RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.,
Depositor,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2003
Mortgage Asset-Backed Pass-Through Certificates
Series 2003-RM2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS..........................................................................6
Section 1.01 Definitions............................................................6
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Section 1.02 Determination of LIBOR................................................61
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES...................................................63
Section 2.01 Conveyance of Mortgage Loans..........................................63
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Section 2.02 Acceptance by Trustee.................................................66
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Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the
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Depositor.............................................................68
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Section 2.04 Representations and Warranties of Residential Funding.................71
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Section 2.05 Execution and Authentication of Certificates; Conveyance of Uncertificated
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Regular Interests.....................................................73
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS...................................................................74
Section 3.01 Master Servicer to Act as Servicer....................................74
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Section 3.02 Subservicing Agreements Between Master Servicer and Subservicers;
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Enforcement of Subservicers' Obligations; Special Servicing...........75
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Section 3.03 Successor Subservicers................................................77
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Section 3.04 Liability of the Master Servicer......................................77
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Section 3.05 No Contractual Relationship Between Subservicer and Trustee or
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Certificateholders....................................................77
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Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee.......78
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Section 3.07 Collection of Certain Mortgage Loan Payments; Deposits to Custodial
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Account...............................................................78
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Section 3.08 Subservicing Accounts; Servicing Accounts.............................80
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Section 3.09 Access to Certain Documentation and Information Regarding the Mortgage
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Loans.................................................................82
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Section 3.10 Permitted Withdrawals from the Custodial Account......................82
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Section 3.11 Maintenance of Primary Insurance Coverage.............................84
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Section 3.12 Maintenance of Fire Insurance and Omissions and Fidelity Coverage
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.....................................................................85
Section 3.13 Enforcement of Due-on-Sale Clauses; Assumption and Modification
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Agreements; Certain Assignments.......................................86
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Section 3.14 Realization Upon Defaulted Mortgage Loans.............................88
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Section 3.15 Trustee to Cooperate; Release of Mortgage Files.......................91
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Section 3.16 Servicing and Other Compensation; Compensating Interest...............92
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Section 3.17 Reports to the Trustee and the Depositor..............................94
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Section 3.18 Annual Statement as to Compliance.....................................94
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Section 3.19 Annual Independent Public Accountants' Servicing Report...............94
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Section 3.20 Right of the Depositor in Respect of the Master Servicer..............95
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS......................................................96
Section 4.01 Certificate Account...................................................96
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Section 4.02 Distributions.........................................................96
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Section 4.03 Statements to Certificateholders; Exchange Act Reporting.............107
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Section 4.04 Distribution of Reports to the Trustee and the Depositor; Advances by the
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Master Servicer......................................................110
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Section 4.05 Allocation of Realized Losses........................................111
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Section 4.06 Reports of Foreclosures and Abandonment of Mortgaged Property........114
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Section 4.07 Optional Purchase of Defaulted Mortgage Loans........................115
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Section 4.08 Distributions on the Uncertificated Regular Interests................115
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ARTICLE V
THE CERTIFICATES...................................................................118
Section 5.01 The Certificates.....................................................118
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Section 5.02 Registration of Transfer and Exchange of Certificates................120
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Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates....................125
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Section 5.04 Persons Deemed Owners................................................126
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Section 5.05 Appointment of Paying Agent..........................................126
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER..............................................127
Section 6.01 Respective Liabilities of the Depositor and the Master Servicer......127
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Section 6.02 Merger or Consolidation of the Depositor or the Master Servicer; Assignment
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of Rights and Delegation of Duties by Master Servicer................127
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Section 6.03 Limitation on Liability of the Depositor, the Master Servicer and Others
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....................................................................128
Section 6.04 Depositor and Master Servicer Not to Resign..........................129
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i
ARTICLE VII
DEFAULT............................................................................130
Section 7.01 Events of Default....................................................130
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Section 7.02 Trustee or Depositor to Act; Appointment of Successor................132
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Section 7.03 Notification to Certificateholders...................................133
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Section 7.04 Waiver of Events of Default..........................................133
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ARTICLE VIII
CONCERNING THE TRUSTEE.............................................................134
Section 8.01 Duties of Trustee....................................................134
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Section 8.02 Certain Matters Affecting the Trustee................................136
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Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans................137
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Section 8.04 Trustee May Own Certificates.........................................138
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Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses; Indemnification
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....................................................................138
Section 8.06 Eligibility Requirements for Trustee.................................139
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Section 8.07 Resignation and Removal of the Trustee...............................139
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Section 8.08 Successor Trustee....................................................140
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Section 8.09 Merger or Consolidation of Trustee...................................141
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Section 8.10 Appointment of Co-Trustee or Separate Trustee........................141
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Section 8.11 Appointment of Custodians............................................142
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Section 8.12 Appointment of Office or Agency......................................142
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ARTICLE IX
TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES...............................143
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
....................................................................143
Section 9.02 Additional Termination Requirements..................................146
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ARTICLE X
REMIC PROVISIONS...................................................................147
Section 10.01REMIC Administration.................................................147
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Section 10.02Master Servicer, REMIC Administrator and Trustee Indemnification
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....................................................................151
ARTICLE XI
MISCELLANEOUS PROVISIONS...........................................................152
ii
Section 11.01Amendment............................................................152
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Section 11.02Recordation of Agreement; Counterparts...............................154
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Section 11.03Limitation on Rights of Certificateholders...........................155
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Section 11.04Governing Law........................................................156
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Section 11.05Notices..............................................................156
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Section 11.06Notices to Rating Agencies...........................................156
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Section 11.07Severability of Provisions...........................................157
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Section 11.08Supplemental Provisions for Resecuritization.........................157
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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 Custodial Agreement
Exhibit F-1 Group I Loan Schedule
Exhibit F-2 Group II Loan Schedule
Exhibit F-3 Group III Loan Schedule
Exhibit G Forms of Request for Release
Exhibit H-1 Form of Transfer Affidavit and Agreement
Exhibit H-2 Form of Transferor Certificate
Exhibit I Form of Investor Representation Letter
Exhibit J Form of Transferor Representation Letter
Exhibit K Text of Amendment to Pooling and Servicing Agreement Pursuant to Section
11.01(e) for a Limited Guaranty
Exhibit L Form of Limited Guaranty
Exhibit M Form of Lender Certification for Assignment of Mortgage Loan
Exhibit N Form of Rule 144A Investment Representation
Exhibit O Form of ERISA Letter
Exhibit P-1 Group I Discount Fractions
Exhibit P-2 Group II Discount Fractions
Exhibit P-3 Group III Discount Fractions
Exhibit Q PAC I Aggregate Planned
Principal Balances and PAC II Aggregate Planned
Principal Balances
Exhibit R-1 Form 10-K Certification
Exhibit R-2 Form 10-K Back-up Certification
iii
This Pooling and Servicing Agreement, effective as of May 1, 2003, among
RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC., as the depositor (together with its
permitted successors and assigns, the "Depositor"), RESIDENTIAL FUNDING
CORPORATION, as master servicer (together with its permitted successors and
assigns, the "Master Servicer"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New
York banking corporation, as trustee (together with its permitted successors and
assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
thirty-four classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein).
REMIC I
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Group I Loans and Group II
Loans and certain other related assets subject to this Agreement as a real
estate mortgage investment conduit (a "REMIC") for federal income tax purposes,
and such segregated pool of assets will be designated as "REMIC I." The Class
R-I Certificates will represent the sole class of "residual interests" in REMIC
I for purposes of the REMIC Provisions (as defined herein) under federal income
tax law. The following table irrevocably sets forth the designation, remittance
rate (the "Uncertificated REMIC I Pass-Through Rate") and initial Uncertificated
Principal Balance for each of the "regular interests" in REMIC I (the "REMIC I
Regular Interests"). The "latest possible maturity date" (determined solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each
REMIC I Regular Interest shall be the Distribution Date following the last
scheduled monthly payment of the Group I Loans. None of the REMIC I Regular
Interests will be certificated.
UNCERTIFICATED REMIC UNCERTIFICATED REMIC I LATEST POSSIBLE
DESIGNATION I PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE
LT-I-SUB 5.50% $ 714.95 May 25, 2033
LT-I-AV Variable(1) (2) May 25, 2033
LT-I-AP 0.00% $ 1,967,663.00 May 25, 2033
LT-I-ZZZ 5.50% $253,363,992.65 May 25, 2033
LT-II-SUB 5.00% 217.65 May 25, 2033
LT-II-AV Variable(1) (3) May 25, 2033
LT-II-AP 0.00% $ 425,520.00 May 25, 2033
LT-II-ZZZ 5.00% $774,274,273.87 May 25, 2033
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(1) Calculated as provided in the definition of Uncertificated REMIC I
Pass-Through Rate.
(2) REMIC I Regular Interest LT-I-AV will accrue interest on an Uncertificated
Notional Amount equal to the aggregate Stated Principal Balance of the
Group I Non-Discount Mortgage Loans.
1
(3) REMIC I Regular Interest LT-II-AV will accrue interest on an
Uncertificated Notional Amount equal to the aggregate Stated Principal
Balance of the Group II Non-Discount Mortgage Loans.
REMIC II
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Group III Loans and
certain other related assets subject to this Agreement as a real estate mortgage
investment conduit (a "REMIC") for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC II." The Class R-II
Certificates will represent the sole class of "residual interests" in REMIC II
for purposes of the REMIC Provisions (as defined herein) under federal income
tax law. The following table irrevocably sets forth the designation, remittance
rate (the "Uncertificated REMIC II Pass-Through Rate") and initial
Uncertificated Principal Balance for each of the "regular interests" in REMIC II
(the "REMIC II Regular Interests"). The "latest possible maturity date"
(determined solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for each REMIC II Regular Interest shall be the
Distribution Date following the last scheduled monthly payment of the Group III
Loans. None of the REMIC II Regular Interests will be certificated.
UNCERTIFICATED REMIC UNCERTIFICATED REMIC II LATEST POSSIBLE
DESIGNATION II PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE
LT-IIIA 6.00% $153,959,077.37 May 25, 2033
LT-III-AV Variable(1) $(2) May 25, 2033
LT-III-AP 0.00% $3,143,800.00 May 25, 2033
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(1) Calculated as provided in the definition of Uncertificated REMIC II
Pass-Through Rate.
(2) REMIC I Regular Interest LT-III-AV will accrue interest on an
Uncertificated Notional Amount equal to the aggregate Stated Principal
Balance of the Group III Non-Discount Mortgage Loans.
REMIC III
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC I Regular Interests
and REMIC II Regular Interests and certain other related assets subject to this
Agreement as a REMIC for federal income tax purposes, and such segregated pool
of assets will be designated as "REMIC III." The Class R-III Certificates will
represent the sole class of "residual interests" in REMIC III for purposes of
the REMIC Provisions under federal income tax law. The following table
irrevocably sets forth the designation, remittance rate (the "Uncertificated
REMIC III Pass-Through Rate") and initial Uncertificated Principal Balance for
the "regular interest" in REMIC III (the "REMIC III Regular Interests"). The
"latest possible maturity date" (determined solely for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii)) for the REMIC III Regular
Interest shall be the Distribution Date following the last scheduled monthly
payment of the Group I Loans. The REMIC III Regular Interests will not be
certificated.
2
UNCERTIFICATED REMIC UNCERTIFICATED REMIC III LATEST POSSIBLE
DESIGNATION III PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE
LT3-AI1 4.50% $68,720,000.00 May 25, 2033
LT3-AI3 4.50% $37,105,000.00 May 25, 2033
LT3-AI4 4.50% $4,533,000.00 May 25, 2033
LT3-AI5 8.50% $36,786,000.00 May 25, 2033
LT3-AI6 5.50% $7,701,000.00 May 25, 2033
LT3-AI7 5.50% $14,233,000.00 May 25, 2033
LT3-AI8 5.50% $11,225,000.00 May 25, 2033
LT3-AI9 (1) $48,335,466.00 May 25, 2033
LT3-AI10 (2) $17,576,534.00 May 25, 2033
LT3-API 0.00% $1,967,663.00 May 25, 2033
LT3-AVI (3) (4) May 25, 2033
LT3-AII 5.00% $75,098,000.00 May 25, 2033
LT3-APII 0.00% $425,520.00 May 25, 2033
LT3-AVII (5) (6) May 25, 2033
LT3-AIII 6.00% $145,318,000.00 May 25, 2033
LT3-APIII 0.00% $3,143,800.00 May 25, 2033
LT3-AVIII (7) (8) May 25, 2033
LT3-R 5.50% $100.00 May 25, 2033
LT3-M1 (9) $4,497,000.00 May 25, 2033
LT3-M2 (9) $1,831,600.00 May 25, 2033
LT3-M3 (9) $1,165,600.00 May 25, 2033
LT3-MIII1 6.00% $3,927,900.00 May 25, 2033
LT3-MIII2 6.00% $1,806,600.00 May 25, 2033
LT3-MIII3 6.00% $1,178,200.00 May 25, 2033
LT3-B1 (9) $499,500.00 May 25, 2033
LT3-B2 (9) $666,000.00 May 25, 2033
LT3-B3 (9) $666,299.13 May 25, 2033
LT3-BIII1 6.00% $549,800.00 May 25, 2033
LT3-BIII2 6.00% $392,700.00 May 25, 2033
LT3-BIII3 6.00% $785,877.37 May 25, 2033
(1) Calculated as provided in the definition of Uncertificated REMIC III
Pass-Through Rate. (2) Calculated as provided in the definition of
Uncertificated REMIC III Pass-Through Rate.
3
(3) REMIC III Regular Interest LT3-AVI will be entitled to 100% of amounts
distributed on REMIC I Regular Interest LT-I-AV. (4) REMIC III Regular Interest
LT3-AVI will not have an Uncertificated Principal Balance, but will be entitled
to 100% of amounts distributed on REMIC I Regular Interest LT-I-AV.
(5) REMIC III Regular Interest LT3-AVII will be entitled to 100% of amounts
distributed on REMIC I Regular Interest LT-II-AV. (6) REMIC III Regular Interest
LT3-AVII will not have an Uncertificated Principal Balance, but will be entitled
to 100% of amounts distributed on REMIC I Regular Interest LT-II-AV.
(7) REMIC III Regular Interest LT3-AVIII will be entitled to 100% of amounts
distributed on REMIC II Regular Interest LT-III-AV. (8) REMIC III Regular
Interest LT3-AVIII will not have an Uncertificated Principal Balance, but will
be entitled to 100% of amounts distributed on REMIC II Regular Interest
LT-III-AV.
(9) Calculated as provided in the definition of Uncertificated REMIC III
Pass-Through Rate.
REMIC IV
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC III Regular
Interests subject to this Agreement as a REMIC for federal income tax purposes,
and such segregated pool of assets will be designated as "REMIC IV." The Class
R-IV Certificates will represent the sole class of "residual interests" in REMIC
IV for purposes of the REMIC Provisions under federal income tax law. The
following table irrevocably sets forth the designation, remittance rate (the
"Uncertificated REMIC IV Pass-Through Rate") and initial Uncertificated
Principal Balance for each of the "regular interests" in REMIC IV (the "REMIC IV
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 IV Regular Interest shall be the Distribution Date following the last
scheduled monthly payment of the Mortgage Loans. None of the REMIC IV Regular
Interests will be certificated.
Aggregate Initial
Pass-Through Certificate-Principal Maturity Date
Designation Type Rate Balance Features Initial Ratings
Fitch S&P
Class A-I-1 Senior 4.00% $ 68,720,000.00 Senior/PAC I May 25, 2033 AAA AAA
Class A-I-2 Senior 1.00% $ 0.00 Senior/Interest OnlMay 25, 2033 AAA AAA
Class A-I-3 Senior 4.50% $ 37,105,000.00 Senior/PAC I May 25, 2033 AAA AAA
Class A-I-4 Senior 4.50% $ 4,533,000.00 Senior/PAC I May 25, 2033 AAA AAA
Class A-I-5 Senior 8.50% $ 36,786,000.00 Senior/PAC I May 25, 2033 AAA AAA
Class A-I-6 Senior 5.50% $ 7,701,000.00 Senior/PAC I May 25, 2033 AAA AAA
Class A-I-7 Senior 5.50% $ 14,233,000.00 Senior/PAC II May 25, 2033 AAA AAA
Class A-I-8 Senior 5.50% $ 11,225,000.00 Senior/PAC II May 25, 2033 AAA AAA
Class A-I-9 Adjustable Senior/Companion/
Senior Rate(1) $ 48,335,466.00 Floater May 25, 2033 AAA AAA
4
Class A-I-10 Adjustable Senior/Companion/
Senior Rate(1) $ 17,576,534.00 Inverse Floater May 25, 2033 AAA AAA
Class AP-I Senior 0.00% $ 1,967,663.00 Senior/Principal OnMay 25, 2033 AAA AAA
Class AV-I Senior Variable Rate(2)$ 0.00 Senior/Interest OnlMay 25, 2033 AAA AAA
Class A-II Senior 5.00% $ 75,098,000.00 Senior May 25, 2018 AAA AAA
Class AP-II Senior 0.00% $ 425,520.00 Senior/Principal OnMay 25, 2018 AAA AAA
Class AV-II Senior Variable Rate(3)$ 0.00 Senior/Interest OnlMay 25, 2018 AAA AAA
Class A-III Senior 6.00% $ 145,318,000.00 Senior May 25, 2033 AAA AAA
Class AP-III Senior 0.00% $ 3,143,800.00 Senior/Principal OnMay 25, 2033 AAA AAA
Class AV-III Senior Variable Rate(4)$ 0.00 Senior/Interest OnlMay 25, 2033 AAA AAA
Class R-I Residual 5.50% $ 100.00 Senior/Residual May 25, 2033 AAA AAA
Class R-II Residual 6.00% $ 100.00 Senior/Residual May 25, 2033 AAA AAA
Class R-III Residual 5.50% $ 100.00 Senior/Residual May 25, 2033 AAA AAA
Class R-IV Residual 5.50% $ 100.00 Senior/Residual May 25, 2033 AAA AAA
Class M-1 Mezzanine Variable Rate(5)$ 4,497,000.00 Xxxxxxxxx Xxx 00, 0000 XX XX
Class M-2 Mezzanine Variable Rate(5)$ 1,831,600.00 Mezzanine May 25, 2033 A A
Class M-3 Mezzanine Variable Rate(5)$ 1,165,600.00 Mezzanine May 25, 2033 BBB BBB
Class M-III-1 Mezzanine 6.00% $ 3,927,900.00 Xxxxxxxxx Xxx 00, 0000 XX XX
Class M-III-2 Mezzanine 6.00% $ 1,806,600.00 Mezzanine May 25, 2033 A A
Class M-III-3 Mezzanine 6.00% $ 1,178,200.00 Mezzanine May 25, 2033 BBB BBB
Class B-1 SubordinateVariable Rate(5)$ 499,500.00 Subordinate May 25, 2033 BB BB
Class B-2 SubordinateVariable Rate(5)$ 666,000.00 Subordinate May 25, 2033 B B
Class B-3 SubordinateVariable Rate(5)$ 666,299.13 Subordinate May 25, 2033 N/R N/R
Class B-III-1 Subordinate 6.00% $ 549,800.00 Subordinate May 25, 2033 BB BB
Class B-III-2 Subordinate 6.00% $ 392,700.00 Subordinate May 25, 2033 B B
Class B-III-3 Subordinate 6.00% $ 785,877.37 Subordinate May 25, 2033 N/R N/R
----------
(1) The Class A-I-9 and Class A-I-10 Certificates will accrue interest based on
the applicable Pass-Through Rate as defined herein.
(2) The Pass-Through Rate for the Class AV-I Certificates will be equal to the
excess of the weighted average of the Net Mortgage Rate of each Group I Loan
over 5.50%.
(3) The Pass-Through Rate for the Class AV-II Certificates will be equal to the
excess of the weighted average of the Net Mortgage Rate of each Group II Loan
over 5.00%.
5
(4) The Pass-Through Rate for the Class AV-III Certificates will be equal to the
excess of the weighted average of the Net Mortgage Rate of each Group III Loan
over 6.00%.
(5) The Pass-Through Rate for the Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates varies from not less than 5.00% per annum
to not more than 5.50% per annum, according to the weighted average of the Class
A-I Certificates weighted average Pass-Through Rate and the Class A-II
Certificates weighted average Pass- Through Rate, as described herein in the
definition of "Pass-Through Rate".
The Group I Loans have an aggregate Cut-off Date Principal Balance equal
to $255,332,470.60. The Group I Loans are fixed-rate, fully amortizing, first
lien mortgage loans having terms to maturity at origination of generally not
more than 30 years. The Group II Loans have an aggregate Cut-off Date Principal
Balance equal to $77,700,011.52. The Group II Loans are fixed- rate, fully
amortizing, first lien mortgage loans having terms to maturity at origination of
generally not more than 15 years. The Group III Loans have an aggregate Cut-off
Date Principal Balance equal to approximately $157,102,977.37. The Group III
Loans are fixed-rate, fully amortizing, first lien mortgage loans having terms
to maturity at origination of generally not more than 30 years.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
Accrued Certificate Interest: With respect to each Distribution Date, as
to any Class of Certificates (other than the Class AP-I, Class AP-II and Class
AP-III Certificates), interest accrued during the preceding 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 of Certificates (other than the Class AP-I, Class AP-II and Class
AP-III Certificates) will be reduced by the amount of:
(i) Prepayment Interest Shortfalls on the Mortgage Loans in the
related Loan Group (to the extent not offset by the Master Servicer with
Compensating Interest as provided in Section 3.16(e)),
(ii) the interest portion (adjusted to the Net Mortgage Rate (or
the Modified Net Mortgage Rate in the case of a Modified Mortgage Loan
in the related Loan Group)) of Excess Special Hazard Losses, Excess
Fraud Losses, Excess Bankruptcy Losses and
6
Extraordinary Losses on the Mortgage Loans in the related Loan Group,
to the extent allocated to the related Certificates,
(iii) the interest portion of Advances that were made with
respect to delinquencies that were ultimately determined to be Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or
Extraordinary Losses on the Mortgage Loans in the related Loan Group to
the extent allocated to the related Certificates, and
(iv) any other interest shortfalls on the Mortgage Loans in the
related Loan Group not covered by the subordination provided by the
related Class M Certificates and related Class B Certificates, including
interest that is not collectible from the Mortgagor pursuant to the
Relief Act or similar legislation or regulations as in effect from time
to time, with all such reductions allocated among all of the
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 related Class of Class
B Certificates or any related 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.
Adjustable Rate Certificates: Any one of the Class A-I-9 Certificates and
Class A-I-10 Certificates.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and any date
of determination, the Mortgage Rate borne by the related Mortgage Note, less the
rate at which the related Subservicing Fee accrues.
Adjustment Date: As to each adjustable rate Mortgage Loan, each date set
forth in the related Mortgage Note on which an adjustment to the interest rate
on such Mortgage Loan becomes effective.
Advance: As to any Mortgage Loan, any advance made by the Master
Servicer, pursuant to Section 4.04.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.
7
Amount Held for Future Distribution: As to any Distribution Date, the
total of the amounts held in the Custodial Account at the close of business on
the preceding Determination Date on account of (i) Liquidation Proceeds,
Insurance Proceeds, Principal Prepayments, Mortgage Loan purchases made pursuant
to Section 2.02, 2.03, 2.04 or 4.07 and Mortgage Loan substitutions made
pursuant to Section 2.03 or 2.04 received or made in the month of such
Distribution Date (other than such Liquidation Proceeds, Insurance Proceeds 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 Due Date in the related Due
Period.
Appraised Value: As to any Mortgaged Property, the appraised value of
such Mortgaged Property based upon the appraisal or appraisals (or field review)
made at the time of the origination of the related Mortgage Loan.
Assignment: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage Loan to the Trustee for the benefit of
Certificateholders, which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering
Mortgages secured by Mortgaged Properties located in the same county, if
permitted by law and accompanied by an Opinion of Counsel to that effect.
Assignment Agreement: The Assignment and Assumption Agreement, dated the
Closing Date, between Residential Funding and the Depositor relating to the
transfer and assignment of the Mortgage Loans.
Available Distribution Amount: The Group I Available Distribution Amount,
Group II Available Distribution Amount or Group III Available Distribution
Amount, as applicable.
Bankruptcy Amount: As to Loan Group I and Loan Group II in the
aggregate, and Loan Group III, and as of any date of determination prior to the
first anniversary of the Cut-off Date, an amount equal to the excess, if any, of
(A) $100,000 over (B) the aggregate amount of Bankruptcy Losses on the Mortgage
Loans in the related Loan Groups or Loan Group allocated solely to one or more
specific Classes of Certificates in accordance with Section 4.05 of this
Agreement. As of any date of determination on or after the first anniversary of
the Cut-off Date, an amount equal to the excess, if any, of
(1) the lesser of (a) the related Bankruptcy Amount calculated as
of the close of business on the Business Day immediately preceding the
most recent anniversary of the Cut- off Date coinciding with or
preceding such date of determination (or, if such date of determination
is an anniversary of the Cut-off Date, the Business Day immediately
preceding such date of determination) (for purposes of this definition,
the "Relevant Anniversary") and (b) the greater of
8
(A) the greater of (i) 0.0006 times the aggregate
principal balance of all the Mortgage Loans in the related Loan
Group as of the Relevant Anniversary having a Loan-to-Value Ratio
at origination which exceeds 75% and (ii) $100,000; and
(B) the greater of (i) the product of (x) an amount equal
to the largest difference in the related Monthly Payment for any
Non-Primary Residence Loan remaining in the related Loan Groups
or Loan Group which had an original Loan-to- Value Ratio of 80%
or greater that would result if the Net Mortgage Rate thereof was
equal to the weighted average (based on the principal balance of
the Mortgage Loans in the related Loan Groups or Loan Group as of
the Relevant Anniversary) of the Net Mortgage Rates of all
Mortgage Loans in the related Loan Groups or Loan Group as of the
Relevant Anniversary less 1.25% per annum, (y) a number equal to
the weighted average remaining term to maturity, in months, of
all Non-Primary Residence Loans remaining in the related Loan
Groups or Loan Group as of the Relevant Anniversary, and (z) one
plus the quotient of the number of all Non- Primary Residence
Loans remaining in the related Loan Groups or Loan Group divided
by the total number of Outstanding Mortgage Loans in the related
Loan Groups or Loan Group as of the Relevant Anniversary, and
(ii) $50,000, over (2) the aggregate amount of related Bankruptcy
Losses allocated solely to one or more specific Classes of
Certificates in accordance with Section 4.05 since the Relevant
Anniversary.
Each Bankruptcy Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
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.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
9
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the State of New York or the State of
California (and such other state or states in which the Custodial Account or the
Certificate Account are at the time located) are required or authorized by law
or executive order to be closed.
Calendar Quarter: A Calendar Quarter shall consist of one of the
following time periods in any given year: January 1 through March 31, April 1
through June 30, July 1 though September 30, and October 1 through December 31.
Cash Liquidation: As to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.
Certificate: Any Class A Certificate, Class M Certificate, Class B
Certificate or Class R Certificate.
Certificate Account: The account or accounts created and maintained
pursuant to Section 4.01, which shall be entitled "Deutsche Bank Trust Company
Americas, as trustee, in trust for the registered holders of Residential Asset
Mortgage Products, Inc., Mortgage Asset-Backed Pass- Through Certificates,
Series 2003-RM2" and which must be an Eligible Account.
Certificate Account Deposit Date: As to any Distribution Date, the
Business Day prior thereto.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that neither a Disqualified
Organization nor a Non-United States Person shall be a holder of a Class R
Certificate for any purpose hereof. Solely for the purpose of giving any consent
or direction pursuant to this Agreement, any Certificate, other than a Class R
Certificate, registered in the name of the Depositor, the Master Servicer or any
Subservicer or any Affiliate thereof shall be deemed not to be outstanding and
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.
10
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate, as reflected on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent, if any, and otherwise on the books of a Depository Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to any Class A (other than
the Class A-I-2, Class AV-I, Class AV-II or Class AV-III Certificates), Class R,
Class M or Class B Certificate, on any date of determination, an amount equal to
(i) the Initial Certificate Principal Balance of such Certificate as specified
on the face thereof, minus (ii) the sum of (x) the aggregate of all amounts
previously distributed with respect to such Certificate (or any predecessor
Certificate) and applied to reduce the Certificate Principal Balance or amount
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. The Class A-I-2, Class AV-I,
Class AV-II and Class AV-III Certificates will not have a Certificate Principal
Balance.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates or uncertificated interests
bearing the same designation.
Class A Certificates: Any one of the Class A-I, Class AP-I, Class AV-I,
Class A-II, Class AP-II, Class AV-II, Class A-III, Class AP-III and Class AV-III
Certificates.
Class A-I Certificate: Any one of the Class A-I-1, Class A-I-2, Class
A-I-3, Class A-I-4, Class A-I-5, Class A-I-6, Class A-I-7, Class A-I-8, Class
A-I-9 and Class A-I-10 Certificates executed by the Trustee and authenticated by
the Certificate Registrar substantially in the form annexed hereto as Exhibit A,
senior to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class
B-3 Certificates with respect to distributions and the allocation of Realized
Losses in respect of the Mortgage Loans as set forth in Section 4.05, and
evidencing an interest designated as a "regular interest" in REMIC IV for
purposes of the REMIC Provisions.
Class AV-I Certificate: Any one of the Class AV-I Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit A, senior to the Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2 and Class B-3 Certificates with respect to
distributions and the allocation of Realized Losses in respect of the Mortgage
Loans as set forth in Section 4.05, and evidencing an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions.
Class AP-I Certificate: Any one of the Class AP-I Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit A, senior to the Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2 and Class B-3 Certificates with
11
respect to distributions and the allocation of Realized Losses in respect of the
Mortgage Loans as set forth in Section 4.05, and evidencing an interest
designated as a "regular interest" in REMIC IV for purposes of the REMIC
Provisions.
Class AP Collection Shortfall: With respect to the Cash Liquidation or
REO Disposition of a Group I Discount Mortgage Loan, Group II Discount Mortgage
Loan or Group III Discount Mortgage Loan and any Distribution Date, the excess
of the amount described in Section 4.02(b)(i)(3)(1) over the amount described in
Section 4.02(b)(i)(3)(2).
Class AP Principal Distribution Amount: As defined in Section 4.02(b)(i).
Class A-II Certificate: Any one of the Class A-II Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit A, senior to the Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2 and Class B-3 Certificates with respect to
distributions and the allocation of Realized Losses in respect of the Mortgage
Loans as set forth in Section 4.05, and evidencing an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions.
Class AV-II Certificate: Any one of the Class AV-II Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates with
respect to distributions and the allocation of Realized Losses in respect of the
Mortgage Loans as set forth in Section 4.05, and evidencing an interest
designated as a "regular interest" in REMIC IV for purposes of the REMIC
Provisions.
Class AP-II Certificate: Any one of the Class AP-II Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates with
respect to distributions and the allocation of Realized Losses in respect of the
Mortgage Loans as set forth in Section 4.05, and evidencing an interest
designated as a "regular interest" in REMIC IV for purposes of the REMIC
Provisions.
Class A-III Certificate: Any one of the Class A-III Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class M-III
and Class B-III Certificates with respect to distributions and the allocation of
Realized Losses in respect of the Mortgage Loans as set forth in Section 4.05,
and evidencing an interest designated as a "regular interest" in REMIC IV for
purposes of the REMIC Provisions.
Class AP-III Certificate: Any one of the Class AP-III Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class M-III
and Class B-III Certificates with respect to distributions and the allocation of
Realized Losses in respect of the Mortgage Loans as set forth in Section 4.05,
and evidencing an interest designated as a "regular interest" in REMIC IV for
purposes of the REMIC Provisions.
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Class AV-III Certificate: Any one of the Class AV-III Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A, senior to the Class M-III
and Class B-III Certificates with respect to distributions and the allocation of
Realized Losses in respect of the Mortgage Loans as set forth in Section 4.05,
and evidencing an interest designated as a "regular interest" in REMIC IV for
purposes of the REMIC Provisions.
Class B Certificates: Any one of the Class B-1, Class B-2, Class B-3 or
Class B-III Certificates.
Class B-1 Certificates: Any one of the Class B-1 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit C, senior to the Class B-2 and Class B-3
Certificates with respect to distributions and the allocation of Realized Losses
in respect of the Mortgage Loans as set forth in Section 4.05, and evidencing an
interest designated as a "regular interest" in REMIC IV for purposes of the
REMIC Provisions.
Class B-2 Certificates: Any one of the Class B-2 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit C, senior to the Class B-3 Certificates with
respect to distributions and the allocation of Realized Losses in respect of the
Mortgage Loans as set forth in Section 4.05, and evidencing an interest
designated as a "regular interest" in REMIC IV for purposes of the REMIC
Provisions.
Class B-3 Certificates: Any one of the Class B-3 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit C, and evidencing an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions.
Class B-III Certificates: Any one of the Class B-III-1, Class B-III-2 or
Class B-III-3 Certificates.
Class B-III-1 Certificate: Any one of the Class B-III-1 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit C, senior to the Class
B-III-2 and Class B-III-3 Certificates with respect to distributions and the
allocation of Realized Losses in respect of the Mortgage Loans as set forth in
Section 4.05, and evidencing an interest designated as a "regular interest" in
REMIC IV for purposes of the REMIC Provisions.
Class B-III-2 Certificate: Any one of the Class B-III-2 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit C, senior to the Class
B-III-3 Certificates with respect to distributions and the allocation of
Realized Losses in respect of the Mortgage Loans as set forth in Section 4.05,
and evidencing an interest designated as a "regular interest" in REMIC IV for
purposes of the REMIC Provisions.
Class B-III-3 Certificate: Any one of the Class B-III-3 Certificates
executed by the Trustee
13
and authenticated by the Certificate Registrar substantially in the form annexed
hereto as Exhibit C, and evidencing an interest designated as a "regular
interest" in REMIC IV for purposes of the REMIC Provisions.
Class M Certificates: Any one of the Class M-1, Class M-2, Class M-3 or
Class M-III Certificates.
Class M-1 Certificates: Any one of the Class M-1 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit B, senior to the Class M-2 and Class M-3
Certificates with respect to distributions and the allocation of Realized Losses
in respect of the Mortgage Loans as set forth in Section 4.05, and evidencing an
interest designated as a "regular interest" in REMIC IV for purposes of the
REMIC Provisions.
Class M-2 Certificates: Any one of the Class M-2 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit B, senior to the Class M-3 Certificates with
respect to distributions and the allocation of Realized Losses in respect of the
Mortgage Loans as set forth in Section 4.05, and evidencing an interest
designated as a "regular interest" in REMIC IV for purposes of the REMIC
Provisions.
Class M-3 Certificates: Any one of the Class M-3 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit B, and evidencing an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions.
Class M-III Certificates: Any one of the Class M-III-1, Class M-III-2 or
Class M-III-3 Certificates.
Class M-III-1 Certificate: Any one of the Class M-III-1 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B, senior to the Class
M-III-2 and Class M-III-3 Certificates with respect to distributions and the
allocation of Realized Losses in respect of the Mortgage Loans as set forth in
Section 4.05, and evidencing an interest designated as a "regular interest" in
REMIC IV for purposes of the REMIC Provisions.
Class M-III-2 Certificate: Any one of the Class M-III-2 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B, senior to the Class
M-III-3 Certificates with respect to distributions and the allocation of
Realized Losses in respect of the Mortgage Loans as set forth in Section 4.05,
and evidencing an interest designated as a "regular interest" in REMIC IV for
purposes of the REMIC Provisions.
Class M-III-3 Certificate: Any one of the Class M-III-3 Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B, and evidencing an
interest designated as a "regular interest" in REMIC IV for purposes of the
14
REMIC Provisions.
Class R Certificate: Any one of the Class R-I, Class R-II, Class R-III or
Class R-IV Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit D and evidencing an interest designated as a
"residual interest" in REMIC I for purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit D and evidencing an interest designated as a
"residual interest" in REMIC II for purposes of the REMIC Provisions.
Class R-III Certificate: Any one of the Class R-III Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit D and evidencing an interest
designated as a "residual interest" in REMIC III for purposes of the REMIC
Provisions.
Class R-IV Certificate: Any one of the Class R-IV Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit D and evidencing an interest designated as a
"residual interest" in REMIC IV for purposes of the REMIC Provisions.
Clearstream: Clearstream Banking, societe anonyme.
Closing Date: May 29, 2003.
Code: The Internal Revenue Code of 1986.
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, but not more than the sum of the Servicing Fee, 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 and
servicing compensation to which the Master Servicer may be entitled pursuant to
Section 3.10(a)(v) and (vi), in each case with respect to the Mortgage Loans in
the related Loan Group; provided that for purposes of this definition the amount
of the Servicing Fee will not be reduced pursuant to Section 7.02 except as may
be required pursuant to the last sentence of such Section.
15
Corporate Trust Office: The principal office of the Trustee at which at
any particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
instrument is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx
00000-0000, Attention: RAMPI, Series 2003-RM2.
Corresponding Certificate: With respect to (i) REMIC III Regular
Interest LT3-AI1, (ii) REMIC III Regular Interest LT3-AI3, (iii) REMIC III
Regular Interest LT3-AI4, (iv) REMIC III Regular Interest LT3-AI5, (v) REMIC III
Regular Interest LT3-AI6, (vi) REMIC III Regular Interest LT3-AI7, (vii) REMIC
III Regular Interest LT3-AI8, (viii) REMIC III Regular Interest LT3-AI9, (ix)
REMIC III Regular Interest LT3-AI10, (x) REMIC III Regular Interest LT3-API,
(xi) REMIC III Regular Interest LT3-AVI, (xii) REMIC III Regular Interest
LT3-AII, (xiii) REMIC III Regular Interest LT3-APII, (xiv) REMIC III Regular
Interest LT3-AVII, (xv) REMIC III Regular Interest LT3-AIII, (xvi) REMIC III
Regular Interest LT3-APIII, (xvii) REMIC III Regular Interest LT3- AVIII,
(xviii) REMIC III Regular Interest LT3-R, (xix) REMIC III Regular Interest
LT3-M1, (xx) REMIC III Regular Interest LT3-M2, (xxi) REMIC III Regular Interest
LT3-M3, (xxii) REMIC III Regular Interest LT3-MIII1, (xxiii) REMIC III Regular
Interest LT3-MIII2, (xxiv) REMIC III Regular Interest LT3-MIII3, (xxv) REMIC III
Regular Interest LT3-B1, (xxvi) REMIC III Regular Interest LT3-B2, (xxvii) REMIC
III Regular Interest LT3-B3, (xxviii) REMIC III Regular Interest LT3-BIII1,
(xxix) REMIC III Regular Interest LT3-BIII2 and (xxx) REMIC III Regular Interest
LT3-BIII3; (i) the Class A-I-1 Certificates, (ii) the Class A-I-3 Certificates,
(iii) the Class A-I-4 Certificates, (iv) the Class A-I-5 Certificates, (v) the
Class A-I-6 Certificates, (vi) the Class A-I-7 Certificates, (vii) the Class
A-I-8 Certificates, (viii) the Class A-I-9 Certificates, (ix) the Class A-I-10
Certificates, (x) the Class AP-I Certificates, (xi) the Class AV-I Certificates,
(xii) the Class A-II Certificates, (xiii) the Class AP-II Certificates, (xiv)
the Class AV-II Certificates, (xv) the Class A- III Certificates, (xvi) the
Class AP-III Certificates, (xvii) the Class AV-III Certificates, (xviii) the
Class R-IV Certificates, (xix) the Class M-1 Certificates, (xx) the Class M-2
Certificates, (xxi) the Class M-3 Certificates, (xxii) the Class M-III-1
Certificates, (xxiii) the Class M-III-2 Certificates, (xiv) the Class M-III-3
Certificates, (xxv) the Class B-1 Certificates, (xxvi) the Class B-2
Certificates, (xxvii) the Class B-3 Certificates, (xxviii) the Class B-III-1
Certificates, (xxix) the Class B-III-2 Certificates and (xxx) the Class B-III-3
Certificates, respectively.
Corresponding Interest: With respect to (x) REMIC I Regular Interests
LT-I-AP and LT-II- AP and REMIC II Regular Interest LT-III-AP, (y) REMIC III
Regular Interests LT3-API, LT3-APII and LT3-APIII.
Credit Support Depletion Date: With respect to each Loan Group, the
first Distribution Date on which the related Senior Percentage equals 100%.
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,
16
for the holders of certain other interests in mortgage loans serviced or sold by
the Master Servicer and for the Master Servicer, into which the amounts set
forth in Section 3.07 shall be deposited directly. Any such account or accounts
shall be an Eligible Account.
Custodial Agreement: An agreement that may be entered into among the
Depositor, the Master Servicer, the Trustee and a Custodian in substantially the
form of Exhibit E hereto.
Custodian: A custodian appointed pursuant to a Custodial Agreement.
---------
Cut-off Date: May 1, 2003.
Cut-off Date Balance: The Group I Cut-off Date Balance, the Group II
Cut-off Date Balance or the Group III Cut-off Date Balance.
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 definitive, fully registered Certificate.
----------------------
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to
59 days" or "30 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the 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.
17
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(3) 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: With respect to any Distribution Date, the 20th day
(or if such 20th day is not a Business Day, the Business Day immediately
following such 20th day) of the month of the related Distribution Date.
Discount Fraction: The Group I Discount Fraction, Group II Discount
Fraction or Group III Discount Fraction, as applicable.
Discount Mortgage Loan: A Group I Discount Mortgage Loan, Group II Discount
Mortgage Loan or Group III Discount Mortgage Loan, as applicable.
Discount Net Mortgage Rate: The Group I Discount Net Mortgage Rate, Group
II Discount Net Mortgage Rate or Group III Discount Net Mortgage Rate, as
applicable.
Disqualified Organization: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, which includes any of the
following: (i) the United States, any State or political subdivision thereof,
any possession of the United States, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for Xxxxxxx Mac, a majority of its
board of directors is not selected by such governmental unit), (ii) a foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income) and (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code. A
Disqualified Organization also includes any "electing large partnership," as
defined in Section 775(a) of the Code and any other Person so designated by the
Trustee based upon an Opinion of Counsel that the holding of an Ownership
Interest in a Class R Certificate by such Person
18
may cause any REMIC or any Person having an Ownership Interest in any Class of
Certificates (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Class R Certificate to such Person. The terms
"United States", "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
Distribution Date: The 25th day of any month beginning in the month
immediately following the month of the initial issuance of the Certificates or,
if such 25th day is not a Business Day, the Business Day immediately following
such 25th day.
Due Date: With respect to any Distribution Date and any Mortgage Loan,
the day during the related Due Period on which the Monthly Payment is due.
Due Period: With respect to any Distribution Date, the calendar month of
such Distribution Date.
Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the debt obligations of which have been
rated by each Rating Agency in its highest rating available, or (ii) an account
or accounts in a depository institution in which such accounts are fully insured
to the limits established by the FDIC, provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Trustee and each Rating Agency) the registered Holders of Certificates have a
claim with respect to the funds in such account or a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (iii) in the case of the Custodial Account, either (A) a trust
account or accounts maintained in the corporate trust department of Bank One,
National Association, or (B) an account or accounts maintained in the corporate
asset services department of Bank One, National Association as long as its short
term debt obligations are rated P-1 (or the equivalent) or better by each Rating
Agency, and its long term debt obligations are rated A2 (or the equivalent) or
better, by each Rating Agency, or (iv) in the case of the Certificate Account, a
trust account or accounts maintained in the corporate trust division of Deutsche
Bank Trust Company Americas, or (v) an account or accounts of a depository
institution acceptable to each Rating Agency (as evidenced in writing by each
Rating Agency that use of any such account as the Custodial Account or the
Certificate Account will not reduce the rating assigned to any Class of
Certificates by such Rating Agency below the lower of the then-current rating or
the rating assigned to such Certificates as of the Closing Date by such Rating
Agency).
Eligible Funds: On any Distribution Date, the portion, if any, of the
Group I Available Distribution Amount, Group II Available Distribution Amount or
Group III Available Distribution Amount remaining after reduction by the sum of
(i) the aggregate amount of Accrued Certificate Interest on the related Senior
Certificates, (ii) the related Senior Principal Distribution Amount (determined
without regard to Section 4.02(a)(ii)(Y)(D) of this Agreement), (iii) the
related Class
19
AP Principal Distribution Amount (determined without regard to Section
4.02(b)(i)(5) of this Agreement) and (iv) the aggregate amount of Accrued
Certificate Interest on the related Class M Certificates and Class B-1
Certificates and Class B-2 Certificates or Class B-III-1 Certificates and Class
B-III-2 Certificates, as applicable.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
-----
Euroclear: Euroclear Bank, S.A./NA, as operator of The Euroclear System.
---------
Event of Default: As defined in Section 7.01.
----------------
Excess Bankruptcy Loss: With respect to the Group I Loans and Group II
Loans, any Bankruptcy Loss on such Mortgage Loans, or portion thereof, which
exceeds the then-applicable related Bankruptcy Amount. With respect to the Group
III Loans, any Bankruptcy Loss on such Mortgage Loans, or portion thereof, which
exceeds the then-applicable related Bankruptcy Amount.
Excess Fraud Loss: With respect to the Group I Loans and Group II Loans,
any Fraud Loss on such Mortgage Loans, or portion thereof, which exceeds the
then-applicable related Fraud Loss Amount. With respect to the Group III Loans,
any Fraud Loss on such Mortgage Loans, or portion thereof, which exceeds the
then-applicable related Fraud Loss Amount.
Excess Loss: With respect to the Group I Loans and Group II Loans, or
Group III Loans, any Excess Fraud Loss, Excess Special Hazard Loss, Excess
Bankruptcy Loss or Extraordinary Loss.
Excess Special Hazard Loss: With respect to the Group I Loans and Group
II Loans, any Special Hazard Loss on such Mortgage Loans, or portion thereof,
which exceeds the then-applicable related Special Hazard Amount. With respect to
the Group III Loans, any Special Hazard Loss on such Mortgage Loans, or portion
thereof, which exceeds the then-applicable related 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 related to a Loan Group 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 Section
4.02(b)(i)(5). The Excess Subordinate Principal Amount for Loan Group I and Loan
Group II will be allocated between the Group I Senior Certificates and Group II
Senior Certificates on a pro rata basis in accordance with the amount of
Realized Losses attributable to each Loan Group and allocated to the related
Certificates on such Distribution Date. The Excess Subordinate Principal Amount
for Loan Group III will be allocated
20
first to the Group III Senior Certificates, then to the Class M-III-1, Class
M-III-2 and Class M-III-3 Certificates, in that order, and finally, to the Class
B-III-1, Class B-III-2 and Class B-III-3 Certificates, in that order, in
accordance with the amount of Realized Losses attributable to Loan Group III and
allocated to those Certificates on such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
------------
Extraordinary Events: Any of the following conditions with respect to a
Mortgaged Property 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, combatting 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; or
(4) any weapon of war employing atomic fission or
radioactive force whether in time of peace or war; or
(5) insurrection, rebellion, revolution, civil war,
usurped power or action taken by governmental authority in
hindering, combatting 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 Mae: Xxxxxx Xxx, a federally chartered and privately owned
corporation organized
21
and existing under the Federal National Mortgage Association Charter Act, or any
successor thereto.
FASIT: A "financial asset securitization investment trust" within the
meaning of Section 860L of the Code.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
FHA: The Federal Housing Administration, or its successor.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
9.01, which Final Distribution Date shall in no event be later than the end of
the 90-day liquidation period described in Section 9.02.
Final Scheduled Distribution Date: With respect to the Group I Senior
Certificates, Group III Senior Certificates, Class M Certificates and Class B
Certificates, May 25, 2033. With respect to the Group II Senior Certificates,
May 25, 2018. No event of default under this Agreement will arise or become
applicable solely by reason of the failure to retire the entire Certificate
Principal Balance of any Class of Class A, Class R, Class M or Class B
Certificates on or before its Final Scheduled Distribution Date.
Fitch: Fitch, Inc., 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.
Fraud Loss Amount: The Group I/Group II Fraud Loss Amount or Group III
Fraud Loss Amount.
Fraud Losses: Losses on Mortgage Loans as to which there was fraud in the
origination of such Mortgage Loan.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Group I Available Distribution Amount: As to any Distribution Date, an
amount equal to (a)
22
the sum of (i) the amount relating to the Group I Loans on deposit in the
Custodial Account as of the close of business on the immediately preceding
Determination Date and amounts deposited in the Custodial Account in connection
with the substitution of Qualified Substitute Mortgage Loans that are Group I
Loans, (ii) the amount of any Advance made on the immediately preceding
Certificate Account Deposit Date with respect to the Group I Loans, (iii) any
amount deposited in the Certificate Account on the related Certificate Account
Deposit Date pursuant to the second paragraph of Section 3.12(a) in respect of
the Group I Loans, (iv) any amount that the Master Servicer is not permitted to
withdraw from the Custodial Account pursuant to Section 3.16(e) in respect of
the Group I Loans and (v) any amount deposited in the Certificate Account
pursuant to Section 4.07 or 9.01 in respect of the Group I Loans, reduced by (b)
the sum as of the close of business on the immediately preceding Determination
Date of (x) the Amount Held for Future Distribution with respect to the Group I
Loans, and (y) amounts permitted to be withdrawn by the Master Servicer from the
Custodial Account in respect of the Group I Loans pursuant to clauses (ii)- (x),
inclusive, of Section 3.10(a).
Group II Available Distribution Amount: As to any Distribution Date, an
amount equal to (a) the sum of (i) the amount relating to the Group II Loans on
deposit in the Custodial Account as of the close of business on the immediately
preceding Determination Date and amounts deposited in the Custodial Account in
connection with the substitution of Qualified Substitute Mortgage Loans that are
Group II Loans, (ii) the amount of any Advance made on the immediately preceding
Certificate Account Deposit Date with respect to the Group II Loans, (iii) any
amount deposited in the Certificate Account on the related Certificate Account
Deposit Date pursuant to the second paragraph of Section 3.12(a) in respect of
the Group II Loans, (iv) any amount that the Master Servicer is not permitted to
withdraw from the Custodial Account pursuant to Section 3.16(e) in respect of
the Group II Loans and (v) any amount deposited in the Certificate Account
pursuant to Section 4.07 or 9.01 in respect of the Group II Loans, reduced by
(b) the sum as of the close of business on the immediately preceding
Determination Date of (x) the Amount Held for Future Distribution with respect
to the Group II Loans, and (y) amounts permitted to be withdrawn by the Master
Servicer from the Custodial Account in respect of the Group II Loans pursuant to
clauses (ii)- (x), inclusive, of Section 3.10(a).
Group III Available Distribution Amount: As to any Distribution Date, an
amount equal to (a) the sum of (i) the amount relating to the Group III Loans on
deposit in the Custodial Account as of the close of business on the immediately
preceding Determination Date and amounts deposited in the Custodial Account in
connection with the substitution of Qualified Substitute Mortgage Loans that are
Group III Loans, (ii) the amount of any Advance made on the immediately
preceding Certificate Account Deposit Date with respect to the Group III Loans,
(iii) any amount deposited in the Certificate Account on the related Certificate
Account Deposit Date pursuant to the second paragraph of Section 3.12(a) in
respect of the Group III Loans, (iv) any amount that the Master Servicer is not
permitted to withdraw from the Custodial Account pursuant to Section 3.16(e) in
respect of the Group III Loans, (v) any amount deposited in the Certificate
Account pursuant to Section 4.07 or 9.01 in respect of the Group III Loans and
(vi) any amount received by the Trustee pursuant to the Surety Bond in respect
of such Distribution Date, reduced by (b) the sum as of the
23
close of business on the immediately preceding Determination Date of (x) the
Amount Held for Future Distribution with respect to the Group III Loans, and (y)
amounts permitted to be withdrawn by the Master Servicer from the Custodial
Account in respect of the Group III Loans pursuant to clauses (ii)-(x),
inclusive, of Section 3.10(a).
Group I Cut-off Date Balance: $255,332,470.60.
Group II Cut-off Date Balance: $77,700,011.52.
Group III Cut-off Date Balance: $157,102,977.37.
------------------------------
Group I Discount Fraction: With respect to each Group I Discount
Mortgage Loan, the fraction expressed as a percentage, the numerator of which is
the Group I Discount Net Mortgage Rate minus the Net Mortgage Rate (or the
initial Net Mortgage Rate with respect to any Group I 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 Group I Discount Net Mortgage Rate. The
Group I Discount Fraction with respect to each Group I Discount Mortgage Loan is
as set forth in Exhibit P-1 attached hereto.
Group II Discount Fraction: With respect to each Group II Discount
Mortgage Loan, the fraction expressed as a percentage, the numerator of which is
the Group II Discount Net Mortgage Rate minus the Net Mortgage Rate (or the
initial Net Mortgage Rate with respect to any Group II 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 Group II Discount Net Mortgage Rate.
The Group II Discount Fraction with respect to each Group II Discount Mortgage
Loan is as set forth in Exhibit P-2 attached hereto.
Group III Discount Fraction: With respect to each Group III Discount
Mortgage Loan, the fraction expressed as a percentage, the numerator of which is
the Group III Discount Net Mortgage Rate minus the Net Mortgage Rate (or the
initial Net Mortgage Rate with respect to any Group III 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 Group III Discount Net Mortgage Rate.
The Group III Discount Fraction with respect to each Group III Discount Mortgage
Loan is as set forth in Exhibit P-3 attached hereto.
Group I Discount Mortgage Loan: Any Group I Loan having a Net Mortgage
Rate (or the initial Net Mortgage Rate) of less than the Group I Discount Net
Mortgage Rate per annum and any Mortgage Loan deemed to be a Group I Discount
Mortgage Loan pursuant to the definition of Qualified Substitute Mortgage Loan.
Group II Discount Mortgage Loan: Any Group II Loan having a Net Mortgage
Rate (or the initial Net Mortgage Rate) of less than the Group II Discount Net
Mortgage Rate per annum and any Mortgage Loan deemed to be a Group II Discount
Mortgage Loan pursuant to the definition of
24
Qualified Substitute Mortgage Loan.
Group III Discount Mortgage Loan: Any Group III Loan having a Net
Mortgage Rate (or the initial Net Mortgage Rate) of less than the Group III
Discount Net Mortgage Rate per annum and any Mortgage Loan deemed to be a Group
III Discount Mortgage Loan pursuant to the definition of Qualified Substitute
Mortgage Loan.
Group I Discount Net Mortgage Rate: With respect to any Group I Loan,
5.50% per annum.
Group II Discount Net Mortgage Rate: With respect to any Group II Loan,
5.00% per annum.
Group III Discount Net Mortgage Rate: With respect to any Group III
Loan, 6.00% per annum.
Group I/Group II Fraud Loss Amount: As of any date of determination
after the Cut-off Date, an amount equal to: (X) prior to the third anniversary
of the Cut-off Date, an amount equal to 1.00% of the aggregate outstanding
principal balance of all of the Group I Loans and Group II Loans as of the
Cut-off Date minus the aggregate amount of Fraud Losses with respect to Group I
Loans and Group II Loans allocated through Subordination in accordance with
Section 4.05 since the Cut-off Date up to such date of determination and (Y)
from the third to the fifth anniversary of the Cut-off Date, an amount equal to
(1) the lesser of (a) the Group I/Group II Fraud Loss Amount as of the most
recent anniversary of the Cut-off Date and (b) 0.50% of the aggregate
outstanding principal balance of all of the Group I Loans and Group II Loans as
of the most recent anniversary of the Cut-off Date minus (2) the aggregate
amount of Fraud Losses with respect to Group I Loans and Group II Loans
allocated through Subordination in accordance with Section 4.05 since the most
recent anniversary of the Cut-off Date up to such date of determination. On and
after the fifth anniversary of the Cut-off Date, the Group I/Group II Fraud Loss
Amount shall be zero.
Group III Fraud Loss Amount: As of any date of determination after the
Cut-off Date, an amount equal to: (X) prior to the first anniversary of the
Cut-off Date, an amount equal to 2.00% of the aggregate outstanding principal
balance of all of the Group III Loans as of the Cut-off Date minus the aggregate
amount of Fraud Losses allocated through Subordination in accordance with
Section 4.05 since the Cut-off Date up to such date of determination and (Y)
from the first to the fifth anniversary of the Cut-off Date, an amount equal to
(1) the lesser of (a) the Group III Fraud Loss Amount as of the most recent
anniversary of the Cut-off Date and (b) 1.00% of the aggregate outstanding
principal balance of all of the Group III Loans as of the most recent
anniversary of the Cut-off Date minus (2) the aggregate amount of Fraud Losses
with respect to Group III Loans allocated through Subordination in accordance
with Section 4.05 since the most recent anniversary of the Cut-off Date up to
such date of determination. On and after the fifth anniversary of the Cut-off
Date, the Group III Fraud Loss Amount shall be zero.
Group I Loans: The Mortgage Loans designated on the Mortgage Loan Schedule
in Exhibit
25
F-1.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan Schedule
in Exhibit F-2.
Group III Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule in Exhibit F-3.
Group I/Group II Optional Termination Date: Any Distribution Date on or
after which the Stated Principal Balance (before giving effect to distributions
to be made on such Distribution Date) of the Group I Loans and Group II Loans is
less than 10.00% of the aggregate Group I Cut-off Date Balance and Group II
Cut-off Date Balance.
Group III Optional Termination Date: Any Distribution Date on or after
which the Stated Principal Balance (before giving effect to distributions to be
made on such Distribution Date) of the Group III Loans is less than 10.00% of
the Group III Cut-off Date Balance.
Group I Senior Accelerated Distribution Percentage, Group II Senior
Accelerated Distribution Percentage or Group III Senior Accelerated Distribution
Percentage: With respect to any Distribution Date occurring on or prior to the
60th Distribution Date, 100%. With respect to any Distribution Date thereafter,
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 related Senior
Percentage for such Distribution Date;
Any reduction to the Senior Accelerated Distribution Percentage
described above shall not occur as of any Distribution Date unless either:
26
(a)(1)(X) the outstanding principal balance of the Group I Loans and
Group II Loans with respect to the Group I Senior Accelerated Distribution
Percentage or Group II Senior Accelerated Distribution Percentage, or the Group
III Loans with respect to the Group III Senior Accelerated Distribution
Percentage, delinquent 60 days or more averaged over the last six months, as a
percentage of the aggregate outstanding Certificate Principal Balance of the
related Subordinate Certificates, is less than 50% or (Y) the outstanding
principal balance of Group I Loans and Group II Loans with respect to the Group
I Senior Accelerated Distribution Percentage or Group II Senior Accelerated
Distribution Percentage, or the Group III Loans with respect to the Group III
Senior Accelerated Distribution Percentage, delinquent 60 days or more averaged
over the last six months, as a percentage of the aggregate outstanding principal
balance of all Group I Loans and Group II Loans with respect to the Group I
Senior Accelerated Distribution Percentage or Group II Senior Accelerated
Distribution Percentage, or the Group III Loans with respect to the Group III
Senior Accelerated Distribution Percentage, averaged over the last six months,
does not exceed 2% and (2) Realized Losses on the Group I Loans and Group II
Loans with respect to the Group I Senior Accelerated Distribution Percentage or
Group II Senior Accelerated Distribution Percentage, or the Group III Loans with
respect to the Group III Senior Accelerated Distribution Percentage, 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 related Subordinate Certificates or
(b)(1) the outstanding principal balance of Group I Loans and Group II
Loans with respect to the Group I Senior Accelerated Distribution Percentage or
Group II Senior Accelerated Distribution Percentage, or the Group III Loans with
respect to the Group III Senior Accelerated Distribution Percentage, delinquent
60 days or more averaged over the last six months, as a percentage of the
aggregate outstanding principal balance of all Group I Loans and Group II Loans
with respect to the Group I Senior Accelerated Distribution Percentage or Group
II Senior Accelerated Distribution Percentage, or the Group III Loans with
respect to the Group III Senior Accelerated Distribution Percentage, averaged
over the last six months, does not exceed 4% and (2) Realized Losses on the
Group I Loans and Group II Loans with respect to the Group I Senior Accelerated
Distribution Percentage or Group II Senior Accelerated Distribution Percentage,
or the Group III Loans with respect to the Group III Senior Accelerated
Distribution Percentage, 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 related Subordinate
Certificates.
For any Distribution Date on which the weighted average of the Senior
Percentages for Loan Group I and Loan Group II, weighted on the basis of the
Stated Principal Balances of the mortgage loans in the related Loan Groups, less
the Discount Fraction of the related Discount Mortgage Loans, is greater than
the weighted average of the Senior Percentages for Loan Group I and Loan Group
II as of the Closing Date, calculated on such basis, each of the Group I Senior
Accelerated Distribution Percentage and Group II Senior Accelerated Distribution
Percentage for such Distribution Date shall be 100%. For any Distribution Date
on which the Group III Senior Percentage is greater than the Group III Senior
Percentage as of the Closing Date, the Group III
27
Senior Accelerated Distribution Percentage for such Distribution Date
shall be 100%.
Notwithstanding the foregoing, upon the reduction of the Certificate
Principal Balances of the applicable Senior Certificates (other than the related
Class AP Certificates) to zero, the related Senior Accelerated Distribution
Percentage shall thereafter be 0%.
Group I Senior Certificates: Any one of the Class A-I, Class AP-I, Class
AV-I, Class R-I , Class R-III and Class R-IV Certificates.
Group II Senior Certificates: Any one of the Class A-II, Class AP-II and
Class AV-II Certificates.
Group III Senior Certificates: Any one of the Class A-III, Class AP-III,
Class AV-III and Class R-II Certificates.
Group I Senior Interest Distribution Amount: As defined in Section
4.02(a)(i)(X).
Group II Senior Interest Distribution Amount: As defined in Section
4.02(a)(i)(Y).
Group III Senior Interest Distribution Amount: As defined in Section
4.02(a)(i)(Z).
Group I Senior Percentage: As of any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Group I Senior Certificates
(other than the Class AP-I Certificates) immediately prior to such Distribution
Date and the denominator of which is the aggregate Stated Principal Balance of
all of the Group I Loans (or related REO Properties) (other than the related
Group I Discount Fraction of each Group I Discount Mortgage Loan) immediately
prior to such Distribution Date.
Group II Senior Percentage: As of any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Group II Senior Certificates
(other than the Class AP-II Certificates) immediately prior to such Distribution
Date and the denominator of which is the aggregate Stated Principal Balance of
all of the Group II Loans (or related REO Properties) (other than the related
Group II Discount Fraction of each Group II Discount Mortgage Loan) immediately
prior to such Distribution Date.
Group III Senior Percentage: As of any Distribution Date, the lesser of
100% and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Group III Senior Certificates
(other than the Class AP-III Certificates) immediately prior to such
Distribution Date and the denominator of which is the aggregate Stated Principal
Balance of all of the Group III Loans (or related REO Properties) (other than
the related Group III Discount Fraction of each Group III Discount Mortgage
Loan) immediately prior to such Distribution Date.
Group I Senior Principal Distribution Amount: As to any Distribution Date,
the lesser of
28
(a) the balance of the Available Distribution Amount related to Loan Group I
remaining after the distribution therefrom of all amounts required to be
distributed therefrom pursuant to Section 4.02(a)(i)(X) and Section
4.02(a)(ii)(X) and (b) the sum of the amounts required to be distributed
therefrom to the Group I Certificateholders on such Distribution Date pursuant
to Section 4.02(a)(ii)(Y) and Section 4.02(a)(xv) and (xvi).
Group II Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the Available Distribution Amount related
to Loan Group II remaining after the distribution therefrom of all amounts
required to be distributed therefrom pursuant to Section 4.02(a)(i)(Y) and
Section 4.02(a)(ii)(X), and (b) the sum of the amounts required to be
distributed therefrom to the Group II Certificateholders on such Distribution
Date pursuant to Section 4.02(a)(ii)(Y) and Section 4.02(a)(xv) and (xvi).
Group III Senior Principal Distribution Amount: As to any Distribution
Date, the lesser of (a) the balance of the Available Distribution Amount related
to Loan Group III remaining after the distribution therefrom of all amounts
required to be distributed therefrom pursuant to Section 4.02(a)(i)(Z) and
4.02(a)(ii)(X), and (b) the sum of the amounts required to be distributed
therefrom to the Group II Certificateholders on such Distribution Date pursuant
to Section 4.02(a)(ii)(Y) and Section 4.02(a)(xv) and (xvi).
Group I/Group II Special Hazard Amount: As of any Distribution Date, an
amount equal to $3,330,325 minus the sum of (i) the aggregate amount of Special
Hazard Losses on the Group I Loans and Group II Loans allocated through
Subordination in accordance with Section 4.05 and (ii) the Adjustment Amount (as
defined below) as most recently calculated. For each anniversary of the Cut-off
Date, the "Adjustment Amount" shall be equal to the amount, if any, by which the
amount calculated in accordance with the preceding sentence (without giving
effect to the deduction of the Adjustment Amount for such anniversary) exceeds
the greatest of (i) twice the outstanding principal balance of the Group I Loan
or Group II Loan that has the largest outstanding principal balance on the
Distribution Date immediately preceding such anniversary, (ii) the product of
1.00% multiplied by the outstanding principal balance of all Group I Loans and
Group II Loans on the Distribution Date immediately preceding such anniversary
and (iii) the aggregate outstanding principal balance (as of the immediately
preceding Distribution Date) of the Group I Loans and Group II Loans in any
single five-digit California zip code area with the largest amount of Group I
Loans and Group II Loans by aggregate principal balance as of such anniversary.
The Group I/Group II Special Hazard Amount may be further reduced by the
Master Servicer (including accelerating the manner in which coverage is reduced)
provided that prior to any such reduction, the Master Servicer shall obtain
written confirmation from each Rating Agency that such reduction shall not
reduce the rating assigned to the Group I Certificates and Group II Certificates
by such Rating Agency below the lower of the then-current rating or the rating
assigned to such Certificates as of the Closing Date by such Rating Agency.
Group III Special Hazard Amount: As of any Distribution Date, an amount
equal to
29
$1,780,014 minus the sum of (i) the aggregate amount of Special Hazard Losses
allocated to the Group III Loans through Subordination in accordance with
Section 4.05 and (ii) the Adjustment Amount (as defined below) as most recently
calculated. For each anniversary of the Cut-off Date, the "Adjustment Amount"
shall be equal to the amount, if any, by which the amount calculated in
accordance with the preceding sentence (without giving effect to the deduction
of the Adjustment Amount for such anniversary) exceeds the greatest of (i) twice
the outstanding principal balance of the Group III Loan that has the largest
outstanding principal balance on the Distribution Date immediately preceding
such anniversary, (ii) the product of 1.00% multiplied by the outstanding
principal balance of all Group III Loans on the Distribution Date immediately
preceding such anniversary and (iii) the aggregate outstanding principal balance
(as of the immediately preceding Distribution Date) of the Group III Loans in
any single five-digit California zip code area with the largest amount of Group
III Loans by aggregate principal balance as of such anniversary.
The Group III Special Hazard Amount may be further reduced by the Master
Servicer (including accelerating the manner in which coverage is reduced)
provided that prior to any such reduction, the Master Servicer shall obtain
written confirmation from each Rating Agency that such reduction shall not
reduce the rating assigned to the Group III Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency.
Group I Subordinate Principal Distribution Amount: With respect to any
Distribution Date and each Class of Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates, (a) the sum of (i) the product of (x) the
Class's pro rata share, based on the Certificate Principal Balance of each such
Class then outstanding, and (y) the aggregate of the amounts calculated for such
Distribution Date under clauses (i), (ii) and (iii) of Section 4.02(a)(ii)(Y)(A)
(without giving effect to the related Senior Percentage) to the extent not
payable to the related Senior Certificates; (ii) such Class's pro rata share,
based on the Certificate Principal Balance of each Class of Class M- 1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates then
outstanding, of the principal collections described in Section
4.02(a)(ii)(Y)(B)(b) (without giving effect to the related Senior Accelerated
Distribution Percentage) to the extent such collections are not otherwise
distributed to the related Senior Certificates; (iii) the product of (x) the
related Prepayment Distribution Percentage and (y) the aggregate of all
Principal Prepayments in Full received in the related Prepayment Period and
Curtailments received in the preceding calendar month (other than the related
Discount Fraction of such Principal Prepayments in Full and Curtailments with
respect to a Group I Discount Mortgage Loan) to the extent not payable to the
related Senior Certificates; (iv) if such Class is the Class of Class M-1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates with the Highest
Priority, any related Excess Subordinate Principal Amount for such Distribution
Date to the extent of Eligible Funds for such Distribution Date; and (v) any
amounts described in clauses (i), (ii) and (iii) as determined for any previous
Distribution Date, that remain undistributed to the extent that such amounts are
not attributable to Realized Losses which have been allocated to a Class of
Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates
minus (b) with respect to the Class of Class M-1, Class M-2, Class M-3, Class
B-1, Class B-2 and Class B-3 Certificates with the Lowest Priority, any related
Excess Subordinate
30
Principal Amount for such Distribution Date; provided, however, that the Group I
Subordinate Principal Distribution Amount for any Class of Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2 and Class B-3 Certificates on any Distribution
Date shall in no event exceed the outstanding Certificate Principal Balance of
such Class of Certificates immediately prior to such date.
Group II Subordinate Principal Distribution Amount: With respect to any
Distribution Date and each Class of Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates, (a) the sum of (i) the product of (x) the
Class's pro rata share, based on the Certificate Principal Balance of each such
Class then outstanding, and (y) the aggregate of the amounts calculated for such
Distribution Date under clauses (i), (ii) and (iii) of Section 4.02(a)(ii)(Y)(A)
(without giving effect to the related Senior Percentage) to the extent not
payable to the related Senior Certificates; (ii) such Class's pro rata share,
based on the Certificate Principal Balance of each Class of Class M- 1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates then
outstanding, of the principal collections described in Section
4.02(a)(ii)(Y)(B)(b) (without giving effect to the related Senior Accelerated
Distribution Percentage) to the extent such collections are not otherwise
distributed to the related Senior Certificates; (iii) the product of (x) the
related Prepayment Distribution Percentage and (y) the aggregate of all
Principal Prepayments in Full received in the related Prepayment Period and
Curtailments received in the preceding calendar month (other than the related
Discount Fraction of such Principal Prepayments in Full and Curtailments with
respect to a Group II Discount Mortgage Loan) to the extent not payable to the
related Senior Certificates; (iv) if such Class is the Class of Class M-1, Class
M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates with the Highest
Priority, any related Excess Subordinate Principal Amount for such Distribution
Date to the extent of Eligible Funds for such Distribution Date; and (v) any
amounts described in clauses (i), (ii) and (iii) as determined for any previous
Distribution Date, that remain undistributed to the extent that such amounts are
not attributable to Realized Losses which have been allocated to a Class of
Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates
minus (b) with respect to the Class of Class M-1, Class M-2, Class M-3, Class
B-1, Class B-2 and Class B-3 Certificates with the Lowest Priority, any related
Excess Subordinate Principal Amount for such Distribution Date; provided,
however, that the Group I Subordinate Principal Distribution Amount for any
Class of Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
Certificates on any Distribution Date shall in no event exceed the outstanding
Certificate Principal Balance of such Class of Certificates immediately prior to
such date.
Group III Subordinate Principal Distribution Amount: With respect to any
Distribution Date and each Class of Class M-III Certificates and Class B-III
Certificates, (a) the sum of (i) the product of (x) the Class's pro rata share,
based on the Certificate Principal Balance of each such Class then outstanding,
and (y) the aggregate of the amounts calculated for such Distribution Date under
clauses (i), (ii) and (iii) of Section 4.02(a)(ii)(Y)(A) (without giving effect
to the related Senior Percentage) to the extent not payable to the related
Senior Certificates; (ii) such Class's pro rata share, based on the Certificate
Principal Balance of each Class of Group III Subordinate Certificates then
outstanding, of the principal collections described in Section
4.02(a)(ii)(Y)(B)(b) (without giving effect to the related Senior Accelerated
Distribution Percentage) to the extent such collections are not otherwise
distributed to the related Senior Certificates; (iii) the product of (x) the
related
31
Prepayment Distribution Percentage and (y) the aggregate of all Principal
Prepayments in Full received in the related Prepayment Period and Curtailments
received in the preceding calendar month (other than the related Discount
Fraction of such Principal Prepayments in Full and Curtailments with respect to
a Group III Discount Mortgage Loan) to the extent not payable to the related
Senior Certificates; (iv) if such Class is the Class of Subordinate Certificates
with the Highest Priority, any related Excess Subordinate Principal Amount for
such Distribution Date to the extent of Eligible Funds for such Distribution
Date; and (v) any amounts described in clauses (i), (ii) and (iii) as determined
for any previous Distribution Date, that remain undistributed to the extent that
such amounts are not attributable to Realized Losses which have been allocated
to a Class of Subordinate Certificates minus (b) with respect to the Class of
Class M-III Certificates and Class B- III Certificates with the Lowest Priority,
any related Excess Subordinate Principal Amount for such Distribution Date;
provided, however, that the Group III Subordinate Principal Distribution Amount
for any Class of Class M-III Certificates and Class B-III Certificates on any
Distribution Date shall in no event exceed the outstanding Certificate Principal
Balance of such Class of Certificates immediately prior to such date.
Highest Priority: As of any date of determination, the related Class of
Subordinate Certificates then outstanding with the earliest priority for
payments pursuant to Section 4.02(a), in the following order: (a) with respect
to Loan Group I and Loan Group II, Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates and (b) with respect to Loan Group III,
Class M-III-1, Class M-III-2, Class M-III-3, Class B-III-1, Class B-III-2 and
Class B-III-3 Certificates.
Independent: When used with respect to any specified Person, means such
a Person who (i) is in fact independent of the Depositor, the Master Servicer
and the Trustee, or any Affiliate thereof, (ii) does not have any direct
financial interest or any material indirect financial interest in the Depositor,
the Master Servicer or the Trustee or in an Affiliate thereof, and (iii) is not
connected with the Depositor, the Master Servicer or the Trustee as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
Initial Certificate Principal Balance: With respect to each Class of
Certificates (other than the Interest Only Certificates), the Certificate
Principal Balance of such Class of Certificates as of the Cut-off Date as set
forth in the Preliminary Statement hereto.
Initial 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 as of the Closing Date and the
denominator of which is the related Cut-off Date Balance.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Insurance Policy or any other related insurance policy
covering a Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under the Mortgage, any Subservicer, the Master Servicer or the
Trustee and are not applied to the restoration of the related Mortgaged Property
or released to
32
the Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing mortgage loans held for its own account.
Interest Accrual Period: With respect to any Distribution Date, the
prior calendar month.
Interest Only Certificates: Any one of the Class A-I-2, Class AV-I, Class
AV-II or Class AV- III Certificates.
Interim Certificates: As defined in Section 2.02.
Late Collections: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
LIBOR: With respect to any Distribution Date, the arithmetic mean of the
London interbank offered rate quotations for one-month U.S. Dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.02.
LIBOR Business Day: Any day other than (i) a Saturday or Sunday or (ii)
a day on which banking institutions in London, England are required or
authorized to by law to be closed.
LIBOR Rate Adjustment Date: With respect to each Distribution Date and
the Adjustable Rate Certificates, the second LIBOR Business Day immediately
preceding the commencement of the related Interest Accrual Period on which banks
are open for dealing in foreign currency and exchange in London, England.
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 of Loan Group I, Loan Group II or Loan Group III.
----------
Loan Group I: The group of Mortgage Loans designated as the Group I
Loans on the Mortgage Loan Schedule in Exhibit F-1.
Loan Group II: The group of Mortgage Loans designated as the Group II
Loans on the Mortgage Loan Schedule in Exhibit F-2.
Loan Group III: The group of Mortgage Loans designated as the Group III
Loans on the Mortgage Loan Schedule in Exhibit F-3.
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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 related Subordinate Certificates
then outstanding, with 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 the latest priority for payments
pursuant to Section 4.02(a), in the following order: (a) with respect to the
Loan Group I and Loan Group II, Class B-3, Class B-2, Class B-1, Class M-3,
Class M-2 and Class M-1 Certificates and (b) with respect to Loan Group III,
Class B-III-3, Class B-III-2, Class B-III-1, Class M-III-3, Class M-III-2 and
Class M-III-1 Certificates.
Maturity Date: With respect to each Class of Certificates of regular
interest or Uncertificated Regular Interest issued by each of REMIC I, REMIC II,
REMIC III and REMIC IV, the latest possible maturity date, solely for purposes
of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, by which the
Certificate Principal Balance of each such Class of Certificates representing a
regular interest in the Trust Fund would be reduced to zero, which is, for each
such regular interest other than the Group II Senior Certificates, May 25, 2033,
which is the Distribution Date following the maturity of the latest maturing
Group I Loan, and which is for the Group II Senior Certificates, May 25, 2018.
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.
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.
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Monthly Payment: With respect to any Mortgage Loan (including any REO
Property) and the Due Date in any Due Period, the payment of principal and
interest due thereon in accordance with the amortization schedule at the time
applicable thereto (after adjustment, if any, for Curtailments and for Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than a Deficient
Valuation, or similar proceeding or any moratorium or similar waiver or grace
period and before any Servicing Modification that constitutes a reduction of the
interest rate on such Mortgage Loan).
Moody's: Xxxxx'x Investors Service, Inc., or its successor in interest.
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Mortgage: With respect to each Mortgage Note related to a Mortgage Loan,
the mortgage, deed of trust or other comparable instrument creating a first or
junior lien on an estate in fee simple interest in real property securing a
Mortgage Note.
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 attached hereto as Exhibit F-1,
Exhibit F-2 and Exhibit F-3, and Qualified Substitute Mortgage Loans held or
deemed held as part of the Trust Fund including, without limitation, each
related Mortgage Note, Mortgage and Mortgage File and all rights appertaining
thereto.
Mortgage Loan Schedule: The lists of the Mortgage Loans attached hereto
as Exhibit F-1, Exhibit F-2 and Exhibit F-3 (as amended from time to time to
reflect the addition of Qualified Substitute Mortgage Loans), which lists shall
set forth at a minimum the following information as to each Mortgage Loan:
(i) the Mortgage Loan identifying number ("RFC LOAN #");
(ii) [reserved];
(iii) the maturity of the Mortgage Note ("MATURITY DATE", or
"MATURITY DT" for Mortgage Loans;
(iv) the Mortgage Rate as of the Cut-off Date ("ORIG RATE");
(v) [reserved];
(vi) the Adjusted Mortgage Rate or Net Mortgage Rate as of the
Cut-off Date ("CURR NET");
35
(vii) the scheduled monthly payment of principal, if any, and
interest as of the Cut- off Date ("ORIGINAL P & I" or "CURRENT P & I"
for the adjustable rate Mortgage Loans);
(viii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix) the Loan-to-Value Ratio at origination ("LTV");
(x) a code "T", "BT" or "CT" under the column "LN FEATURE,"
indicating that the Mortgage Loan is secured by a second or vacation
residence (the absence of any such code means the Mortgage Loan is
secured by a primary residence); and
(xi) a code "N" under the column "OCCP CODE", indicating that the
Mortgage Loan is secured by a non-owner occupied residence (the absence
of any such code means the Mortgage Loan is secured by an owner occupied
residence).
Such schedules may consist of multiple reports that collectively set
forth all of the information required.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
together with any modification thereto.
Mortgage Rate: 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.
Mortgagor: The obligor on a Mortgage Note.
---------
Net Mortgage Rate: With respect to any Mortgage Loan as of any date of
determination, a per annum rate equal to the Adjusted Mortgage Rate for such
Mortgage Loan as of such date minus the sum of the Servicing Fee Rate and minus
the rate at which any applicable lender-paid mortgage insurance accrues.
Non-Discount Mortgage Loan: A Group I Loan that is not a Group I
Discount Mortgage Loan, a Group II Loan that is not a Group II Discount Loan or
a Group III Loan that is not a Group III 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.
------------------------
36
Nonrecoverable Advance: Any Advance previously made or proposed to be
made by the Master Servicer or Subservicer in respect of a Mortgage Loan (other
than a Deleted Mortgage Loan) which, in the good faith judgment of the Master
Servicer, will not, or, in the case of a proposed Advance, would not, be
ultimately recoverable by the Master Servicer from related Late Collections,
Insurance Proceeds, Liquidation Proceeds or REO Proceeds. To the extent that any
Mortgagor is not obligated under the related Mortgage documents to pay or
reimburse any portion of any Servicing Advances that are outstanding with
respect to the related Mortgage Loan as a result of a modification of such
Mortgage Loan by the Master Servicer, which forgives amounts which the Master
Servicer or Subservicer had previously advanced, and the Master Servicer
determines that no other source of payment or reimbursement for such advances is
available to it, such Servicing Advances shall be deemed to be nonrecoverable.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is not subject to a Subservicing Agreement.
Notice: As defined in Section 4.04.
Notional Amount: With respect to the Class A-I-2 Certificates,
immediately prior to any Distribution Date, an amount equal to the product of
0.50 and the Certificate Principal Balance of the Class A-I-1 Certificates. For
federal income tax purposes, however, the Notional Amount of the Class A-I-2
Certificates will be equal to the Uncertificated Principal Balance of REMIC III
Regular Interest LT3-AI1 , and when such Notional Amount is multiplied by a
Pass-Through Rate of 0.50%, the resulting Accrued Certificate Interest will be
the economic equivalent of the Accrued Certificate Interest resulting under the
definition thereof. The Class AV-I, Class AV-II and Class AV-III Certificates
will not accrue interest on a Notional Amount, but will be entitled to 100% of
amounts distributed on REMIC III Regular Interest LT3-AVI, REMIC III Regular
Interest LT3-AVII and REMIC III Regular Interest LT3-AVIII, respectively.
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 Depositor or the Master
Servicer, as the case may be, and delivered to the Trustee, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the
Trustee and the Master Servicer, who may be counsel for the Depositor or the
Master Servicer, provided that any opinion of counsel (i) referred to in the
definition of "Disqualified Organization" or (ii) relating to the qualification
of REMIC I, REMIC II, REMIC III or REMIC IV as REMICs or compliance with the
REMIC Provisions must, unless otherwise specified, be an opinion of Independent
counsel.
Outstanding Mortgage Loan: As to the Due Date in any Due Period, a
Mortgage Loan (including an REO Property) that was not the subject of a
Principal Prepayment in Full, Cash Liquidation or REO Disposition and that was
not purchased, deleted or substituted for prior to such Due Date pursuant to
Section 2.02, 2.03, 2.04 or 4.07.
37
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.
PAC I Aggregate Planned Principal Balance: With respect to the PAC I
Certificates and each Distribution Date, the amount set forth for such Classes
on such Distribution Date on Exhibit Q hereto.
PAC I Certificates: Any one of the Class A-I-1, Class A-I-3, Class
A-I-4, Class A-I-5 and Class A-I-6 Certificates.
PAC II Aggregate Planned Principal Balance: With respect to the PAC II
Certificates and each Distribution Date, the amount set forth for such Classes
on such Distribution Date on Exhibit Q hereto.
PAC II Certificates: Any one of the Class A-I-7 Certificates and Class
A-I-8 Certificates.
Pass-Through Rate: With respect to the Class A-I Certificates (other
than the Adjustable Rate Certificates), Class A-II, Class A-III, Class R, Class
M-III and Class B-III Certificates, the Pass-Through Rate set forth in the
Preliminary Statement. For federal income tax purposes, however, the
Pass-Through Rate with respect to the Class A-I-2 Certificates will be 0.50% per
annum, and when such Pass-Through Rate is multiplied by a Notional Amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LT3-AI1,
the resulting Accrued Certificate Interest will be the economic equivalent of
the Accrued Certificate Interest resulting under the definition thereof. With
respect to the Class A-I-9 Certificates and the initial Interest Accrual Period,
2.76875% per annum, and as to any Interest Accrual Period thereafter, a per
annum rate equal to LIBOR plus 1.45%, subject to a maximum rate of 7.50% per
annum and a minimum rate of 1.45% per annum. With respect to the Class A-I-10
Certificates and the initial Interest Accrual Period, 13.01093710% per annum,
and as to any Interest Accrual Period thereafter, a per annum rate equal to
16.63749942% minus the product of LIBOR and 2.74999986, subject to a maximum
rate of 16.63749942% per annum and a minimum rate of 0.00% per annum.
With respect to the Class AV-I Certificates and any Distribution Date, a
rate equal to the weighted average, expressed as a percentage, of the Pool Strip
Rates of all Group I Loans as of the Due Date in the related Due Period,
weighted on the basis of the respective Stated Principal Balances of such Group
I Loans as of the day immediately preceding such Distribution Date (or, with
respect to the initial Distribution Date, at the close of business on the
Cut-off Date). With respect to the Class AV-I Certificates and the initial
Distribution Date, the Pass-Through Rate is equal to approximately 0.2302% per
annum. For federal income tax purposes, the Class AV-I Certificates will not
have a Pass-Through Rate, but will be entitled to 100% of amounts distributed on
REMIC III Regular Interest LT3-AVI.
With respect to the Class AV-II Certificates and any Distribution Date,
a rate equal to the
38
weighted average, expressed as a percentage, of the Pool Strip Rates of all
Group II Loans as of the Due Date in the related Due Period, weighted on the
basis of the respective Stated Principal Balances of such Group II Loans as of
the day immediately preceding such Distribution Date (or, with respect to the
initial Distribution Date, at the close of business on the Cut-off Date). With
respect to the Class AV-II Certificates and the initial Distribution Date, the
Pass-Through Rate is equal to approximately 0.3279% per annum. For federal
income tax purposes, the Class AV-II Certificates will not have a Pass-Through
Rate, but will be entitled to 100% of amounts distributed on REMIC III Regular
Interest LT3-AVII.
With respect to the Class AV-III Certificates and any Distribution Date,
a rate equal to the weighted average, expressed as a percentage, of the Pool
Strip Rates of all Group III Loans as of the Due Date in the related Due Period,
weighted on the basis of the respective Stated Principal Balances of such Group
III Loans as of the day immediately preceding such Distribution Date (or, with
respect to the initial Distribution Date, at the close of business on the
Cut-off Date). With respect to the Class AV-III Certificates and the initial
Distribution Date, the Pass-Through Rate is equal to approximately 0.1570% per
annum. For federal income tax purposes, the Class AV-III Certificates will not
have a Pass-Through Rate, but will be entitled to 100% of amounts distributed on
REMIC III Regular Interest LT3-AVIII.
With respect to the Class M-1, Class M-2, Class M-3, Class B-1, Class
B-2 and Class B-3 Certificates, the weighted average of the Class A-I
Certificates weighted average Pass-Through Rate and the Class A-II Certificates
weighted average Pass-Through Rate, based on the respective Group I Loans and
Group II Loans subordination amounts. The Group I Loans and Group II Loans
subordination amounts will be the excess of the aggregate Stated Principal
Balance of the related Mortgage Loans, other than the related Discount Fraction
of each related Discount Mortgage Loan, over the aggregate principal balance of
the Class A-I, Class R-I, Class R-III and Class R-IV Certificates, and the Class
A-II Certificates, respectively. The Class A-I Certificates weighted average
Pass-Through Rate for this purpose is the weighted average of the Pass-Through
Rates of the Class A-I, Class R-I, Class R-III and Class R-IV Certificates, and
the Class A-II Certificates weighted average Pass-Through Rate for this purpose
is the Pass-Through Rate on the Class A-II Certificates, in each case based on
their respective principal balances. This determination will be made as of the
related Distribution Date prior to giving effect to any distributions on the
Certificates on that date. The Pass-Through Rate on the Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2 and Class B-3 Certificates with respect to the
first Interest Accrual Period is approximately 5.3833% per annum. For federal
income tax purposes, the Pass-Through Rate on the Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2 and Class B-3 Certificates will be a per annum rate
equal to the weighted average of the Uncertificated REMIC III Pass-Through Rates
on REMIC III Regular Interests LT3-M1, LT3-M2, LT3-M3, LT3-B1, LT3-B2 and
LT3-B3, weighted on the basis of each such REMIC III Regular Interest's
Uncertificated Principal Balance.
Paying Agent: Deutsche Bank Trust Company Americas or any successor Paying
Agent appointed by the Trustee.
39
Percentage Interest: With respect to any Class A Certificate, Class M
Certificate or Class B Certificate, the undivided percentage ownership interest
in the related Class evidenced by such Certificate, which percentage ownership
interest shall be equal to the Initial Certificate Principal Balance thereof
divided by the aggregate Initial Certificate Principal Balance of all of the
Certificates of the same Class. The Percentage Interest with respect to a Class
R Certificate shall be stated on the face thereof.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by
the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof,
provided that the unsecured obligations of the party agreeing to
repurchase such obligations are at the time rated by each Rating Agency
in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution or
trust company; provided that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard
& Poor's, in the case of the principal depository institution in a
depository institution holding company, debt obligations of the
depository institution holding 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 only Rating Agency
is Standard & Poor's and if the depository or trust company is a
principal subsidiary of a bank holding company and the debt obligations
of such subsidiary are not separately rated, the applicable rating shall
be that of the bank holding company; and, provided further that, if the
original maturity of such short-term obligations of a domestic branch of
a foreign depository institution or trust company shall exceed 30 days,
the short-term rating of such institution shall be A-1+ in the case of
Standard & Poor's if Standard & Poor's is a Rating Agency;
(iv) commercial paper and demand notes (having original
maturities of not more than 365 days) of any corporation incorporated
under the laws of the United States or any state thereof which on the
date of acquisition has been rated by each Rating Agency in its highest
short-term rating available; provided that such commercial paper and
demand notes shall have a remaining maturity of not more than 30 days;
40
(v) a money market fund or a qualified investment fund rated by
each Rating Agency in its highest long-term rating available; and
(vi) other obligations or securities that are acceptable to each
Rating Agency as a Permitted Investment hereunder and will not reduce
the rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to
such Certificates as of the Closing Date by such Rating Agency, as
evidenced in writing;
provided, however, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations. References herein to the highest rating available on unsecured
long-term debt shall mean AAA in the case of Standard & Poor's and Fitch and Aaa
in the case of Moody's, and 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
either A-1 by Standard & Poor's, P-1 by Moody's or F-1 by Fitch in the case of
Fitch.
Permitted Transferee: Any Transferee of a Class R Certificate, other
than a Disqualified Organization or Non-United States Person.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pool Strip Rate: With respect to each Group I Loan, a per annum rate
equal to the excess of (a) the Net Mortgage Rate of such Group I Loan over (b)
the Group I Discount Net Mortgage Rate (but not less than 0.00%) per annum. With
respect to each Group II Loan, a per annum rate equal to the excess of (a) the
Net Mortgage Rate of such Group II Loan over (b) the Group II Discount Net
Mortgage Rate (but not less than 0.00%) per annum. With respect to each Group
III Loan, a per annum rate equal to the excess of (a) the Net Mortgage Rate of
such Group III Loan over (b) the Group III Discount Net Mortgage Rate (but not
less than 0.00%) per annum.
Prepayment Assumption: 300% of the prepayment speed assumption, used for
determining the accrual of original issue discount and market discount and
premium on the Certificates for federal income tax purposes. The prepayment
speed assumption assumes a constant rate of prepayment of mortgage loans of 0.2%
per annum of the then outstanding principal balance of such mortgage loans in
the first month of the life of the mortgage loans, increasing by an additional
0.2% per annum in each succeeding month until the thirtieth month, and a
constant 6% per annum rate of prepayment thereafter for the life of the mortgage
loans.
41
Prepayment Distribution Percentage: With respect to any Distribution
Date and each Class of Subordinate Certificates, under the applicable
circumstances set forth below, the respective percentages set forth below:
(i) For any Distribution Date on which any Class of related
Subordinate Certificates are outstanding:
(a) in the case of the Class of related Subordinate
Certificates then outstanding with the Highest Priority and each
other Class of related Subordinate Certificates for which the
related Principal Payment Distribution Trigger has been
satisfied, a fraction, expressed as a percentage, the numerator
of which is the Certificate Principal Balance of such Class
immediately prior to such date and the denominator of which is
the sum of the Certificate Principal Balances immediately prior
to such date of (1) the Class of related Subordinate Certificates
then outstanding with the Highest Priority and (2) all other
Classes of related Subordinate Certificates for which the
respective Principal Payment Distribution Triggers have been
satisfied; and
(b) in the case of each other Class of related Subordinate
Certificates for which the Principal Payment Distribution
Triggers have not been satisfied, 0%; and
(ii) Notwithstanding the foregoing, if the application of the
foregoing percentages on any Distribution Date as provided in Section
4.02 (determined without regard to the proviso to the related definition
of "Subordinate Principal Distribution Amount") would result in a
distribution in respect of principal of any Class or Classes of related
Subordinate Certificates in an amount greater than the remaining
Certificate Principal Balance thereof (any such class, a "Maturing
Class"), then: (a) the Prepayment Distribution Percentage of each
Maturing Class shall be reduced to a level that, when applied as
described above, would exactly reduce the Certificate Principal Balance
of such Class to zero; (b) the Prepayment Distribution Percentage of
each other Class of related Subordinate Certificates (any such Class, a
"Non-Maturing Class") shall be recalculated in accordance with the
provisions in paragraph (ii) above, as if the Certificate Principal
Balance of each Maturing Class had been reduced to zero (such percentage
as recalculated, the "Recalculated Percentage"); (c) the total amount of
the reductions in the Prepayment Distribution Percentages of the
Maturing Class or Classes pursuant to clause (a) of this sentence,
expressed as an aggregate percentage, shall be allocated among the
Non-Maturing Classes in proportion to their respective Recalculated
Percentages (the portion of such aggregate reduction so allocated to any
Non-Maturing Class, the "Adjustment Percentage"); and (d) for purposes
of such Distribution Date, the Prepayment Distribution Percentage of
each Non-Maturing Class shall be equal to the sum of (1) the Prepayment
Distribution Percentage thereof, calculated in accordance with the
provisions in paragraph (ii) above as if the Certificate Principal
Balance of each Maturing Class had not been reduced to zero, plus (2)
the related Adjustment Percentage.
42
Prepayment Interest Shortfall: As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the related Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan) on the Stated Principal Balance of such Mortgage Loan over the amount of
interest (adjusted to the related Net Mortgage Rate (or Modified Net Mortgage
Rate in the case of a Modified Mortgage Loan)) paid by the Mortgagor for such
Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to one month's
interest at the related Net Mortgage Rate (or Modified Net Mortgage Rate in the
case of a Modified Mortgage Loan) on the amount of such Curtailment.
Prepayment Period: As to any Distribution Date and Principal Prepayment
in Full, the period commencing on the 16th day of the month prior to 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 as indicated on Exhibit F with the exception of either code "23" or
"96" under the column "MI CO CODE."
Principal Payment Distribution Trigger: With respect to any Distribution
Date and any Class of Subordinate Certificates (other than the Class M-1
Certificates or Class M-III-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 related 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 in the related Loan Groups or Loan Group (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 related Subordinate Certificates.
Principal Prepayment: Any payment of principal or other recovery on a
Mortgage Loan, including a recovery that takes the form of Liquidation Proceeds
or Insurance Proceeds, which is received in advance of its scheduled Due Date
and is not accompanied by an amount as to interest representing scheduled
interest on such payment due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Program Guide: The Residential Funding Seller Guide for mortgage
collateral sellers that participate in Residential Funding's standard mortgage
programs, and Residential Funding's Servicing Guide and any other subservicing
arrangements which Residential Funding has arranged to accommodate the servicing
of the Mortgage Loans.
43
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 first day of 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 Depositor for a Deleted Mortgage Loan which must, on
the date of such substitution, as confirmed in an Officers' Certificate
delivered to the Trustee, (i) have an outstanding principal balance, after
deduction of the principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than one Mortgage Loan
for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after
such deduction), not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan (the amount of any shortfall to be deposited by Residential
Funding, in the Custodial Account in the month of substitution); (ii) have a
Mortgage Rate and a Net Mortgage Rate no lower than and not more than 1% per
annum higher than the Mortgage Rate and Net Mortgage Rate, respectively, of the
Deleted Mortgage Loan as of the date of substitution; (iii) have a Loan-to-Value
Ratio at the time of substitution no higher than that of the Deleted Mortgage
Loan at the time of substitution; (iv) have a remaining term to stated maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan; (v) comply with each representation and warranty set forth in
Sections 2.03 and 2.04 hereof and Section 4 of the Assignment Agreement and (vi)
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
Group I Discount Mortgage Loan, Group II Discount Mortgage Loan or Group III
Discount Mortgage Loan, such Qualified Substitute Mortgage Loan shall be deemed
to be a Group I Discount Mortgage Loan, Group II Discount Mortgage Loan or Group
III Discount Mortgage Loan, respectively, and to have a Group I Discount
Fraction, Group II Discount Fraction or Group III Discount Fraction,
respectively, equal to the related 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 AV-I, Class AV-II or Class AV-III Certificates, as
applicable, and
(ii) the excess of the Pool Strip Rate on such Qualified Substitute
Mortgage Loan as
44
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-IV Certificates pursuant to Section 4.02
hereof.
Rating Agency: Fitch or Standard & Poor's. If either agency or a
successor is no longer in existence, "Rating Agency" shall be such statistical
credit rating agency, or other comparable Person, designated by the Depositor,
notice of which designation shall be given to the Trustee and the Master
Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO Property) as
to which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan (or
REO Property) as of the date of Cash Liquidation or REO Disposition, plus (ii)
interest (and REO Imputed Interest, if any) at the Net Mortgage Rate from the
Due Date as to which interest was last paid or advanced to Certificateholders up
to the last day of the month in which the Cash Liquidation (or REO Disposition)
occurred on the Stated Principal Balance of such Mortgage Loan (or REO Property)
outstanding during each Due Period that such interest was not paid or advanced,
minus (iii) the proceeds, if any, received during the month in which such Cash
Liquidation (or REO Disposition) occurred, to the extent applied as recoveries
of interest at the Net Mortgage Rate and to principal of the Mortgage Loan, net
of the portion thereof reimbursable to the Master Servicer or any Subservicer
with respect to related Advances or expenses as to which the Master Servicer or
Subservicer is entitled to reimbursement thereunder but which have not been
previously reimbursed. With respect to each Mortgage Loan which is the subject
of a Servicing Modification, (a) (1) the amount by which the interest portion of
a Monthly Payment or the principal balance of such Mortgage Loan was reduced or
(2) the sum of any other amounts owing under the Mortgage Loan that were
forgiven and that constitute Servicing Advances that are reimbursable to the
Master Servicer or a Subservicer, and (b) any such amount with respect to a
Monthly Payment that was or would have been due in the month immediately
following the month in which a Principal Prepayment or the Purchase Price of
such Mortgage Loan is received or is deemed to have been received. With respect
to each Mortgage Loan which has become the subject of a Deficient Valuation, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect to each
Mortgage Loan which has become the object of a Debt Service Reduction, the
amount of such Debt Service Reduction. Notwithstanding the above, neither a
Deficient Valuation nor a Debt Service Reduction shall be deemed a Realized Loss
hereunder so long as the Master Servicer has notified the Trustee in writing
that the Master Servicer is diligently pursuing any remedies that may exist in
connection with the representations and warranties made regarding the related
Mortgage Loan and either (A) the related Mortgage Loan is not in default with
regard to payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any premiums on any applicable
primary hazard insurance policy and any related escrow payments in respect of
such Mortgage Loan are being advanced on a current basis by the Master Servicer
or a Subservicer, in either case without giving effect to any Debt Service
Reduction.
45
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 Interest: Any one of the REMIC regular interests in the Trust Fund.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
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 I: 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 (other than with
respect to the items in clause (v) and the proceeds thereof), consisting of:
(i) the Group I Loans and Group II Loans and the related Mortgage
Files;
(ii) all payments on and collections in respect of the Group I
Loans and Group II 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 Group I Loan or Group II Loan and
which has been acquired for the benefit of the Certificateholders by
foreclosure or deed in lieu of foreclosure;
(iv) the hazard insurance policies and Primary Insurance Policy
pertaining to the Group I Loans, if any; and
(v) all proceeds of clauses (i) through (iv) above.
REMIC I Regular Interests: REMIC I Regular Interest LT-I-SUB, REMIC I
Regular Interest LT-I-AP, REMIC I Regular Interest LT-I-AV, REMIC I Regular
Interest LT-I-ZZZ, REMIC I Regular Interest LT-II-SUB, REMIC I Regular Interest
LT-II-AP, REMIC I Regular Interest LT-II- AV and REMIC I Regular Interest
LT-II-ZZZ.
REMIC I Regular Interest LT-I-SUB: A regular interest in REMIC I that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal
46
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 LT-I-AP: A regular interest in REMIC I that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-I-AV: A regular interest in REMIC I that is
held as an asset of REMIC III, that has an initial notional amount equal to
$255,332,470.60, 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 LT-I-ZZZ: A regular interest in REMIC I that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, and that has such other terms as
are described herein.
REMIC I Regular Interest LT-II-SUB: A regular interest in REMIC I that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-II-AP: A regular interest in REMIC I that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT-II-AV: A regular interest in REMIC I that is
held as an asset of REMIC III, that has an initial notional amount equal to
$77,700,011.52, 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 LT-II-ZZZ: A regular interest in REMIC I that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, and that has such other terms as
are described herein.
REMIC I Subordinated Balance Ratio: The ratio among the Uncertificated
Principal Balances of each REMIC I Regular Interest ending with the designation
"SUB," equal to the ratio among, with respect to each such REMIC I Regular
Interest, the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the aggregate current
Certificate Principal Balance of the Senior Certificates related to such Loan
Group.
REMIC II: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC
47
election is to be made (other than with respect to the items in clause (v) and
the proceeds thereof), consisting of:
(i) the Group III Loans and the related Mortgage Files;
(ii) all payments on and collections in respect of the Group III
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 Group III Loan and which has been
acquired for the benefit of the Certificateholders by foreclosure or
deed in lieu of foreclosure;
(iv) the hazard insurance policies and Primary Insurance Policy
pertaining to the Group III Loans, if any; and
(v) all proceeds of clauses (i) through (iv) above.
REMIC II Regular Interests: REMIC II Regular Interest LT-IIIA, REMIC II
Regular Interest LT-III-AV and REMIC II Regular Interest LT-III-AP.
REMIC II Regular Interest LT-IIIA: A regular interest in REMIC II that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II Regular Interest LT-III-AV: A regular interest in REMIC II that
is held as an asset of REMIC III, that has an initial notional amount equal to
$157,102,977.37, that bears interest at the related Uncertificated REMIC II
Pass-Through Rate, and that has such other terms as are described herein.
REMIC II Regular Interest LT-III-AP: A regular interest in REMIC II that
is held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, and that has such other terms as
are described herein.
REMIC III: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of the
REMIC I Regular Interests and the REMIC II Regular Interests.
REMIC III Regular Interests: REMIC III Regular Interest LT3-AI1, REMIC
III Regular Interest LT3-AI3, REMIC III Regular Interest LT3-AI4, REMIC III
Regular Interest LT3-AI5, REMIC III Regular Interest LT3-AI6, REMIC III Regular
Interest LT3-AI7, REMIC III Regular
48
Interest LT3-AI8, REMIC III Regular Interest LT3-AI9, REMIC III Regular Interest
LT3-AI10, REMIC III Regular Interest LT3-API, REMIC III Regular Interest
LT3-AVI, REMIC III Regular Interest LT3-AII, REMIC III Regular Interest
LT3-APII, REMIC III Regular Interest LT3-AVII, REMIC III Regular Interest
LT3-AIII, REMIC III Regular Interest LT3-APIII, REMIC III Regular Interest
LT3-AVIII, REMIC III Regular Interest LT3-R, REMIC III Regular Interest LT3-M1,
REMIC III Regular Interest LT3-M2, REMIC III Regular Interest LT3-M3, REMIC III
Regular Interest LT3-MIII1, REMIC III Regular Interest LT3-MIII2, REMIC III
Regular Interest LT3-MIII3, REMIC III Regular Interest LT3-B1, REMIC III Regular
Interest LT3-B2, REMIC III Regular Interest LT3-B3, REMIC III Regular Interest
LT3-BIII1, REMIC III Regular Interest LT3-BIII2 and REMIC III Regular Interest
LT3-BIII3.
REMIC III Regular Interest LT3-AI1: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-AI3: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-AI4: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-AI5: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-AI6: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-AI7: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-AI8: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal
49
Balance, that bears interest at the related Uncertificated REMIC III
Pass-Through Rate, and that has such other terms as are described herein.
REMIC III Regular Interest LT3-AI9: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-AI10: A regular interest in REMIC III
that is held as an asset of REMIC IV, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC III Pass-Through Rate, and that has such other
terms as are described herein.
REMIC III Regular Interest LT3-API: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that is not entitled to
distributions of interest, and that has such other terms as are described
herein.
REMIC III Regular Interest LT3-AVI: A regular interest in REMIC III that
is held as an asset of REMIC IV that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-AII: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-APII: A regular interest in REMIC III
that is held as an asset of REMIC IV, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that is not entitled to
distributions of interest, and that has such other terms as are described
herein.
REMIC III Regular Interest LT3-AVII: A regular interest in REMIC III
that is held as an asset of REMIC IV that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-AIII: A regular interest in REMIC III
that is held as an asset of REMIC IV, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC III Pass-Through Rate, and that has such other
terms as are described herein.
REMIC III Regular Interest LT3-APIII: A regular interest in REMIC III
that is held as an asset of REMIC IV, that has an initial principal balance
equal to the related Uncertificated Principal
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Balance, that is not entitled to distributions of interest, and that has such
other terms as are described herein.
REMIC III Regular Interest LT3-AVIII: A regular interest in REMIC III
that is held as an asset of REMIC IV that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-R: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-M1: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-M2: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-M3: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-MIII1: A regular interest in REMIC III
that is held as an asset of REMIC IV, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC III Pass-Through Rate, and that has such other
terms as are described herein.
REMIC III Regular Interest LT3-MIII2: A regular interest in REMIC III
that is held as an asset of REMIC IV, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC III Pass-Through Rate, and that has such other
terms as are described herein.
REMIC III Regular Interest LT3-MIII3: A regular interest in REMIC III
that is held as an asset of REMIC IV, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC III Pass-Through Rate, and that has such other
terms as are described herein.
REMIC III Regular Interest LT3-B1: A regular interest in REMIC III that is
held as an asset
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of REMIC IV, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-B2: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-B3: A regular interest in REMIC III that
is held as an asset of REMIC IV, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC III Pass-Through Rate, and that has such other terms as are
described herein.
REMIC III Regular Interest LT3-BIII1: A regular interest in REMIC III
that is held as an asset of REMIC IV, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC III Pass-Through Rate, and that has such other
terms as are described herein.
REMIC III Regular Interest LT3-BIII2: A regular interest in REMIC III
that is held as an asset of REMIC IV, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC III Pass-Through Rate, and that has such other
terms as are described herein.
REMIC III Regular Interest LT3-BIII3: A regular interest in REMIC III
that is held as an asset of REMIC IV, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC III Pass-Through Rate, and that has such other
terms as are described herein.
REMIC IV: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of the
REMIC III Regular Interests.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
temporary and final regulations (or, to the extent not inconsistent with such
temporary or final regulations, proposed regulations) and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
REO Acquisition: The acquisition by the Master Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.14.
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REO Disposition: As to any REO Property, a determination by the Master
Servicer that it has received substantially all Insurance Proceeds, Liquidation
Proceeds, REO Proceeds and other payments and recoveries (including proceeds of
a final sale) which the Master Servicer expects to be finally recoverable from
the sale or other disposition of the REO Property.
REO Imputed Interest: As to any REO Property, for any period, an amount
equivalent to interest (at a rate equal to the sum of the Net Mortgage Rate that
would have been applicable to the related Mortgage Loan had it been outstanding)
on the unpaid principal balance of the Mortgage Loan as of the date of
acquisition thereof for such period.
REO Proceeds: Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged Property) which proceeds are required to be deposited into the
Custodial Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed in lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Repurchase Event: As defined in the Assignment Agreement.
----------------
Request for Release: A request for release, the forms of which are
attached as Exhibit G hereto, or an electronic request in a form acceptable to
the Custodian.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement, the Program Guide or the related Subservicing Agreement in respect of
such Mortgage Loan.
Residential Funding: Residential Funding Corporation, a Delaware
corporation, in its capacity as seller of the Mortgage Loans to the Depositor
and any successor thereto.
Responsible Officer: When used with respect to the Trustee, any officer
of the 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.
Seller's Agreement: An agreement for the origination and sale of
Mortgage Loans generally in the form of the Seller Contract referred to or
contained in the Program Guide, or in such other form as has been approved by
the Master Servicer and the Depositor, 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: The Group I Senior Accelerated
Distribution
53
Percentage, Group II Senior Accelerated Distribution Percentage or Group III
Senior Accelerated Distribution Percentage.
Senior Certificates: Any one of the Class A or Class R Certificates.
Senior Interest Distribution Amount: The Group I Senior Interest
Distribution Amount, Group II Senior Interest Distribution Amount or Group III
Senior Interest Distribution Amount.
Senior Percentage: The Group I Senior Percentage, Group II Senior
Percentage or Group III Senior Percentage.
Senior Principal Distribution Amount: The Group I Senior Principal
Distribution Amount, Group II Senior Principal Distribution Amount or Group III
Senior Principal Distribution Amount.
Servicing Accounts: The account or accounts created and maintained pursuant
to Section 3.08.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other unanticipated event by the Master Servicer or a Subservicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
including any expenses incurred in relation to any such proceedings that result
from the Mortgage Loan being registered on the MERS(R) System, (iii) the
management and liquidation of any REO Property, (iv) any mitigation procedures
implemented in accordance with Section 3.07 and (v) compliance with the
obligations under Sections 3.01, 3.08, 3.12(a) and 3.14, including, if the
Master Servicer or any Affiliate of the Master Servicer provides services such
as appraisals and brokerage services that are customarily provided by Persons
other than servicers of mortgage loans, reasonable compensation for such
services.
Servicing Fee: With respect to any Mortgage Loan and Distribution Date,
the fee payable monthly to the Master Servicer in respect of master servicing
compensation that accrues at an annual rate equal to the Servicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as of the
related Due Date in the related Due Period, as may be adjusted pursuant to
Section 3.16(e).
Servicing Fee Rate: The per annum rate designated on the Mortgage Loan
Schedule as the "MSTR SERV FEE," as may be adjusted with respect to successor
Master Servicers as provided in Section 7.02.
Servicing Modification: Any reduction of the interest rate on or the
outstanding principal balance of a Mortgage Loan or any extension of the final
maturity date of a Mortgage Loan, in each case pursuant to a modification of a
Mortgage Loan that is in default or, in the judgment of the
54
Master Servicer, default is reasonably foreseeable pursuant to a modification of
such Mortgage Loan 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 Amount: The Group I/Group II Special Hazard Amount or Group
III Special Hazard Amount.
Special Hazard Loss: Any Realized Loss not in excess of the cost of the
lesser of repair or replacement of a Mortgaged Property suffered by such
Mortgaged Property 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, a division of The XxXxxx-Xxxx
Companies, or its successor in interest.
Startup Date: The day designated as such pursuant to Article X hereof.
------------
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property, at any given time, (i) the Cut-off Date Principal Balance of the
Mortgage Loan, minus (ii) the sum of (a) the aggregate of the principal portion
of the Monthly Payments due with respect to such Mortgage Loan or REO Property
during each Due Period commencing on the first Due Period after the Cut-off Date
and ending with the Due Period related to the most recent Distribution Date
which were received or with respect to which an Advance was made, and (b) all
Principal Prepayments with respect to such Mortgage Loan or REO Property, and
all Insurance Proceeds, Liquidation Proceeds and REO Proceeds, to the extent
applied by the Master Servicer as recoveries of principal in accordance with
Section 3.14 with respect to such Mortgage Loan or REO Property, in each case
which were distributed pursuant to Section 4.02 on any previous Distribution
Date, and (c) any Realized Loss allocated to Certificateholders with respect
thereto for any previous Distribution Date.
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. With respect to Loan Group I and Loan Group II, the Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates shall be
referred to as the related Subordinate Certificates. With respect to Loan Group
III, the Class M-III Certificates and Class B-III Certificates shall be referred
to the related Subordinate Certificates.
Subordinate Percentage: As of any Distribution Date, as determined
separately for each Loan
55
Group, 100% minus the related Senior Percentage as of such Distribution Date.
Subordinate Principal Distribution Amount: The Group I Subordinate
Principal Distribution Amount, Group II Subordinate Principal Distribution
Amount or Group III Subordinate Principal Distribution Amount.
Subordination: The provisions described in Section 4.05 relating to the
allocation of Realized Losses.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of reference
thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement and who generally satisfied the requirements set forth in
the Program Guide in respect of the qualification of a Subservicer as of the
date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and
interest on a Mortgage Loan which is advanced by the related Subservicer (net of
its Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in
accordance with Section 3.08.
Subservicing Agreement: The written contract between the Master Servicer
and any Subservicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02, generally in the form of the servicer
contract referred to or contained in the Program Guide or in such other form as
has been approved by the Master Servicer and the Depositor.
Subservicing Fee: As to any Mortgage Loan, the fee payable monthly to
the related Subservicer (or, in the case of a Nonsubserviced Mortgage Loan, to
the Master Servicer) in respect of subservicing and other compensation that
accrues with respect to each Distribution Date at an annual rate equal to the
Subservicing Fee Rate multiplied by the Stated Principal Balance of such
Mortgage Loan as of the related Due Date in the related Due Period.
Subservicing Fee Rate: The per annum rate designated as "SUBSERV FEE" on
the Mortgage Loan Schedule as the "SUBSERV FEE".
Tax Returns: The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of REMIC I, REMIC II, REMIC III and REMIC IV due to their
classification as REMICs under the REMIC Provisions, together with any and all
other
56
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.
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest
in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
Trust Fund: Collectively, the assets of REMIC I, REMIC II, REMIC III and
REMIC IV.
Uniform Single Attestation Program for Mortgage Bankers: The Uniform
Single Attestation Program for Mortgage Bankers, as published by the Mortgage
Bankers Association of America and effective with respect to fiscal periods
ending on or after December 15, 1995.
Uncertificated Accrued Interest: With respect to any REMIC I Regular
Interest, REMIC II Regular Interest or REMIC III Regular Interest for any
Distribution Date, except for REMIC I Regular Interest LT-I-AP, REMIC I Regular
Interest LT-II-AP, REMIC II Regular Interest LT-III- AP, REMIC III Regular
Interest LT3-API, REMIC III Regular Interest LT3-APII and REMIC III Regular
Interest LT3-APIII, one month's interest at the related Uncertificated
Pass-Through Rate for such Distribution Date, accrued on the Uncertificated
Principal Balance or Uncertificated Notional Amount, as applicable, immediately
prior to such Distribution Date. Uncertificated Accrued Interest for the
Uncertificated Regular Interests shall accrue on the basis of a 360-day year
consisting of twelve 30-day months. For purposes of calculating the amount of
Uncertificated Accrued Interest for the REMIC I Regular Interests for any
Distribution Date, any Prepayment Interest Shortfalls (to the extent not covered
by Compensating Interest) relating to the Group I Loans for any Distribution
Date shall be allocated first to REMIC I Regular Interests LT-I-SUB and LT-I-
ZZZ, and then to REMIC I Regular Interest LT-I-AV, in each case to the extent of
one month's interest at the then applicable respective Uncertificated REMIC I
Pass-Through Rate on the respective Uncertificated Principal Balance of each
such Uncertificated REMIC I Regular Interest. For purposes of calculating the
amount of Uncertificated Accrued Interest for the REMIC I Regular Interests for
any Distribution Date, any Prepayment Interest Shortfalls (to the extent not
covered by Compensating Interest) relating to the Group II Loans for any
Distribution Date shall be allocated first to REMIC I Regular Interests
LT-II-SUB and LT-II-ZZZ, and then to REMIC I Regular Interest LT-II-AV, in each
case to the extent of one month's interest at the then applicable respective
Uncertificated REMIC I Pass-Through Rate on the respective Uncertificated
Principal Balance of each such Uncertificated REMIC I Regular Interest. For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC II Regular Interests for any Distribution Date, any Prepayment Interest
Shortfalls (to the extent not covered by Compensating Interest) relating to the
Group III Loans for any Distribution Date shall be allocated first to REMIC II
Regular Interest LT- IIIA, and then to REMIC II Regular Interest LT-III-AV, in
each case to the extent of one month's interest at the then applicable
respective Uncertificated REMIC II Pass-Through Rate on the respective
Uncertificated Principal Balance of each such Uncertificated REMIC II Regular
Interest.
For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC III Regular Interests for any Distribution Date, any
Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) allocated to the Certificates (other than the Class R Certificates)
shall be allocated to the REMIC III Regular Interests for which such
Certificates are the Corresponding Certificates.
Uncertificated Notional Amount: With respect to REMIC I Regular Interest
LT-I-AV, REMIC I Regular Interest LT-II-AV and REMIC II Regular Interest
LT-III-AV, the aggregate Stated Principal Balance of the Group I Loans, Group II
Loans and the Group III Loans, respectively, as of the day immediately preceding
such Distribution Date (or, with respect to the initial Distribution Date, at
the close of business on the Cut-off Date). REMIC III Regular Interest LT3-AVI,
REMIC III Regular Interest LT3-AVII and REMIC III Regular Interest LT3-AVIII,
will not have Uncertificated Notional Amounts, but will be entitled to 100% of
the amounts distributed on REMIC I Regular Interest LT-I-AV, REMIC I Regular
Interest LT-II-AV and REMIC II Regular Interest LT- III-AV, respectively.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I
Pass-Through Rate, Uncertificated REMIC II Pass-Through Rate or Uncertificated
REMIC III Pass-Through Rate.
Uncertificated Principal Balance: The principal amount of any REMIC I
Regular Interest, REMIC II Regular Interest or REMIC III Regular Interest
outstanding as of any date of determination. The Uncertificated Principal
Balance of each REMIC I Regular Interest, REMIC II Regular Interest or REMIC III
Regular Interest shall never be less than zero.
Uncertificated REMIC I Pass-Through Rate: With respect to any
Distribution Date and REMIC I Regular Interest LT-I-SUB and REMIC I Regular
Interest LT-I-ZZZ a per annum rate equal to 5.50%. With respect to REMIC I
Regular Interest LT-II-SUB and REMIC I Regular Interest LT-II-ZZZ, a per annum
rate equal to 5.00%. With respect to REMIC I Regular Interest LT-I-AP and REMIC
I Regular Interest LT-II-AP, a per annum rate equal to 0.00%. With respect to
REMIC I Regular Interest LT-I-AV, a per annum rate equal to the weighted average
of the Pool Strip Rates for each Group I Loan. With respect to REMIC I Regular
Interest LT-II-AV, a per annum rate equal to the weighted average of the Pool
Strip Rates for each Group II Loan.
Uncertificated REMIC II Pass-Through Rate: With respect to any
Distribution Date and REMIC II Regular Interest LT-II-A, a per annum rate equal
to 6.00%. With respect to REMIC II Regular Interest LT-III-AP, a per annum rate
equal to 0.00%. With respect to REMIC II Regular Interest LT-III-AV, a per annum
rate equal to the weighted average of the Pool Strip Rates for each Group III
Loan.
57
Uncertificated REMIC III Pass-Through Rate: With respect to each REMIC
III Regular Interest (other than REMIC III Regular Interest LT3-AI9, REMIC III
Regular Interest LT3-AI10, REMIC III Regular Interest LT3-AVI, REMIC III Regular
Interest LT3-AVII, REMIC III Regular Interest LT3-AVIII, REMIC III Regular
Interest LT3-M1, REMIC III Regular Interest LT3-M2, REMIC III Regular Interest
LT3-M3, REMIC III Regular Interest LT3-B1, REMIC III Regular Interest LT3-B2 and
REMIC III Regular Interest LT3-B3) and any Distribution Date, the per annum rate
specified in the Preliminary Statement. With respect to REMIC III Regular
Interest LT3-AI9, a per annum rate equal to LIBOR plus 1.45%, subject to a
maximum rate of 7.50% per annum and a minimum rate of 1.45% per annum. With
respect to REMIC III Regular Interest LT3-AI10, a per annum rate equal to
16.63749942% minus the product of LIBOR and 2.74999986, subject to a maximum
rate of 16.63749942% per annum and a minimum rate of 0.00% per annum. With
respect to REMIC III Regular Interest LT3-M1, REMIC III Regular Interest LT3-M2,
REMIC III Regular Interest LT3-M3, REMIC III Regular Interest LT3-B1, REMIC III
Regular Interest LT3-B2 and REMIC III Regular Interest LT3-B3, a per annum rate
equal to the weighted average of the Uncertificated REMIC I Pass-Through Rates
on REMIC I Regular Interests LT-I-SUB and REMIC I Regular Interest LT-II-SUB,
weighted on the basis of the Uncertificated Principal Balance of each such REMIC
I Regular Interest. REMIC III Regular Interest LT3-AVI, REMIC III Regular
Interest LT3-AVII and REMIC III Regular Interest LT3-AVIII will not have
Uncertificated Pass-Through Rates, but will be entitled to 100% of amounts
distributed on REMIC I Regular Interest LT-I-AV, REMIC I Regular Interest
LT-II-AV and REMIC II Regular Interest LT-III-AV, respectively.
Uncertificated Regular Interests: The REMIC I Regular Interests, REMIC
II Regular Interests and REMIC III Regular Interests.
Uninsured Cause: Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies.
United States Person: A citizen or resident of the United States, a
corporation, partnership or other entity (treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States, any state thereof, or the District
of Columbia (except in the case of a partnership, to the extent provided in
Treasury regulations) provided that, for purposes solely of the restrictions on
the transfer of Class R Certificates, no partnership or other entity treated as
a partnership for United States federal income tax purposes shall be treated as
a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate that is described
in Section 7701(a)(30)(D) of the Code, or a trust that is described in Section
7701(a)(30)(E) of the Code.
VA: The Veterans Administration, or its successor.
Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. 95.00% of all of the Voting Rights shall
be allocated among Holders of the Class
58
A Certificates (other than the Interest Only Certificates), Class M Certificates
and Class B Certificates, in proportion to the outstanding Certificate Principal
Balances of their respective Certificates; 1% of all of the Voting Rights shall
be allocated among the Holders of the Class A-I-2 Certificates; 1% of all of the
Voting Rights shall be allocated among the Holders of the Class AV-I
Certificates; 1% of all of the Voting Rights shall be allocated among the
Holders of the Class AV-II Certificates; 1% of all of the Voting Rights shall be
allocated among the Holders of the Class AV-III Certificates; 0.25%, 0.25%,
0.25% and 0.25% of all of the Voting Rights shall be allocated among the Holders
of the Class R-I, Class R-II, Class R-III and Class R-IV Certificates,
respectively; in each case to be allocated among the Certificates of such Class
in accordance with their respective Percentage Interest.
59
Section 1.02 Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rates on the
Adjustable Rate Certificates, if any, for any Interest Accrual Period (other
than the initial Interest Accrual Period) will be determined on each LIBOR Rate
Adjustment Date.
On each LIBOR Rate Adjustment Date (other than for the initial Interest
Accrual Period), LIBOR shall be established by the Trustee and, as to any
Interest Accrual Period, will equal the rate for one month United States dollar
deposits that appears on the Telerate Screen Page 3750 as of 11:00 a.m., London
time, on such LIBOR Rate Adjustment Date. "Telerate Screen Page 3750" means the
display designated as page 3750 on the Telerate Service (or such other page as
may replace page 3750 on that service for the purpose of displaying London
interbank offered rates of major banks). If such rate does not appear on such
page (or such other page as may replace that page on that service, or if such
service is no longer offered, LIBOR shall be so established by use of such other
service for displaying LIBOR or comparable rates as may be selected by the
Trustee after consultation with the Master Servicer), the rate will be the
Reference Bank Rate. The "Reference Bank Rate" will be determined on the basis
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 Adjustable Rate 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 Adjustable Rate
Certificates then outstanding. If no such quotations can be obtained, the rate
will be LIBOR for the prior Distribution Date, or in the case of the first LIBOR
Rate Adjustment Date, 1.31875%; provided however, if, under the priorities
listed previously in this paragraph, LIBOR for a Distribution Date would be
based on LIBOR for the previous Distribution Date for the third consecutive
Distribution Date, the Trustee, after consultation with the Master Servicer,
shall select an alternative comparable index over which the Trustee has no
control, used for determining one- month Eurodollar lending rates that is
calculated and published or otherwise made available by an independent party.
The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment
Date and the Master Servicer's subsequent calculation of the Pass-Through Rates
applicable to each of the Adjustable Rate Certificates for the relevant Interest
Accrual Period, in the absence of manifest error, will be final and binding.
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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 the Pass-Through Rates on each of the Adjustable Rate
Certificates for the current and the immediately preceding Interest Accrual
Period.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby assign to the Trustee without recourse, all the right, title and
interest of the Depositor in and to (i) the Mortgage Loans, including all
interest and principal received on or with respect to the Mortgage Loans after
the Cut-off Date (other than payments of principal and interest due on the
Mortgage Loans in the month of May 2003); and (ii) all proceeds of the
foregoing.
(b) In connection with such assignment, and contemporaneously with the
delivery of this Agreement, except as set forth in Section 2.01(c) below, the
Depositor does hereby deliver to, and deposit with, the Trustee, or to and with
one or more Custodians, as the duly appointed agent or agents of the Trustee for
such purpose, the following documents or instruments (or copies thereof as
permitted by this Section) with respect to each Mortgage Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to the
order of the Trustee and showing an unbroken chain of endorsements from
the originator thereof to the Person endorsing it to the Trustee, or
with respect to any Destroyed Mortgage Note, an original lost note
affidavit from the related Seller or Residential Funding stating that
the original Mortgage Note was lost, misplaced or destroyed, together
with a copy of the related Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a MOM
Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
thereon or, if the original Mortgage has not yet been returned from the
public recording office, a copy of the original Mortgage with evidence
of recording indicated thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R)
System, the assignment (which may be included in one or more blanket
assignments if permitted by applicable law) of the Mortgage to the
Trustee with evidence of recording indicated thereon or a copy of such
assignment with evidence of recording indicated thereon;
(iv) The original recorded assignment or assignments of the
Mortgage showing an unbroken chain of title from the originator to the
Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS(R) System and noting the presence of a MIN) with
evidence of recordation noted thereon or attached thereto, or a copy of
such assignment or assignments of the Mortgage with evidence of
recording indicated thereon; and
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(v) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Mortgage Loan, or a
copy of each modification, assumption agreement or preferred loan
agreement.
(c) The Depositor may, in lieu of delivering originals of the documents
set forth in Section 2.01(b)(ii), (iii), (iv) and (v) (or copies thereof as
permitted by Section 2.01(b)) to the Trustee or the Custodian 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 below. Within thirty Business
Days following the earlier of (i) the receipt of the original of all of the
documents or instruments set forth in Section 2.01(b)(ii), (iii), (iv) and (v)
(or copies thereof as permitted by such Section) for any Mortgage Loan and (ii)
a written request by the Trustee to deliver those documents with respect to any
or all of the Mortgage Loans then being held by the Master Servicer, the Master
Servicer shall deliver a complete set of such documents to the Trustee or the
Custodian or Custodians that are the duly appointed agent or agents of the
Trustee. On the Closing Date, the Master Servicer shall certify that it has in
its possession an original or copy of each of the documents referred to in
Section 2.01(b)(ii), (iii), (iv) and (v) which has been delivered to it by the
Depositor.
(d) In connection with any Mortgage Loan, if the Depositor cannot
deliver the Mortgage, any assignment, modification, assumption agreement or
preferred loan agreement (or copy thereof as permitted by Section 2.01(b)) with
evidence of recording thereon concurrently with the execution and delivery of
this Agreement because of (i) a delay caused by the public recording office
where such Mortgage, assignment, modification, assumption agreement or preferred
loan agreement as the case may be, has been delivered for recordation, or (ii) a
delay in the receipt of certain information necessary to prepare the related
assignments, the Depositor shall deliver or cause to be delivered to the Trustee
or the respective Custodian a copy of such Mortgage, assignment, modification,
assumption agreement or preferred loan agreement.
The Depositor shall promptly cause to be recorded in the appropriate
public office for real property records the Assignment referred to in clause
(iii) of Section 2.01(b), except (a) in states where, in the opinion of counsel
acceptable to the Trustee and the Master Servicer, such recording is not
required to protect the Trustee's interests in the Mortgage Loan or (b) if MERS
is identified on the Mortgage or on a properly recorded assignment of the
Mortgage as the mortgagee of record solely as nominee for Residential Funding
and its successors and assigns. If any Assignment is lost or returned unrecorded
to the Depositor because of any defect therein, the Depositor shall prepare a
substitute Assignment or cure such defect, as the case may be, and cause such
Assignment to be recorded in accordance with this paragraph. The Depositor shall
promptly deliver or cause to be delivered to the Trustee or the respective
Custodian such Mortgage or Assignment (or copy thereof as permitted by Section
2.01(b)) with evidence of recording indicated thereon upon receipt thereof from
the public recording office or from the related Subservicer.
If the Depositor delivers to the Trustee or Custodian any Mortgage Note
or Assignment of
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Mortgage in blank, the Depositor shall, or shall cause the Custodian to,
complete the endorsement of the Mortgage Note and the Assignment of Mortgage in
the name of the Trustee in conjunction with the Interim Certification issued by
the Custodian, as contemplated by Section 2.02.
Any of the items set forth in Sections 2.01(b)(ii), (iii), (iv) and (v)
that may be delivered as a copy rather than the original may be delivered to the
Trustee or the Custodian.
In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Depositor further agrees that it will cause, at the
Depositor's own expense, within 30 days after the Closing Date, the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the Depositor
to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Depositor further agrees that it
will not, and will not permit the Master Servicer to, and the Master Servicer
agrees that it will not, alter the codes referenced in this paragraph with
respect to any Mortgage Loan during the term of this Agreement unless and until
such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
(e) It is intended that the conveyances by the Depositor to the Trustee
of the Mortgage Loans as provided for in this Section 2.01 be construed as a
sale by the Depositor to the Trustee of the Mortgage Loans for the benefit of
the Certificateholders. Further, it is not intended that any such conveyance be
deemed to be a pledge of the Mortgage Loans by the Depositor to the Trustee to
secure a debt or other obligation of the Depositor. However, in the event that
the Mortgage Loans are held to be property of the Depositor or of Residential
Funding, or if for any reason this Agreement is held or deemed to create a
security interest in the Mortgage Loans, then it is intended that (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction; (b) the conveyances
provided for in this Section 2.01 shall be deemed to be (1) a grant by the
Depositor to the Trustee of a security interest in all of the Depositor's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to (A) the Mortgage Loans, including the
related Mortgage Note and Mortgage, (B) all amounts payable pursuant to the
Mortgage Loans in accordance with the terms thereof and (C) any and all general
intangibles consisting of, arising from or relating to any of the foregoing, and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts from time to time held or invested in the Certificate Account or the
Custodial Account, whether in the form of cash, instruments, securities or other
property and (2) an assignment by the Depositor to the Trustee of any security
interest in any and all of Residential Funding's right (including the power to
convey title thereto), title and interest, whether now owned or hereafter
acquired, in and to the property described in the foregoing clauses (1)(A), (B)
and (C) granted by Residential Funding to the Depositor pursuant to the
Assignment Agreement; (c) the possession by the Trustee, the Custodian or any
other
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agent of the Trustee of Mortgage Notes or such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party," or possession by a purchaser or
a person designated by such secured party, for purposes of perfecting the
security interest pursuant to the Uniform Commercial Code as in effect in the
States of New York and Minnesota and any other applicable jurisdiction; and (d)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law.
The Depositor and, at the Depositor's direction, Residential Funding and
the Trustee shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans and the other
property described above, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement. Without limiting the
generality of the foregoing, the Depositor shall prepare and deliver to the
Trustee not less than 15 days prior to any filing date and, the Trustee shall
forward for filing, or shall cause to be forwarded for filing, at the expense of
the Depositor, all filings necessary to maintain the effectiveness of any
original filings necessary under the Uniform Commercial Code as in effect in any
jurisdiction to perfect the Trustee's security interest in or lien on the
Mortgage Loans as evidenced by an Officers' Certificate of the Depositor,
including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of Residential
Funding, the Depositor or the Trustee (such preparation and filing shall be at
the expense of the Trustee, if occasioned by a change in the Trustee's name),
(2) any change of location of the place of business or the chief executive
office of Residential Funding or the Depositor or (3) any transfer of any
interest of Residential Funding or the Depositor in any Mortgage Loan.
Section 2.02 Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage Loans
subject to a Custodial Agreement, and based solely upon a receipt or
certification executed by the Custodian, receipt by the respective Custodian as
the duly appointed agent of the Trustee) of the documents referred to in Section
2.01(b)(i) through (iii) above (except that for purposes of such acknowledgment
only, a Mortgage Note may be endorsed in blank and an Assignment of Mortgage may
be in blank) and declares that it, or a Custodian as its agent, holds and will
hold such documents and the other documents constituting a part of the Mortgage
Files delivered to it, or a Custodian as its agent, 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
Certificate") to the effect that all documents
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required to be delivered pursuant to Section 2.01(b) above have been executed
and received and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, except for any exceptions listed on Schedule A
attached to such Interim Certification. Upon delivery of the Mortgage Files by
the Depositor or the Master Servicer, the Trustee shall acknowledge receipt (or,
with respect to Mortgage Loans subject to a Custodial Agreement, and based
solely upon a receipt or certification 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. The Trustee or Custodian (such
Custodian being so obligated under a Custodial Agreement) agrees to review each
Mortgage File delivered to it pursuant to Section 2.01(c) within 45 days after
receipt thereof to ascertain that all documents required to be delivered
pursuant to such Section have been received, and that such documents relate to
the Mortgage Loans identified on the Mortgage Loan Schedule, as supplemented,
that have been conveyed to it.
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, after receiving notice from the Custodian, shall promptly so notify the
Master Servicer and the Depositor; provided, that if the Mortgage Loan related
to such Mortgage File is listed on Schedule A of the Assignment Agreement, no
notification shall be necessary. Pursuant to Section 2.3 of the Custodial
Agreement, the Custodian will notify the Master Servicer, the Depositor and the
Trustee of any such omission or defect found by it in respect of any Mortgage
File held by it. If such omission or defect materially and adversely affects the
interests in the related Mortgage Loan of the Certificateholders, the Master
Servicer shall promptly notify the related Subservicer of such omission or
defect and request that such Subservicer correct or cure such omission or defect
within 60 days from the date the Master Servicer was notified of such omission
or defect and, if such Subservicer does not correct or cure such omission or
defect within such period, that such Subservicer purchase such Mortgage Loan
from the Trust Fund at its Purchase Price, in either case within 90 days from
the date the Master Servicer was notified of such omission or defect; provided
that if the omission or defect would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such cure
or repurchase must occur within 90 days from the date such breach was
discovered; and provided further, that no cure, substitution or repurchase shall
be required if such omission or defect is in respect of a Mortgage Loan listed
on Schedule A of the Assignment Agreement. The Purchase Price for any such
Mortgage Loan shall be deposited or caused to be deposited by the Master
Servicer in the Custodial Account maintained by it pursuant to Section 3.07 and,
upon receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee or any Custodian, as the case may be, shall
release to the Master Servicer the related Mortgage File and the Trustee shall
execute and deliver such instruments of transfer or assignment prepared by the
Master Servicer, in each case without recourse, as shall be necessary to vest in
the Subservicer or its designee, as the case may be, any Mortgage Loan released
pursuant hereto and thereafter such Mortgage Loan shall not be part of the Trust
Fund. In furtherance of the foregoing, if the Subservicer or Residential Funding
that repurchases the Mortgage Loan is not a member of MERS and the Mortgage is
registered on the MERS(R) System, the Master Servicer, at its own expense and
without any right of reimbursement, shall cause MERS to execute and deliver an
assignment of the Mortgage in recordable form to transfer the Mortgage from MERS
to such Subservicer or Residential Funding
66
and shall cause such Mortgage to be removed from registration on the MERS(R)
System in accordance with MERS' rules and regulations. It is understood and
agreed that the obligation of the Subservicer, to so cure or purchase any
Mortgage Loan as to which a material and adverse defect in or omission of a
constituent document exists shall constitute the sole remedy respecting such
defect or omission available to Certificateholders or the Trustee on behalf of
Certificateholders.
Section 2.03 Representations, Warranties and Covenants of the Master Servicer
and the Depositor.
(a) The Master Servicer hereby represents and warrants to the Trustee
for the benefit of the Certificateholders that:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and is or will be in compliance with the laws of each state in
which any Mortgaged Property is located to the extent necessary to
ensure the enforceability of each Mortgage Loan in accordance with the
terms of this Agreement;
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not violate the Master Servicer's Certificate of
Incorporation or Bylaws or constitute a material default (or an event
which, with notice or lapse of time, or both, would constitute a
material default) under, or result in the material breach of, any
material contract, agreement or other instrument to which the Master
Servicer is a party or which may be applicable to the Master Servicer or
any of its assets;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Depositor, constitutes a valid, legal
and binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(iv) The Master Servicer is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of the Master Servicer or
its properties or might have consequences that would materially
adversely affect its performance hereunder;
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
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(vi) The Master Servicer will comply in all material respects in
the performance of this Agreement with all reasonable rules and
requirements of each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement
furnished in writing or report delivered to the Depositor, any Affiliate
of the Depositor or the Trustee by the Master Servicer will, to the
knowledge of the Master Servicer, contain any untrue statement of a
material fact or omit a material fact necessary to make the information,
certificate, statement or report not misleading;
(viii) The Master Servicer has examined each existing, and will
examine each new, Subservicing Agreement and is or will be familiar with
the terms thereof. The terms of each existing Subservicing Agreement and
each designated Subservicer are acceptable to the Master Servicer and
any new Subservicing Agreements will comply with the provisions of
Section 3.02; and
(ix) The Master Servicer is a member of MERS in good standing,
and will comply in all material respects with the rules and procedures
of MERS in connection with the servicing of the Mortgage Loans that are
registered with MERS.
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(a) shall survive delivery of the respective Mortgage
Files to the Trustee or any Custodian.
Upon discovery by either the Depositor, the Master Servicer, the Trustee
or any Custodian of a breach of any representation or warranty set forth in this
Section 2.03(a) which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties (any Custodian being so
obligated under a Custodial Agreement). Within 90 days of its discovery or its
receipt of notice of such breach, the Master Servicer shall either (i) cure such
breach in all material respects or (ii) to the extent that such breach is with
respect to a Mortgage Loan or a related document, purchase such Mortgage Loan
from the Trust Fund at the Purchase Price and in the manner set forth in Section
2.02; provided that if the omission or defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from the date such
breach was discovered. The obligation of the Master Servicer to cure such breach
or to so purchase such Mortgage Loan shall constitute the sole remedy in respect
of a breach of a representation and warranty set forth in this Section 2.03(a)
available to the Certificateholders or the Trustee on behalf of the
Certificateholders.
(b) The Depositor hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that as of the Closing Date (or, if otherwise
specified below, as of the date so specified):
(i) The information set forth in Exhibit F-1, Exhibit F-2 and
Exhibit F-3 hereto
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with respect to each Mortgage Loan or the Mortgage Loans, as the case
may be, is true and correct in all material respects at the respective
date or dates which such information is furnished;
(ii) Immediately prior to the conveyance of the Mortgage Loans to
the Trustee, the Depositor had good title to, and was the sole owner of,
each Mortgage Loan free and clear of any pledge, lien, encumbrance or
security interest (other than rights to servicing and related
compensation) and such conveyance validly transfers ownership of the
Mortgage Loans to the Trustee free and clear of any pledge, lien,
encumbrance or security interest; and
(iii) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1).
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(b) shall survive delivery of the respective Mortgage
Files to the Trustee or any Custodian.
Upon discovery by any of the Depositor, the Master Servicer, the Trustee
or any Custodian of a breach of any of the representations and warranties set
forth in this Section 2.03(b) which materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan, the party discovering
such breach shall give prompt written notice to the other parties (any Custodian
being so obligated under a Custodial Agreement); provided, however, that in the
event of a breach of the representation and warranty set forth in Section
2.03(b)(iii), the party discovering such breach shall give such notice within
five days of discovery. Within 90 days of its discovery or its receipt of notice
of breach, the Depositor shall either (i) cure such breach in all material
respects or (ii) purchase such Mortgage Loan from the Trust Fund at the Purchase
Price and in the manner set forth in Section 2.02; provided that the Depositor
shall have the option to substitute a Qualified Substitute Mortgage Loan or
Loans for such Mortgage Loan if such substitution occurs within two years
following the Closing Date; provided that if the omission or defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure, substitution or repurchase must occur
within 90 days from the date such breach was discovered. Any such substitution
shall be effected by the Depositor under the same terms and conditions as
provided in Section 2.04 for substitutions by Residential Funding. It is
understood and agreed that the obligation of the Depositor to cure such breach
or to so purchase or substitute for any Mortgage Loan as to which such a breach
has occurred and is continuing shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on behalf of the
Certificateholders. Notwithstanding the foregoing, the Depositor shall not be
required to cure breaches or purchase or substitute for Mortgage Loans as
provided in this Section 2.03(b) if the substance of the breach of a
representation set forth above also constitutes fraud in the origination of the
Mortgage Loan.
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Section 2.04 Representations and Warranties of Residential Funding.
The Depositor, as assignee of Residential Funding under the Assignment
Agreement, hereby assigns to the Trustee for the benefit of the
Certificateholders all of its right, title and interest in respect of the
Assignment Agreement applicable to a Mortgage Loan. Insofar as the Assignment
Agreement relates to the representations and warranties made by Residential
Funding in respect of such Mortgage Loan and any remedies provided thereunder
for any breach of such representations and warranties, such right, title and
interest may be enforced by the Master Servicer on behalf of the Trustee and the
Certificateholders. Upon the discovery by the Depositor, the Master Servicer,
the Trustee or any Custodian of a breach of any of the representations and
warranties made in the Assignment Agreement in respect of any Mortgage Loan or
of any Repurchase Event which materially and adversely affects the interests of
the Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties (any Custodian being so
obligated under a Custodial Agreement). The Master Servicer shall promptly
notify Residential Funding of such breach or Repurchase Event and request that
Residential Funding either (i) cure such breach or Repurchase Event in all
material respects within 90 days from the date the Master Servicer was notified
of such breach or Repurchase Event or (ii) purchase such Mortgage Loan from the
Trust Fund at the Purchase Price and in the manner set forth in Section 2.02;
provided that, in the case of a breach or Repurchase Event under the Assignment
Agreement, Residential Funding shall have the option to substitute a Qualified
Substitute Mortgage Loan or Loans for such Mortgage Loan if such substitution
occurs within two years following the Closing Date; provided that if the breach
would cause the Mortgage Loan to be other than a "qualified mortgage" as defined
in Section 860G(a)(3) of the Code, any such cure or substitution must occur
within 90 days from the date the breach was discovered. If the breach of
representation and warranty that gave rise to the obligation to repurchase or
substitute a Mortgage Loan pursuant to Section 4 of the Assignment Agreement was
the representation and warranty set forth in clause (v) of Section 4 thereof,
then the Master Servicer shall request that Residential Funding pay to the Trust
Fund, concurrently with and in addition to the remedies provided in the
preceding sentence, an amount equal to any liability, penalty or expense that
was actually incurred and paid out of or on behalf of the Trust Fund, and that
directly resulted from such breach, or if incurred and paid by the Trust Fund
thereafter, concurrently with such payment. In the event that Residential
Funding elects to substitute a Qualified Substitute Mortgage Loan or Loans for a
Deleted Mortgage Loan pursuant to this Section 2.04, Residential Funding shall
deliver to the Trustee for the benefit of the Certificateholders with respect to
such Qualified Substitute Mortgage Loan or Loans, the original Mortgage Note,
the Mortgage, an Assignment of the Mortgage in recordable form, and such other
documents and agreements as are required by Section 2.01, with the Mortgage Note
endorsed as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
shall not be part of the Trust Fund and will be retained by the Master Servicer
and remitted by the Master Servicer to Residential Funding on the next
succeeding Distribution Date. For the month of substitution, distributions to
the Certificateholders will include the Monthly Payment due on a Deleted
Mortgage Loan for such month and thereafter Residential Funding shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master
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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 Group I Discount
Mortgage Loan, Group II Discount Mortgage Loan or Group III Discount Mortgage
Loan, the amended related 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, and Residential Funding shall be deemed to have made the
representations and warranties with respect to the Qualified Substitute Mortgage
Loan contained in Section 4 of the Assignment Agreement, as of the date of
substitution, and the covenants, representations and warranties set forth in
this Section 2.04, and in Section 2.03 hereof and in Section 4 of the Assignment
Agreement, and the Master Servicer shall be obligated to repurchase or
substitute for any Qualified Substitute Mortgage Loan as to which a Repurchase
Event (as defined in the Assignment Agreement) has occurred pursuant to Section
4 of the Assignment Agreement. In connection with the substitution of one or
more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the Master Servicer will determine the amount (if any) by which the aggregate
principal balance of all such Qualified Substitute Mortgage Loans as of the date
of substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (in each case after application of the principal portion
of the Monthly Payments due in the month of substitution that are to be
distributed to the Certificateholders in the month of substitution). Residential
Funding shall deposit the amount of such shortfall into the Custodial Account on
the day of substitution, without any reimbursement therefor. Residential Funding
shall give notice in writing to the Trustee of such event, which notice shall be
accompanied by an Officers' Certificate as to the calculation of such shortfall
and by an Opinion of Counsel to the effect that such substitution will not cause
(a) any federal tax to be imposed on the Trust Fund, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code or (b) any portion of REMIC I, REMIC II, REMIC
III or REMIC IV to fail to qualify as a REMIC at any time that any Certificate
is outstanding.
It is understood and agreed that the obligation of Residential Funding
to cure such breach or purchase (or in the case of Residential Funding to
substitute for) such Mortgage Loan as to which such a breach has occurred and is
continuing and to make any additional payments required under the Assignment
Agreement in connection with a breach of the representation and warranty in
clause (v) of Section 4 thereof shall constitute the sole remedy respecting such
breach available to the Certificateholders or the Trustee on behalf of the
Certificateholders. If the Master Servicer is Residential Funding, then the
Trustee shall also have the right to give the notification and require the
purchase or substitution provided for in the second preceding paragraph in the
event of such a breach of a representation or warranty made by Residential
Funding in the Assignment Agreement. In connection with the purchase of or
substitution for any such Mortgage Loan by Residential Funding, the Trustee
shall assign to Residential Funding all of the right, title and interest in
respect of the Assignment Agreement applicable to such Mortgage Loan.
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Section 2.05 Execution and Authentication of Certificates; Conveyance of
Uncertificated Regular Interests.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery of the Mortgage Files to it, or any Custodian on its behalf,
subject to any exceptions noted, together with the assignment to it of all other
assets included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such delivery and in exchange therefor, the Trustee, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
has executed and caused to be authenticated and delivered to or upon the order
of the Depositor the Certificates in authorized denominations which evidence
ownership of the entire Trust Fund.
(b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse, all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests, the REMIC II Regular Interests and the
REMIC III Regular Interests for the benefit of the Holders of the REMIC IV
Regular Interests and the Holders of the Class R-IV Certificates. The Trustee
acknowledges receipt of the REMIC I Regular Interests, the REMIC II Regular
Interests and the REMIC III Regular Interests (each of which are uncertificated)
and declares that it holds and will hold the same in trust for the exclusive use
and benefit of the Holders of the REMIC IV Regular Interests and Holders of the
Class R-IV Certificates. The interests evidenced by the Class R-IV Certificates,
together with the REMIC IV Regular Interests, constitute the entire beneficial
ownership interest in REMIC IV.
(c) In exchange for the REMIC I Regular Interests, the REMIC II Regular
Interests and the REMIC III Regular Interests and, concurrently with the
assignment to the Trustee thereof, pursuant to the written request of the
Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Regular
Certificates in authorized denominations evidencing (together with the Class
R-IV Certificates) the entire beneficial ownership interest in REMIC IV.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Servicer.
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(a) The Master Servicer shall service and administer the Mortgage Loans
in accordance with the terms of this Agreement and the respective Mortgage
Loans, following such procedures as it would employ in its good faith business
judgment and which are normal and usual in its general mortgage servicing
activities, and shall have full power and authority, acting alone or through
Subservicers as provided in Section 3.02, to do any and all things which it may
deem necessary or desirable in connection with such servicing and
administration. Without limiting the generality of the foregoing, the Master
Servicer in its own name or in the name of a Subservicer is hereby authorized
and empowered by the Trustee when the Master Servicer or the Subservicer, as the
case may be, believes it appropriate in its best judgment, to execute and
deliver, on behalf of the Certificateholders and the Trustee or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, or of consent to assumption or modification in connection
with a proposed conveyance, or of assignment of any Mortgage and Mortgage Note
in connection with the repurchase of a Mortgage Loan and all other comparable
instruments, or with respect to the modification or re-recording of a Mortgage
for the purpose of correcting the Mortgage, the subordination of the lien of the
Mortgage in favor of a public utility company or government agency or unit with
powers of eminent domain, the taking of a deed in lieu of foreclosure, the
completion of judicial or non-judicial foreclosure, the conveyance of a
Mortgaged Property to the related insurer, the acquisition of any property
acquired by foreclosure or deed in lieu of foreclosure, or the management,
marketing and conveyance of any property acquired by foreclosure or deed in lieu
of foreclosure with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. The Master Servicer further is authorized and empowered by
the Trustee, on behalf of the Certificateholders and the Trustee, in its own
name or in the name of the Subservicer, when the Master Servicer or the
Subservicer, as the case may be, believes it is appropriate in its best judgment
to register any Mortgage Loan on the MERS(R) System, or cause the removal from
the registration of any Mortgage Loan on the MERS(R) System, to execute and
deliver, on behalf of the Trustee and the Certificateholders or any of them, any
and all instruments of assignment and other comparable instruments with respect
to such assignment or re-recording of a Mortgage in the name of MERS, solely as
nominee for the Trustee and its successors and assigns. Any expenses incurred in
connection with the actions described in the preceding sentence shall be borne
by the Master Servicer in accordance with Section 3.16(c), with no right of
reimbursement; provided, that if, as a result of MERS discontinuing or becoming
unable to continue operations in connection with the MERS 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
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Section 1001 of the Code and any proposed, temporary or final regulations
promulgated thereunder (other than in connection with a proposed conveyance or
assumption of such Mortgage Loan that is treated as a Principal Prepayment in
Full pursuant to Section 3.13(d) hereof) and cause any of REMIC I, REMIC II,
REMIC III or REMIC IV to fail to qualify as a REMIC under the Code. The Trustee
shall furnish the Master Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Master Servicer to service and
administer the Mortgage Loans. The Trustee shall not be liable for any action
taken by the Master Servicer or any Subservicer pursuant to such powers of
attorney. In servicing and administering any Nonsubserviced Mortgage Loan, the
Master Servicer shall, to the extent not inconsistent with this Agreement,
comply with the Program Guide as if it were the originator of such Mortgage Loan
and had retained the servicing rights and obligations in respect thereof. In
connection with servicing and administering the Mortgage Loans, the Master
Servicer and any Affiliate of the Master Servicer (i) may perform services such
as appraisals and brokerage services that are customarily provided by Persons
other than servicers of mortgage loans, and shall be entitled to reasonable
compensation therefor in accordance with Section 3.10 and (ii) may, at its own
discretion and on behalf of the Trustee, obtain credit information in the form
of a "credit score" from a credit repository.
(b) All costs incurred by the Master Servicer or by Subservicers in
effecting the timely payment of taxes and assessments on the properties subject
to the Mortgage Loans shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the amount owing under the
related Mortgage Loans, notwithstanding that the terms of such Mortgage Loan so
permit, and such costs shall be recoverable to the extent permitted by Section
3.10(a)(ii).
(c) The Master Servicer may enter into one or more agreements in
connection with the offering of pass-through certificates evidencing interests
in one or more of the Certificates providing for the payment by the Master
Servicer of amounts received by the Master Servicer as servicing compensation
hereunder and required to cover certain Prepayment Interest Shortfalls on the
Mortgage Loans, which payment obligation will thereafter be an obligation of the
Master Servicer hereunder.
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' Obligations;
Special Servicing.
(a) The Master Servicer may continue in effect Subservicing Agreements
entered into by Residential Funding and Subservicers prior to the execution and
delivery of this Agreement, and may enter into new Subservicing Agreements with
Subservicers, for the servicing and administration of all or some of the
Mortgage Loans. Each Subservicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans, and in either case shall be
authorized to transact business in the state or states in which the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Subservicer to perform its obligations
hereunder and under the Subservicing Agreement, and in either case shall be a
Xxxxxxx Mac, Xxxxxx Xxx or HUD approved mortgage servicer. In addition, any
Subservicer of a Mortgage Loan insured by the FHA
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must be an FHA-approved servicer, and any Subservicer of a Mortgage Loan
guaranteed by the VA must be a VA-approved servicer. Each Subservicer of a
Mortgage Loan shall be entitled to receive and retain, as provided in the
related Subservicing Agreement and in Section 3.07, the related Subservicing Fee
from payments of interest received on such Mortgage Loan after payment of all
amounts required to be remitted to the Master Servicer in respect of such
Mortgage Loan. For any Mortgage Loan that is a Nonsubserviced Mortgage Loan, the
Master Servicer shall be entitled to receive and retain an amount equal to the
Subservicing Fee from payments of interest. Unless the context otherwise
requires, references in this Agreement to actions taken or to be taken by the
Master Servicer in servicing the Mortgage Loans include actions taken or to be
taken by a Subservicer on behalf of the Master Servicer. Each Subservicing
Agreement will be upon such terms and conditions as are generally required by,
permitted by or consistent with the Program Guide and are not inconsistent with
this Agreement and as the Master Servicer and the Subservicer have agreed. With
the approval of the Master Servicer, a Subservicer may delegate its servicing
obligations to third- party servicers, but such Subservicer will remain
obligated under the related Subservicing Agreement. The Master Servicer and a
Subservicer may enter into amendments thereto or a different form of
Subservicing Agreement, and the form referred to or included in the Program
Guide is merely provided for information and shall not be deemed to limit in any
respect the discretion of the Master Servicer to modify or enter into different
Subservicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of
either this Agreement or the Program Guide in a manner which would materially
and adversely affect the interests of the Certificateholders.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall use its best
reasonable efforts to enforce the obligations of each Subservicer under the
related Subservicing Agreement, to the extent that the non-performance of any
such obligation would have a material and adverse effect on a Mortgage Loan,
including, without limitation, the obligation to purchase a Mortgage Loan on
account of defective documentation, as described in Section 2.02, or on account
of a breach of a representation or warranty, as described in Section 2.04. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements, as appropriate, and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Master Servicer would employ in its good faith business
judgment and which are normal and usual in its general mortgage servicing
activities. The Master Servicer shall pay the costs of such enforcement at its
own expense, and shall be reimbursed therefor only (i) from a general recovery
resulting from such enforcement to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loan or (ii) from a
specific recovery of costs, expenses or attorneys fees against the party against
whom such enforcement is directed.
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Section 3.03 Successor Subservicers.
The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and conditions of such
Subservicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Subservicing
Agreement by the Master Servicer or the Subservicer, the Master Servicer shall
either act as servicer of the related Mortgage Loan or enter into a Subservicing
Agreement with a successor Subservicer which will be bound by the terms of the
related Subservicing Agreement. If the Master Servicer or any Affiliate of
Residential Funding acts as servicer, it will not assume liability for the
representations and warranties of the Subservicer which it replaces. If the
Master Servicer enters into a Subservicing Agreement with a successor
Subservicer, the Master Servicer shall use reasonable efforts to have the
successor Subservicer assume liability for the representations and warranties
made by the terminated Subservicer in respect of the related Mortgage Loans and,
in the event of any such assumption by the successor Subservicer, the Master
Servicer may, in the exercise of its business judgment, release the terminated
Subservicer from liability for such representations and warranties.
Section 3.04 Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer or a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Master Servicer shall remain obligated and liable to the Trustee
and Certificateholders for the servicing and administering of the Mortgage Loans
in accordance with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer or the
Depositor and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
The Master Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Master Servicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship Between Subservicer and Trustee or
Certificateholders.
Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Master Servicer alone and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Subservicer in
its capacity as such except as set forth in Section 3.06. The foregoing
provision shall not in any way limit a Subservicer's obligation to cure an
omission or defect or to repurchase a Mortgage Loan as referred to in Section
2.02 hereof.
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Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee.
(a) In the event the Master Servicer shall for any reason no longer be
the master servicer (including by reason of an Event of Default), the Trustee,
its designee or its successor shall thereupon assume all of the rights and
obligations of the Master Servicer under each Subservicing Agreement that may
have been entered into. The Trustee, its designee or the successor servicer for
the Trustee shall be deemed to have assumed all of the Master Servicer's
interest therein and to have replaced the Master Servicer as a party to the
Subservicing Agreement to the same extent as if the Subservicing Agreement had
been assigned to the assuming party except that the Master Servicer shall not
thereby be relieved of any liability or obligations under the Subservicing
Agreement.
(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. In the event of any such arrangement, the Master Servicer shall make
timely advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements unless otherwise agreed to
by the Holders of the Classes of Certificates affected thereby; provided,
however, that no such extension shall be made if any advance would be a
Nonrecoverable Advance. Consistent with the terms of this Agreement, the Master
Servicer may also waive, modify or vary any term of any Mortgage Loan or consent
to the postponement of strict compliance with any such term or in any manner
grant indulgence to any Mortgagor if in the Master Servicer's determination such
waiver, modification, postponement or indulgence is not materially adverse to
the interests of the Certificateholders (taking into account any estimated
Realized Loss that might result absent such action), provided, however, that the
Master Servicer may not modify materially or permit any Subservicer to modify
any Mortgage Loan, including without limitation any modification that would
change the Mortgage Rate, forgive the payment of any principal or interest
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(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), 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, no such reduction of the Mortgage Rate shall reduce the
Mortgage Rate below one-half of the Mortgage Rate as in effect on the Cut-off
Date, but not less than the sum of the Servicing Fee and the Subservicing Fee,
and the final maturity date for any Mortgage Loan shall not be extended beyond
the Maturity Date. In connection with any Curtailment of a Mortgage Loan, the
Master Servicer, to the extent not inconsistent with the terms of the Mortgage
Note and local law and practice, may permit the Mortgage Loan to be re-amortized
such that the Monthly Payment is recalculated as an amount that will fully
amortize the remaining Stated Principal Balance thereof by the original Maturity
Date based on the original Mortgage Rate; provided, that such reamortization
shall not be permitted if it would constitute a reissuance of the Mortgage Loan
for federal income tax purposes.
(i) 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):
(ii) 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;
(iii) All payments on account of interest at the Adjusted
Mortgage Rate on the Mortgage Loans, including the interest component of
any Subservicer Advance or of any REO Proceeds received in connection
with an REO Property for which an REO Disposition has occurred;
(iv) Insurance Proceeds and Liquidation Proceeds (net of any
related expenses of the Subservicer);
(v) All proceeds of any Mortgage Loans purchased pursuant to
Section 2.02, 2.03 or 2.04 and all amounts required to be deposited in
connection with the substitution of a Qualified Substitute Mortgage Loan
pursuant to Section 2.03 or 2.04; and
(vi) Any amounts required to be deposited pursuant to Section
3.07(c).
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
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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.
(b) 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 Group I, Group II
and Group III Available Distribution Amount, as applicable, for the Distribution
Date in the month of receipt, but is not obligated to do so. If the Master
Servicer so elects, such amounts will be deemed to have been received (and any
related Realized Loss shall be deemed to have occurred) on the last day of the
month prior to the receipt thereof.
(c) The Master Servicer shall use its best efforts to cause the
institution maintaining the Custodial Account to invest the funds in the
Custodial Account attributable to the Mortgage Loans in Permitted Investments
which shall mature not later than the Certificate Account Deposit Date next
following the date of such investment (with the exception of the Amount Held for
Future Distribution) and which shall not be sold or disposed of prior to their
maturities. All income and gain realized from any such investment shall be for
the benefit of the Master Servicer as additional servicing compensation and
shall be subject to its withdrawal or order from time to time. The amount of any
losses incurred in respect of any such investments attributable to the
investment of amounts in respect of the Mortgage Loans shall be deposited in the
Custodial Account by the Master Servicer out of its own funds immediately as
realized.
(d) The Master Servicer shall give notice to the Trustee and the
Depositor of any change in the location of the Custodial Account and the
location of the Certificate Account prior to the use thereof.
Section 3.08 Subservicing Accounts; Servicing Accounts.
-----------------------------------------
(a) In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Master Servicer shall cause the
Subservicer, pursuant to the Subservicing Agreement, to establish and maintain
one or more Subservicing Accounts which shall be an Eligible Account or, if such
account is not an Eligible Account, shall generally satisfy the requirements of
the Program Guide and be otherwise acceptable to the Master Servicer and each
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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, if any, 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
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to the Primary Insurance Policy) and 3.12(a) (with respect to hazard insurance),
to refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required, to Mortgagors on balances in the Servicing Account or to
clear and terminate the Servicing Account at the termination of this Agreement
in accordance with Section 9.01 or in accordance with the Program Guide. As part
of its servicing duties, the Master Servicer shall, and the Subservicers will,
pursuant to the Subservicing Agreements, be required to pay to the Mortgagors
interest on funds in this account to the extent required by law.
(d) The Master Servicer shall advance the payments referred to in the
preceding subsection that are not timely paid by the Mortgagors or advanced by
the Subservicers on the date when the tax, premium or other cost for which such
payment is intended is due, but the Master Servicer shall be required so to
advance only to the extent that such advances, in the good faith judgment of the
Master Servicer, will be recoverable by the Master Servicer out of Insurance
Proceeds, Liquidation Proceeds or otherwise.
Section 3.09 Access to Certain Documentation and Information Regarding the
Mortgage Loans.
In the event that compliance with this Section 3.09 shall make any Class
of Certificates legal for investment by federally insured savings and loan
associations, the Master Servicer shall provide, or cause the Subservicers to
provide, to the Trustee, the Office of Thrift Supervision or the FDIC and the
supervisory agents and examiners thereof access to the documentation regarding
the Mortgage Loans required by applicable regulations of the Office of Thrift
Supervision, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices designated by the Master
Servicer. The Master Servicer shall permit such representatives to photocopy any
such documentation and shall provide equipment for that purpose at a charge
reasonably approximating the cost of such photocopying to the Master Servicer.
Section 3.10 Permitted Withdrawals from the Custodial Account.
(a) The Master Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit therein pursuant to
Section 3.07 that are attributable to the Mortgage Loans for the following
purposes:
(i) to make deposits into the Certificate Account in the amounts
and in the manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for
previously unreimbursed Advances, Servicing Advances or other expenses
made pursuant to Sections 3.01, 3.08, 3.12(a), 3.14 and 4.04 or
otherwise reimbursable pursuant to the terms of this Agreement, such
withdrawal right being limited to amounts received on the related
Mortgage Loans (including, for this purpose, REO Proceeds, Insurance
Proceeds, Liquidation Proceeds and proceeds from the purchase of a
Mortgage Loan pursuant to Section 2.02, 2.03, 2.04 or 4.07)
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which represent (A) Late Collections of Monthly Payments for which any
such advance was made in the case of Subservicer Advances or Advances
pursuant to Section 4.04 and (B) late recoveries of the payments for
which such advances were made in the case of Servicing Advances;
(iii) to pay to itself or the related Subservicer (if not
previously retained by such Subservicer) out of each payment received by
the Master Servicer on account of interest on a Mortgage Loan as
contemplated by Sections 3.14 and 3.16, an amount equal to that
remaining portion of any such payment as to interest (but not in excess
of the Servicing Fee and the Subservicing Fee, if not previously
retained) which, when deducted, will result in the remaining amount of
such interest being interest at a rate per annum equal to the Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan) on the amount specified in the amortization schedule of
the related Mortgage Loan as the principal balance thereof at the
beginning of the period respecting which such interest was paid after
giving effect to any previous Curtailments;
(iv) to pay to itself as additional servicing compensation any
interest or investment income earned on funds deposited in the Custodial
Account that it is entitled to withdraw pursuant to Section 3.07(c);
(v) to pay to itself as additional servicing compensation any
Foreclosure Profits, and any amounts remitted by Subservicers as
interest in respect of Curtailments pursuant to Section 3.08(b);
(vi) to pay to itself, a Subservicer, Residential Funding, the
Depositor or any other appropriate Person, as the case may be, with
respect to each Mortgage Loan or property acquired in respect thereof
that has been purchased or otherwise transferred pursuant to Section
2.02, 2.03, 2.04, 4.07 or 9.01, all amounts received thereon and not
required to be distributed to Certificateholders as of the date on which
the related Stated Principal Balance or Purchase Price is determined;
(vii) to reimburse itself or the related Subservicer for any
Nonrecoverable Advance or Advances in the manner and to the extent
provided in subsection (c) below, and any Advance or Servicing Advance
made in connection with a modified Mortgage Loan that is in default or,
in the judgment of the Master Servicer, default is reasonably
foreseeable pursuant to Section 3.07(a), to the extent the amount of the
Advance or Servicing Advance was added to the outstanding principal
balance of the Mortgage Loan in the prior calendar month;
(viii) to reimburse itself or the Depositor for expenses incurred
by and reimbursable to it or the Depositor pursuant to Section 3.14(c),
6.03, 10.01 or otherwise;
(ix) to reimburse itself for amounts expended by it (a) pursuant
to Section 3.14
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in good faith in connection with the restoration of property damaged by
an Uninsured Cause, and (b) in connection with the liquidation of a
Mortgage Loan or disposition of an REO Property to the extent not
otherwise reimbursed pursuant to clause (ii) or (viii) above; and
(x) to withdraw any amount deposited in the Custodial Account
that was not required to be deposited therein pursuant to Section 3.07,
including any payoff fees or penalties or any other additional amounts
payable to the Master Servicer or Subservicer pursuant to the terms of
the Mortgage Note.
(b) Since, in connection with withdrawals pursuant to clauses (ii),
(iii), (v) and (vi), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Master
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Custodial Account pursuant to such clauses.
(c) The Master Servicer shall be entitled to reimburse itself or the
related Subservicer for any Advance or Subservicer 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 or Subservicer Advance previously paid
to Certificateholders (and not theretofore reimbursed to the Master Servicer or
the related Subservicer).
Section 3.11 Maintenance of Primary Insurance Coverage.
-----------------------------------------
(a) The Master Servicer shall not take, or permit any Subservicer to
take, any action which would result in noncoverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Master Servicer
or Subservicer, would have been covered thereunder. To the extent coverage is
available, the Master Servicer shall keep or cause to be kept in full force and
effect each such Primary Insurance Policy until the principal balance of the
related Mortgage Loan secured by a Mortgaged Property is reduced to 80% or less
of the Appraised Value at origination in the case of such a Mortgage Loan having
a Loan-to-Value Ratio at origination in excess of 80%, provided that such
Primary Insurance Policy was in place as of the Cut-off Date and the Master
Servicer had knowledge of such Primary Insurance Policy. The Master Servicer
shall not cancel or refuse to renew any such Primary Insurance Policy applicable
to a Nonsubserviced Mortgage Loan, or consent to any Subservicer canceling or
refusing to renew any such Primary Insurance Policy applicable to a Mortgage
Loan subserviced by it, that is in effect at the date of the initial issuance of
the Certificates and is required to be kept in force hereunder unless the
replacement Primary Insurance Policy for such canceled or non-renewed policy is
maintained with an insurer whose claims-paying ability is acceptable to each
Rating Agency for mortgage pass-through certificates having a rating equal to or
better than the lower of the then-current rating or the rating assigned to
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the Certificates as of the Closing Date by such Rating Agency.
(b) In connection with its activities as administrator and servicer of
the Mortgage Loans, the Master Servicer agrees to present or to cause the
related Subservicer to present, on behalf of the Master Servicer, the
Subservicer, if any, the Trustee and Certificateholders, claims to the insurer
under any Primary Insurance Policies, in a timely manner in accordance with such
policies, and, in this regard, to take or cause to be taken such reasonable
action as shall be necessary to permit recovery under any Primary Insurance
Policies respecting defaulted Mortgage Loans. Pursuant to Section 3.07, any
Insurance Proceeds collected by or remitted to the Master Servicer under any
Primary Insurance Policies shall be deposited in the Custodial Account, subject
to withdrawal pursuant to Section 3.10.
Section 3.12 Maintenance of Fire Insurance and Omissions and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage in an amount which is equal to the
lesser of the principal balance owing on such Mortgage Loan (together with the
principal balance of any mortgage loan secured by a lien that is senior to the
Mortgage Loan) or 100 percent of the insurable value of the improvements;
provided, however, that such coverage may not be less than the minimum amount
required to fully compensate for any loss or damage on a replacement cost basis.
To the extent it may do so without breaching the related Subservicing Agreement,
the Master Servicer shall replace any Subservicer that does not cause such
insurance, to the extent it is available, to be maintained. The Master Servicer
shall also cause to be maintained on property acquired upon foreclosure, or deed
in lieu of foreclosure, of any Mortgage Loan, fire insurance with extended
coverage in an amount which is at least equal to the amount necessary to avoid
the application of any co-insurance clause contained in the related hazard
insurance policy. Pursuant to Section 3.07, any amounts collected by the Master
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures) shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 3.10. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating monthly distributions to Certificateholders, be added to the
amount owing under the Mortgage Loan, notwithstanding that the terms of the
Mortgage Loan so permit. Such costs shall be recoverable by the Master Servicer
out of related late payments by the Mortgagor or out of Insurance Proceeds and
Liquidation Proceeds to the extent permitted by Section 3.10. It is understood
and agreed that no earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired in respect of a Mortgage Loan
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. Whenever the
improvements securing a Mortgage Loan are located at the time of origination of
such Mortgage Loan in a federally designated special flood hazard area, the
Master Servicer shall cause flood insurance (to the extent available) to be
maintained in respect thereof. Such flood insurance shall be in an amount equal
to the lesser of (i) the amount required to compensate for any loss or damage to
the Mortgaged Property on a replacement cost basis and (ii) the maximum amount
of such insurance
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available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Master Servicer shall obtain and maintain a
blanket fire insurance policy with extended coverage insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first sentence of this Section
3.12(a), it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.12(a) and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Any such deposit by the Master Servicer shall
be made on the Certificate Account Deposit Date next preceding the Distribution
Date which occurs in the month following the month in which payments under any
such policy would have been deposited in the Custodial Account. In connection
with its activities as administrator and servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy.
(b) The Master Servicer shall obtain and maintain at its own expense and
keep in full force and effect throughout the term of this Agreement a blanket
fidelity bond and an errors and omissions insurance policy covering the Master
Servicer's officers and employees and other persons acting on behalf of the
Master Servicer in connection with its activities under this Agreement. The
amount of coverage shall be at least equal to the coverage that would be
required by Xxxxxx Xxx or Xxxxxxx Mac, whichever is greater, with respect to the
Master Servicer if the Master Servicer were servicing and administering the
Mortgage Loans for Xxxxxx Mae or Xxxxxxx Mac. In the event that any such bond or
policy ceases to be in effect, the Master Servicer shall obtain a comparable
replacement bond or policy from an issuer or insurer, as the case may be,
meeting the requirements, if any, of the Program Guide and acceptable to the
Depositor. Coverage of the Master Servicer under a policy or bond obtained by an
Affiliate of the Master Servicer and providing the coverage required by this
Section 3.12(b) shall satisfy the requirements of this Section 3.12(b).
Section 3.13 Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Master
Servicer or Subservicer, to the extent it has knowledge of such conveyance,
shall enforce any due-on-sale clause contained in any Mortgage Note or Mortgage,
to the extent permitted under applicable law and governmental regulations, but
only to the extent that such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the foregoing:
(i) the Master Servicer shall not be deemed to be in default
under this Section 3.13(a) by reason of any transfer or assumption which
the Master Servicer is restricted by law from preventing; and
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(ii) if the Master Servicer determines that it is reasonably
likely that any Mortgagor will bring, or if any Mortgagor does bring,
legal action to declare invalid or otherwise avoid enforcement of a
due-on-sale clause contained in any Mortgage Note or Mortgage, the
Master Servicer shall not be required to enforce the due-on-sale clause
or to contest such action.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.13(a), in any case in which a
Mortgaged Property is to be conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption or modification agreement or supplement to the
Mortgage Note or Mortgage which requires the signature of the Trustee, or if an
instrument of release signed by the Trustee is required releasing the Mortgagor
from liability on the Mortgage Loan, the Master Servicer is authorized, subject
to the requirements of the sentence next following, to execute and deliver, on
behalf of the Trustee, the assumption agreement with the Person to whom the
Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person; provided, however, none of
such terms and requirements shall both constitute a "significant modification"
effecting an exchange or reissuance of such Mortgage Loan under the Code (or
final, temporary or proposed Treasury regulations promulgated thereunder) and
cause any of REMIC I, REMIC II, REMIC III or REMIC IV to fail to qualify as
REMICs under the Code or the imposition of any tax on "prohibited transactions"
or "contributions" after the startup date under the REMIC Provisions. The Master
Servicer shall execute and deliver such documents only if it reasonably
determines that (i) its execution and delivery thereof will not conflict with or
violate any terms of this Agreement or cause the unpaid balance and interest on
the Mortgage Loan to be uncollectible in whole or in part, (ii) any required
consents of insurers under any Required Insurance Policies have been obtained
and (iii) subsequent to the closing of the transaction involving the assumption
or transfer (A) the Mortgage Loan will continue to be secured by a first
mortgage lien (or junior lien of the same priority in relation to any senior
mortgage loan, with respect to any Mortgage Loan secured by a junior Mortgage)
pursuant to the terms of the Mortgage, (B) such transaction will not adversely
affect the coverage under any Required Insurance Policies, (C) the Mortgage Loan
will fully amortize over the remaining term thereof, (D) no material term of the
Mortgage Loan (including the interest rate on the Mortgage Loan) will be altered
nor will the term of the Mortgage Loan be changed and (E) if the
seller/transferor of the Mortgaged Property is to be released from liability on
the Mortgage Loan, the buyer/transferee of the Mortgaged Property would be
qualified to assume the Mortgage Loan based on generally comparable credit
quality and such release will not (based on the Master Servicer's or
Subservicer's good faith determination) adversely affect the collectability of
the Mortgage Loan. Upon receipt of appropriate instructions from the Master
Servicer in accordance with the foregoing, the Trustee shall execute any
necessary instruments for such assumption or substitution of liability as
directed by the Master Servicer. Upon the closing of the transactions
contemplated by such documents, the Master Servicer shall cause the originals or
true and correct copies of the assumption agreement, the release (if any), or
the modification or
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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 other similar matters if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of the
related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be adversely affected thereby
and that each of REMIC I, REMIC II, REMIC III or REMIC IV would continue to
qualify as a REMIC under the Code as a result thereof and that no tax on
"prohibited transactions" or "contributions" after the startup day would be
imposed on any of REMIC I, REMIC II, REMIC III or REMIC IV as a result thereof.
Any fee collected by the Master Servicer or the related Subservicer for
processing such a request will be retained by the Master Servicer or such
Subservicer as additional servicing compensation.
(d) Subject to any other applicable terms and conditions of this
Agreement, the Trustee and Master Servicer shall be entitled to approve an
assignment in lieu of satisfaction with respect to any Mortgage Loan, provided
the obligee with respect to such Mortgage Loan following such proposed
assignment provides the Trustee and Master Servicer with a "Lender Certification
for Assignment of Mortgage Loan" in the form attached hereto as Exhibit M, in
form and substance satisfactory to the Trustee and Master Servicer, providing
the following: (i) that the Mortgage Loan is secured by Mortgaged Property
located in a jurisdiction in which an assignment in lieu of satisfaction is
required to preserve lien priority, minimize or avoid mortgage recording taxes
or otherwise comply with, or facilitate a refinancing under, the laws of such
jurisdiction; (ii) that the substance of the assignment is, and is intended to
be, a refinancing of such Mortgage Loan and that the form of the transaction is
solely to comply with, or facilitate the transaction under, such local laws;
(iii) that the Mortgage Loan following the proposed assignment will have a rate
of interest at least 0.25 percent below or above the rate of interest on such
Mortgage Loan prior to such proposed assignment; and (iv) that such assignment
is at the request of the borrower under the related Mortgage Loan. Upon approval
of an assignment in lieu of satisfaction with respect to any Mortgage Loan, the
Master Servicer shall receive cash in an amount equal to the unpaid principal
balance of and accrued interest on such Mortgage Loan and the Master Servicer
shall treat such amount as a Principal Prepayment in Full with respect to such
Mortgage Loan for all purposes hereof.
Section 3.14 Realization Upon Defaulted Mortgage Loans.
-----------------------------------------
(a) The Master Servicer shall foreclose upon or otherwise comparably
convert (which may include an REO Acquisition) the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.07. Alternatively, the Master Servicer may
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take other actions in respect of a defaulted Mortgage Loan, which may include
(i) accepting a short sale (a payoff of the Mortgage Loan for an amount less
than the total amount contractually owed in order to facilitate a sale of the
Mortgaged Property by the Mortgagor) or permitting a short refinancing (a payoff
of the Mortgage Loan for an amount less than the total amount contractually owed
in order to facilitate refinancing transactions by the Mortgagor not involving a
sale of the Mortgaged Property), (ii) arranging for a repayment plan or (iii)
agreeing to a modification in accordance with Section 3.07. In connection with
such foreclosure or other conversion or action, the Master Servicer shall,
consistent with Section 3.11, follow such practices and procedures as it shall
deem necessary or advisable, as shall be normal and usual in its general
mortgage servicing activities and as shall be required or permitted by the
Program Guide; provided that the Master Servicer shall not be liable in any
respect hereunder if the Master Servicer is acting in connection with any such
foreclosure or other conversion or action in a manner that is consistent with
the provisions of this Agreement. The Master Servicer, however, shall not be
required to expend its own funds or incur other reimbursable charges in
connection with any foreclosure, or attempted foreclosure which is not
completed, or towards the correction of any default on a related senior mortgage
loan, or towards the restoration of any property unless it shall determine (i)
that such restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Holders of Certificates of one or more
Classes after reimbursement to itself for such expenses or charges and (ii) that
such expenses and charges will be recoverable to it through Liquidation
Proceeds, Insurance Proceeds, or REO Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Custodial Account pursuant to
Section 3.10, whether or not such expenses and charges are actually recoverable
from related Liquidation Proceeds, Insurance Proceeds or REO Proceeds). In the
event of such a determination by the Master Servicer pursuant to this Section
3.14(a), the Master Servicer shall be entitled to reimbursement of its funds so
expended pursuant to Section 3.10.
In addition, the Master Servicer may pursue any remedies that may be
available in connection with a breach of a representation and warranty with
respect to any such Mortgage Loan in accordance with Sections 2.03 and 2.04.
However, the Master Servicer is not required to continue to pursue both
foreclosure (or similar remedies) with respect to the Mortgage Loans and
remedies in connection with a breach of a representation and warranty if the
Master Servicer determines in its reasonable discretion that one such remedy is
more likely to result in a greater recovery as to the Mortgage Loan. Upon the
occurrence of a Cash Liquidation or REO Disposition, following the deposit in
the Custodial Account of all Insurance Proceeds, Liquidation Proceeds and other
payments and recoveries referred to in the definition of "Cash Liquidation" or
"REO Disposition," as applicable, upon receipt by the Trustee of written
notification of such deposit signed by a Servicing Officer, the Trustee or any
Custodian, as the case may be, shall release to the Master Servicer the related
Mortgage File and the Trustee shall execute and deliver such instruments of
transfer or assignment prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in the Master Servicer or its designee,
as the case may be, the related Mortgage Loan, and thereafter such Mortgage Loan
shall not be part of the Trust Fund. Notwithstanding the foregoing or any other
provision of this Agreement, in the Master Servicer's sole discretion with
respect to any defaulted Mortgage Loan or REO Property as to either of the
following provisions, (i) a Cash Liquidation or REO Disposition may be deemed to
have occurred if substantially all amounts
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expected by the Master Servicer to be received in connection with the related
defaulted Mortgage Loan or REO Property have been received, and (ii) for
purposes of determining the amount of any Liquidation Proceeds, Insurance
Proceeds, REO Proceeds or other unscheduled collections or the amount of any
Realized Loss, the Master Servicer may take into account minimal amounts of
additional receipts expected to be received or any estimated additional
liquidation expenses expected to be incurred in connection with the related
defaulted Mortgage Loan or REO Property.
(b) In the event that title to any Mortgaged Property is acquired by the
Trust Fund as an REO Property by foreclosure or by deed in lieu of foreclosure,
the deed or certificate of sale shall be issued to the Trustee or to its nominee
on behalf of Certificateholders. Notwithstanding any such acquisition of title
and cancellation of the related Mortgage Loan, such REO Property shall (except
as otherwise expressly provided herein) be considered to be an Outstanding
Mortgage Loan held in the Trust Fund until such time as the REO Property shall
be sold. Consistent with the foregoing for purposes of all calculations
hereunder so long as such REO Property shall be considered to be an Outstanding
Mortgage Loan it shall be assumed that, notwithstanding that the indebtedness
evidenced by the related Mortgage Note shall have been discharged, such Mortgage
Note and the related amortization schedule in effect at the time of any such
acquisition of title (after giving effect to any previous Curtailments and
before any adjustment thereto by reason of any bankruptcy or similar proceeding
or any moratorium or similar waiver or grace period) remain in effect.
(c) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer on behalf of the Trust Fund shall dispose of
such REO Property as soon as practicable, giving due consideration to the
interests of the Certificateholders, but in all cases within three full years
after the taxable year of its acquisition by the Trust Fund for purposes of
Section 860G(a)(8) of the Code (or such shorter period as may be necessary under
applicable state (including any state in which such property is located) law to
maintain the status of each of REMIC I, REMIC II, REMIC III or REMIC IV as a
REMIC under applicable state law and avoid taxes resulting from such property
failing to be foreclosure property under applicable state law) or, at the
expense of the Trust Fund, request, more than 60 days before the day on which
such grace period would otherwise expire, an extension of such grace period
unless the Master Servicer obtains for the Trustee an Opinion of Counsel,
addressed to the Trustee and the Master Servicer, to the effect that the holding
by the Trust Fund of such REO Property subsequent to such period will not result
in the imposition of taxes on "prohibited transactions" as defined in Section
860F of the Code or cause any of REMIC I, REMIC II, REMIC III or REMIC IV to
fail to qualify as a REMIC (for federal (or any applicable State or local)
income tax purposes) at any time that any Certificates are outstanding, in which
case the Trust Fund may continue to hold such REO Property (subject to any
conditions contained in such Opinion of Counsel). The Master Servicer shall be
entitled to be reimbursed from the Custodial Account for any costs incurred in
obtaining such Opinion of Counsel, as provided in Section 3.10. Notwithstanding
any other provision of this Agreement, no REO Property acquired by the Trust
Fund shall be rented (or allowed to continue to be rented) or otherwise used by
or on behalf of the Trust Fund in such a manner or pursuant to any terms that
would (i) cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code or (ii)
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subject REMIC I, REMIC II, REMIC III or REMIC IV to the imposition of any
federal income taxes on the income earned from such REO Property, including any
taxes imposed by reason of Section 860G(c) of the Code, unless the Master
Servicer has agreed to indemnify and hold harmless the Trust Fund with respect
to the imposition of any such taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or purchase or
repurchase of any Mortgage Loan pursuant to the terms of this Agreement, as well
as any recovery resulting from a collection of Liquidation Proceeds, Insurance
Proceeds or REO Proceeds, will be applied in the following order of priority:
first, to reimburse the Master Servicer or the related Subservicer in accordance
with Section 3.10(a)(ii); second, to the Certificateholders to the extent of
accrued and unpaid interest on the Mortgage Loan, and any related REO Imputed
Interest, at the Net Mortgage Rate (or the Modified Net Mortgage Rate in the
case of a Modified Mortgage Loan), to the Due Date in the related Due Period
prior to the Distribution Date on which such amounts are to be distributed;
third, to the Certificateholders as a recovery of principal on the Mortgage Loan
(or REO Property) (provided that if any such Class of Certificates to which such
Realized Loss was allocated is no longer outstanding, such subsequent recovery
shall be distributed to the persons who were the Holders of such Class of
Certificates when it was retired); fourth, to the Master Servicer; fifth, 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 sixth, to Foreclosure
Profits.
Section 3.15 Trustee to Cooperate; Release of Mortgage Files.
-----------------------------------------------
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
upon the receipt by the Master Servicer of a notification that payment in full
will be escrowed in a manner customary for such purposes, the Master Servicer
will immediately notify the Trustee (if it holds the related Mortgage File) or
the Custodian by a certification of a Servicing Officer (which certification
shall include a statement to the effect that all amounts received or to be
received in connection with such payment which are required to be deposited in
the Custodial Account pursuant to Section 3.07 have been or will be so
deposited), substantially in one of the forms attached hereto as Exhibit G
requesting delivery to it of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall promptly release, or cause the
Custodian to release, the related Mortgage File to the Master Servicer. The
Master Servicer is authorized to execute and deliver to the Mortgagor the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage, together with
the Mortgage Note with, as appropriate, written evidence of cancellation thereon
and to cause the removal from the registration on the MERS(R) System of such
Mortgage and to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release, including any applicable UCC
termination statements. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or foreclosure
of any Mortgage
90
Loan, the Master Servicer shall deliver to the Custodian, with a copy to the
Trustee, a certificate of a Servicing Officer substantially in one of the forms
attached as Exhibit G hereto, requesting that possession of all, or any document
constituting part of, the Mortgage File be released to the Master Servicer and
certifying as to the reason for such release and that such release will not
invalidate any insurance coverage provided in respect of the Mortgage Loan under
any Required Insurance Policy. Upon receipt of the foregoing, the Trustee shall
deliver, or cause the Custodian to deliver, the Mortgage File or any document
therein to the Master Servicer. The Master Servicer shall cause each Mortgage
File or any document therein so released to be returned to the Trustee, or the
Custodian as agent for the Trustee when the need therefor by the Master Servicer
no longer exists, unless (i) the Mortgage Loan has been 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
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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 Custodian) and
shall not be entitled to reimbursement therefor except as specifically provided
in Sections 3.10 and 3.14.
(d) The Master Servicer's right to receive servicing compensation may
not be transferred in whole or in part except in connection with the transfer of
all of its responsibilities and obligations of the Master Servicer under this
Agreement.
(e) Notwithstanding clauses (a) and (b) above, the amount of servicing
compensation that the Master Servicer shall be entitled to receive for its
activities hereunder for the period ending on each Distribution Date shall be
reduced (but not below zero) by an amount equal to 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); second, to any
income or gain realized from any investment of funds held in the Custodial
Account or the Certificate Account to which the Master Servicer is entitled
pursuant to Sections 3.07(c) or 4.01(b), respectively; and third, to any amounts
of servicing compensation to which the Master Servicer is entitled pursuant to
Section 3.10(a)(v) or (vi). In making such reduction, the Master Servicer 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); (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) and (iii) will not withdraw from the Custodial Account any such amount
of servicing compensation to which it is entitled pursuant to Section 3.10(a)(v)
or (vi). With respect to any Distribution Date, (i) Compensating Interest
derived from Loan Group I shall be used on such Distribution Date to cover any
Prepayment Interest Shortfalls on the Group I Loans, (ii) Compensating Interest
derived from Loan Group II shall be used on such Distribution Date to cover any
Prepayment Interest Shortfalls on the Group II Loans and (iii) Compensating
Interest derived from Loan Group III shall be used on such Distribution Date to
cover any Prepayment Interest Shortfalls on the Group III Loans.
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Section 3.17 Reports to the Trustee and the Depositor.
Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Trustee and the Depositor a statement, certified
by a Servicing Officer, setting forth the status of the Custodial Account as of
the close of business on such Distribution Date as it relates to the Mortgage
Loans and showing, for the period covered by such statement, the aggregate of
deposits in or withdrawals from the Custodial Account in respect of the Mortgage
Loans for each category of deposit specified in Section 3.07 and each category
of withdrawal specified in Section 3.10.
Section 3.18 Annual Statement as to Compliance.
The Master Servicer will deliver to the Depositor and the Trustee on or
before the earlier of (a) March 31 of each year, beginning with the first March
31 that occurs at least six months after the Cut-off Date or (b) with respect to
any calendar year during which the Depositor's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the date on which the Depositor's annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission (or, in each case, if such day is not a
Business Day, the immediately preceding Business Day), an Officers' Certificate
stating, as to each signer thereof, that (i) a review of the activities of the
Master Servicer during the preceding calendar year related to its servicing of
mortgage loans and of its performance under the pooling and servicing
agreements, including this Agreement, has been made under such officers'
supervision, (ii) to the best of such officers' knowledge, based on such review,
the Master Servicer has complied in all material respects with the minimum
servicing standards set forth in the Uniform Single Attestation Program for
Mortgage Bankers and has fulfilled all of its material obligations in all
material respects throughout such year, or, if there has been material
noncompliance with such servicing standards or a default in the fulfillment in
all material respects of any such obligation relating to this Agreement, such
statement shall include a description of such noncompliance or specify each such
default, as the case may be, known to such officer and the nature and status
thereof and (iii) to the best of such officers' knowledge, each Subservicer has
complied in all material respects with the minimum servicing standards set forth
in the Uniform Single Attestation Program for Mortgage Bankers and has fulfilled
all of its material obligations under its Subservicing Agreement in all material
respects throughout such year, or if there has been material noncompliance with
such servicing standards or a material default in the fulfillment of such
obligations relating to this Agreement, specifying such statement shall include
a description of such noncompliance or specify each such default, as the case
may be, known to such officer and the nature and status thereof.
Section 3.19 Annual Independent Public Accountants' Servicing Report.
-------------------------------------------------------
On or before the earlier of (a) March 31 of each year, beginning with
the first March 31 that occurs at least six months after the Cut-off Date or (b)
with respect to any calendar year during which the Depositor's annual report on
Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, the date on which the Depositor's
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annual report on Form 10-K is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission (or, in each case,
if such day is not a Business Day, the immediately preceding Business Day), the
Master Servicer at its expense shall cause a firm of independent public
accountants which shall be members of the American Institute of Certified Public
Accountants to furnish a report to the Depositor and the Trustee stating its
opinion that, on the basis of an examination conducted by such firm
substantially in accordance with standards established by the American Institute
of Certified Public Accountants, the assertions made pursuant to Section 3.18
regarding compliance with the minimum servicing standards set forth in the
Uniform Single Attestation Program for Mortgage Bankers during the preceding
calendar year are fairly stated in all material respects, subject to such
exceptions and other qualifications that, in the opinion of such firm, such
accounting standards require it to report. In rendering such statement, such
firm may rely, as to matters relating to the direct servicing of mortgage loans
by Subservicers, upon comparable statements for examinations conducted by
independent public accountants substantially in accordance with standards
established by the American Institute of Certified Public Accountants (rendered
within one year of such statement) with respect to such Subservicers.
Section 3.20 Right of the Depositor in Respect of the Master Servicer.
The Master Servicer shall afford the Depositor, upon reasonable notice,
during normal business hours access to all records maintained by the Master
Servicer in respect of its rights and obligations hereunder and access to
officers of the Master Servicer responsible for such obligations. Upon request,
the Master Servicer shall furnish the Depositor with its most recent financial
statements and such other information as the Master Servicer possesses regarding
its business, affairs, property and condition, financial or otherwise. The
Master Servicer shall also cooperate with all reasonable requests for
information including, but not limited to, notices, tapes and copies of files,
regarding itself, the Mortgage Loans or the Certificates from any Person or
Persons identified by the Depositor or Residential Funding. The Depositor may,
but is not obligated to perform, or cause a designee to perform, any defaulted
obligation of the Master Servicer hereunder or exercise the rights of the Master
Servicer hereunder; provided that the Master Servicer shall not be relieved of
any of its obligations hereunder by virtue of such performance by the Depositor
or its designee. The Depositor shall not have the responsibility or liability
for any action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01 Certificate Account.
(a) The Master Servicer acting as agent of the Trustee shall establish
and maintain a Certificate Account in which the Master Servicer shall 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 Group I, Group II and Group III Available
Distribution Amount for the immediately succeeding Distribution Date.
(b) The Trustee shall, upon written request from the Master Servicer,
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Investments designated in the
name of the Trustee for the benefit of the Certificateholders, which shall
mature not later than the Business Day next preceding the Distribution Date next
following the date of such investment (except that (i) any investment in the
institution with which the Certificate Account is maintained may mature on such
Distribution Date and (ii) any other investment may mature on such Distribution
Date if the Trustee shall advance funds on such Distribution Date to the
Certificate Account in the amount payable on such investment on such
Distribution Date, pending receipt thereof to the extent necessary to make
distributions on the Certificates) and shall not be sold or disposed of prior to
maturity. All income and gain realized from any such investment shall be for the
benefit of the Master Servicer and shall be subject to its withdrawal or order
from time to time. The amount of any losses incurred in respect of any such
investments shall be deposited in the Certificate Account by the Master Servicer
out of its own funds immediately as realized. 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.
(a) On each Distribution Date (x) the Master Servicer on behalf of the
Trustee or (y) the Paying Agent appointed by the Trustee based solely on
information provided by the Master Servicer, shall distribute to each
Certificateholder of record on the next preceding Record Date (other than as
provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by
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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 shall be based on the
aggregate of the Percentage Interests represented by Certificates of the
applicable Class held by such Holder) of the following amounts, in the following
order of priority (subject to the provisions of Section 4.02(b) below), in each
case to the extent of the Group I, Group II and Group III Available Distribution
Amount:
(i) (X) from the Group I Available Distribution Amount, to the
Group I Senior Certificates (other than the Class AP-I Certificates), on
a pro rata basis based on the Accrued Certificate Interest payable on
such Classes of Certificates for such Distribution Date, plus any
Accrued Certificate Interest thereon remaining unpaid from any previous
Distribution Date except as provided in the last paragraph of this
Section 4.02(a) (the "Group I Senior Interest Distribution Amount");
(Y) from the Group II Available Distribution Amount, to
the Group II Senior Certificates (other than the Class AP-II
Certificates), on a pro rata basis based on the Accrued
Certificate Interest payable on such Classes of Certificates for
such Distribution Date, plus any Accrued Certificate Interest
thereon remaining unpaid from any previous Distribution Date
except as provided in the last paragraph of this Section 4.02(a)
(the "Group II Senior Interest Distribution Amount");
(Z) from the Group III Available Distribution Amount, to
the Group III Senior Certificates (other than the Class AP-III
Certificates), on a pro rata basis based on the Accrued
Certificate Interest payable on such Classes of Certificates for
such Distribution Date, plus any Accrued Certificate Interest
thereon remaining unpaid from any previous Distribution Date
except as provided in the last paragraph of this Section 4.02(a)
(the "Group III Senior Interest Distribution Amount");
(ii) (X) to the Class AP-I, Class AP-II or Class AP-III
Certificates, as applicable, the related Class AP Principal Distribution
Amount (as defined in Section 4.02(b)(i) herein); and
(Y) to the related Senior Certificates (other than the
Class AP-I, Class AP- II and Class AP-III Certificates), in the
priorities and amounts set forth in Section 4.02(b)(ii) through
(iv), the sum of the following (applied to reduce the Certificate
Principal Balances of such Senior Certificates, as applicable):
(A) the related Senior Percentage for such Distribution
Date times the sum of the following:
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(i) the principal portion of each Monthly Payment
due during the related Due Period on each Outstanding
Mortgage Loan (other than the related Discount Fraction of
the principal portion of such payment with respect to a
related Discount Mortgage Loan) in the related Loan Group,
whether or not received on or prior to the related
Determination Date, minus the principal portion of any
Debt Service Reduction (other than the related Discount
Fraction of the principal portion of such Debt Service
Reductions with respect to each related Discount Mortgage
Loan) which together with other related Bankruptcy Losses
exceeds the related Bankruptcy Amount;
(ii) the Stated Principal Balance of any Mortgage
Loan in the related Loan Group repurchased during the
preceding calendar month (or deemed to have been so
repurchased in accordance with Section 3.07(b)) pursuant
to Sections 2.02, 2.03, 2.04 or 4.07 of this Agreement,
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 of this
Agreement during the preceding calendar month (other than
the related Discount Fraction of such Stated Principal
Balance or shortfall with respect to each related Discount
Mortgage Loan); and
(iii) the principal portion of all other
unscheduled collections with respect to the related Loan
Group (other than Principal Prepayments in Full and
Curtailments and amounts received in connection with a
Cash Liquidation or REO Disposition of a Mortgage Loan
described in Section 4.02(a)(ii)(B), including without
limitation Insurance Proceeds, Liquidation Proceeds and
REO Proceeds) received during the preceding calendar month
(or deemed to have been so received in accordance with
Section 3.07(b)) to the extent applied by the Master
Servicer as recoveries of principal of the related
Mortgage Loan pursuant to Section 3.14 (other than the
related Discount Fraction of the principal portion of such
unscheduled collections, with respect to each related
Discount Mortgage Loan);
(B) with respect to each Mortgage Loan in the related Loan
Group for which a Cash Liquidation or a REO Disposition occurred
during the preceding calendar month (or was deemed to have
occurred during such period in accordance with Section 3.07(b))
and did not result in any Excess Special Hazard Losses, Excess
Bankruptcy Losses, Excess Fraud Losses or Extraordinary Losses,
an amount equal to the lesser of (a) the related Senior
Percentage for such Distribution Date times the Stated Principal
Balance of such Mortgage Loan (other than the related Discount
Fraction of such Stated Principal Balance with respect to each
related Discount Mortgage Loan) and (b) the related Senior
Accelerated Distribution Percentage for such Distribution Date
times the related unscheduled collections (including without
limitation Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) to the extent
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applied by the Master Servicer as recoveries of principal of the
related Mortgage Loan pursuant to Section 3.14 (in each case
other than the portion of such unscheduled collections, with
respect to a related Discount Mortgage Loan, included in Section
4.02(b)(i)(3) of this Agreement);
(C) the related Senior Accelerated Distribution Percentage
for such Distribution Date times the aggregate of all Principal
Prepayments in Full received in the related Prepayment Period and
Curtailments with respect to the related Loan Group received in
the preceding calendar month (other than the related Discount
Fraction of such Principal Prepayments in Full and Curtailments
with respect to each related Discount Mortgage Loan);
(D) any Excess Subordinate Principal Amount allocated to
the related Loan Group but only to the extent of Eligible Funds
in the related Loan Group for such Distribution Date; and
(E) any amounts described in subsection (ii), clauses (Y)
(A), (B) and (C) of this Section 4.02(a), as determined for any
previous Distribution Date, which remain unpaid after application
of amounts previously distributed pursuant to this clause (E) to
the extent that such amounts are not attributable to Realized
Losses which have been allocated to the related Subordinate
Certificates; and
(F) to the Holders of the Group I Certificates, Group II
Certificates or Group III Certificates, as applicable, amounts
required to be distributed pursuant to Section 4.02(c);
(iii) to the Holders of the Class M-1 Certificates and Class
M-III-1 Certificates, as applicable, the Accrued Certificate Interest
thereon for such Distribution Date, plus any Accrued Certificate
Interest thereon remaining unpaid from any previous Distribution Date,
except as provided below;
(iv) to the Holders of the Class M-1 Certificates and Class
M-III-1 Certificates, as applicable, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of Certificates
for such Distribution Date, applied in reduction of the Certificate
Principal Balance of the Class M-1 Certificates and Class M-III-1
Certificates;
(v) to the Holders of the Class M-2 Certificates and Class
M-III-2 Certificates, as applicable, the Accrued Certificate Interest
thereon for such Distribution Date, plus any Accrued Certificate
Interest thereon remaining unpaid from any previous Distribution Date,
except as provided below;
(vi) to the Holders of the Class M-2 Certificates and Class
M-III-2 Certificates, as applicable, an amount equal to (x) the
Subordinate Principal Distribution Amount for such
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Class of Certificates for such Distribution Date, applied in reduction
of the Certificate Principal Balance of the Class M-2 Certificates and
Class M-III-2 Certificates;
(vii) to the Holders of the Class M-3 Certificates and Class
M-III-3 Certificates, as applicable, the Accrued Certificate Interest
thereon for such Distribution Date, plus any Accrued Certificate
Interest thereon remaining unpaid from any previous Distribution Date,
except as provided below;
(viii) to the Holders of the Class M-3 Certificates and Class
M-III-3 Certificates, as applicable, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of Certificates
for such Distribution Date, applied in reduction of the Certificate
Principal Balance of the Class M-3 Certificates and Class M-III-3
Certificates;
(ix) to the Holders of the Class B-1 Certificates and Class
B-III-1 Certificates, as applicable, the Accrued Certificate Interest
thereon for such Distribution Date, plus any Accrued Certificate
Interest thereon remaining unpaid from any previous Distribution Date,
except as provided below;
(x) to the Holders of the Class B-1 Certificates and Class
B-III-1 Certificates, as applicable, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of Certificates
for such Distribution Date, applied in reduction of the Certificate
Principal Balance of the Class B-1 Certificates and Class B-III-1
Certificates;
(xi) to the Holders of the Class B-2 Certificates and Class
B-III-2 Certificates, as applicable, the Accrued Certificate Interest
thereon for such Distribution Date, plus any Accrued Certificate
Interest thereon remaining unpaid from any previous Distribution Date,
except as provided below;
(xii) to the Holders of the Class B-2 Certificates and Class
B-III-2 Certificates, as applicable, an amount equal to (x) the
Subordinate Principal Distribution Amount for such Class of Certificates
for such Distribution Date, applied in reduction of the Certificate
Principal Balance of the Class B-2 Certificates and Class B-III-2
Certificates;
(xiii) to the Holders of the Class B-3 Certificates and Class
B-III-3 Certificates, as applicable, an amount equal to (x) the Accrued
Certificate Interest thereon for such Distribution Date, plus any
Accrued Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xiv) to the Holders of the Class B-3 Certificates and Class
B-III-3 Certificates, as applicable, an amount equal to the Subordinate
Principal Distribution Amount for such Class of Certificates for such
Distribution Date;
(xv) to the related Senior Certificates, in the priority set
forth in Section 4.02(b),
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the portion, if any, of the related Available Distribution Amount
remaining after the foregoing distributions, applied to reduce the
Certificate Principal Balances of such Senior Certificates, but in no
event more than the aggregate of the outstanding Certificate Principal
Balances of each such Class of Senior Certificates, and thereafter, to
each Class of related Subordinate Certificates then outstanding
beginning with such Class with the Highest Priority, any portion of the
related Available Distribution Amount remaining after the related Senior
Certificates have been retired, applied to reduce the Certificate
Principal Balance of each such Class of Subordinate Certificates, but in
no event more than the outstanding Certificate Principal Balance of each
such Class of Subordinate Certificates; and
(xvi) to the Class R-IV Certificates, the balance, if any, of the
related Available Distribution Amount.
Notwithstanding the foregoing, on any Distribution Date, with respect to
the Class of Subordinate Certificates outstanding on such Distribution Date with
the Lowest Priority, or in the event the related Subordinate Certificates are no
longer outstanding, the Senior Certificates, Accrued Certificate Interest
thereon remaining unpaid from any previous Distribution Date will be
distributable only to the extent that such unpaid Accrued Certificate Interest
was attributable to interest shortfalls relating to the failure of the Master
Servicer to make any required Advance, or the determination by the Master
Servicer that any proposed Advance would be a Nonrecoverable Advance with
respect to the related Mortgage Loan where such Mortgage Loan has not yet been
the subject of a Cash Liquidation or REO Disposition or the related Liquidation
Proceeds, Insurance Proceeds and REO Proceeds have not yet been distributed to
the Certificateholders.
(b) Distributions of principal on the Senior Certificates on each
Distribution Date occurring prior to the Credit Support Depletion Date will be
made as follows:
(i) to the Class AP-I, Class AP-II and Class AP-III Certificates
from the Group I Available Distribution Amount, Group II Available
Distribution Amount and Group III Available Distribution Amount,
respectively, until the Certificate Principal Balance thereof is reduced
to zero, an amount (the related "Class AP Principal Distribution
Amount") equal to the aggregate of:
(1) the related Discount Fraction of the principal
portion of each Monthly Payment on each related Discount
Mortgage Loan due during the related Due Period, whether
or not received on or prior to the related Determination
Date, minus the related Discount Fraction of the principal
portion of any related Debt Service Reduction which
together with other related Bankruptcy Losses exceeds the
related Bankruptcy Amount;
(2) the related Discount Fraction of the principal
portion of all unscheduled collections on each related
Discount Mortgage Loan received during the preceding
calendar month or, in the case of Principal Prepayments
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in Full, during the related Prepayment Period (other than
amounts received in connection with a Cash Liquidation or
REO Disposition of a related Discount Mortgage Loan
described in clause (3) below), including Principal
Prepayments in Full, Curtailments and repurchases
(including repurchases deemed to have occurred during such
period in accordance with Section 3.07(b)) of related
Discount Mortgage Loans(or, in the case of a substitution
of a related Deleted Mortgage Loan, the related Discount
Fraction of the amount of any shortfall deposited in the
Custodial Account in connection with such substitution);
(3) in connection with the Cash Liquidation or REO
Disposition of a related Discount Mortgage Loan 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 related Discount Mortgage Loan immediately
prior to such Distribution Date and (2) the aggregate
amount of the collections on such related Discount
Mortgage Loan to the extent applied as recoveries of
principal;
(4) any amounts allocable to principal for the
related Loan Group for any previous Distribution Date
(calculated pursuant to clauses (1) through (3) above)
that remain undistributed; and
(5) the amount of any related Class AP Collection
Shortfalls for such Distribution Date and the amount of
any such Class AP Collection Shortfalls remaining unpaid
for all previous Distribution Dates, but only to the
extent of the Eligible Funds in the related Loan Group for
such Distribution Date;
(ii) the following amounts shall be distributed to the Group I
Senior Certificates (other than the Class A-I-2 Certificates and Class
AP-I Certificates) as follows:
(A) the Group I Senior Principal Distribution Amount shall
be distributed to the Class R-I, Class R-III and Class R-IV
Certificates, concurrently on a pro rata basis, until the
Certificate Principal Balances thereof have been reduced to zero;
(B) the balance of the Group I Senior Principal
Distribution Amount remaining after the distribution described in
clause (A) above, if any, shall be distributed in the following
order of priority, until the aggregate Certificate Principal
Balance of the Class I-A-1, Class I-A-3, Class I-A-4, Class I-A-5
and Class I-A-6 Certificates has been reduced to the PAC I
Aggregate Planned Principal Balance for such Distribution Date:
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(1) first, concurrently as follows:
(a) 75% to the Class A-I-1, Class A-I-3 and
Class A-I-4 Certificates, in that order, in each
case until the Certificate Principal Balance of
that class has been reduced to zero; and
(b) 25% to the Class A-I-5 Certificates,
until the Certificate Principal Balance thereof has
been reduced to zero; and
(2) second, to the Class A-I-6 Certificates, until
the Certificate Principal Balance thereof has been reduced
to zero;
(C) the balance of the Group I Senior Principal
Distribution Amount remaining after the distributions described
in clauses (A) and (B) above, if any, shall be distributed
sequentially to the Class A-I-7 Certificates and Class A-I-8
Certificates, in each case until the aggregate Certificate
Principal Balance of the Class A-I-7 Certificates and Class A-I-8
Certificates has been reduced to the PAC II Aggregate Planned
Principal Balance for such Distribution Date;
(D) the balance of the Group I Senior Principal
Distribution Amount remaining after the distributions described
in clauses (A) through (C) above, if any, shall be distributed
concurrently on a pro rata basis, to the Class A-I-9 Certificates
and Class A-I-10 Certificates, until the Certificate Principal
Balances thereof have been reduced to zero;
(E) the balance of the Group I Senior Principal
Distribution Amount remaining after the distribution described in
clauses (A) through (D) above, if any, shall be distributed
sequentially to the Class A-I-7 Certificates and Class A-I-8
Certificates, without regard to the PAC II Aggregate Planned
Principal Balance for such Distribution Date, in each case until
the Certificate Principal Balance has been reduced to zero;
(F) the balance of the Group I Senior Principal
Distribution Amount remaining after the distributions described
in clauses (A) through (E) above, if any, shall be distributed to
the Class A-I-1, Class A-I-3, Class A-I-4, Class A-I-5 and Class
A-I-6 Certificates in the manner and order of priority set forth
in clauses (B)(1) and (2) above, without regard to the PAC I
Aggregate Planned Principal Balance for such Distribution Date,
until the Certificate Principal Balances thereof have been
reduced to zero.
(iii) the Group II Senior Principal Distribution Amount shall be
distributed to the Class A-II Certificates, until the Certificate
Principal Balance thereof has been reduced to zero.
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(iv) the following amounts shall be distributed to the Group III
Senior Certificates (other than the Class AP-III Certificates) as
follows:
(A) the Group III Senior Principal Distribution Amount
shall be distributed to the Class R-II Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
and
(B) the balance of the Group I Senior Principal
Distribution Amount remaining after the distribution described in
clause (A) above, if any, shall be distributed to the Class A-III
Certificates, until the Certificate Principal Balance thereof has
been reduced to zero.
(v) With respect to the Group I Loans and Group II Loans, prior
to the occurrence of the Credit Support Depletion Date but after the
reduction of the Certificate Principal Balances of either the Group I
Senior Certificates or the Group II Senior Certificates to zero
(exclusive of the related Class AP Certificates), the remaining Group I
Senior Certificates or Group II Senior Certificates, as applicable, will
be entitled to receive, in addition to any Principal Prepayments in Full
and Curtailments related to such Certificates' respective Loan Group,
100% of the Principal Prepayments in Full and Curtailments on the
Mortgage Loans in the other Loan Group (exclusive of the related
Discount Fraction thereof), and in accordance with the priorities set
forth in clause 4.02(b)(ii) or (iii) above, and in reduction of the
Certificate Principal Balances thereof, on any Distribution Date unless
(i) the weighted average of the initial Subordinate Percentages for both
Loan Groups, weighted on the basis of the Stated Principal Balances of
the Mortgage Loans in the related Loan Group, is at least two times the
weighted average of the initial Subordinate Percentages for both Loan
Groups (calculated on such basis) and (ii) the outstanding principal
balance of the Mortgage Loans in both Loan Groups delinquent 60 days or
more averaged over the last six months, as a percentage of the aggregate
outstanding Certificate Principal Balance of the Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2 and Class B-3 Certificates, is less than
50%. In addition, on any Distribution Date prior to the Credit Support
Depletion Date on which the aggregate Certificate Principal Balance of
either the Group I Senior Certificates or the Group II Senior
Certificates, as applicable, is greater than the aggregate Stated
Principal Balance of the Mortgage Loans in the related Loan Group in
each case after giving effect to distributions to be made on such
Distribution Date, (1) 100% of the Principal Prepayments in Full and
Curtailments allocable to the Class M-1, Class M-2, Class M-3, Class
B-1, Class B-2 and Class B-3 Certificates on the Mortgage Loans in the
other Loan Group will be distributed to such Class or Classes (exclusive
of the related Class AP Certificates) of Group I Senior Certificates or
Group II Senior Certificates, as applicable, and in accordance with the
priorities set forth in clause 4.02(b)(ii) or (iii) above, and in
reduction of the Certificate Principal Balances thereof, until the
aggregate Certificate Principal Balance of such Class or Classes of
Certificates equals the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group, and (2) an amount equal to one
month's interest
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at the applicable Pass-Through Rate for such Class or Classes of
Certificates on the amount of such difference will be distributed from
the related Available Distribution Amount for the other Loan Group
allocable to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2
and Class B-3 Certificates first to pay any unpaid interest on such
Class or Classes of Certificates and then to pay principal on such
Classes in the manner described in (1) above.
(vi) With respect to the Group I Loans and Group II Loans, on or
after the occurrence of the Credit Support Depletion Date, all
priorities relating to distributions as described in Section 4.02(b)(ii)
or (iii) of this Agreement in respect of principal among the Senior
Certificates (other than the Class AP Certificates) will be disregarded,
and (i) the remaining Group I Senior Principal Distribution Amount will
be distributed to the Group I Senior Certificates (other than the Class
AP-I Certificates) pro rata in accordance with their respective
outstanding Certificate Principal Balances, (ii) the remaining Group II
Senior Principal Distribution Amount will be distributed to the Group II
Senior Certificates (other than the Class AP-II Certificates) pro rata
in accordance with their respective outstanding Certificate Principal
Balances, (iii) the related Senior Interest Distribution Amount will be
distributed as described in Section 4.02(a)(i)(X), (Y) and (Z) and (iv)
an amount equal to the related Discount Fraction of the principal
portion of scheduled payments and unscheduled collections received or
advanced in respect of related Discount Mortgage Loans will be
distributed to the Class AP-I Certificates and Class AP-II Certificates,
as applicable.
(vii) Except as described in clause (v) above, after the
reduction of the Certificate Principal Balances of the Group I Senior
Certificates or Group II Senior Certificates (other than the related
Class AP Certificates) to zero but prior to the Credit Support Depletion
Date, the related Senior Certificates (other than the related Class AP
Certificates) will be entitled to no further distributions of principal
thereon and the related Available Distribution Amount will be paid
solely to the holders of the related Class AP Certificates, the related
Class AV Certificates and the Class M-1, Class M-2, Class M-3, Class
B-1, Class B-2 and Class B-3 Certificates, in each case as described
herein.
(viii) With respect to the Group III Loans, on or after the
occurrence of the Credit Support Depletion Date, all priorities relating
to distributions as described in Section 4.02(b)(iv) of this Agreement
in respect of principal among the Group III Senior Certificates (other
than the Class AP-III Certificates) will be disregarded, and (i) the
remaining Group III Senior Principal Distribution Amount will be
distributed to the Group III Senior Certificates (other than the Class
AP-III Certificates) pro rata in accordance with their respective
outstanding Certificate Principal Balances, (ii) the Group III Senior
Interest Distribution Amount will be distributed as described in Section
4.02(a)(i)(Z) and (iii) an amount equal to the Discount Fraction of the
principal portion of scheduled payments and unscheduled collections
received or advanced in respect of Group III Discount Mortgage Loans
will be distributed to the Class AP-III Certificates.
(ix) With respect to the Group III Loans, after the reduction of
the Certificate
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Principal Balances of the Group III Senior Certificates (other than the
Class AP-III Certificates) to zero but prior to the Credit Support
Depletion Date, the Group III Senior Certificates (other than the Class
AP-III Certificates) will be entitled to no further distributions of
principal thereon and the related Available Distribution Amount will be
paid solely to the holders of the Class AP-III Certificates, Class
AV-III Certificates, Class M-III Certificates and Class B-III
Certificates, in each case as described herein.
(x) Notwithstanding the foregoing clauses (i) through (ix), if,
on any Distribution Date, (1) Excess Special Hazard Losses, Excess Fraud
Losses and Excess Bankruptcy Losses on the Group I Loans or Group II
Loans are allocated to any Class M-III Certificates or Class B-III
Certificates as described in Section 4.05(c) below, an amount equal to
the lesser of (a) the aggregate amount of such allocated Excess Special
Hazard Losses, Excess Fraud Losses and Excess Bankruptcy Losses and (b)
the aggregate amount of Principal Prepayments in Full and Curtailments
on the Group III Loans will be diverted to the Class A-I, Class AP-I,
Class AV-I, Class A-II, Class AP-II, Class AV-II, Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2 and Class B-3 Certificates and shall be
paid to such Certificates as a Principal Prepayment in Full and (2)
Excess Special Hazard Losses, Excess Fraud Losses and Excess Bankruptcy
Losses on the Group III Loans are allocated to any Class X-0, Xxxxx X-0,
Class M-3, Class B-1, Class B-2 or Class B-3 Certificates as described
in Section 4.05(c) below, an amount equal to the lesser of (a) the
aggregate amount of such allocated Excess Special Hazard Losses, Excess
Fraud Losses and Excess Bankruptcy Losses and (b) the aggregate amount
of Principal Prepayments in Full and Curtailments on the Group I Loans
and Group II Loans will be diverted to the Class A-III, Class AP-III,
Class AV-III, Class M-III and Class B-III Certificates and shall be paid
to such Certificates as a Principal Prepayment in Full.
(c) In addition to the foregoing distributions, with respect to any
Mortgage Loan that was previously the subject of a Cash Liquidation or an REO
Disposition that resulted in a Realized Loss, in the event that within two years
of the date on which such Realized Loss was determined to have occurred the
Master Servicer receives amounts which the Master Servicer reasonably believes
to represent subsequent recoveries (net of any related liquidation expenses), or
determines that it holds surplus amounts previously reserved to cover estimated
expenses specifically related to such Mortgage Loan (including, but not limited
to, recoveries (net of any related liquidation expenses) in respect of the
representations and warranties made by the related Seller pursuant to the
applicable Seller's Agreement), the Master Servicer shall distribute such
amounts to the Class or Classes to which such Realized Loss was allocated (with
the amounts to be distributed allocated among such Classes in the same
proportions as such Realized Loss was allocated), and within each such Class to
the Certificateholders of record as of the Record Date immediately preceding the
date of such distribution (or if such Class of Certificates is no longer
outstanding, to the Certificateholders of record at the time that such Realized
Loss was allocated) with respect to the Certificates of any Class, on a pro rata
basis based on the Percentage Interest represented by each Certificate of such
Class as of such Record Date; provided that no such distribution to any Class of
Certificates of subsequent recoveries related to a Mortgage Loan shall exceed,
either individually or in the
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aggregate and together with any other amounts paid in reimbursement therefor,
the amount of the related Realized Loss that was allocated to such Class of
Certificates.
(d) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.
(e) Except as otherwise provided in Section 9.01, if the Master Servicer
anticipates that a final distribution with respect to any Class of Certificates
will be made on the next Distribution Date, the Master Servicer shall, no later
than the Determination Date in the month of such final distribution, notify the
Trustee and the Trustee shall, no later than two (2) Business Days after such
Determination Date, mail on such date to each Holder of such Class of
Certificates a notice to the effect that: (i) the Trustee anticipates that the
final distribution with respect to such Class of Certificates will be made on
such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee or as otherwise specified therein, and
(ii) no interest shall accrue on such Certificates from and after the end of the
prior calendar month. In the event that Certificateholders required to surrender
their Certificates pursuant to Section 9.01(c) do not surrender their
Certificates for final cancellation, the Trustee shall cause funds distributable
with respect to such Certificates to be withdrawn from the Certificate Account
and credited to a separate escrow account for the benefit of such
Certificateholders as provided in Section 9.01(d).
Section 4.03 Statements to Certificateholders; Exchange Act Reporting.
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(a) The Master Servicer shall forward to the Trustee no later than 5:00
P.M. New York time on the second Business Day prior to each Distribution Date,
and the Trustee shall on such Distribution Date make available electronically
via the Trustee's internet website which is presently located at
xxxxx://xxx.xxxxxxxxxxxxxx.xx.xxx/xxxx, or for persons unable to use this
website by mail by contacting the investor relations desk at (000) 000-0000, to
each Holder and the Depositor, a statement setting forth the following
information as to each Class of Certificates, in each case to the extent
applicable:
(i) (A) the amount of such distribution to the Certificateholders
of such Class applied to reduce the Certificate Principal Balance
thereof, and (B) the aggregate amount included therein representing
Principal Prepayments;
(ii) the amount of such distribution to Holders of such Class of
Certificates allocable to interest;
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(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the
amount of the shortfall;
(iv) the amount of any Advance by the Master Servicer with
respect to the Group I, Group II and Group III Loans pursuant to Section
4.04;
(v) the number of Group I, Group II and Group III Loans and the
Stated Principal Balance after giving effect to the distribution of
principal on such Distribution Date;
(vi) the aggregate Certificate Principal Balance of each Class of
the Certificates, after giving effect to the amounts distributed on such
Distribution Date, separately identifying any reduction thereof due to
Realized Losses other than pursuant to an actual distribution of
principal;
(vii) on the basis of the most recent reports furnished to it by
Subservicers, the number and aggregate principal balances of Group I,
Group II and Group III Loans that are Delinquent (A) one month, (B) two
months and (C) three or more months and the number and aggregate
principal balance of Group I, Group II and Group III Loans that are in
foreclosure;
(viii) the number, aggregate principal balance and book value of
any REO Properties;
(ix) the aggregate Accrued Certificate Interest remaining unpaid,
if any, for each Class of Certificates, after giving effect to the
distribution made on such Distribution Date;
(x) the aggregate amount of Realized Losses for such Distribution
Date and the aggregate amount of Realized Losses on the Group I, Group
II and Group III Loans incurred since the Cut-off Date;
(xi) the Special Hazard Amount, Bankruptcy Amount and Fraud Loss
Amount as of the close of business on such Distribution Date and a
description of any change in the calculation of such amounts;
(xii) the Pass-Through Rate on each Class of Certificates;
(xiii) the number and aggregate principal balance of Group I,
Group II and Group III Loans repurchased under Section 4.07;
(xiv) the aggregate amount of any recoveries on previously
foreclosed loans from Residential Funding due to a breach of
representation or warranty;
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(xv) the weighted average remaining term to maturity of the Group
I, Group II and Group III Loans after giving effect to the amounts
distributed on such Distribution Date; and
(xvi) the weighted average Mortgage Rates of the Group I, Group
II and Group III Loans after giving effect to the amounts distributed on
such Distribution Date.
In the case of information furnished pursuant to clauses (i) and (ii)
above, the amounts shall be expressed as a dollar amount per Certificate with a
$1,000 denomination. In addition to the statement provided to the Trustee as set
forth in this Section 4.03(a), the Master Servicer shall provide to any manager
of a trust fund consisting of some or all of the Certificates, upon reasonable
request, such additional information as is reasonably obtainable by the Master
Servicer at no additional expense to the Master Servicer.
(b) Within a reasonable period of time after the end of each calendar
year, the Master Servicer shall prepare, or cause to be prepared, and the
Trustee shall forward, or cause to be forwarded, to each Person who at any time
during the calendar year was the Holder of a Certificate, other than a Class R
Certificate, a statement containing the information set forth in clauses (i) and
(ii) of subsection (a) above aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Master Servicer and Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Master Servicer and Trustee pursuant to any requirements of the
Code.
(c) As soon as reasonably practicable, upon the written request of any
Certificateholder, the Master Servicer shall provide the requesting
Certificateholder with such information as is necessary and appropriate, in the
Master Servicer's sole discretion, for purposes of satisfying applicable
reporting requirements under Rule 144A.
(d) The Master Servicer shall, on behalf of the Depositor and in respect
of the Trust Fund, sign and cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Exchange Act, and the
rules and regulations of the Commission thereunder. In connection with the
preparation and filing of such periodic reports, the Trustee shall timely
provide to the Master Servicer (I) a list of Certificateholders as shown on the
Certificate Register as of the end of each calendar year, (II) copies of all
pleadings, other legal process and any other documents relating to any claims,
charges or complaints involving the Trustee, as trustee hereunder, or the Trust
Fund that are received by the Trustee, (III) notice of all matters that, to the
actual knowledge of a Responsible Officer of the Trustee, have been submitted to
a vote of the Certificateholders, other than those matters that have been
submitted to a vote of the Certificateholders at the request of the Depositor or
the Master Servicer, and (IV) notice of any failure of the Trustee to make any
distribution to the Certificateholders as required pursuant to this Agreement.
Neither the Master Servicer nor the Trustee shall have any liability with
respect to the Master Servicer's failure to properly prepare or file such
periodic reports resulting from or relating to the Master Servicer's inability
or failure to obtain any information not resulting from the Master Servicer's
own negligence
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or willful misconduct. Any Form 10-K filed with the Commission in connection
with this clause (d) shall include a certification, signed by the senior officer
in charge of the servicing functions of the Master Servicer, in the form
attached as Exhibit R-1 hereto or such other form as may be required or
permitted by the Commission (the "Form 10-K Certification"), in compliance with
Rule 13a-14 and 15d-14 under the Exchange Act and any additional directives of
the Commission. In connection with the Form 10-K Certification, the Trustee
shall provide the Master Servicer with a back-up certification substantially in
the form attached hereto as Exhibit R-2. This Section 4.03(d) may be amended in
accordance with this Agreement without the consent of the Certificateholders.
Section 4.04 Distribution of Reports to the Trustee and the
Depositor; Advances by the Master Servicer.
(a) Prior to the close of business on the Business Day next succeeding
each Determination Date, the Master Servicer shall furnish a written statement
(which may be in a mutually agreeable electronic format) to the Trustee, any
Paying Agent and the Depositor (the information in such statement to be made
available to Certificateholders by the Master Servicer on request) (provided
that the Master Servicer will use its best efforts to deliver such written
statement not later than 12:00 p.m. New York time on the second Business Day
prior to the Distribution Date) setting forth (i) the Group I, Group II and
Group III Available Distribution Amounts, (ii) the amounts required to be
withdrawn from the Custodial Account and deposited into the Certificate Account
on the immediately succeeding Certificate Account Deposit Date pursuant to
clause (iii) of Section 4.01(a), (iii) the amount of Prepayment Interest
Shortfalls, and (iv) to the extent required, a report detailing the Stated
Principal Balance, Mortgage Rate, Modified Mortgage Rate, remaining term to
maturity and Monthly Payment for any Modified Mortgage Loan pursuant to Section
3.13. 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 a per annum rate equal to the Net Mortgage Rate), less the amount of
any related Servicing Modifications, Debt Service Reductions or reductions in
the amount of interest collectable from the Mortgagor pursuant to the Relief Act
or similar legislation or regulations then in effect, on the Outstanding
Mortgage Loans as of the related Due Date in the related Due Period, which
Monthly Payments were due during the related Due Period and not received as of
the close of business as of the related Determination Date; provided that no
Advance shall be made if it would be a Nonrecoverable Advance, (ii) withdraw
from amounts on deposit in the Custodial Account and deposit in the Certificate
Account all or a portion of the Amount Held for Future Distribution in discharge
of any such Advance, or (iii) make advances in the form of any combination of
clauses (i) and (ii)
109
aggregating the amount of such Advance. Any portion of the Amount Held for
Future Distribution so used shall be replaced by the Master Servicer by deposit
in the Certificate Account on or before 11:00 A.M. New York time on any future
Certificate Account Deposit Date to the extent that funds attributable to the
Mortgage Loans that are available in the Custodial Account for deposit in the
Certificate Account on such Certificate Account Deposit Date shall be less than
payments to Certificateholders required to be made on the following Distribution
Date. The Master Servicer shall be entitled to use any Advance made by a
Subservicer as described in Section 3.07(b) that has been deposited in the
Custodial Account on or before such Distribution Date as part of the Advance
made by the Master Servicer pursuant to this Section 4.04.
The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by a certificate of a Servicing
Officer delivered to the Depositor and the Trustee.
In the event that the Master Servicer determines as of the Business Day
preceding any Certificate Account Deposit Date that it will be unable to deposit
in the Certificate Account an amount equal to the Advance required to be made
for the immediately succeeding Distribution Date, it shall give notice to the
Trustee of its inability to advance (such notice may be given by telecopy), not
later than 3:00 P.M., New York time, on such Business Day, specifying the
portion of such amount that it will be unable to deposit. Not later than 3:00
P.M., New York time, on the Certificate Account Deposit Date the Trustee shall,
unless by 12:00 Noon, New York time, on such day the Trustee shall have been
notified in writing (by telecopy) that the Master Servicer shall have directly
or indirectly deposited in the Certificate Account such portion of the amount of
the Advance as to which the Master Servicer shall have given notice pursuant to
the preceding sentence, pursuant to Section 7.01, (a) terminate all of the
rights and obligations of the Master Servicer under this Agreement in accordance
with Section 7.01 and (b) assume the rights and obligations of the Master
Servicer hereunder, including the obligation to deposit in the Certificate
Account an amount equal to the Advance for the immediately succeeding
Distribution Date.
The Trustee shall deposit all funds it receives pursuant to this Section
4.04 into the Certificate Account.
Section 4.05 Allocation of Realized Losses.
(a) Prior to each Distribution Date, the Master Servicer shall determine
the total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Servicing Modifications, Debt Service Reduction, Deficient
Valuation or REO Disposition that occurred during the related Prepayment Period
or, in the case of a Servicing Modification that constitutes a reduction of the
interest rate on a Mortgage Loan, the amount of the reduction in the interest
portion of the Monthly Payment due in the month in which such Distribution Date
occurs. The amount of each Realized Loss shall be evidenced by an Officers'
Certificate. All Realized Losses on the Mortgage Loans (other than Excess
Losses) shall be allocated as follows: (a) with respect to the Group I Loans,
first, to the Class B-3 Certificates until the Certificate Principal Balance
thereof has been reduced to zero;
110
second, to the Class B-2 Certificates until the Certificate Principal Balance
thereof has been reduced to zero; third, to the Class B-1 Certificates until the
Certificate Principal Balance thereof has been reduced to zero; fourth, to the
Class M-3 Certificates until the Certificate Principal Balance thereof has been
reduced to zero; fifth, to the Class M-2 Certificates until the Certificate
Principal Balance thereof has been reduced to zero; sixth, to the Class M-1
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; and, thereafter, if any such Realized Losses are on a Group I Discount
Mortgage Loan, to the Class AP-I Certificates in an amount equal to the related
Group I Discount Fraction of the principal portion thereof, and the remainder of
such Realized Losses on the Group I Discount Mortgage Loans and the entire
amount of such Realized Losses on Group I Non-Discount Mortgage Loans, among the
Group I Senior Certificates (other than the Class AP-I Certificates) on a pro
rata basis, as described below, (b) with respect to the Group II Loans, first,
to the Class B-3 Certificates until the Certificate Principal Balance thereof
has been reduced to zero; second, to the Class B-2 Certificates until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class B-1 Certificates until the Certificate Principal Balance thereof has been
reduced to zero; fourth, to the Class M-3 Certificates until the Certificate
Principal Balance thereof has been reduced to zero; fifth, to the Class M-2
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; sixth, to the Class M-1 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; and, thereafter, if any such Realized
Losses are on a Group II Discount Mortgage Loan, to the Class AP-II Certificates
in an amount equal to the related Group II Discount Fraction of the principal
portion thereof, and the remainder of such Realized Losses on the Group II
Discount Mortgage Loans and the entire amount of such Realized Losses on Group
II Non-Discount Mortgage Loans, among the Group II Senior Certificates (other
than the Class AP-II Certificates) on a pro rata basis, as described below and
(c) with respect to the Group III Loans, first, to the Class B-III-3
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; second, to the Class B-III-2 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class B-III-1
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; fourth, to the Class M-III-3 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; fifth, to the Class M-III-2
Certificates until the Certificate Principal Balance thereof has been reduced to
zero; sixth, to the Class M-III-1 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; and, thereafter, if any such Realized
Losses are on a Group III Discount Mortgage Loan, to the Class AP-III
Certificates in an amount equal to the related Group III Discount Fraction of
the principal portion thereof, and the remainder of such Realized Losses on the
Group III Discount Mortgage Loans and the entire amount of such Realized Losses
on Group III Non-Discount Mortgage Loans, among the Group III Senior
Certificates (other than the Class AP-III Certificates) on a pro rata basis, as
described below.
(b) Any Extraordinary Losses with respect to the Group I Loans will be
allocated among the Group I Senior Certificates and the Class M-1, Class M-2,
Class M-3, Class B-1, Class B-2 and Class B-3 Certificates on a pro rata basis;
provided that the related Discount Fraction of the principal portion of a
Realized Loss on a Group I Discount Mortgage Loans will be allocated to the
Class AP-I Certificates. Any Extraordinary Losses with respect to the Group II
Loans will be allocated among the Group II Senior Certificates and the Class
M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates on a
pro rata basis; provided that the related Discount Fraction of the principal
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portion of a Realized Loss on a Group II Discount Mortgage Loans will be
allocated to the Class AP- II Certificates. Any Extraordinary Losses with
respect to the Group III Loans will be allocated among the Group III Senior
Certificates, Class M-III Certificates and Class B-III Certificates on a pro
rata basis; provided that the related Discount Fraction of the principal portion
of a Realized Loss on a Group III Discount Mortgage Loans will be allocated to
the Class AP-III Certificates. With respect to Loan Group I and Loan Group II,
the portion allocated to the Class X-0, Xxxxx X-0, Class M-3, Class B-1, Class
B-2 and Class B-3 Certificates will be based on each Certificates' interest in
the related Loan Group.
(c) Excess Special Hazard Losses, Excess Bankruptcy Losses and Excess
Fraud Losses will be allocated as follows: (a) with respect to the Group I Loans
and Group II Loans, first, to the Class B-III-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; second, to the
Class B-III-2 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; third, to the Class B-III-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; fourth, to the
Class M-III-3 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; fifth, to the Class M-III-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and sixth, to
the Class M-III-1 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; and (b) with respect to the Group III Loans, first, to
the Class B-3 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; second, to the Class B-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class B-1 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; fourth, to the Class M-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; fifth, to the Class M-2
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; and sixth, to the Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; provided however that such
losses will be so allocated pursuant to this provision solely to the extent of
the remaining Special Hazard Loss Amount, Bankruptcy Amount or Fraud Loss
Amount, as applicable, related to the certificate group to which these losses
are allocated and to the extent of the Certificate Principal Balance of the
Class B Certificates or Class M Certificates related to that Loan Group, and
thereafter shall be allocated pro rata among all the Certificates in the
certificate group in which these losses occurred; and provided further, that the
related Discount Fraction of the principal portion of any Excess Loss on a
Discount Mortgage Loan will be allocated to the Class AP-I, Class AP-II or Class
AP-III Certificates, as applicable.
As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a pro
rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such Distribution
Date in the case of the principal portion of a Realized Loss or based on the
Accrued Certificate Interest thereon payable on such Distribution Date (without
regard to any Compensating Interest for such Distribution Date) in the case of
an interest portion of a Realized Loss.
(d) Any allocation of the principal portion of Realized Losses (other
than Debt Service
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Reductions) to the Class A, Class R, Class M or Class B Certificates shall be
made by reducing the Certificate Principal Balance thereof by the amount so
allocated, which allocation shall be deemed to have occurred on such
Distribution Date. Allocations of the interest portions of Realized Losses shall
be made by operation of the definition of "Accrued Certificate Interest" and by
operation of the priority of payment provisions of Section 4.02(a). 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.
(e) Realized Losses on the Group I Loans and the Group II Loans shall be
applied after all distributions have been made on each Distribution Date first,
to each REMIC I Regular Interest ending with the designation "SUB," so that the
Uncertificated Principal Balance of each such REMIC I Regular Interest is equal
to 0.01% of the excess of (x) the aggregate Stated Principal Balance of the
Mortgage Loans in the related Loan Group over (y) the Certificate Principal
Balance of the Senior Certificates relating to the related Loan Group (except
that if any such excess is a larger number than in the preceding distribution
period, the least amount of Realized Losses shall be applied to such REMIC I
Regular Interests such that the REMIC I Subordinated Balance Ratio is
maintained); and second, any remaining Realized Losses on the Group I Loans
shall be allocated to REMIC I Regular Interest LT-I-ZZZ and any remaining
Realized Losses on the Group II Loans shall be allocated to REMIC I Regular
Interest LT-II-ZZZ (except that if a Realized Loss is recognized with respect to
a Group I Discount Mortgage Loan or a Group II Discount Mortgage Loan, the
applicable Group I Discount Fraction or Group II Discount Fraction of such
Realized Loss will be allocated to REMIC I Regular Interest LT-I-AP or REMIC I
Regular Interest LT-II-AP, as applicable). Realized Losses on the Group III
Loans shall be applied to REMIC II Regular Interest LT-IIIA until the
Certificate Principal Balance has been reduced to zero (except that if a
Realized Loss is recognized with respect to a Group III Discount Mortgage Loan,
the applicable Group III Discount Fraction of such Realized Loss will be
allocated to REMIC III Regular Interest LT-III-AP). Realized Losses are
allocable to the REMIC III Regular Interests as such amounts are allocable to
the Corresponding Certificates.
Section 4.06 Reports of Foreclosures and Abandonment of Mortgaged Property.
The Master Servicer or the Subservicers shall file information returns
with respect to the receipt of mortgage interest received in a trade or
business, the reports of foreclosures and abandonments of any Mortgaged Property
and the informational returns relating to cancellation of indebtedness income
with respect to any Mortgaged Property required by Sections 6050H, 6050J and
6050P of the Code, respectively, and deliver to the Trustee an Officers'
Certificate on or before March 31 of each year (other than the calendar year in
which the Certificates are issued) stating that such reports have been filed.
Such reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
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Section 4.07 Optional Purchase of Defaulted Mortgage Loans.
---------------------------------------------
As to any Mortgage Loan which is delinquent in payment by 90 days or
more, the Master Servicer may, at its option, purchase such Mortgage Loan from
the Trustee at the Purchase Price therefor; provided, that any such Mortgage
Loan that becomes 90 days or more delinquent during any given Calendar Quarter
shall only be eligible for purchase pursuant to this Section 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. 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. If at any time the Master Servicer makes a
payment to the Certificate Account covering the amount of the Purchase Price for
such a Mortgage Loan, and the Master Servicer provides to the Trustee a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Certificate Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the request of the Master
Servicer without recourse to the Master Servicer which shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Master Servicer will thereupon own such
Mortgage, and all such security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto.
Section 4.08 Distributions on the Uncertificated Regular Interests.
-----------------------------------------------------
(a) On each Distribution Date, the Trustee shall be deemed to allocate
and distribute the Group I Available Distribution Amount, Group II Available
Distribution Amount and Group III Available Distribution Amount to the extent on
deposit in the Certificate Account for such date to the interests issued in
respect of REMIC I, REMIC II and REMIC III as specified in this Section.
(b) On each Distribution Date, the following amounts, in the following
order of priority, to the extent of the Group I Available Distribution Amount
and Group II Available Distribution Amount reduced by distributions made to the
Class R-I Certificates pursuant to Section 4.02(a), shall be deemed distributed
by REMIC I to REMIC III on account of the REMIC I Regular Interests:
(i) Uncertificated Accrued Interest on the REMIC I Regular
Interests for such Distribution Date, plus any Uncertificated Accrued Interest
thereon remaining unpaid from any previous Distribution Date; and
(ii) to the extent of amounts remaining after the distributions
made pursuant to clause (i) above, allocated as follows: (A) first, to the
Holders of REMIC I Regular Interests LT-I- AP and LT-II-AP, an amount equal to
the amount deemed distributed in respect of the Corresponding Interest for such
Distribution Date, (B) second, to each REMIC I Regular Interest ending with the
designation "SUB," so that the principal balance of each such REMIC I Regular
Interest is equal to 0.01% of the excess of (x) the aggregate Stated Principal
Balance of the Mortgage
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Loans in the related Loan Group over (y) the Certificate Principal Balances of
the Senior Certificates related to such Loan Group (except that if any such
excess is a larger number than in the preceding distribution period, the least
amount of principal shall be distributed to such REMIC I Regular Interests such
that the REMIC I Subordinated Balance Ratio is maintained); and (C) thereafter,
any remaining principal from the Group I Available Distribution Amount to REMIC
I Regular Interest LT-I-ZZZ and any remaining principal from the Group II
Available Distribution Amount to REMIC I Regular Interest LT-II-ZZZ.
(c) On each Distribution Date, the following amounts, in the following
order of priority, to the extent of the Group III Available Distribution Amount
reduced by distributions made to the Class R-II Certificates pursuant to Section
4.02(a), shall be deemed distributed by REMIC II to REMIC III on account of the
REMIC II Regular Interests:
(i) Uncertificated Accrued Interest on the REMIC II Regular
Interests for such Distribution Date, plus any Uncertificated Accrued Interest
thereon remaining unpaid from any previous Distribution Date; and
(ii) to the extent of amounts remaining after the distributions
made pursuant to clause (i) above, allocated as follows: (A) first, to the
Holders of REMIC II Regular Interest LT-III- AP, an amount equal to the amount
deemed distributed in respect of the Corresponding Interest for such
Distribution Date, and (B) thereafter, any remaining principal from the Group
III Available Distribution Amount to REMIC II Regular Interest LT-IIIA until the
Uncertificated Principal Balance of such REMIC II Regular Interest is reduced to
zero.
(d) On each Distribution Date, the following amounts, in the following
order of priority, to the extent of the Available Distribution Amount reduced by
distributions made to the Class R-III Certificates pursuant to Section 4.02(a),
shall be deemed distributed by REMIC III to REMIC IV on account of the REMIC III
Regular Interests:
(i) Uncertificated Accrued Interest on the REMIC III Regular
Interests for such Distribution Date, plus any Uncertificated Accrued Interest
thereon remaining unpaid from any previous Distribution Date; and
(ii) an amount equal to the sum of the amounts in respect of
principal distributed on account of the Certificates (other than the Class R
Certificates) for such Distribution Date shall be deemed distributed on the
REMIC III Regular Interests in accordance with the priority assigned to the
Corresponding Certificates, until the Uncertificated Principal Balance of each
such REMIC III Regular Interest is reduced to zero.
(e) Notwithstanding the deemed distributions on the Uncertificated REMIC
I Regular Interests, the Uncertificated REMIC II Regular Interests and the
Uncertificated REMIC III Regular Interests described in this Section 4.08,
distributions of funds from the Certificate Account shall be made only in
accordance with Section 4.02.
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116
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) The Class A Certificates, Class M Certificates, Class B Certificates
and Class R Certificates shall be substantially in the forms set forth in
Exhibits A, B, C and D, respectively, and shall, on original issue, be executed
and delivered by the Trustee to the Certificate Registrar for authentication and
delivery to or upon the order of the Depositor upon receipt by the Trustee or
one or more Custodians of the documents specified in Section 2.01. The Class A
(other than the Interest Only Certificates), Class M-1 and Class M-III-1
Certificates shall be issuable in minimum dollar denominations of $25,000 and
integral multiples of $1 in excess thereof. The Class M-2, Class M- III-2, Class
M-3, Class M-III-3, Class B-1, Class B-2, Class B-3 , Class B-III-1, Class
B-III-2 and Class B-III-3 Certificates shall be issuable in minimum dollar
denominations of $250,000 and integral multiples of $1 in excess thereof. The
Class A-I-2, Class AV-I, Class AV-II, Class AV-III and each Class of Class R
Certificates shall be issued in registered, certificated form in minimum
percentage interests of 20.00% and integral multiples of 0.01% in excess
thereof; provided, however, that one Class R Certificate of each Class will be
issuable to the REMIC Administrator as "tax matters person" pursuant to Section
10.01(c) in a minimum denomination representing a Percentage Interest of not
less than 0.01%.
The Certificates shall be executed by manual or facsimile signature on
behalf of an authorized officer of the Trustee. Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Trustee shall bind the Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Certificate or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Certificate Registrar by manual signature, and such certificate
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
(b) The Class A and Class M Certificates shall initially be issued as
one or more Certificates registered in the name of the Depository or its nominee
and, except as provided below, registration of such Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Certificate Owners shall hold their respective Ownership Interests
in and to each Class A or Class M Certificate, through the book-entry facilities
of the Depository and, except as provided below, shall not be entitled to
Definitive Certificates in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or
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brokerage firm representing such Certificate Owner. Each Depository Participant
shall transfer the Ownership Interests only in the Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
The Trustee, the Master Servicer and the Depositor may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of Book-
Entry Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Certificateholders and shall give notice to the
Depository of such record date.
If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor or (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall issue the Definitive Certificates. Neither the
Depositor, the Master Servicer nor the Trustee shall be liable for any actions
taken by the Depository or its nominee, including, without limitation, any delay
in delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depositor in connection with the issuance of the Definitive
Certificates pursuant to this Section 5.01 shall be deemed to be imposed upon
and performed by the Trustee, and the Trustee and the Master Servicer shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
(c) Each of the Certificates is intended to be a "security" governed by
Article 8 of the Uniform Commercial Code as in effect in the State of New York
and any other applicable jurisdiction, to the extent that any of such laws may
be applicable.
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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 R Certificate, upon satisfaction of
the conditions set forth below, the Trustee shall execute and the Certificate
Registrar shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of a like Class and
aggregate Percentage Interest.
(c) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and the Certificate Registrar
shall authenticate and deliver the Certificates of such Class which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee or the Certificate Registrar) be duly endorsed by, or be accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class 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 (the "1933 Act"), and any applicable state securities laws
or is made in accordance with said Act and laws. Except as otherwise provided in
this Section 5.02(d), in the event that a transfer of a Class B Certificate is
to be made, (i) unless the Depositor directs the Trustee otherwise, the Trustee
shall require a written Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee and the Depositor that such transfer may
be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from said Act and laws or is being made pursuant to said Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee, the Trust
Fund, the Depositor or the Master Servicer, and (ii) the Trustee shall require
the transferee to execute a representation letter, substantially in the form of
Exhibit I hereto, and the Trustee shall require the transferor to execute a
representation letter, substantially in the form of Exhibit J hereto, each
acceptable to and in form and substance satisfactory to the Depositor and the
Trustee certifying to the Depositor and the Trustee the facts surrounding such
transfer, which representation letters shall not be an expense of the Trustee,
the Trust Fund, the Depositor or the Master Servicer. In lieu of the
requirements set forth in the
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preceding sentence, transfers of Class B Certificates may be made in accordance
with this Section 5.02(d) if the prospective transferee of such a Certificate
provides the Trustee and the Master Servicer with an investment letter
substantially in the form of Exhibit N attached hereto, which investment letter
shall not be an expense of the Trustee, the Depositor, or the Master Servicer,
and which investment letter states that, among other things, such transferee (i)
is a "qualified institutional buyer" as defined under Rule 144A, acting for its
own account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (ii) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the 1933 Act provided by
Rule 144A. The Holder of a Class B Certificate desiring to effect any transfer,
sale, pledge or other disposition shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Master Servicer and the Certificate Registrar
against any liability that may result if the transfer, sale, pledge or other
disposition is not so exempt or is not made in accordance with such federal and
state laws and this Agreement.
(e) (i) In the case of any Class B or Class R Certificate presented for
registration in the name of any Person, either (i) the Trustee shall require an
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee, the Depositor and the Master Servicer to the effect that the purchase
or holding of such Class 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 ERISA, or Section 4975 of the Code (or
comparable provisions of any subsequent enactments), and will not subject the
Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Depositor or the Master Servicer or
(ii) the prospective transferee shall be required to provide the Trustee, the
Depositor and the Master Servicer with a certification to the effect set forth
in Exhibit O (with respect to a Class B Certificate), or in paragraph fourteen
of Exhibit H-1 (with respect to a Class R Certificate), which the Trustee may
rely upon without further inquiry or investigation, or such other certifications
as the Trustee may deem desirable or necessary in order to establish that such
transferee or the Person in whose name such registration is requested 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 insurance company investing its general accounts, an investment
manager, a named fiduciary or a trustee of any such plan) who is using "plan
assets" of any such plan to effect such acquisition (each, a "Plan Investor") or
(b) in the case of a 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").
(f) 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
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Transaction Exemption ("PTE") 94-29, 59 Fed. Reg. 14674 (March 29, 1994), as
amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21, 1997), and PTE 2000-58, 65
Fed. Reg. 67765 (November 13, 2000) and PTE 2002-41, 67 Fed Reg. 54487 (August
22, 2002) (the "RFC Exemption"), and that it understands that there are certain
conditions to the availability of the RFC Exemption including that such
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by Standard & Poor's, Fitch or Xxxxx'x or (c) such Transferee is
a Complying Insurance Company.
(g) (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, 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.
(h) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a Permitted Transferee
and shall promptly notify the Trustee of any change or impending
change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Class R Certificate, the Trustee shall
require delivery to it, and shall not register the Transfer of
any Class R Certificate until its receipt of, (I) an affidavit
and agreement (a "Transfer Affidavit and Agreement," in the form
attached hereto as Exhibit H-1) from the proposed Transferee, in
form and substance satisfactory to the Master Servicer,
representing and warranting, among other things, that it is a
Permitted Transferee, that it is not acquiring its Ownership
Interest in the Class R Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person
who is not a Permitted Transferee, that for so long as it retains
its
121
Ownership Interest in a Class R Certificate, it will endeavor to
remain a Permitted Transferee, and that it has reviewed the
provisions of this Section 5.02(f) and agrees to be bound by
them, and (II) a certificate, in the form attached hereto as
Exhibit H-2, from the Holder wishing to transfer the Class R
Certificate, in form and substance satisfactory to the Master
Servicer, representing and warranting, among other things, that
no purpose of the proposed Transfer is to impede the assessment
or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit
and Agreement by a proposed Transferee under clause (B) above, if
a Responsible Officer of the Trustee who is assigned to this
Agreement has actual knowledge that the proposed Transferee is
not a Permitted Transferee, no Transfer of an Ownership Interest
in a Class R Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall agree (x) to require a
Transfer Affidavit and Agreement from any other Person to whom
such Person attempts to transfer its Ownership Interest in a
Class R Certificate and (y) not to transfer its Ownership
Interest unless it provides a certificate to the Trustee in the
form attached hereto as Exhibit H-2.
(E) Each Person holding or acquiring an Ownership Interest
in a Class R Certificate, by purchasing an Ownership Interest in
such Certificate, agrees to give the Trustee written notice that
it is a "pass- through interest holder" within the meaning of
Temporary Treasury Regulations Section 1.67-3T(a)(2)(i)(A)
immediately upon acquiring an Ownership Interest in a Class R
Certificate, if it is, or is holding an Ownership Interest in a
Class R Certificate on behalf of, a "pass- through interest
holder."
(ii) The Trustee will register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit and
Agreement, a certificate of the Holder requesting such transfer in the
form attached hereto as Exhibit H-2 and all of such other documents as
shall have been reasonably required by the Trustee as a condition to
such registration. Transfers of the Class R Certificates to Non-United
States Persons and Disqualified Organizations (as defined in Section
860E(e)(5) of the Code) are prohibited.
(iii) 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
122
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.
(iv) If any purported Transferee shall become a Holder of a Class
R Certificate in violation of the restrictions in this Section 5.02(f)
and to the extent that the retroactive restoration of the rights of the
Holder of such Class R Certificate as described in clause (iii)(A) above
shall be invalid, illegal or unenforceable, then the Master Servicer
shall have the right, without notice to the holder or any prior holder
of such Class R Certificate, to sell such Class R Certificate to a
purchaser selected by the Master Servicer on such terms as the Master
Servicer may choose. Such purported Transferee shall promptly endorse
and deliver each Class R Certificate in accordance with the instructions
of the Master Servicer. Such purchaser may be the Master Servicer itself
or any Affiliate of the Master Servicer. The proceeds of such sale, net
of the commissions (which may include commissions payable to the Master
Servicer or its Affiliates), expenses and taxes due, if any, will be
remitted by the Master Servicer to such purported Transferee. The terms
and conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Master Servicer, and the Master
Servicer shall not be liable to any Person having an Ownership Interest
in a Class R Certificate as a result of its exercise of such discretion.
(v) 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.
(vi) 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
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Agency to downgrade its then-current ratings, if any, of the
Class A, 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) A certificate of the Master Servicer stating that the
Master Servicer has received an Opinion of Counsel, in form and
substance satisfactory to the Master Servicer, to the effect that
such modification, addition to or absence of such provisions will
not cause any of REMIC I, REMIC II, REMIC III or REMIC IV to
cease to qualify as a REMIC and will not cause (x) any of REMIC
I, REMIC II, REMIC III or REMIC IV to be subject to an
entity-level tax caused by the Transfer of any Class R
Certificate to a Person that is a Disqualified Organization or
(y) a Certificateholder or another Person to be subject to a
REMIC-related tax caused by the Transfer of a Class R Certificate
to a Person that is not a Permitted Transferee.
(i) 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.
(j) All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
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If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) there is delivered to the Trustee and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor, Class and Percentage Interest but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
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Section 5.04 Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of transfer,
the Depositor, the Master Servicer, the Trustee, the Certificate Registrar and
any agent of the Depositor, the Master Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.02 and for all other purposes whatsoever, except as and to
the extent provided in the definition of "Certificateholder" and in Section
4.08, and neither the Depositor, the Master Servicer, the Trustee, the
Certificate Registrar nor any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar shall be affected by notice to the contrary
except as provided in Section 5.02(f).
Section 5.05 Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making
distributions to Certificateholders pursuant to Section 4.02. In the event of
any such appointment, on or prior to each Distribution Date the Master Servicer
on behalf of the Trustee shall deposit or cause to be deposited with the Paying
Agent a sum sufficient to make the payments to Certificateholders in the amounts
and in the manner provided for in Section 4.02 and 4.03, such sum to be held in
trust for the benefit of Certificateholders.
The Trustee shall cause each Paying Agent to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee
that such Paying Agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders. Any sums so
held by such Paying Agent shall be held only in Eligible Accounts to the extent
such sums are not distributed to the Certificateholders on the date of receipt
by such Paying Agent.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Master Servicer.
The Depositor and the Master Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by the Depositor and the Master Servicer herein. By
way of illustration and not limitation, the Depositor is not liable for the
servicing and administration of the Mortgage Loans, nor is it obligated by
Section 7.01 or 10.01 to assume any obligations of the Master Servicer or to
appoint a designee to assume such obligations, nor is it liable for any other
obligation hereunder that it may, but is not obligated to, assume unless it
elects to assume such obligation in accordance herewith.
Section 6.02 Merger or Consolidation of the Depositor or the
Master Servicer; Assignment of Rights and Delegation of
Duties by Master Servicer.
(a) The Depositor and the Master Servicer will each keep in full effect
its existence, rights and franchises as a corporation under the laws of the
state of its incorporation, and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
(b) Any Person into which the Depositor or the Master Servicer may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Xxxxxx Mae or Xxxxxxx Mac; and provided further that each Rating Agency's
ratings, if any, of the Class A, Class R, Class M or Class B Certificates 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 Xxx or Xxxxxxx Mac, is reasonably
satisfactory to the Trustee and the Depositor, is willing to service the
Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement, in form and substance reasonably satisfactory to the Depositor and
the Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
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observed by the Master Servicer under this Agreement; provided further that each
Rating Agency's rating of the Classes of Certificates that have been rated in
effect immediately prior to such assignment and delegation will not be
qualified, reduced or withdrawn as a result of such assignment and delegation
(as evidenced by a letter to such effect from each Rating Agency). In the case
of any such assignment and delegation, the Master Servicer shall be released
from its obligations under this Agreement, except that the Master Servicer shall
remain liable for all liabilities and obligations incurred by it as Master
Servicer hereunder prior to the satisfaction of the conditions to such
assignment and delegation set forth in the next preceding sentence.
Section 6.03 Limitation on Liability of the Depositor, the Master
Servicer and Others.
Neither the Depositor, the Master Servicer nor any of the directors,
officers, employees or agents of the Depositor or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Master Servicer or any such
Person against any breach of warranties or representations made herein or any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer shall be indemnified
by the Trust Fund and held harmless against any loss, liability or expense
incurred in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder.
Neither the Depositor nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal or administrative action,
proceeding, hearing or examination that is not incidental to its respective
duties under this Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Depositor or the Master
Servicer may in its discretion undertake any such action, proceeding, hearing or
examination that it may deem necessary or desirable in respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action, proceeding, hearing or examination and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the Master Servicer shall be entitled to be reimbursed therefor
out of amounts attributable to the Mortgage Loans on deposit in the Custodial
Account as provided by Section 3.10 and, on the Distribution Date(s) following
such reimbursement, the aggregate of such expenses and costs shall be allocated
in reduction of the Accrued Certificate Interest on each Class entitled thereto
in the same manner as if such expenses
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and costs constituted a Prepayment Interest Shortfall.
Section 6.04 Depositor and Master Servicer Not to Resign.
-------------------------------------------
Subject to the provisions of Section 6.02, neither the Depositor nor the
Master Servicer shall resign from its respective obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Depositor or the Master Servicer shall be evidenced by an
Opinion of Counsel (at the expense of the resigning party) to such effect
delivered to the Trustee. No such resignation by the Master Servicer shall
become effective until the Trustee or a successor servicer shall have assumed
the Master Servicer's responsibilities and obligations in accordance with
Section 7.02.
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ARTICLE VII
DEFAULT
Section 7.01 Events of Default.
Event of Default, wherever used herein, means any one of the following
events (whatever reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the Master Servicer shall fail to distribute or cause to be
distributed to Holders of Certificates of any Class any distribution required to
be made under the terms of the Certificates of such Class and this Agreement
and, in either case, such failure shall continue unremedied for a period of 5
days after the date upon which written notice of such failure, requiring such
failure to be remedied, shall have been given to the Master Servicer by the
Trustee or the Depositor or to the Master Servicer, the Depositor and the
Trustee by the Holders of Certificates of such Class evidencing Percentage
Interests aggregating not less than 25%; or
(i) the Master Servicer shall fail to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in the Certificates of any Class or in
this Agreement and such failure shall continue unremedied for a period
of 30 days (except that such number of days shall be 15 in the case of a
failure to pay the premium for any Required Insurance Policy) after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee or
the Depositor, or to the Master Servicer, the Depositor and the Trustee
by the Holders of Certificates of any Class evidencing, as to such
Class, Percentage Interests aggregating not less than 25%; or
(ii) 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
(iii) 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
(iv) the Master Servicer shall admit in writing its inability to
pay its debts
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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
(v) the Master Servicer shall notify the Trustee pursuant to
Section 4.04(b) that it is unable to deposit in the Certificate Account
an amount equal to the Advance.
If an Event of Default described in clauses (i)-(v) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, either the Depositor or the Trustee shall
at the direction of Holders of Certificates entitled to at least 51% of the
Voting Rights, by notice in writing to the Master Servicer (and to the Depositor
if given by the Trustee or to the Trustee if given by the Depositor), terminate
all of the rights and obligations of the Master Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof, other than its rights
as a Certificateholder hereunder; provided, however, the successor to the Master
Servicer appointed pursuant to Section 7.02 shall have accepted the duties of
Master Servicer effective upon the resignation of the Master Servicer. If an
Event of Default described in clause (v) hereof shall occur, the Trustee shall,
by notice to the Master Servicer and the Depositor, immediately terminate all of
the rights and obligations of the Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder as provided in Section 4.04(b). On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder thereof) or the Mortgage Loans or
otherwise, shall subject to Section 7.02 pass to and be vested in the Trustee or
the Trustee's designee appointed pursuant to Section 7.02; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee or its designee for administration by it of all cash
amounts which shall at the time be credited to the Custodial Account or the
Certificate Account or thereafter be received with respect to the Mortgage
Loans. No such termination shall release the Master Servicer for any liability
that it would otherwise have hereunder for any act or omission prior to the
effective time of such termination.
Notwithstanding any termination of the activities of Residential Funding
in its capacity as Master Servicer hereunder, Residential Funding shall be
entitled to receive, out of any late collection of a Monthly Payment on a
Mortgage Loan which was due prior to the notice terminating Residential
Funding's rights and obligations as Master Servicer hereunder and received after
such notice, that portion to which Residential Funding would have been entitled
pursuant to Sections 3.10(a)(ii), (vi) and (vii) as well as its Servicing Fee in
respect thereof, and any other amounts payable to Residential Funding hereunder
the entitlement to which arose prior to the termination of its activities
hereunder. Upon the termination of Residential Funding as Master Servicer
hereunder the Depositor shall
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deliver to the Trustee a copy of the Program Guide.
Section 7.02 Trustee or Depositor to Act; Appointment of Successor.
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(a) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 or resigns in accordance with Section 6.04,
the Trustee or, upon notice to the Depositor and with the Depositor's consent
(which shall not be unreasonably withheld) a designee (which meets the standards
set forth below) of the Trustee, shall be the successor in all respects to the
Master Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer (except for the responsibilities, duties and liabilities contained in
Sections 2.02 and 2.03(a), excluding the duty to notify related Subservicers as
set forth in such Sections, and its obligations to deposit amounts in respect of
losses incurred prior to such notice or termination on the investment of funds
in the Custodial Account or the Certificate Account pursuant to Sections 3.07(c)
and 4.01(c) by the terms and provisions hereof); provided, however, that any
failure to perform such duties or responsibilities caused by the preceding
Master Servicer's failure to provide information required by Section 4.04 shall
not be considered a default by the Trustee hereunder. As 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 Depositor, the Trustee, the Custodian and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. The Servicing Fee for any
successor Master Servicer appointed pursuant to this Section 7.02 will be
lowered with respect to those Mortgage Loans, if any, where the Subservicing Fee
accrues at a rate of less than 0.50% per annum in the event that the successor
Master Servicer is not servicing such Mortgage Loans directly and it is
necessary to raise the related Subservicing Fee to a rate of 0.50% per annum in
order to hire a Subservicer with respect to such Mortgage Loans.
(b) In connection with the termination or resignation of the Master
Servicer hereunder,
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either (i) the successor Master Servicer, including the Trustee if the Trustee
is acting as successor Master Servicer, shall represent and warrant that it is a
member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the Mortgage Loans that are registered with MERS, in which case the
predecessor Master Servicer shall cooperate with the successor Master Servicer
in causing MERS to revise its records to reflect the transfer of servicing to
the successor Master Servicer as necessary under MERS' rules and regulations, or
(ii) the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Trustee and to execute
and deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor Master Servicer.
The predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The predecessor Master Servicer
shall bear any and all fees of MERS, costs of preparing any assignments of
Mortgage, and fees and costs of filing any assignments of Mortgage that may be
required under this subsection (b). The successor Master Servicer shall cause
such assignment to be delivered to the Trustee or the Custodian promptly upon
receipt of the original with evidence of recording thereon or a copy certified
by the public recording office in which such assignment was recorded.
Section 7.03 Notification to Certificateholders.
----------------------------------
(a) Upon any such termination or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to the
Certificateholders at their respective addresses appearing in the Certificate
Register.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived as provided in Section 7.04 hereof.
Section 7.04 Waiver of Events of Default.
The Holders representing at least 66% of the Voting Rights of
Certificates affected by a default or Event of Default hereunder may waive any
default or Event of Default; provided, however, that (a) a default or Event of
Default under clause (i) of Section 7.01 may be waived only by all of the
Holders of Certificates affected by such default or Event of Default and (b) no
waiver pursuant to this Section 7.04 shall affect the Holders of Certificates in
the manner set forth in Section 11.01(b)(i), (ii) or (iii). Upon any such waiver
of a default or Event of Default by the Holders representing the requisite
percentage of Voting Rights of Certificates affected by such default or Event of
Default, such default or Event of Default shall cease to exist and shall be
deemed to have been remedied for every purpose hereunder. No such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon except to the extent expressly so waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent investor would exercise or use under the circumstances in the
conduct of such investor's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. The Trustee shall notify the
Certificateholders of any such documents which do not materially conform to the
requirements of this Agreement in the event that the Trustee, after so
requesting, does not receive satisfactorily corrected documents.
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 each of REMIC I, REMIC II, REMIC III and REMIC IV 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
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correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee by the Depositor or the Master
Servicer and which on their face, do not contradict the requirements of
this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders holding
Certificates which evidence, Percentage Interests aggregating not less
than 25% of the affected classes as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iv) The Trustee shall not be charged with knowledge of any
default (other than a default in payment to the Trustee) specified in
clauses (i) and (ii) of Section 7.01 or an Event of Default under
clauses (iii), (iv) and (v) of Section 7.01 unless a Responsible Officer
of the Trustee assigned to and working in the Corporate Trust Office
obtains actual knowledge of such failure or event or the Trustee
receives written notice of such failure or event at its Corporate Trust
Office from the Master Servicer, the Depositor or any Certificateholder;
and
(v) Except to the extent provided in Section 7.02, no provision
in this Agreement shall require the Trustee to expend or risk its own
funds (including, without limitation, the making of any Advance) or
otherwise incur any personal financial liability in the performance of
any of its duties as Trustee hereunder, or in the exercise of any of its
rights or powers, if the Trustee shall have reasonable grounds for
believing that repayment of funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) The Trustee shall timely pay, from its own funds, the amount of any
and all federal, state and local taxes imposed on the Trust Fund or its assets
or transactions including, without limitation, (A) "prohibited transaction"
penalty taxes as defined in Section 860F of the Code, if, when and as the same
shall be due and payable, (B) any tax on contributions to a REMIC after the
Closing Date imposed by Section 860G(d) of the Code and (C) any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code, but
only if such taxes arise out of a breach by the Trustee of its obligations
hereunder, which breach constitutes negligence or willful misconduct of the
Trustee.
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Section 8.02 Certain Matters Affecting the Trustee.
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(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default
(which has not been cured), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and
skill in their exercise as a prudent investor would exercise or use
under the circumstances in the conduct of such investor's own affairs;
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by the
Holders of Certificates of any Class evidencing, as to such Class,
Percentage Interests, aggregating not less than 50%; provided, however,
that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against
such expense or liability as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the Master
Servicer, if an Event of Default shall have occurred and is continuing,
and otherwise by the Certificateholder requesting the investigation;
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(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys provided that the Trustee shall remain
liable for any acts of such agents or attorneys; and
(vii) To the extent authorized under the Code and the regulations
promulgated thereunder, each Holder of a Class R Certificate hereby
irrevocably appoints and authorizes the Trustee to be its
attorney-in-fact for purposes of signing any Tax Returns required to be
filed on behalf of the Trust Fund. The Trustee shall sign on behalf of
the Trust Fund and deliver to the Master Servicer in a timely manner any
Tax Returns prepared by or on behalf of the Master Servicer that the
Trustee is required to sign as determined by the Master Servicer
pursuant to applicable federal, state or local tax laws, provided that
the Master Servicer shall indemnify the Trustee for signing any such Tax
Returns that contain errors or omissions.
(b) Following the issuance of the Certificates (and except as provided
for in Section 3.22(d)), the Trustee shall not accept any contribution of assets
to the Trust Fund unless it shall have obtained or been furnished with an
Opinion of Counsel to the effect that such contribution will not (i) cause any
of REMIC I, REMIC II, REMIC III or REMIC IV to fail to qualify as a REMIC at any
time that any Certificates are outstanding or (ii) cause the Trust Fund to be
subject to any federal tax as a result of such contribution (including the
imposition of any federal tax on "prohibited transactions" imposed under Section
860F(a) of the Code).
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
-----------------------------------------------------
The recitals contained herein and in the Certificates (other than the
execution of the Certificates and relating to the acceptance and receipt of the
Mortgage Loans) shall be taken as the statements of the Depositor or the Master
Servicer as the case may be, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates (except that the
Certificates shall be duly and validly executed and authenticated by it as
Certificate Registrar) or of any Mortgage Loan or related document, or of MERS
or the MERS(R) System. Except as otherwise provided herein, the Trustee shall
not be accountable for the use or application by the Depositor or the Master
Servicer of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Depositor or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Custodial Account or the Certificate Account by the Depositor or the Master
Servicer.
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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 its part, arising out of, or in connection
with, the acceptance and administration of the Trust Fund, including the costs
and expenses (including reasonable legal fees and expenses) of defending itself
against any claim in connection with the exercise or performance of any of its
powers or duties under this Agreement, 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
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Section 8.05(b) shall not pertain to any loss, liability or expense of the
Trustee, including the costs and expenses of defending itself against any claim,
incurred in connection with any actions taken by the Trustee at the direction of
Certificateholders pursuant to the terms of this Agreement.
Section 8.06 Eligibility Requirements for Trustee.
------------------------------------
The Trustee hereunder shall at all times be a national banking
association or a New York banking corporation having its principal office in a
state and city acceptable to the Depositor and organized and doing business
under the laws of such state or the United States of America, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority. If such corporation or national banking association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07.
Section 8.07 Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor and the Master
Servicer. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation then the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Depositor
may remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee. In addition, in the event that
the Depositor determines that the Trustee has failed (i) to distribute or cause
to be distributed to Certificateholders any amount required to be distributed
hereunder, if such amount is held by the Trustee or its Paying Agent (other than
the Master Servicer or the Depositor) for distribution or (ii) to otherwise
observe or perform in any material respect any of its covenants, agreements or
obligations hereunder, and such failure shall continue unremedied for a period
of 5 days (in respect of clause (i) above) or 30 days (in respect of
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clause (ii) above) after the date on which written notice of such failure,
requiring that the same be remedied, shall have been given to the Trustee by the
Depositor, then the Depositor may remove the Trustee and appoint a successor
trustee by written instrument delivered as provided in the preceding sentence.
In connection with the appointment of a successor trustee pursuant to the
preceding sentence, the Depositor shall, on or before the date on which any such
appointment becomes effective, obtain from each Rating Agency written
confirmation that the appointment of any such successor trustee will not result
in the reduction of the ratings on any class of the Certificates below the
lesser of the then current or original ratings on such Certificates.
(c) The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.08.
Section 8.08 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder (other than any Mortgage Files at
the time held by a Custodian, which shall become the agent of any successor
trustee hereunder), and the Depositor, the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Depositor.
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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
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conditions of this Article VIII. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer and the
Depositor, appoint one or more Custodians who are not Affiliates of the
Depositor or the Master Servicer to hold all or a portion of the Mortgage Files
as agent for the Trustee, by entering into a Custodial Agreement. Subject to
Article VIII, the Trustee agrees to comply with the terms of each Custodial
Agreement and to enforce the terms and provisions thereof against the Custodian
for the benefit of the Certificateholders. Each Custodian shall be a depository
institution subject to supervision by federal or state authority, shall have a
combined capital and surplus of at least $15,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any Mortgage File. Each
Custodial Agreement may be amended only as provided in Section 11.01. The
Trustee shall notify the Certificateholders of the appointment of any Custodian
(other than the Custodian appointed as of the Closing Date) pursuant to this
Section 8.11.
Section 8.12 Appointment of Office or Agency.
The Trustee will maintain an office or agency in the City of New York
where Certificates may be surrendered for registration of transfer or exchange.
The Trustee initially designates its offices located at DTC Transfer Services,
00 Xxxxx Xxxxxx, Xxxxxxxx Xxxx Entrance, Xxx Xxxx, Xxx Xxxx 00000 for the
purpose of keeping the Certificate Register. The Trustee will maintain an office
at the address stated in Section 11.05(c) hereof where notices and demands to or
upon the Trustee in respect of this Agreement may be served.
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ARTICLE IX
TERMINATION 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 Depositor, the Master Servicer and the Trustee created
hereby in respect of the Certificates (other than the obligation of the Trustee
to make certain payments after the Final Distribution Date to Certificateholders
and the obligation of the Depositor to send certain notices as hereinafter set
forth) shall terminate upon the last action required to be taken by the Trustee
on the Final Distribution Date pursuant to this Article IX following the earlier
of:
(i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, or
(ii) the purchase by the Master Servicer of all Group I Loans and
Group II Loans and all property acquired in respect of any Group I Loan
and Group II Loan remaining in the Trust Fund, or the purchase by the
Master Servicer of all Group III Loans and all property acquired in
respect of any Group III Loan remaining in the Trust Fund, in each case,
at a price equal to 100% of the unpaid principal balance of each
Mortgage Loan (or, if less than such unpaid principal balance, the fair
market value of the related underlying property of such Mortgage Loan
with respect to Mortgage Loans as to which title has been acquired if
such fair market value is less than such unpaid principal balance) (net
of any unreimbursed Advances attributable to principal) on the day of
repurchase, plus accrued interest thereon at the Net Mortgage Rate (or
Modified Net Mortgage Rate in the case of any Modified Mortgage Loan),
to, but not including, the first day of the month in which such
repurchase price is distributed; provided, however, that in no event
shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Xxxxxx
X. Xxxxxxx, the late ambassador of the United States to the Court of St.
Xxxxx, living on the date hereof; provided further, that, if the amount
due under any Certificate shall not have been reduced to zero prior to
the Maturity Date, the Master Servicer shall be required to terminate
this Agreement in accordance with this clause (ii); and provided
further, that the purchase price set forth above shall be increased as
is necessary, as determined by the Master Servicer, to avoid
disqualification of any of REMIC I, REMIC II, REMIC III or REMIC IV as a
REMIC. The purchase price paid by the Master Servicer shall also include
any amounts owed by Residential Funding pursuant to the last paragraph
of Section (d) of the Assignment Agreement in respect of any liability,
penalty or expense that resulted from a breach of the representation and
warranty set forth in clause (xxii) of such Section, that remain unpaid
on the date of such purchase.
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The right of the Master Servicer to purchase all the assets of the Trust
Fund relating to the Group I Loans and Group II Loans, pursuant to clause (ii)
above is conditioned upon the date of such purchase occurring on or after the
Group I/Group II Optional Termination Date. The right of the Master Servicer to
purchase all the assets of the Trust Fund relating to the Group III Loans,
pursuant to clause (ii) above is conditioned upon the date of such purchase
occurring on or after the Group III Optional Termination Date. If such right is
exercised by the Master Servicer, the Master Servicer shall be deemed to have
been reimbursed for the full amount of any unreimbursed Advances theretofore
made by it with respect to the Mortgage Loans being purchased. In addition, the
Master Servicer shall provide to the Trustee the certification required by
Section 3.15 and the Trustee and any Custodian shall, promptly following payment
of the purchase price, release to the Master Servicer the Mortgage Files
pertaining to the Mortgage Loans being purchased.
In addition to the foregoing, on any Distribution Date on or after the
Group I/Group II Optional Termination Date, the Master Servicer shall have the
right, at its option, to purchase the Group I Senior Certificates, Group II
Senior Certificates, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and
Class B-3 Certificates in whole, but not in part, at a price equal to the sum of
the outstanding Certificate Principal Balance of such Certificates plus the sum
of one month's Accrued Certificate Interest thereon, or, with respect to the
Class A-I-2, Class AV-I and Class AV-II Certificates, on their respective
Notional Amount, any previously unpaid Accrued Certificate Interest, and any
unpaid Prepayment Interest Shortfall previously allocated thereto. On any
Distribution Date on or after the Group III Optional Termination Date, the
Master Servicer shall have the right, at its option, to purchase the Group III
Senior Certificates, Class M-III Certificates and Class B-III Certificates in
whole, but not in part, at a price equal to the sum of the outstanding
Certificate Principal Balance of such Certificates plus the sum of one month's
Accrued Certificate Interest thereon, or, with respect to the Class AV-III
Certificates, on their Notional Amount, any previously unpaid Accrued
Certificate Interest, and any unpaid Prepayment Interest Shortfall previously
allocated thereto. If the Master Servicer exercises this right to purchase the
outstanding Group I Senior Certificates, Group II Senior Certificates, Class
M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates, or
Group III Senior Certificates, Class M-III Certificates and Class B-III
Certificates, the Master Servicer will promptly terminate the respective
obligations and responsibilities created hereby in respect of these Certificates
pursuant to this Article IX.
(b) The Master Servicer shall give the Trustee not less than 60 days'
prior notice of the Distribution Date on which the Master Servicer anticipates
that the final distribution will be made to Certificateholders (whether as a
result of the exercise by the Master Servicer of its right to purchase the
assets of the Trust Fund or otherwise). Notice of any termination, specifying
the anticipated Final Distribution Date (which shall be a date that would
otherwise be a Distribution Date) upon which the Certificateholders may
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Master Servicer
(if it is exercising its right to purchase the assets of the Trust Fund), or by
the Trustee (in any other case) by letter to Certificateholders mailed not
earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution specifying:
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(i) the anticipated Final Distribution Date upon which final
payment of the Certificates is anticipated to be made upon presentation
and surrender of Certificates at the office or agency of the Trustee
therein designated,
(ii) the amount of any such final payment, if known, and
(iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, and that payment will be made only
upon presentation and surrender of the Certificates at the office or
agency of the Trustee therein specified.
If the Master Servicer is obligated to give notice to Certificateholders
as aforesaid, it shall give such notice to the Certificate Registrar at the time
such notice is given to Certificateholders. In the event such notice is given by
the Master Servicer, the Master Servicer shall deposit in the Certificate
Account before the Final Distribution Date in immediately available funds an
amount equal to the purchase price for the assets of the Trust Fund computed as
above provided. The Master Servicer shall provide to the Trustee written
notification of any change to the anticipated Final Distribution Date as soon as
practicable. If the Trust Fund is not terminated on the anticipated Final
Distribution Date, for any reason, the Trustee shall promptly mail notice
thereof to each affected Certificateholder.
(c) Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall distribute to the Certificateholders (i)
the amount otherwise distributable on such Distribution Date, if not in
connection with the Master Servicer's election to repurchase, or (ii) if the
Master Servicer elected to so repurchase, an amount equal to the outstanding
Certificate Principal Balance of the Certificates, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest.
(d) In the event that any Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before the Final
Distribution Date, the Trustee shall on such date cause all funds in the
Certificate Account not distributed in final distribution to Certificateholders
to be withdrawn therefrom and credited to the remaining Certificateholders by
depositing such funds in a separate escrow account for the benefit of such
Certificateholders, and the Master Servicer (if it exercised its right to
purchase the assets of the Trust Fund), or the Trustee (in any other case) shall
give a second written notice to the remaining Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice any Certificate
shall not have been surrendered for cancellation, the Trustee shall take
appropriate steps as directed by the Master Servicer to contact the remaining
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining the escrow account and of contacting Certificateholders
shall be paid out of the assets which remain in the escrow account. If within
nine months after the second notice any Certificates shall not have been
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
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to such holders. No interest shall accrue or be payable to any Certificateholder
on any amount held in the escrow account or by the Master Servicer as a result
of such Certificateholder's failure to surrender its Certificate(s) for final
payment thereof in accordance with this Section 9.01 and the Certificateholders
shall look only to the Master Servicer for such payment.
Section 9.02 Additional Termination Requirements.
-----------------------------------
(a) Any of (i) REMIC I, (ii) REMIC II or (iii) REMIC I, REMIC II, REMIC
III and REMIC IV, as the case may be, shall be terminated in accordance with the
following additional requirements, unless the Trustee and the Master Servicer
have received an Opinion of Counsel (which Opinion of Counsel shall not be an
expense of the Trustee) to the effect that the failure of any of REMIC I, REMIC
II, REMIC III and REMIC IV, as the case may be, to comply with the requirements
of this Section 9.02 will not (i) result in the imposition on the Trust Fund of
taxes on "prohibited transactions," as described in Section 860F of the Code, or
(ii) cause any of REMIC I, REMIC II, REMIC III or REMIC IV to fail to qualify as
a REMIC at any time that any Certificate is outstanding:
(i) The Master Servicer shall establish a 90-day liquidation
period for each of (i) REMIC I, (ii) REMIC II or (iii) REMIC I, REMIC
II, REMIC III and REMIC IV, and specify the first day of such period in
a statement attached to the Trust Fund's final Tax Return pursuant to
Treasury regulations Section 1.860F-1. The Master Servicer also shall
satisfy all of the requirements of a qualified liquidation for each of
(i) REMIC I, (ii) REMIC II or (iii) REMIC I, REMIC II, REMIC III and
REMIC IV, under Section 860F of the Code and the regulations thereunder;
(ii) The Master Servicer shall notify the Trustee at the
commencement of such 90-day liquidation period and, at or prior to the
time of making of the final payment on the Certificates, the Trustee
shall sell or otherwise dispose of all of the remaining assets of the
Trust Fund in accordance with the terms hereof; and
(iii) If the Master Servicer is exercising its right to purchase
the assets of the Trust Fund, the Master Servicer shall, during the
90-day liquidation period and at or prior to the Final Distribution
Date, purchase all of the assets of the Trust Fund for cash; provided,
however, that in the event that a calendar quarter ends after the
commencement of the 90-day liquidation period but prior to the Final
Distribution Date, the Master Servicer shall not purchase any of the
assets of the Trust Fund prior to the close of that calendar quarter.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints the Master Servicer as its attorney-in-fact to adopt a
plan of complete liquidation for each of (i) REMIC I, (ii) REMIC II or (iii)
REMIC I, REMIC II, REMIC III and REMIC IV at the expense of the Trust Fund in
accordance with the terms and conditions of this Agreement.
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ARTICLE X
REMIC PROVISIONS
Section 10.01 REMIC Administration.
(a) The REMIC Administrator shall make an election to treat each of
REMIC I, REMIC II, REMIC III and REMIC IV as a REMIC under the Code and, if
necessary, under applicable state law. Such election will be made on Form 1066
or other appropriate federal tax or information return (including Form 8811) or
any appropriate state return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. The REMIC I Regular
Interests shall be designated as the "regular interests" and the Class R-I
Certificates shall be designated as the sole class of "residual interests" in
the REMIC I. The REMIC II Regular Interests shall be designated as the "regular
interests" and the Class R-II Certificates shall be designated as the sole class
of "residual interests" in REMIC II. The REMIC III Regular Interests shall be
designated as the "regular interests" and the Class R-III Certificates shall be
designated as the sole class of "residual interests" in REMIC III. The Class
A-I-1, Class A-I-2, Class A-I-3, Class A-I-4, Class A-I-5, Class A-I-6, Class
A-I-7, Class A-I-8, Class A-I-9, Class A-I-10, Class AP-I, Class AV-I, Class
A-II, Class AP-II, Class AV-II, Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2, Class B-3, Class A-III, Class AP-III, Class AV-III, Class M-III-1,
Class M-III-2, Class M-III-3, Class B-III-1, Class B-III-2, Class B-III-3
Certificates shall be designated as the "regular interests" in REMIC IV and the
Class R-IV Certificates shall be designated the sole class of "residual
interests" in REMIC IV. The REMIC Administrator and the Trustee shall not permit
the creation of any "interests" (within the meaning of Section 860G of the Code)
in the REMIC other than the Certificates.
(b) The Closing Date is hereby designated as the "startup day" of each
of REMIC I, REMIC II, REMIC III and REMIC IV within the meaning of Section
860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate in each
REMIC representing a 0.01% Percentage Interest of the Class R Certificates in
each REMIC and shall be designated as the "tax matters person" with respect to
each of REMIC I, REMIC II, REMIC III and REMIC IV in the manner provided under
Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1. The REMIC Administrator, as tax matters person, shall (i) act
on behalf of each of REMIC I, REMIC II, REMIC III and REMIC IV in relation to
any tax matter or controversy involving the Trust Fund and (ii) represent the
Trust Fund in any administrative or judicial proceeding relating to an
examination or audit by any governmental taxing authority with respect thereto.
The legal expenses, including without limitation attorneys' or accountants'
fees, and costs of any such proceeding and any liability resulting therefrom
shall be expenses of the Trust Fund and the REMIC Administrator shall be
entitled to reimbursement therefor out of amounts attributable to the Mortgage
Loans on deposit in the Custodial Account as provided by Section 3.10 unless
such legal expenses and costs are incurred by reason of the REMIC
Administrator's willful misfeasance, bad faith or gross negligence. If the REMIC
Administrator is no longer the Master Servicer hereunder, at its option the
REMIC Administrator may continue its duties as REMIC
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Administrator and shall be paid reasonable compensation not to exceed $3,000 per
year by any successor Master Servicer hereunder for so acting as the REMIC
Administrator.
(d) The REMIC Administrator shall prepare or cause to be prepared all of
the Tax Returns that it determines are required with respect to the 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, if any, and market discount or premium (using the Prepayment
Assumption) and (iii) to the Internal Revenue Service the name, title, address
and telephone number of the person who will serve as the representative of each
REMIC created hereunder.
(f) The Master Servicer and the REMIC Administrator shall take such
actions and shall cause each REMIC created hereunder to take such actions as are
reasonably within the Master Servicer's or the REMIC Administrator's control and
the scope of its duties more specifically set forth herein as shall be necessary
or desirable to maintain the status thereof as a REMIC under the REMIC
Provisions (and the Trustee shall assist the Master Servicer and the REMIC
Administrator, to the extent reasonably requested by the Master Servicer and the
REMIC Administrator to do so). In performing their duties as more specifically
set forth herein, the Master Servicer and the REMIC Administrator shall not
knowingly or intentionally take any action, cause the Trust Fund to take any
action or fail to take (or fail to cause to be taken) any action reasonably
within their respective control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, could (i) endanger the status of any of REMIC I, REMIC II, REMIC
III or REMIC IV as a REMIC or (ii) result in the imposition of a tax upon any of
REMIC I, REMIC II, REMIC III or REMIC IV (including but not limited to the tax
on prohibited transactions as defined in Section 860F(a)(2) of the Code (except
as provided in Section 3.22(d)) 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
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Certificateholders, at the expense of the Trust Fund, but in no event at the
expense of the Master Servicer, the REMIC Administrator or the Trustee) to the
effect that the contemplated action will not, with respect to the Trust Fund
created hereunder, endanger such status or, unless the Master Servicer or the
REMIC Administrator or both, as applicable, determine in its or their sole
discretion to indemnify the Trust Fund against the imposition of such a tax,
result in the imposition of such a tax. Wherever in this Agreement a
contemplated action may not be taken because the timing of such action might
result in the imposition of a tax on the Trust Fund, or may only be taken
pursuant to an Opinion of Counsel that such action would not impose a tax on the
Trust Fund, such action may nonetheless be taken provided that the indemnity
given in the preceding sentence with respect to any taxes that might be imposed
on the Trust Fund has been given and that all other preconditions to the taking
of such action have been satisfied. The Trustee shall not take or fail to take
any action (whether or not authorized hereunder) as to which the Master Servicer
or the REMIC Administrator, as applicable, has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action. In addition, prior to taking any action with
respect to the Trust Fund or its assets, or causing the Trust Fund to take any
action, which is not expressly permitted under the terms of this Agreement, the
Trustee will consult with the Master Servicer or the REMIC Administrator, as
applicable, or its designee, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to the Trust Fund and
the Trustee shall not take any such action or cause the Trust Fund to take any
such action as to which the Master Servicer or the REMIC Administrator, as
applicable, has advised it in writing that an Adverse REMIC Event could occur.
The Master Servicer or the REMIC Administrator, as applicable, may consult with
counsel to make such written advice, and the cost of same shall be borne by the
party seeking to take the action not expressly permitted by this Agreement, but
in no event at the expense of the Master Servicer or the REMIC Administrator. At
all times as may be required by the Code, the Master Servicer or the REMIC
Administrator, as applicable, will to the extent within its control and the
scope of its duties more specifically set forth herein, maintain substantially
all of the assets of the REMIC as "qualified mortgages" as defined in Section
860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of
any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of any REMIC as defined in Section
860G(c) of the Code, on any contributions to any REMIC after the startup day
therefor pursuant to Section 860G(d) of the Code, or any other tax imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Master Servicer, if such tax arises out of or results from
a breach by the Master Servicer of any of its obligations under this Agreement
or the Master Servicer has in its sole discretion determined to indemnify the
Trust Fund against such tax, (ii) to the Trustee, if such tax arises out of or
results from a breach by the Trustee of any of its obligations under this
Article X, or (iii) otherwise against amounts on deposit in the Custodial
Account as provided by Section 3.10 and on the Distribution Date(s) following
such reimbursement the aggregate of such taxes shall be allocated in reduction
of the Accrued Certificate Interest on each Class entitled thereto in the same
manner as if such taxes constituted a Prepayment Interest Shortfall.
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(h) The Trustee and the Master Servicer shall, for federal income tax
purposes, maintain books and records with respect to each REMIC on a calendar
year and on an accrual basis or as otherwise may be required by the REMIC
Provisions.
(i) Following the startup day, neither the Master Servicer nor the
Trustee shall accept any contributions of assets to any REMIC unless (subject to
Section 10.01(f)) the Master Servicer and the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in any REMIC will
not cause any of REMIC I, REMIC II, REMIC III or REMIC IV to fail to qualify as
a REMIC at any time that any Certificates are outstanding or subject any such
REMIC to any tax under the REMIC Provisions or other applicable provisions of
federal, state and local law or ordinances.
(j) Neither the Master Servicer nor the Trustee shall (subject to
Section 10.01(f)) enter into any arrangement by which any of REMIC I, REMIC II,
REMIC III or REMIC IV will receive a fee or other compensation for services nor
permit any of REMIC I, REMIC II, REMIC III or REMIC IV to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury Regulations, the "latest possible maturity date" by which the
Certificate Principal Balance of each Class of Certificates (other than the
Class A-I-2, Class AV-I, Class AV-II and Class AV-III Certificates) representing
a regular interest in the applicable REMIC and the Uncertificated Principal
Balance of each Uncertificated Regular Interest 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 the Trust Fund.
(m) Neither the Trustee nor the Master Servicer shall sell, dispose of
or substitute for any of the Mortgage Loans (except in connection with (i) the
default, imminent default or foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of any REMIC pursuant to Article IX of this Agreement or (iv) a
purchase of Mortgage Loans pursuant to Article II or III of this Agreement) or
acquire any assets for any REMIC or sell or dispose of any investments in the
Custodial Account or the Certificate Account for gain, or accept any
contributions to any REMIC after the Closing Date unless it has received an
Opinion of Counsel that such sale, disposition, substitution or acquisition will
not (a) affect adversely the status of any of REMIC I, REMIC II, REMIC III or
REMIC IV as a REMIC or (b) unless the Master Servicer has determined in its sole
discretion to indemnify the Trust Fund against such tax, cause any REMIC to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions.
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Section 10.02 Master Servicer, REMIC Administrator and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Depositor, the
REMIC Administrator and the Master Servicer for any taxes and costs including,
without limitation, any reasonable attorneys fees imposed on or incurred by the
Trust Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants set forth in Article VIII or this Article X. In the event
that Residential Funding is no longer the Master Servicer, the Trustee shall
indemnify Residential Funding for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by Residential
Funding as a result of a breach of the Trustee's covenants set forth in Article
VIII or this Article X.
(b) The REMIC Administrator agrees to indemnify the Trust Fund, the
Depositor, the Master Servicer and the Trustee for any taxes and costs
(including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Depositor, the Master Servicer or the Trustee,
as a result of a breach of the REMIC Administrator's covenants set forth in this
Article X with respect to compliance with the REMIC Provisions, including
without limitation, any penalties arising from the Trustee's execution of Tax
Returns prepared by the REMIC Administrator that contain errors or omissions;
provided, however, that such liability will not be imposed to the extent such
breach is a result of an error or omission in information provided to the REMIC
Administrator by the Master Servicer in which case Section 10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor, the REMIC Administrator and the Trustee for any taxes and costs
(including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Depositor or the Trustee, as a result of a
breach of the Master Servicer's covenants set forth in this Article X or in
Article III with respect to compliance with the REMIC Provisions, including
without limitation, any penalties arising from the Trustee's execution of Tax
Returns prepared by the Master Servicer that contain errors or omissions.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
(a) This Agreement or any Custodial Agreement may be amended from time
to time by the Depositor, the Master Servicer and the Trustee:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein,
which may be inconsistent with any other provisions herein or therein or
to correct any error,
(iii) to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or desirable to maintain the
qualification of REMIC I, REMIC II, REMIC III or REMIC IV as REMICs at
all times that any Certificate is outstanding or to avoid or minimize
the risk of the imposition of any tax on the Trust Fund pursuant to the
Code that would be a claim against the Trust Fund, provided that the
Trustee has received an Opinion of Counsel to the effect that (A) such
action is necessary or desirable to maintain such qualification or to
avoid or minimize the risk of the imposition of any such tax and (B)
such action will not adversely affect in any material respect the
interests of any Certificateholder,
(iv) to change the timing and/or nature of deposits into the
Custodial Account or the Certificate Account or to change the name in
which the Custodial Account is maintained, provided that (A) the
Certificate Account Deposit Date shall in no event be later than the
related Distribution Date, (B) such change shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder and (C) such change shall not result
in a reduction of the rating assigned to any Class of Certificates below
the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date, as evidenced by a letter from each
Rating Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section
5.02(f) or any other provision hereof restricting transfer of the Class
R Certificates by virtue of their being the "residual interests" in the
Trust Fund provided that (A) such change shall not result in reduction
of the rating assigned to any such Class of Certificates below the lower
of the then- current rating or the rating assigned to such Certificates
as of the Closing Date, as evidenced by a letter from each Rating Agency
to such effect, and (B) such change shall not, as evidenced by an
Opinion of Counsel (at the expense of the party seeking so to modify,
eliminate or add such provisions), cause the Trust Fund or any of the
Certificateholders (other than the transferor) to be subject to a
federal tax caused by a transfer to a Person that is not a Permitted
Transferee, or
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(vi) to make any other provisions with respect to matters or
questions arising under this Agreement or such Custodial Agreement which
shall not be materially inconsistent with the provisions of this
Agreement, provided that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder and is authorized or permitted under
Section 11.09(d).
(b) This Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Trustee and the Holders
of Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Certificates affected thereby for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or such Custodial Agreement or of modifying in any
manner the rights of the Holders of Certificates of such Class; provided,
however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate,
(ii) adversely affect in any material respect the interest of the
Holders of Certificates of any Class in a manner other than as described
in clause (i) hereof without the consent of Holders of Certificates of
such Class evidencing, as to such Class, Percentage Interests
aggregating not less than 66%, or
(iii) reduce the aforesaid percentage of Certificates of any
Class the Holders of which are required to consent to any such
amendment, in any such case without the consent of the Holders of all
Certificates of such Class then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (at the expense of the party seeking
such amendment) to the effect that such amendment or the exercise of any power
granted to the Master Servicer, the Depositor 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 REMIC I, REMIC II, REMIC III or REMIC IV
to fail to qualify as REMICs at any time that any Certificate is outstanding.
The Trustee may but shall not be obligated to enter into any amendment pursuant
to this Section that affects its rights, duties and immunities and this
agreement or otherwise; provided however, such consent shall not be unreasonably
withheld.
(d) Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
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(e) The Depositor shall have the option, in its sole discretion, to
obtain and deliver to the Trustee any corporate guaranty, payment obligation,
irrevocable letter of credit, surety bond, insurance policy or similar
instrument or a reserve fund, or any combination of the foregoing, for the
purpose of protecting the Holders of the Class R Certificates against any or all
Realized Losses or other shortfalls. Any such instrument or fund shall be held
by the Trustee for the benefit of the Class R Certificateholders, but shall not
be and shall not be deemed to be under any circumstances included in REMIC I,
REMIC II, REMIC III or REMIC IV. To the extent that any such instrument or fund
constitutes a reserve fund for federal income tax purposes, (i) any reserve fund
so established shall be an outside reserve fund and not an asset of the REMIC,
(ii) any such reserve fund shall be owned by the Depositor, and (iii) amounts
transferred by the REMIC to any such reserve fund shall be treated as amounts
distributed by the REMIC to the Depositor or any successor, all within the
meaning of Treasury regulations Section 1.860G-2(h). In connection with the
provision of any such instrument or fund, this Agreement and any provision
hereof may be modified, added to, deleted or otherwise amended in any manner
that is related or incidental to such instrument or fund or the establishment or
administration thereof, such amendment to be made by written instrument executed
or consented to by the Depositor and such related insurer but without the
consent of any Certificateholder and without the consent of the Master Servicer
or the Trustee being required unless any such amendment would impose any
additional obligation on, or otherwise adversely affect the interests of the
Certificateholders, the Master Servicer or the Trustee, as applicable; provided
that the Depositor obtains an Opinion of Counsel (which need not be an opinion
of Independent counsel) to the effect that any such amendment will not cause (a)
any federal tax to be imposed on the Trust Fund, including without limitation,
any federal tax imposed on "prohibited transactions" under Section 860F(a)(1) of
the Code or on "contributions after the startup date" under Section 860G(d)(1)
of the Code and (b) any of REMIC I, REMIC II, REMIC III or REMIC IV to fail to
qualify as a REMIC at any time that any Certificate is outstanding. In the event
that the Depositor elects to provide such coverage in the form of a limited
guaranty provided by General Motors Acceptance Corporation, the Depositor may
elect that the text of such amendment to this Agreement shall be substantially
in the form attached hereto as Exhibit K (in which case Residential Funding's
Subordinate Certificate Loss Obligation as described in such exhibit shall be
established by Residential Funding's consent to such amendment) and that the
limited guaranty shall be executed in the form attached hereto as Exhibit L,
with such changes as the Depositor shall deem to be appropriate; it being
understood that the Trustee has reviewed and approved the content of such forms
and that the Trustee's consent or approval to the use thereof is not required.
Section 11.02 Recordation of Agreement; Counterparts.
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(a) To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer and at its expense on direction by the Trustee (pursuant to the
request of the Holders of Certificates entitled to at least 25% of the Voting
Rights), but only upon direction accompanied by
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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.
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(a) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of any
of the parties hereto.
(b) No Certificateholder shall have any right to vote (except as
expressly provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as hereinbefore provided, and unless also the Holders
of Certificates of any Class evidencing in the aggregate not less than 25% of
the related Percentage Interests of such Class, shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
of any Class shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates of such Class or any other Class, or
to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the common benefit of Certificateholders of such Class
or all Classes, as the case may be. For the protection and enforcement of the
provisions of this Section 11.03, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
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Section 11.04 Governing Law.
This agreement and the Certificates shall be governed by and construed
in accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 11.05 Notices.
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All demands and notices hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid (except for notices to the Trustee which shall
be deemed to have been duly given only when received), to (a) in the case of the
Depositor, 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: President (RAMP), or such other address as may hereafter be
furnished to the Master Servicer and the Trustee in writing by the Depositor;
(b) in the case of the Master Servicer, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000-0000, Attention: Bond Administration or such other address as
may be hereafter furnished to the Depositor and the Trustee by the Master
Servicer in writing; (c) in the case of the Trustee, 0000 Xxxx Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Residential Asset Mortgage Products Inc.
Series 2003-RM2 or such other address as may hereafter be furnished to the
Depositor and the Master Servicer in writing by the Trustee; (d) in the case of
Fitch, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 0000, Attention: Residential
Mortgage Backed Group, or such other address as may be hereafter furnished to
the Depositor, the Trustee and the Master Servicer in writing by Fitch; and (e)
in the case of Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Mortgage Surveillance, or such other address as may be hereafter
furnished to the Depositor, the Trustee and the Master Servicer in writing by
Standard & Poor's. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
Section 11.06 Notices to Rating Agencies.
The Depositor, the Master Servicer or the Trustee, as applicable, shall
notify each Rating Agency and each Subservicer at such time as it is otherwise
required pursuant to this Agreement to give notice of the occurrence of, any of
the events described in clause (i), (ii), (iii), (iv), (vii), (viii), (ix) or
(x) below or 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 (x) and (vi) below:
(i) a material change or amendment to this Agreement,
(ii) the occurrence of an Event of Default,
(iii) the termination or appointment of a successor Master
Servicer or Trustee or
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a change in the majority ownership of the Trustee,
(iv) 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,
(v) the statement required to be delivered to the Holders of each
Class of Certificates pursuant to Section 4.03,
(vi) the statements required to be delivered pursuant to Sections
3.18 and 3.19,
(vii) a change in the location of the Custodial Account or the
Certificate Account,
(viii) 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,
(ix) the occurrence of the Final Distribution Date, and
(x) 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 (iv), (vii) or (viii) above, the Master Servicer shall
provide prompt written notice to each Rating Agency and the Subservicer of any
such event known to the Master Servicer.
Section 11.07 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.08 Supplemental Provisions for Resecuritization.
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(a) This Agreement may be supplemented by means of the addition of a
separate Article hereto (a "Supplemental Article") for the purpose of
resecuritizing any of the Certificates issued hereunder, under the following
circumstances. With respect to any Class or Classes of Certificates issued
hereunder, or any portion of any such Class, as to which the Depositor or any of
its Affiliates (or any designee thereof) is the registered Holder (the
"Resecuritized Certificates"), the Depositor may deposit such Resecuritized
Certificates into a new REMIC, grantor trust, FASIT or custodial arrangement (a
"Restructuring Vehicle") to be held by the Trustee pursuant to a Supplemental
Article. The instrument adopting such Supplemental Article shall be executed by
the Depositor, the
156
Master Servicer and the Trustee; provided, that neither the Master Servicer nor
the Trustee shall withhold their consent thereto if their respective interests
would not be materially adversely affected thereby. To the extent that the terms
of the Supplemental Article do not in any way affect any provisions of this
Agreement as to any of the Certificates initially issued hereunder, the adoption
of the Supplemental Article shall not constitute an "amendment" of this
Agreement.
Each Supplemental Article shall set forth all necessary provisions
relating to the holding of the Resecuritized Certificates by the Trustee, the
establishment of the Restructuring Vehicle, the issuing of various classes of
new certificates by the Restructuring Vehicle and the distributions to be made
thereon, and any other provisions necessary to the purposes thereof. In
connection with each Supplemental Article, the Depositor shall deliver to the
Trustee an Opinion of Counsel to the effect that (i) the Restructuring Vehicle
will qualify as a REMIC, grantor trust, FASIT or other entity not subject to
taxation for federal income tax purposes and (ii) the adoption of the
Supplemental Article will not endanger the status of any of REMIC I, REMIC II,
REMIC III or REMIC IV as a REMIC or result in the imposition of a tax upon the
Trust Fund (including but not limited to the tax on prohibited transaction as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC as set forth in Section 860G(d) of the Code.
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IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized and their respective seals, duly attested, to be
hereunto affixed, all as of the date and year first above written.
[Seal] RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
Attest: By:
---------------------------------------
Name: Xxxxx Xxxxxxxxxx Name: Xxxxxxx Xxxx
Title: Vice President Title: Vice President
[Seal] RESIDENTIAL FUNDING CORPORATION
Attest: By:
---------------------------------------
Name: Name: Xxxxx Xxxxxxxxxx
Title: Title: Managing Director
[Seal] DEUTSCHE BANK TRUST COMPANY
AMERICAS
as Trustee
Attest: By:
---------------------------------------
Name: Name:
Title: Title:
[Seal]
Attest: By:
--------------------------------------- ----------------------------
Name: Name:
Title: Title:
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 29th day of May, 2003, before me, a notary public in and for said
State, personally appeared Xxxxxxx Xxxx, known to me to be a Vice President of
Residential Asset Mortgage Products, Inc., one of the corporations that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 29th day of May, 2003, before me, a notary public in and for said
State, personally appeared Xxxxx Xxxxxxxxxx, known to me to be a Managing
Director of Residential Funding Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 29th day of May, 2003, before me, a notary public in and for said
State, personally appeared __________________, known to me to be a/an
_________________ of Deutsche Bank Trust Company Americas, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said banking entity and acknowledged to me that such
banking entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 29th day of May, 2003, before me, a notary public in and for said
State, personally appeared __________________, known to me to be a/an
_________________ of Deutsche Bank Trust Company Americas, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said banking entity and acknowledged to me that such
banking entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
