), or the Trustee (in any other case) shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for cancellation and receive the
final distribution with respect thereto. If within six months after the second notice any Certificate shall
not have been surrendered for cancellation, the Trustee shall take appropriate steps as directed by the
Master Servicer to contact the remaining Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the escrow account and of contacting Certificateholders shall be paid out
of the assets which remain in the escrow account. If within nine months after the second notice any
Certificates shall not have been surrendered for cancellation, the Trustee shall pay to the Master Servicer
all amounts distributable to the holders thereof and the Master Servicer shall thereafter hold such amounts
until distributed to such Holders. No interest shall accrue or be payable to any Certificateholder on any
amount held in the escrow account or by the Master Servicer as a result of such Certificateholder's failure
to surrender its Certificate(s) for final payment thereof in accordance with this Section 9.01.
(d) If any Certificateholders do not surrender their Certificates on or before the Distribution Date on
which a purchase of the outstanding Certificates is to be made, the Trustee shall on such date cause all
funds in the Certificate Account deposited therein by the Master Servicer pursuant to Section 9.01(b) to be
withdrawn therefrom and deposited in a separate escrow account for the benefit of such Certificateholders,
and the Master Servicer shall give a second written notice to such Certificateholders to surrender their
Certificates for payment of the purchase price therefor. If within six months after the second notice any
Certificate shall not have been surrendered for cancellation, the Trustee shall take appropriate steps as
directed by the Master Servicer to contact the Holders of such Certificates concerning surrender of their
Certificates. The costs and expenses of maintaining the escrow account and of contacting Certificateholders
shall be paid out of the assets which remain in the escrow account. If within nine months after the second
notice any Certificates shall not have been surrendered for cancellation in accordance with this Section
9.01, the Trustee shall pay to the Master Servicer all amounts distributable to the Holders thereof and the
Master Servicer shall thereafter hold such amounts until distributed to such Holders. No interest shall
accrue or be payable to any Certificateholder on any amount held in the escrow account or by the Master
Servicer as a result of such Certificateholder's failure to surrender its Certificate(s) for payment in
accordance with this Section 9.01. Any Certificate that is not surrendered on the Distribution Date on which
a purchase pursuant to this Section 9.01 occurs as provided above will be deemed to have been purchased and
the Holder as of such date will have no rights with respect thereto except to receive the purchase price
therefor minus any costs and expenses associated with such escrow account and notices allocated thereto. Any
Certificates so purchased or deemed to have been purchased on such Distribution Date shall remain outstanding
hereunder until the Master Servicer has terminated the respective obligations and responsibilities created
hereby in respect of the Certificates pursuant to this Article IX. The Master Servicer shall be for all
purposes the Holder thereof as of such date.
Section 9.02. Additional Termination Requirements.
(a) Each REMIC that comprises the Trust Fund shall be terminated in accordance with the following
additional requirements, unless (subject to Section 10.01(f)) the Trustee and the Master Servicer have
received an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the Trustee) to the
effect that the failure of each such REMIC to comply with the requirements of this Section 9.02 will not (i)
result in the imposition on the Trust Fund of taxes on "prohibited transactions," as described in Section
860F of the Code, or (ii) cause any such REMIC to fail to qualify as a REMIC at any time that any Certificate
is outstanding:
(i) The Master Servicer shall establish a 90-day liquidation period for each such REMIC and specify the
first day of such period in a statement attached to the Trust Fund's final Tax Return pursuant to
Treasury regulations Section 1.860F-1. The Master Servicer also shall satisfy all of the requirements
of a qualified liquidation for a REMIC under Section 860F of the Code and regulations thereunder;
(ii) The Master Servicer shall notify the Trustee at the commencement of such 90-day liquidation period
and, at or prior to the time of making of the final payment on the Certificates, the Trustee shall
sell or otherwise dispose of all of the remaining assets of the Trust Fund in accordance with the
terms hereof; and
(iii) If the Master Servicer or the Company is exercising its right to purchase the assets of the Trust
Fund, the Master Servicer shall, during the 90-day liquidation period and at or prior to the Final
Distribution Date, purchase all of the assets of the Trust Fund for cash.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably approves and appoints the Master
Servicer as its attorney-in-fact to adopt a plan of complete liquidation for each REMIC at the expense of the
Trust Fund in accordance with the terms and conditions of this Agreement.
Section 9.03. Termination of Multiple REMICs.
If the REMIC Administrator makes two or more separate REMIC elections, the applicable REMIC shall be
terminated on the earlier of the Final Distribution Date and the date on which it is deemed to receive the
last deemed distributions on the related Uncertificated REMIC Regular Interests and the last distribution due
on the Certificates is made.
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The REMIC Administrator shall make an election to treat the Trust Fund as one or more REMICs under the
Code and, if necessary, under applicable state law. The assets of each such REMIC will be set forth in the
Series Supplement. Such election will be made on Form 1066 or other appropriate federal tax or information
return (including Form 8811) or any appropriate state return for the taxable year ending on the last day of
the calendar year in which the Certificates are issued. For the purposes of each REMIC election in respect
of the Trust Fund, Certificates and interests to be designated as the "regular interests" and the sole class
of "residual interests" in the REMIC will be set forth in Section 10.03 of the Series Supplement. The REMIC
Administrator and the Trustee shall not permit the creation of any "interests" (within the meaning of Section
860G of the Code) in any REMIC elected in respect of the Trust Fund other than the "regular interests" and
"residual interests" so designated.
(b) The Closing Date is hereby designated as the "startup day" of the Trust Fund within the meaning of
Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate representing a 0.01% Percentage Interest each
Class of the Class R Certificates and shall be designated as "the tax matters person" with respect to each
REMIC in the manner provided under Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1. The REMIC Administrator, as tax matters person, shall (i) act on behalf of each REMIC in
relation to any tax matter or controversy involving the Trust Fund and (ii) represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any governmental taxing
authority with respect thereto. The legal expenses, including without limitation attorneys' or accountants'
fees, and costs of any such proceeding and any liability resulting therefrom shall be expenses of the Trust
Fund and the REMIC Administrator shall be entitled to reimbursement therefor out of amounts attributable to
the Mortgage Loans on deposit in the Custodial Account as provided by Section 3.10 unless such legal expenses
and costs are incurred by reason of the REMIC Administrator's willful misfeasance, bad faith or gross
negligence. If the REMIC Administrator is no longer the Master Servicer hereunder, at its option the REMIC
Administrator may continue its duties as REMIC Administrator and shall be paid reasonable compensation not to
exceed $3,000 per year by any successor Master Servicer hereunder for so acting as the REMIC Administrator.
(d) The REMIC Administrator shall prepare or cause to be prepared all of the Tax Returns that it
determines are required with respect to each REMIC created hereunder and deliver such Tax Returns in a timely
manner to the Trustee and the Trustee shall sign and file such Tax Returns in a timely manner. The expenses
of preparing such returns shall be borne by the REMIC Administrator without any right of reimbursement
therefor. The REMIC Administrator agrees to indemnify and hold harmless the Trustee with respect to any tax
or liability arising from the Trustee's signing of Tax Returns that contain errors or omissions. The Trustee
and Master Servicer shall promptly provide the REMIC Administrator with such information as the REMIC
Administrator may from time to time request for the purpose of enabling the REMIC Administrator to prepare
Tax Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a Class R Certificate such information
as is necessary for the application of any tax relating to the transfer of a Class R Certificate to any
Person who is not a Permitted Transferee, (ii) to the Trustee, and the Trustee shall forward to the
Certificateholders, such information or reports as are required by the Code or the REMIC Provisions including
reports relating to interest, original issue discount and market discount or premium (using the Prepayment
Assumption) and (iii) to the Internal Revenue Service the name, title, address and telephone number of the
person who will serve as the representative of each REMIC.
(f) The Master Servicer and the REMIC Administrator shall take such actions and shall cause each REMIC
created hereunder to take such actions as are reasonably within the Master Servicer's or the REMIC
Administrator's control and the scope of its duties more specifically set forth herein as shall be necessary
or desirable to maintain the status of each REMIC as a REMIC under the REMIC Provisions (and the Trustee
shall assist the Master Servicer and the REMIC Administrator, to the extent reasonably requested by the
Master Servicer and the REMIC Administrator to do so). The Master Servicer and the REMIC Administrator shall
not knowingly or intentionally take any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action reasonably within their respective control that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the status of any portion of any
REMIC formed under the Series Supplement as a REMIC or (ii) result in the imposition of a tax upon any such
REMIC (including but not limited to the tax on prohibited transactions as defined in Section 860F(a)(2) of
the Code and the tax on contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, in the absence of an Opinion of Counsel or the indemnification referred to in this sentence, an
"Adverse REMIC Event") unless the Master Servicer or the REMIC Administrator, as applicable, has received an
Opinion of Counsel (at the expense of the party seeking to take such action or, if such party fails to pay
such expense, and the Master Servicer or the REMIC Administrator, as applicable, determines that taking such
action is in the best interest of the Trust Fund and the Certificateholders, at the expense of the Trust
Fund, but in no event at the expense of the Master Servicer, the REMIC Administrator or the Trustee) to the
effect that the contemplated action will not, with respect to each REMIC created hereunder, endanger such
status or, unless the Master Servicer, the REMIC Administrator or both, as applicable, determine in its or
their sole discretion to indemnify the Trust Fund against the imposition of such a tax, result in the
imposition of such a tax. Wherever in this Agreement a contemplated action may not be taken because the
timing of such action might result in the imposition of a tax on the Trust Fund, or may only be taken
pursuant to an Opinion of Counsel that such action would not impose a tax on the Trust Fund, such action may
nonetheless be taken provided that the indemnity given in the preceding sentence with respect to any taxes
that might be imposed on the Trust Fund has been given and that all other preconditions to the taking of such
action have been satisfied. The Trustee shall not take or fail to take any action (whether or not authorized
hereunder) as to which the Master Servicer or the REMIC Administrator, as applicable, has advised it in
writing that it has received an Opinion of Counsel to the effect that an Adverse REMIC Event could occur with
respect to such action. In addition, prior to taking any action with respect to any REMIC created hereunder
or any related assets thereof, or causing any such REMIC to take any action, which is not expressly permitted
under the terms of this Agreement, the Trustee will consult with the Master Servicer or the REMIC
Administrator, as applicable, or its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to any such REMIC, and the Trustee shall not take any such action
or cause any such REMIC to take any such action as to which the Master Servicer or the REMIC Administrator,
as applicable, has advised it in writing that an Adverse REMIC Event could occur. The Master Servicer or the
REMIC Administrator, as applicable, may consult with counsel to make such written advice, and the cost of
same shall be borne by the party seeking to take the action not expressly permitted by this Agreement, but in
no event at the expense of the Master Servicer or the REMIC Administrator. At all times as may be required
by the Code, the Master Servicer will to the extent within its control and the scope of its duties more
specifically set forth herein, maintain substantially all of the assets of each REMIC created hereunder as
"qualified mortgages" as defined in Section 860G(a)(3) of the Code and "permitted investments" as defined in
Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of any REMIC created hereunder as
defined in Section 860F(a)(2) of the Code, on "net income from foreclosure property" of any such REMIC as
defined in Section 860G(c) of the Code, on any contributions to any such REMIC after the Startup Day therefor
pursuant to Section 860G(d) of the Code, or any other tax is imposed by the Code or any applicable provisions
of state or local tax laws, such tax shall be charged (i) to the Master Servicer, if such tax arises out of
or results from a breach by the Master Servicer of any of its obligations under this Agreement or the Master
Servicer has in its sole discretion determined to indemnify the Trust Fund against such tax, (ii) to the
Trustee, if such tax arises out of or results from a breach by the Trustee of any of its obligations under
this Article X, or (iii) otherwise against amounts on deposit in the Custodial Account as provided by Section
3.10 and on the Distribution Date(s) following such reimbursement the aggregate of such taxes shall be
allocated in reduction of the Accrued Certificate Interest on each Class entitled thereto in the same manner
as if such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Master Servicer shall, for federal income tax purposes, maintain books and records
with respect to each REMIC created hereunder on a calendar year and on an accrual basis or as otherwise may
be required by the REMIC Provisions.
(i) Following the Startup Day, neither the Master Servicer nor the Trustee shall accept any contributions
of assets to any REMIC created hereunder unless (subject to Section 10.01(f)) the Master Servicer and the
Trustee shall have received an Opinion of Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in such REMIC will not cause the REMIC to fail
to qualify as a REMIC at any time that any Certificates are outstanding or subject the REMIC to any tax under
the REMIC Provisions or other applicable provisions of federal, state and local law or ordinances.
(j) Neither the Master Servicer nor the Trustee shall (subject to Section 10.01(f)) enter into any
arrangement by which any REMIC created hereunder will receive a fee or other compensation for services nor
permit any such REMIC to receive any income from assets other than "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the "latest
possible maturity date" by which the Certificate Principal Balance of each Class of Certificates (other than
the Interest Only Certificates) representing a regular interest in the applicable REMIC and the
Uncertificated Principal Balance of each Uncertificated REMIC Regular Interest (other than each
Uncertificated REMIC Regular Interest represented by a Class A-V Certificate, if any) and the rights to the
Interest Only Certificates and Uncertificated REMIC Regular Interest represented by a Class A-V Certificate
would be reduced to zero is the Maturity Date for each such Certificate and Interest.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall prepare and file with the
Internal Revenue Service Form 8811, "Information Return for Real Estate Mortgage Investment Conduits (REMIC)
and Issuers of Collateralized Debt Obligations" for each REMIC created hereunder.
(m) Neither the Trustee nor the Master Servicer shall sell, dispose of or substitute for any of the
Mortgage Loans (except in connection with (i) the default, imminent default or foreclosure of a Mortgage
Loan, including but not limited to, the acquisition or sale of a Mortgaged Property acquired by deed in lieu
of foreclosure, (ii) the bankruptcy of any REMIC created hereunder, (iii) the termination of any such REMIC
pursuant to Article IX of this Agreement or (iv) a purchase of Mortgage Loans pursuant to Article II or III
of this Agreement) nor acquire any assets for any such REMIC, nor sell or dispose of any investments in the
Custodial Account or the Certificate Account for gain nor accept any contributions to any such REMIC after
the Closing Date unless it has received an Opinion of Counsel that such sale, disposition, substitution or
acquisition will not (a) affect adversely the status of such REMIC as a REMIC or (b) unless the Master
Servicer has determined in its sole discretion to indemnify the Trust Fund against such tax, cause such REMIC
to be subject to a tax on "prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
Section 10.02. Master Servicer, REMIC Administrator and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Company, the REMIC Administrator and the Master
Servicer for any taxes and costs including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Company or the Master Servicer, as a result of a breach of the Trustee's
covenants set forth in Article VIII or this Article X.
(b) The REMIC Administrator agrees to indemnify the Trust Fund, the Company, the Master Servicer and the
Trustee for any taxes and costs (including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Company, the Master Servicer or the Trustee, as a result of a breach of the
REMIC Administrator's covenants set forth in this Article X with respect to compliance with the REMIC
Provisions, including without limitation, any penalties arising from the Trustee's execution of Tax Returns
prepared by the REMIC Administrator that contain errors or omissions; provided, however, that such liability
will not be imposed to the extent such breach is a result of an error or omission in information provided to
the REMIC Administrator by the Master Servicer in which case Section 10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund, the Company, the REMIC Administrator and the
Trustee for any taxes and costs (including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Company, the REMIC Administrator or the Trustee, as a result of a breach of
the Master Servicer's covenants set forth in this Article X or in Article III with respect to compliance with
the REMIC Provisions, including without limitation, any penalties arising from the Trustee's execution of Tax
Returns prepared by the Master Servicer that contain errors or omissions.
Section 10.03. Designation of REMIC(s).
As provided in Section 10.03 of the Series Supplement.
Section 10.04. Distributions on the Uncertificated REMIC I and REMIC II Regular Interests.
As provided in Section 10.04 of the Series Supplement.
Section 10.05. Compliance with Withholding Requirements.
As provided in Section 10.05 of the Series Supplement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
(a) This Agreement or any Custodial Agreement may be amended from time to time by the Company, the Master
Servicer and the Trustee, without the consent of any of the Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein, which may be inconsistent with any other
provisions herein or therein or to correct any error,
(iii) to modify, eliminate or add to any of its provisions to such extent as shall be necessary or desirable
to maintain the qualification of the Trust Fund as a REMIC at all times that any Certificate is
outstanding or to avoid or minimize the risk of the imposition of any tax on the Trust Fund pursuant
to the Code that would be a claim against the Trust Fund, provided that the Trustee has received an
Opinion of Counsel to the effect that (A) such action is necessary or desirable to maintain such
qualification or to avoid or minimize the risk of the imposition of any such tax and (B) such action
will not adversely affect in any material respect the interests of any Certificateholder,
(iv) to change the timing and/or nature of deposits into the Custodial Account or the Certificate Account
or to change the name in which the Custodial Account is maintained, provided that (A) the Certificate
Account Deposit Date shall in no event be later than the related Distribution Date, (B) such change
shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder and (C) such change shall not result in a reduction of the rating
assigned to any Class of Certificates below the lower of the then-current rating or the rating
assigned to such Certificates as of the Closing Date (in the case of the Insured Certificates (as
defined in the Series Supplement), such determination shall be made without giving effect to the
Certificate Policy (as defined in the Series Supplement)), as evidenced by a letter from each Rating
Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section 5.02(f) or any other provision hereof
restricting transfer of the Class R Certificates, by virtue of their being the "residual interests" in
a REMIC, provided that (A) such change shall not result in reduction of the rating assigned to any
such Class of Certificates below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date (in the case of the Insured Certificates (as defined in the Series
Supplement), such determination shall be made without giving effect to the Certificate Policy (as
defined in the Series Supplement)), as evidenced by a letter from each Rating Agency to such effect,
and (B) such change shall not (subject to Section 10.01(f)), as evidenced by an Opinion of Counsel (at
the expense of the party seeking so to modify, eliminate or add such provisions), cause any REMIC
created hereunder or any of the Certificateholders (other than the transferor) to be subject to a
federal tax caused by a transfer to a Person that is not a Permitted Transferee,
(vi) to make any other provisions with respect to matters or questions arising under this Agreement or such
Custodial Agreement which shall not be materially inconsistent with the provisions of this Agreement,
provided that such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Certificateholder or
(vii) to amend any provision herein or therein that is not material to any of the
Certificateholders.
(b) This Agreement or any Custodial Agreement may also be amended from time to time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates evidencing in the aggregate
not less than 66% of the Percentage Interests of each Class of Certificates with a Certificate Principal
Balance greater than zero affected thereby for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or such Custodial Agreement or of modifying in
any manner the rights of the Holders of Certificates of such Class; provided, however, that no such amendment
shall:
(i) reduce in any manner the amount of, or delay the timing of, payments which are required to be
distributed on any Certificate without the consent of the Holder of such Certificate,
(ii) reduce the aforesaid percentage of Certificates of any Class the Holders of which are required to
consent to any such amendment, in any such case without the consent of the Holders of all Certificates
of such Class then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee shall not consent to any
amendment to this Agreement unless it shall have first received an Opinion of Counsel (subject to Section
10.01(f) and at the expense of the party seeking such amendment) to the effect that such amendment or the
exercise of any power granted to the Master Servicer, the Company or the Trustee in accordance with such
amendment is permitted hereunder and will not result in the imposition of a federal tax on the Trust Fund or
cause any REMIC created under the Series Supplement to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(d) Promptly after the execution of any such amendment the Trustee shall furnish written notification of
the substance of such amendment to the Custodian and each Certificateholder. It shall not be necessary for
the consent of Certificateholders under this Section 11.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
(e) The Company shall have the option, in its sole discretion, to obtain and deliver to the Trustee any
corporate guaranty, payment obligation, irrevocable letter of credit, surety bond, insurance policy or
similar instrument or a reserve fund, or any combination of the foregoing, for the purpose of protecting the
Holders of the Class B Certificates against any or all Realized Losses or other shortfalls. Any such
instrument or fund shall be held by the Trustee for the benefit of the Class B Certificateholders, but shall
not be and shall not be deemed to be under any circumstances included in the Trust Fund. To the extent that
any such instrument or fund constitutes a reserve fund for federal income tax purposes, (i) any reserve fund
so established shall be an outside reserve fund and not an asset of the Trust Fund, (ii) any such reserve
fund shall be owned by the Company, and (iii) amounts transferred by the Trust Fund to any such reserve fund
shall be treated as amounts distributed by the Trust Fund to the Company or any successor, all within the
meaning of Treasury Regulations Section 1.860G-2(h) as it reads as of the Cut-off Date. In connection with
the provision of any such instrument or fund, this Agreement and any provision hereof may be modified, added
to, deleted or otherwise amended in any manner that is related or incidental to such instrument or fund or
the establishment or administration thereof, such amendment to be made by written instrument executed or
consented to by the Company but without the consent of any Certificateholder and without the consent of the
Master Servicer or the Trustee being required unless any such amendment would impose any additional
obligation on, or otherwise adversely affect the interests of the Senior Certificateholders, the Class M
Certificateholders, the Master Servicer or the Trustee, as applicable; provided that the Company obtains
(subject to Section 10.01(f)) an Opinion of Counsel (which need not be an opinion of Independent counsel) to
the effect that any such amendment will not cause (a) any federal tax to be imposed on the Trust Fund,
including without limitation, any federal tax imposed on "prohibited transactions" under Section 860F(a)(1)
of the Code or on "contributions after the startup date" under Section 860G(d)(1) of the Code and (b) any
REMIC created hereunder to fail to qualify as a REMIC at any time that any Certificate is outstanding. In
the event that the Company elects to provide such coverage in the form of a limited guaranty provided by
General Motors Acceptance Corporation, the Company may elect that the text of such amendment to this
Agreement shall be substantially in the form attached hereto as Exhibit K (in which case Residential
Funding's Subordinate Certificate Loss Obligation as described in such exhibit shall be established by
Residential Funding's consent to such amendment) and that the limited guaranty shall be executed in the form
attached hereto as Exhibit L, with such changes as the Company shall deem to be appropriate; it being
understood that the Trustee has reviewed and approved the content of such forms and that the Trustee's
consent or approval to the use thereof is not required.
Section 11.02. Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable jurisdictions in which any
or all of the properties subject to the Mortgages are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected by the Master Servicer and at its expense on direction
by the Trustee (pursuant to the request of Holders of Certificates entitled to at least 25% of the Voting
Rights), but only upon direction accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders.
(b) For the purpose of facilitating the recordation of this Agreement as herein provided and for other
purposes, this Agreement may be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same
instrument.
Section 11.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate to terminate this Agreement or the
Trust Fund, nor entitle such Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the Trust Fund, nor otherwise
affect the rights, obligations and liabilities of any of the parties hereto.
(b) No Certificateholder shall have any right to vote (except as expressly provided herein) or in any
manner otherwise control the operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners or members of an association; nor shall
any Certificateholder be under any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision of this Agreement to institute
any suit, action or proceeding in equity or at law upon or under or with respect to this Agreement, unless
such Holder previously shall have given to the Trustee a written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of Certificates of any Class evidencing in the
aggregate not less than 25% of the related Percentage Interests of such Class, shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or
proceeding it being understood and intended, and being expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of Certificates of any Class shall
have any right in any manner whatever by virtue of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates of such Class or any other Class, or to
obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under
this Agreement, except in the manner herein provided and for the common benefit of Certificateholders of such
Class or all Classes, as the case may be. For the protection and enforcement of the provisions of this
Section 11.03, each and every Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 11.04. Governing Law.
This agreement and the Certificates shall be governed by and construed in accordance with the laws of
the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
Section 11.05. Notices.
As provided in Section 11.05 of the Series Supplement.
Section 11.06. Required Notices to Rating Agency and Subservicer.
The Company, the Master Servicer or the Trustee, as applicable, (i) shall notify each Rating Agency at
such time as it is otherwise required pursuant to this Agreement to give notice of the occurrence of, any of
the events described in clause (a), (b), (c), (d), (g), (h), (i) or (j) below, (ii) shall notify the
Subservicer at such time as it is otherwise required pursuant to this Agreement to give notice of the
occurrence of, any of the events described in clause (a), (b), (c)(1), (g)(1), or (i) below, or (iii)
provide a copy to each Rating Agency at such time as otherwise required to be delivered pursuant to this
Agreement of any of the statements described in clauses (e) and (f) below:
(a) a material change or amendment to this Agreement,
(b) the occurrence of an Event of Default,
(c) (1) the termination or appointment of a successor Master Servicer or (2) the termination or
appointment of a successor Trustee or a change in the majority ownership of the Trustee,
(d) the filing of any claim under the Master Servicer's blanket fidelity bond and the errors and omissions
insurance policy required by Section 3.12 or the cancellation or modification of coverage under any
such instrument,
(e) the statement required to be delivered to the Holders of each Class of Certificates pursuant to
Section 4.03,
(f) the statements required to be delivered pursuant to Sections 3.18 and 3.19,
(g) (1) a change in the location of the Custodial Account or (2) a change in the location of the
Certificate Account,
(h) the occurrence of any monthly cash flow shortfall to the Holders of any Class of Certificates
resulting from the failure by the Master Servicer to make an Advance pursuant to Section 4.04,
(i) the occurrence of the Final Distribution Date, and
(j) the repurchase of or substitution for any Mortgage Loan,
provided, however, that with respect to notice of the occurrence of the events described in clauses (d), (g)
or (h) above, the Master Servicer shall provide prompt written notice to each Rating Agency and the
Subservicer, if applicable, of any such event known to the Master Servicer.
Section 11.07. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Agreement or of the Certificates or the
rights of the Holders thereof.
Section 11.08. Supplemental Provisions for Resecuritization.
This Agreement may be supplemented by means of the addition of a separate Article hereto (a
"Supplemental Article") for the purpose of resecuritizing any of the Certificates issued hereunder, under the
following circumstances. With respect to any Class or Classes of Certificates issued hereunder, or any
portion of any such Class, as to which the Company or any of its Affiliates (or any designee thereof) is the
registered Holder (the "Resecuritized Certificates"), the Company may deposit such Resecuritized Certificates
into a new REMIC, grantor trust or custodial arrangement (a "Restructuring Vehicle") to be held by the
Trustee pursuant to a Supplemental Article. The instrument adopting such Supplemental Article shall be
executed by the Company, the Master Servicer and the Trustee; provided, that neither the Master Servicer nor
the Trustee shall withhold their consent thereto if their respective interests would not be materially
adversely affected thereby. To the extent that the terms of the Supplemental Article do not in any way
affect any provisions of this Agreement as to any of the Certificates initially issued hereunder, the
adoption of the Supplemental Article shall not constitute an "amendment" of this Agreement.
Each Supplemental Article shall set forth all necessary provisions relating to the holding of the
Resecuritized Certificates by the Trustee, the establishment of the Restructuring Vehicle, the issuing of
various classes of new certificates by the Restructuring Vehicle and the distributions to be made thereon,
and any other provisions necessary for the purposes thereof. In connection with each Supplemental Article,
the Company shall deliver to the Trustee an Opinion of Counsel to the effect that (i) the Restructuring
Vehicle will qualify as a REMIC, grantor trust or other entity not subject to taxation for federal income tax
purposes and (ii) the adoption of the Supplemental Article will not endanger the status of the Trust Fund as
a REMIC or (subject to Section 10.01(f)) result in the imposition of a tax upon the Trust Fund (including but
not limited to the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC as set forth in Section 860G(d) of the Code).
Section 11.09. Allocation of Voting Rights.
As provided in Section 11.09 of the Series Supplement.
Section 11.10. No Petition.
As provided in Section 11.10 of the Series Supplement.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01. Intent of the Parties; Reasonableness.
The Company, the Trustee and the Master Servicer acknowledge and agree that the purpose of this
Article XII is to facilitate compliance by the Company with the provisions of Regulation AB and related rules
and regulations of the Commission. The Company shall not exercise its right to request delivery of
information or other performance under these provisions other than in good faith, or for purposes other than
compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission under
the Securities Act and the Exchange Act. Each of the Master Servicer and the Trustee acknowledges that
interpretations of the requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants in the mortgage-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with reasonable requests made by
the Company in good faith for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. Each of the Master Servicer and the Trustee shall cooperate reasonably
with the Company to deliver to the Company (including any of its assignees or designees), any and all
disclosure, statements, reports, certifications, records and any other information necessary in the
reasonable, good faith determination of the Company to permit the Company to comply with the provisions of
Regulation AB.
Section 12.02. Additional Representations and Warranties of the Trustee.
(a)....The Trustee shall be deemed to represent and warrant to the Company as of the date
hereof and on each date on which information is provided to the Company under Sections 12.01, 12.02(b) or
12.03 that, except as disclosed in writing to the Company prior to such date: (i) it is not aware and has
not received notice that any default, early amortization or other performance triggering event has occurred
as to any other Securitization Transaction due to any default of the Trustee; (ii) there are no aspects of
its financial condition that could have a material adverse effect on the performance by it of its trustee
obligations under this Agreement or any other Securitization Transaction as to which it is the trustee; (iii)
there are no material legal or governmental proceedings pending (or known to be contemplated) against it that
would be material to Certificateholders; (iv) there are no relationships or transactions relating to the
Trustee with respect to the Company or any sponsor, issuing entity, servicer, trustee, originator,
significant obligor, enhancement or support provider or other material transaction party (as each of such
terms are used in Regulation AB) relating to the Securitization Transaction contemplated by the Agreement, as
identified by the Company to the Trustee in writing as of the Closing Date (each, a "Transaction Party") that
are outside the ordinary course of business or on terms other than would be obtained in an arm's length
transaction with an unrelated third party, apart from the Securitization Transaction, and that are material
to the investors' understanding of the Certificates; and (v) the Trustee is not an affiliate of any
Transaction Party. The Company shall notify the Trustee of any change in the identity of a Transaction Party
after the Closing Date.
(b)....If so requested by the Company on any date following the Closing Date, the Trustee
shall, within five Business Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or, if any such representation and
warranty is not accurate as of the date of such confirmation, provide the pertinent facts, in writing, to the
Company. Any such request from the Company shall not be given more than once each calendar quarter, unless
the Company shall have a reasonable basis for determining that any of the representations and warranties may
not be accurate.
Section 12.03. Information to Be Provided by the Trustee.
For so long as the Certificates are outstanding, for the purpose of satisfying the Company's
reporting obligation under the Exchange Act with respect to any class of Certificates, the Trustee shall
provide to the Company a written description of (a) any litigation or governmental proceedings pending
against the Trustee as of the last day of each calendar month that would be material to Certificateholders,
and (b) any affiliations or relationships (as described in Item 1119 of Regulation AB) that develop following
the Closing Date between the Trustee and any Transaction Party of the type described in Section 12.02(a)(iv)
or 12.02(a)(v) as of the last day of each calendar year. Any descriptions required with respect to legal
proceedings, as well as updates to previously provided descriptions, under this Section 12.03 shall be given
no later than five Business Days prior to the Determination Date following the month in which the relevant
event occurs, and any notices and descriptions required with respect to affiliations, as well as updates to
previously provided descriptions, under this Section 12.03 shall be given no later than January 31 of the
calendar year following the year in which the relevant event occurs. As of the date the Company or Master
Servicer files each report on Form 10-D and report on Form 10-K with respect to the Certificates, the Trustee
will be deemed to represent that any information previously provided by the Trustee under this Article XII is
materially correct and does not have any material omissions unless the Trustee has provided an update to such
information. The Company will allow the Trustee to review any disclosure relating to material litigation
against the Trustee prior to filing such disclosure with the Commission to the extent the Company changes the
information provided by the Trustee.
Section 12.04. Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Trustee shall:
(a) deliver to the Company a report (in form and substance reasonably satisfactory to the Company)
regarding the Trustee's assessment of compliance with the applicable Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB. Such report shall be signed by an authorized officer of the Trustee, and shall
address each of the Servicing Criteria specified on Exhibit R hereto; and
(b) deliver to the Company a report of a registered public accounting firm reasonably acceptable to the
Company that attests to, and reports on, the assessment of compliance made by the Trustee and delivered
pursuant to the preceding paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and
2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.
Section 12.05. Indemnification; Remedies.
(a) The Trustee shall indemnify the Company, each affiliate of the Company, the Master Servicer and each
broker dealer acting as underwriter, placement agent or initial purchaser of the Certificates or each Person
who controls any of such parties (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the respective present and former directors, officers, employees and agents of each of
the foregoing, and shall hold each of them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
.......................(i)(A) any untrue statement of a material fact contained or alleged to be contained in
any information, report, certification, accountants' attestation or other material provided under this
Article XII by or on behalf of the Trustee (collectively, the "Trustee Information"), or (B) the omission or
alleged omission to state in the Trustee Information a material fact required to be stated in the Trustee
Information or necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, by way of clarification, that clause (B) of this paragraph
shall be construed solely by reference to the Trustee Information and not to any other information
communicated in connection with a sale or purchase of securities, without regard to whether the Trustee
Information or any portion thereof is presented together with or separately from such other information; or
.......................(ii) any failure by the Trustee to deliver any information, report, certification or
other material when and as required under this Article XII, other than a failure by the Trustee to deliver an
accountants' attestation.
(b) In the case of any failure of performance described in clause (ii) of Section 12.05(a), the Trustee
shall (i) promptly reimburse the Company for all costs reasonably incurred by the Company in order to obtain
the information, report, certification, accountants' letter or other material not delivered by the Trustee as
required and (ii) cooperate with the Company to mitigate any damages that may result from such failure.
(c) The Company and the Master Servicer shall indemnify the Trustee, each affiliate of the Trustee or each
Person who controls the Trustee (within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the respective present and former directors, officers, employees and agents of the
Trustee, and shall hold each of them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon (i) any untrue statement of a material fact
contained or alleged to be contained in any information provided under this Agreement by or on behalf of the
Company or Master Servicer for inclusion in any report filed with Commission under the Exchange Act
(collectively, the "RFC Information"), or (ii) the omission or alleged omission to state in the RFC
Information a material fact required to be stated in the RFC Information or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading; provided,
by way of clarification, that clause (ii) of this paragraph shall be construed solely by reference to the RFC
Information and not to any other information communicated in connection with a sale or purchase of
securities, without regard to whether the RFC Information or any portion thereof is presented together with
or separately from such other information.
EXHIBIT A
FORM OF CLASS A CERTIFICATE, [PRINCIPAL ONLY/CLASS A-P] CERTIFICATE AND [INTEREST ONLY/CLASS A-V] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL
ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX
ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS ___________
__, ____. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [___]% OF THE PREPAYMENT SPEED ASSUMPTION (AS DESCRIBED
IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH
RATE,] THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $[ ] OF OID PER [$1,000] [$100,000] OF
[INITIAL CERTIFICATE PRINCIPAL BALANCE] [NOTIONAL AMOUNT], THE YIELD TO MATURITY IS [ ]% AND THE AMOUNT
OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $[ ] PER [$1,000] [$100,000]
OF [INITIAL CERTIFICATE PRINCIPAL BALANCE] [NOTIONAL AMOUNT], COMPUTED USING THE APPROXIMATE METHOD. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT SPEED ASSUMPTION
OR AT ANY OTHER RATE OR AS TO THE CONSTANCY OF THE PASS-THROUGH RATE.]
Certificate No. [ %][Variable] Pass-Through Rate
[based on a Notional Amount]
Class A- Senior
Date of Pooling and Servicing [Percentage Interest: %]
Agreement and Cut-off Date:
___________ 1, ____ Aggregate Initial [Certificate Principal
Balance] [[Interest Only/Class A-V] Notional
First Distribution Date: Amount] [Subclass Notional Amount] of the
_________ 25, ____ Class A- Certificates:
Master Servicer: [Initial] [Certificate Principal
Residential Funding Balance] [Interest Only/Class A-V] [Subclass]
Corporation Notional Amount] of this Certificate:
$ ]
Assumed Final
Distribution Date: CUSIP 76110F-
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES ____-___
evidencing a percentage interest in the distributions allocable to the Class
A- Certificates with respect to a Trust Fund consisting primarily of a pool
of conventional one- to four-family fixed interest rate first mortgage loans
formed and sold by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does not represent an
obligation of or interest in Residential Accredit Loans, Inc., the Master Servicer, the Trustee referred to
below or GMAC Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality or by Residential
Accredit Loans, Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, Inc. or any of their affiliates
will have any obligation with respect to any certificate or other obligation secured by or payable from
payments on the Certificates.
This certifies that is the
registered owner of the Percentage Interest evidenced by this Certificate [(obtained by dividing the [Initial
Certificate Principal Balance] [Initial [Interest Only/Class A-V] Notional Amount] of this Certificate by the
aggregate [Initial Certificate Principal Balance of all Class A- Certificates] [Initial [Interest
Only/Class A-V] Notional Amounts of all [Interest Only/Class A-V] Certificates], both as specified above)] in
certain distributions with respect to the Trust Fund consisting primarily of an interest in a pool of
conventional one- to four-family fixed interest rate first mortgage loans (the "Mortgage Loans"), formed and
sold by Residential Accredit Loans, Inc. (hereinafter called the "Company," which term includes any successor
entity under the Agreement referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement") among the Company, the Master Servicer and
__________________, as trustee (the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each
month or, if such 25th day is not a Business Day, the Business Day immediately following (the "Distribution
Date"), commencing as described in the Agreement, to the Person in whose name this Certificate is registered
at the close of business on the last day (or if such last day is not a Business Day, the Business Day
immediately preceding such last day) of the month immediately preceding the month of such distribution (the
"Record Date"), from the Available Distribution Amount in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount [(of interest and principal, if any)] required to be
distributed to Holders of Class A- Certificates on such Distribution Date. [The [Interest Only/Class
A-V] Notional Amount of the [Interest Only/Class A-V] Certificates as of any date of determination is equal
to the aggregate Stated Principal Balance of the Mortgage Loans corresponding to the Uncertificated REMIC
Regular Interests represented by such [Interest Only/Class A-V] Certificates.] [The Subclass Notional Amount
of the [Interest Only/Class A-V]- Certificates as of any date of determination is equal to the aggregate
Stated Principal Balance of the Mortgage Loans corresponding to the Uncertificated REMIC Regular Interests
represented by such [Interest Only/Class A-V]- Certificates immediately prior to such date.] [The [Interest
Only/Class A-V][- ] Certificates have no Certificate Principal Balance.]
Distributions on this Certificate will be made either by the Master Servicer acting on behalf
of the Trustee or by a Paying Agent appointed by the Trustee in immediately available funds (by wire transfer
or otherwise) for the account of the Person entitled thereto if such Person shall have so notified the Master
Servicer or such Paying Agent, or by check mailed to the address of the Person entitled thereto, as such name
and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and surrender of this Certificate at
the office or agency appointed by the Trustee for that purpose in the City and State of New York. The
[Initial Certificate Principal Balance] [Initial [Interest Only/Class A-V] Notional Amount] [initial Subclass
Notional Amount] of this Certificate is set forth above.] [The Certificate Principal Balance hereof will be
reduced to the extent of distributions allocable to principal and any Realized Losses allocable hereto.]
This Certificate is one of a duly authorized issue of Certificates issued in several Classes
designated as Mortgage Asset-Backed Pass-Through Certificates of the Series specified hereon (herein
collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and recoveries
respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. In the event
Master Servicer funds are advanced with respect to any Mortgage Loan, such advance is reimbursable to the
Master Servicer, to the extent provided in the Agreement, from related recoveries on such Mortgage Loan or
from other cash that would have been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or the Certificate
Account created for the benefit of Certificateholders may be made by the Master Servicer from time to time
for purposes other than distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of advances made, or certain expenses incurred, by
either of them.
The Agreement permits, with certain exceptions therein provided, the amendment of the Agreement
and the modification of the rights and obligations of the Company, the Master Servicer and the Trustee and
the rights of the Certificateholders under the Agreement at any time by the Company, the Master Servicer and
the Trustee with the consent of the Holders of Certificates evidencing in the aggregate not less than 66% of
the Percentage Interests of each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders of this
Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of any of the Certificates and,
in certain additional circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set forth, the transfer
of this Certificate is registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Trustee in the City and State of New
York, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly executed by the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more new Certificates of
authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons in Classes and in
denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange, but the
Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar and any agent of
the Company, the Master Servicer, the Trustee or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither the Company, the Master
Servicer, the Trustee nor any such agent shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of the State of
New York.
The obligations created by the Agreement in respect of the Certificates and the Trust Fund
created thereby shall terminate upon the payment to Certificateholders of all amounts held by or on behalf of
the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the
maturity or other liquidation of the last Mortgage Loan subject thereto or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (ii) the purchase by the
Master Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in respect of
such Mortgage Loans, thereby effecting early retirement of the Certificates. The Agreement permits, but does
not require, the Master Servicer to (i) purchase at a price determined as provided in the Agreement all
remaining Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii) purchase in whole,
but not in part, all of the Certificates from the Holders thereof; provided, that any such option may only be
exercised if the Pool Stated Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans.
Reference is hereby made to the further provisions of this Certificate set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Certificate Registrar,
by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated: ______________________________ [_________________________],
as Trustee
By:_______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: ______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
___________________________________________________________________________(Please print or typewrite name and
address including postal zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of registration of such interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate to the following address:
Dated: ______________________
_______________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available funds to
____________________________________________________________________________ for the account of
____________________________________________ account number ___________________, or, if mailed by check, to
___________________________________________________. Applicable statements should be mailed to
___________________________________________________________________.
This information is provided by____________________________________ , the assignee named above, or
_________________________________, as its agent.
EXHIBIT B
FORM OF CLASS M CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES [CLASS M-1
CERTIFICATES] [AND CLASS M-2 CERTIFICATES] AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL
ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX
ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS ___________
__, ____. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [___]% OF THE PREPAYMENT SPEED ASSUMPTION (AS DESCRIBED
IN THE PROSPECTUS SUPPLEMENT), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $[____] OF OID PER $[1,000]
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS [_____]% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $[____] PER $[1,000] OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, COMPUTED UNDER THE APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS
WILL PREPAY AT A RATE BASED ON THE PREPAYMENT SPEED ASSUMPTION OR AT ANY OTHER RATE.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE
OR HOLDING OF THIS CERTIFICATE (OR INTEREST HEREIN) THAT EITHER (A) SUCH TRANSFEREE IS NOT AN
INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY PLAN, OR ANY OTHER PERSON, ACTING, DIRECTLY
OR INDIRECTLY, ON BEHALF OF OR PURCHASING ANY CERTIFICATE WITH "PLAN ASSETS" OF ANY PLAN (A "PLAN
INVESTOR"), (B) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION
EXEMPTION ("PTE") 94-29, AS MOST RECENTLY AMENDED, PTE 2002-41, 67 FED. REG. 54487 (AUGUST 22, 2002)
(THE "RFC EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY
OF THE RFC EXEMPTION INCLUDING THAT SUCH CERTIFICATE MUST BE RATED, AT THE TIME OF PURCHASE, NOT LOWER
THAN "BBB-" (OR ITS EQUIVALENT) BY STANDARD & POOR'S, FITCH OR XXXXX'X OR (C) (I) THE TRANSFEREE IS AN
INSURANCE COMPANY, (II) THE SOURCE OF FUNDS TO BE USED BY IT TO PURCHASE THE CERTIFICATE IS AN
"INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 95-60), AND (III) THE CONDITIONS SET FORTH IN SECTIONS I AND III
OF PTCE 95-60 HAVE BEEN SATISFIED (EACH ENTITY THAT SATISFIES THIS CLAUSE (C), A "COMPLYING INSURANCE
COMPANY).
IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR HELD BY ANY PERSON THAT DOES NOT
SATISFY THE CONDITIONS DESCRIBED IN THE PRECEDING PARAGRAPH, THEN THE LAST PRECEDING TRANSFEREE THAT
EITHER (I) IS NOT A PLAN INVESTOR, (II) ACQUIRED SUCH CERTIFICATE IN COMPLIANCE WITH THE RFC
EXEMPTION, OR (III) IS A COMPLYING INSURANCE COMPANY SHALL BE RESTORED, TO THE EXTENT PERMITTED BY
LAW, TO ALL RIGHTS AND OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF SUCH
TRANSFER OF THIS CERTIFICATE. THE TRUSTEE SHALL BE UNDER NO LIABILITY TO ANY PERSON FOR MAKING ANY
PAYMENTS DUE ON THIS CERTIFICATE TO SUCH PRECEDING TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE (OR INTEREST HEREIN)
WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION 5.02(e) OF THE POOLING AND SERVICING AGREEMENT SHALL
INDEMNIFY AND HOLD HARMLESS THE COMPANY, THE TRUSTEE, THE MASTER SERVICER, ANY SUBSERVICER, AND THE TRUST
FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR EXPENSES INCURRED BY SUCH PARTIES AS A RESULT
OF SUCH ACQUISITION OR HOLDING.
Certificate No. [ ]% Pass-Through Rate
Class M- Subordinate Aggregate Certificate
Principal Balance
Date of Pooling and Servicing of the Class M Certificates:
Agreement and Cut-off Date: $
___________ 1, ____
Initial Certificate Principal
First Distribution Date: Balance of this Certificate:
_________ 25, ____ $
Master Servicer: CUSIP: 76110F-
Residential Funding Corporation
Assumed Final Distribution Date:
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the Class M-
Certificates with respect to the Trust Fund consisting primarily of a pool of conventional one-
to four-family fixed interest rate first mortgage loans formed and sold by RESIDENTIAL ACCREDIT
LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does not represent an
obligation of or interest in Residential Accredit Loans, Inc., the Master Servicer, the Trustee referred to
below or GMAC Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality or by Residential
Accredit Loans, Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, Inc. or any of their affiliates
will have any obligation with respect to any certificate or other obligation secured by or payable from
payments on the Certificates.
This certifies that __________________________________________________ is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing the Certificate Principal
Balance of this Certificate by the aggregate Certificate Principal Balance of all Class M- Certificates,
both as specified above) in certain distributions with respect to a Trust Fund consisting primarily of a pool
of conventional one- to four-family fixed interest rate first mortgage loans (the "Mortgage Loans"), formed
and sold by Residential Accredit Loans, Inc. (hereinafter called the "Company," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was created pursuant to a Pooling
and Servicing Agreement dated as specified above (the "Agreement") among the Company, the Master Servicer and
__________________, as trustee (the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each
month or, if such 25th day is not a Business Day, the Business Day immediately following (the "Distribution
Date"), commencing as described in the Agreement, to the Person in whose name this Certificate is registered
at the close of business on the last day (or if such last day is not a Business Day, the Business Day
immediately preceding such last day) of the month immediately preceding the month of such distribution (the
"Record Date"), from the Available Distribution Amount in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount (of interest and principal, if any) required to be
distributed to Holders of Class M- Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master Servicer acting on behalf
of the Trustee or by a Paying Agent appointed by the Trustee in immediately available funds (by wire transfer
or otherwise) for the account of the Person entitled thereto if such Person shall have so notified the Master
Servicer or such Paying Agent, or by check mailed to the address of the Person entitled thereto, as such name
and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and surrender of this Certificate at
the office or agency appointed by the Trustee for that purpose in the City and State of New York. The
Initial Certificate Principal Balance of this Certificate is set forth above. The Certificate Principal
Balance hereof will be reduced to the extent of the distributions allocable to principal and any Realized
Losses allocable hereto.
Any transferee of this Certificate will be deemed to have represented by virtue of its purchase
or holding of this Certificate (or interest herein) that either (a) such transferee is not an investment
manager, a named fiduciary or a trustee of any plan, or any other person, acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any plan (a "plan investor"), (b) it has
acquired and is holding such Certificate in reliance on prohibited transaction exemption ("PTE") 94-29, as
most recently amended, PTE 2002-41, 67 fed. Reg. 54487 (August 22, 2002) (the "RFC Exemption"), and that it
understands that there are certain conditions to the availability of the RFC Exemption including that such
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or its equivalent) by Standard &
Poor's, Fitch or Xxxxx'x or (c) (i) the transferee is an insurance company, (ii) the source of funds to be
used by it to purchase the Certificate is an "insurance company general account" (within the meaning of U.S.
Department of Labor prohibited transaction class exemption ("PTCE") 95-60), and (iii) the conditions set
forth in Sections I and III of PTCE 95-60 have been satisfied (each entity that satisfies this clause (c), a
"complying insurance company).
If this Certificate (or any interest herein) is acquired or held by any person that does not
satisfy the conditions described in the preceding paragraph, then the last preceding transferee that either
(i) is not a plan investor, (ii) acquired such Certificate in compliance with the RFC Exemption, or (iii) is
a complying insurance company shall be restored, to the extent permitted by law, to all rights and
obligations as Certificate owner thereof retroactive to the date of such transfer of this Certificate. The
Trustee shall be under no liability to any person for making any payments due on this Certificate to such
preceding transferee.
This Certificate is one of a duly authorized issue of Certificates issued in several Classes
designated as Mortgage Asset-Backed Pass-Through Certificates of the Series specified hereon (herein
collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and recoveries
respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. In the event
Master Servicer funds are advanced with respect to any Mortgage Loan, such advance is reimbursable to the
Master Servicer, to the extent provided in the Agreement, from related recoveries on such Mortgage Loan or
from other cash that would have been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or the Certificate
Account created for the benefit of Certificateholders may be made by the Master Servicer from time to time
for purposes other than distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of advances made, or certain expenses incurred, by
either of them.
The Agreement permits, with certain exceptions therein provided, the amendment of the Agreement
and the modification of the rights and obligations of the Company, the Master Servicer and the Trustee and
the rights of the Certificateholders under the Agreement at any time by the Company, the Master Servicer and
the Trustee with the consent of the Holders of Certificates evidencing in the aggregate not less than 66% of
the Percentage Interests of each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders of this
Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of any of the Certificates and,
in certain additional circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set forth, the transfer
of this Certificate is registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Trustee in the City and State of New
York, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly executed by the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more new Certificates of
authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons in Classes and in
denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange, but the
Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar and any agent of
the Company, the Master Servicer, the Trustee or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither the Company, the Master
Servicer, the Trustee nor any such agent shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of the State of
New York.
The obligations created by the Agreement in respect of the Certificates and the Trust Fund
created thereby shall terminate upon the payment to Certificateholders of all amounts held by or on behalf of
the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the
maturity or other liquidation of the last Mortgage Loan subject thereto or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (ii) the purchase by the
Master Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in respect of
such Mortgage Loans, thereby effecting early retirement of the Certificates. The Agreement permits, but does
not require, the Master Servicer to (i) purchase at a price determined as provided in the Agreement all
remaining Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii) purchase in whole,
but not in part, all of the Certificates from the Holders thereof; provided, that any such option may only be
exercised if the Pool Stated Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the Certificate Registrar,
by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated: ______________________________ [_________________________],
as Trustee
By:_______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: ______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
___________________________________________________________________________(Please print or typewrite name and
address including postal zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of registration of such interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate to the following address:
Dated: ______________________
_______________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available funds to
____________________________________________________________________________ for the account of
____________________________________________ account number ___________________, or, if mailed by check, to
___________________________________________________. Applicable statements should be mailed to
___________________________________________________________________.
This information is provided by____________________________________ , the assignee named above, or
_________________________________, as its agent.
EXHIBIT C
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES AND CLASS M CERTIFICATES [AND
CLASS B-1] [CLASS B-2 CERTIFICATES] DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH
ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A
CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
MASTER SERVICER, THE COMPANY AND THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE
COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
CODE. THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX
ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS ___________
__, ____. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT 100% OF THE PREPAYMENT SPEED ASSUMPTION (AS DESCRIBED
IN THE PROSPECTUS SUPPLEMENT), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $[ ] OF OID PER
$[1,000] OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS [ ]% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $[ ] PER $[1,000] OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, COMPUTED UNDER THE APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS
WILL PREPAY AT A RATE BASED ON THE PREPAYMENT SPEED ASSUMPTION OR AT ANY OTHER RATE.
Certificate No. [ ]% Pass-Through Rate
Class B- Subordinate Aggregate Certificate
Principal Balance
Date of Pooling and Servicing of the Class B-
Agreement and Cut-off Date: Certificates as of
___________ 1, ____ the Cut-off Date:
$
First Distribution Date:
_________ 25, ____ Initial Certificate Principal
Balance of this Certificate:
Master Servicer: $
Residential Funding Corporation
Assumed Final Distribution Date:
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the Class B-
Certificates with respect to the Trust Fund consisting primarily of a pool of conventional one-
to four-family fixed interest rate first mortgage loans formed and sold by RESIDENTIAL ACCREDIT
LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does not represent an
obligation of or interest in Residential Accredit Loans, Inc., the Master Servicer, the Trustee referred to
below or GMAC Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality or by Residential
Accredit Loans, Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, Inc. or any of their affiliates
will have any obligation with respect to any certificate or other obligation secured by or payable from
payments on the Certificates.
This certifies that Residential Accredit Loans, Inc. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Certificate Principal Balance of this
Certificate by the aggregate Certificate Principal Balance of all Class B- Certificates, both as
specified above) in certain distributions with respect to a Trust Fund consisting primarily of a pool of
conventional one- to four-family fixed interest rate first mortgage loans (the "Mortgage Loans"), formed and
sold by Residential Accredit Loans, Inc. (hereinafter called the "Company," which term includes any successor
entity under the Agreement referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement") among the Company, the Master Servicer and
__________________, as trustee (the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each
month or, if such 25th day is not a Business Day, the Business Day immediately following (the "Distribution
Date"), commencing on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such last day is not a Business
Day, the Business Day immediately preceding such last day) of the month next preceding the month of such
distribution (the "Record Date"), from the Available Distribution Amount in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount (of interest and principal, if any)
required to be distributed to Holders of Class B Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master Servicer acting on behalf
of the Trustee or by a Paying Agent appointed by the Trustee in immediately available funds (by wire transfer
or otherwise) for the account of the Person entitled thereto if such Person shall have so notified the Master
Servicer or such Paying Agent, or by check mailed to the address of the Person entitled thereto, as such name
and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and surrender of this Certificate at
the office or agency appointed by the Trustee for that purpose in the City and State of New York. The
Initial Certificate Principal Balance of this Certificate is set forth above. The Certificate Principal
Balance hereof will be reduced to the extent of the distributions allocable to principal and any Realized
Losses allocable hereto.
No transfer of this Class B Certificate will be made unless such transfer is exempt from the
registration requirements of the Securities Act of 1933, as amended, and any applicable state securities laws
or is made in accordance with said Act and laws. In the event that such a transfer is to be made, (i) the
Trustee or the Company may require an opinion of counsel acceptable to and in form and substance satisfactory
to the Trustee and the Company that such transfer is exempt (describing the applicable exemption and the
basis therefor) from or is being made pursuant to the registration requirements of the Securities Act of
1933, as amended, and of any applicable statute of any state and (ii) the transferee shall execute an
investment letter in the form described by the Agreement. The Holder hereof desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Company, the Master Servicer and the Certificate
Registrar acting on behalf of the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with such Federal and state laws. In connection with any such transfer,
the Trustee will also require either (i) an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee, the Company and the Master Servicer with respect to the permissibility of such
transfer under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of
the Internal Revenue Code (the "Code") and stating, among other things, that the transferee's acquisition of
a Class B Certificate will not constitute or result in a non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code or (ii) a representation letter, in the form as described by Section
5.02(e) of the Agreement, either stating that the transferee is not an employee benefit or other plan subject
to the prohibited transaction provisions of ERISA or Section 4975 of the Code (a "Plan"), or any other person
(including an investment manager, a named fiduciary or a trustee of any Plan) acting, directly or indirectly,
on behalf of or purchasing any Certificate with "plan assets" of any Plan, or stating that the transferee is
an insurance company, the source of funds to be used by it to purchase the Certificate is an "insurance
company general account" (within the meaning of Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60), and the purchase is being made in reliance upon the availability of the exemptive relief
afforded under Sections I and III of PTCE 95-60.
This Certificate is one of a duly authorized issue of Certificates issued in several Classes
designated as Mortgage Asset-Backed Pass-Through Certificates of the Series specified hereon (herein
collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and recoveries
respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. In the event
Master Servicer funds are advanced with respect to any Mortgage Loan, such advance is reimbursable to the
Master Servicer, to the extent provided in the Agreement, from related recoveries on such Mortgage Loan or
from other cash that would have been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or the Certificate
Account created for the benefit of Certificateholders may be made by the Master Servicer from time to time
for purposes other than distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of advances made, or certain expenses incurred, by
either of them.
The Agreement permits, with certain exceptions therein provided, the amendment of the Agreement
and the modification of the rights and obligations of the Company, the Master Servicer and the Trustee and
the rights of the Certificateholders under the Agreement at any time by the Company, the Master Servicer and
the Trustee with the consent of the Holders of Certificates evidencing in the aggregate not less than 66% of
the Percentage Interests of each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders of this
Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of any of the Certificates and,
in certain additional circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set forth, the transfer
of this Certificate is registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Trustee in the City and State of New
York, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly executed by the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more new Certificates of
authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons in Classes and in
denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange, but the
Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar and any agent of
the Company, the Master Servicer, the Trustee or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither the Company, the Master
Servicer, the Trustee nor any such agent shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of the State of
New York.
The obligations created by the Agreement in respect of the Certificates and the Trust Fund
created thereby shall terminate upon the payment to Certificateholders of all amounts held by or on behalf of
the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the
maturity or other liquidation of the last Mortgage Loan subject thereto or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (ii) the purchase by the
Master Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in respect of
such Mortgage Loans, thereby effecting early retirement of the Certificates. The Agreement permits, but does
not require, the Master Servicer to (i) purchase at a price determined as provided in the Agreement all
remaining Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii) purchase in whole,
but not in part, all of the Certificates from the Holders thereof; provided, that any such option may only be
exercised if the Pool Stated Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the Certificate Registrar,
by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated: ______________________________ [_________________________],
as Trustee
By:_______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: ______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
___________________________________________________________________________(Please print or typewrite name and
address including postal zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of registration of such interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate to the following address:
Dated: ______________________
_______________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available funds to
____________________________________________________________________________ for the account of
____________________________________________ account number ___________________, or, if mailed by check, to
___________________________________________________. Applicable statements should be mailed to
___________________________________________________________________.
This information is provided by____________________________________ , the assignee named above, or
_________________________________, as its agent.
EXHIBIT D
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON OR A DISQUALIFIED
ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL INTEREST" IN A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A
CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
MASTER SERVICER, THE COMPANY AND THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE
COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE
PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES, OR ANY AGENCY
OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF
ITS ACTIVITIES ARE SUBJECT TO TAX AND EXCEPT FOR XXXXXXX MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY
OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C) ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES
DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS
SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING THE TAX IMPOSED BY
SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES
DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER SECTION 775(a) OF THE
CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO
AS A "DISQUALIFIED ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY
PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH
HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.
Certificate No. [ ]% Pass-Through Rate
Class R Senior Aggregate Initial Certificate
Principal Balance of the
Date of Pooling and Servicing Class R Certificates:
Agreement and Cut-off Date: $100.00
___________ 1, ____
Initial Certificate Principal
First Distribution Date: Balance of this Certificate:
_________ 25, ____ $
Master Servicer: Percentage Interest:
Residential Funding Corporation %
Assumed Final Distribution Date: CUSIP 76110F-
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the Class R Certificates
with respect to the Trust Fund consisting primarily of a pool of conventional one- to
four-family fixed interest rate first mortgage loans formed and sold by RESIDENTIAL ACCREDIT
LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and does not represent an
obligation of or interest in Residential Accredit Loans, Inc., the Master Servicer, the Trustee referred to
below or GMAC Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed or insured by any governmental agency or instrumentality or by Residential
Accredit Loans, Inc., the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, Inc. or any of their affiliates
will have any obligation with respect to any certificate or other obligation secured by or payable from
payments on the Certificates.
This certifies that is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing the Initial Certificate
Principal Balance of this Certificate by the aggregate Initial Certificate Principal Balance of all Class R
Certificates, both as specified above) in certain distributions with respect to the Trust Fund consisting
primarily of a pool of conventional one- to four-family fixed interest rate first mortgage loans (the
"Mortgage Loans"), formed and sold by Residential Accredit Loans, Inc. (hereinafter called the "Company,"
which term includes any successor entity under the Agreement referred to below). The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the "Agreement") among the Company,
the Master Servicer and __________________, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each
month or, if such 25th day is not a Business Day, the Business Day immediately following (the "Distribution
Date"), commencing as described in the Agreement, to the Person in whose name this Certificate is registered
at the close of business on the last day (or if such last day is not a Business Day, the Business Day
immediately preceding such last day) of the month immediately preceding the month of such distribution (the
"Record Date"), from the Available Distribution Amount in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount (of interest and principal, if any) required to be
distributed to Holders of Class R Certificates on such Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be bound by the restrictions
set forth in the Agreement to the effect that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to the Trustee of, among other
things, an affidavit to the effect that it is a United States Person and Permitted Transferee, (iii) any
attempted or purported transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the purported transferee, and (iv)
if any person other than a United States Person and a Permitted Transferee acquires any Ownership Interest in
this Certificate in violation of such restrictions, then the Company will have the right, in its sole
discretion and without notice to the Holder of this Certificate, to sell this Certificate to a purchaser
selected by the Company, which purchaser may be the Company, or any affiliate of the Company, on such terms
and conditions as the Company may choose.
Notwithstanding the above, the final distribution on this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and surrender of this Certificate at
the office or agency appointed by the Trustee for that purpose in the City and State of New York. The
Initial Certificate Principal Balance of this Certificate is set forth above. The Certificate Principal
Balance hereof will be reduced to the extent of distributions allocable to principal and any Realized Losses
allocable hereto. Notwithstanding the reduction of the Certificate Principal Balance hereof to zero, this
Certificate will remain outstanding under the Agreement and the Holder hereof may have additional obligations
with respect to this Certificate, including tax liabilities, and may be entitled to certain additional
distributions hereon, in accordance with the terms and provisions of the Agreement.
No transfer of this Class R Certificate will be made unless the Trustee has received either (i)
an opinion of counsel acceptable to and in form and substance satisfactory to the Trustee, the Company and
the Master Servicer with respect to the permissibility of such transfer under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code (the "Code") and
stating, among other things, that the transferee's acquisition of a Class R Certificate will not constitute
or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, stating that the transferee is not
an employee benefit or other plan subject to the prohibited transaction provisions of ERISA or Section 4975
of the Code (a "Plan"), or any other person (including an investment manager, a named fiduciary or a trustee
of any Plan) acting, directly or indirectly, on behalf of or purchasing any Certificate with "plan assets" of
any Plan.
This Certificate is one of a duly authorized issue of Certificates issued in several Classes
designated as Mortgage Asset-Backed Pass-Through Certificates of the Series specified hereon (herein
collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and recoveries
respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. In the event
Master Servicer funds are advanced with respect to any Mortgage Loan, such advance is reimbursable to the
Master Servicer, to the extent provided in the Agreement, from related recoveries on such Mortgage Loan or
from other cash that would have been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or the Certificate
Account created for the benefit of Certificateholders may be made by the Master Servicer from time to time
for purposes other than distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of advances made, or certain expenses incurred, by
either of them.
The Agreement permits, with certain exceptions therein provided, the amendment of the Agreement
and the modification of the rights and obligations of the Company, the Master Servicer and the Trustee and
the rights of the Certificateholders under the Agreement at any time by the Company, the Master Servicer and
the Trustee with the consent of the Holders of Certificates evidencing in the aggregate not less than 66% of
the Percentage Interests of each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all future holders of this
Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof
whether or not notation of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of any of the Certificates and,
in certain additional circumstances, without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set forth, the transfer
of this Certificate is registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Trustee in the City and State of New
York, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly executed by the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more new Certificates of
authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons in Classes and in
denominations specified in the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or exchange, but the
Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar and any agent of
the Company, the Master Servicer, the Trustee or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither the Company, the Master
Servicer, the Trustee nor any such agent shall be affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the laws of the State of
New York.
The obligations created by the Agreement in respect of the Certificates and the Trust Fund
created thereby shall terminate upon the payment to Certificateholders of all amounts held by or on behalf of
the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the
maturity or other liquidation of the last Mortgage Loan subject thereto or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (ii) the purchase by the
Master Servicer from the Trust Fund of all remaining Mortgage Loans and all property acquired in respect of
such Mortgage Loans, thereby effecting early retirement of the Certificates. The Agreement permits, but does
not require, the Master Servicer to (i) purchase at a price determined as provided in the Agreement all
remaining Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii) purchase in whole,
but not in part, all of the Certificates from the Holders thereof; provided, that any such option may only be
exercised if the Pool Stated Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans.
Reference is hereby made to the further provisions of this Certificate set forth on the reverse
hereof, which further provisions shall for all purpose have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Certificate Registrar,
by manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be valid
for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated: ______________________________ [_________________________],
as Trustee
By:_______________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: ______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
___________________________________________________________________________(Please print or typewrite name and
address including postal zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of registration of such interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate to the following address:
Dated: ______________________
_______________________________________
Signature by or on behalf of assignor
__________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available funds to
____________________________________________________________________________ for the account of
____________________________________________ account number ___________________, or, if mailed by check, to
___________________________________________________. Applicable statements should be mailed to
___________________________________________________________________.
This information is provided by____________________________________ , the assignee named above, or
_________________________________, as its agent.
EXHIBIT E
FORM OF SELLER/SERVICER CONTRACT
This Seller/Servicer Contract (as may be amended, supplemented or otherwise modified from time to
time, this "Contract") is made this day of , 20 , by and between
Residential Funding Corporation, its successors and assigns ("Residential Funding") and
(the "Seller/Servicer," and, together with Residential Funding, the
"parties" and each, individually, a "party").
WHEREAS, the Seller/Servicer desires to sell Loans to, and/or service Loans for, Residential Funding,
and Residential Funding desires to purchase Loans from the Seller/Servicer and/or have the Seller/Servicer
service various of its Loans, pursuant to the terms of this Contract and the Residential Funding Seller and
Servicer Guides incorporated herein by reference, as amended, supplemented or otherwise modified, from time
to time (together, the "Guides").
NOW, THEREFORE, in consideration of the premises, and the terms, conditions and agreements set forth
below, the parties agree as follows:
1. Incorporation of Guides by Reference.
The Seller/Servicer acknowledges that it has received and read the Guides. All provisions of the
Guides are incorporated by reference into and made a part of this Contract, and shall be binding upon the
parties; provided, however, that the Seller/Servicer shall be entitled to sell Loans to and/or service Loans
for Residential Funding only if and for so long as it shall have been authorized to do so by Residential
Funding in writing. Specific reference in this Contract to particular provisions of the Guides and not to
other provisions does not mean that those provisions of the Guides not specifically cited in this Contract
are not applicable. All terms used herein shall have the same meanings as such terms have in the Guides,
unless the context clearly requires otherwise.
2. Amendments.
This Contract may not be amended or modified orally, and no provision of this Contract may be waived
or amended except in writing signed by the party against whom enforcement is sought. Such a written waiver
or amendment must expressly reference this Contract. However, by their terms, the Guides may be amended or
supplemented by Residential Funding from time to time. Any such amendment(s) to the Guides shall be binding
upon the parties hereto.
3. Representations and Warranties.
a. Reciprocal Representations and Warranties.
The Seller/Servicer and Residential Funding each represents and warrants to the other that as
of the date of this Contract:
(1) Each party is duly organized, validly existing, and in good standing under the laws of its
jurisdiction of organization, is qualified, if necessary, to do business and in good
standing in each jurisdiction in which it is required to be so qualified, and has the
requisite power and authority to enter into this Contract and all other agreements
which are contemplated by this Contract and to carry out its obligations hereunder and
under the Guides and under such other agreements.
(2) This Contract has been duly authorized, executed and delivered by each party and constitutes a valid
and legally binding agreement of each party enforceable in accordance with its terms.
(3) There is no action, proceeding or investigation pending or threatened, and no basis therefor is known
to either party, that could affect the validity or prospective validity of this
Contract.
(4) Insofar as its capacity to carry out any obligation under this Contract is concerned, neither party is
in violation of any charter, articles of incorporation, bylaws, mortgage, indenture,
indebtedness, agreement, instrument, judgment, decree, order, statute, rule or
regulation and none of the foregoing adversely affects its capacity to fulfill any of
its obligations under this Contract. Its execution of, and performance pursuant to,
this Contract will not result in a violation of any of the foregoing.
b. Seller/Servicer's Representations, Warranties and Covenants.
In addition to the representations, warranties and covenants made by the Seller/Servicer
pursuant to subparagraph (a) of this paragraph 3, the Seller/Servicer makes the
representations, warranties and covenants set forth in the Guides and, upon request, agrees to
deliver to Residential Funding the certified Resolution of Board of Directors which authorizes
the execution and delivery of this Contract.
4. Remedies of Residential Funding.
If an Event of Seller Default or an Event of Servicer Default shall occur, Residential Funding may, at
its option, exercise one or more of those remedies set forth in the Guides.
5. Seller/Servicer's Status as Independent Contractor.
At no time shall the Seller/Servicer represent that it is acting as an agent of Residential Funding.
The Seller/Servicer shall, at all times, act as an independent contractor.
6. Prior Agreements Superseded.
This Contract restates, amends and supersedes any and all prior Seller Contracts or Servicer Contracts
between the parties except that any subservicing agreement executed by the Seller/Servicer in connection with
any loan-security exchange transaction shall not be affected.
7. Assignment.
This Contract may not be assigned or transferred, in whole or in part, by the Seller/Servicer without
the prior written consent of Residential Funding. Residential Funding may sell, assign, convey, hypothecate,
pledge or in any other way transfer, in whole or in part, without restriction, its rights under this Contract
and the Guides with respect to any Commitment or Loan.
8. Notices.
All notices, requests, demands or other communications that are to be given under this Contract shall
be in writing, addressed to the appropriate parties and sent by telefacsimile or by overnight courier or by
United States mail, postage prepaid, to the addresses and telefacsimile numbers specified below. However,
another name, address and/or telefacsimile number may be substituted by the Seller/Servicer pursuant to the
requirements of this paragraph 8, or Residential Funding pursuant to an amendment to the Guides.
If to Residential Funding, notices must be sent to the appropriate address or telefacsimile number specified
in the Guides.
If to the Seller/Servicer, notice must be sent to:
Attention:
Telefacsimile Number: ( ) -
9. Jurisdiction and Venue.
---------------------------------------------------------------------------------------------------------------
Each of the parties irrevocably submits to the jurisdiction of any state or federal court located in
Hennepin County, Minnesota, over any action, suit or proceeding to enforce or defend any right under this
Contract or otherwise arising from any loan sale or servicing relationship existing in connection with this
Contract, and each of the parties irrevocably agrees that all claims in respect of any such action or
proceeding may be heard or determined in such state or federal court. Each of the parties irrevocably waives
the defense of an inconvenient forum to the maintenance of any such action or proceeding and any other
substantive or procedural rights or remedies it may have with respect to the maintenance of any such action
or proceeding in any such forum. Each of the parties agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in
any other manner provided by law. Each of the parties further agrees not to institute any legal actions or
proceedings against the other party or any director, officer, employee, attorney, agent or property of the
other party, arising out of or relating to this Contract in any court other than as hereinabove specified in
this paragraph 9.
10. Miscellaneous.
This Contract, including all documents incorporated by reference herein, constitutes the entire
understanding between the parties hereto and supersedes all other agreements, covenants, representations,
warranties, understandings and communications between the parties, whether written or oral, with respect to
the transactions contemplated by this Contract. All paragraph headings contained herein are for convenience
only and shall not be construed as part of this Contract. Any provision of this Contract that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction, and, to this end, the provisions hereof are
severable. This Contract shall be governed by, and construed and enforced in accordance with, applicable
federal laws and the laws of the State of Minnesota.
IN WITNESS WHEREOF, the duly authorized officers of the Seller/Servicer and Residential Funding have
executed this Seller/Servicer Contract as of the date first above written.
ATTEST: SELLER/SERVICER
[Corporate Seal]
(Name of Seller/Servicer)
By: By:
(Signature) (Signature)
By: By:
(Typed Name) (Typed Name)
Title: Title:
======================================= =========================================================
ATTEST: RESIDENTIAL FUNDING CORPORATION
[Corporate Seal]
By: By:
(Signature) (Signature)
By: By:
(Typed Name) (Typed Name)
Title: Title:
EXHIBIT F
FORMS OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you for the referenced pool, we
request the release of the Mortgage Loan File described below.
Pooling and Servicing Agreement Dated:
Series#:
Account#:
Pool#:
Loan#:
MIN#:
Borrower Name(s):
Reason for Document Request: (circle one)
Mortgage Loan Prepaid in Full Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection with such payments which are
required to be deposited have been or will be so deposited as provided in the Pooling and Servicing
Agreement."
Residential Funding Corporation
Authorized Signature
******************************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off documents being enclosed with a copy of
this form. You should retain this form for your files in accordance with the terms of the Pooling and
Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other:
Name:
Title:
Date:
EXHIBIT G-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or beneficial owner of the Mortgage
Asset-Backed Pass-Through Certificates, Series ____-___, Class R (the "Owner")), a [savings institution]
[corporation] duly organized and existing under the laws of [the State of
] [the United States], on behalf of which he makes this affidavit and
agreement.
2. That the Owner (i) is not and will not be a "disqualified organization" or an electing large
partnership as of [date of transfer] within the meaning of Sections 860E(e)(5) and 775, respectively, of the
Internal Revenue Code of 1986, as amended (the "Code") or an electing large partnership under Section 775(a)
of the Code, (ii) will endeavor to remain other than a disqualified organization for so long as it retains
its ownership interest in the Class R Certificates, and (iii) is acquiring the Class R Certificates for its
own account or for the account of another Owner from which it has received an affidavit and agreement in
substantially the same form as this affidavit and agreement. (For this purpose, a "disqualified organization"
means an electing large partnership under Section 775 of the Code, the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing (other than an instrumentality all
of the activities of which are subject to tax and, except for the Federal Home Loan Mortgage Corporation, a
majority of whose board of directors is not selected by any such governmental entity) or any foreign
government, international organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization (other than certain farmers'
cooperatives) that is generally exempt from federal income tax unless such organization is subject to the tax
on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on transfers of Class R Certificates to
disqualified organizations or electing large partnerships, under the Code, that applies to all transfers of
Class R Certificates after March 31, 1988; (ii) that such tax would be on the transferor (or, with respect to
transfers to electing large partnerships, on each such partnership), or, if such transfer is through an agent
(which person includes a broker, nominee or middleman) for a disqualified organization, on the agent; (iii)
that the person (other than with respect to transfers to electing large partnerships) otherwise liable for
the tax shall be relieved of liability for the tax if the transferee furnishes to such person an affidavit
that the transferee is not a disqualified organization and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that the Class R Certificates may be "noneconomic
residual interests" within the meaning of Treasury regulations promulgated pursuant to the Code and that the
transferor of a noneconomic residual interest will remain liable for any taxes due with respect to the income
on such residual interest, unless no significant purpose of the transfer was to impede the assessment or
collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through entity" holding Class R Certificates if
either the pass-through entity is an electing large partnership under Section 775 of the Code or if at any
time during the taxable year of the pass-through entity a disqualified organization is the record holder of
an interest in such entity. (For this purpose, a "pass through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a partnership, trust or estate, and certain
cooperatives.)
5. The Owner is either (i) a citizen or resident of the United States, (ii) a corporation, partnership or
other entity treated as a corporation or a partnership for U.S. federal income tax purposes and created or
organized in or under the laws of the United States, any state thereof or the District of Columbia (other
than a partnership that is not treated as a United States person under any applicable Treasury regulations),
(iii) an estate that is described in Section 7701(a)(30)(D) of the Code, or (iv) a trust that is described in
Section 7701(a)(30)(E) of the Code.
6. The Owner hereby agrees that it will not cause income from the Class R Certificates to be attributable
to a foreign permanent establishment or fixed base (within the meaning of an applicable income tax treaty) of
the Owner or another United States taxpayer.
7. That the Owner is aware that the Trustee will not register the transfer of any Class R Certificates
unless the transferee, or the transferee's agent, delivers to it an affidavit and agreement, among other
things, in substantially the same form as this affidavit and agreement. The Owner expressly agrees that it
will not consummate any such transfer if it knows or believes that any of the representations contained in
such affidavit and agreement are false.
8. That the Owner has reviewed the restrictions set forth on the face of the Class R Certificates and the
provisions of Section 5.02(f) of the Pooling and Servicing Agreement under which the Class R Certificates
were issued (in particular, clause (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the Trustee to
deliver payments to a person other than the Owner and negotiate a mandatory sale by the Trustee in the event
the Owner holds such Certificates in violation of Section 5.02(f)). The Owner expressly agrees to be bound
by and to comply with such restrictions and provisions.
9. That the Owner consents to any additional restrictions or arrangements that shall be deemed necessary
upon advice of counsel to constitute a reasonable arrangement to ensure that the Class R Certificates will
only be owned, directly or indirectly, by an Owner that is not a disqualified organization.
10. The Owner's Taxpayer Identification Number is .
11. This affidavit and agreement relates only to the Class R Certificates held by the Owner and not to any
other holder of the Class R Certificates. The Owner understands that the liabilities described herein relate
only to the Class R Certificates.
12. That no purpose of the Owner relating to the transfer of any of the Class R Certificates by the Owner
is or will be to impede the assessment or collection of any tax; in making this representation, the Owner
warrants that the Owner is familiar with (i) Treasury Regulation Section 1.860E-1(c) and recent amendments
thereto, effective as of July 19, 2002, and (ii) the preamble describing the adoption of the amendments to
such regulation, which is attached hereto as Exhibit 1.
13. That the Owner has no present knowledge or expectation that it will be unable to pay any United States
taxes owed by it so long as any of the Certificates remain outstanding. In this regard, the Owner hereby
represents to and for the benefit of the person from whom it acquired the Class R Certificate that the Owner
intends to pay taxes associated with holding such Class R Certificate as they become due, fully understanding
that it may incur tax liabilities in excess of any cash flows generated by the Class R Certificate.
14. That the Owner has no present knowledge or expectation that it will become insolvent or subject to a
bankruptcy proceeding for so long as any of the Class R Certificates remain outstanding.
15. The Purchaser is not an employee benefit plan or other plan subject to the prohibited transaction
provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Code, or an investment manager, named fiduciary or a trustee of any such plan, or any other Person
acting, directly or indirectly, on behalf of or purchasing any Certificate with "plan assets" of any such
plan.
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on its behalf, pursuant
to the authority of its Board of Directors, by its [Title of Officer] and its corporate seal to be hereunto
attached, attested by its [Assistant] Secretary, this ________ day of ________, 200______.
[NAME OF OWNER]
By:
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known or proved to me to be
the same person who executed the foregoing instrument and to be the [Title of Officer] of the Owner, and
acknowledged to me that he executed the same as his free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this _________ day of ____________, 200______.
NOTARY PUBLIC
COUNTY OF __________________________________
STATE OF
My Commission expires the ____day of _____, 20 .
EXHIBIT 1
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9004]
RIN 1545-AW98
Real Estate Mortgage Investment Conduits
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations relating to safe
harbor transfers of noneconomic residual interests in real estate
mortgage investment conduits (REMICs). The final regulations provide
additional limitations on the circumstances under which transferors may
claim safe harbor treatment.
DATES: Effective Date: These regulations are effective July 19, 2002.
Applicability Date: For dates of applicability, see Sec. 1.860E-
(1)(c)(10).
FOR FURTHER INFORMATION CONTACT: Xxxxxxxx Xxxxxxxxxx at (000) 000-0000
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information in this final rule has been reviewed
and, pending receipt and evaluation of public comments, approved by the
Office of Management and Budget (OMB) under 44 U.S.C. 3507 and assigned
control number 1545-1675.
The collection of information in this regulation is in Sec. 1.860E-
1(c)(5)(ii). This information is required to enable the IRS to verify
that a taxpayer is complying with the conditions of this regulation.
The collection of information is mandatory and is required. Otherwise,
the taxpayer will not receive the benefit of safe harbor treatment as
provided in the regulation. The likely respondents are businesses and
other for-profit institutions.
Comments on the collection of information should be sent to the
Office of Management and Budget, Attn: Desk Officer for the Department
of the Treasury, Office of Information and Regulatory Affairs,
Xxxxxxxxxx, XX, 00000, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, W:CAR:MP:FP:S, Xxxxxxxxxx, XX
00000. Comments on the collection of information should be received by
September 17, 2002. Comments are specifically requested concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including
whether the information will have practical utility;
The accuracy of the estimated burden associated with the collection
of information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced;
How the burden of complying with the collection of information may
be minimized, including through the application of automated collection
techniques or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of service to provide information.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
control number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on
an estimated number of respondents of 470 and an estimated average
annual burden hours per respondent of one hour.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Background
This document contains final regulations regarding the proposed
amendments to 26 CFR part 1 under section 860E of the Internal Revenue
Code (Code). The regulations provide the circumstances under which a
transferor of a noneconomic REMIC residual interest meeting the
investigation and representation requirements may avail itself of the
safe harbor by satisfying either the formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules
governing the transfer of noneconomic REMIC residual interests. In
general, a transfer of a noneconomic residual interest is disregarded
for all tax purposes if a significant purpose of the transfer is to
[[Page 47452]]
enable the transferor to impede the assessment or collection of tax. A
purpose to impede the assessment or collection of tax (a wrongful
purpose) exists if the transferor, at the time of the transfer, either
knew or should have known that the transferee would be unwilling or
unable to pay taxes due on its share of the REMIC's taxable income.
Under a safe harbor, the transferor of a REMIC noneconomic residual
interest is presumed not to have a wrongful purpose if two requirements
are satisfied: (1) the transferor conducts a reasonable investigation
of the transferee's financial condition (the investigation
requirement); and (2) the transferor secures a representation from the
transferee to the effect that the transferee understands the tax
obligations associated with holding a residual interest and intends to
pay those taxes (the representation requirement).
The IRS and Treasury have been concerned that some transferors of
noneconomic residual interests claim they satisfy the safe harbor even
in situations where the economics of the transfer clearly indicate the
transferee is unwilling or unable to pay the tax associated with
holding the interest. For this reason, on February 7, 2000, the IRS
published in the Federal Register (65 FR 5807) a notice of proposed
rulemaking (REG-100276-97; REG-122450-98) designed to clarify the safe
harbor by adding the ``formula test,'' an economic test. The proposed
regulation provides that the safe harbor is unavailable unless the
present value of the anticipated tax liabilities associated with
holding the residual interest does not exceed the sum of: (1) The
present value of any consideration given to the transferee to acquire
the interest; (2) the present value of the expected future
distributions on the interest; and (3) the present value of the
anticipated tax savings associated with holding the interest as the
REMIC generates losses.
The notice of proposed rulemaking also contained rules for FASITs.
Section 1.860H-6(g) of the proposed regulations provides requirements
for transfers of FASIT ownership interests and adopts a safe harbor by
reference to the safe harbor provisions of the REMIC regulations.
In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3
I.R.B. 335) to set forth an alternative safe harbor that taxpayers
could use while the IRS and the Treasury considered comments on the
proposed regulations. Under the alternative safe harbor, if a
transferor meets the investigation requirement and the representation
requirement but the transfer fails to meet the formula test, the
transferor may invoke the safe harbor if the transferee meets a two-
prong test (the asset test). A transferee generally meets the first
prong of this test if, at the time of the transfer, and in each of the
two years preceding the year of transfer, the transferee's gross assets
exceed $100 million and its net assets exceed $10 million. A transferee
generally meets the second prong of this test if it is a domestic,
taxable corporation and agrees in writing not to transfer the interest
to any person other than another domestic, taxable corporation that
also satisfies the requirements of the asset test. A transferor cannot
rely on the asset test if the transferor knows, or has reason to know,
that the transferee will not comply with its written agreement to limit
the restrictions on subsequent transfers of the residual interest.
Rev. Proc. 2001-12 provides that the asset test fails to be
satisfied in the case of a transfer or assignment of a noneconomic
residual interest to a foreign branch of an otherwise eligible
transferee. If such a transfer or assignment were permitted, a
corporate taxpayer might seek to claim that the provisions of an
applicable income tax treaty would resource excess inclusion income as
foreign source income, and that, as a consequence, any U.S. tax
liability attributable to the excess inclusion income could be offset
by foreign tax credits. Such a claim would impede the assessment or
collection of U.S. tax on excess inclusion income, contrary to the
congressional purpose of assuring that such income will be taxable in
all events. See, e.g., sections 860E(a)(1), (b), (e) and 860G(b) of the
Code.
The Treasury and the IRS have learned that certain taxpayers
transferring noneconomic residual interests to foreign branches have
attempted to rely on the formula test to obtain safe harbor treatment
in an effort to impede the assessment or collection of U.S. tax on
excess inclusion income. Accordingly, the final regulations provide
that if a noneconomic residual interest is transferred to a foreign
permanent establishment or fixed base of a U.S. taxpayer, the transfer
is not eligible for safe harbor treatment under either the asset test
or the formula test. The final regulations also require a transferee to
represent that it will not cause income from the noneconomic residual
interest to be attributable to a foreign permanent establishment or
fixed base.
Section 1.860E-1(c)(8) provides computational rules that a taxpayer
may use to qualify for safe harbor status under the formula test.
Section 1.860E-1(c)(8)(i) provides that the transferee is presumed to
pay tax at a rate equal to the highest rate of tax specified in section
11(b). Some commentators were concerned that this presumed rate of
taxation was too high because it does not take into consideration
taxpayers subject to the alternative minimum tax rate. In light of the
comments received, this provision has been amended in the final
regulations to allow certain transferees that compute their taxable
income using the alternative minimum tax rate to use the alternative
minimum tax rate applicable to corporations.
Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present
values in the formula test are to be computed using a discount rate
equal to the applicable Federal short-term rate prescribed by section
1274(d). This is a change from the proposed regulation and Rev. Proc.
2001-12. In those publications the provision stated that ``present
values are computed using a discount rate equal to the applicable
Federal rate prescribed in section 1274(d) compounded semiannually''
and that ``[a] lower discount rate may be used if the transferee can
demonstrate that it regularly borrows, in the course of its trade or
business, substantial funds at such lower rate from an unrelated third
party.'' The IRS and the Treasury Department have learned that, based
on this provision, certain taxpayers have been attempting to use
unrealistically low or zero interest rates to satisfy the formula test,
frustrating the intent of the test. Furthermore, the Treasury
Department and the IRS believe that a rule allowing for a rate other
than a rate based on an objective index would add unnecessary
complexity to the safe harbor. As a result, the rule in the proposed
regulations that permits a transferee to use a lower discount rate, if
the transferee can demonstrate that it regularly borrows substantial
funds at such lower rate, is not included in the final regulations; and
the Federal short-term rate has been substituted for the applicable
Federal rate. To simplify taxpayers' computations, the final
regulations allow use of any of the published short-term rates,
provided that the present values are computed with a corresponding
period of compounding. With the exception of the provisions relating to
transfers to foreign branches, these changes generally have the
proposed applicability date of February 4, 2000, but taxpayers may
choose to apply the interest rate formula set forth in the proposed
regulation and Rev. Proc. 2001-12 for transfers occurring before August
19, 2002.
It is anticipated that when final regulations are adopted with
respect to
[[Page 47453]]
FASITs, Sec. 1.860H-6(g) of the proposed regulations will be adopted in
substantially its present form, with the result that the final
regulations contained in this document will also govern transfers of
FASIT ownership interests with substantially the same applicability
date as is contained in this document.
Effect on Other Documents
Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is obsolete for transfers of
noneconomic residual interests in REMICs occurring on or after August
19, 2002.
Special Analyses
It is hereby certified that these regulations will not have a
significant economic impact on a substantial number of small entities.
This certification is based on the fact that it is unlikely that a
substantial number of small entities will hold REMIC residual
interests. Therefore, a Regulatory Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. It has
been determined that this Treasury decision is not a significant
regulatory action as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It also has been determined that
sections 553(b) and 553(d) of the Administrative Procedure Act (5
U.S.C. chapter 5) do not apply to these regulations.
Drafting Information
The principal author of these regulations is Xxxxxxxx Xxxxxxxxxx.
However, other personnel from the IRS and Treasury Department
participated in their development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record keeping requirements.
26 CFR Part 602
Reporting and record keeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602 are amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
EXHIBIT G-2
FORM OF TRANSFEROR CERTIFICATE
____________, 20
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
__________________
__________________
__________________
Attention: Residential Funding Corporation Series ____-___
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___, Class R
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
(the "Seller") to
(the "Purchaser") of
$ Initial Certificate Principal Balance of Mortgage Asset-Backed Pass-Through
Certificates, Series ____-___, Class R (the "Certificates"), pursuant to Section 5.02 of the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of ___________ 1, ____ among
Residential Accredit Loans, Inc., as seller (the "Company"), Residential Funding Corporation, as master
servicer (the "Master Servicer"), and __________________, as trustee (the "Trustee"). All terms used herein
and not otherwise defined shall have the meanings set forth in the Pooling and Servicing Agreement. The
Seller hereby certifies, represents and warrants to, and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the transfer of the Certificate by the Seller to the Purchaser is
or will be to impede the assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to the Trustee and the Master Servicer a
transfer affidavit and agreement in the form attached to the Pooling and Servicing Agreement as Exhibit G-1.
The Seller does not know or believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a reasonable investigation of the financial
condition of the Purchaser as contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Seller has determined that the Purchaser has historically paid its debts as they
become due and has found no significant evidence to indicate that the Purchaser will not continue to pay its
debts as they become due in the future. The Seller understands that the transfer of a Class R Certificate
may not be respected for United States income tax purposes (and the Seller may continue to be liable for
United States income taxes associated therewith) unless the Seller has conducted such an investigation.
4. The Seller has no actual knowledge that the proposed Transferee is not both a United States Person and
a Permitted Transferee.
Very truly yours,
(Seller)
By:
Name:
Title:
EXHIBIT H
FORM OF INVESTOR REPRESENTATION LETTER
____________, 20
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
__________________
__________________
__________________
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Residential Funding Corporation Series ____-___
RE: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___, [Class B-]
Ladies and Gentlemen:
__________________________________________ (the "Purchaser") intends to purchase from
______________________________________________(the "Seller") $ ____________________________________ Initial
Certificate Principal Balance of Mortgage Asset-Backed Pass-Through Certificates, Series ____-___, Class
(the "Certificates"), issued pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of ___________ 1, ____ among Residential Accredit Loans, Inc., as seller (the
"Company"), Residential Funding Corporation, as master servicer (the "Master Servicer"), and
__________________, as trustee (the "Trustee"). All terms used herein and not otherwise defined shall have
the meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby certifies, represents
and warrants to, and covenants with, the Company, the Trustee and the Master Servicer that:
1. The Purchaser understands that (a) the Certificates have not been and will not be registered or
qualified under the Securities Act of 1933, as amended (the "Act") or any state securities law,
(b) the Company is not required to so register or qualify the Certificates, (c) the
Certificates may be resold only if registered and qualified pursuant to the provisions of the
Act or any state securities law, or if an exemption from such registration and qualification is
available, (d) the Pooling and Servicing Agreement contains restrictions regarding the transfer
of the Certificates and (e) the Certificates will bear a legend to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own account for investment only and not with a
view to or for sale in connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional investor having such knowledge and
experience in financial and business matters, and, in particular, in such matters related to
securities similar to the Certificates, such that it is capable of evaluating the merits and
risks of investment in the Certificates, (b) able to bear the economic risks of such an
investment and (c) an "accredited investor" within the meaning of Rule 501(a) promulgated
pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity to review (a) [a copy of the Private
Placement Memorandum, dated , 20 , relating to the
Certificates (b)] a copy of the Pooling and Servicing Agreement and [b] [c] such other
information concerning the Certificates, the Mortgage Loans and the Company as has been
requested by the Purchaser from the Company or the Seller and is relevant to the Purchaser's
decision to purchase the Certificates. The Purchaser has had any questions arising from such
review answered by the Company or the Seller to the satisfaction of the Purchaser. [If the
Purchaser did not purchase the Certificates from the Seller in connection with the initial
distribution of the Certificates and was provided with a copy of the Private Placement
Memorandum (the "Memorandum") relating to the original sale (the "Original Sale") of the
Certificates by the Company, the Purchaser acknowledges that such Memorandum was provided to it
by the Seller, that the Memorandum was prepared by the Company solely for use in connection
with the Original Sale and the Company did not participate in or facilitate in any way the
purchase of the Certificates by the Purchaser from the Seller, and the Purchaser agrees that it
will look solely to the Seller and not to the Company with respect to any damage, liability,
claim or expense arising out of, resulting from or in connection with (a) error or omission, or
alleged error or omission, contained in the Memorandum, or (b) any information, development or
event arising after the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will it authorize any person to (a) offer,
pledge, sell, dispose of or otherwise transfer any Certificate, any interest in any Certificate
or any other similar security to any person in any manner, (b) solicit any offer to buy or to
accept a pledge, disposition of other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) otherwise approach
or negotiate with respect to any Certificate, any interest in any Certificate or any other
similar security with any person in any manner, (d) make any general solicitation by means of
general advertising or in any other manner or (e) take any other action, that (as to any of (a)
through (e) above) would constitute a distribution of any Certificate under the Act, that would
render the disposition of any Certificate a violation of Section 5 of the Act or any state
securities law, or that would require registration or qualification pursuant thereto. The
Purchaser will not sell or otherwise transfer any of the Certificates, except in compliance
with the provisions of the Pooling and Servicing Agreement.
6. The Purchaser
(a) is not an employee benefit or other plan subject to the prohibited transaction provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (a "Plan"), or any other person (including an
investment manager, a named fiduciary or a trustee of any Plan) acting, directly or indirectly,
on behalf of or purchasing any Certificate with "plan assets" of any Plan within the meaning of
the Department of Labor ("DOL") regulation at 29 C.F.R.ss.2510.3-101; or
(b) is an insurance company, the source of funds to be used by it to purchase the Certificates is an
"insurance company general account" (within the meaning of DOL Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the purchase is being made in reliance upon the availability of
the exemptive relief afforded under Sections I and III of PTCE 95-60.
In addition, the Purchaser hereby certifies, represents and warrants to, and covenants with, the
Company, the Trustee and the Master Servicer that the Purchaser will not transfer such Certificates to any
Plan or person unless such Plan or person meets the requirements set forth in either 6(a) or (b) above.
Very truly yours,
By: __________________________________
Name:
Title:
EXHIBIT I
FORM OF TRANSFEROR REPRESENTATION LETTER
__________, 20
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
__________________
__________________
__________________
Attention: Residential Funding Corporation Series ____-___
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___, [Class B-]
Ladies and Gentlemen:
In connection with the sale by ________________ (the "Seller") to ___________________ (the
"Purchaser") of $_______________ Initial Certificate Principal Balance of Mortgage Asset-Backed Pass-Through
Certificates, Series ____-___, Class (the "Certificates"), issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of ___________ 1, ____ among Residential Accredit
Loans, Inc., as seller (the "Company"), Residential Funding Corporation, as master servicer, and
__________________, as trustee (the "Trustee"). The Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered, pledged, sold, disposed of
or otherwise transferred any Certificate, any interest in any Certificate or any other similar security to
any person in any manner, (b) has solicited any offer to buy or to accept a pledge, disposition or other
transfer of any Certificate, any interest in any Certificate or any other similar security from any person in
any manner, (c) has otherwise approached or negotiated with respect to any Certificate, any interest in any
Certificate or any other similar security with any person in any manner, (d) has made any general
solicitation by means of general advertising or in any other manner, or (e) has taken any other action, that
(as to any of (a) through (e) above) would constitute a distribution of the Certificates under the Securities
Act of 1933 (the "Act"), that would render the disposition of any Certificate a violation of Section 5 of the
Act or any state securities law, or that would require registration or qualification pursuant thereto. The
Seller will not act, in any manner set forth in the foregoing sentence with respect to any Certificate. The
Seller has not and will not sell or otherwise transfer any of the Certificates, except in compliance with the
provisions of the Pooling and Servicing Agreement.
Very truly yours,
(Seller)
By:
Name:
Title:
EXHIBIT J
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
The undersigned seller, as registered holder (the "Seller"), intends to transfer the Rule 144A
Securities described above to the undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the agreements pursuant to which the Rule 144A
Securities were issued, the Seller hereby certifies the following facts: Neither the Seller nor anyone
acting on its behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar security to, or solicited any offer
to buy or accept a transfer, pledge or other disposition of the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security from, or otherwise approached or negotiated with respect
to the Rule 144A Securities, any interest in the Rule 144A Securities or any other similar security with, any
person in any manner, or made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the Rule 144A Securities under the
Securities Act of 1933, as amended (the "1933 Act"), or that would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration pursuant thereto, and that the
Seller has not offered the Rule 144A Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the Seller, the Trustee and the Master
Servicer (as defined in the Pooling and Servicing Agreement (the "Agreement"), dated as of ___________ 1,
____ among Residential Funding Corporation as Master Servicer, Residential Accredit Loans, Inc. as depositor
pursuant to Section 5.02 of the Agreement and __________________, as trustee, as follows:
(a) The Buyer understands that the Rule 144A Securities have not been registered under the 1933 Act or the
securities laws of any state.
(b) The Buyer considers itself a substantial, sophisticated institutional investor having such knowledge
and experience in financial and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
(c) The Buyer has been furnished with all information regarding the Rule 144A Securities that it has
requested from the Seller, the Trustee or the Servicer.
(d) Neither the Buyer nor anyone acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other disposition of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other similar security from, or
otherwise approached or negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Rule 144A Securities under the 1933 Act or that would render
the disposition of the Rule 144A Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it authorized or will it authorize any person
to act, in such manner with respect to the Rule 144A Securities.
(e) The Buyer is a "qualified institutional buyer" as that term is defined in Rule 144A under the 1933 Act
and has completed either of the forms of certification to that effect attached hereto as Annex 1 or
Annex 2. The Buyer is aware that the sale to it is being made in reliance on Rule 144A. The Buyer is
acquiring the Rule 144A Securities for its own account or the accounts of other qualified
institutional buyers, understands that such Rule 144A Securities may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the 1933 Act.
[3. The Buyer
(a) is not an employee benefit or other plan subject to the prohibited transaction provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (a "Plan"), or any other person (including an investment manager, a
named fiduciary or a trustee of any Plan) acting, directly or indirectly, on behalf of or purchasing
any Certificate with "plan assets" of any Plan within the meaning of the Department of Labor ("DOL")
regulation at 29 C.F.R.ss.2510.3-101; or
(b) is an insurance company, the source of funds to be used by it to purchase the Certificates is an
"insurance company general account" (within the meaning of DOL Prohibited Transaction Class Exemption
("PTCE") 95-60), and the purchase is being made in reliance upon the availability of the exemptive
relief afforded under Sections I and III of PTCE 95-60.]
4. This document may be executed in one or more counterparts and by the different parties
hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original;
such counterparts, together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as of the date set forth
below.
Print Name of Seller Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification:
No. No:
Date: Date:
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A Investment
Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice President
or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified institutional buyer" as that term
is defined in Rule 144A under the Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $ in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A) and (ii) the Buyer satisfies the criteria in the category
marked below.
-- Corporation, etc. The Buyer is a corporation (other than a bank, savings and loan association or
similar institution), Massachusetts or similar business trust, partnership, or charitable
organization described in Section 501(c)(3) of the Internal Revenue Code.
-- Bank. The Buyer (a) is a national bank or banking institution organized under the laws of any State,
territory or the District of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements, a copy of which is
attached hereto.
-- Savings and Loan. The Buyer (a) is a savings and loan association, building and loan association,
cooperative bank, homestead association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest annual financial statements.
-- Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15 of the Securities Exchange Act
of 1934.
-- Insurance Company. The Buyer is an insurance company whose primary and predominant business activity
is the writing of insurance or the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a similar official or agency
of a State or territory or the District of Columbia.
-- State or Local Plan. The Buyer is a plan established and maintained by a State, its political
subdivisions, or any agency or instrumentality of the State or its political subdivisions, for
the benefit of its employees.
-- ERISA Plan. The Buyer is an employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
-- Investment Adviser. The Buyer is an investment adviser registered under the Investment Advisers Act
of 1940.
-- SBIC. The Buyer is a Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.
-- Business Development Company. The Buyer is a business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
-- Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust company and whose participants
are exclusively (a) plans established and maintained by a State, its political subdivisions, or
any agency or instrumentality of the State or its political subdivisions, for the benefit of
its employees, or (b) employee benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund that includes as participants
individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of issuers that are affiliated
with the Buyer, (ii) securities that are part of an unsold allotment to or subscription by the Buyer, if the
Buyer is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan participations, (v)
repurchase agreements, (vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Buyer, the Buyer used the cost of such securities to the Buyer and did not include
any of the securities referred to in the preceding paragraph. Further, in determining such aggregate amount,
the Buyer may have included securities owned by subsidiaries of the Buyer, but only if such subsidiaries
are consolidated with the Buyer in its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands that the seller to it and
other parties related to the Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that, in connection with any
purchase of securities sold to the Buyer for the account of a third party (including any separate account) in
reliance on Rule 144A, the Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition, the Buyer agrees that the Buyer
will not purchase securities for a third party unless the Buyer has obtained a current representation letter
from such third party or taken other appropriate steps contemplated by Rule 144A to conclude that such third
party independently meets the definition of "qualified institutional buyer" set forth in Rule 144A.
---------------------------------------------------------------------------------------------------------------
7. The Buyer will notify each of the parties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's purchase of Rule 144A Securities
will constitute a reaffirmation of this certification as of the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A Investment
Representation to which this Certification is attached:
8. As indicated below, the undersigned is the President, Chief Financial Officer or Senior Vice President
of the Buyer or, if the Buyer is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of Investment Companies (as
defined below), is such an officer of the Adviser.
9. In connection with purchases by Buyer, the Buyer is a "qualified institutional buyer" as defined in
SEC Rule 144A because (i) the Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of Investment Companies, owned at
least $100,000,000 in securities (other than the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year. For purposes of determining the amount of securities owned by the Buyer or
the Buyer's Family of Investment Companies, the cost of such securities was used.
-- The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
-- The Buyer is part of a Family of Investment Companies which owned in the aggregate
$ in securities (other than the excluded securities referred to
below) as of the end of the Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
10. The term "Family of Investment Companies" as used herein means two or more registered investment
companies (or series thereof) that have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
11. The term "securities" as used herein does not include (i) securities of issuers that are affiliated
with the Buyer or are part of the Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity swaps.
12. The Buyer is familiar with Rule 144A and understands that each of the parties to which this
certification is made are relying and will continue to rely on the statements made herein because one or more
sales to the Buyer will be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
13. The undersigned will notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
EXHIBIT K
[TEXT OF AMENDMENT TO POOLING AND SERVICING
AGREEMENT PURSUANT TO SECTION 11.01(E) FOR A
LIMITED GUARANTY]
ARTICLE XIII
Subordinate Certificate Loss Coverage; Limited Guaranty
Section 13.01. Subordinate Certificate Loss Coverage; Limited Guaranty. (a) Subject to
subsection (c) below, prior to the later of the third Business Day prior to each Distribution Date or the
related Determination Date, the Master Servicer shall determine whether it or any Sub-Servicer will be
entitled to any reimbursement pursuant to Section 4.02(a) on such Distribution Date for Advances or
Sub-Servicer Advances previously made, (which will not be Advances or Sub-Servicer Advances that were made
with respect to delinquencies which were subsequently determined to be Excess Special Hazard Losses, Excess
Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses) and, if so, the Master Servicer shall demand
payment from Residential Funding of an amount equal to the amount of any Advances or Sub-Servicer Advances
reimbursed pursuant to Section 4.02(a), to the extent such Advances or Sub-Servicer Advances have not been
included in the amount of the Realized Loss in the related Mortgage Loan, and shall distribute the same to
the Class B Certificateholders in the same manner as if such amount were to be distributed pursuant to
Section 4.02(a).
(b) Subject to subsection (c) below, prior to the later of the third Business Day prior to
each Distribution Date or the related Determination Date, the Master Servicer shall determine whether any
Realized Losses (other than Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses and
Extraordinary Losses) will be allocated to the Class B Certificates on such Distribution Date pursuant to
Section 4.05, and, if so, the Master Servicer shall demand payment from Residential Funding of the amount of
such Realized Loss and shall distribute the same to the Class B Certificateholders in the same manner as if
such amount were to be distributed pursuant to Section 4.02(a); provided, however, that the amount of such
demand in respect of any Distribution Date shall in no event be greater than the sum of (i) the additional
amount of Accrued Certificate Interest that would have been paid for the Class B Certificateholders on such
Distribution Date had such Realized Loss or Losses not occurred plus (ii) the amount of the reduction in the
Certificate Principal Balances of the Class B Certificates on such Distribution Date due to such Realized
Loss or Losses. Notwithstanding such payment, such Realized Losses shall be deemed to have been borne by the
Certificateholders for purposes of Section 4.05. Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses and Extraordinary Losses allocated to the Class B Certificates will not be covered by the
Subordinate Certificate Loss Obligation.
(c) Demands for payments pursuant to this Section shall be made prior to the later of the
third Business Day prior to each Distribution Date or the related Determination Date by the Master Servicer
with written notice thereof to the Trustee. The maximum amount that Residential Funding shall be required to
pay pursuant to this Section on any Distribution Date (the "Amount Available") shall be equal to the lesser
of (X) minus the sum of (i) all previous payments made under subsections (a) and (b) hereof
and (ii) all draws under the Limited Guaranty made in lieu of such payments as described below in subsection
(d) and (Y) the then outstanding Certificate Principal Balances of the Class B Certificates, or such lower
amount as may be established pursuant to Section 13.02. Residential Funding's obligations as described in
this Section are referred to herein as the "Subordinate Certificate Loss Obligation."
(d) The Trustee will promptly notify General Motors Acceptance Corporation of any failure
of Residential Funding to make any payments hereunder and shall demand payment pursuant to the limited
guaranty (the "Limited Guaranty"), executed by General Motors Acceptance Corporation, of Residential
Funding's obligation to make payments pursuant to this Section, in an amount equal to the lesser of (i) the
Amount Available and (ii) such required payments, by delivering to General Motors Acceptance Corporation a
written demand for payment by wire transfer, not later than the second Business Day prior to the Distribution
Date for such month, with a copy to the Master Servicer.
(e) All payments made by Residential Funding pursuant to this Section or amounts paid under
the Limited Guaranty shall be deposited directly in the Certificate Account, for distribution on the
Distribution Date for such month to the Class B Certificateholders.
(f) The Company shall have the option, in its sole discretion, to substitute for either or
both of the Limited Guaranty or the Subordinate Certificate Loss Obligation another instrument in the form of
a corporate guaranty, an irrevocable letter of credit, a surety bond, insurance policy or similar instrument
or a reserve fund; provided that (i) the Company obtains (subject to the provisions of Section 10.01(f) as if
the Company was substituted for the Master Servicer solely for the purposes of such provision) an Opinion of
Counsel (which need not be an opinion of Independent counsel) to the effect that obtaining such substitute
corporate guaranty, irrevocable letter of credit, surety bond, insurance policy or similar instrument or
reserve fund will not cause either (a) any federal tax to be imposed on the Trust Fund, including without
limitation, any federal tax imposed on "prohibited transactions" under Section 860(F)(a)(1) of the Code or on
"contributions after the startup date" under Section 860(G)(d)(1) of the Code or (b) the Trust Fund to fail
to qualify as a REMIC at any time that any Certificate is outstanding, and (ii) no such substitution shall be
made unless (A) the substitute Limited Guaranty or Subordinate Certificate Loss Obligation is for an initial
amount not less than the then current Amount Available and contains provisions that are in all material
respects equivalent to the original Limited Guaranty or Subordinate Certificate Loss Obligation (including
that no portion of the fees, reimbursements or other obligations under any such instrument will be borne by
the Trust Fund), (B) the long term debt obligations of any obligor of any substitute Limited Guaranty or
Subordinate Certificate Loss Obligation (if not supported by the Limited Guaranty) shall be rated at least
the lesser of (a) the rating of the long term debt obligations of General Motors Acceptance Corporation as of
the date of issuance of the Limited Guaranty and (b) the rating of the long term debt obligations of General
Motors Acceptance Corporation at the date of such substitution and (C) the Company obtains written
confirmation from each nationally recognized credit rating agency that rated the Class B Certificates at the
request of the Company that such substitution shall not lower the rating on the Class B Certificates below
the lesser of (a) the then-current rating assigned to the Class B Certificates by such rating agency and (b)
the original rating assigned to the Class B Certificates by such rating agency. Any replacement of the
Limited Guaranty or Subordinate Certificate Loss Obligation pursuant to this Section shall be accompanied by
a written Opinion of Counsel to the substitute guarantor or obligor, addressed to the Master Servicer and the
Trustee, that such substitute instrument constitutes a legal, valid and binding obligation of the substitute
guarantor or obligor, enforceable in accordance with its terms, and concerning such other matters as the
Master Servicer and the Trustee shall reasonably request. Neither the Company, the Master Servicer nor the
Trustee shall be obligated to substitute for or replace the Limited Guaranty or Subordinate Certificate Loss
Obligation under any circumstance.
Section 13.02. Amendments Relating to the Limited Guaranty. Notwithstanding Sections 11.01 or
13.01: (i) the provisions of this Article XIII may be amended, superseded or deleted, (ii) the Limited
Guaranty or Subordinate Certificate Loss Obligation may be amended, reduced or canceled, and (iii) any other
provision of this Agreement which is related or incidental to the matters described in this Article XIII may
be amended in any manner; in each case by written instrument executed or consented to by the Company and
Residential Funding but without the consent of any Certificateholder and without the consent of the Master
Servicer or the Trustee being required unless any such amendment would impose any additional obligation on,
or otherwise adversely affect the interests of, the Master Servicer or the Trustee, as applicable; provided
that the Company shall also obtain a letter from each nationally recognized credit rating agency that rated
the Class B Certificates at the request of the Company to the effect that such amendment, reduction, deletion
or cancellation will not lower the rating on the Class B Certificates below the lesser of (a) the
then-current rating assigned to the Class B Certificates by such rating agency and (b) the original rating
assigned to the Class B Certificates by such rating agency, unless (A) the Holder of 100% of the Class B
Certificates is Residential Funding or an Affiliate of Residential Funding, or (B) such amendment, reduction,
deletion or cancellation is made in accordance with Section 11.01(e) and, provided further that the Company
obtains (subject to the provisions of Section 10.01(f) as if the Company was substituted for the Master
Servicer solely for the purposes of such provision), in the case of a material amendment or supercession (but
not a reduction, cancellation or deletion of the Limited Guaranty or the Subordinate Certificate Loss
Obligation), an Opinion of Counsel (which need not be an opinion of Independent counsel) to the effect that
any such amendment or supercession will not cause either (a) any federal tax to be imposed on the Trust Fund,
including without limitation, any federal tax imposed on "prohibited transactions" under Section 860F(a)(1)
of the Code or on "contributions after the startup date" under Section 860G(d)(1) of the Code or (b) the
Trust Fund to fail to qualify as a REMIC at any time that any Certificate is outstanding. A copy of any such
instrument shall be provided to the Trustee and the Master Servicer together with an Opinion of Counsel that
such amendment complies with this Section 13.02.
EXHIBIT L
[FORM OF LIMITED GUARANTY]
LIMITED GUARANTY
RESIDENTIAL ACCREDIT LOANS, INC.
Mortgage Asset-Backed Pass-Through Certificates
Series ____-___
__________, 200
__________________
__________________
__________________
Attention: Residential Funding Corporation Series ____-___
Ladies and Gentlemen:
WHEREAS, Residential Funding Corporation, a Delaware corporation ("Residential Funding"), an
indirect wholly-owned subsidiary of General Motors Acceptance Corporation, a New York corporation ("GMAC"),
plans to incur certain obligations as described under Section 13.01 of the Pooling and Servicing Agreement
dated as of ___________ 1, ____ (the "Servicing Agreement"), among Residential Accredit Loans, Inc. (the
"Company"), Residential Funding and __________________ (the "Trustee") as amended by Amendment No.
thereto, dated as of , with respect to the Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___ (the "Certificates"); and
WHEREAS, pursuant to Section 13.01 of the Servicing Agreement, Residential Funding agrees to
make payments to the Holders of the Class B Certificates with respect to certain losses on the Mortgage Loans
as described in the Servicing Agreement; and
WHEREAS, GMAC desires to provide certain assurances with respect to the ability of Residential
Funding to secure sufficient funds and faithfully to perform its Subordinate Certificate Loss Obligation;
NOW THEREFORE, in consideration of the premises herein contained and certain other good and
valuable consideration, the receipt of which is hereby acknowledged, GMAC agrees as follows:
1. Provision of Funds. (a) GMAC agrees to contribute and deposit in the Certificate Account on behalf of
Residential Funding (or otherwise provide to Residential Funding, or to cause to be made available to
Residential Funding), either directly or through a subsidiary, in any case prior to the related Distribution
Date, such moneys as may be required by Residential Funding to perform its Subordinate Certificate Loss
Obligation when and as the same arises from time to time upon the demand of the Trustee in accordance with
Section 13.01 of the Servicing Agreement.
(b) The agreement set forth in the preceding clause (a) shall be absolute, irrevocable and
unconditional and shall not be affected by the transfer by GMAC or any other person of all or any part of its
or their interest in Residential Funding, by any insolvency, bankruptcy, dissolution or other proceeding
affecting Residential Funding or any other person, by any defense or right of counterclaim, set-off or
recoupment that GMAC may have against Residential Funding or any other person or by any other fact or
circumstance. Notwithstanding the foregoing, GMAC's obligations under clause (a) shall terminate upon the
earlier of (x) substitution for this Limited Guaranty pursuant to Section 13.01(f) of the Servicing
Agreement, or (y) the termination of the Trust Fund pursuant to the Servicing Agreement.
2. Waiver. GMAC hereby waives any failure or delay on the part of Residential Funding, the Trustee or
any other person in asserting or enforcing any rights or in making any claims or demands hereunder. Any
defective or partial exercise of any such rights shall not preclude any other or further exercise of that or
any other such right. GMAC further waives demand, presentment, notice of default, protest, notice of
acceptance and any other notices with respect to this Limited Guaranty, including, without limitation, those
of action or nonaction on the part of Residential Funding or the Trustee.
3. Modification, Amendment and Termination. This Limited Guaranty may be modified, amended or terminated
only by the written agreement of GMAC and the Trustee and only if such modification, amendment or termination
is permitted under Section 13.02 of the Servicing Agreement. The obligations of GMAC under this Limited
Guaranty shall continue and remain in effect so long as the Servicing Agreement is not modified or amended in
any way that might affect the obligations of GMAC under this Limited Guaranty without the prior written
consent of GMAC.
4. Successor. Except as otherwise expressly provided herein, the guarantee herein set forth shall be
binding upon GMAC and its respective successors.
5. Governing Law. This Limited Guaranty shall be governed by the laws of the State of New York.
6. Authorization and Reliance. GMAC understands that a copy of this Limited Guaranty shall be delivered
to the Trustee in connection with the execution of Amendment No. 1 to the Servicing Agreement and GMAC hereby
authorizes the Company and the Trustee to rely on the covenants and agreements set forth herein.
7. Definitions. Capitalized terms used but not otherwise defined herein shall have the meaning given
them in the Servicing Agreement.
8. Counterparts. This Limited Guaranty may be executed in any number of counterparts, each of which
shall be deemed to be an original and such counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, GMAC has caused this Limited Guaranty to be executed and delivered by its
respective officers thereunto duly authorized as of the day and year first above written.
GENERAL MOTORS ACCEPTANCE
CORPORATION
By:
Name:
Title:
Acknowledged by:
__________________,
as Trustee
By:
Name:
Title:
RESIDENTIAL ACCREDIT LOANS, INC.
By:
Name:
Title:
EXHIBIT M
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
__________ , 20
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
__________________
__________________
__________________
Attention: Residential Funding Corporation Series ____-___
Re: Mortgage Asset-Backed Pass-Through Certificates, Series ____-___
Assignment of Mortgage Loan
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by
(the "Trustee") to (the
"Lender") of (the "Mortgage Loan") pursuant to Section 3.13(d) of the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of ___________ 1, ____ among
Residential Accredit Loans, Inc., as seller (the "Company"), Residential Funding Corporation, as Master
Servicer, and the Trustee. All terms used herein and not otherwise defined shall have the meanings set forth
in the Pooling and Servicing Agreement. The Lender hereby certifies, represents and warrants to, and
covenants with, the Master Servicer and the Trustee that:
(i) the Mortgage Loan is secured by Mortgaged Property located in a jurisdiction in which an assignment in
lieu of satisfaction is required to preserve lien priority, minimize or avoid mortgage recording taxes or
otherwise comply with, or facilitate a refinancing under, the laws of such jurisdiction;
(ii) the substance of the assignment is, and is intended to be, a refinancing of such Mortgage Loan
and the form of the transaction is solely to comply with, or facilitate the transaction under, such local
laws;
(iii) the Mortgage Loan following the proposed assignment will be modified to have a rate of interest
at least 0.25 percent below or above the rate of interest on such Mortgage Loan prior to such proposed
assignment; and
(iv) such assignment is at the request of the borrower under the related Mortgage Loan.
Very truly yours,
(Lender)
By:
Name:
Title:
EXHIBIT N
FORM OF REQUEST FOR EXCHANGE
[DATE]
__________________
__________________
__________________
Re: Residential Accredit Loans, Inc.,
Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___
Residential Funding Corporation, as the Holder of a _______ % Percentage Interest of the
[Interest Only/Class A-V][-1] Certificates, hereby requests the Trustee to exchange the above-referenced
Certificates for the Subclasses referred to below:
1. [Interest Only/Class A-V]- Certificates, corresponding to the following Uncertificated REMIC Regular
Interests: [List numbers corresponding to the related loans and Pool Strip Rates from
the Mortgage Loan Schedule]. The initial Subclass Notional Amount and the Initial
Pass-Through Rate on the [Interest Only/Class A-V]- Certificates will be
$___________________ and ____________%, respectively.
2. [Repeat as appropriate.]
The Subclasses requested above will represent in the aggregate all of the Uncertificated REMIC
Regular Interests represented by the [Interest Only/Class A-V][-1] Certificates surrendered for exchange.
All capitalized terms used but not defined herein shall have the meanings set forth in the
Pooling and Servicing Agreement, dated as of ___________ 1, ____, among Residential Accredit Loans, Inc.,
Residential Funding Corporation and __________________, as trustee.
RESIDENTIAL FUNDING CORPORATION
By:
Name:
Title:
EXHIBIT O
Form of Form 10-K Certification
I, [identify the certifying individual], certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D required to be filed in
respect of the period covered by this report on Form 10-K of the trust (the "Exchange Act periodic reports")
created pursuant to the Series Supplement dated ___________________ to the Standard Terms of Pooling and
Servicing Agreement dated ____________________ (together, the "P&S Agreement") among Residential Accredit
Loans, Inc., Residential Funding Corporation (the "Master Servicer") and [Name of Trustee] (the "Trustee");
2. Based on my knowledge, the Exchange Act periodic reports, taken as a whole, do not contain any
untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other information required to be
provided under Form 10-D for the period covered by this report is included in the Exchange Act periodic
reports;
4. I am responsible for reviewing the activities performed by the Master Servicer and based on my
knowledge and the compliance review conducted in preparing the servicer compliance statement required in this
report under Item 1123 of Regulation AB, and except a disclosed in the Exchange Act periodic reports, the
Master Servicer has fulfilled its obligations under the P&S Agreement; and
5. All of the reports on assessment of compliance with servicing criteria for asset-backed
securities and their related attestation reports on assessment of compliance with servicing criteria for
asset-backed securities required to be included in this report in accordance with Item 1122 of Regulation AB
and Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this report, except as otherwise
disclosed in this report. Any material instances of noncompliance described in such reports have been
disclosed in this report on Form 10-K.
In giving the certifications above, I have reasonably relied on the information provided to me by the
following unaffiliated parties: [the Trustee].
Date:_______________________
____________________________*
[Signature]
[Title:]
* to be signed by the senior officer in charge of the servicing functions of the Master Servicer
EXHIBIT P
[FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE]
The undersigned, a Responsible Officer of [_________] (the "Trustee") certifies that:
(a) The Trustee has performed all of the duties specifically required to be performed by it
pursuant to the provisions of the Pooling and Servicing Agreement dated as of [_________], 20[__] (the
"Agreement") by and among [__________], as depositor, Residential Funding Corporation, as Master Servicer, and
the Trustee in accordance with the standards set forth therein.
(b) Based on my knowledge, the list of Certificateholders as shown on the Certificate Register as
of the end of each calendar year that is provided by the Trustee pursuant to the Agreement is accurate as of
the last day of the 20[__] calendar year.
Capitalized terms used and not defined herein shall have the meanings given such terms in the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of _________, 20__.]
Name:
Title:
EXHIBIT Q
INFORMATION TO BE PROVIDED BY THE MASTER SERVICER TO THE RATING AGENCIES RELATING TO REPORTABLE MODIFIED
MORTGAGE LOANS
Account number
Transaction Identifier
Unpaid Principal Balance prior to Modification
Next Due Date
Monthly Principal and Interest Payment
Total Servicing Advances
Current Interest Rate
Original Maturity Date
Original Term to Maturity (Months)
Remaining Term to Maturity (Months)
Trial Modification Indicator
Mortgagor Equity Contribution
Total Servicer Advances
Trial Modification Term (Months)
Trial Modification Start Date
Trial Modification End Date
Trial Modification Period Principal and Interest Payment
Trial Modification Interest Rate
Trial Modification Term
Rate Reduction Indicator
Interest Rate Post Modification
Rate Reduction Start Date
Rate Reduction End Date
Rate Reduction Term
Term Modified Indicator
Modified Amortization Period
Modified Final Maturity Date
Total Advances Written Off
Unpaid Principal Balance Written Off
Other Past Due Amounts Written Off
Write Off Date
Unpaid Principal Balance Post Write Off
Capitalization Indicator
Mortgagor Contribution
Total Capitalized Amount
Modification Close Date
Unpaid Principal Balance Post Capitalization Modification
Next Payment Due Date per Modification Plan
Principal and Interest Payment Post Modification
Interest Rate Post Modification
Payment Made Post Capitalization
Delinquency Status to Modification Plan
EXHIBIT R
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Trustee shall address, at a minimum, the criteria
identified as below as "Applicable Servicing Criteria":
-------------------------------------------------------------------------- ------------------
Applicable
Servicing
Servicing Criteria Criteria
-------------------------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Reference Criteria
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
General Servicing Considerations
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted
to monitor the third party's performance and
compliance with such servicing activities.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the pool assets are
maintained.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the amount
of coverage required by and otherwise in accordance
with the terms of the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Cash Collection and Administration
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(i) Payments on pool assets are deposited into the |X| (as to
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days
following receipt, or such other number of days accounts held by
specified in the transaction agreements. Trustee)
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an |X| (as to
obligor or to an investor are made only by authorized investors only)
personnel.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other
fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of |X| (as to
overcollateralization, are separately maintained accounts held by
(e.g., with respect to commingling of cash) as set Trustee)
1122(d)(2)(iv) forth in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(v) Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this
criterion, "federally insured depository institution"
with respect to a foreign financial institution means
a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for
all asset-backed securities related bank accounts,
including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after
the bank statement cutoff date, or such other number
of days specified in the transaction agreements; (C)
reviewed and approved by someone other than the person
who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling
items are resolved within 90 calendar days of their
original identification, or such other number of days
specified in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Investor Remittances and Reporting
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(3)(i) Reports to investors, including those to be filed with
the Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms
set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and
regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal
balance and number of pool assets serviced by the
servicer.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in |X|
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Disbursements made to an investor are posted within
two business days to the servicer's investor records,
or such other number of days specified in the |X|
1122(d)(3)(iii) transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, |X|
1122(d)(3)(iv) or custodial bank statements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Pool Asset Administration
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(i) Collateral or security on pool assets is maintained as
required by the transaction agreements or related
asset pool documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Pool assets and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance
with any conditions or requirements in the transaction
agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made
in accordance with the related pool asset documents
are posted to the servicer's obligor records
maintained no more than two business days after
receipt, or such other number of days specified in the
transaction agreements, and allocated to principal,
interest or other items (e.g., escrow) in accordance
with the related pool asset documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(v) The servicer's records regarding the pool assets agree
with the servicer's records with respect to an
obligor's unpaid principal balance.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an
obligor's pool asset (e.g., loan modifications or
re-agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with
the timeframes or other requirements established by
the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained
during the period a pool asset is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or
such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent pool assets including, for
example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for
pool assets with variable rates are computed based on
the related pool asset documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such
as escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's pool asset documents, on
at least an annual basis, or such other period
specified in the transaction agreements; (B) interest
on such funds is paid, or credited, to obligors in
accordance with applicable pool asset documents and
state laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment of
the related pool asset, or such other number of days
specified in the transaction agreements.
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1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
transaction agreements.
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1122(d)(4)(xii) Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the
obligor, unless the late payment was due to the
obligor's error or omission.
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Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of
1122(d)(4)(xiii) days specified in the transaction agreements.
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1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts
are recognized and recorded in accordance with the
transaction agreements.
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Any external enhancement or other support, identified
in Item 1114(a)(1) through (3) or Item 1115 of
Regulation AB, is maintained as set forth in the |X|
1122(d)(4)(xv) transaction agreements.
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