RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
Dated as of August 1, 2006,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of March 1, 2006
Mortgage Asset-Backed Pass-Through Certificates
SERIES 2006-QA7
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................................8
Section 1.01. Definitions.......................................................8
Section 1.02. Determination of LIBOR...........................................63
Section 1.03. Use of Words and Phrases.........................................64
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..........64
Section 2.01. Conveyance of Mortgage Loans.....................................64
Section 2.02. Acceptance by Trustee............................................70
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Company.........................................71
Section 2.04. Representations and Warranties of Sellers........................76
Section 2.05. Execution and Authentication of Certificates/Issuance
of Certificates Evidencing Interests in REMICs...................76
Section 2.06. Conveyance of Uncertificated REMIC Regular Interests;
Acceptance by the Trustee........................................77
Section 2.07. Issuance of Certificates Evidencing Interest in REMIC IV
and REMIC V......................................................77
Section 2.08. Purposes and Powers of the Trust.................................77
Section 2.09. Agreement Regarding Ability to Disclose..........................77
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...........................78
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...........................................83
Section 4.01. Certificate Account..............................................83
Section 4.02. Distributions....................................................83
Section 4.03. Statements to Certificateholders; Statements to the
Rating Agencies; Exchange Act Reporting..........................89
Section 4.04. Distribution of Reports to the Trustee and the Company;
Advances by the Master Servicer..................................89
Section 4.05. Allocation of Realized Losses....................................91
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property....93
Section 4.07. Optional Purchase of Defaulted Mortgage Loans....................93
Section 4.08. Surety Bond......................................................93
Section 4.09. Swap Agreement...................................................93
ARTICLE V THE CERTIFICATES.........................................................95
-i-
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 5.01. The Certificates.................................................95
Section 5.02. Registration of Transfer and Exchange of Certificates............95
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates...............100
Section 5.04. Persons Deemed Owners...........................................100
Section 5.05. Appointment of Paying Agent.....................................100
Section 5.06. U.S.A. Patriot Act Compliance...................................101
ARTICLE VI THE COMPANY AND THE MASTER SERVICER.....................................102
Section 6.01. Respective Liabilities of the Company and Master Servicer.......102
Section 6.02. Merger or Consolidation of the Company or Master Servicer;
Assignment of Rights and Delegation of Duties by the Master
Servicer........................................................102
Section 6.03. Limitation on Liability of the Company, Master Servicer
and Others......................................................102
Section 6.04. Company and Master Servicer Not to Resign.......................102
ARTICLE VII DEFAULT.................................................................103
ARTICLE VIII CONCERNING THE TRUSTEE AND SUPPLEMENTAL INTEREST TRUST TRUSTEE..........104
ARTICLE IX TERMINATION.............................................................113
Section 9.01. Optional Purchase by the Master Servicer of All Certificates;
Termination Upon Purchase by the Master Servicer or
Liquidation of All Mortgage LoansLiquidation....................113
ARTICLE X REMIC PROVISIONS........................................................118
Section 10.01. REMIC Administration............................................118
Section 10.02. Master Servicer; REMIC Administrator and Trustee
Indemnification.................................................118
Section 10.03. Designation of REMICs...........................................118
Section 10.04. Distributions on the Uncertificated REMIC Regular Interests.....119
Section 10.05. Compliance with Withholding Requirements........................119
ARTICLE XI MISCELLANEOUS PROVISIONS................................................120
Section 11.01. Amendment.......................................................120
Section 11.02. Recordation of Agreement; Counterparts..........................120
Section 11.03. Limitation on Rights of Certificateholders......................120
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 11.04. Governing Law...................................................120
Section 11.05. Notices.........................................................120
Section 11.06. Required Notices to Rating Agency and Subservicer...............121
Section 11.07. Severability of Provisions......................................121
Section 11.08. Supplemental Provisions for Resecuritization....................121
Section 11.09. Allocation of Voting Rights.....................................121
Section 11.10. No Petition.....................................................122
ARTICLE XII COMPLIANCE WITH REGULATION AB...........................................123
-iii-
EXHIBITS
Exhibit One: Mortgage Loan Schedule
Exhibit Two: Information to be Included in Monthly Distribution
Date Statement
Exhibit Three: Standard Terms of Pooling and Servicing Agreement,
dated as of March 1, 2006
Exhibit Four: Swap Agreement
Exhibit Five: SB-AM Swap Agreement
Exhibit Six Form of Certificate to be Given by Certificate
Owner
Exhibit Seven Form of Certificate to be Given by Euroclear or
Cedel
Exhibit Eight Form of Certificate to be Given by Transferee of
Beneficial Interest in a Regulation S Book-Entry
Certificate
Exhibit Nine Form of Transfer Certificate for Exchange or
Transfer from 144A Book-Entry Certificate to
Regulation S Book-Entry Certificate
Exhibit Ten Form of Initial Purchaser Exchange Instructions
Exhibit Eleven Form of Class SB-1 Certificate
-iv-
This is a Series Supplement, dated as of August 1, 2006 (the "Series
Supplement"), to the Standard Terms of Pooling and Servicing Agreement, dated as
of March 1, 2006 and attached as Exhibit Four hereto (the "Standard Terms" and,
together with this Series Supplement, the "Pooling and Servicing Agreement" or
"Agreement"), among RESIDENTIAL ACCREDIT LOANS, INC., as the company (together
with its permitted successors and assigns, the "Company"), RESIDENTIAL FUNDING
CORPORATION, as master servicer (together with its permitted successors and
assigns, the "Master Servicer"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, as
Trustee and supplemental interest trust trustee (together with its permitted
successors and assigns, the "Trustee" and the "Supplemental Interest Trust
Trustee"), respectively.
PRELIMINARY STATEMENT:
The Company intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
multiple classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans.
The terms and provisions of the Standard Terms are hereby incorporated
by reference herein as though set forth in full herein. If any term or provision
contained herein shall conflict with or be inconsistent with any provision
contained in the Standard Terms, the terms and provisions of this Series
Supplement shall govern. All capitalized terms not otherwise defined herein
shall have the meanings set forth in the Standard Terms. The Pooling and
Servicing Agreement shall be dated as of the date of this Series Supplement.
REMIC I
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Mortgage Loans and certain
other related assets (exclusive of the Supplemental Interest Trust Account, the
Swap Agreement and the SB-AM Swap Agreement) subject to this Agreement as a real
estate mortgage investment conduit (a "REMIC") for federal income tax purposes,
and such segregated pool of assets will be designated as "REMIC I." The Class
R-I Certificates will represent the sole Class of "residual interests" in REMIC
I for purposes of the REMIC Provisions (as defined herein) under federal income
tax law. The Class R-I Certificates will not bear interest or have a Certificate
Principal Balance. The following table irrevocably sets forth the designation,
remittance rate (the "Uncertificated REMIC I Pass-Through Rate") and initial
Uncertificated Principal Balance for each of the "regular interests" in REMIC I
(the "REMIC I Regular Interests"). The "latest possible maturity date"
(determined solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for each REMIC I Regular Interest shall be the Maturity
Date. None of the REMIC I Regular Interests will be certificated.
INITIAL
UNCERTIFICATED UNCERTIFICATED
REMIC I REMIC I
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
I-1-A Variable(1) $8,491,680.910
I-2-A Variable(1) $8,242,402.445
I-3-A Variable(1) $8,000,438.260
I-4-A Variable(1) $7,765,573.830
I-5-A Variable(1) $7,537,600.910
1
INITIAL
UNCERTIFICATED UNCERTIFICATED
REMIC I REMIC I
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
I-6-A Variable(1) $7,316,317.365
I-7-A Variable(1) $7,101,526.980
I-8-A Variable(1) $6,893,039.305
I-9-A Variable(1) $6,690,669.455
I-10-A Variable(1) $6,494,237.990
I-11-A Variable(1) $6,303,570.725
I-12-A Variable(1) $6,118,498.570
I-13-A Variable(1) $5,938,857.410
I-14-A Variable(1) $5,764,487.925
I-15-A Variable(1) $5,595,235.480
I-16-A Variable(1) $5,430,949.980
I-17-A Variable(1) $5,271,485.715
I-18-A Variable(1) $5,116,701.250
I-19-A Variable(1) $4,966,459.315
I-20-A Variable(1) $4,820,626.650
I-21-A Variable(1) $4,679,073.905
I-22-A Variable(1) $4,541,675.515
I-23-A Variable(1) $4,408,309.635
I-24-A Variable(1) $4,278,857.930
I-25-A Variable(1) $4,153,205.595
I-26-A Variable(1) $4,031,241.165
I-27-A Variable(1) $3,912,856.435
I-28-A Variable(1) $3,797,946.395
I-29-A Variable(1) $3,686,409.105
I-30-A Variable(1) $3,578,145.615
I-31-A Variable(1) $3,473,059.865
I-32-A Variable(1) $3,371,058.635
I-33-A Variable(1) $3,272,051.420
I-34-A Variable(1) $3,175,944.560
I-35-A Variable(1) $3,083,276.040
I-36-A Variable(1) $2,992,814.185
I-37-A Variable(1) $2,904,895.470
I-38-A Variable(1) $2,819,557.885
I-39-A Variable(1) $2,736,725.675
I-40-A Variable(1) $2,656,325.345
I-41-A Variable(1) $2,578,285.515
I-42-A Variable(1) $2,502,536.935
I-43-A Variable(1) $2,429,012.350
I-44-A Variable(1) $2,357,646.510
I-45-A Variable(1) $2,288,376.055
I-46-A Variable(1) $2,221,139.505
I-47-A Variable(1) $2,155,877.165
I-48-A Variable(1) $2,092,531.105
I-49-A Variable(1) $2,031,045.080
I-50-A Variable(1) $1,971,364.505
I-51-A Variable(1) $1,913,436.400
I-52-A Variable(1) $1,857,209.325
I-53-A Variable(1) $1,802,633.365
I-54-A Variable(1) $1,749,660.055
I-55-A Variable(1) $1,698,242.360
I-56-A Variable(1) $1,648,383.270
I-57-A Variable(1) $1,599,938.625
I-58-A Variable(1) $1,552,916.705
2
INITIAL
UNCERTIFICATED UNCERTIFICATED
REMIC I REMIC I
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
I-59-A Variable(1) $1,507,230.900
I-60-A Variable(1) $49,728,743.425
I-1-B Variable(1) $8,491,680.910
I-2-B Variable(1) $8,242,402.445
I-3-B Variable(1) $8,000,438.260
I-4-B Variable(1) $7,765,573.830
I-5-B Variable(1) $7,537,600.910
I-6-B Variable(1) $7,316,317.365
I-7-B Variable(1) $7,101,526.980
I-8-B Variable(1) $6,893,039.305
I-9-B Variable(1) $6,690,669.455
I-10-B Variable(1) $6,494,237.990
I-11-B Variable(1) $6,303,570.725
I-12-B Variable(1) $6,118,498.570
I-13-B Variable(1) $5,938,857.410
I-14-B Variable(1) $5,764,487.925
I-15-B Variable(1) $5,595,235.480
I-16-B Variable(1) $5,430,949.980
I-17-B Variable(1) $5,271,485.715
I-18-B Variable(1) $5,116,701.250
I-19-B Variable(1) $4,966,459.315
I-20-B Variable(1) $4,820,626.650
I-21-B Variable(1) $4,679,073.905
I-22-B Variable(1) $4,541,675.515
I-23-B Variable(1) $4,408,309.635
I-24-B Variable(1) $4,278,857.930
I-25-B Variable(1) $4,153,205.595
I-26-B Variable(1) $4,031,241.165
I-27-B Variable(1) $3,912,856.435
I-28-B Variable(1) $3,797,946.395
I-29-B Variable(1) $3,686,409.105
I-30-B Variable(1) $3,578,145.615
I-31-B Variable(1) $3,473,059.865
I-32-B Variable(1) $3,371,058.635
I-33-B Variable(1) $3,272,051.420
I-34-B Variable(1) $3,175,944.560
I-35-B Variable(1) $3,083,276.040
I-36-B Variable(1) $2,992,814.185
I-37-B Variable(1) $2,904,895.470
I-38-B Variable(1) $2,819,557.885
I-39-B Variable(1) $2,736,725.675
I-40-B Variable(1) $2,656,325.345
I-41-B Variable(1) $2,578,285.515
I-42-B Variable(1) $2,502,536.935
I-43-B Variable(1) $2,429,012.350
I-44-B Variable(1) $2,357,646.510
I-45-B Variable(1) $2,288,376.055
I-46-B Variable(1) $2,221,139.505
I-47-B Variable(1) $2,155,877.165
I-48-B Variable(1) $2,092,531.105
I-49-B Variable(1) $2,031,045.080
I-50-B Variable(1) $1,971,364.505
I-51-B Variable(1) $1,913,436.400
3
INITIAL
UNCERTIFICATED UNCERTIFICATED
REMIC I REMIC I
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
I-52-B Variable(1) $1,857,209.325
I-53-B Variable(1) $1,802,633.365
I-54-B Variable(1) $1,749,660.055
I-55-B Variable(1) $1,698,242.360
I-56-B Variable(1) $1,648,383.270
I-57-B Variable(1) $1,599,938.625
I-58-B Variable(1) $1,552,916.705
I-59-B Variable(1) $1,507,230.900
I-60-B Variable(1) $49,728,743.425
A-I Variable(1) $14,041,082.10
I Variable(1) $23,827.52
II Variable(1) $35,402.51
(1) Calculated as provided in the definition of Uncertificated REMIC I
Pass-Through Rate.
REMIC II
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC I Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC II." The Class R-II Certificates will represent the
sole Class of "residual interests" in REMIC II for purposes of the REMIC
Provisions under federal income tax law. The Class R-II Certificates will not
bear interest or have a Certificate Principal Balance. The following table
irrevocably sets forth the designation, remittance rate (the "Uncertificated
REMIC II Pass-Through Rate") and initial Uncertificated Principal Balance for
each of the "regular interests" in REMIC II (the "REMIC II Regular Interests").
The "latest possible maturity date" (determined solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each REMIC II
Regular Interest shall be the Maturity Date. None of the REMIC II Regular
Interests will be certificated.
UNCERTIFICATED INITIAL UNCERTIFICATED
REMIC II REMIC II
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
Y-1 Variable(1) $119,134.79
Y-2 Variable(1) $177,012.55
Z-1 Variable(1) $238,156,074.11
Z-2 Variable(1) $353,848,090.68
LT-IO Variable(1) (2)
(1) Calculated as provided in the definition of Uncertificated REMIC II
Pass-Through Rate.
(2) REMIC II Regular Interest LT-IO will not have an Uncertificated Principal
Balance but will accrue interest on its uncertificated notional amount
calculated in accordance with the definition of "Uncertificated Notional Amount"
herein.
4
REMIC III
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the REMIC II Regular Interests
as a REMIC for federal income tax purposes, and such segregated pool of assets
will be designated as "REMIC III." 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 Class R-III Certificates will not
bear interest or have a Certificate Principal Balance. The following table
irrevocably sets forth the designation, remittance rate (the "Uncertificated
REMIC III Pass-Through Rate") and initial Uncertificated Principal Balance for
each of the "regular interests" in REMIC III (the "REMIC III Regular
Interests"). The "latest possible maturity date" (determined solely for purposes
of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each REMIC
III Regular Interest shall be the Maturity Date. None of the REMIC III Regular
Interests will be certificated.
UNCERTIFICATED REMIC INITIAL
III UNCERTIFICATED
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE
LT1 Variable(1) $238,117,211.29
LT2 Variable(1) $8,792.23
LT3 0.00% $15,035.29
LT4 Variable(1) $15,035.29
LT5 Variable(1) $353,790240.65
LT6 Variable(1) $12,954.99
LT7 0.00% $22,447.52
LT8 Variable(1) $22,447.52
LT-Y1 Variable(1) $119,134.79
LT-Y2 Variable(1) $177,012.55
LT-IO Variable(1) (2)
(1) Calculated as provided in the definition of Uncertificated REMIC III
Pass-Through Rate. (2) REMIC III Regular Interest LT-IO will not have an
Uncertificated Principal Balance but will accrue
interest on its uncertificated notional amount calculated as provided in the
definition of Uncertificated Notional Amount.
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 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 Class R-IV Certificates will
not bear interest or have a Certificate Principal Balance. The following table
irrevocably sets forth the designation, Pass-Through Rate, aggregate Initial
Certificate Principal Balance, certain features, Maturity Date, initial ratings
and minimum denominations for each Class of Certificates that evidence "regular
interests" in REMIC IV and REMIC IV Regular Interests SB-IO, SB-PO and IO (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 Maturity
Date. REMIC IV Regular Interests SB-IO, SB-PO and IO will not be certificated.
5
AGGREGATE
INITIAL
PASS- CERTIFICATE
THROUGH PRINCIPAL MATURITY XXXXX'X MINIMUM
DESIGNATION TYPE RATE BALANCE FEATURES DATE /S&P DENOMINATION
Class I-A-1 Regular(1) Adjustable $223,383,000.00 Senior/Adjustable Rate August 25, 2036 Aaa /AAA $100,000.00
Rate(2)(3)
Class II-A-1 Regular(1) Adjustable $298,708,000.00 Senior/Super Senior/ August 25, 2036 Aaa /AAA $100,000.00
Rate(2)(3) Adjustable Rate
Class II-A-2 Regular(1) Adjustable $33,190,000.00 Senior/Senior Support/ August 25, 2036 Aaa /AAA $100,000.00
Rate(2)(3) Adjustable Rate
Class M-1 Regular(1) Adjustable $9,476,000.00 Xxxxxxxxx/Xxxxxxxxxx Xxxxxx 00, 0000 Xx0 / AA+ $100,000.00
Rate(2)(3) Rate
Class M-2 Regular(1) Adjustable $3,849,000.00 Xxxxxxxxx/Xxxxxxxxxx Xxxxxx 00, 0000 Xx0 / XX $100,000.00
Rate(2)(3) Rate
Class M-3 Regular(1) Adjustable $2,665,000.00 Xxxxxxxxx/Xxxxxxxxxx Xxxxxx 00, 0000 Xx0 / XX- $100,000.00
Rate(2)(3) Rate
Class M-4 Regular(1) Adjustable $2,961,000.00 Mezzanine/Adjustable August 25, 2036 A1 / A+ $250,000.00
Rate(2)(3) Rate
Class M-5 Regular(1) Adjustable $2,665,000.00 Xxxxxxxxx/Xxxxxxxxxx Xxxxxx 00, 0000 X0 / X $250,000.00
Rate(2)(3) Rate
Class M-6 Regular(1) Adjustable $2,073,000.00 Xxxxxxxxx/Xxxxxxxxxx Xxxxxx 00, 0000 X0 / X- $250,000.00
Rate(2)(3) Rate
Class M-7 Regular(1) Adjustable $2,073,000.00 Xxxxxxxxx/Xxxxxxxxxx Xxxxxx 00, 0000 Xxx0 / BBB+ $250,000.00
Rate(2)(3) Rate
Class M-8 Regular(1) Adjustable $2,073,000.00 Xxxxxxxxx/Xxxxxxxxxx Xxxxxx 00, 0000 Xxx0 / BBB $250,000.00
Rate(2)(3) Rate
Class M-9 Regular(1) Adjustable $2,073,000.00 Xxxxxxxxx/Xxxxxxxxxx Xxxxxx 00, 0000 Xxx0 / BBB $250,000.00
Rate(2)(3) Rate
Class M-10 Regular(1) Adjustable $2,962,000.00 Xxxxxxxxx/Xxxxxxxxxx Xxxxxx 00, 0000 Xx0 / XXX- $250,000.00
Rate(2)(3) Rate
SB-IO Regular(4) (4) N/A Subordinate/Interest August 25, 2036 N/R N/A
Only
SB-PO Regular(5) N/A $4,149,312,13 Subordinate/Principal August 25, 2036 N/R N/A
Only
IO Regular(6) (7) (8) Interest Only August 25, 2036 N/R N/R
(1) This Class of Certificates represents ownership of a REMIC IV Regular
Interest together with certain rights to payments to be made from amounts
received under the Swap Agreement which will be deemed made for federal
income tax purposes outside of REMIC IV by the holders of the Class SB
Certificates as the owners of the Swap Agreement and (ii) the obligation to
pay the Class IO Distribution Amount. Any amount distributed on this Class
of Certificates on any Distribution Date in excess of the amount
distributable on the related REMIC IV Regular Interest on such Distribution
Date shall be treated for federal income tax purposes as having been paid
from the Supplemental Interest Trust Account and any amount distributable on
such REMIC IV Regular Interest on such Distribution Date in excess of the
amount distributable on such Class of Certificates on such Distribution Date
shall be treated as having been paid to the Supplemental Interest Trust
Account, all pursuant to and as further provided in Section 4.09 hereof.
(2) The Class A Certificates and Class M Certificates, will accrue interest at a
per annum rate equal to the lesser of (i) LIBOR plus the applicable Margin
and (ii) the related Net WAC Cap Rate (but, with respect to any class of
Class M Certificates, not more than 14.00% per annum).
(3) The Class A Certificates and Class M Certificates will also entitle their
holders to receive certain payments from the holders of the Class SB
Certificates from amounts to which the REMIC V Regular Interests are
entitled and from amounts received under the Swap Agreement, which will not
be a part of their ownership of the REMIC IV Regular Interests.
(4) REMIC IV Regular Interest SB-IO shall have no entitlement to principal, and
shall be entitled to distributions of interest subject to the terms and
conditions hereof, in an aggregate amount equal to the aggregate interest
distributable with respect to the Class SB Certificates pursuant to the
terms and conditions hereof.
(5) REMIC IV Regular Interest SB-PO shall have no entitlement to interest, and
shall be entitled to distributions of principal subject to the terms and
conditions hereof, in aggregate amount equal to the aggregate initial
Certificate Principal Balance of the Class SB Certificates pursuant to the
terms and conditions hereof.
(6) For federal income tax purposes, REMIC IV Regular Interest IO will not have
a Pass Through Rate, but will be entitled to 100% of the amounts distributed
on REMIC III Regular Interest LT-IO.
(7) For federal income tax purposes, REMIC IV Regular Interest IO will not have
an Uncertificated Principal Balance, but will have a notional amount equal
to the Uncertificated Notional Amount of REMIC III Regular Interest LT-IO.
6
REMIC V
As provided herein, the REMIC Administrator will make an election
to treat the segregated pool of assets consisting of REMIC IV Regular Interests
SB-IO, SB-PO and IO as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as REMIC V. The Class R-X
Certificates will represent the sole Class of "residual interests" in REMIC V
for purposes of the REMIC Provisions under federal income tax law. The Class R-X
Certificates will not bear interest or have a Certificate Principal Balance. The
following table irrevocably sets forth the designation, Pass-Through Rate,
aggregate Initial Certificate Principal Balance, certain features and Maturity
Date for the Class SB-1 Certificates and the Class SB-2 Certificates which in
the aggregate represent the two "regular interests" in REMIC V designated REMIC
V Regular Interest SB and REMIC V Regular Interest IO (the "REMIC V 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 V
Regular Interests shall be the Maturity Date.
AGGREGATE
INITIAL
PASS- CERTIFICATE
THROUGH PRINCIPAL MATURITY
DESIGNATION TYPE RATE BALANCE FEATURES DATE
Class SB-1(1) Regular(1) (1) $1,037,328.03 Subordinate August 25,
2036
Class SB-2(1) Regular(1) (1) $3,111,984.10 Subordinate August 25,
2036
(1) The Class SB-1 Certificates and SB-2 Certificates will accrue interest as
described in the definition of Accrued Certificate Interest. The Class SB-1
Certificates and SB-2 Certificates will not accrue interest on their
Certificate Principal Balances.
REMIC V Regular Interest IO will be held as an asset of the
Supplemental Interest Trust Account established by the Trustee and will be
treated for federal income tax purposes as owned by the holders of the Class SB
Certificates.
REMIC V Regular Interest SB will not have a Pass-Through Rate,
but will be entitled to 100% of all amounts distributed or deemed distributed on
REMIC IV Regular Interests SB-IO and SB-PO. REMIC V Regular Interest IO will not
have a Pass-Through Rate, but will be entitled to 100% of all amounts
distributed or deemed distributed on REMIC IV Regular Interest IO. The rights of
the holders of the Class SB Certificates to payments under the Swap Agreement
and SB-AM Swap Agreement shall be outside and apart from their rights with
respect to the REMIC V Regular Interests.
The Mortgage Loans have an aggregate Cut-off Date Principal Balance
equal to $592,300,312.13. The Mortgage Loans are hybrid adjustable-rate mortgage
loans having terms to maturity at origination or modification of generally not
more than 30 years.
In consideration of the mutual agreements herein contained, the Company,
the Master Servicer and the Trustee agree as follows:
7
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
Accrued Certificate Interest: With respect to each Distribution Date and
each Class of Class A Certificates and Class M Certificates, interest accrued
during the related Interest Accrual Period on the Certificate Principal Balance
thereof immediately prior to such Distribution Date at the Pass Through Rate for
that Distribution Date.
The amount of Accrued Certificate Interest on each Class of Class A
Certificates and Class M Certificates shall be reduced by the amount of
Prepayment Interest Shortfalls on the related Mortgage Loans during the prior
calendar month to the extent not covered by Compensating Interest pursuant to
Section 3.16, and by Relief Act Shortfalls on the related Mortgage Loans during
the related Due Period. The portion of any Prepayment Interest Shortfalls or
Relief Act Shortfalls allocated to the Class A Certificates will be equal to the
related Senior Percentage of all such reductions with respect to the related
Mortgage Loans, such reductions to be allocated among the related Class A
Certificates in proportion to the amount of Accrued Certificate Interest payable
on such Certificates on such Distribution Date absent such reductions, with the
remainder of such reductions allocated among the Holders of all Classes of Class
M Certificates, pro rata, on the basis of Accrued Certificate Interest payable
on such Distribution Date absent such reductions.
Accrued Certificate Interest with respect to any Class of Class M
Certificates for any Distribution Date shall further be reduced by the interest
portion of Realized Losses allocated to any Class of Class M Certificates
pursuant to Section 4.05.
Accrued Certificate Interest with respect to the Class A Certificates
and Class M Certificates shall accrue on the basis of a 360-day year and the
actual number of days in the related Interest Accrual Period.
With respect to each Distribution Date and each class of the Class SB
Certificates, interest accrued during the preceding Interest Accrual Period at
the related Pass-Through Rate on the Notional Amount as specified in the
definition of Pass-Through Rate, immediately prior to such Distribution Date,
reduced by any interest shortfalls with respect to the Mortgage Loans, including
Prepayment Interest Shortfalls to the extent not covered by Compensating
Interest pursuant to Section 3.16 or by Excess Cash Flow pursuant to Section
4.02(c)(iii) and (iv). Accrued Certificate Interest on each class of the Class
SB Certificates shall accrue on the basis of a 360-day year and the actual
number of days in the related Interest Accrual Period.
Adjustment Date: With respect to each Mortgage Loan, each date set forth
in the related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.
8
Affected Party: As defined in the Swap Agreement.
Available Distribution Amount: As to any Distribution Date, an amount
equal to (a) the sum of (i) the amount relating to the Mortgage Loans on deposit
in the Custodial Account as of the close of business on the immediately
preceding Determination Date, including any Subsequent Recoveries, and amounts
deposited in the Custodial Account in connection with the substitution of
Qualified Substitute Mortgage Loans, (ii) the amount of any Advance made on the
immediately preceding Certificate Account Deposit Date, (iii) any amount
deposited in the Certificate Account on the related Certificate Account Deposit
Date pursuant to the second paragraph of Section 3.12(a), (iv) any amount
deposited in the Certificate Account pursuant to Section 4.07 or Section 9.01,
(v) any amount that the Master Servicer is not permitted to withdraw from the
Custodial Account or the Certificate Account pursuant to Section 3.16(e), (vi)
any amount received by the Trustee pursuant to the Surety Bond in respect of
such Distribution Date and (vii) the proceeds of any Pledged Assets received by
the Master Servicer, reduced by (b) the sum as of the close of business on the
immediately preceding Determination Date of (v) any payments or collections
consisting of Prepayment Charges on the Mortgage Loans that were received during
the related Prepayment Period; (w) aggregate Foreclosure Profits, (x) the Amount
Held for Future Distribution, (y) amounts permitted to be withdrawn by the
Master Servicer from the Custodial Account in respect of the Mortgage Loans
pursuant to clauses (ii)-(x), inclusive, of Section 3.10(a), and (z) any Net
Swap Payments required to be made to the Swap Counterparty and Swap Termination
Payments not due to a Swap Counterparty Trigger Event for such Distribution
Date.
Basis Risk Shortfalls: The Group I Basis Risk Shortfalls, Group II Basis
Risk Shortfalls and Class M Basis Risk Shortfalls, as applicable.
Book-Entry Certificate: The Class A, Class M and Class SB-1
Certificates.
Certificate: Any Class A, Class M, Class SB or Class R Certificate.
Certificate Account: The separate account or accounts created and
maintained pursuant to Section 4.01 of the Standard Terms, which shall be
entitled "DEUTSCHE BANK TRUST COMPANY AMERICAS, as trustee, in trust for the
registered holders of Residential Accredit Loans, Inc., Mortgage Asset-Backed
Pass-Through Certificates, Series 2006-QA7" and which must be an Eligible
Account.
Certificate Principal Balance: With respect to any Class A Certificate
or Class M Certificate, on any date of determination, an amount equal to (i) the
Initial Certificate Principal Balance of such Certificate as specified on the
face thereof minus (ii) the sum of (x) the aggregate of all amounts previously
distributed with respect to such Certificate (or any predecessor Certificate)
and applied to reduce the Certificate Principal Balance thereof pursuant to
Section 4.02(c) and (y) in the case of any Class of Class M Certificates, the
aggregate of all reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses which were previously allocated to
such Certificate (or any predecessor Certificate) pursuant to Section 4.05;
provided, that with respect to any Distribution Date, the Certificate Principal
Balances of (i) the Class I-A or Class M Certificates will be increased, in each
case to the extent of Realized Losses previously allocated thereto and remaining
9
unreimbursed, by the Subsequent Recovery Allocation Amount for Loan Group I in
the following order of priority: to the Class I-A Certificates Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9
and Class M-10 Certificates, in that order and (ii) the Class II-A Certificates
or Class M Certificates will be increased, in each case to the extent of
Realized Losses previously allocated thereto and remaining unreimbursed, by the
Subsequent Recovery Allocation Amount for Loan Group II in the following order
of priority: first to the Class II-A Certificates, pro rata, and then to the
Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9 and Class M-10 Certificates, in that order, but only to the
extent of Subsequent Recoveries received during the preceding calendar month.
The Class R Certificates will not have a Certificate Principal Balance.
Certificate Policy: None.
Class A Interest Distribution Priority: With respect to each Class of
Class A Certificates and any Distribution Date, the amount available for payment
of Accrued Certificate Interest thereon for that Distribution Date plus Accrued
Certificate Interest thereon remaining unpaid from any prior Distribution Date,
in the amounts and priority as follows: first, concurrently, to the Class A-I
Certificates, from the Class A-I Interest Remittance Amount and to the Class
A-II Certificates, pro rata, from the Class A-II Interest Remittance Amount;
second, to the Class A-I Certificates, from the remaining Class A-II Interest
Remittance Amount or to the Class A-II Certificates, pro rata, from the
remaining Class A-I Interest Remittance Amount, as needed after taking into
account any distributions in respect of interest on the Class A Certificates
made in first above; third, concurrently, from the Principal Remittance Amount
related to Loan Group I to the Class A-I Certificates, and from the Principal
Remittance Amount related to Loan Group II to the Class A-II Certificates, pro
rata, after taking into account any distributions in respect of interest on the
Class A Certificates made in first and second above; and fourth, from the
remaining Principal Remittance Amount related to Loan Group II to the Class A-I
Certificates, or from the remaining Principal Remittance Amount related to Loan
Group I to the Class A-II Certificates, pro rata, as needed after taking into
account any distributions in respect of interest on the Class A Certificates
made in first, second and third above.
Class A Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the Principal
Distribution Amount for that Distribution Date or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution Date, the lesser
of:
(i) the Principal Distribution Amount for that Distribution Date; and
(ii) the excess, if any, of (A) the aggregate Certificate Principal Balance
of the Class A Certificates immediately prior to that Distribution Date over
(B) the lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal Balance
of the Mortgage Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization Floor.
10
Class I-A-1 Certificate: The Class I-A-1 Certificates, executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed to the Standard Terms as Exhibit A, senior to the Class M Certificates,
Class SB Certificates and Class R Certificates with respect to distributions and
the allocation of Realized Losses in respect of Group I Loans as set forth in
Section 4.05, and evidencing (i) an interest designated as a "regular interest"
in REMIC IV for purposes of the REMIC Provisions, (ii) the right to receive
payments under the Swap Agreement and SB-AM Swap Agreement, and (iii) the right
to receive Basis Risk Shortfalls.
Class I-A-1 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
0.19% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.38% per
annum.
Class I-A Interest Remittance Amount: With respect to any Distribution
Date, the portion of the Available Distribution Amount for that Distribution
Date attributable to interest received or advanced with respect to the Group I
Loans, reduced by the amount of any Net Swap Payments or Swap Termination
Payment not due to a Swap Counterparty Trigger Event paid from the interest
payments received or advanced on the Group I Loans.
Class II-A Certificates: Any one of the Class II-A-1 Certificates or
Class II-A-2 Certificates, executed by the Trustee and authenticated by the
Certificate Registrar substantially in the form annexed to the Standard Terms as
Exhibit A, senior to the Class M Certificates, Class SB Certificates and Class R
Certificates with respect to distributions and the allocation of Realized Losses
in respect of Group II Loans as set forth in Section 4.05, and evidencing (i) an
interest designated as a "regular interest" in REMIC IV for purposes of the
REMIC Provisions, (ii) the right to receive payments under the Swap Agreement
and SB-AM Swap Agreement, and (iii) the right to receive Basis Risk Shortfalls.
Class II-A-1 Certificate: The Class II-A-1 Certificates, executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed to the Standard Terms as Exhibit A.
Class II-A-1 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
0.185% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.370% per
annum.
Class II-A-2 Certificate: The Class II-A-2 Certificates, executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed to the Standard Terms as Exhibit A.
Class II-A-2 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
0.25% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.50% per
annum.
Class II-A Interest Remittance Amount: With respect to any Distribution
Date, the portion of the Available Distribution Amount for that Distribution
Date attributable to interest received or advanced with respect to the Group II
Loans, reduced by the amount of any Net Swap Payments or Swap Termination
Payment not due to a Swap Counterparty Trigger Event paid from the interest
payments received or advanced on the Group II Loans.
11
Class A-P Certificates: None.
Class B Certificate: None.
Class M Basis Risk Shortfalls: With respect to each Class of Class M
Certificates and any Distribution Date, the sum of (a) with respect to any
Distribution Date on which the Net WAC Cap Rate for the Class M Certificates is
used to determine the Pass-Through Rate of such Class, an amount equal to the
excess of (x) Accrued Certificate Interest for such Class calculated at a per
annum rate equal to LIBOR plus the related Margin for such Distribution Date
(which shall not exceed 14.000% per annum), over (y) Accrued Certificate
Interest for such Class calculated using the Net WAC Cap Rate for the Class M
Certificates for such Distribution Date, (b) any shortfalls for such Class
calculated pursuant to clause (a) above remaining unpaid from prior Distribution
Dates, and (c) one month's interest on the amount in clause (b) (based on the
number of days in the preceding Interest Accrual Period) at a per annum rate
equal to LIBOR plus the related Margin for such Distribution Date.
Class M Certificates: Collectively, the Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates.
Class M-1 Certificate: Any one of the Class M-1 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed to the Standard Terms as Exhibit B, senior to the Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class
M-10, Class SB and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i)
an interest designated as a "regular interest" in REMIC IV for purposes of the
REMIC Provisions, (ii) the right to receive payments under the Swap Agreement
and SB-AM Swap Agreement and (iii) the right to receive Basis Risk Shortfalls.
Class M-1 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
0.29% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.435% per
annum.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount or (ii) on or after the Stepdown Date
if a Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount for that Distribution Date)
and (2) the Certificate Principal Balance of the Class M-1 Certificates
12
immediately prior to that Distribution Date over (B) the lesser of (x) the
product of (1) the applicable Subordination Percentage and (2) the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the excess, if any,
of the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-2 Certificate: Any one of the Class M-2 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed to the Standard Terms as Exhibit B, senior to the Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class SB
and Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC IV for purposes of the REMIC
Provisions, (ii) the right to receive payments under the Swap Agreement and
SB-AM Swap Agreement and (iii) the right to receive Basis Risk Shortfalls.
Class M-2 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
0.31% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.465% per
annum.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount and Class M-1 Principal Distribution
Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect
for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount and the
Class M-1 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates and Class M-1 Certificates (after
taking into account the payment of the Class A Principal Distribution Amount and
the Class M-1 Principal Distribution Amount for that Distribution Date) and (2)
the Certificate Principal Balance of the Class M-2 Certificates immediately
prior to that Distribution Date over (B) the lesser of (x) the product of (1)
the applicable Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be made on
that Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to
be made on that Distribution Date, over the Overcollateralization Floor.
Class M-3 Certificate: Any one of the Class M-3 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8, Class M-9, Class M-10, Class SB Certificates and Class R
Certificates with respect to distributions and the allocation of Realized Losses
13
as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC IV for purposes of the REMIC Provisions, (ii) the
right to receive payments under the Swap Agreement and SB-AM Swap Agreement and
(iii) the right to receive Basis Risk Shortfalls.
Class M-3 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
0.33% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.495% per
annum.
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution
Amount and Class M-2 Principal Distribution Amount or (ii) on or after the
Stepdown Date if a Trigger Event is not in effect for that Distribution Date,
the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount, Class M-1
Principal Distribution Amount and Class M-2 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A, Class M-1 and Class M-2 Certificates (after
taking into account the payment of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount and the Class M-2 Principal
Distribution Amount for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-3 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the applicable
Subordination Percentage and (2) the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization Floor.
Class M-4 Certificate: Any one of the Class M-4 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9, Class M-10, Class SB Certificates and Class R Certificates
with respect to distributions and the allocation of Realized Losses as set forth
in Section 4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC IV for purposes of the REMIC Provisions, (ii) the right to
receive payments under the Swap Agreement and SB-AM Swap Agreement and (iii) the
right to receive Basis Risk Shortfalls.
Class M-4 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
0.38% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.76% per
annum.
14
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution
Amount, Class M-2 Principal Distribution Amount and Class M-3 Principal
Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount, Class M-1
Principal Distribution Amount, Class M-2 Principal Distribution Amount and Class
M-3 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A, Class M-1, Class M-2 and Class M-3
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount and the Class M-3 Principal Distribution Amount
for that Distribution Date) and (2) the Certificate Principal Balance of the
Class M-4 Certificates immediately prior to that Distribution Date over (B) the
lesser of (x) the product of (1) the applicable Subordination Percentage and (2)
the aggregate Stated Principal Balance of the Mortgage Loans after giving effect
to distributions to be made on that Distribution Date and (y) the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-5 Certificate: Any one of the Class M-5 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-6, Class M-7, Class M-8,
Class M-9, Class M-10, Class SB Certificates and Class R Certificates with
respect to distributions and the allocation of Realized Losses as set forth in
Section 4.05, and evidencing (i) an interest designated as a "regular interest"
in REMIC IV for purposes of the REMIC Provisions, (ii) the right to receive
payments under the Swap Agreement and SB-AM Swap Agreement and (iii) the right
to receive Basis Risk Shortfalls.
Class M-5 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
0.40% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.600% per
annum.
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution
Amount, Class M-2 Principal Distribution Amount, Class M-3 Principal
Distribution Amount and Class M-4 Principal Distribution Amount or (ii) on or
after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
15
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount, Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
Class M-3 Principal Distribution Amount and Class M-4 Principal Distribution
Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A, Class M-1, Class M-2, Class M-3 and Class M-4
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount and
the Class M-4 Principal Distribution Amount for that Distribution Date) and (2)
the Certificate Principal Balance of the Class M-5 Certificates immediately
prior to that Distribution Date over (B) the lesser of (x) the product of (1)
the applicable Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be made on
that Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to
be made on that Distribution Date, over the Overcollateralization Floor.
Class M-6 Certificate: Any one of the Class M-6 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-7, Class M-8, Class M-9,
Class M-10, Class SB Certificates and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC
IV for purposes of the REMIC Provisions, (ii) the right to receive payments
under the Swap Agreement and SB-AM Swap Agreement and (iii) the right to receive
Basis Risk Shortfalls.
Class M-6 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
0.48% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.720% per
annum.
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution
Amount, Class M-2 Principal Distribution Amount, Class M-3 Principal
Distribution Amount, Class M-4 Principal Distribution Amount and Class M-5
Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount, Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
Class M-3 Principal Distribution Amount, Class M-4 Principal Distribution Amount
and Class M-5 Principal Distribution Amount; and
16
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4 and
Class M-5 Certificates (after taking into account the payment of the Class A
Principal Distribution Amount, the Class M-1 Principal Distribution Amount, the
Class M-2 Principal Distribution Amount, the Class M-3 Principal Distribution
Amount, the Class M-4 Principal Distribution Amount and the Class M-5 Principal
Distribution Amount for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-6 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the applicable
Subordination Percentage and (2) the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization Floor.
Class M-7 Certificate: Any one of the Class M-7 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-8, Class M-9, Class
M-10, Class SB Certificates and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC
IV for purposes of the REMIC Provisions, (ii) the right to receive payments
under the Swap Agreement and SB-AM Swap Agreement and (iii) the right to receive
Basis Risk Shortfalls.
Class M-7 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
0.95% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 1.425% per
annum.
Class M-7 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution
Amount, Class M-2 Principal Distribution Amount, Class M-3 Principal
Distribution Amount, Class M-4 Principal Distribution Amount, Class M-5
Principal Distribution Amount and Class M-6 Principal Distribution Amount or
(ii) on or after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount, Class M-1
Principal Distribution Amount, Class M-2 Principal Distribution Amount, Class
M-3 Principal Distribution Amount, Class M-4 Principal Distribution Amount,
Class M-5 Principal Distribution Amount and Class M-6 Principal Distribution
Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5 and Class M-6 Certificates (after taking into account the payment of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution
Amount, Class M-2 Principal Distribution Amount, Class M-3 Principal
Distribution Amount, Class M-4 Principal Distribution Amount, Class M-5
Principal Distribution Amount and Class M-6 Principal Distribution Amount for
that Distribution Date) and (2) the Certificate Principal Balance of the Class
17
M-7 Certificates immediately prior to that Distribution Date over (B) the lesser
of (x) the product of (1) the applicable Subordination Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the excess, if any,
of the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-8 Certificate: Any one of the Class M-8 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-9, Class M-10, Class SB
Certificates and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i)
an interest designated as a "regular interest" in REMIC IV for purposes of the
REMIC Provisions, (ii) the right to receive payments under the Swap Agreement
and SB-AM Swap Agreement and (iii) the right to receive Basis Risk Shortfalls.
Class M-8 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
1.050% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 1.575% per
annum.
Class M-8 Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, Class M-1 Principal Distribution
Amount, Class M-2 Principal Distribution Amount, Class M-3 Principal
Distribution Amount, Class M-4 Principal Distribution Amount, Class M-5
Principal Distribution Amount, Class M-6 Principal Distribution Amount and Class
M-7 Principal Distribution Amount or (ii) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount, Class M-1
Principal Distribution Amount, Class M-2 Principal Distribution Amount, Class
M-3 Principal Distribution Amount, Class M-4 Principal Distribution Amount,
Class M-5 Principal Distribution Amount, Class M-6 Principal Distribution Amount
and Class M-7 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A, Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6 and Class M-7 Certificates (after taking into account the
payment of the Class A Principal Distribution Amount, Class M-1 Principal
Distribution Amount, Class M-2 Principal Distribution Amount, Class M-3
Principal Distribution Amount, Class M-4 Principal Distribution Amount, Class
M-5 Principal Distribution Amount, Class M-6 Principal Distribution Amount and
Class M-7 Principal Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-8 Certificates immediately prior to
that Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be made on
that Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to
be made on that Distribution Date, over the Overcollateralization Floor.
18
Class M-9 Certificate: Any one of the Class M-9 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-10 Certificates, Class
SB Certificates and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i)
an interest designated as a "regular interest" in REMIC IV for purposes of the
REMIC Provisions, (ii) the right to receive payments under the Swap Agreement
and SB-AM Swap Agreement and (iii) the right to receive Basis Risk Shortfalls.
Class M-9 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
1.85% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 2.775% per
annum.
Class M-9 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, Class M-6 Principal Distribution Amount, the
Class M-7 Principal Distribution Amount and the Class M-8 Principal Distribution
Amount or (b) on or after the Stepdown Date if a Trigger Event is not in effect
for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount, the Class
M-1 Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
the Class M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount, the Class M-5 Principal Distribution Amount, Class M-6
Principal Distribution Amount, Class M-7 Principal Distribution Amount and the
Class M-8 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates and Class M-8
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, the Class M-3 Principal Distribution Amount, the
Class M-4 Principal Distribution Amount, the Class M-5 Principal Distribution
Amount, Class M-6 Principal Distribution Amount, Class M-7 Principal
Distribution Amount and the Class M-8 Principal Distribution Amount for that
Distribution Date) and (2) the Certificate Principal Balance of the Class M-9
Certificates immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the excess, if any,
of the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
19
Class M-10 Certificate: Any one of the Class M-10 Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit B, senior to the Class SB Certificates and
Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC IV for purposes of the REMIC
Provisions, (ii) the right to receive payments under the Swap Agreement and
SB-AM Swap Agreement and (iii) the right to receive Basis Risk Shortfalls.
Class M-10 Margin: With respect to any Distribution Date prior to the
second Distribution Date after the first possible Optional Termination Date,
2.250% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 3.375% per
annum.
Class M-10 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution Amount, the Class M-5
Principal Distribution Amount, Class M-6 Principal Distribution Amount, the
Class M-7 Principal Distribution Amount, the Class M-8 Principal Distribution
Amount and the Class M-9 Principal Distribution Amount or (b) on or after the
Stepdown Date if a Trigger Event is not in effect for that Distribution Date,
the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount, the Class
M-1 Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
the Class M-3 Principal Distribution Amount, the Class M-4 Principal
Distribution Amount, the Class M-5 Principal Distribution Amount, Class M-6
Principal Distribution Amount, Class M-7 Principal Distribution Amount, the
Class M-8 Principal Distribution Amount and the Class M-9 Principal Distribution
Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates and Class M-9 Certificates (after taking into account the payment
of the Class A Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution Amount, the Class M-3
Principal Distribution Amount, the Class M-4 Principal Distribution Amount, the
Class M-5 Principal Distribution Amount, Class M-6 Principal Distribution
Amount, Class M-7 Principal Distribution Amount, the Class M-8 Principal
Distribution Amount and the Class M-9 Principal Distribution Amount for that
Distribution Date) and (2) the Certificate Principal Balance of the Class M-10
Certificates immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the excess, if any,
of the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
20
Class R Certificate: Any one of the Class R-I, Class R-II or Class
R-III, Class R-IV and Class R-X Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed to the Standard Terms as Exhibit D and evidencing an interest
designated as a "residual interest" in REMIC I for purposes of the REMIC
Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed to the Standard Terms as Exhibit D and evidencing an interest
designated as a "residual interest" in REMIC II for purposes of the REMIC
Provisions.
Class 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 to the Standard Terms 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 to the Standard Terms as Exhibit D and evidencing an interest
designated as a "residual interest" in REMIC IV for purposes of the REMIC
Provisions.
Class R-X Certificate: Any one of the Class R-X Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed to the Standard Terms as Exhibit D and evidencing an interest
designated as a "residual interest" in REMIC V for purposes of the REMIC
Provisions.
Class SB Certificate: Any one of the Class SB-1 Certificates or Class
SB-2 Certificates executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit Eleven,
subordinate to the Class A Certificates and Class M Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing ownership of the REMIC V Regular Interests for purposes of
the REMIC Provisions, together with certain rights to payments under the Swap
Agreement for purposes of the REMIC Provisions and certain obligations with
respect to payments of Basis Risk Shortfalls.
Clearstream: Clearstream Banking, societe anonyme.
Closing Date: August 30, 2006.
Corporate Trust Office: The principal office of the Trustee at which at
any particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
instrument is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx
00000-0000, Attention: Residential Funding Corporation, RALI 2006-QA7.
21
Cut-off Date Principal Balance: $592,300,312.13
Custodial File: Any mortgage loan document in the Mortgage File that is
required to be delivered to the Trustee or the Custodian pursuant to Section
2.01(b) of this Agreement.
Cut-off Date: August 1, 2006.
Defaulting Party: As defined in the Swap Agreement.
Definitive Certificate: Any definitive, fully registered Certificate.
Determination Date: With respect to any Distribution Date, the second
Business Day prior to each Distribution Date.
Discount Net Mortgage Rate: Not applicable.
Due Period: With respect to each Distribution Date, the calendar month
in which such Distribution Date occurs.
Early Termination Date: Shall have the meaning set forth in the Swap
Agreement.
Euroclear: Euroclear Bank, S.A./NA, as operator of The Euroclear System.
Excess Bankruptcy Loss: Not applicable.
Excess Cash Flow: With respect to any Distribution Date, an amount equal
to the sum of (A) the excess of (i) the Available Distribution Amount for that
Distribution Date over (ii) the sum of (a) the Interest Distribution Amount for
that Distribution Date and (b) the lesser of (1) the aggregate Certificate
Principal Balance of Class A Certificates and Class M Certificates immediately
prior to such Distribution Date and (2) the Principal Remittance Amount for that
Distribution Date to the extent not applied to pay interest on the Class A
Certificates and Class M Certificates on such Distribution Date, (B) the
Overcollateralization Reduction Amount, if any, for that Distribution Date and
(C) any Net Swap Payments received by the Supplemental Interest Trust Trustee
under the Swap Agreement for that Distribution Date and deposited in the
Supplemental Interest Trust Account pursuant to Section 4.09(c).
Excess Fraud Loss: Not applicable.
Excess Overcollateralization Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralization Amount on such
Distribution Date over (b) the Required Overcollateralization Amount.
Excess Special Hazard Loss: Not applicable.
Excess Subordinate Principal Amount: Not applicable.
22
Expense Fee Rate: With respect to any Mortgage Loan as of any date of
determination, the sum of the Servicing Fee Rate and the rate per annum at which
the Subservicing Fee accrues.
Gross Margin: With respect to each Mortgage Loan, the fixed percentage
set forth in the related Mortgage Note and indicated on the Mortgage Loan
Schedule attached hereto as the "NOTE MARGIN," which percentage is added to the
related Index on each Adjustment Date to determine (subject to rounding in
accordance with the related Mortgage Note, the Periodic Cap, the Maximum
Mortgage Rate and the Minimum Mortgage Rate) the interest rate to be borne by
such Mortgage Loan until the next Adjustment Date.
Group I Basis Risk Shortfall--With respect to Class I-A-1 Certificates
and any Distribution Date, an amount equal to the excess of (i) Accrued
Certificate Interest for that class calculated at a rate equal to One-Month
LIBOR plus the related Margin, over (ii) Accrued Certificate Interest for that
class calculated using the Group I Net WAC Rate; plus any unpaid Group I Basis
Risk Shortfall from prior Distribution Dates, plus interest thereon to the
extent not previously paid from Excess Cash Flow calculated at a rate equal to
One-Month LIBOR plus the Class I-A-1 Margin.
Group I Certificates: The Class I-A-1 Certificates.
Group I Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group I Loans.
Group I Net WAC Rate: With respect to any Distribution Date, a per annum
rate equal to (i) the weighted average of the Net Mortgage Rates (or, if
applicable, the Modified Net Mortgage Rates) on the Group I Loans using the Net
Mortgage Rates in effect for the Monthly Payments due on such Mortgage Loans
during the related Due Period, weighted on the basis of the respective Stated
Principal Balances thereof for such Distribution Date, multiplied by a fraction
equal to 30 divided by the actual number of days in the related Interest Accrual
Period minus (ii) the product of (a) a fraction, expressed as a percentage, the
numerator of which is the amount of any Net Swap Payments or Swap Termination
Payment not due to a Swap Counterparty Trigger Event paid from interest and
principal payments received or advanced on the Group I Loans owed to the Swap
Counterparty as of such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Group I Loans as of such Distribution
Date, and (b) a fraction expressed as a percentage, the numerator of which is
360 and the denominator of which is the actual number of days in the related
Interest Accrual Period.
Group I Principal Distribution Amount: For any Distribution Date, the
product of (x) the Class A Principal Distribution Amount for such Distribution
Date and (y) a fraction, the numerator of which is the portion of the Principal
Allocation Amount related to the Group I Loans for such Distribution Date and
the denominator of which is the Principal Allocation Amount for all of the
Mortgage Loans for such Distribution Date.
Group I REMIC II Net WAC Rate: With respect to any Distribution Date, a
per annum rate equal to the weighted average of the Net Mortgage Rates on the
Group I Loans reduced by the REMIC II Net WAC Rate.
23
Group I REMIC III Net WAC Rate: With respect to any Distribution Date, a
per annum rate equal to the weighted average of the Uncertificated REMIC II
Pass-Through Rates for REMIC II Regular Interests Y-1 and Z-1.
Group II Basis Risk Shortfall--With respect to any class of Class II-A
Certificates and any Distribution Date, an amount equal to the excess of (i)
Accrued Certificate Interest for that class calculated at a rate equal to
One-Month LIBOR plus the related Margin, over (ii) Accrued Certificate Interest
for that class calculated using the related Net WAC Cap Rate; plus any unpaid
Group II Basis Risk Shortfall from prior Distribution Dates, plus interest
thereon to the extent not previously paid from Excess Cash Flow calculated at a
rate equal to One-Month LIBOR plus the related Margin.
Group II Certificates: The Class II-A-1 and Class II-A-2 Certificates.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group II Loans.
Group II Net WAC Rate: With respect to any Distribution Date, a per
annum rate equal to (i) the weighted average of the Net Mortgage Rates (or, if
applicable, the Modified Net Mortgage Rates) on the Group II Loans using the Net
Mortgage Rates in effect for the Monthly Payments due on such Mortgage Loans
during the related Due Period, weighted on the basis of the respective Stated
Principal Balances thereof for such Distribution Date, multiplied by a fraction
equal to 30 divided by the actual number of days in the related Interest Accrual
Period minus (ii) the product of (a) a fraction, expressed as a percentage, the
numerator of which is the amount of any Net Swap Payments or Swap Termination
Payment not due to a Swap Counterparty Trigger Event paid from interest and
principal payments received or advanced on the Group II Loans owed to the Swap
Counterparty as of such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Group II Loans as of such Distribution
Date, and (b) a fraction expressed as a percentage, the numerator of which is
360 and the denominator of which is the actual number of days in the related
Interest Accrual Period.
Group II Principal Distribution Amount: For any Distribution Date, the
product of (x) the Class A Principal Distribution Amount for such Distribution
Date and (y) a fraction, the numerator of which is the portion of the Principal
Allocation Amount related to the Group II Loans for such Distribution Date and
the denominator of which is the Principal Allocation Amount for all of the
Mortgage Loans for such Distribution Date.
Group II REMIC II Net WAC Rate: With respect to any Distribution Date, a
per annum rate equal to the weighted average of the Net Mortgage Rates on the
Group II Loans reduced by the REMIC II Net WAC Rate.
Group II REMIC III Net WAC Rate: With respect to any Distribution Date,
a per annum rate equal to the weighted average of the Uncertificated REMIC II
Pass-Through Rates for REMIC II Regular Interests Y-2 and Z-2.
24
Index: With respect to any Mortgage Loan and as to any Adjustment Date
therefor, the related index as stated in the related Mortgage Note.
Interest Accrual Period: (i) With respect to the Distribution Date in
September 2006, the period commencing on the Closing Date and ending on the day
immediately preceding the Distribution Date in September 2006, and with respect
to any Distribution Date after the Distribution Date in September 2006, the
period commencing on the Distribution Date in the month immediately preceding
the month in which such Distribution Date occurs and ending on the day
immediately preceding such Distribution Date.
Interest Distribution Amount: For any Distribution Date, the aggregate
of the amounts payable pursuant to Section 4.02(c)(i).
Interest Only Certificates: None.
LIBOR: With respect to any Distribution Date, the arithmetic mean of the
London interbank offered rate quotations for one-month U.S. Dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.02.
LIBOR Business Day: Any day other than (i) a Saturday or Sunday or (ii)
a day on which banking institutions in London, England are required or
authorized to by law to be closed.
LIBOR Certificates: The Class A Certificates and Class M Certificates.
LIBOR Rate Adjustment Date: With respect to each Distribution Date, the
second LIBOR Business Day immediately preceding the commencement of the related
Interest Accrual Period.
Liquidation Proceeds: As defined in the Standard Terms but excluding
Subsequent Recoveries.
Loan Group: Either Loan Group I or Loan Group II.
Loan Group I: The group of Mortgage Loans comprised of the Group I
Loans.
Loan Group II: The group of Mortgage Loans comprised of the Group II
Loans.
Margin: The Class I-A-1 Margin, Class II-A-1 Margin, Class II-A-2
Margin, Class M-1 Margin, Class M-2 Margin, Class M-3 Margin, Class M-4 Margin,
Class M-5 Margin, Class M-6 Margin, Class M-7 Margin, Class M-8 Margin, Class
M-9 Margin or Class M-10 Margin, as applicable.
Marker Rate: With respect to the Class SB Certificates or REMIC IV
Regular Interest SB-IO and any Distribution Date, in relation to REMIC III
Regular Interests LT1, LT2, LT3, LT4 and LT-Y1, a per annum rate equal to two
(2) times the weighted average of the Uncertificated REMIC III Pass-Through
Rates for REMIC III Regular Interest LT2 and REMIC III Regular Interest LT3.
25
With respect to the Class SB Certificates or REMIC IV Regular Interest SB-IO and
any Distribution Date, in relation to REMIC III Regular Interests LT5, LT6, LT7,
LT8 and LT-Y2, a per annum rate equal to two (2) times the weighted average of
the Uncertificated REMIC III Pass-Through Rates for REMIC III Regular Interest
LT6 and REMIC III Regular Interest LT7.
Maturity Date: August 25, 2036, the Distribution Date in the month of
the latest scheduled maturity date of any Mortgage Loan.
Maximum Mortgage Rate: As to any Mortgage Loan, the per annum rate
indicated in Mortgage Loan Schedule hereto attached hereto as the "NOTE
CEILING," which rate is the maximum interest rate that may be applicable to such
Mortgage Loan at any time during the life of such Mortgage Loan.
Maximum Net Mortgage Rate: As to any Mortgage Loan and any date of
determination, the Maximum Mortgage Rate minus the Expense Fee Rate.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans attached
hereto as Exhibit One ( and as amended from time to time to reflect the addition
of Qualified Substitute Mortgage Loans), which list or lists shall set forth the
following information as to each Mortgage Loan:
(i) the Mortgage Loan identifying number ("RFC LOAN #");
(ii) the maturity of the Mortgage Note ("MATURITY DATE");
(iii) the Mortgage Rate as of origination ("ORIG RATE");
(iv) the Mortgage Rate as of the Cut-off Date ("CURR RATE");
(v) the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
(vi) the scheduled monthly payment of principal, if any, and interest as
of the Cut-off Date ("ORIGINAL P & I" or "CURRENT P & I");
(vii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(viii) the Maximum Mortgage Rate ("NOTE CEILING");
(ix) the maximum Net Mortgage Rate ("NET CEILING");
(x) the Note Margin ("NOTE MARGIN");
(xi) the Note Margin ("NOTE MARGIN");
(xii) the Periodic Cap ("PERIODIC DECR" or "PERIODIC INCR");
(xiii) the rounding of the semi-annual or annual adjustment to the
Mortgage Rate ("NOTE METHOD");
26
(xiv) the Loan-to-Value Ratio at origination ("LTV");
(xv) the rate at which the Subservicing Fee accrues ("SUBSERV FEE") and
at which the Servicing Fee accrues ("MSTR SERV FEE");
(xvi) a code "T," "BT" or "CT" under the column "LN FEATURE," indicating
that the Mortgage Loan is secured by a second or vacation residence; and
(xvii) a code "N" under the column "OCCP CODE," indicating that the
Mortgage Loan is secured by a non-owner occupied residence.
Such schedule may consist of multiple reports that collectively set
forth all of the information required.
Mortgage Rate: With respect to any Mortgage Loan, the interest rate
borne by the related Mortgage Note, or any modification thereto other than a
Servicing Modification. The Mortgage Rate on each Mortgage Loan will adjust on
each Adjustment Date to equal the sum (rounded to the nearest multiple of one
eighth of one percent (0.125%) or up to the nearest one-eighth of one percent,
which are indicated by a "U" on the Mortgage Loan Schedule, except in the case
of the Mortgage Loans indicated by an "X" on the Mortgage Loan Schedule under
the heading "NOTE METHOD"), of the related Index plus the Note Margin, in each
case subject to the applicable Periodic Cap, Maximum Mortgage Rate and Minimum
Mortgage Rate.
Net Mortgage Rate: With respect to any Mortgage Loan as of any date of
determination, a per annum rate equal to the Mortgage Rate for such Mortgage
Loan as of such date minus the related Expense Fee Rate.
Net Swap Payment: With respect to each Distribution Date, the net
payment required to be made pursuant to the terms of the Swap Agreement by
either the Swap Counterparty or the Supplemental Interest Trust Trustee, on
behalf of the Supplemental Interest Trust, which net payment shall not take into
account any Swap Termination Payment.
Net WAC Cap Rate: For any Distribution Date and for the Class I-A-1
Certificates and Class I-A-2 Certificates, the Group I Net WAC Rate. For any
Distribution Date and for the Class II-A-1 Certificates and Class II-A-2
Certificates, the Group II Net WAC Rate. For any Distribution Date and for the
Class M Certificates, the weighted average of the Group I Net WAC Rate and the
Group II Net WAC Rate, weighted on the basis of the related Subordination
Component for each Loan Group, multiplied by a fraction the numerator of which
is 30 and the denominator of which is the actual number of days in the related
Interest Accrual Period for such Certificates, minus (ii) the product of (a) a
fraction, expressed as a percentage, the numerator of which is the amount of any
Net Swap Payments or Swap Termination Payment not due to a Swap Counterparty
Trigger Event owed to the Swap Counterparty as of such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans as of such Distribution Date, and (b) a fraction expressed as a
percentage, the numerator of which is 360 and the denominator of which is the
actual number of days in the related Interest Accrual Period.
27
Note Margin: With respect to each Mortgage Loan, the fixed percentage
set forth in the related Mortgage Note and indicated in Exhibit One hereto as
the "NOTE MARGIN," which percentage is added to the Index on each Adjustment
Date to determine (subject to rounding in accordance with the related Mortgage
Note, the Periodic Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate)
the interest rate to be borne by such Mortgage Loan until the next Adjustment
Date.
Notional Amount: With respect to the Class SB Certificates or REMIC IV
Regular Interest SB-IO, immediately prior to any Distribution Date is equal to
the aggregate of the Uncertificated Principal Balances of the REMIC III Regular
Interests.
Optional Termination Date: Any Distribution Date on or after which the
aggregate Stated Principal Balance (after giving effect to distributions to be
made on such Distribution Date) of the Mortgage Loans is less than 10.00% of the
Cut-off Date Principal Balance.
Overcollateralization Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans before giving effect to distributions of principal to be made on such
Distribution Date over (b) the aggregate Certificate Principal Balance of the
Class A Certificates and Class M Certificates immediately prior to such date.
Overcollateralization Floor: An amount equal to the product of 0.50% and
the Cut-off Date Principal Balance.
Overcollateralization Increase Amount: With respect to any Distribution
Date, the lesser of (a) Excess Cash Flow for that Distribution Date (to the
extent not used to cover the amounts described in clauses (b)(iv), (v) and (vi)
of the definition of Principal Distribution Amount as of such Distribution Date)
and (b) the excess of (1) the Required Overcollateralization Amount for such
Distribution Date over (2) the Overcollateralization Amount for such
Distribution Date.
Overcollateralization Reduction Amount: With respect to any Distribution
Date on which the Excess Overcollateralization Amount is, after taking into
account all other distributions to be made on such Distribution Date, greater
than zero, the Overcollateralization Reduction Amount shall be equal to the
lesser of (i) the Excess Overcollateralization Amount for that Distribution Date
and (ii) the Principal Remittance Amount on such Distribution Date.
Pass-Through Rate: With respect to the Class of Class A Certificates and
any Distribution Date, a per annum rate equal to the lesser of (i) LIBOR plus
the related Margin and (ii) the related Net WAC Cap Rate. With respect to each
class of Class M Certificates and any Distribution Date, a per annum rate equal
to the least of (i) LIBOR plus the related Margin, (ii) the related Net WAC Cap
Rate and (iii) 14.00% per annum.
With respect to the Class SB Certificates or REMIC IV Regular Interest
SB-IO and any Distribution Date, a per annum rate equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (i) through (viii) below, and the denominator of
which is the aggregate principal balance of the REMIC III Regular Interests. For
purposes of calculating the Pass-Through Rate for the Class SB Certificates or
REMIC IV Regular Interest SB-IO, the numerator is equal to the sum of the
following components:
28
(i) the Uncertificated Pass-Through Rate for REMIC III Regular
Interest LT1 minus the related Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC III Regular
Interest LT2 minus the related Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LT2;
(iii) the Uncertificated Pass-Through Rate for REMIC III Regular
Interest LT4 minus twice the related Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC III Regular Interest LT4;
(iv) the Uncertificated Pass-Through Rate for REMIC III Regular
Interest LT5 minus the related Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LT5;
(v) the Uncertificated Pass-Through Rate for REMIC III Regular
Interest LT6 minus the related Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LT6;
(vi) the Uncertificated Pass-Through Rate for REMIC III Regular
Interest LT8 minus twice the related Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC III Regular Interest LT8;
(vii) the Uncertificated Pass-Through Rate for REMIC III Regular
Interest LT-Y1 minus the related Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LT-Y1; and
(viii) the Uncertificated Pass-Through Rate for REMIC III Regular
Interest LT-Y2 minus the related Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC III Regular Interest LT-Y2.
Permanent Regulation S Global Offered Certificate: Any one of the Class
SB Certificates substantially in the form of Exhibit Eleven-B hereto, and, in
both cases, more fully described in Section 5.02(g) hereof.
Prepayment Assumption: The prepayment assumption to be used for
determining the accrual of original issue discount and premium and market
discount on the Certificates for federal income tax purposes, which assumes a
constant prepayment rate of 30% per annum of the then outstanding principal
balance of the Mortgage Loans.
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, received in connection with a full or partial prepayment of
such Mortgage Loan in accordance with the terms thereof.
29
Prepayment Charge Loan: Any Mortgage Loan for which a Prepayment Charge
may be assessed and to which such Prepayment Charge the Class SB Certificates
are entitled, as indicated on the Mortgage Loan Schedule.
Principal Allocation Amount: With respect to any Distribution Date, the
sum of (a) the Principal Remittance Amount for that Distribution Date, as
adjusted to reflect any Net Swap Payments or Swap Termination Payments not due
to a Swap Counterparty Trigger Event to the extent not covered by interest
payments received or advanced on the Mortgage Loans on that Distribution Date,
(b) any Realized Losses covered by amounts included in clause (iv) of the
definition of Principal Distribution Amount and (c) the aggregate amount of the
principal portion of Realized Losses on the Mortgage Loans in the calendar month
preceding that Distribution Date, to the extent covered by Excess Cash Flow
included in clause (v) of the definition of Principal Distribution Amount;
provided, however, that on any Distribution Date on which there is (i)
insufficient Subsequent Recoveries to cover all unpaid Realized Losses on the
Mortgage Loans described in clause (b) above, in determining the Group I
Principal Distribution Amount and the Group II Principal Distribution Amount,
Subsequent Recoveries will be allocated to the Class I-A Certificates and Class
II-A Certificates, pro rata, based on the principal portion of unpaid Realized
Losses from prior Distribution Dates on the Group I Loans and Group II Loans,
respectively, and (ii) insufficient Excess Cash Flow to cover all Realized
Losses on the Mortgage Loans described in clause (c) above, in determining the
Group I Principal Distribution Amount and the Group II Principal Distribution
Amount, the Excess Cash Flow remaining after the allocation described in clause
(b) or (i) above, as applicable, will be allocated to the Class I-A-1
Certificates and Class II-A Certificates, pro rata, based on the principal
portion of Realized Losses incurred during the calendar month preceding that
Distribution Date on the Group I Loans and Group II Loans, respectively.
Principal Distribution Amount: With respect to any Distribution Date,
the lesser of (a) the excess of (x) Available Distribution Amount plus for
inclusion in Excess Cash Flow for purposes of clauses (b)(v) and (b)(vi) below,
the amounts received by the Supplemental Interest Trust Trustee under the Swap
Agreement for that Distribution Date over (y) the Interest Distribution Amount
and (b) the sum of:
(i) the principal portion of each Monthly Payment received or Advanced
with respect to the related Due Period on each Outstanding Mortgage Loan;
(ii) the Stated Principal Balance of any Mortgage Loan repurchased
during the related Prepayment Period (or deemed to have been so repurchased in
accordance with Section 3.07(b)) pursuant to Section 2.02, 2.03, 2.04 or 4.07
and the amount of any shortfall deposited in the Custodial Account in connection
with the substitution of a Deleted Mortgage Loan pursuant to Section 2.03 or
2.04 during the prior calendar month;
(iii) the principal portion of all other unscheduled collections, other
than Subsequent Recoveries, on the Mortgage Loans received (or deemed to have
been so received) during the prior calendar month or, in the case of Principal
Prepayments in Full, during the related Prepayment Period, including, without
limitation, Curtailments, Insurance Proceeds, Liquidation Proceeds, REO Proceeds
and Principal Prepayments, to the extent applied by the Master Servicer as
recoveries of principal pursuant to Section 3.14;
30
(iv) the lesser of (1) Subsequent Recoveries for such Distribution Date
and (2) the principal portion of any Realized Losses allocated to the Class A
Certificates or the Class M Certificates on a prior Distribution Date and
remaining unpaid;
(v) the lesser of (1) the Excess Cash Flow for such Distribution Date
(to the extent not used pursuant to clause (iv) of this definition on such
Distribution Date) and (2) the principal portion of any Realized Losses incurred
(or deemed to have been incurred) on any Mortgage Loans in the calendar month
preceding such Distribution Date that are allocated to any Class of
Certificates; and
(vi) the lesser of (a) the Excess Cash Flow for such Distribution Date,
to the extent not used pursuant to clauses (iv) and (v) of this definition on
such Distribution Date, and (b) the amount of any Overcollateralization Increase
Amount for such Distribution Date;
minus
(vii) (A) the amount of any Overcollateralization Reduction Amount for
such Distribution Date and (B) the amount of any Capitalization Reimbursement
Amount for such Distribution Date.
Principal Only Certificates: None.
Principal Remittance Amount: With respect to any Distribution Date, all
amounts described in clauses (b)(i) through (iii) of the definition of Principal
Distribution Amount for that Distribution Date.
Record Date: With respect to each Distribution Date and each Class of
Book Entry Certificates, the Business Day immediately preceding such
Distribution Date. With respect to each Class of Definitive Certificates, the
close of business on the last Business Day of the month next preceding the month
in which the related Distribution Date occurs, except in the case of the first
Record Date which shall be the Closing Date.
Regular Certificates: The Class A, Class M and Class SB Certificates.
Related Group: With respect to the Class I-A Certificates, the Group I
Loans. With respect to the Class II-A Certificates, the Group II Loans.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Shortfalls: Interest shortfalls on the Mortgage Loans
resulting from the Relief Act or similar legislation or regulations.
REMIC I: The segregated pool of assets (exclusive of the Supplemental
Interest Trust Account, the Swap Agreement and the SB-AM Swap Agreement), with
respect to which a REMIC election is to be made, consisting of:
(i) the Mortgage Loans and the related Mortgage Files;
31
(ii) all payments and collections in respect of the Mortgage
Loans due after the Cut-off Date (other than Monthly Payments due in the month
of the Cut-off Date) as shall be on deposit in the Custodial Account or in the
Certificate Account and identified as belonging to the Trust Fund;
(iii) property which secured a Mortgage Loan and which has been
acquired for the benefit of the Certificateholders by foreclosure or deed in
lieu of foreclosure;
(iv) the hazard insurance policies and Primary Insurance Policies
pertaining to the Mortgage Loans, if any; and
(v) all proceeds of clauses (i) through (iv) above.
REMIC I Available Distribution Amount: The Available Distribution Amount
increased by the amount of any Net Swap Payment described in clause (b)(z)
thereof.
REMIC I Distribution Amount: For any Distribution Date, the REMIC I
Available Distribution Amount shall be distributed to REMIC II in respect of the
REMIC I Regular Interests and the Class R-I Certificates in the following
amounts and priority:
(a) to each of the REMIC I Regular Interests, pro rata, in an
amount equal to (A) Uncertificated Accrued Interest for such REMIC I Regular
Interests for such Distribution Date, plus (B) any amounts payable in respect
thereof remaining unpaid from previous Distribution Dates; and
(b) to the extent of amounts remaining after the distributions
made pursuant to clause (a) above, payments of principal shall be allocated as
follows:
(i) first, to REMIC I Regular Interests I and II, an
amount equal to 1/10,000 of such principal payments for the Group I
Loans and the Group II Loans, respectively; provided that the
Uncertificated Principal Balances of REMIC I Regular Interests I and II
shall not be reduced below zero;
(ii) second, any remainder sequentially to REMIC I Regular
Interests I-1-A and I-1-B through the REMIC I Regular Interests with
numerical designations equal to the number of such Distribution Date,
starting with the lowest numerical designation until the Uncertificated
Principal Balance of each such REMIC I Regular Interest is reduced to
zero, provided that, for REMIC I Regular Interests with the same
numerical designation, such payments of principal shall be allocated pro
rata between such REMIC I Regular Interests;
(iii) third, any remainder to REMIC I Regular Interest A-I
until the Uncertificated Principal Balance of such REMIC I Regular
Interest is reduced to zero;
(iv) fourth, any remainder to the REMIC I Regular
Interests remaining outstanding after the foregoing distributions (other
than REMIC I Regular Interests I and II), starting with the lowest
numerical designation until the Uncertificated Principal Balance of each
such REMIC I Regular Interest is reduced to zero, provided that, for
REMIC I Regular Interests with the same numerical designation, such
payments of principal shall be allocated pro rata between such REMIC I
Regular Interests;
32
(v) fifth, any remainder to REMIC I Regular Interests I
and II, pro rata according to their respective Uncertificated Principal
Balances as reduced by the distributions deemed made pursuant to (i)
above, until their respective Uncertificated Principal Balances are
reduced to zero; and
(c) to the extent of amounts remaining after the distributions
made pursuant to clauses (a) and (b) above, to the Class R-I Certificates, such
remaining amount.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I Realized Losses: Realized Losses on the Mortgage Loans shall be
allocated to the REMIC I Regular Interests as follows: The interest portion of
Realized Losses on the Mortgage Loans shall be allocated among the REMIC I
Regular Interests, pro rata, according to the amount of interest accrued but
unpaid thereon, in reduction thereof. Any interest portion of such Realized
Losses in excess of the amount allocated pursuant to the preceding sentence
shall be treated as a principal portion of Realized Losses not attributable to
any specific Mortgage Loan and allocated pursuant to the succeeding sentences.
An amount equal to 1/10,000 of the principal portion of Realized Losses on Group
I Loans and Group II Loans shall be allocated first, on each Distribution Date,
to REMIC I Regular Interests I and II, respectively, provided that the
Uncertificated Principal Balances of REMIC I Regular Interests I and II shall
not be reduced below zero. Any remaining principal portion of Realized Losses on
the Mortgage Loans shall be allocated first, on each Distribution Date, to REMIC
I Regular Interest A-I until the Uncertificated Principal Balance of such REMIC
I Regular Interest has been reduced to zero, and thereafter to REMIC I Regular
Interest I-1-A through REMIC I Regular Interest I-60-B, starting with the lowest
numerical denomination until the Uncertificated Principal Balance of such REMIC
I Regular Interest has been reduced to zero, provided that, for REMIC I Regular
Interests with the same numerical denomination, such Realized Losses shall be
allocated pro rata between such REMIC I Regular Interests.
REMIC I Regular Interest. Any of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto. The designations for the respective REMIC I Regular Interests are set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest A-I: A regular interest in REMIC I that is held
as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
33
REMIC I Regular Interest I: A regular interest in REMIC I that is held
as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest II: A regular interest in REMIC I that is held
as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC II: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of the
REMIC I Regular Interests.
REMIC II Available Distribution Amount: For any Distribution Date, the
amount distributed from REMIC I to REMIC II on such Distribution Date in respect
of the REMIC I Regular Interests.
REMIC II Distribution Amount: For any Distribution Date, the REMIC II
Available Distribution Amount shall be distributed to REMIC III in respect of
the REMIC II Regular Interests and the Class R-II Certificates in the following
amounts and priority:
(a) to REMIC II Regular Interest LT-IO, in an amount equal to (i)
Uncertificated Accrued Interest for such REMIC II Regular Interest for such
Distribution Date, plus (ii) any amounts in respect thereof remaining unpaid
from previous Distribution Dates;
(b) to the extent of the portion of the REMIC II Available
Distribution Amount related to Loan Group I remaining after payment of the
amounts pursuant to paragraph (a) of this definition of "REMIC II Distribution
Amount":
(i) first, to REMIC II Regular Interests Y-1 and Z-1,
concurrently, the Uncertificated Accrued Interest for such Regular
Interests remaining unpaid from previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts;
(ii) second, to REMIC II Regular Interests Y-1 and Z-1,
concurrently, the Uncertificated Accrued Interest for such Regular
Interests for the current Distribution Date, pro rata according to their
respective Uncertificated Accrued Interest; and
(iii) third, to REMIC II Regular Interests Y-1 and Z-1,
the REMIC II Regular Interest Y-1 Principal Distribution Amount and the
REMIC II Regular Interest Z-1 Principal Distribution Amount,
respectively.
(c) To the extent of the portion of the REMIC II Available
Distribution Amount related to Loan Group II remaining after payment of the
amounts pursuant to paragraph (a) of this definition of "REMIC II Distribution
Amount":
34
(i) first, to REMIC II Regular Interests Y-2 and Z-2,
concurrently, the Uncertificated Accrued Interest for such Regular
Interests remaining unpaid from previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts;
(ii) second, to REMIC II Regular Interests Y-2 and Z-2,
concurrently, the Uncertificated Accrued Interest for such Regular
Interests for the current Distribution Date, pro rata according to their
respective Uncertificated Accrued Interest; and
(iii) third, to REMIC II Regular Interests Y-2 and Z-2,
the REMIC II Regular Interest Y-2 Principal Distribution Amount and the
REMIC II Regular Interest Z-2 Principal Distribution Amount,
respectively.
(d) To the extent of the REMIC II Available Distribution Amount for such
Distribution Date remaining after payment of the amounts pursuant to paragraphs
(a) through (c) of this definition of "REMIC II Distribution Amount":
(i) first, to each of the REMIC II Regular Interests, pro
rata according to the amount of unreimbursed Realized Losses allocable
to principal previously allocated to each such Regular Interest, the
aggregate amount of any distributions to the Certificates as
reimbursement of such Realized Losses on such Distribution Date pursuant
to clause (vii) in Section 4.02(c); provided, however, that any amounts
distributed pursuant to this paragraph (d)(i) of this definition of
"REMIC II Distribution Amount" shall not cause a reduction in the
Uncertificated Principal Balances of any of the REMIC II Regular
Interests; and
(ii) second, to the Class R-II Certificates, any remaining
amount.
REMIC II Net WAC Rate: With respect to any Distribution Date, a per
annum rate equal to the excess, if any, of the Uncertificated REMIC I
Pass-Through Rate for REMIC I Regular Interest A-I over the weighted average of
(v) with respect to REMIC I Regular Interests ending with the designation "B,"
the weighted average of the Uncertificated REMIC I Pass-Through Rates for such
REMIC I Regular Interests, weighted on the basis of the Uncertificated Principal
Balance of such REMIC I Regular Interests for each such Distribution Date, (w)
with respect to REMIC I Regular Interest A-I, the Uncertificated REMIC I
Pass-Through Rate for such REMIC I Regular Interest, (x) with respect to REMIC I
Regular Interest I, the Uncertificated REMIC I Pass-Through Rate for such REMIC
I Regular Interest, (y) with respect to REMIC I Regular Interest II, the
Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular Interest, and
(z) with respect to REMIC I Regular Interests ending with the designation "A,"
for each Distribution Date listed below, the weighted average of the rates
listed below for each such REMIC I Regular Interest listed below, weighted on
the basis of the Uncertificated Principal Balance of each such REMIC I Regular
Interest for each such Distribution Date:
35
DISTRIBUTION
DATE REMIC I REGULAR INTEREST RATE
1 I-1-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
2 I-2-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A Uncertificated REMIC I Pass-Through Rate
3 I-3-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A and I-2-A Uncertificated REMIC I Pass-Through Rate
4 I-4-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-3-A Uncertificated REMIC I Pass-Through Rate
5 I-5-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-4-A Uncertificated REMIC I Pass-Through Rate
6 I-6-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-5-A Uncertificated REMIC I Pass-Through Rate
7 I-7-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-6-A Uncertificated REMIC I Pass-Through Rate
8 I-8-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-7-A Uncertificated REMIC I Pass-Through Rate
9 I-9-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-8-A Uncertificated REMIC I Pass-Through Rate
10 I-10-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-9-A Uncertificated REMIC I Pass-Through Rate
11 I-11-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-10-A Uncertificated REMIC I Pass-Through Rate
12 I-12-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-11-A Uncertificated REMIC I Pass-Through Rate
13 I-13-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-12-A Uncertificated REMIC I Pass-Through Rate
14 I-14-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-13-A Uncertificated REMIC I Pass-Through Rate
15 I-15-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-14-A Uncertificated REMIC I Pass-Through Rate
16 I-16-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-15-A Uncertificated REMIC I Pass-Through Rate
17 I-17-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-16-A Uncertificated REMIC I Pass-Through Rate
18 I-18-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-17-A Uncertificated REMIC I Pass-Through Rate
19 I-19-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-18-A Uncertificated REMIC I Pass-Through Rate
20 I-20-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
36
DISTRIBUTION
DATE REMIC I REGULAR INTEREST RATE
I-1-A through I-19-A Uncertificated REMIC I Pass-Through Rate
21 I-21-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-20-A Uncertificated REMIC I Pass-Through Rate
22 I-22-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-21-A Uncertificated REMIC I Pass-Through Rate
23 I-23-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-22-A Uncertificated REMIC I Pass-Through Rate
24 I-24-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-23-A Uncertificated REMIC I Pass-Through Rate
25 I-25-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-24-A Uncertificated REMIC I Pass-Through Rate
26 I-26-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-25-A Uncertificated REMIC I Pass-Through Rate
27 I-27-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-26-A Uncertificated REMIC I Pass-Through Rate
28 I-28-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-27-A Uncertificated REMIC I Pass-Through Rate
29 I-29-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-28-A Uncertificated REMIC I Pass-Through Rate
30 I-30-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-29-A Uncertificated REMIC I Pass-Through Rate
31 I-31-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-30-A Uncertificated REMIC I Pass-Through Rate
32 I-32-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-31-A Uncertificated REMIC I Pass-Through Rate
33 I-33-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-32-A Uncertificated REMIC I Pass-Through Rate
34 I-34-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-33-A Uncertificated REMIC I Pass-Through Rate
35 I-35-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-34-A Uncertificated REMIC I Pass-Through Rate
36 I-36-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-35-A Uncertificated REMIC I Pass-Through Rate
37 I-37-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-36-A Uncertificated REMIC I Pass-Through Rate
38 I-38-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-37-A Uncertificated REMIC I Pass-Through Rate
39 I-39-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-38-A Uncertificated REMIC I Pass-Through Rate
40 I-40-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
37
DISTRIBUTION
DATE REMIC I REGULAR INTEREST RATE
I-1-A through I-39-A Uncertificated REMIC I Pass-Through Rate
41 I-41-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-40-A Uncertificated REMIC I Pass-Through Rate
42 I-42-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-41-A Uncertificated REMIC I Pass-Through Rate
43 I-43-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-42-A Uncertificated REMIC I Pass-Through Rate
44 I-45-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-44-A Uncertificated REMIC I Pass-Through Rate
45 I-46-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-45-A Uncertificated REMIC I Pass-Through Rate
46 I-47-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-46-A Uncertificated REMIC I Pass-Through Rate
47 I-48-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-47-A Uncertificated REMIC I Pass-Through Rate
48 I-49-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-48-A Uncertificated REMIC I Pass-Through Rate
49 I-50-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-49-A Uncertificated REMIC I Pass-Through Rate
50 I-51-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-50-A Uncertificated REMIC I Pass-Through Rate
51 I-52-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-51-A Uncertificated REMIC I Pass-Through Rate
52 I-53-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-52-A Uncertificated REMIC I Pass-Through Rate
53 I-54-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-53-A Uncertificated REMIC I Pass-Through Rate
54 I-55-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-54-A Uncertificated REMIC I Pass-Through Rate
55 I-56-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-55-A Uncertificated REMIC I Pass-Through Rate
56 I-57-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-56-A Uncertificated REMIC I Pass-Through Rate
57 I-58-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-57-A Uncertificated REMIC I Pass-Through Rate
58 I-59-A through I-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-58-A Uncertificated REMIC I Pass-Through Rate
59 1-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
38
DISTRIBUTION
DATE REMIC I REGULAR INTEREST RATE
I-1-A through I-59-A Uncertificated REMIC I Pass-Through Rate
60 1-60-A 2 multiplied by Swap LIBOR, subject to a maximum
rate of Uncertificated REMIC I Pass-Through Rate
I-1-A through I-59-A Uncertificated REMIC I Pass-Through Rate
Thereafter I-1-A through I-60A Uncertificated REMIC I Pass-Through Rate
REMIC II Regular Interest. Any of the separate non-certificated
beneficial ownership interests in REMIC II issued hereunder and designated as a
"regular interest" in REMIC II. Each REMIC II Regular Interest shall accrue
interest at the related Uncertificated REMIC II Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto. The designations for the respective REMIC II Regular Interests are set
forth in the Preliminary Statement hereto.
REMIC II Realized Losses: Realized Losses on Group I Loans and Group II
Loans shall be allocated to the REMIC II Regular Interests as follows: (1) The
interest portion of Realized Losses on Group I Loans, if any, shall be allocated
among REMIC II Regular Interests Y-1 and Z-1, pro rata, according to the amount
of interest accrued but unpaid thereon, in reduction thereof, and thereafter to
REMIC II Regular Interest LT-IO in reduction thereof; and (2) the interest
portion of Realized Losses on Group II Loans, if any, shall be allocated among
REMIC II Regular Interests Y-2 and Z-2, pro rata, according to the amount of
interest accrued but unpaid thereon, in reduction thereof, and thereafter to
REMIC II Regular Interest LT-IO in reduction thereof. Any interest portion of
such Realized Losses in excess of the amount allocated pursuant to the preceding
sentence shall be treated as a principal portion of Realized Losses not
attributable to any specific Mortgage Loan in such Loan Group and allocated
pursuant to the succeeding sentences. The principal portion of Realized Losses
on Group I Loans and Group II Loans shall be allocated to the REMIC II Regular
Interests as follows: (1) The principal portion of Realized Losses on Group I
Loans shall be allocated, first, to REMIC II Regular Interest Y-1 to the extent
of the REMIC II Regular Interest Y-1 Principal Reduction Amount in reduction of
the Uncertificated Principal Balance of such Regular Interest and, second, the
remainder, if any, of such principal portion of such Realized Losses shall be
allocated to REMIC II Regular Interest Z-1 in reduction of the Uncertificated
Principal Balance thereof; and (2) the principal portion of Realized Losses on
Group II Loans shall be allocated, first, to REMIC II Regular Interest Y-2 to
the extent of the REMIC II Regular Interest Y-2 Principal Reduction Amount in
reduction of the Uncertificated Principal Balance of such Regular Interest and,
second, the remainder, if any, of such principal portion of such Realized Losses
shall be allocated to REMIC II Regular Interest Z-2 in reduction of the
Uncertificated Principal Balance thereof.
REMIC II Regular Interest Y-1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest Y-1
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC II Regular Interest Y-1 on such Distribution Date.
39
REMIC II Regular Interest Y-2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest Y-2
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC II Regular Interest Y-2 on such Distribution Date.
REMIC II Regular Interest Z-1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest Z-1
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC II Regular Interest Z-1 on such Distribution Date.
REMIC II Regular Interest Z-2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest Z-2
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC II Regular Interest Z-2 on such Distribution Date.
REMIC II Y Principal Reduction Amounts: For any Distribution Date the
amounts by which the Uncertificated Principal Balances of REMIC II Regular
Interests Y-1 and Y-2, respectively, will be reduced on such Distribution Date
by the allocation of Realized Losses and the distribution of principal,
determined as follows:
First determine the Group I REMIC II Net WAC Rate and the Group II REMIC
II Net WAC Rate for distributions of interest that will be made on the next
succeeding Distribution Date (for each Loan Group, the "Group Interest Rate" for
that Loan Group). The REMIC II Y Principal Reduction Amounts for REMIC II
Regular Interests Y-1 and Y-2 will be determined pursuant to the "Generic
solution for the REMIC II Y Regular Interests" set forth below (the "Generic
Solution") by making the following identifications among the Loan Groups and
their related REMIC II Regular Interests:
A. Determine which Loan Group has the lower Group Interest Rate.
That Loan Group will be identified with Loan Group AA and the REMIC II Regular
Interests related to that Loan Group will be respectively identified with the
REMIC II Regular Interests YAA and ZAA. The Group Interest Rate for that Loan
Group will be identified with J%. If the two Loan Groups have the same Group
Interest Rate pick one for this purpose, subject to the restriction that each
Loan Group may be picked only once in the course of any such selections pursuant
to paragraphs A and B of this definition.
B. Determine which Loan Group has the higher Group Interest Rate.
That Loan Group will be identified with Loan Group BB and the REMIC II Regular
Interests related to that Group will be respectively identified with the REMIC
II Regular Interests YBB and ZBB. The Group Interest Rate for that Loan Group
will be identified with K%. If the two Loan Groups have the same Group Interest
Rate the Loan Group not selected pursuant to paragraph A, above, will be
selected for purposes of this paragraph B.
Second, apply the Generic Solution set forth below to determine the
REMIC II Y Principal Reduction Amounts for the Distribution Date using the
identifications made above.
40
GENERIC SOLUTION FOR THE REMIC II Y PRINCIPAL REDUCTION AMOUNTS: For any
Distribution Date, the amounts by which the Uncertificated Principal Balances of
REMIC II Regular Interests YAA and ZAA, respectively, will be reduced on such
Distribution Date by the allocation of Realized Losses and the distribution of
principal, determined as follows:
J% and K% represent the interest rates on Loan Group AA and Loan
Group BB respectively. J% (LESS-THAN) K%.
For purposes of the succeeding formulas the following symbols shall have
the meanings set forth below:
PJB = the Loan Group AA Subordination Component after the
allocation of Realized Losses and distributions of principal on such
Distribution Date.
PKB = the Loan Group BB Subordination Component after the
allocation of Realized Losses and distributions of principal on such
Distribution Date.
R = the Class CB Pass-Through Rate = (J%PJB + K%PKB)/(PJB + PKB)
Yj = the REMIC II Regular Interest YAA Uncertificated Principal
Balance after distributions on the prior Distribution Date.
Yk = the REMIC II Regular Interest YBB Uncertificated Principal
Balance after distributions on the prior Distribution Date.
(DELTA)Yj = the REMIC II Regular Interest YAA Principal Reduction
Amount.
(DELTA)Yk = the REMIC II Regular Interest YBB Principal Reduction
Amount.
Zj = the REMIC II Regular Interest ZAA Uncertificated Principal
Balance after distributions on the prior Distribution Date.
Zk = the REMIC II Regular Interest ZBB Uncertificated Principal
Balance after distributions on the prior Distribution Date.
(DELTA)Zj = the REMIC II Regular Interes ZAA Principal Reduction
Amount.
= (DELTA)Pj - (DELTA)Yj
(DELTA)Zk = the REMIC II Regular Interest ZBB Principal Reduction
Amount.
= (DELTA)Pk - (DELTA)Yk
Pj = the aggregate Uncertificated Principal Balance of REMIC II
Regular Interests YAA and ZAA after distributions on the prior Distribution
Date, which is equal to the aggregate principal balance of the Group AA Loans.
Pk = the aggregate Uncertificated Principal Balance of REMIC II
Regular Interests YBB and ZBB after distributions on the prior Distribution
Date, which is equal to the aggregate principal balance of the Group BB Loans.
41
(DELTA)Pj = the aggregate principal reduction resulting on such
Distribution Date on the Group AA Loans as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (d)(i) or (d)(ii) of
the definition of REMIC II Distribution Amount) to be made and Realized Losses
to be allocated on such Distribution Date, if applicable, which is equal to the
aggregate of the REMIC II Regular Interest YAA Principal Reduction Amount and
the REMIC II Regular Interest ZAA Principal Reduction Amount.
(DELTA)Pk= the aggregate principal reduction resulting on such
Distribution Date on the Group BB Loans as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (d)(i) or (d)(ii) of
the definition of REMIC II Distribution Amount) to be made and realized losses
to be allocated on such Distribution Date, which is equal to the aggregate of
the REMIC II Regular Interest YBB Principal Reduction Amount and the REMIC II
Regular Interest ZBB Principal Reduction Amount.
(alpha) = .0005
(gamma) = (R - J%)/(K% - R). (gamma) is a non-negative number
unless its denominator is zero, in which event it is undefined.
If (gamma) is zero, (DELTA)Yk = Yk and (DELTA)Yj =
(Yj/Pj)(DELTA)Pj.
If (gamma) is undefined, (DELTA)Yj = Yj, (DELTA)Yk =
(Yk/Pk)(DELTA)Pk. if denominator
In the remaining situations, (DELTA)Yk and (DELTA)Yj shall be
defined as follows:
1. If Yk - (alpha)(Pk - (DELTA)Pk) => 0, Yj- (alpha)(Pj - (DELTA)Pj) =>
0, and (gamma) (Pj - (DELTA)Pj) < (Pk - (DELTA)Pk), (DELTA)Yk = Yk -
(alpha)(gamma) (Pj - (DELTA)Pj) and (DELTA)Yj = Yj - (alpha)(Pj - (DELTA)Pj).
2. If Yk - (alpha)(Pk - (DELTA)Pk) => 0, Yj - (alpha)(Pj - (DELTA)Pj) =>
0, and (gamma) (Pj - (DELTA)Pj) => (Pk - (DELTA)Pk), (DELTA)Yk = Yk - (alpha)(Pk
- (DELTA)Pk) and (DELTA)Yj = Yj - ((alpha)/(gamma))(Pk - (DELTA)Pk).
3. If Yk - (alpha) (Pk - (DELTA)Pk) (LESS-THAN) 0, Yj - (alpha)(Pj -
(DELTA)Pj) => 0, and Yj - (alpha)(Pj - (DELTA)Pj) => Yj - (Yk/(gamma)),
(DELTA)Yk = Yk - (alpha)(gamma) (Pj - (DELTA)Pj) and (DELTA)Yj = Yj - (alpha)(Pj
- (DELTA)Pj).
4. If Yk - (alpha)(Pk - (DELTA)Pk) (LESS-THAN) 0, Yj - (Yk/(gamma)) =>
0, and Yj - (alpha)(Pj - (DELTA)Pj) <= Yj - (Yk/(gamma)), (DELTA)Yk = 0 and
(DELTA)Yj = Yj - (Yk/(gamma)).
5. If Yj - (alpha)(Pj - (DELTA)Pj) < 0, Yj - (Yk/(gamma)) < 0, and Yk -
(alpha)(Pk - (DELTA)Pk) <= Yk - ((gamma)Yj), (DELTA)Yk = Yk - ((gamma)Yj) and
(DELTA)Yj = 0.
6. If Yj - (alpha)(Pj - (DELTA)Pj) (LESS-THAN) 0, Yk - (alpha)(Pk -
(DELTA)Pk) => 0, and Yk - (alpha)(Pk - (DELTA)Pk) => Yk - ((gamma)Yj), (DELTA)Yk
= Yk - (alpha)(Pk - (DELTA)Pk) and (DELTA)Yj = Yj - ((alpha)/(gamma))(Pk -
(DELTA)Pk).
42
The purpose of the foregoing definitional provisions together with the
related provisions allocating Realized Losses and defining the REMIC II Regular
Interest Y-1 and Y-2 and REMIC II Regular Interest Z-1 and Z-2 Principal
Distribution Amounts is to accomplish the following goals in the following order
of priority:
1. Making the ratio of Yk to Yj equal to (gamma) after taking
account of the allocation Realized Losses and the distributions that
will be made through end of the Distribution Date to which such
provisions relate and assuring that the Principal Reduction Amounts for
each of the REMIC II Regular Interests is greater than or equal to zero
for such Distribution Date;
2. Making (i) the REMIC II Regular Interest YAA Uncertificated
Principal Balance less than or equal to 0.0005 of the sum of the
Uncertificated Principal Balances for REMIC II Regular Interest YAA and
REMIC II Regular Interest ZAA and (ii) the REMIC II Regular Interest YBB
Uncertificated Principal Balances less than or equal to 0.0005 of the
sum of the Uncertificated Principal Balances for REMIC II Regular
Interest YBB and REMIC II Regular Interest ZBB in each case after giving
effect to allocations of Realized Losses and distributions to be made
through the end of the Distribution Date to which such provisions
relate; and
3. Making the larger of (a) the fraction whose numerator is Yk
and whose denominator is the sum of Yk and Zk and (b) the fraction whose
numerator is Yj and whose denominator is the sum of Yj, and Zj as large
as possible while remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
REMIC II Y Principal Reduction Amount to accomplish both of goals 1 and 2 above,
the amounts thereof should be adjusted to so as to accomplish such goals within
the requirement that each REMIC II Y Principal Reduction Amount must be less
than or equal to the sum of (a) the principal Realized Losses to be allocated on
the related Distribution Date for the related Loan Group and (b) the remainder
of the Available Distribution Amount for the related Loan Group or after
reduction thereof by the distributions to be made on such Distribution in
respect of interest on the related REMIC II Regular Interests, or, if both of
such goals cannot be accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such requirement. In the
event of any conflict among the provisions of the definition of the REMIC II Y
Principal Reduction Amounts, such conflict shall be resolved on the basis of the
goals and their priorities set forth above within the requirement set forth in
the preceding sentence.
REMIC II Z Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of REMIC II Regular
Interests Z-1 and Z-2, respectively, will be reduced on such Distribution Date
by the allocation of Realized Losses and the distribution of principal, which
shall be in each case the excess of (A) the sum of (x) the excess of the REMIC
II Available Distribution Amount for the related Loan Group (i.e. the "related
Loan Group" for REMIC II Regular Interest Z-1 is Loan Group I and the "related
Loan Group" for REMIC II Regular Interest Z-2 is Loan Group II) exclusive of any
amount in respect of Subsequent Recoveries included therein over the amount
43
thereof distributable (i) in respect of interest on such REMIC II Regular
Interest and REMIC II Regular Interest Y-1 (in the case of REMIC II Regular
Interest Z-1) or REMIC II Regular Interest Y-2 (in the case of REMIC II Regular
Interest Z-2) and (ii) to such REMIC II Regular Interest and REMIC II Regular
Interest Y-1 (in the case of REMIC II Regular Interest Z-1) or REMIC II Regular
Interest Y-2 (in the case of REMIC II Regular Interest Z-2) pursuant to clause
(d)(i) of the definition of "REMIC II Distribution Amount" and (y) the amount of
Realized Losses allocable to principal for the related Loan Group over (B) the
related REMIC II Y Principal Reduction Amount.
REMIC III: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of the
REMIC II Regular Interests.
REMIC III Available Distribution Amount: For any Distribution Date, the
amount distributed from REMIC II to REMIC III on such Distribution Date in
respect of the REMIC II Regular Interests.
REMIC III Distribution Amount: For any Distribution Date, the REMIC III
Available Distribution Amount shall be distributed to REMIC IV in respect of the
REMIC III Regular Interests and to the Class R-III Certificateholders in the
following amounts and priority:
(a) to REMIC IV as the holder of REMIC III Regular Interest
LT-IO, in an amount equal to (i) Uncertificated Accrued Interest for such
Regular Interest for such Distribution Date, plus (ii) any amounts in respect
thereof remaining unpaid from previous Distribution Dates;
(b) to the extent of the portion of the REMIC III Available
Distribution Amount related to Loan Group I remaining after the distributions
made pursuant to clause (a) above, to REMIC IV as the holder of REMIC III
Regular Interests LT1, LT2, LT3, LT4 and LT-Y1, allocated as follows:
(i) to REMIC III Regular Interests LT1, LT2, LT3, LT4 and
LT-Y1, pro rata, in an amount equal to (A) their Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates; and
(ii) to REMIC III Regular Interests LT1, LT2, LT3, LT4 and
LT-Y1, in an amount equal to the remainder of such portion of the REMIC
III Available Distribution Amount related to Loan Group I remaining
after the distributions made pursuant to clauses (a) and (b)(i) above,
allocated as follows:
(A) in respect of REMIC III Regular Interests
LT2, LT3, LT4 and LT-Y1, their respective
Principal Distribution Amounts;
(B) in respect of REMIC III Regular Interest LT1
any remainder until the Uncertificated
Principal Balance thereof is reduced to
zero;
44
(C) any remainder in respect of REMIC III
Regular Interests LT2, LT3, LT4 and LT-Y1,
pro rata according to their respective
Uncertificated Principal Balances as reduced
by the distributions deemed made pursuant to
(A) above, until their respective
Uncertificated Principal Balances are
reduced to zero;
(c) to the extent of the portion of the REMIC III Available
Distribution Amount related to Loan Group II remaining after the distributions
made pursuant to clause (a) above, to REMIC IV as the holder of REMIC III
Regular Interests LT5, LT6, LT7, LT8 and LT-Y2, allocated as follows:
(i) to REMIC III Regular Interests LT5, LT6, LT7, LT8 and
LT-Y2, pro rata, in an amount equal to (A) their Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in respect
thereof remaining unpaid from previous Distribution Dates; and
(ii) to REMIC III Regular Interests LT5, LT6, LT7, LT8 and
LT-Y2, in an amount equal to the remainder of such portion of the REMIC
III Available Distribution Amount related to Loan Group II remaining
after the distributions made pursuant to clauses (a) and (c)(i) above,
allocated as follows:
(A) in respect of REMIC III Regular Interests
LT6, LT7, LT8 and LT-Y2, their respective
Principal Distribution Amounts;
(B) in respect of REMIC III Regular Interest LT5
any remainder until the Uncertificated
Principal Balance thereof is reduced to
zero;
(C) any remainder in respect of REMIC III
Regular Interests LT6, LT7, LT8 and LT-Y2,
pro rata according to their respective
Uncertificated Principal Balances as reduced
by the distributions deemed made pursuant to
(A) above, until their respective
Uncertificated Principal Balances are
reduced to zero;
(d) to the extent of amounts remaining after the distributions
made pursuant to clauses (a) through (c) above:
(i) first, to each of the REMIC III Regular
Interests, pro rata according to the amount of
unreimbursed Realized Losses allocable to principal
previously allocated to each such REMIC III Regular
Interest, the aggregate amount of any distributions to the
Certificates as reimbursement of such Realized Losses on
such Distribution Date pursuant to clause (vii) in Section
4.02(c); provided, however, that any amounts distributed
pursuant to this paragraph (d)(i) of this definition of
"REMIC III Distribution Amount" shall not cause a
reduction in the Uncertificated Principal Balances of any
of the REMIC III Regular Interests; and
45
(ii) second, to the Class R-III
Certificates, any remaining amount.
REMIC III Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of REMIC III Regular
Xxxxxxxxx XX0, XX0, XX0, XX0, XX0, XX0, XX0, XX0, XX-X0 and LT-Y2, respectively,
will be reduced on such Distribution Date by the allocation of Realized Losses
and the distribution of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall have
the meanings set forth below:
Y1 = the aggregate Uncertificated Principal Balance of REMIC III Regular
Interests LT1 and LT-Y1 after distributions on the prior Distribution Date.
Y2 = the Uncertificated Principal Balance of REMIC III Regular Interest
LT2 after distributions on the prior Distribution Date.
Y3 = the Uncertificated Principal Balance of REMIC III Regular Interest
LT3 after distributions on the prior Distribution Date.
Y4 = the Uncertificated Principal Balance of REMIC III Regular Interest
LT4 after distributions on the prior Distribution Date (note: Y3 = Y4).
AY1 = the combined REMIC III Regular Interest LT1 and LT-Y1 Principal
Reduction Amount. Such amount shall be allocated first to REMIC III Regular
Interest LT-Y1 up to the REMIC III Regular Interest LT-Y1 Principal Reduction
Amount and thereafter the remainder shall be allocated to REMIC III Regular
Interest LT1.
(DELTA)Y2 = the REMIC III Regular Interest LT2 Principal Reduction
Amount.
(DELTA)Y3 = the REMIC III Regular Interest LT3 Principal Reduction
Amount.
(DELTA)Y4 = the REMIC III Regular Interest LT4 Principal Reduction
Amount.
P0 = the aggregate Uncertificated Principal Balance of REMIC III Regular
Interests LT1, LT2, LT3, LT4 and LT-Y1 after distributions and the allocation of
Realized Losses on the prior Distribution Date.
P1 = the Uncertificated Principal Balance of REMIC III Regular Interests
LT1, LT2, LT3, LT4 and LT-Y1 after distributions and the allocation of Realized
Losses to be made on such Distribution Date.
(DELTA)P = P0 - P1 = the aggregate of the REMIC III Regular Interests
LT1, LT2, LT3, LT4 and LT-Y1 Principal Reduction Amounts.
46
=the aggregate of the principal portions of Realized Losses to be
allocated to, and the principal distributions to be made on, the Class A-I
Certificates and the Class M Certificates on such Distribution Date (including
distributions of accrued and unpaid interest on the Class SB Certificates for
prior Distribution Dates).
R0 = the Group I REMIC III Net WAC Rate (stated as a monthly rate) after
giving effect to amounts distributed and Realized Losses allocated on the prior
Distribution Date.
R1 = the Group I REMIC III Net WAC Rate (stated as a monthly rate) after
giving effect to amounts to be distributed and Realized Losses to be allocated
on such Distribution Date.
(alpha) = (Y2 + Y3)/P0. The initial value of a on the Closing Date for
use on the first Distribution Date shall be 0.0001.
(gamma)0 = the lesser of (A) the sum of (1) for all Classes of Class A-I
Certificates of the product for each Class of (i) the monthly interest rate (as
limited by the related Net WAC Cap Rate, if applicable) for such Class
applicable for distributions to be made on such Distribution Date and (ii) the
aggregate Certificate Principal Balance for such Class after distributions and
the allocation of Realized Losses on the prior Distribution Date, (2) for all
Classes of Class M Certificates of the product for each Class of (i) the monthly
interest rate (as limited by the related Net WAC Cap Rate, if applicable) for
such Class applicable for distributions to be made on such Distribution Date and
(ii) the aggregate Certificate Principal Balance for such Class multiplied by a
fraction whose numerator is the Uncertificated Principal Balance of REMIC II
Regular Interest Y-1 and whose denominator is the sum of the Uncertificated
Principal Balances of REMIC II Regular Interests Y-1 and Y-2 after distributions
and the allocation of Realized Losses on the prior Distribution Date and (3) the
amount, if any, by which the sum of the amounts in clauses (A)(1), (2) and (3)
of the definition of A0 exceeds S0*Q0 and (B) R0*P0.
(gamma)1 = the lesser of (A) the sum of (1) for all Classes of Class A-I
Certificates of the product for each Class of (i) the monthly interest rate (as
limited by the related Net WAC Cap Rate, if applicable) for such Class
applicable for distributions to be made on the next succeeding Distribution Date
and (ii) the aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses to be made on such
Distribution Date, (2) for all Classes of Class M Certificates of the product
for each Class of (i) the monthly interest rate (as limited by the related Net
WAC Cap Rate, if applicable) for such Class applicable for distributions to be
made on the next succeeding Distribution Date and (ii) the aggregate Certificate
Principal Balance for such Class multiplied by a fraction whose numerator is the
Uncertificated Principal Balance of REMIC II Regular Interest Y-1 and whose
denominator is the sum of the Uncertificated Principal Balances of REMIC II
Regular Interests Y-1 and Y-2 after distributions and the allocation of Realized
Losses to be made on such Distribution Date and (3) the amount, if any, by which
the sum of the amounts in clauses (A)(1), (2) and (3) of the definition of A1
exceeds S1*Q1 and (B) R1*P1.
Then, based on the foregoing definitions:
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4;
(DELTA)Y2 = ((alpha)/2){( (gamma)0R1 - (gamma)1R0)/R0R1};
47
(DELTA)Y3 = (alpha)(DELTA)P - (DELTA)Y2; and
(DELTA)Y4 = (DELTA)Y3.
if both (DELTA)Y2 and (DELTA)Y3, as so determined, are non-negative
numbers. Otherwise:
(1) If (DELTA)Y2, as so determined, is negative, then
(DELTA)Y2 = 0;
(DELTA)Y3 = (xxxxx){(xxxxx)0X0X0 - (xxxxx)0X0X0}/{(xxxxx)0X0};
(XXXXX)X0 = (DELTA)Y3; and
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.
(2) If (DELTA)Y3, as so determined, is negative, then
(DELTA)Y3 = 0;
(DELTA)Y2 = (xxxxx){(xxxxx)0X0X0 - (xxxxx)0X0X0}/{0X0X0X0 - (xxxxx)0X0};
(XXXXX)X0 = (DELTA)Y3; and
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.
For purposes of the succeeding formulas the following symbols shall have
the meanings set forth below:
Y5 = the aggregate Uncertificated Principal Balance of REMIC III Regular
Interests LT5 and LT-Y2 after distributions on the prior Distribution Date.
Y6 = the Uncertificated Principal Balance of REMIC III Regular Interest
LT6 after distributions on the prior Distribution Date.
Y7 = the Uncertificated Principal Balance of REMIC III Regular Interest
LT7 after distributions on the prior Distribution Date.
Y8 = the Uncertificated Principal Balance of REMIC III Regular Interest
LT8 after distributions on the prior Distribution Date (note: Y7 = Y8).
(DELTA)Y5 = the aggregate of the REMIC III Regular Interest LT5 and
LT-Y2 Principal Reduction Amounts. Such amount shall be allocated first to REMIC
III Regular Interest LT-Y2 up to the REMIC III Regular Interest LT-Y2 Principal
Reduction Amount and thereafter the remainder shall be allocated to REMIC III
Regular Interest LT5.
(DELTA)Y6 = the REMIC III Regular Interest LT6 Principal Reduction
Amount.
(DELTA)Y7 = the REMIC III Regular Interest LT7 Principal Reduction
Amount.
48
(DELTA)Y8 = the REMIC III Regular Interest LT8 Principal Reduction
Amount.
Q0 = the aggregate Uncertificated Principal Balance of REMIC III Regular
Interests LT5, LT6, LT7, LT8 and LT-Y2 after distributions and the allocation of
Realized Losses on the prior Distribution Date.
Q1 = the aggregate Uncertificated Principal Balance of REMIC III Regular
Interests LT5, LT6, LT7, LT8 and LT-Y2 after distributions and the allocation of
Realized Losses to be made on such Distribution Date.
(DELTA)Q = Q0 - Q1 = the aggregate of the REMIC III Regular Interests
LT5, LT6, LT7, LT8 and LT-Y2 Principal Reduction Amounts.
=the aggregate of the principal portions of Realized Losses to be
allocated to, and the principal distributions to be made on, the Class A-II
Certificates and the Class M Certificates on such Distribution Date (including
distributions of accrued and unpaid interest on the Class SB Certificates for
prior Distribution Dates).
S0 = the Group II REMIC III Net WAC Rate (stated as a monthly rate)
after giving effect to amounts distributed and Realized Losses allocated on the
prior Distribution Date.
S1 = the Group II REMIC III Net WAC Rate (stated as a monthly rate)
after giving effect to amounts to be distributed and Realized Losses to be
allocated on such Distribution Date.
(beta) = (Y6 + Y7)/Q0. The initial value of (beta) on the Closing Date
for use on the first Distribution Date shall be 0.0001.
(GAMMA)0 = the lesser of (A) the sum of (1) for all Classes of Class
A-II Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the related Net WAC Cap Rate, if applicable) for such Class
applicable for distributions to be made on such Distribution Date and (ii) the
aggregate Certificate Principal Balance for such Class after distributions and
the allocation of Realized Losses on the prior Distribution Date, (2) for all
Classes of Class M Certificates of the product for each Class of (i) the monthly
interest rate (as limited by the related Net WAC Cap Rate, if applicable) for
such Class applicable for distributions to be made on such Distribution Date and
(ii) the aggregate Certificate Principal Balance for such Class multiplied by a
fraction whose numerator is the Uncertificated Principal Balance of REMIC II
Regular Interest Y-2 and whose denominator is the sum of the Uncertificated
Principal Balances of REMIC II Regular Interests Y-1 and Y-2 after distributions
and the allocation of Realized Losses on the prior Distribution Date and (3) the
amount, if any, by which the sum of the amounts in clauses (A)(1), (2) and (3)
of the definition of (gamma)0 exceeds R0*P0 and (B) S0*Q0.
(GAMMA)1 = the lesser of (A) the sum of (1) for all Classes of Class
A-II Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the related Net WAC Cap Rate, if applicable) for such Class
applicable for distributions to be made on the next succeeding Distribution Date
and (ii) the aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses to be made on such
Distribution Date, (2) for all Classes of Class M Certificates of the product
for each Class of (i) the monthly interest rate (as limited by the related Net
WAC Cap Rate, if applicable) for such Class applicable for distributions to be
49
made on the next succeeding Distribution Date and (ii) the aggregate Certificate
Principal Balance for such Class multiplied by a fraction whose numerator is the
Uncertificated Principal Balance of REMIC II Regular Interest Y-2 and whose
denominator is the sum of the principal balances of REMIC II Regular Interests
Y-1 and Y-2 after distributions and the allocation of Realized Losses to be made
on such Distribution Date and (3) the amount, if any, by which the sum of the
amounts in clauses (A)(1), (2) and (3) of the definition of (gamma)1 exceeds
R1*P1 and (B) S1*Q1.
Then, based on the foregoing definitions:
(DELTA)Y5 = (DELTA)Q - (DELTA)Y6 - (DELTA)Y7 - (DELTA)Y8;
(DELTA)Y6 = ((beta)/2){((GAMMA)0S1 - (GAMMA)1S0)/S0S1};
(DELTA)Y7 = (beta)(DELTA)Q - (DELTA)Y6; and
(DELTA)Y8 = (DELTA)Y7.
if both (DELTA)Y6 and (DELTA)Y7, as so determined, are non-negative
numbers. Otherwise:
(1) If (DELTA)Y6, as so determined, is negative, then
(DELTA)Y6 = 0;
(DELTA)Y7 = (xxxx){(XXXXX)0X0X0 - (XXXXX)0X0X0}/{(XXXXX)0X0};
(XXXXX)X0 = (DELTA)Y7; and
(DELTA)Y5 = (DELTA)Q - (DELTA)Y6 - (DELTA)Y7 - (DELTA)Y8.
(2) If (DELTA)Y7, as so determined, is negative, then
(DELTA)Y7 = 0;
(DELTA)Y6 = (xxxx){(XXXXX)0X0X0 - (XXXXX)0X0X0}/{0X0X0X0 - (XXXXX)0X0};
(XXXXX)X0 = (DELTA)Y7; and
(DELTA)Y5 = (DELTA)Q - (DELTA)Y6 - (DELTA)Y7 - (DELTA)Y8.
REMIC III Realized Losses: Realized Losses on Group I Loans and Group II
Loans shall be allocated to the REMIC III Regular Interests as follows: (1) The
interest portion of Realized Losses on Group I Loans, if any, shall be allocated
among REMIC III Regular Interests LT1, LT2, LT4 and LT-Y1, pro rata according to
the amount of interest accrued but unpaid thereon, in reduction thereof, and
thereafter to REMIC III Regular Interest LT-IO in reduction thereof; and (2) the
interest portion of Realized Losses on Group II Loans, if any, shall be
allocated among REMIC III Regular Interests LT5, LT6, LT8 and LT-Y2, pro rata,
according to the amount of interest accrued but unpaid thereon, in reduction
thereof, and thereafter to REMIC III Regular Interest LT-IO in reduction
thereof. Any interest portion of such Realized Losses in excess of the amount
50
allocated pursuant to the preceding sentence shall be treated as a principal
portion of Realized Losses not attributable to any specific Mortgage Loan in
such Loan Group and allocated pursuant to the succeeding sentences. The
principal portion of Realized Losses with respect to Loan Group I and Loan Group
II shall be allocated to the REMIC III Regular Interests as follows: (1) The
principal portion of Realized Losses on Group I Loans shall be allocated, first,
to REMIC III Regular Interest LT-Y1 to the extent that such losses were
allocated to REMIC II Regular Interest Y-1 in reduction of the Uncertificated
Principal Balance thereof, second, to REMIC III Regular Interests LT2, LT3 and
LT4 pro-rata according to their respective REMIC III Principal Reduction Amounts
to the extent thereof in reduction of the Uncertificated Principal Balance of
such REMIC III Regular Interests and, third, the remainder, if any, of such
principal portion of such Realized Losses shall be allocated to REMIC III
Regular Interest LT1 in reduction of the Uncertificated Principal Balance
thereof; and (2) the principal portion of Realized Losses on Group II Loans
shall be allocated, first, to REMIC III Regular Interest LT-Y2 to the extent
that such losses were allocated to REMIC II Regular Interest Y-2 in reduction of
the Uncertificated Principal Balance thereof, second, to REMIC III Regular
Interests LT6, LT7 and LT8 pro-rata according to their respective REMIC III
Principal Reduction Amounts to the extent thereof in reduction of the
Uncertificated Principal Balance of such REMIC III Regular Interests and, third,
the remainder, if any, of such principal portion of such Realized Losses shall
be allocated to REMIC III Regular Interest LT5 in reduction of the
Uncertificated Principal Balance thereof.
REMIC III Regular Interest. Any of the separate non-certificated
beneficial ownership interests in REMIC III issued hereunder and designated as a
"regular interest" in REMIC III. Each REMIC III Regular Interest shall accrue
interest at the related Uncertificated REMIC III Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal, subject
to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto. The designations for the respective REMIC III Regular Interests are set
forth in the Preliminary Statement hereto.
REMIC III Regular Interest LT1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT1
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC III Regular Interest LT1 on such Distribution Date.
REMIC III Regular Interest LT2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT2
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC III Regular Interest LT2 on such Distribution Date.
REMIC III Regular Interest LT3 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT3
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC III Regular Interest LT3 on such Distribution Date.
REMIC III Regular Interest LT4 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT4
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC III Regular Interest LT4 on such Distribution Date.
51
REMIC III Regular Interest LT5 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT5
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC III Regular Interest LT5 on such Distribution Date.
REMIC III Regular Interest LT6 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT6
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC III Regular Interest LT6 on such Distribution Date.
REMIC III Regular Interest LT7 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT7
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC III Regular Interest LT7 on such Distribution Date.
REMIC III Regular Interest LT8 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT8
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC III Regular Interest LT8 on such Distribution Date.
REMIC III Regular Interest LT-Y1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT-Y1
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC III Regular Interest LT-Y1 on such Distribution Date.
REMIC III Regular Interest LT-Y2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC III Regular Interest LT-Y2
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to REMIC III Regular Interest LT-Y2 on such Distribution Date.
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 IV Available Distribution Amount: For any Distribution Date, the
amount distributed from REMIC III to REMIC IV on such Distribution Date in
respect of the REMIC III Regular Interests.
REMIC IV Distribution Amount: For any Distribution Date, the REMIC IV
Available Distribution Amount shall be deemed distributed to Class A and Class M
Certificates in respect of the portion of such Certificates representing
ownership of REMIC IV Regular Interests, REMIC IV Regular Interests SB-IO, SB-PO
and IO and the Class R-IV Certificates in the following amounts and priority:
52
(i) to REMIC V in respect of REMIC IV Regular Interest IO, the amount
distributable with respect to such REMIC IV Regular Interest as described in the
Preliminary Statement, being paid from and in reduction of the REMIC IV
Available Distribution Amount for such Distribution Date;
(ii) to the Class A Certificateholders, the Accrued Certificate Interest
payable on the Class A Certificates with respect to such Distribution Date, plus
any related amounts accrued pursuant to this clause (i) but remaining unpaid
from any prior Distribution Date, being paid from and in reduction of the REMIC
IV Available Distribution Amount for such Distribution Date;
(iii) to the Class M Certificateholders, from the amount, if any, of the
Available Distribution Amount remaining after the foregoing distributions,
Accrued Certificate Interest payable on the Class M Certificates with respect to
such Distribution Date, plus any related amounts accrued pursuant to this clause
(ii) but remaining unpaid from any prior Distribution Date, sequentially, to the
Class M-1 Certificateholders, Class M-2 Certificateholders, Class M-3
Certificateholders, Class M-4 Certificateholders, Class M-5 Certificateholders,
Class M-6 Certificateholders, Class M-7 Certificateholders, Class M-8
Certificateholders, Class M-9 Certificateholders, Class M-10 Certificateholders
and Class M-11 Certificateholders, in that order, being paid from and in
reduction of the REMIC IV Available Distribution Amount for such Distribution
Date;
(iv) the Principal Distribution Amount shall be distributed as follows,
to be applied to reduce the principal balance of the REMIC IV Regular Interest
related to the applicable Certificates in each case to the extent of the
remaining Principal Distribution Amount:
(A) first, the Class A-I Principal Distribution Amount shall be
distributed sequentially to the Class A-I-1 Certificateholders, Class A-I-2
Certificateholders, Class A-I-3 Certificateholders and Class A-I-4
Certificateholders, in that order, in each case until the Certificate
Principal Balance thereof is reduced to zero;
(B) second, to the Class M-1 Certificateholders, the Class M-1
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-1 Certificates has been reduced to zero;
(C) third, to the Class M-2 Certificateholders, the Class M-2
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-2 Certificates has been reduced to zero;
(D) fourth, to the Class M-3 Certificateholders, the Class M-3
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-3 Certificates has been reduced to zero;
(E) fifth, to the Class M-4 Certificateholders, the Class M-4
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-4 Certificates has been reduced to zero;
53
(F) sixth, to the Class M-5 Certificateholders, the Class M-5
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-5 Certificates has been reduced to zero;
(G) seventh, to the Class M-6 Certificateholders, the Class M-6
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-6 Certificates has been reduced to zero;
(H) eighth, to the Class M-7 Certificateholders, the Class M-7
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-7 Certificates has been reduced to zero;
(I) ninth, to the Class M-8 Certificateholders, the Class M-8
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-8 Certificates has been reduced to zero;
(J) tenth, to the Class M-9 Certificateholders, the Class M-9
Principal Distribution Amount, until the Certificate Principal Balance of
the Class M-9 Certificates has been reduced to zero; and
(K) eleventh, to the Class M-10 Certificateholders, the Class
M-10 Principal Distribution Amount, until the Certificate Principal Balance
of the Class M-10 Certificates has been reduced to zero; and
(v) to the Class A Certificateholders and Class M Certificateholders,
the amount of any Prepayment Interest Shortfalls allocated thereto for such
Distribution Date, on a pro rata basis based on Prepayment Interest Shortfalls
allocated thereto to the extent not offset by Eligible Master Servicing
Compensation on such Distribution Date;
(vi) to the Class A Certificateholders and Class M Certificateholders,
the amount of any Prepayment Interest Shortfalls previously allocated thereto
remaining unpaid from prior Distribution Dates together with interest thereon at
the related Pass-Through Rate, on a pro rata basis based on unpaid Prepayment
Interest Shortfalls previously allocated thereto;
(vii) to REMIC V in respect of REMIC IV Regular Interests SB-IO and
SB-PO, (A) from the amount, if any, of the REMIC IV Available Distribution
Amount remaining after the foregoing distributions, the sum of (I) Accrued
Certificate Interest on the Class SB Certificates, (II) the amount of any
Overcollateralization Reduction Amount for such Distribution Date and (III) for
any Distribution Date after the Certificate Principal Balance of each Class of
Class A Certificates and Class M Certificates has been reduced to zero, the
Overcollateralization Amount and (B) from prepayment charges on deposit in the
Certificate Account, any prepayment charges received on the Mortgage Loans
during the related Prepayment Period; and
(viii) to the Class R-IV Certificateholders, the balance, if any, of the
REMIC IV Available Distribution Amount.
54
REMIC IV Regular Interest SB-PO: A separate beneficial ownership
interest in REMIC IV issued hereunder and designated as a Regular Interest in
REMIC IV, held as an asset of REMIC X. XXXXX XX Regular Interest SB-PO shall
have no entitlement to interest, and shall be entitled to distributions of
principal subject to the terms and conditions hereof, in aggregate amount equal
to the initial Certificate Principal Balance of the Class SB Certificates as set
forth in the Preliminary Statement hereto.
REMIC IV Regular Interest SB-IO: A separate beneficial ownership
interest in REMIC IV issued hereunder and designated as a Regular Interest in
REMIC IV, held as an asset of REMIC X. XXXXX XX Regular Interest SB-IO shall
have no entitlement to principal, and shall be entitled to distributions of
interest subject to the terms and conditions hereof, in aggregate amount equal
to the interest distributable with respect to the Class SB Certificates pursuant
to the terms and conditions hereof.
REMIC IV Regular Interest IO: A separate beneficial ownership interest
in REMIC IV issued hereunder and designated as a Regular Interest in REMIC IV,
held as an asset of REMIC X. XXXXX XX Regular Interest IO shall have no
entitlement to principal, and shall be entitled to distributions of interest
subject to the terms and conditions hereof, in aggregate amount equal to the
interest distributable with respect to REMIC III Regular Interest LT-IO.
REMIC IV Regular Interests: REMIC IV Regular Interests SB-IO, SB-PO and
IO, together with the Class A Certificates and Class M Certificates, exclusive
of their respective rights to receive the payment of Basis Risk Shortfalls and
other amounts pursuant to the SB-AM Swap Agreement.
REMIC V: 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
REMIC IV Regular Interests SB-IO, SB-PO and IO.
REMIC V Available Distribution Amount: For any Distribution Date, the
amounts deemed distributed from REMIC IV to REMIC V on such Distribution Date in
respect of REMIC IV Regular Interests SB-IO, SB-PO and IO pursuant to the
definition of REMIC IV Distribution Amount.
REMIC V Distribution Amount: For any Distribution Date, the REMIC V
Available Distribution Amount shall be deemed distributed by REMIC V to the
holders of the Class SB Certificates on account of REMIC V Regular Interest SB
and to the Supplemental Interest Trust Account on account of REMIC V Regular
Interest IO.
REMIC V Regular Interests. Either of the separate beneficial ownership
interests in REMIC V issued hereunder and designated as a "regular interest" in
REMIC V. The REMIC V Regular Interests shall be entitled to distributions of
interest and principal, subject to the terms and conditions hereof, as set forth
in the Preliminary Statement hereto.
Required Overcollateralization Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date, an amount equal to 0.70% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date; (ii) on
or after the Stepdown Date, the greater of (x) 1.40% of the outstanding
aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions made on that Distribution Date and (y) the Overcollateralization
Floor; and (iii) on or after the Stepdown Date if a Trigger Event is in effect,
55
the Required Overcollateralization Amount for the immediately preceding
Distribution Date; provided that the Required Overcollateralization Amount may
be reduced so long as written confirmation is obtained from each rating agency
that the reduction will not reduce the ratings assigned to the Class A
Certificates and Class M Certificates by that rating agency below the lower of
the then-current ratings or the ratings assigned to those certificates as of the
closing date by that rating agency.
Rule 144A: Rule 144A under the Securities Act of 1933, as in effect from
time to time.
Rule 144A Global Offered Certificate: Any one of the Class SB-1
Certificates substantially in the form of Exhibit Eleven-A hereto, and, in both
cases, more fully described in Section 5.02(g) hereof.
SB-AM Swap Agreement: The interest rate swap agreement between the
Trustee, on behalf of the Class A Certificateholders and Class M
Certificateholders, and the Trustee, on behalf of the Class SB
Certificateholders, evidenced by the confirmation attached hereto as Exhibit
Five and incorporated herein by reference.
Senior Certificate: Any one of the Class A Certificates.
Senior Enhancement Percentage: With respect to any Distribution Date,
the percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class M Certificates and (ii) the Overcollateralization
Amount, in each case prior to the distribution of the Principal Distribution
Amount on such Distribution Date, by (y) the aggregated Stated Principal Balance
of the Mortgage Loans after giving effect to distributions to be made on that
Distribution Date.
Senior Percentage: With respect to each Loan Group and any Distribution
Date, the percentage equal to the lesser of (x) the aggregate Certificate
Principal Balances of the related Class A Certificates immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of the
Mortgage Loans in such Loan Group immediately prior to such Distribution Date
and (y) 100%.
Sharia Mortgage Loan: A declining balance co-ownership transaction,
structured so as to comply with Islamic religious law.
Sharia Mortgage Loan Co-Ownership Agreement: The agreement that defines
the relationship between the consumer and co-owner and the parties' respective
rights under a Sharia Mortgage Loan, including their respective rights with
respect to the indicia of ownership of the related Mortgaged Property.
Sharia Mortgage Loan Security Instrument: The mortgage, security
instrument or other comparable instrument creating a first lien on an estate in
fee simple or leasehold interest in real property securing an Obligation to Pay.
Sixty-Plus Delinquency Percentage: With respect to any Distribution Date
on or after the Stepdown date, the arithmetic average, for each of the three
consecutive Distribution Dates ending with such Distribution Date, of the
fraction, expressed as a percentage, equal to (x) the aggregate Stated Principal
56
Balance of the Mortgage Loans that are 60 or more days delinquent in payment of
principal and interest for that Distribution Date, including Mortgage Loans in
foreclosure, and REO Properties over (y) the aggregate Stated Principal Balance
of all of the Mortgage Loans immediately preceding that Distribution Date.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property, as of any date of determination, (i) the sum of (a) the Cut-off
Date Principal Balance of the Mortgage Loan plus (b) any amount by which the
Stated Principal Balance of the Mortgage Loan has been increased pursuant to a
Servicing Modification, minus (ii) the sum of (a) the principal portion of the
Monthly Payments due with respect to such Mortgage Loan or REO Property during
each Due Period ending with the Due Period relating to the most recent
Distribution Date which were received or with respect to which an Advance was
made, (b) all Principal Prepayments with respect to such Mortgage Loan or REO
Property, and all Insurance Proceeds, Liquidation Proceeds and REO Proceeds, to
the extent applied by the Master Servicer as recoveries of principal in
accordance with Section 3.14 with respect to such Mortgage Loan or REO Property,
in each case which were distributed pursuant to Section 4.02 on any previous
Distribution Date, and (c) any Realized Loss incurred with respect to such
Mortgage Loan allocated to Certificateholders with respect thereto for any
previous Distribution Date.
Stepdown Date: The earlier to occur of (i) the Distribution Date
immediately succeeding the Distribution Date on which the aggregate Certificate
Principal Balance of the Class A Certificates has been reduced to zero or (ii)
the later to occur of (x) the Distribution Date in September 2009 and (y) the
first Distribution Date on which the Senior Enhancement Percentage (calculated
for this purpose only after taking into account payments of principal on the
Mortgage Loans due on the related Due Date or received during the related
Prepayment Period but prior to distribution of the Principal Distribution Amount
in respect of the Certificates then entitled to distributions of principal on
such Distribution Date) is greater than or equal to approximately 12.50%.
Subordination Component: With respect to any Distribution Date and each
Loan Group, the positive excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans in that Loan Group, over the aggregate Certificate
Principal Balance of the related Class A Certificates, in each case immediately
prior to that Distribution Date.
57
Subordination Percentage: With respect to each class of Class A
certificates and Class M, the respective approximate percentage set forth in the
table below:
CLASS PERCENTAGE
A 87.50%
M-1 90.70%
M-2 92.00%
M-3 92.90%
M-4 93.90%
M-5 94.80%
M-6 95.50%
M-7 96.20%
M-8 96.90%
M-9 97.60%
M-10 98.60%
Subsequent Recovery Allocation Amount: With respect to a Loan Group,
that portion of the Principal Allocation Amount in respect of that Loan Group
attributable to the amounts described in clause (iv) of the definition of
Principal Distribution Amount.
Supplemental Interest Trust Account: The separate trust account created
and maintained by the Trustee pursuant to Section 4.09(a).
Supplemental Interest Trust: The separate trust created and maintain by
the Supplemental Interest Trust Trustee pursuant to Section 4.09(a). The primary
activities of the Supplemental Interest Trust created pursuant to this Agreement
shall be:
(i) holding the Swap Agreement;
(ii) receiving collections or making payments with respect to the
Swap Agreement; and
(iii) engaging in other activities that are necessary or
incidental to accomplish these limited purposes, which activities cannot
be contrary to the status of the Supplemental Interest Trust as a
qualified special purpose entity under existing accounting literature.
Supplemental Interest Trust Trustee: Deutsche Bank Trust Company
Americas, a national banking association, not in its individual capacity, but
solely in its capacity as trustee of the Supplemental Interest Trust, and any
successor thereto, and any corporation or national banking association resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Swap Agreement: The interest rate swap agreement between the Swap
Counterparty and the Supplemental Interest Trust Trustee, on behalf of the
Supplemental Interest Trust, which agreement provides for Net Swap Payments and
Swap Termination Payments to be paid, as provided therein, together with any
schedules, confirmations or other agreements relating thereto, attached hereto
as Exhibit 4.
Swap Agreement Notional Balance: As to the Swap Agreement and each
Floating Rate Payer Payment Date and Fixed Rate Payer Payment Date (each as
defined in the Swap Agreement) the amount set forth on Schedule I to the Swap
Agreement for such Floating Rate Payer Payment Date and Fixed Rate Payer Payment
Date.
58
Swap Counterparty: The swap counterparty under the Swap Agreement either
(a) entitled to receive payments from the Supplemental Interest Trust Trustee
from amounts payable by the Supplemental Interest Trust under this Agreement or
(b) required to make payments to the Supplemental Interest Trust Trustee for
payment to the Supplemental Interest Trust, in either case pursuant to the terms
of the Swap Agreement, and any successor in interest or assign. Initially, the
Swap Counterparty shall be HSBC Bank USA, N.A.
Swap Counterparty Trigger Event: With respect to any Distribution Date,
(i) an Event of Default under the Swap Agreement with respect to which the Swap
Counterparty is a Defaulting Party, (ii) a Termination Event under the Swap
Agreement with respect to which the Swap Counterparty is the sole Affected
Party, or (iii) an additional termination event under the Swap Agreement with
respect to which the Swap Counterparty is the sole Affected Party.
Swap LIBOR: LIBOR as determined pursuant to the Swap Agreement.
Swap Termination Payment: Upon the occurrence of an Early Termination
Date, the payment to be made by the Supplemental Interest Trust Trustee on
behalf of the Supplemental Interest Trust to the Swap Counterparty from payments
from the Supplemental Interest Trust, or by the Swap Counterparty to the
Supplemental Interest Trust Trustee for payment to the Supplemental Interest
Trust, as applicable, pursuant to the terms of the Swap Agreement.
Temporary Regulation S Global Offered Certificate: Any one of the Class
SB-1 Certificates substantially in the form of Exhibit Eleven -C hereto, and, in
both cases, more fully described in Section 5.02(g) hereof.
Trigger Event: A Trigger Event is in effect with respect to any
Distribution Date on or after the Stepdown Date if either (a) the Sixty-Plus
Delinquency Percentage, as determined on that Distribution Date exceeds 40.00%
of the Senior Enhancement Percentage for that Distribution Date or (b) the
aggregate amount of Realized Losses on the Mortgage Loans as a percentage of the
initial aggregate Stated Principal Balance as of the Cut-off Date exceeds the
applicable amount set forth below:
o September 2008 to August 2009: 0.20% with respect to September 2008,
plus an additional 1/12th of 0.30% for each month through August
2009.
o September 2009 to August 2010: 0.50% with respect to September 2009,
plus an additional 1/12th of 0.40% for each month through August
2010.
o September 2010 to August 2011: 0.90% with respect to September 2010,
plus an additional 1/12th of 0.35% for each month through August
2011.
59
o September 2011 to August 2012: 1.25% with respect to September 2011,
plus an additional 1/12th of 0.25% for each month through August
2012.
o September 2012 and thereafter: 1.50%.
Uncertificated Accrued Interest: With respect to any Uncertificated
REMIC Regular Interest for any Distribution Date, one month's interest at the
related Uncertificated Pass-Through Rate for such Distribution Date, accrued on
the Uncertificated Principal Balance or Uncertificated Notional Amount, as
applicable, immediately prior to such Distribution Date. Uncertificated Accrued
Interest for the Uncertificated REMIC 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, REMIC II Regular Interests and REMIC III Regular Interests
for any Distribution Date, any Prepayment Interest Shortfalls and Relief Act
Shortfalls (to the extent not covered by Compensating Interest) shall be
allocated among REMIC I Regular Interests, REMIC II Regular Interests and REMIC
III Regular Interests, respectively, pro rata, based on, and to the extent of,
Uncertificated Accrued Interest, as calculated without application of this
sentence. Uncertificated Accrued Interest on REMIC IV Regular Interest SB-PO
shall be zero. Uncertificated Accrued Interest on the REMIC IV Regular Interest
SB-IO for each Distribution Date shall equal Accrued Certificate Interest for
the Class SB Certificates.
Uncertificated Notional Amount: With respect to the Class SB
Certificates or REMIC IV Regular Interest SB-IO, immediately prior to any
Distribution Date, the aggregate of the Uncertificated Principal Balances of the
REMIC III Regular Interests.
With respect to REMIC II Regular Interest LT-IO and REMIC III Regular
Interest LT-IO and each Distribution Date listed below, the aggregate
Uncertificated Principal Balance of the REMIC I Regular Interests ending with
the designation "A" listed below:
DISTRIBUTION
DATE REMIC I REGULAR INTERESTS
1 I-1-A through X-00-X
0 X-0-X xxxxxxx X-00-X
0 X-0-X through X-00-X
0 X-0-X xxxxxxx X-00-X
0 X-0-X through X-00X
0 X-0-X xxxxxxx X-00-X
0 X-0-X through X-00-X
0 X-0-X xxxxxxx X-00-X
0 X-0-X through I-60-A
10 I-10-A through I-60-A
11 I-11-A through I-60-A
12 I-12-A through I-60-A
13 I-13-A through I-60-A
14 I-14-A through I-60-A
15 I-15-A through I-60-A
16 I-16-A through I-60-A
60
DISTRIBUTION
DATE REMIC I REGULAR INTERESTS
17 I-17-A through I-60-A
18 I-18-A through I-60-A
19 I-19-A through I-60-A
20 I-20-A through I-60-A
21 I-21-A through I-60-A
22 I-22-A through I-60-A
23 I-23-A through I-60-A
24 I-24-A through I-60-A
25 I-25-A through I-60-A
26 I-26-A through I-60-A
27 I-27-A through I-60-A
28 I-28-A through I-60-A
29 I-29-A through I-60-A
30 I-30-A through I-60-A
31 I-31-A through I-60-A
32 I-32-A through I-60-A
33 I-33-A through I-60-A
34 I-34-A through I-60-A
35 I-35-A through I-60-A
36 I-36-A through I-60-A
37 I-37-A through I-60-A
38 I-38-A through I-60-A
39 I-39-A through I-60-A
40 I-40-A through I-60-A
41 I-41-A through I-60-A
42 I-42-A through I-60-A
43 I-43-A through I-60-A
44 I-44-A through I-60-A
45 I-45-A through I-60-A
46 I-46-A through I-60-A
47 I-47-A through I-60-A
48 I-48-A through I-60-A
49 I-49-A through I-60-A
50 I-50-A through I-60-A
51 I-51-A through I-60-A
52 I-52-A through I-60-A
53 I-53-A through I-60-A
54 I-54-A through I-60-A
55 I-55-A through I-60-A
56 I-56-A through I-60-A
57 I-57-A through I-60-A
58 I-58-A through I-60-A
59 I-59-A through I-60-A
60 I-60-A
thereafter $0.00
61
With respect to REMIC IV Regular Interest IO, immediately prior to any
Distribution Date, an amount equal to the Uncertificated Notional Amount of
REMIC III Regular Interest LT-IO.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I
Pass-Through Rate, the Uncertificated REMIC II Pass-Through Rate or the
Uncertificated REMIC III Pass-Through Rate, as applicable
Uncertificated Principal Balance: The principal amount of any
Uncertificated Regular Interest outstanding as of any date of determination. The
Uncertificated Principal Balance of each Uncertificated Regular Interest shall
be reduced first by Realized Losses allocated thereto by the definition of REMIC
I Realized Losses, REMIC II Realized Losses or REMIC III Realized Losses, as
applicable, and by all distributions of principal deemed made on such
Uncertificated Regular Interest on such Distribution Date. The Uncertificated
Principal Balance of each Uncertificated Regular Interest shall never be less
than zero. With respect to REMIC IV Regular Interest SB-PO the initial amount
set forth with respect thereto in the Preliminary Statement as reduced by
distributions deemed made in respect thereof pursuant to Section 4.02 and
Realized Losses allocated thereto pursuant to Section 4.05.
Uncertificated REMIC Regular Interests: The REMIC I Regular Interests,
the REMIC II Regular Interests, the REMIC III Regular Interests and REMIC IV
Regular Interests SB-IO, SB-PO and IO.
Uncertificated REMIC I Pass-Through Rate: With respect to each REMIC I
Regular Interest ending with the designation "A", a per annum rate equal to the
weighted average Net Mortgage Rate of the Mortgage Loans multiplied by two (2),
subject to a maximum rate of 11.12%. With respect to each REMIC I Regular
Interest ending with the designation "B", the greater of (x) a per annum rate
equal to the excess, if any, of (i) 2 multiplied by the weighted average Net
Mortgage Rate of the Mortgage Loans over (ii) 11.12% and (y) 0.00000%. With
respect to REMIC I Regular Interest A-I, the weighted average of the Net
Mortgage Rates on the Mortgage Loans. With respect to REMIC I Regular Interest
I, the weighted average of the Net Mortgage Rates on the Group I Loans. With
respect to REMIC I Regular Interest II, the weighted average of the Net Mortgage
Rates on the Group II Loans.
Uncertificated REMIC II Pass-Through Rate: With respect to any
Distribution Date and (i) REMIC II Regular Interests Y-1 and Z-1, the Group I
REMIC II Net WAC Rate, (ii) REMIC II Regular Interests Y-2 and Z-2, the Group II
REMIC II Net WAC Rate, and (iii) REMIC II Regular Interest LT-IO, the excess of
(i) the weighted average of the Uncertificated REMIC I Pass-Through Rates for
REMIC I Regular Interests ending with the designation "A," over (ii) 2
multiplied by Swap LIBOR.
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Uncertificated REMIC III Pass-Through Rate: With respect to any
Distribution Date and (i) REMIC III Regular Interests LT1, LT2 and LT-Y1, the
Group I REMIC III Net WAC Rate, (ii) REMIC III Regular Interests LT5, LT6 and
LT-Y2, the Group II REMIC III Net WAC Rate, (iii) REMIC III Regular Interests
LT3 and LT7, zero (0.00%), (iv) REMIC III Regular Interest LT4, twice the Group
I REMIC III Net WAC Rate, (v) REMIC II Regular Interest LT8, twice the Group II
REMIC III Net WAC Rate; and (vi) REMIC III Regular Interest LT-IO, the excess of
(i) the weighted average of the Uncertificated REMIC I Pass-Through Rates for
REMIC I Regular Interests ending with the designation "A," over (ii) 2
multiplied by Swap LIBOR.
Underwriter: Residential Funding Securities LLC.
Section 1.02. DETERMINATION OF LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on the
LIBOR Certificates for any Interest Accrual Period will be determined as of each
LIBOR Rate Adjustment Date. On each LIBOR Rate Adjustment Date, or if such LIBOR
Rate Adjustment Date is not a Business Day, then on the next succeeding Business
Day, LIBOR shall be established by the Trustee and, as to any Interest Accrual
Period, will equal the rate for one month United States dollar deposits that
appears on the Dow Xxxxx Telerate Screen Page 3750 as of 11:00 a.m., London
time, on such LIBOR Rate Adjustment Date. "Dow Xxxxx Telerate Screen Page 3750"
means the display designated as page 3750 on the Telerate Service (or such other
page as may replace page 3750 on that service for the purpose of displaying
London interbank offered rates of major banks). If such rate does not appear on
such page (or such other page as may replace that page on that service, or if
such service is no longer offered, LIBOR shall be so established by use of such
other service for displaying LIBOR or comparable rates as may be selected by the
Trustee after consultation with the Master Servicer), the rate will be the
Reference Bank Rate. The "Reference Bank Rate" will be determined on the basis
of the rates at which deposits in U.S. Dollars are offered by the reference
banks (which shall be any three major banks that are engaged in transactions in
the London interbank market, selected by the Trustee after consultation with the
Master Servicer) as of 11:00 a.m., London time, on the LIBOR Rate Adjustment
Date to prime banks in the London interbank market for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of
the LIBOR Certificates then outstanding. The Trustee will request the principal
London office of each of the reference banks to provide a quotation of its rate.
If at least two such quotations are provided, the rate will be the arithmetic
mean of the quotations rounded up to the next multiple of 1/16%. If on such date
fewer than two quotations are provided as requested, the rate will be the
arithmetic mean of the rates quoted by one or more major banks in New York City,
selected by the Trustee after consultation with the Master Servicer, as of 11:00
a.m., New York City time, on such date for loans in U.S. Dollars to leading
European banks for a period of one month in amounts approximately equal to the
aggregate Certificate Principal Balance of the LIBOR Certificates then
outstanding. If no such quotations can be obtained, the rate will be LIBOR for
the prior Distribution Date; provided however, if, under the priorities
described above, LIBOR for a Distribution Date would be based on LIBOR for the
previous Distribution Date for the third consecutive Distribution Date, the
Trustee, after consultation with the Master Servicer, shall select an
alternative comparable index (over which the Trustee has no control), used for
determining one-month Eurodollar lending rates that is calculated and published
(or otherwise made available) by an independent party.
63
The establishment of LIBOR by the Trustee and the Master Servicer on any
LIBOR Rate Adjustment Date and the Master Servicer's subsequent calculation of
the Pass-Through Rate applicable to the LIBOR Certificates for the relevant
Interest Accrual Period, in the absence of manifest error, will be final and
binding.
Promptly following each LIBOR Rate Adjustment Date the Trustee shall
supply the Master Servicer with the results of its determination of LIBOR on
such date. Furthermore, the Trustee will supply to any Certificateholder so
requesting by telephone by calling (000) 000-0000 the Pass-Through Rate on the
LIBOR Certificates for the current and the immediately preceding Interest
Accrual Period.
Section 1.03. USE OF WORDS AND PHRASES.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore," "hereinafter"
and other equivalent words refer to the Pooling and Servicing Agreement as a
whole. All references herein to Articles, Sections or Subsections shall mean the
corresponding Articles, Sections and Subsections in the Pooling and Servicing
Agreement. The definitions set forth herein include both the singular and the
plural.
References in the Pooling and Servicing Agreement to "interest" on and
"principal" of the Mortgage Loans shall mean, with respect to the Sharia
Mortgage Loans, if any, amounts in respect profit payments and acquisition
payments, respectively.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. CONVEYANCE OF MORTGAGE LOANS.
(a) (See Section 2.01(a) of the Standard Terms).
(b) In connection with such assignment, except as set forth in Section
2.01(c) and subject to Section 2.01(d) below, the Company does hereby (1) with
respect to each Mortgage Loan (other than a Cooperative Loan or a Sharia
Mortgage Loan) deliver to the Master Servicer (or an affiliate of the Master
Servicer) each of the documents or instruments described in clause (I)(ii) below
(and the Master Servicer shall hold (or cause such affiliate to hold) such
documents or instruments in trust for the use and benefit of all present and
future Certificateholders), (2) with respect to each MOM Loan, deliver to and
deposit with the Trustee, or the Custodian on behalf of the Trustee, the
documents or instruments described in clauses (I)(i) and (v) below, (3) with
respect to each Mortgage Loan that is not a MOM Loan but is registered on the
MERS(R) System, deliver to and deposit with the Trustee, or to the Custodian on
behalf of the Trustee, the documents or instruments described in clauses (I)(i),
(iv) and (v) below, (4) with respect to each Mortgage Loan that is not a MOM
Loan and is not registered on the MERS(R) System, deliver to and deposit with
the Trustee, or to the Custodian on behalf of the Trustee, the documents or
instruments described in clauses (I)(i), (iii), (iv) and (v), and (5) with
respect to each Cooperative Loan and Sharia Mortgage Loan, the documents or
instruments described in clause (II) and clause (III) below:
64
(I) with respect to each Mortgage Loan so assigned (other than a
Cooperative Loan or a Sharia Mortgage Loan):
(i) The original Mortgage Note, endorsed without recourse in
blank or to the order of the Trustee, and showing an unbroken chain of
endorsements from the originator thereof to the Person endorsing it to
the Trustee, or with respect to any Destroyed Mortgage Note, an original
lost note affidavit from the related Seller or Residential Funding
stating that the original Mortgage Note was lost, misplaced or
destroyed, together with a copy of the related Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a MOM
Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon or a copy of the Mortgage with evidence of recording
indicated thereon;
(iii) The original Assignment of the Mortgage to the Trustee with
evidence of recording indicated thereon or a copy of such assignment
with evidence of recording indicated thereon;
(iv) The original recorded assignment or assignments of the
Mortgage showing an unbroken chain of title from the originator thereof
to the Person assigning it to the Trustee (or to MERS, if the Mortgage
Loan is registered on the MERS(R) System and noting the presence of a
MIN) with evidence of recordation noted thereon or attached thereto, or
a copy of such assignment or assignments of the Mortgage with evidence
of recording indicated thereon; and
(v) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Mortgage Loan or a
copy of each modification, assumption agreement or preferred loan
agreement;
(II) with respect to each Cooperative Loan so assigned:
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;
A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from such
originator to the Trustee or a copy of such Cooperative Lease and
Assignment of Proprietary Lease and copies of any such intervening
assignments;
The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument)
executed in blank or copies thereof;
65
The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related Cooperative Loan
or a copy thereof;
The Security Agreement or a copy thereof;
Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative
Loan as secured party, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease;
Copies of the filed UCC-3 assignments of the security interest
referenced in clause (vi) above showing an unbroken chain of title from
the originator to the Trustee, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease;
An executed assignment of the interest of the originator in the
Security Agreement, Assignment of Proprietary Lease and the recognition
agreement referenced in clause (iv) above, showing an unbroken chain of
title from the originator to the Trustee, or a copy thereof;
The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Cooperative Loan or a
copy of each modification, assumption agreement or preferred loan
agreement; and
A duly completed UCC-1 financing statement showing the Master
Servicer as debtor, the Company as secured party and the Trustee as
assignee and a duly completed UCC-1 financing statement showing the
Company as debtor and the Trustee as secured party, each in a form
sufficient for filing, evidencing the interest of such debtors in the
Cooperative Loans or copies thereof; and
(III) with respect to each Sharia Mortgage Loan so assigned:
(i) The original Obligation to Pay, endorsed without recourse in
blank or to the order of the Trustee and showing an unbroken chain of
endorsements from the originator thereof to the Person endorsing it to
the Trustee, or with respect to any Destroyed Obligation to Pay, an
original affidavit from the related Seller or Residential Funding
stating that the original Obligation to Pay was lost, misplaced or
destroyed, together with a copy of the related Obligation to Pay;
(ii) The original Sharia Mortgage Loan Security Instrument, with
evidence of recording indicated thereon or a copy of the Sharia Mortgage
Loan Security Instrument with evidence of recording indicated thereon;
(iii) An original Assignment and Amendment of Security
Instrument, assigned to the Trustee with evidence of recording indicated
thereon or a copy of such Assignment and Amendment of Security
Instrument with evidence of recording indicated thereon;
66
(iv) The original recorded assignment or assignments of the
Sharia Mortgage Loan Security Instrument showing an unbroken chain of
title from the originator thereof to the Person assigning it to the
Trustee with evidence of recordation noted thereon or attached thereto,
or a copy of such assignment or assignments of the Sharia Mortgage Loan
Security Instrument with evidence of recording indicated thereon;
(v) The original Sharia Mortgage Loan Co-Ownership Agreement with
respect to the related Sharia Mortgage Loan or a copy of such Sharia
Mortgage Loan Co-Ownership Agreement; and
(vi) The original of each modification or assumption agreement,
if any, relating to such Sharia Mortgage Loan or a copy of each
modification or assumption agreement.
(c) The Company may, in lieu of delivering the original of the documents
set forth in Sections 2.01(b)(I)(iii), (iv) and (v), Sections 2.01(b)(II)(ii),
(iv), (vii), (ix) and (x) and Sections 2.01(b)(III)(ii), (iii), (iv), (v) and
(vi) (or copies thereof) to the Trustee or to the Custodian on behalf of the
Trustee, deliver such documents to the Master Servicer, and the Master Servicer
shall hold such documents in trust for the use and benefit of all present and
future Certificateholders until such time as is set forth in the next sentence.
Within thirty Business Days following the earlier of (i) the receipt of the
original of all of the documents or instruments set forth in Sections
2.01(b)(I)(iii), (iv) and (v), Sections 2.01(b)(II)(ii), (iv), (vii), (ix) and
(x) and Sections 2.01(b)(III)(ii), (iii), (iv), (v) and (vi) (or copies thereof)
for any Mortgage Loan and (ii) a written request by the Trustee to deliver those
documents with respect to any or all of the Mortgage Loans then being held by
the Master Servicer, the Master Servicer shall deliver a complete set of such
documents to the Trustee or to the Custodian on behalf of the Trustee.
The parties hereto agree that it is not intended that any Mortgage Loan
be included in the Trust Fund that is either (i) a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003, (ii) a
"High-Cost Home Loan" as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004, (iii) a "High Cost Home Mortgage Loan" as defined in
the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004
or (iv) a "High-Cost Home Loan" as defined in the Indiana House Enrolled Act No.
1229, effective as of January 1, 2005.
(d) Notwithstanding the provisions of Section 2.01(c), in connection
with any Mortgage Loan, if the Company cannot deliver the original of the
Mortgage, any assignment, modification, assumption agreement or preferred loan
agreement (or copy thereof as permitted by Section 2.01(b)) with evidence of
recording thereon concurrently with the execution and delivery of this Agreement
because of (i) a delay caused by the public recording office where such
Mortgage, assignment, modification, assumption agreement or preferred loan
agreement as the case may be, has been delivered for recordation, or (ii) a
delay in the receipt of certain information necessary to prepare the related
assignments, the Company shall deliver or cause to be delivered to the Trustee
or to the Custodian on behalf of the Trustee a copy of such Mortgage,
assignment, modification, assumption agreement or preferred loan agreement.
67
The Company (i) shall promptly cause to be recorded in the appropriate
public office for real property records the Assignment referred to in clause
(I)(iii) of Section 2.01(b), except (a) in states where, in the opinion of
counsel acceptable to the Trustee and the Master Servicer, such recording is not
required to protect the Trustee's interests in the Mortgage Loan against the
claim of any subsequent transferee or any successor to or creditor of the
Company or the originator of such Mortgage Loan or (b) if MERS is identified on
the Mortgage or on a properly recorded assignment of the Mortgage as the
mortgagee of record solely as nominee for the Seller and its successors and
assigns, (ii) shall promptly cause to be filed the Form UCC-3 assignment and
UCC-1 financing statement referred to in clauses (II)(vii) and (x),
respectively, of Section 2.01(b) and (iii) shall promptly cause to be recorded
in the appropriate public recording office for real property records the
Assignment Agreement and Amendment of Security Instrument referred to in clause
(III)(iii) of Section 2.01(b). If any Assignment, Assignment Agreement and
Amendment of Security Instrument, Form UCC-3 or Form UCC-1, as applicable, is
lost or returned unrecorded to the Company because of any defect therein, the
Company shall prepare a substitute Assignment, Assignment Agreement and
Amendment of Security Instrument, Form UCC-3 or Form UCC-1, as applicable, or
cure such defect, as the case may be, and cause such Assignment or Assignment
Agreement and Amendment of Security Instrument to be recorded in accordance with
this paragraph. The Company shall promptly deliver or cause to be delivered to
the applicable person described in Section 2.01(b) any Assignment, substitute
Assignment, or Assignment Agreement and Amendment of Security Instrument or Form
UCC-3 or Form UCC-1, as applicable, (or copy thereof) recorded in connection
with this paragraph with evidence of recording indicated thereon at the time
specified in Section 2.01(c). In connection with its servicing of Cooperative
Loans, the Master Servicer will use its best efforts to file timely continuation
statements with regard to each financing statement and assignment relating to
Cooperative Loans as to which the related Cooperative Apartment is located
outside of the State of New York.
If the Company delivers to the Trustee or to the Custodian on behalf of
the Trustee any Mortgage Note, Obligation to Pay, Assignment Agreement and
Amendment of Security Instrument or Assignment of Mortgage in blank, the Company
shall, or shall cause the Custodian to, complete the endorsement of the Mortgage
Note, Obligation to Pay, Assignment Agreement and Amendment of Security
Instrument and Assignment of Mortgage in the name of the Trustee in conjunction
with the Interim Certification issued by the Custodian, as contemplated by
Section 2.02.
In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Company further agrees that it will cause, at the Company's
own expense, within 30 Business Days after the Closing Date, the MERS(R) System
to indicate that such Mortgage Loans have been assigned by the Company to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Company further agrees that it will
not, and will not permit the Master Servicer to, and the Master Servicer agrees
that it will not, alter the codes referenced in this paragraph with respect to
any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
68
(e) (See Section 2.01(e) of the Standard Terms).
(f) It is intended that the conveyance by the Company to the Trustee of
the Mortgage Loans as provided for in this Section 2.01 be and the
Uncertificated REMIC Regular Interests, if any (as provided for in Section
2.06), be construed as a sale by the Company to the Trustee of the Mortgage
Loans and any Uncertificated REMIC Regular Interests for the benefit of the
Certificateholders. Further, it is not intended that such conveyance be deemed
to be a pledge of the Mortgage Loans and any Uncertificated REMIC Regular
Interests by the Company to the Trustee to secure a debt or other obligation of
the Company. Nonetheless, (a) this Agreement is intended to be and hereby is a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in Section 2.01 shall be deemed to
be, and hereby is, (1) a grant by the Company to the Trustee of a security
interest in all of the Company's right (including the power to convey title
thereto), title and interest, whether now owned or hereafter acquired, in and to
any and all general intangibles, payment intangibles, accounts, chattel paper,
instruments, documents, money, deposit accounts, certificates of deposit, goods,
letters of credit, advices of credit and investment property and other property
of whatever kind or description now existing or hereafter acquired consisting
of, arising from or relating to any of the following: (A) the Mortgage Loans,
including (i) with respect to each Cooperative Loan, the related Mortgage Note,
Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate and Cooperative Lease, (ii) with respect to each Sharia Mortgage
Loan, the related Sharia Mortgage Loan Security Instrument, Sharia Mortgage Loan
Co-Ownership Agreement, Obligation to Pay and Assignment Agreement and Amendment
of Security Instrument, (iii) with respect to each Mortgage Loan other than a
Cooperative Loan or a Sharia Mortgage Loan, the related Mortgage Note and
Mortgage, and (iv) any insurance policies and all other documents in the related
Mortgage File, (B) all amounts payable pursuant to the Mortgage Loans in
accordance with the terms thereof, (C) any Uncertificated REMIC Regular
Interests and (D) all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the
Certificate Account or the Custodial Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment by the Company
to the Trustee of any security interest in any and all of Residential Funding's
right (including the power to convey title thereto), title and interest, whether
now owned or hereafter acquired, in and to the property described in the
foregoing clauses (1)(A), (B), (C) and (D) granted by Residential Funding to the
Company pursuant to the Assignment Agreement; (c) the possession by the Trustee,
any Custodian on behalf of the Trustee or any other agent of the Trustee of
Mortgage Notes or such other items of property as constitute instruments, money,
payment intangibles, negotiable documents, goods, deposit accounts, letters of
credit, advices of credit, investment property, certificated securities or
chattel paper shall be deemed to be "possession by the secured party," or
possession by a purchaser or a person designated by such secured party, for
purposes of perfecting the security interest pursuant to the Minnesota Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction as in effect (including, without limitation, Sections 8-106, 9-313,
9-314 and 9-106 thereof); and (d) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, securities intermediaries, bailees or agents of, or persons
holding for (as applicable) the Trustee for the purpose of perfecting such
security interest under applicable law.
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The Company and, at the Company's direction, Residential Funding and the
Trustee shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
determined to create a security interest in the Mortgage Loans, any
Uncertificated REMIC Regular Interests and the other property described above,
such security interest would be determined to be a perfected security interest
of first priority under applicable law and will be maintained as such throughout
the term of this Agreement. Without limiting the generality of the foregoing,
the Company shall prepare and deliver to the Trustee not less than 15 days prior
to any filing date and, the Trustee shall forward for filing, or shall cause to
be forwarded for filing, at the expense of the Company, all filings necessary to
maintain the effectiveness of any original filings necessary under the Uniform
Commercial Code as in effect in any jurisdiction to perfect the Trustee's
security interest in or lien on the Mortgage Loans and any Uncertificated REMIC
Regular Interests, as evidenced by an Officers' Certificate of the Company,
including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of Residential
Funding, the Company or the Trustee (such preparation and filing shall be at the
expense of the Trustee, if occasioned by a change in the Trustee's name), (2)
any change of type or jurisdiction of organization of Residential Funding or the
Company, (3) any transfer of any interest of Residential Funding or the Company
in any Mortgage Loan or (4) any transfer of any interest of Residential Funding
or the Company in any Uncertificated REMIC Regular Interest.
(g) The Master Servicer hereby acknowledges the receipt by it of each
Initial Monthly Payment Fund. The Master Servicer shall hold each Initial
Monthly Payment Fund in the Custodial Account and shall include the related
Initial Monthly Payment Fund in the Available Distribution Amount for the each
Loan Group for the initial Distribution Date. Notwithstanding anything herein to
the contrary, neither Initial Monthly Payment Fund shall be an asset of any
REMIC. To the extent that either Initial Monthly Payment Fund constitutes a
reserve fund for federal income tax purposes, (1) it shall be an outside reserve
fund and not an asset of any REMIC, (2) it shall be owned by the Seller and (3)
amounts transferred by any REMIC to such Initial Monthly Payment Fund shall be
treated as transferred to the Seller or any successor, all within the meaning of
Section 1.860G-2(h) of the Treasury Regulations.
(h) (See Section 2.01(h) of the Standard Terms).
Section 2.02. ACCEPTANCE BY TRUSTEE. (See Section 2.02 of the Standard
Terms.)
The Trustee acknowledges receipt (or, with respect to Mortgage
Loans subject to a Custodial Agreement, and based solely upon a receipt or
certification executed by the Custodian, receipt by the respective Custodian as
the duly appointed agent of the Trustee) of the documents referred to in Section
2.01(b)(i) above (except that for purposes of such acknowledgement only, a
Mortgage Note may be endorsed in blank) and declares that it, or a Custodian as
its agent, holds and will hold such documents and the other documents
constituting a part of the Custodial Files delivered to it, or a Custodian as
its agent, and the rights of Residential Funding with respect to any Pledged
Assets, Additional Collateral and the Surety Bond assigned to the Trustee
pursuant to Section 2.01, in trust for the use and benefit of all present and
future Certificateholders. The Trustee or Custodian (the Custodian being so
obligated under a Custodial Agreement) agrees, for the benefit of
Certificateholders, to review each Custodial File delivered to it pursuant to
Section 2.01(b) within 45 days after the Closing Date to ascertain that all
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required documents (specifically as set forth in Section 2.01(b)), have been
executed and received, and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, as supplemented, that have been
conveyed to it, and to deliver to the Trustee a certificate (the "Interim
Certification") to the effect that all documents required to be delivered
pursuant to Section 2.01(b) above have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule,
except for any exceptions listed on Schedule A attached to such Interim
Certification. Upon delivery of the Custodial Files by the Company or the Master
Servicer, the Trustee shall acknowledge receipt (or, with respect to Mortgage
Loans subject to a Custodial Agreement, and based solely upon a receipt or
certification executed by the Custodian, receipt by the respective Custodian as
the duly appointed agent of the Trustee) of the documents referred to in Section
2.01(c) above.
If the Custodian, as the Trustee's agent, finds any document or
documents constituting a part of a Custodial File to be missing or defective,
the Trustee shall promptly so notify the Master Servicer and the Company.
Pursuant to Section 2.3 of the Custodial Agreement, the Custodian will notify
the Master Servicer, the Company and the Trustee of any such omission or defect
found by it in respect of any Custodial File held by it in respect of the items
reviewed by it pursuant to the Custodial Agreement. If such omission or defect
materially and adversely affects the interests of the Certificateholders, the
Master Servicer shall promptly notify Residential Funding of such omission or
defect and request Residential Funding to correct or cure such omission or
defect within 60 days from the date the Master Servicer was notified of such
omission or defect and, if Residential Funding does not correct or cure such
omission or defect within such period, require Residential Funding to purchase
such Mortgage Loan from the Trust Fund at its Purchase Price, within 90 days
from the date the Master Servicer was notified of such omission or defect;
provided that if the omission or defect would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such cure or repurchase must occur within 90 days from the date such breach
was discovered. The Purchase Price for any such Mortgage Loan shall be deposited
by the Master Servicer in the Custodial Account maintained by it pursuant to
Section 3.07 and, upon receipt by the Trustee of written notification of such
deposit signed by a Servicing Officer, the Master Servicer, the Trustee or the
Custodian, as the case may be, shall release the contents of any related
Mortgage File in its possession to the owner of such Mortgage Loan (or such
owner's designee), and the Trustee shall execute and deliver such instruments of
transfer or assignment prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in Residential Funding or its designee
any Mortgage Loan released pursuant hereto and thereafter such Mortgage Loan
shall not be part of the Trust Fund. It is understood and agreed that the
obligation of Residential Funding to so cure or purchase any Mortgage Loan as to
which a material and adverse defect in or omission of a constituent document
exists shall constitute the sole remedy respecting such defect or omission
available to Certificateholders or the Trustee on behalf of the
Certificateholders.
Section 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
SERVICER AND THE COMPANY.
(a) The Master Servicer hereby represents and warrants to the Trustee
for the benefit of the Certificateholders that:
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(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and is or will be in compliance with the laws of each state in
which any Mortgaged Property is located to the extent necessary to
ensure the enforceability of each Mortgage Loan in accordance with the
terms of this Agreement;
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not violate the Master Servicer's Certificate of
Incorporation or Bylaws or constitute a material default (or an event
which, with notice or lapse of time, or both, would constitute a
material default) under, or result in the material breach of, any
material contract, agreement or other instrument to which the Master
Servicer is a party or which may be applicable to the Master Servicer or
any of its assets;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Company, constitutes a valid, legal and
binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(iv) The Master Servicer is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of the Master Servicer or
its properties or might have consequences that would materially
adversely affect its performance hereunder;
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vi) The Master Servicer will comply in all material respects in
the performance of this Agreement with all reasonable rules and
requirements of each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement
furnished in writing or report delivered to the Company, any Affiliate
of the Company or the Trustee by the Master Servicer will, to the
knowledge of the Master Servicer, contain any untrue statement of a
material fact or omit a material fact necessary to make the information,
certificate, statement or report not misleading;
(viii) The Master Servicer has examined each existing, and will
examine each new, Subservicing Agreement and is or will be familiar with
the terms thereof. The terms of each existing Subservicing Agreement and
each designated Subservicer are acceptable to the Master Servicer and
any new Subservicing Agreements will comply with the provisions of
Section 3.02; and
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(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 Custodial Files to
the Trustee or the Custodian.
Upon discovery by either the Company, the Master Servicer, the
Trustee or the Custodian of a breach of any representation or warranty set forth
in this Section 2.03(a) which materially and adversely affects the interests of
the Certificateholders in any Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties (the Custodian being so
obligated under a Custodial Agreement). Within 90 days of its discovery or its
receipt of notice of such breach, the Master Servicer shall either (i) cure such
breach in all material respects or (ii) to the extent that such breach is with
respect to a Mortgage Loan or a related document, purchase such Mortgage Loan
from the Trust Fund at the Purchase Price and in the manner set forth in Section
2.02; provided that if the 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 Company hereby represents and warrants to the Trustee for the
benefit of Certificateholders that as of the Closing Date (or, if otherwise
specified below, as of the date so specified):
(i) No Mortgage Loan is 30 or more days Delinquent in payment of
principal and interest as of the Cut-off Date and no Mortgage Loan has
been so Delinquent more than once in the 12-month period prior to the
Cut-off Date;
(ii) The information set forth in Exhibit One hereto with
respect to each Mortgage Loan or the Mortgage Loans, as the case may be,
is true and correct in all material respects at the date or dates
respecting which such information is furnished;
(iii) The Mortgage Loans are adjustable-rate mortgage loans with
Monthly Payments due, with respect to a majority of the Mortgage Loans,
on the first day of each month and terms to maturity at origination or
modification of not more than 30 years;
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(iv) To the best of the Company's knowledge, each Mortgage Loan
is required to be covered by a standard hazard insurance policy. If a
Mortgage Loan is secured by a Mortgaged Property with a Loan-to-Value
Ratio at origination in excess of 80%, such Mortgage Loan is the subject
of a Primary Insurance Policy that insures (a) at least 35% of the
Stated Principal Balance of the Mortgage Loan at origination if the
Loan-to-Value Ratio is between 100.00% and 95.01%, (b) at least 30% of
the Stated Principal Balance of the Mortgage Loan at origination if the
Loan-to-Value Ratio is between 95.00% and 90.01%, (c) at least 25% of
such balance if the Loan-to-Value Ratio is between 90.00% and 85.01% and
(d) at least 12% of such balance if the Loan-to-Value Ratio is between
85.00% and 80.01%. To the best of the Company's knowledge, each such
Primary Insurance Policy is in full force and effect and the Trustee is
entitled to the benefits thereunder;
(v) The issuers of the Primary Insurance Policies are insurance
companies whose claims-paying abilities are currently acceptable to each
Rating Agency;
(vi) No more than 0.5% of the Mortgage Loans by aggregate Stated
Principal Balance as of the Cut-off Date are secured by Mortgaged
Properties located in any one zip code area in California, and no more
than 0.5% of the Mortgage Loans by aggregate Stated Principal Balance as
of the Cut-off Date are secured by Mortgaged Properties located in any
one zip code area outside California;
(vii) The improvements upon the Mortgaged Properties are insured
against loss by fire and other hazards as required by the Program Guide,
including flood insurance if required under the National Flood Insurance
Act of 1968, as amended. The Mortgage requires the Mortgagor to maintain
such casualty insurance at the Mortgagor's expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at the Mortgagor's expense and to
seek reimbursement therefor from the Mortgagor;
(viii) Immediately prior to the assignment of the Mortgage Loans
to the Trustee, the Company had good title to, and was the sole owner
of, each Mortgage Loan free and clear of any pledge, lien, encumbrance
or security interest (other than rights to servicing and related
compensation) and such assignment validly transfers ownership of the
Mortgage Loans to the Trustee free and clear of any pledge, lien,
encumbrance or security interest;
(ix) No more than 67.22% of the Mortgage Loans by aggregate
Stated Principal Balance as of the Cut-off Date were underwritten under
a reduced loan documentation program, no more than 9.99% of the Mortgage
Loans by aggregate Stated Principal Balance as of the Cut-off Date were
underwritten under a no-stated income program, and no more than 5.92% of
the Mortgage Loans by aggregate Stated Principal Balance as of the
Cut-off Date were underwritten under a no income/no asset program;
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(x) Except with respect to no more than 11.61% of the Mortgage
Loans by aggregate Stated Principal Balance as of the Cut-off Date, the
Mortgagor represented in its loan application with respect to the
related Mortgage Loan that the Mortgaged Property would be
owner-occupied;
(xi) None of the Mortgage Loans is a Buy-Down Mortgage Loan;
(xii) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1), (2), (4), (5), (6), (7) and (9) without reliance on the
provisions of Treasury Regulation Section 1.860G-2(a)(3) or Treasury
Regulation Section 1.860G-2(f)(2) or any other provision that would
allow a Mortgage Loan to be treated as a "qualified mortgage"
notwithstanding its failure to meet the requirements of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1), (2), (4), (5), (6), (7) and (9);
(xiii) A policy of title insurance was effective as of the
closing of each Mortgage Loan and is valid and binding and remains in
full force and effect, unless the Mortgaged Properties are located in
the State of Iowa and an attorney's certificate has been provided as
described in the Program Guide;
(xiv) No Mortgage Loan is a Cooperative Loan;
(xv) With respect to each Mortgage Loan originated under a
"streamlined" Mortgage Loan program (through which no new or updated
appraisals of Mortgaged Properties are obtained in connection with the
refinancing thereof), the related Seller has represented that either (a)
the value of the related Mortgaged Property as of the date the Mortgage
Loan was originated was not less than the appraised value of such
property at the time of origination of the refinanced Mortgage Loan or
(b) the Loan-to-Value Ratio of the Mortgage Loan as of the date of
origination of the Mortgage Loan generally meets the Company's
underwriting guidelines;
(xvi) Interest on each Mortgage Loan is calculated on the basis
of a 360-day year consisting of twelve 30-day months;
(xvii) None of the Mortgage Loans contain in the related
Mortgage File a Destroyed Mortgage Note;
(xviii) Approximately 0.2% of the Mortgage Loans by aggregate
Stated Principal Balance as of the Cut-off Date have been made to
International Borrowers;
(xix) No Mortgage Loan provides for payments that are subject to
reduction by withholding taxes levied by any foreign (non-United States)
sovereign government; and
(xx) None of the Mortgage Loans are Additional Collateral Loans
and none of the Mortgage Loans are Pledged Asset Loans.
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It is understood and agreed that the representations and warranties set forth in
this Section 2.03(b) shall survive delivery of the respective Custodial Files to
the Trustee or any Custodian.
Upon discovery by any of the Company, the Master Servicer, the Trustee
or any Custodian of a breach of any of the representations and warranties set
forth in this Section 2.03(b) that materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan, the party discovering
such breach shall give prompt written notice to the other parties (any Custodian
being so obligated under a Custodial Agreement); provided, however, that in the
event of a breach of the representation and warranty set forth in Section
2.03(b)(xii), the party discovering such breach shall give such notice within
five days of discovery. Within 90 days of its discovery or its receipt of notice
of breach, the Company shall either (i) cure such breach in all material
respects or (ii) purchase such Mortgage Loan from the Trust Fund at the Purchase
Price and in the manner set forth in Section 2.02; provided that the Company
shall have the option to substitute a Qualified Substitute Mortgage Loan or
Loans for such Mortgage Loan if such substitution occurs within two years
following the Closing Date; provided that if the omission or defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered. Any such substitution shall be
effected by the Company under the same terms and conditions as provided in
Section 2.04 for substitutions by Residential Funding. It is understood and
agreed that the obligation of the Company to cure such breach or to so purchase
or substitute for any Mortgage Loan as to which such a breach has occurred and
is continuing shall constitute the sole remedy respecting such breach available
to the Certificateholders or the Trustee on behalf of the Certificateholders.
Section 2.04. REPRESENTATIONS AND WARRANTIES OF SELLERS.(See Section
2.04 of the Standard Terms)
Section 2.05. EXECUTION AND AUTHENTICATIO OF CERTIFICATES/ISSUANCE
OF CERTIFICATES EVIDENCING INTERESTS IN REMICS.
The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery of the Custodial Files to it, or any Custodian on its behalf,
subject to any exceptions noted, together with the assignment to it of all other
assets included in the Trust Fund and/or the applicable REMIC, receipt of which
is hereby acknowledged. Concurrently with such delivery and in exchange
therefor, the Trustee, pursuant to the written request of the Company executed
by an officer of the Company, has executed and caused to be authenticated and
delivered to or upon the order of the Company the Class R-I Certificates in
authorized denominations which, together with the REMIC I Regular Interests,
evidence the beneficial interest in REMIC I, the Class R-II Certificates in
authorized denominations which, together with the REMIC II Regular Interests,
evidence the beneficial interest in REMIC II, and the Class R-III Certificates
in authorized denominations which, together with the REMIC III Regular
Interests, evidence the beneficial interest in REMIC III.
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Section 2.06. CONVEYANCE OF UNCERTIFICATED REMIC REGULAR INTERESTS;
ACCEPTANCE BY THE TRUSTEE.
The Company, as of the Closing Date, and concurrently with the execution
and delivery hereof, does hereby assign without recourse all the right, title
and interest of the Company in and to the Uncertificated REMIC Regular Interests
to the Trustee for the benefit of the Holders of each Class of Certificates
(other than the Class R-I, Class R-II and Class R-III Certificates, and with
respect to REMIC IV Regular Interests SB-IO, SB-PO and IO, the Class R-IV
Certificates). The Trustee acknowledges receipt of the Uncertificated REMIC
Regular Interests and declares that it holds and will hold the same in trust for
the exclusive use and benefit of all present and future Holders of each Class of
Certificates (other than the Class R-I, Class R-II and Class R-III Certificates,
and with respect to REMIC IV Regular Interests SB-IO, SB-PO and IO, the Class
R-IV Certificates). The rights of the Holders of each Class of Certificates
(other than the Class R-I, Class R-II and Class R-III Certificates) to receive
distributions from the proceeds of REMIC IV in respect of such Classes and the
rights of the Holders of the Class SB Certificates and the Class R-X
Certificates to receive distributions from the proceeds of REMIC V in respect of
such Classes, and all ownership interests of the Holders of such Classes in such
distributions, shall be as set forth in this Agreement.
Section 2.07. ISSUANCE OF CERTIFICATES EVIDENCING INTEREST IN REMIC IV
AND REMIC V.
The Trustee acknowledges the assignment to it of the Uncertificated
REMIC Regular Interests, and, concurrently therewith and in exchange therefor,
pursuant to the written request of the Company executed by an officer of the
Company, the Trustee has executed and caused to be authenticated and delivered
to or upon the order of the Company, (i) all Classes of Certificates (other than
the Class SB, Class R-I, Class R-II and Class R-III Certificates) in authorized
denominations, which, together with REMIC IV Regular Interests SB-IO, SB-PO and
IO, evidence the beneficial interests in the entire REMIC IV and (ii) the Class
SB and Class R-X Certificates which evidence the beneficial interests in the
entire REMIC V.
Section 2.08. PURPOSES AND POWERS OF THE TRUST. (See Section 2.08 of
the Standard Terms.)
Section 2.09. AGREEMENT REGARDING ABILITY TO DISCLOSE.
The Company, the Master Servicer and the Trustee hereby agree,
notwithstanding any other express or implied agreement to the contrary, that any
and all Persons, and any of their respective employees, representatives, and
other agents may disclose, immediately upon commencement of discussions, to any
and all Persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to any of them relating to such tax
treatment and tax structure. For purposes of this paragraph, the terms "tax
treatment" and "tax structure" are defined under Treasury Regulation ss.
1.6011-4(c).
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ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Servicer. (See Section 3.01 of
the Standard Terms)
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' and Sellers'
Obligations. (See Section 3.02 of the Standard Terms)
Section 3.03 Successor Subservicers. (See Section 3.03 of the Standard
Terms)
Section 3.04 Liability of the Master Servicer. (See Section 3.04 of the
Standard Terms)
Section 3.05 No Contractual Relationship Between Subservicer and
Trustee or Certificateholders. (See Section 3.05 of the
Standard Terms)
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. (See Section 3.06 of the Standard Terms)
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposit to
Custodial Account.
(a) (See Section 3.07(a) of the Standard Terms)
(b) The Master Servicer shall establish and maintain a Custodial Account
in which the Master Servicer shall deposit or cause to be deposited on a daily
basis, except as otherwise specifically provided herein, the following payments
and collections remitted by Subservicers or received by it in respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest on the Mortgage Loans due on or before the Cut-off Date):
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans and the principal
component of any Subservicer Advance or of any REO Proceeds received in
connection with an REO Property for which an REO Disposition has
occurred;
(ii) All payments on account of interest at the Adjusted Mortgage
Rate on the Mortgage Loans, including Buydown Funds, if any, and the
interest component of any Subservicer Advance or of any REO Proceeds
received in connection with an REO Property for which an REO Disposition
has occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation
Proceeds (net of any related expenses of the Subservicer);
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(iv) All proceeds of any Mortgage Loans purchased pursuant to
Section 2.02, 2.03, 2.04 or 4.07 (including amounts received from
Residential Funding pursuant to the last paragraph of Section 4 of the
Assignment Agreement in respect of any liability, penalty or expense
that resulted from a breach of the Compliance With Laws Representation
and all amounts required to be deposited in connection with the
substitution of a Qualified Substitute Mortgage Loan pursuant to Section
2.03 or 2.04;
(v) Any amounts required to be deposited pursuant to Section
3.07(c) or 3.21;
(vi) All amounts transferred from the Certificate Account to the
Custodial Account in accordance with Section 4.02(a);
(vii) Any amounts realized by the Subservicer and received by the
Master Servicer in respect of any Additional Collateral;
(viii) Any amounts received by the Master Servicer in respect of
Pledged Assets; and
(ix) Any amounts received by the Master Servicer in connection
with any Prepayment Charges on the Prepayment Charge Loans.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments on the Mortgage Loans which are not part of the Trust
Fund (consisting of payments in respect of principal and interest on the
Mortgage Loans due on or before the Cut-off Date) and payments or collections in
the nature of late payment charges or assumption fees may but need not be
deposited by the Master Servicer in the Custodial Account. In the event any
amount not required to be deposited in the Custodial Account is so deposited,
the Master Servicer may at any time withdraw such amount from the Custodial
Account, any provision herein to the contrary notwithstanding. Amounts received
by the Master Servicer in connection with Prepayment Charges on the Prepayment
Charge Loans shall be remitted by the Master Servicer on the Certificate Account
Deposit Date to the Trustee and shall be deposited by the Trustee, upon the
receipt thereof and written direction with respect thereto, into the Certificate
Account. The Custodial Account may contain funds that belong to one or more
trust funds created for mortgage pass-through certificates of other series and
may contain other funds respecting payments on Mortgage Loans belonging to the
Master Servicer or serviced or master serviced by it on behalf of others.
Notwithstanding such commingling of funds, the Master Servicer shall keep
records that accurately reflect the funds on deposit in the Custodial Account
that have been identified by it as being attributable to the Mortgage Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds
and the proceeds of the purchase of any Mortgage Loan pursuant to Sections 2.02,
2.03, 2.04 and 4.07 received in any calendar month, the Master Servicer may
elect to treat such amounts as included in the Available Distribution Amount for
the Distribution Date in the month of receipt, but is not obligated to do so. If
the Master Servicer so elects, such amounts will be deemed to have been received
(and any related Realized Loss shall be deemed to have occurred) on the last day
of the month prior to the receipt thereof.
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(c) (See Section 3.07(c) of the Standard Terms)
(d) (See Section 3.07(d) of the Standard Terms)
(e) Notwithstanding Section 3.07(a), The Master Servicer shall not waive
(or permit a Subservicer to waive) any Prepayment Charge unless: (i) the
enforceability thereof shall have been limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally, (ii) the enforcement thereof is illegal, or any local, state or
federal agency has threatened legal action if the prepayment penalty is
enforced, (iii) the collectability thereof shall have been limited due to
acceleration in connection with a foreclosure or other involuntary payment or
(iv) such waiver is standard and customary in servicing similar Mortgage Loans
and relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Master Servicer, maximize recovery of total proceeds
taking into account the value of such Prepayment Charge and the related Mortgage
Loan. In no event will the Master Servicer waive a Prepayment Charge in
connection with a refinancing of a Mortgage Loan that is not related to a
default or a reasonably foreseeable default. If a Prepayment Charge is waived,
but does not meet the standards described above, then the Master Servicer is
required to remit the amount of such waived Prepayment Charge to the Trustee at
the time that the amount prepaid on the related Mortgage Loan is required to be
deposited into the Custodial Account, and upon receipt thereof and written
direction with respect thereto, the Trustee shall deposit such amount into the
Certificate Account. Notwithstanding any other provisions of this Agreement, any
payments made by the Master Servicer in respect of any waived Prepayment Charges
pursuant to this Section shall be deemed to be paid outside of the Trust Fund
and not part of any REMIC.
Section 3.08. Subservicing Accounts; Servicing Accounts (See Section
3.08 of the Standard Terms)
Section 3.09. Access to Certain Documentation and Information Regarding
the Mortgage Loans (See Section 3.09 of the Standard
Terms)
Section 3.10. Permitted Withdrawals from the Custodial Account
(See Section 3.10 of the Standard Terms)
Section 3.11. Maintenance of the Primary Insurance Policies; Collections
Thereunder (See Section 3.011 of the Standard Terms)
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity
Coverage (See Section 3.12 of the Standard Terms)
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments
(See Section 3.13 of the Standard Terms)
Section 3.14. Realization Upon Defaulted Mortgage Loans (See Section
3.14 of the Standard Terms)
Section 3.15. Trustee to Cooperate; Release of Custodial Files (See
Section 3.15 of the Standard Terms)
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(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 Custodial File) or
the Custodian by a certification of a Servicing Officer (which certification
shall include a statement to the effect that all amounts received or to be
received in connection with such payment which are required to be deposited in
the Custodial Account pursuant to Section 3.07 have been or will be so
deposited), substantially in one of the forms attached hereto as Exhibit F, or,
in the case of the Custodian, an electronic request in a form acceptable to the
Custodian, requesting delivery to it of the Custodial File. Within two Business
Days of receipt of such certification and request, the Trustee shall release, or
cause the Custodian to release, the related Custodial File to the Master
Servicer. The Master Servicer is authorized to execute and deliver to the
Mortgagor the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage,
together with the Mortgage Note with, as appropriate, written evidence of
cancellation thereon and to cause the removal from the registration on the
MERS(R) System of such Mortgage and to execute and deliver, on behalf of the
Trustee and the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation or of partial or full release. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Custodial Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan, the Master Servicer shall deliver to the Custodian, with a
copy to the Trustee, a certificate of a Servicing Officer substantially in one
of the forms attached as Exhibit F hereto, or, in the case of the Custodian, an
electronic request in a form acceptable to the Custodian, requesting that
possession of all, or any document constituting part of, the Custodial File be
released to the Master Servicer and certifying as to the reason for such release
and that such release will not invalidate any insurance coverage provided in
respect of the Mortgage Loan under any Required Insurance Policy. Upon receipt
of the foregoing, the Trustee shall deliver, or cause the Custodian to deliver,
the Custodial File or any document therein to the Master Servicer. The Master
Servicer shall cause each Custodial File or any document therein so released to
be returned to the Trustee, or the Custodian as agent for the Trustee when the
need therefor by the Master Servicer no longer exists, unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or (ii) the Custodial File or
such document has been delivered directly or through a Subservicer to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Master Servicer has delivered directly or through a Subservicer to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Custodial File or such document was
delivered and the purpose or purposes of such delivery. In the event of the
liquidation of a Mortgage Loan, the Trustee shall deliver the Request for
Release with respect thereto to the Master Servicer upon 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
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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) (See Section 3.16(a) of the Standard Terms)
(b) Additional servicing compensation in the form of assumption
fees, late payment charges, investment income on amounts in the
Custodial Account or the Certificate Account or otherwise (but not
including Prepayment Charges) shall be retained by the Master Servicer
or the Subservicer to the extent provided herein, subject to clause (e)
below. Prepayment charges shall be deposited into the Certificate
Account and shall be paid on each Distribution Date to the holders of
the Class SB-1 Certificates and Class SB-2 Certificates on a pro rata
basis in accordance with the respective Certificate Principal Balances
thereof.
(c) (See Section 3.16(c) of the Standard Terms)
(d) (See Section 3.16(d) of the Standard Terms)
(e) (See Section 3.16(e) of the Standard Terms)
Section 3.17. Reports to the Trustee and the Company
(See Section 3.17 of the Standard Terms)
Section 3.18. Annual Statement as to Compliance (See Section 3.18 of
the Standard Terms)
Section 3.19. Annual Independent Public Accountants' Servicing Report
(See Section 3.19 of the Standard Terms)
Section 3.20. Rights of the Company in Respect of the Master Servicer
(See Section 3.20 of the Standard Terms)
Section 3.21. Administration of Buydown Funds (See Section 3.21 of the
Standard Terms)
Section 3.22 Advance Facility (See Section 3.22 of the Standard Terms)
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. CERTIFICATE ACCOUNT.
(a) The Master Servicer on behalf of the Trustee shall establish and
maintain a Certificate Account in which the Master Servicer shall cause to be
deposited on behalf of the Trustee on or before 2:00 P.M. New York time on each
Certificate Account Deposit Date by wire transfer of immediately available funds
an amount equal to the sum of (i) any Advance for the immediately succeeding
Distribution Date, (ii) any amount required to be deposited in the Certificate
Account pursuant to Section 3.12(a), (iii) any amount required to be deposited
in the Certificate Account pursuant to Section 3.16(e) or Section 4.07, (iv) any
amount required to be paid pursuant to Section 9.01 and (v) all other amounts
constituting the Available Distribution Amount for the immediately succeeding
Distribution Date.
On or prior to the Business Day immediately following each
Determination Date, the Master Servicer shall determine any amounts owed by the
Swap Counterparty under the Swap Agreement and inform the Supplemental Interest
Trust Trustee in writing of the amount so calculated.
(b) (See Section 4.01(b) of the Standard Terms)
Section 4.02. DISTRIBUTIONS.
(a) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall allocate and distribute the Available Distribution
Amount to the extent on deposit in the Certificate Account for such date to the
interests issued in respect of REMIC I, REMIC II, REMIC III, REMIC IV and REMIC
V as specified in this Section.
(b) (1) On each Distribution Date, the REMIC I Distribution
Amount shall be distributed by REMIC I to REMIC II on account of the REMIC I
Regular Interests in the amounts and with the priorities set forth in the
definition thereof.
(2) On each Distribution Date, the REMIC II Distribution
Amount shall be distributed by REMIC II to REMIC III on account of the
REMIC II Regular Interests in the amounts and with the priorities set forth
in the definition thereof.
(3) On each Distribution Date, the REMIC III Distribution
Amount shall be deemed to have been distributed by REMIC III to the
Certificateholders on account of the REMIC III Regular Interests
represented thereby in the amounts and with the priorities set forth in the
definition thereof.
(4) On each Distribution Date, the REMIC IV Distribution
Amount shall be deemed to have been distributed by REMIC IV to the
Certificateholders (other than the Class SB Certificateholders) on account
of the REMIC IV Regular Interests represented thereby and to REMIC V on
account of REMIC IV Regular Interests SB-IO, SB-PO and IO in the amounts
and with the priorities set forth in the definition thereof.
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(5) On each Distribution Date, the REMIC V Distribution
Amount shall be deemed to have been distributed by REMIC V to the Class SB
Certificateholders on account of the REMIC V Regular Interests as set forth
in the definition thereof.
(6) On each Distribution Date, the amount, if any, deemed
received by the holders of the Class SB Certificates in respect of REMIC V
Regular Interest IO and under the SB-AM Swap Agreement shall be deemed to
have been paid on behalf of the Class SB Certificates by the Trustee
pursuant to Section 4.09 in respect of the Net Swap Payment owed to the
Swap Counterparty. On each Distribution Date, the amount, if any, received
by the Trustee from the Swap Counterparty in respect of the Swap Agreement
shall be deemed to have been received by the Supplemental Interest Trust
Trustee on behalf of the Class SB Certificates. On each Distribution Date,
amounts paid to the Class A Certificates and Class M Certificates pursuant
to Section 4.02(c)(v) in respect of Basis Risk Shortfall shall be deemed to
have been paid by the Class SB Certificateholder pursuant to the SB-AM Swap
Agreement.
(5) Notwithstanding the distributions described in
this Section 4.02(b), distribution of funds from the Certificate Account shall
be made only in accordance with Section 4.02(c).
(c) On each Distribution Date (x) the Master Servicer on behalf of the
Trustee or (y) the Paying Agent appointed by the Trustee and the Supplemental
Interest Trustee, shall distribute to each Certificateholder of record on the
next preceding Record Date (other than as provided in Section 9.01 of the
Standard Terms respecting the final distribution) either in immediately
available funds (by wire transfer or otherwise) to the account of such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Master Servicer or the
Paying Agent, as the case may be, or, if such Certificateholder has not so
notified the Master Servicer or the Paying Agent by the Record Date, by check
mailed to such Certificateholder at the address of such Holder appearing in the
Certificate Register such Certificateholder's share (which share with respect to
each Class of Certificates, shall be based on the aggregate of the Percentage
Interests represented by Certificates of the applicable Class held by such
Holder of the following amounts), in the following order of priority, in each
case to the extent of the Available Distribution Amount on deposit in the
Certificate Account and the Supplemental Interest Trust Account pursuant to
Section 4.09(c):
(i) The Interest Distribution Amount, sequentially:
(A) first, to the Class A Certificates, on a pro
rata basis, Accrued Certificate Interest due thereon for such
Distribution Date plus any Accrued Certificate Interest due
thereon remaining unpaid from any prior Distribution Date,
together with interest thereon at the related Pass-Through Rate
in effect for such Distribution Date, in accordance with the
Class A Interest Distribution Priority;
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(B) second, to the Class M-1 Certificates, Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued Certificate Interest due thereon remaining unpaid
from any prior Distribution Date, together with interest thereon
at the related Pass-Through Rate in effect for such Distribution
Date;
(C) third, to the Class M-2 Certificates Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued Certificate Interest due thereon remaining unpaid
from any prior Distribution Date, together with interest thereon
at the related Pass-Through Rate in effect for such Distribution
Date;
(D) fourth, to the Class M-3 Certificates Accrued
Certificate Interest due thereon for such Distribution Date plus
any related Accrued Certificate Interest due thereon remaining
unpaid from any prior Distribution Date, together with interest
thereon at the related Pass-Through Rate in effect for such
Distribution Date;
(E) fifth, to the Class M-4 Certificates, Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued Certificate Interest due thereon remaining unpaid
from any prior Distribution Date, together with interest thereon
at the related Pass-Through Rate in effect for such Distribution
Date;
(F) sixth, to the Class M-5 Certificates Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued Certificate Interest due thereon remaining unpaid
from any prior Distribution Date, together with interest thereon
at the related Pass-Through Rate in effect for such Distribution
Date;
(G) seventh, to the Class M-6 Certificates Accrued
Certificate Interest due thereon for such Distribution Date plus
any related Accrued Certificate Interest due thereon remaining
unpaid from any prior Distribution Date, together with interest
thereon at the related Pass-Through Rate in effect for such
Distribution Date;
(H) eighth, to the Class M-7 Certificates, Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued Certificate Interest due thereon remaining unpaid
from any prior Distribution Date, together with interest thereon
at the related Pass-Through Rate in effect for such Distribution
Date;
(I) ninth, to the Class M-8 Certificates Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued Certificate Interest due thereon remaining unpaid
from any prior Distribution Date, together with interest thereon
at the related Pass-Through Rate in effect for such Distribution
Date;
85
(J) tenth, to the Class M-9 Certificates Accrued
Certificate Interest due thereon for such Distribution Date plus
any Accrued Certificate Interest due thereon remaining unpaid
from any prior Distribution Date, together with interest thereon
at the related Pass-Through Rate in effect for such Distribution
Date; and
(K) eleventh, to the Class M-10 Certificates
Accrued Certificate Interest due thereon for such Distribution
Date plus any Accrued Certificate Interest due thereon remaining
unpaid from any prior Distribution Date, together with interest
thereon at the related Pass-Through Rate in effect for such
Distribution Date;
(ii) to the Class A Certificateholders and Class M
Certificateholders from the amount, if any, of Available
Distribution Amount remaining after the foregoing distributions,
the Principal Distribution Amount, which amount shall be
allocated in the manner and priority set forth in Section
4.02(d), until the aggregate Certificate Principal Balance of
each Class of Class A Certificates and Class M Certificates has
been reduced to zero;
(iii) to the Class A Certificateholders and Class M
Certificateholders from the amount, if any, of Excess Cash Flow
remaining after the foregoing distributions, the amount of any
related Prepayment Interest Shortfalls with respect to the
Mortgage Loans for that Distribution Date, to the extent not
covered by Compensating Interest on such Distribution Date,
which amount shall be allocated to the Class A
Certificateholders and Class M Certificateholders on a pro rata
basis, based on the amount of Prepayment Interest Shortfalls
allocated thereto for such Distribution Date;
(iv) to the Class A Certificateholders and Class M
Certificateholders from the amount, if any, of Excess Cash Flow
remaining after the foregoing distributions, the amount of any
Prepayment Interest Shortfalls allocated thereto remaining
unpaid from prior Distribution Dates together with interest
thereon at the related Pass-Through Rate in effect for such
Distribution Date, which amount shall be allocated to the Class
A Certificateholders and Class M Certificateholders on a pro
rata basis, based on the amount of Prepayment Interest
Shortfalls remaining unpaid;
(v) to the Class A Certificates and Class M Certificates
from the amount, if any, of Excess Cash Flow remaining after the
foregoing distributions the amount of any Basis Risk Shortfall
on such Certificates, which amount shall be allocated first, to
the Class A Certificates on a pro rata basis, based on their
respective Basis Risk Shortfall for such Distribution Date, and
then, sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9
and Class M-10 Certificateholders, in that order;
86
(vi) to pay the holders of the Class A Certificates and
Class M Certificates, on a pro rata basis, based on Relief Act
Shortfalls allocated thereto for such Distribution Date, the
amount of any Relief Act Shortfalls allocated thereto with
respect to the Mortgage Loans for such Distribution Date,
(vii) first, to the Class A Certificateholders, the
principal portion of any Realized Losses previously allocated to
those Certificates and remaining unreimbursed, on a pro rata
basis based on their respective principal portion of any
Realized Losses previously allocated to those Certificates and
remaining unreimbursed, and then, sequentially, to the Class
X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8, Class M-9 and Class M-10
Certificateholders, in that order, the principal portion of any
Realized Losses previously allocated to such Class and remaining
unreimbursed;
(viii) to the Supplemental Interest Trust Account for
payment to the Swap Counterparty, any Swap Termination Payments
due to a Swap Counterparty Trigger Event;
(ix) to the Class SB Certificates, on a pro rata basis
in accordance with the Certificate Principal Balances thereof,
(A) from the amount, if any, of the Available Distribution
Amount remaining after the foregoing distributions, the sum of
(I) Accrued Certificate Interest thereon, (II) the amount of any
Overcollateralization Reduction Amount for such Distribution
Date and (III) for any Distribution Date after the Certificate
Principal Balance of each Class A Certificate and Class M
Certificate has been reduced to zero, the Overcollateralization
Amount, (B) from prepayment charges on deposit in the
Certificate Account, any prepayment charges received on the
Mortgage Loans during the related Prepayment Period, and (C)
from the Net Swap Payments owed by the Swap Counterparty, if
any, the amount of such Net Swap Payments remaining after the
foregoing distributions; and
(x) to the Class R-III Certificateholders, the balance,
if any, of the Available Distribution Amount.
All payments of amounts in respect of Basis Risk Shortfall made pursuant
to Section 4.02(c)(v) shall, for federal income tax purposes, be deemed to have
been distributed from REMIC V to the holders of the Class SB Certificates and
then paid outside of any REMIC to the recipients thereof pursuant to an interest
rate cap contract. By accepting their Certificates the holders of the
Certificates agree to treat such payments in the manner described in the
preceding sentence for purposes of filing their income tax returns.
(d) The Principal Distribution Amount payable to the Class A
Certificateholders and Class M Certificateholders shall be distributed as
follows:
(i) first, Group I Principal Distribution Amount will be
distributed to the Class I-A-1 Certificateholders until the Certificate
Principal Balances thereof have been reduced to zero, and, concurrently,
the Group II Principal Distribution Amount will be distributed to the
Class II-A-1 Certificateholders and Class II-A-2 Certificateholders on a
pro rata basis in accordance with their respective Certificate Principal
Balances, until the Certificate Principal Balances thereof have been
reduced to zero;
87
(ii) second, the Class M-1 Principal Distribution Amount shall
be distributed to the Class M-1 Certificates until the Certificate
Principal Balance thereof has been reduced to zero;
(iii) third, the Class M-2 Principal Distribution Amount shall
be distributed to the Class M-2 Certificates until the Certificate
Principal Balance thereof has been reduced to zero;
(iv) fourth, the Class M-3 Principal Distribution Amount shall
be distributed to the Class M-3 Certificates until the Certificate
Principal Balance thereof has been reduced to zero;
(v) fifth, the Class M-4 Principal Distribution Amount shall be
distributed to the Class M-4 Certificates until the Certificate
Principal Balance thereof has been reduced to zero;
(vi) sixth, the Class M-5 Principal Distribution Amount shall be
distributed to the Class M-5 Certificates until the Certificate
Principal Balance thereof has been reduced to zero;
(vii) seventh, the Class M-6 Principal Distribution Amount shall
be distributed to the Class M-6 Certificates until the Certificate
Principal Balance thereof has been reduced to zero;
(viii) eighth, the Class M-7 Principal Distribution Amount shall
be distributed to the Class M-7 Certificates until the Certificate
Principal Balance thereof has been reduced to zero;
(ix) ninth, the Class M-8 Principal Distribution Amount shall be
distributed to the Class M-8 Certificates until the Certificate
Principal Balance thereof has been reduced to zero;
(x) tenth, the Class M-9 Principal Distribution Amount shall be
distributed to the Class M-9 Certificates until the Certificate
Principal Balance thereof has been reduced to zero; and
(xi) eleventh, the Class M-10 Principal Distribution Amount
shall be distributed to the Class M-10 Certificates until the
Certificate Principal Balance thereof has been reduced to zero.
(e) Notwithstanding the foregoing clauses (c) and (d), upon the
reduction of the Certificate Principal Balance of a Class of Class A
Certificates or Class M Certificates to zero, such Class of Certificates will
not be entitled to further distributions pursuant to Section 4.02, including,
without limitation, the payment of current and unreimbursed Prepayment Interest
Shortfalls pursuant to clauses (c)(iii) and (iv) and Basis Risk Shortfall
pursuant to clause (c)(v).
88
(f) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be solely
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm") for which it acts as agent. Each brokerage
firm shall be responsible for disbursing funds to the Certificate Owners that it
represents. None of the Trustee, the Certificate Registrar, the Company or the
Master Servicer shall have any responsibility therefor.
(g) [Reserved]
(h) Except as otherwise provided in Section 9.01 of the Standard Terms,
if the Master Servicer anticipates that a final distribution with respect to any
Class of Certificates will be made on a future Distribution Date, the Master
Servicer shall, no later than 40 days prior to such final Distribution Date,
notify the Trustee and the Trustee shall, not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of such final
distribution, distribute, or cause to be distributed, to each Holder of such
Class of Certificates a notice to the effect that: (i) the Trustee anticipates
that the final distribution with respect to such Class of Certificates will be
made on such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee or as otherwise specified therein, and
(ii) no interest shall accrue on such Certificates from and after the end of the
related Interest Accrual Period. In the event that Certificateholders required
to surrender their Certificates pursuant to Section 9.01(c) of the Standard
Terms do not surrender their Certificates for final cancellation, the Trustee
shall cause funds distributable with respect to such Certificates to be
withdrawn from the Certificate Account and credited to a separate non-interest
bearing escrow account for the benefit of such Certificateholders as provided in
Section 9.01(d) of the Standard Terms.
Section 4.03. STATEMENTS TO CERTIFICATEHOLDERS; STATEMENTS TO THE
RATING AGENCIES; EXCHANGE ACT REPORTING. (See Section
4.03 of the Standard Terms)
Section 4.04. DISTRIBUTION OF REPORTS TO THE TRUSTEE AND THE COMPANY;
ADVANCES BY THE MASTER SERVICER.
(a) (See Section 4.04(a) of the Standard Terms).
(b) On or before 2:00 P.M. New York time on each Certificate Account
Deposit Date, the Master Servicer shall either (i) deposit in the Certificate
Account from its own funds, or funds received therefor from the Subservicers, an
amount equal to the Advances to be made by the Master Servicer in respect of the
related Distribution Date, which shall be in an aggregate amount equal to the
aggregate amount of Monthly Payments (with each interest portion thereof
adjusted to the Net Mortgage Rate), less the amount of any related Servicing
Modifications, Debt Service Reductions or reductions in the amount of interest
89
collectable from the Mortgagor pursuant to the Servicemembers Civil Relief Act,
as amended, or similar legislation or regulations then in effect, on the
Outstanding Mortgage Loans as of the related Due Date, which Monthly Payments
were not received as of the close of business as of the related Determination
Date; provided that no Advance shall be made if it would be a Nonrecoverable
Advance; and provided, further, that the Monthly Payment for purposes of this
Section 4.04 shall mean the minimum monthly payment due under the Mortgage Note,
net of the Servicing Fee and Subservicing Fee, (ii) withdraw from amounts on
deposit in the Custodial Account and deposit in the Certificate Account all or a
portion of the Amount Held for Future Distribution in discharge of any such
Advance, or (iii) make advances in the form of any combination of (i) and (ii)
aggregating the amount of such Advance. Any portion of the Amount Held for
Future Distribution so used shall be replaced by the Master Servicer by deposit
in the Certificate Account on or before 11:00 A.M. New York time on any future
Certificate Account Deposit Date to the extent that funds attributable to the
Mortgage Loans that are available in the Custodial Account for deposit in the
Certificate Account on such Certificate Account Deposit Date shall be less than
payments to Certificateholders required to be made on the following Distribution
Date. The Master Servicer shall be entitled to use any Advance made by a
Subservicer as described in Section 3.07(b) that has been deposited in the
Custodial Account on or before such Distribution Date as part of the Advance
made by the Master Servicer pursuant to this Section 4.04. The amount of any
reimbursement pursuant to Section 4.02(a) in respect of outstanding Advances on
any Distribution Date shall be allocated to specific Monthly Payments due but
delinquent for previous Due Periods, which allocation shall be made, to the
extent practicable, to Monthly Payments which have been delinquent for the
longest period of time. Such allocations shall be conclusive for purposes of
reimbursement to the Master Servicer from recoveries on related Mortgage Loans
pursuant to Section 3.10.
The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officers' Certificate of the
Master Servicer delivered to the Company and the Trustee.
If the Master Servicer determines as of the Business Day preceding any
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date, it shall give notice to the Trustee of
its inability to advance (such notice may be given by telecopy), not later than
3:00 P.M., New York time, on such Business Day, specifying the portion of such
amount that it will be unable to deposit. Not later than 3:00 P.M., New York
time, on the Certificate Account Deposit Date the Trustee shall, unless by 12:00
Noon, New York time, on such day the Trustee shall have been notified in writing
(by telecopy) that the Master Servicer shall have directly or indirectly
deposited in the Certificate Account such portion of the amount of the Advance
as to which the Master Servicer shall have given notice pursuant to the
preceding sentence, pursuant to Section 7.01, (a) terminate all of the rights
and obligations of the Master Servicer under this Agreement in accordance with
Section 7.01 and (b) assume the rights and obligations of the Master Servicer
hereunder, including the obligation to deposit in the Certificate Account an
amount equal to the Advance for the immediately succeeding Distribution Date.
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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 shall be allocated as
follows:
first, to the Excess Cash Flow as part of the Principal Distribution
Amount as provided in Section 4.02(c), to the extent of the Excess Cash Flow for
such Distribution Date,
second, in reduction of the Overcollateralization Amount, until such
amount has been reduced to zero;
third, to the Class M-10 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
fourth, to the Class M-9 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
fifth, to the Class M-8 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
sixth, to the Class M-7 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
seventh, to the Class M-6 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
eighth, to the Class M-5 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
ninth, to the Class M-4 Certificates, until the Certificate Principal
Balance thereof has been reduced
to zero;
tenth, to the Class M-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
eleventh, to the Class M-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and
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twelfth, to the Class M-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and
thirteenth, for losses on the Group I Loans to the Class I-A-1
Certificates until the aggregate Certificate Principal Balance thereof has been
reduced to zero, and for losses on the Group II Loans, to the Class II-A-1
Certificates and Class A-II-2 Certificates on a pro rata basis, based on their
then outstanding Certificate Principal Balances prior to giving effect to
distributions to be made on such Distribution Date, until the aggregate
Certificate Principal Balance of each such Class has been reduced to zero;
provided, however, that such losses otherwise allocable to the Class II-A-1
Certificates will be allocated to the Class II-A-2 Certificates until the
Certificate Principal Balance of the Class II-A-2 Certificates has been reduced
to zero.
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 in respect of such Distribution
Date (without regard to any Compensating Interest allocated to the Available
Distribution Amount for such Distribution Date) in the case of an interest
portion of a Realized Loss.
(b) Any allocation of the principal portion of Realized Losses (other
than Debt Service Reductions) to the Class of Class A Certificates or Class M
Certificates on any Distribution Date shall be made by reducing the Certificate
Principal Balance thereof by the amount so allocated, which allocation shall be
deemed to have occurred on such Distribution Date, until the Certificate
Principal Balance thereof has been reduced to zero; provided, that no such
reduction shall reduce the aggregate Certificate Principal Balance of the
Certificates below the aggregate Stated Principal Balance of the Mortgage Loans.
Allocations of the interest portions of Realized Losses (other than any interest
rate reduction resulting from a Servicing Modification) to any Class of Class of
Class A Certificates or Class M Certificates on any Distribution Date shall be
made by operation of the definition of "Accrued Certificate Interest" for each
Class for such Distribution Date. Allocations of the interest portion of a
Realized Loss resulting from an interest rate reduction in connection with a
Servicing Modification shall be made by operation of the priority of payment
provisions of Section 4.02
(c). All Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the Certificates of such Class in
proportion to the Percentage Interests evidenced thereby. (c) Realized Losses
shall be allocated among the REMIC I Regular Interests pursuant to the
definition of REMIC I Realized Losses, the REMIC II Regular Interests pursuant
to the definition of REMIC II Realized Losses and the REMIC III Regular
Interests pursuant to the definition of REMIC III Realized Losses.
(d) Realized Losses allocated to the Excess Cash Flow or the
Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of this
Section, the definition of Accrued Certificate Interest and the operation of
Section 4.02(c) shall be deemed allocated to the Class SB-1 Certificates and
SB-2 Certificates, on a pro rata basis in accordance with the respective
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Certificate Principal Balances thereof. Realized Losses allocated to the Class
SB Certificates shall, to the extent such Realized Losses represent Realized
Losses on an interest portion, be allocated to REMIC IV Regular Interest SB-IO.
Realized Losses allocated to the Excess Cash Flow pursuant to paragraph (b) of
this Section shall be deemed to reduce Accrued Certificate Interest on REMIC IV
Regular Interest SB-IO. Realized Losses allocated to the Overcollateralization
Amount pursuant to paragraph (b) of this Section shall be deemed first to reduce
the principal balance of REMIC IV Regular Interest SB-PO until such principal
balance shall have been reduced to zero and thereafter to reduce accrued and
unpaid interest on REMIC IV Regular Interest SB-IO.
Section 4.06. REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED
PROPERTY. (See Section 4.06 of the Standard Terms.)
Section 4.07. OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS.
(See Section 4.07 of the Standard Terms.)
Section 4.08. SURETY BOND. (See Section 4.08 of the Standard Terms.)
Section 4.09. SWAP AGREEMENT.
(a) On the Closing Date, the Supplemental Interest Trust Trustee shall
(i) establish and maintain in its name, in trust for the benefit of the
Certificateholders, the Supplemental Interest Trust Account and (ii) for the
benefit of the Certificateholders, cause the Supplemental Interest Trust to
enter into the Swap Agreement.
(b) The Supplemental Interest Trust Trustee shall deposit in the
Supplemental Interest Trust Account all payments that are payable to the Trust
Fund under the Swap Agreement. Net Swap Payments and Swap Termination Payments
(other than Swap Termination Payments resulting from a Swap Counterparty Trigger
Event) payable by the Supplemental Interest Trust to the Swap Counterparty
pursuant to the Swap Agreement shall be excluded from the Available Distribution
Amount and paid to the Swap Counterparty prior to any distributions to the
Certificateholders. On each Distribution Date, such amounts will be remitted by
the Supplemental Interest Trust Trustee to the Supplemental Interest Trust
Account for payment to the Swap Counterparty, first to make any Net Swap Payment
owed to the Swap Counterparty pursuant to the Swap Agreement for such
Distribution Date, and second to make any Swap Termination Payment (not due to a
Swap Counterparty Trigger Event) owed to the Swap Counterparty pursuant to the
Swap Agreement for such Distribution Date. For federal income tax purposes, such
amounts paid to the Supplemental Interest Trust Account on each Distribution
Date shall first be deemed paid to the Supplemental Interest Trust Account in
respect of REMIC V Regular Interest IO to the extent of the amount distributable
on such REMIC V Regular Interest IO on such Distribution Date, and any remaining
amount shall be deemed paid to the Supplemental Interest Trust Account in
respect of the SB-AM Swap Agreement. Any Swap Termination Payment triggered by a
Swap Counterparty Trigger Event owed to the Swap Counterparty pursuant to the
Swap Agreement will be subordinated to distributions to the Holders of the Class
A Certificates and Class M Certificates and shall be paid as set forth under
Section 4.02.
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(c) Net Swap Payments payable by the Swap Counterparty to the
Supplemental Interest Trust Trustee on behalf of the Trust Fund pursuant to the
Swap Agreement shall be deposited by the Supplemental Interest Trust Trustee
into the Supplemental Interest Trust Account and shall be applied in accordance
with Section 4.02.
(d) Subject to Sections 8.01 and 8.02 of the Standard Terms, the
Supplemental Interest Trust Trustee agrees to comply with the terms of the Swap
Agreement and to enforce the terms and provisions thereof against the Swap
Counterparty at the written direction of the Holders of Certificates entitled to
at least 51% of the Voting Rights, or if the Supplemental Interest Trust Trustee
does not receive such direction from such Certificateholders, then at the
written direction of Residential Funding.
(e) The Supplemental Interest Trust Account shall be an Eligible
Account. Amounts held in the Supplemental Interest Trust Account from time to
time shall continue to constitute assets of the Trust Fund, but not of the
REMICs, until released from the Supplemental Interest Trust Account pursuant to
this Section 4.09. The Supplemental Interest Trust Account constitutes an
"outside reserve fund" within the meaning of Treasury Regulation Section
1.860G-2(h) and is not an asset of the REMICs. The Class SB Certificateholders
shall be the owners of the Supplemental Interest Trust Account. The Supplemental
Interest Trust Trustee shall keep records that accurately reflect the funds on
deposit in the Supplemental Interest Trust Account. The Supplemental Interest
Trust Trustee shall, at the written direction of the Master Servicer, invest
amounts on deposit in the Supplemental Interest Trust Account in Permitted
Investments. In the absence of written direction to the Supplemental Interest
Trust Trustee from the Master Servicer, all funds in the Supplemental Interest
Trust Account shall remain uninvested.
(f) The Supplemental Interest Trust Trustee shall enter into the SB-AM
Swap Agreement on behalf of the holders of the Class A Certificates and Class M
Certificates on the one hand, and on behalf of the holders of the Class SB
Certificates on the other hand. Pursuant to the SB-AM Swap Agreement, all
holders of Certificates (other than the Class SB Certificates and Class R
Certificates) shall be treated as having agreed to pay, on each Distribution
Date, to the holder of the Class SB Certificates an aggregate amount equal to
the excess, if any, of (i) the amount payable on such Distribution Date on the
REMIC IV Regular Interest corresponding to such Class of Certificates over (ii)
the amount payable on such Class of Certificates on such Distribution Date (such
excess, a "Class IO Distribution Amount"). In addition, pursuant to the SB-AM
Swap Agreement, the holders of the Class SB Certificates shall be treated as
having agreed to pay the related Basis Risk Shortfalls to the holders of the
Certificates (other than the Class SB and Class R Certificates) in accordance
with the terms of this Agreement. Any payments to the Certificates from amounts
deemed received in respect of the SB-AM Swap Agreement shall not be payments
with respect to a "regular interest" in a REMIC within the meaning of Code
Section 860G(a)(1). However, any payment from the Certificates (other than the
Class SB Certificates and Class R Certificates) of a Class IO Distribution
Amount shall be treated for tax purposes as having been received by the holders
of such Certificates in respect of the REMIC IV Regular Interest corresponding
to such Class of Certificates and as having been paid by such holders to the
Supplemental Interest Trust Account pursuant to the SB-AM Swap Agreement. Thus,
each Certificate (other than the Class R Certificates) shall be treated as
representing not only ownership of regular interests in REMIC IV or REMIC V, as
applicable, but also ownership of an interest in, and obligations with respect
to, a notional principal contract.
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(g) Upon the occurrence of an Early Termination Date, the Supplemental
Interest Trust Trustee shall use reasonable efforts to appoint a successor swap
counterparty. To the extent that the Supplemental Interest Trust Trustee
receives a Swap Termination Payment from the Swap Counterparty, the Supplemental
Interest Trust Trustee shall apply such Swap Termination Payment to appoint a
successor swap counterparty. In the event that the trust receives a Swap
Termination Payment from the Swap Counterparty and a replacement swap agreement
or similar agreement cannot be obtained within 30 days after receipt by the
Supplemental Interest Trust Trustee of such Swap Termination Payment, then the
Supplemental Interest Trust Trustee shall deposit such Swap Termination Payment
into a separate, non interest bearing account and will, on each subsequent
Distribution Date, withdraw from the amount then remaining on deposit in such
reserve account an amount equal to the Net Swap Payment, if any, that would have
been paid to the Trust by the original Swap Counterparty calculated in
accordance with the terms of the original Swap Agreement, and deposit such
amount into the Supplemental Interest Trust Account for distribution on such
Distribution Date pursuant to Section 4.02(c). To the extent that the Trust is
required to pay a Swap Termination Payment to the Swap Counterparty, any upfront
payment received from the counterparty to a replacement swap agreement will be
used to pay such Swap Termination Payment prior to using any portion of the
Available Distribution Amount for such Distribution Date.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates. (See Section 5.01 of the Standard Terms)
Section 5.02. Registration of Transfer and Exchange of Certificates
(a) (See Section 5.02(a) of the Standard Terms)
(b) (See Section 5.02(b) of the Standard Terms)
(c) (See Section 5.02(c) of the Standard Terms)
(d) No transfer, sale, pledge or other disposition of a Class SB
Certificate shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. EXCEPT WITH RESPECT TO (I) THE TRANSFER OF A
CLASS SB-2 CERTIFICATE FROM THE COMPANY OR AN AFFILIATE OF THE COMPANY TO
DEUTSCHE BANK TRUST COMPANY AMERICAS, AS NIM TRUSTEE, OR (II) A TRANSFER OF THE
CLASS SB-2 CERTIFICATE FROM THE NIM TRUSTEE TO THE COMPANY OR AN AFFILIATE OF
THE COMPANY, In the event that a transfer of a Class SB Certificate is to be
made either (i)(A) the Trustee shall require a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Company that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from said Act and laws or is being
made pursuant to said Act and laws, which Opinion of Counsel shall not be an
expense of the Trustee, the Company or the Master Servicer (except that, if such
transfer is made by the Company or the Master Servicer or any Affiliate thereof,
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the Company or the Master Servicer shall provide such Opinion of Counsel at
their own expense); provided that such Opinion of Counsel will not be required
in connection with the initial transfer of any such Certificate by the Company
or any Affiliate thereof to the Company or an Affiliate of the Company and (B)
the Trustee shall require the transferee to execute a representation letter,
substantially in the form of Exhibit H to the Standard Terms, and the Trustee
shall require the transferor to execute a representation letter, substantially
in the form of Exhibit I to the Standard Terms, each acceptable to and in form
and substance satisfactory to the Company and the Trustee certifying to the
Company and the Trustee the facts surrounding such transfer, which
representation letters shall not be an expense of the Trustee, the Company or
the Master Servicer; provided, however, that such representation letters will
not be required in connection with any transfer of any such Certificate by the
Company or any Affiliate thereof to the Company or an Affiliate of the Company,
and the Trustee shall be entitled to conclusively rely upon a representation
(which, upon the request of the Trustee, shall be a written representation) from
the Company, of the status of such transferee as an Affiliate of the Company or
(ii) the prospective transferee of such a Certificate shall be required to
provide the Trustee, the Company and the Master Servicer with an investment
letter substantially in the form of Exhibit J attached to the Standard Terms (or
such other form as the Company in its sole discretion deems acceptable), which
investment letter shall not be an expense of the Trustee, the Company or the
Master Servicer, and which investment letter states that, among other things,
such transferee (A) is a "qualified institutional buyer" as defined under Rule
144A, acting for its own account or the accounts of other "qualified
institutional buyers" as defined under Rule 144A, and (B) is aware that the
proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act of 1933, as amended, provided by Rule
144A. The Holder of any such Certificate desiring to effect any such transfer,
sale, pledge or other disposition shall, and does hereby agree to, indemnify the
Trustee, the Company, the Master Servicer and the Certificate Registrar against
any liability that may result if the transfer, sale, pledge or other disposition
is not so exempt or is not made in accordance with such federal and state laws.
(e) (i) In the case of any Class SB or Class R Certificate presented for
registration in the name of any Person, either (A) the Trustee shall require an
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee, the Company and the Master Servicer to the effect that the purchase or
holding of such Class SB or Class R Certificate is permissible under applicable
law, will not constitute or result in any non-exempt prohibited transaction
under Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), and will not subject the Trustee, the Company or the
Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Master Servicer or (B) the prospective
Transferee shall be required to provide the Trustee, the Company and the Master
Servicer with a certification to the effect set forth in paragraph six of
Exhibit H (with respect to any Class SB Certificate) or paragraph fifteen of
Exhibit G-1 (with respect to any Class R Certificate), which the Trustee may
rely upon without further inquiry or investigation, or such other certifications
as the Trustee may deem desirable or necessary in order to establish that such
Transferee or the Person in whose name such registration is requested either (a)
is not an employee benefit plan or other plan subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code, or any Person
(including an investment manager, a named fiduciary or a trustee of any such
plan) who is using "plan assets" of any such plan to effect such acquisition
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(each, a "Plan Investor") or (b) in the case of any Class SB Certificate, the
following conditions are satisfied: (i) such Transferee is an insurance company,
(ii) the source of funds used to purchase or hold such Certificate (or interest
therein) is an "insurance company general account" (as defined in U.S.
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60, and
(iii) the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied (each entity that satisfies this clause (b), a "Complying Insurance
Company").
(ii) Any Transferee of a Class M Certificate will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan Investor, (b) it
has acquired and is holding such Certificate in reliance on Prohibited
Transaction Exemption ("PTE") 94-29, as most recently amended, PTE 2002-41, 67
Fed. Reg. 54487 (August 22, 2002) (the "RFC Exemption"), and that it understands
that there are certain conditions to the availability of the RFC Exemption
including that such Certificate must be rated, at the time of purchase, not
lower than "BBB-" (or its equivalent) by Standard & Poor's, Fitch or Xxxxx'x or
(c) such Transferee is a Complying Insurance Company.
(iii) (A) If any Class M Certificate (or any interest therein) is
acquired or held by any Person that does not satisfy the conditions
described in paragraph (ii) above, then the last preceding Transferee
that either (i) is not a Plan Investor, (ii) acquired such Certificate
in compliance with the RFC Exemption, or (iii) is a Complying Insurance
Company shall be restored, to the extent permitted by law, to all rights
and obligations as Certificate Owner thereof retroactive to the date of
such Transfer of such Class M Certificate. The Trustee shall be under no
liability to any Person for making any payments due on such Certificate
to such preceding Transferee.
(B) Any purported Certificate Owner whose acquisition or holding
of any Class M Certificate (or interest therein) was effected in
violation of the restrictions in this Section 5.02(e) shall indemnify
and hold harmless the Company, the Trustee, the Master Servicer, any
Subservicer, the Underwriters and the Trust Fund from and against any
and all liabilities, claims, costs or expenses incurred by such parties
as a result of such acquisition or holding.
(iv) Each Holder of a Certificate or any interest therein acquired as of
any date prior to the termination of the Swap Agreement that is a Plan Investor
shall be deemed to have represented, by its acquisition or holding of such
Certificate or any interest therein, that at least one of PTCE 84-14, 90-1,
91-38, 95-60 or 96-23 or other applicable exemption applies to such Holder's
right to receive payments from the Supplemental Interest Trust.
(f) (See Section 5.02(f) of the Standard Terms)
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(g) Provisions Regarding Rule 144A and Regulation S Transfers. (i) Class
SB-1 Certificates sold to "qualified institutional buyers" as defined in and in
reliance on Rule 144A under the 1933 Act shall be represented by one or more
Rule 144A Global Offered Certificates. Class SB-1 Certificates sold in offshore
transactions in reliance on Regulation S under the Securities Act shall be
represented initially by Temporary Regulation S Global Offered Certificates.
(ii) The Temporary Regulation S Global Offered Certificates shall be
exchanged on the later of (a) 40 days after the later of the Closing Date (b)
the date on which the requisite certifications are due to and provided to the
Trustee (the later of clauses (a) and (b), the "Exchange Date") for Permanent
Regulation S Global Offered Certificates. Regulation S Global Offered
Certificates shall be issued in registered form, without coupons, and deposited
upon the order of the Transferor with the Trustee as custodian for and
registered in the name of a nominee of the Depository for credit to the account
of the depositaries for Euroclear and Clearstream.
(iii) A Certificate Owner holding an interest in a Temporary Regulation
S Global Offered Certificate may receive payments in respect of the Certificates
on the Temporary Regulation S Global Offered Certificate only after the
delivery, to Euroclear or Clearstream, as the case may be, of a written
certification substantially in the form set forth in Exhibit Six, and upon
delivery by Euroclear or Clearstream, as the case may be, to the Trustee and
Certificate Registrar of a certification or certifications substantially in the
form set forth in Exhibit Seven (the "Clearing System Certificate"). The
delivery by a Certificate Owner of the certification referred to above shall
constitute its irrevocable instruction to Euroclear or Clearstream, as the case
may be, to arrange for the exchange of the Certificate Owner's interest in the
Temporary Regulation S Global Offered Certificate for a beneficial interest in
the Permanent Regulation S Global Offered Certificate after the Exchange Date in
accordance with paragraph (iv) below.
(iv) After (i) the Exchange Date and (ii) receipt by the Certificate
Registrar of written instructions from Euroclear or Clearstream, as the case may
be, directing the Certificate Registrar to credit or cause to be credited to
either Euroclear's or Clearstream's, as the case may be, Depository's account a
beneficial interest in the Permanent Regulation S Global Offered Certificate in
a principal amount not greater than that of the beneficial interest in the
Temporary Regulation S Global Offered Certificate, the Certificate Registrar
shall instruct the Depository to reduce the principal amount of the Temporary
Regulation S Global Offered Certificate and increase the principal amount of the
Permanent Regulation S Global Offered Certificate, by the principal amount of
the beneficial interest in the Temporary Regulation S Global Offered Certificate
to be so transferred, and to credit or cause to be credited to the account of
Euroclear, Clearstream or a Person who has an account with the Depository as the
case may be, a beneficial interest in the Permanent Regulation S Global Offered
Certificate having a Certificate Principal Balance of the Temporary Regulation S
Global Class [ ] that was reduced upon the transfer. Upon return of the entire
principal amount of the Temporary Regulation S Global Offered Certificate to the
Trustee in exchange for beneficial interests in the Permanent Regulation S
Global Offered Certificate, Trustee shall cancel the Temporary Regulation S
Global Offered Certificate by perforation and shall forthwith destroy it.
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(v) For transfer of an interest in a Permanent Regulation S Global
Offered Certificate for an interest in the Rule 144A Global Offered Certificate,
if the Certificateholder of a beneficial interest in a Permanent Regulation S
Global Offered Certificate deposited with the Depository wishes at any time to
exchange its interest in the Permanent Regulation S Global Offered Certificate,
or to transfer its interest in the Permanent Regulation S Global Offered
Certificate to a Person who wishes to take delivery thereof in the form of an
interest in the Rule 144A Global Offered Certificate, the Certificateholder may,
subject to the rules and procedures of Euroclear or Clearstream and the
Depository, as the case may be, give directions for the Certificate Registrar to
exchange or cause the exchange or transfer or cause the transfer of the interest
for an equivalent beneficial interest in the Rule 144A Global Offered
Certificate. Upon receipt by the Certificate Registrar of instructions from
Euroclear or Clearstream, from the Depository or from the Certificateholder, as
the case may be, directing the Certificate Registrar to credit or cause to be
credited a beneficial interest in the Rule 144A Global Offered Certificate equal
to the Percentage Interest in the Permanent Regulation S Global Offered
Certificate to be exchanged or transferred (such instructions to contain
information regarding the Depository Participant account to be credited with the
increase, and, with respect to an exchange or transfer of an interest in the
Permanent Regulation S Global Offered Certificate, information regarding the
Depository Participant account to be debited with the decrease), the Certificate
Registrar shall instruct the Depository to reduce the Permanent Regulation S
Global Offered Certificate by the aggregate principal amount of the beneficial
interest in the Permanent Regulation S Global Offered Certificate to be so
exchanged or transferred, and the Certificate Registrar shall instruct the
Depository, concurrently with the reduction, to increase the principal amount of
the Rule 144A Global Offered Certificate by the aggregate Certificate Principal
Balance of the beneficial interest in the Permanent Regulation S Global Offered
Certificate to be so exchanged or transferred, and to credit or cause to be
credited to the account of the Person specified in the instructions a beneficial
interest in the Rule 144A Global Offered Certificate equal to the reduction in
the Certificate Principal Balance of the Permanent Regulation S Global Offered
Certificate.
(vi) For transfers of an interest in the Rule 144A Global Offered
Certificate for an interest in a Regulation S Global Offered Certificate, if a
Certificate Owner holding a beneficial interest in the Rule 144A Global Offered
Certificate wishes at any time to exchange its interest in the Rule 144A Global
Offered Certificate for an interest in a Regulation S Global Offered
Certificate, or to transfer its interest in the 144A Book-Entry Certificate to a
Person who wishes to take delivery thereof in the form of an interest in the
Regulation S Global Offered Certificate, the Certificateholder may, subject to
the rules and procedures of the Depository, give directions for the Certificate
Registrar to exchange or cause the exchange or transfer or cause the transfer of
the interest for an equivalent beneficial interest in the Regulation S Global
Offered Certificate. Upon receipt by the Certificate Registrar of (A)
instructions given in accordance with the Depository's procedures from a
Depository Participant or from the Certificateholder, as the case may be,
directing the Certificate Registrar to credit or cause to be credited a
beneficial interest in the Regulation S Global Offered Certificate in an amount
equal to the beneficial interest in the Rule 144A Global Offered Certificate to
be exchanged or transferred, (B) a written order given in accordance with the
Depository's procedures containing information regarding the account of the
depositaries for Euroclear or Clearstream or another Depository Participant, as
the case may be, to be credited with the increase and the name of the account
and (C) certificates in the forms of Exhibits Eight and Nine, respectively,
given by the proposed transferee and the Certificate Owner of the interest, the
Certificate Registrar shall instruct the Depository to reduce the Rule 144A
Global Offered Certificate by the aggregate principal amount of the beneficial
interest in the Rule 144A Global Offered Certificate to be so exchanged or
transferred and the Certificate Registrar shall instruct the Depository,
concurrently with the reduction, to increase the principal amount of the
Regulation S Global Offered Certificate by the aggregate Certificate Principal
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Balance of the beneficial interest in the Rule 144A Global Offered Certificate
to be so exchanged or transferred, and to credit or cause to be credited to the
account of the Person specified in the instructions a beneficial interest in the
Regulation S Global Offered Certificate equal to the reduction in the
Certificate Principal Balance of the Rule 144A Global Offered Certificate.
(vii) Notwithstanding any other provisions of this Section 5.02(g), the
Underwriter may exchange beneficial interests in the Temporary Regulation S
Global Offered Certificates held by it for interests in the Rule 144A Global
Offered Certificates only after delivery by the Underwriter of instructions for
the exchange substantially in the form of Exhibit Ten. Upon receipt of the
instructions provided in the preceding sentence, the Certificate Registrar shall
instruct the Depository to reduce the principal amount of the Temporary
Regulation S Global Offered Certificate to be so transferred and shall instruct
the Depository to increase the principal amount of the Rule 144A Global Offered
Certificate and credit or cause to be credited to the account of the placement
agent a beneficial interest in the Rule 144A Global Offered Certificate having a
principal amount equal to the amount by which the principal amount of the
Temporary Regulation S Global Offered Certificate was reduced upon the transfer
pursuant to the instructions provided in the first sentence of this clause
(vii).
(viii) If a transfer of a Class SB Certificate which is a Definitive
Certificate is to be made, the Trustee shall require a written Opinion of
Counsel acceptable to and in form and substance satisfactory to the Trustee and
the Company that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from said Act and laws or is
being made pursuant to the 1933 Act, which Opinion of Counsel shall not be an
expense of the Trustee, the Trust Fund, the Company or the Master Servicer.
(ix) The Holder of a Class SB Certificate desiring to effect any
transfer, sale, pledge or other disposition shall, and does hereby agree to,
indemnify the Trustee, the Company, the Master Servicer and the Certificate
Registrar against any liability that may result if the transfer, sale, pledge or
other disposition is not so exempt or is not made in accordance with the
provisions of this Agreement.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates(See
Section 5.03 of the Standard Terms)
Section 5.04. Persons Deemed Owners (See Section 5.04 of the Standard
Terms)
Section 5.05. Appointment of Paying Agent
The Trustee and Supplemental Interest Trust Trustee may appoint a
Paying Agent for the purpose of making distributions to the Certificateholders
pursuant to Section 4.02. In the event of any such appointment, on or prior to
each Distribution Date the Master Servicer on behalf of the Trustee or
Supplemental Interest Trust Trustee, as applicable, shall deposit or cause to be
deposited with the Paying Agent a sum sufficient to make the payments to the
Certificateholders in the amounts and in the manner provided for in Section
4.02, such sum to be held in trust for the benefit of the Certificateholders.
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The Trustee or Supplemental Interest Trust Trustee, as
applicable, shall cause each Paying Agent to execute and deliver to the Trustee
or Supplemental Interest Trust Trustee, as applicable, an instrument in which
such Paying Agent shall agree with the Trustee or Supplemental Interest Trust
Trustee, as applicable, that such Paying Agent shall hold all sums held by it
for the payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be distributed to such
Certificateholders. Any sums so held by such Paying Agent shall be held only in
Eligible Accounts to the extent such sums are not distributed to the
Certificateholders on the date of receipt by such Paying Agent.
Section 5.06. U.S.A. Patriot Act Compliance (See Section 5.05 of the
Standard Terms)
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ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
Section 6.01. RESPECTIVE LIABILITIES OF THE COMPANY AND MASTER
SERVICER. (See Section 6.01 of the Standard Terms.)
Section 6.02. MERGER OR CONSOLIDATION OF THE COMPANY OR MASTER
SERVICER; ASSIGNMENT OF RIGHTS AND DELEGATION
OF DUTIES BY THE MASTER SERVICER. (
(a) (See Section 6.08(a) of the Standard Terms.).
(b) (See Section 6.08(b) of the Standard Terms).
(c) (See Section 6.08(c) of the Standard Terms).
(d) Notwithstanding anything else in this Section 6.02 to the contrary,
the conversion of Residential Funding Corporation's or Residential Accredit
Loans, Inc.'s organizational structure from a Delaware corporation to a limited
liability company shall not require the consent of any party or notice to any
party and shall not in any way affect the rights or obligations of Residential
Funding Corporation or Residential Accredit Loans, Inc. hereunder.
Section 6.03. LIMITATION ON LIABILITY OF THE COMPANY, MASTER SERVICER
AND OTHERS. (See Section 6.03 of the Standard Terms.)
Section 6.04. COMPANY AND MASTER SERVICER NOT TO RESIGN. (See Section
6.04 of the Standard Terms.)
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ARTICLE VII
DEFAULT
(See Article VII of the Standard Terms.)
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ARTICLE VIII
CONCERNING THE TRUSTEE AND SUPPLEMENTAL INTEREST TRUST TRUSTEE
Section 8.01. Duties of the Trustee and Supplemental Interest Trust
Trustee.
(a) The Trustee and Supplemental Interest Trust Trustee, prior to the
occurrence of an Event of Default and after the curing or waiver of all Events
of Default which may have occurred, undertake 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 and
Supplemental Interest Trust Trustee shall exercise such of the rights and powers
vested in each 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 or Supplemental Interest Trust Trustee, as applicable,
upon receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to the Trustee or Supplemental
Interest Trust 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 or Supplemental
Interest Trust Trustee, as applicable, 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 or Supplemental Interest Trust Trustee,
as applicable, 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 and Supplemental
Interest Trust 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 ansd Supplemental Interest Trust Trustee covenant and agree that
each shall perform its respective obligations hereunder in a manner so as to
maintain the status of any portion of any REMIC formed under the Series
Supplement as a REMIC under the REMIC Provisions and (subject to Section
10.01(f)) to prevent the imposition of any federal, state or local income,
prohibited transaction, contribution or other tax on the Trust Fund or
Supplemental Interest Trust to the extent that maintaining such status and
avoiding such taxes are reasonably within the control of the Trustee or
Supplemental Interest Trust Trustee and are reasonably within the scope of their
respective duties under this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee or Supplemental Trust Trustee, as applicable, from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct; provided, however, that:
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(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 and Supplemental
Interest Trust Trustee, as applicable, shall be determined solely by the
express provisions of this Agreement, the Trustee or Supplemental
Interest Trust 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 or Supplemental Interest Trust Trustee,
and, in the absence of bad faith on the part of the Trustee or
Supplemental Interest Trust Trustee, the Trustee or Supplemental
Interest Trust Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee or Supplemental
Interest Trust Trustee, as applicable, by the Company or the Master
Servicer and which on their face, do not contradict the requirements of
this Agreement;
(ii) The Trustee or Supplemental Interest Trust 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 or
Supplemental Interest Trust Trustee, as applicable, unless it shall be
proved that the Trustee or Supplemental Interest Trust Trustee, as
applicable, was negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders of any Class holding
Certificates which evidence, as to such Class, Percentage Interests
aggregating not less than 25% as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iv) The Trustee shall not be charged with knowledge of any
default (other than a default in payment to the Trustee) specified in
clauses (i) and (ii) of Section 7.01 or an Event of Default under
clauses (iii), (iv) and (v) of Section 7.01 unless a Responsible Officer
of the Trustee assigned to and working in the Corporate Trust Office
obtains actual knowledge of such failure or event or the Trustee
receives written notice of such failure or event at its Corporate Trust
Office from the Master Servicer, the Company or any Certificateholder;
and
(v) Except to the extent provided in Section 7.02, no provision
in this Agreement shall require the Trustee or Supplemental Interest
Trust Trustee, as applicable, 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 or Supplemental Interest Trust Trustee, as applicable,
hereunder, or in the exercise of any of its rights or powers, if the
Trustee or Supplemental Interest Trust Trustee, as applicable, 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
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Closing Date imposed by Section 860G(d) of the Code and (C) any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code, but
only if such taxes arise out of a breach by the Trustee of its obligations
hereunder, which breach constitutes negligence or willful misconduct of the
Trustee.
Section 8.02. Certain Matters Affecting the Trustee and Supplemental
Interest Trust Trustee.
(e) Except as otherwise provided in Section 8.01:
(i) The Trustee or Supplemental Interest Trust Trustee, as
applicable, 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 or Supplemental Interest Trust Trustee, as
applicable, 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 or Supplemental Interest Trust Trustee, as
applicable, 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 or Supplemental Interest Trust Trustee, as
applicable, reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default (which has not been cured or
waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their
exercise as a prudent investor would exercise or use under the
circumstances in the conduct of such investor's own affairs;
(iv) The Trustee or Supplemental Interest Trust Trustee, as
applicable, shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
Holders of Certificates of any Class evidencing, as to such Class,
Percentage Interests, aggregating not less than 50%; provided, however,
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that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against
such expense or liability as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the Master
Servicer, if an Event of Default shall have occurred and is continuing,
and otherwise by the Certificateholder requesting the investigation;
(vi) The Trustee or Supplemental Interest Trust Trustee, as
applicable, may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or
attorneys; and
(vii) To the extent authorized under the Code and the
regulations promulgated thereunder, each Holder of a Class R Certificate
hereby irrevocably appoints and authorizes the Trustee to be its
attorney-in-fact for purposes of signing any Tax Returns required to be
filed on behalf of the Trust Fund. The Trustee shall sign on behalf of
the Trust Fund and deliver to the Master Servicer in a timely manner any
Tax Returns prepared by or on behalf of the Master Servicer that the
Trustee is required to sign as determined by the Master Servicer
pursuant to applicable federal, state or local tax laws, provided that
the Master Servicer shall indemnify the Trustee for signing any such Tax
Returns that contain errors or omissions.
(f) Following the issuance of the Certificates, the Trustee shall not
accept any contribution of assets to the Trust Fund unless (subject to Section
10.01(f)) it shall have obtained or been furnished with an Opinion of Counsel to
the effect that such contribution will not (i) cause any portion of any REMIC
formed under the Series Supplement to fail to qualify as a REMIC at any time
that any Certificates are outstanding or (ii) cause the Trust Fund to be subject
to any federal tax as a result of such contribution (including the imposition of
any federal tax on "prohibited transactions" imposed under Section 860F(a) of
the Code).
Section 8.03. Trustee and Supplemental Interest Trust Trustee Not
Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
execution of the Certificates and relating to the acceptance and receipt of the
Mortgage Loans) shall be taken as the statements of the Company or the Master
Servicer as the case may be, and the Trustee and Supplemental Interest Trust
Trustee assume no responsibility for their correctness. The Trustee and
Supplemental Interest Trust Trustee make 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 and
Supplemental Interest Trust Trustee shall not be accountable for the use or
application by the Company or the Master Servicer of any of the Certificates or
of the proceeds of such Certificates, or for the use or application of any funds
paid to the Company or the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Custodial Account or the Certificate Account
by the Company or the Master Servicer.
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Section 8.04. Trustee and Supplemental Interest Trust Trustee May Own
Certificates.
The Trustee and Supplemental Interest Trust Trustee, in their 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 and Supplemental
Interest Trust Trustee's Fees and Expenses; Indemnification.
(a) The Master Servicer covenants and agrees to pay to the
Trustee, any co-trustee and the Supplemental Interest Trust Trustee from time to
time, and the Trustee, any co-trustee and the Supplemental Interest Trust
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, any co-trustee and the Supplemental
Interest Trust Trustee, and the Master Servicer will pay or reimburse the
Trustee, any co-trustee and the Supplemental Interest Trust Trustee upon request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee, any co-trustee or the Supplemental Interest Trust 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,
any co-trustee or the Supplemental Interest Trust 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 or
Supplemental Interest Trust Trustee, as applicable, for, and to hold the Trustee
or Supplemental Interest Trust Trustee, as applicable, harmless against, any
loss, liability or expense incurred without negligence or willful misconduct on
the Trustee's or Supplemental Interest Trust Trustee's, as applicable, part,
arising out of, or in connection with, the acceptance and administration of the
Trust Fund or or Supplemental Interest Trust, as applicable, 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 their
respective powers or duties under this Agreement, the Swap Agreement and the
Custodial Agreement, and the Master Servicer further agrees to indemnify the
Trustee for, and to hold the Trustee harmless against, any loss, liability or
expense arising out of, or in connection with, the provisions set forth in the
second paragraph of Section 2.01(c) hereof, including, without limitation, all
costs, liabilities and expenses (including reasonable legal fees and expenses)
of investigating and defending itself against any claim, action or proceeding,
pending or threatened, relating to the provisions of this paragraph, provided
that:
(i) with respect to any such claim, the Trustee shall have given
the Master Servicer written notice thereof promptly after the Trustee
shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee
shall cooperate and consult fully with the Master Servicer in preparing
such defense; and
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(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 or
Supplemental Interest Trust Trustee, as applicable, under the conditions and to
the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the
Master Servicer in this Section 8.05(b) shall not be available (A) for any loss,
liability or expense of the Trustee or Supplemental Interest Trust Trustee, as
applicable, including the costs and expenses of defending itself against any
claim, incurred in connection with any actions taken by the Trustee or
Supplemental Interest Trust Trustee, as applicable, at the direction of the
Certificateholders pursuant to the terms of this Agreement or (B) where the
Trustee is required to indemnify the Master Servicer pursuant to Section
12.05(a).
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a national
banking association having its principal office in a state and city acceptable
to the Company and organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation or national banking association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07.
The Trustee and Supplemental Interest Trust Trustee, and any successors
thereto, shall at all times be the same Person.
Section 8.07 Resignation and Removal of the Trustee and Supplemental
Interest Trust Trustee.
(a) The Trustee and Supplemental Interest Trust Trustee, together, may
at any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Company. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee and
successor supplemental interest trust 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 and
successor supplemental interest trust trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee and Supplemental Interest Trust Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee and successor supplemental interest trust trustee.
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(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Company, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Company may
remove the Trustee and Supplemental Interest Trust Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee. In addition, in the event that the Company determines that
the Trustee or Supplemental Interest Trust Trustee has failed (i) to distribute
or cause to be distributed to the Certificateholders any amount required to be
distributed hereunder, if such amount is held by the Trustee or its Paying Agent
(other than the Master Servicer or the Company) or the Supplemental Interest
Trust Trustee for distribution or (ii) to otherwise observe or perform in any
material respect any of its covenants, agreements or obligations hereunder, and
such failure shall continue unremedied for a period of 5 days (in respect of
clause (i) above) or 30 days (in respect of clause (ii) above other than any
failure to comply with the provisions of Article XII, in which case no notice or
grace period shall be applicable) after the date on which written notice of such
failure, requiring that the same be remedied, shall have been given to the
Trustee by the Company, then the Company may remove the Trustee and Supplemental
Interest Trust Trustee and appoint a successor trustee and successor
supplemental interest trust trustee by written instrument delivered as provided
in the preceding sentence. In connection with the appointment of a successor
trustee and successor supplemental interest trust trustee pursuant to the
preceding sentence, the Company shall, on or before the date on which any such
appointment becomes effective, obtain from each Rating Agency written
confirmation that the appointment of any such successor trustee and successor
supplemental interest trust 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 Supplemental Interest Trust
Trustee, together, and appoint a successor trustee and successor supplemental
interest trust trustee by written instrument or instruments, in triplicate,
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Company, one complete set to
the Trustee and Supplemental Interest Trust Trustee so removed and one complete
set to the successors so appointed.
(d) Any resignation or removal of the Trustee and Supplemental Interest
Trust Trustee and appointment of a successor trustee and successor supplemental
interest trust trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee and
successor supplemental interest trust trustee as provided in Section 8.08.
Section 8.08 Successor Trustee and Successor Supplemental Interest
Trust Trustee.
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(e) Any successor trustee and successor supplemental interest trust
trustee appointed as provided in Section 8.07 shall execute, acknowledge and
deliver to the Company and to its predecessor trustee or predecessor
supplemental interest trust trustee, as applicable, an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee and predecessor supplemental interest trust trustee shall
become effective and such successor trustee and successor supplemental interest
trust trustee shall become effective and such successor trustee and successor
supplemental interest trust 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 or supplemental interest trust trustee herein. The predecessor trustee
and predecessor supplemental interest trust trustee shall deliver to the
successor trustee and successor supplemental interest trust trustee, as
applicable, all Custodial Files and related documents and statements held by it
hereunder (other than any Custodial Files at the time held by a Custodian, which
shall become the agent of any successor trustee hereunder), and the Company, the
Master Servicer, predecessor trustee and predecessor supplemental interest trust
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 and successor supplemental interest trust trustee all
such rights, powers, duties and obligations.
(f) No successor trustee or successor supplemental interest trust
trustee shall accept appointment as provided in this Section unless at the time
of such acceptance (i) such successor trustee shall be eligible under the
provisions of Section 8.06, and (ii) such successor trustee and successor
supplemental interest trust trustee shall be the same Person.
(g) Upon acceptance of appointment by a successor trustee or successor
supplemental interest trust trustee as provided in this Section, the Company
shall mail notice of the succession of such trustee and supplemental interest
trust trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register. If the Company fails to mail such notice
within 10 days after acceptance of appointment by the successor trustee and
successor supplemental interest trust trustee, the successor trustee shall cause
such notice to be mailed at the expense of the Company.
Section 8.09 Merger or Consolidation of Trustee.
Any corporation or national banking association into which the Trustee
and Supplemental Interest Trust 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 and
Supplemental Interest Trust Trustee shall be a party, or any corporation or
national banking association succeeding to the business of the Trustee and
Supplemental Interest Trust Trustee, shall be the successor of the Trustee and
Supplemental Interest Trust Trustee, as applicable, 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.
111
Section 8.10 Appointment of Co-Trustee or Separate Trustee. (See Section
8.10 of the Standard Terms).
Section 8.11 Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer
and the Company, or shall, at the direction of the Company and the Master
Servicer, appoint custodians who are not Affiliates of the Company, the Master
Servicer or any Seller to hold all or a portion of the Custodial 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
with respect to the Custodial Files and to enforce the terms and provisions
thereof against the related custodian for the benefit of the Certificateholders.
Each custodian shall be a depository institution subject to supervision by
federal or state authority, shall have a combined capital and surplus of at
least $15,000,000 and shall be qualified to do business in the jurisdiction in
which it holds any Custodial File. Each Custodial Agreement, with respect to the
Custodial Files, may be amended only as provided in Section 11.01. The Trustee
shall notify the Certificateholders of the appointment of any custodian (other
than the custodian appointed as of the Closing Date) pursuant to this Section
8.11.
Section 8.12 Appointment of Office or Agency. (See Section 8.12 of the
Standard Terms).
Section 8.13 Swap Agreement.
The Supplemental Interest Trust Trustee is hereby authorized and
directed to, and agrees that it shall (a) enter into the Swap Agreement on
behalf of the Supplemental Interest Trust and (b) enter into the SB-AM Swap
Agreement on behalf of (i) the Class A Certificateholders and Class M
Certificateholders on the one hand, and (ii) the Class SB Certificateholders on
the other hand.
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ARTICLE IX
TERMINATION
Section 9.01. Optional Purchase by the Master Servicer of All Certificates;
Termination Upon Purchase by the Master Servicer or Liquidation of
All Mortgage Loans
(a) Subject to Section 9.02, the respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created
hereby in respect of the Certificates (other than the obligation of the Trustee
to make certain payments after the Final Distribution Date to Certificateholders
and the obligation of the Company to send certain notices as hereinafter set
forth) shall terminate upon the last action required to be taken by the Trustee
on the Final Distribution Date pursuant to this Article IX following the earlier
of:
(i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, or
(ii) at the option of the Master Servicer, the purchase of all
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining in the Trust Fund, at a price equal to the sum of (A) 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) 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, and (B) any unpaid Swap Termination Payment payable to the
Swap Counterparty (or any Swap Termination Payment payable to the Swap
Counterparty as a result of the exercise of the option provided for in
this Section 9.01(a)(ii))); provided, however, that in no event shall
the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late ambassador of the United States to the Court of St. Xxxxx,
living on the date hereof; and provided further, that the purchase price
set forth above shall be increased as is necessary, as determined by the
Master Servicer, to avoid disqualification of any REMIC created
hereunder as a REMIC. The purchase price paid by the Master Servicer,
pursuant to Section 9.01(a)(ii) shall also include any amounts owed by
Residential Funding pursuant to the last paragraph of Section 4 of the
Assignment Agreement in respect of any liability, penalty or expense
that resulted from a breach of the representation and warranty set forth
in clause (xlvii) of Section 4 of the Assignment Agreement that remain
unpaid on the date of such purchase.
The right of the Master Servicer to purchase all of the Mortgage Loans
pursuant to clause (ii) above is conditioned upon the Pool Stated Principal
Balance as of the Final Distribution Date, prior to giving effect to
distributions to be made on such Distribution Date, being less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans.
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If such right is exercised by the Master Servicer, the Master Servicer
shall be deemed to have been reimbursed for the full amount of any unreimbursed
Advances theretofore made by it with respect to the Mortgage Loans. In addition,
the Master Servicer shall provide to the Trustee the certification required by
Section 3.15 and the Trustee and any Custodian shall, promptly following payment
of the purchase price, release to the Master Servicer the Custodial Files
pertaining to the Mortgage Loans being purchased.
In addition to the foregoing, on any Distribution Date on which the Pool
Stated Principal Balance, prior to giving effect to distributions to be made on
such Distribution Date, is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans, the Master Servicer shall have the right, at its
option, to purchase the Class A Certificates, Class M Certificates and Class SB
Certificates in whole, but not in part, at a price equal to the outstanding
Certificate Principal Balance of such Certificates plus the sum of Accrued
Certificate Interest thereon for the related Interest Accrual Period and any
previously unpaid Accrued Certificate Interest, and any unpaid Prepayment
Interest Shortfalls previously allocated thereto and, in the case of Prepayment
Interest Shortfalls, accrued interest thereon at the applicable Pass-Through
Rate. If the Master Servicer exercises this right to purchase the outstanding
Class A Certificates, Class M Certificates and Class SB Certificates, the Master
Servicer will promptly terminate the respective obligations and responsibilities
created hereby in respect of these Certificates pursuant to this Article IX.
(b) The Master Servicer shall give the Trustee, the Supplemental
Interest Trust Trustee and the Swap Counterparty (so long as the Swap Agreement
has not previously been terminated) not less than 40 days prior notice of the
Distribution Date on which (1) the Master Servicer anticipates that the final
distribution will be made to Certificateholders as a result of the exercise by
the Master Servicer of its right to purchase the Mortgage Loans or on which (2)
the Master Servicer anticipates that the Certificates will be purchased as a
result of the exercise by the Master Servicer to purchase the outstanding
Certificates. Notice of any termination, specifying the anticipated Final
Distribution Date (which shall be a date that would otherwise be a Distribution
Date) upon which the Certificateholders may surrender their Certificates to the
Trustee (if so required by the terms hereof) for payment of the final
distribution and cancellation or notice of any purchase of the outstanding
Certificates, specifying the Distribution Date upon which the Holders may
surrender their Certificates to the Trustee for payment, shall be given promptly
by the Master Servicer, or by the Trustee (in any other case) by letter to the
Certificateholders (with a copy to the Certificate Registrar) mailed (or
distributed through the Depository with respect to any Book-Entry Certificates)
not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution specifying:
(i) the anticipated Final Distribution Date upon which final
payment of the Certificates is anticipated to be made upon presentation
and surrender of Certificates at the office or agency of the Trustee
therein designated where required pursuant to this Agreement or, in the
case of the purchase by the Master Servicer of the outstanding
Certificates, the Distribution Date on which such purchase is to be
made,
114
(ii) the amount of any such final payment, or in the case of the
purchase of the outstanding Certificates, the purchase price, in either
case, if known, and
(iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, and in the case of the Senior
Certificates, or in the case of all of the Certificates in connection
with the exercise by the Master Servicer of its right to purchase the
Certificates, that payment will be made only upon presentation and
surrender of the Certificates at the office or agency of the Trustee
therein specified.
If the Master Servicer or the Trustee is obligated to give notice to
Certificateholders as required above, it shall give such notice to the
Certificate Registrar at the time such notice is given to Certificateholders
and, if the Master Servicer is exercising its rights to purchase the outstanding
Certificates, it shall give such notice to each Rating Agency at the time such
notice is given to Certificateholders. In the event of a purchase of the
Mortgage Loans by the Master Servicer, the Master Servicer shall deposit in the
Certificate Account before the Final Distribution Date in immediately available
funds an amount equal to the purchase price computed as provided above. As a
result of the exercise by the Master Servicer of its right to purchase the
outstanding Certificates, the Master Servicer shall deposit in the Certificate
Account before the Distribution Date on which such purchase is to occur in
immediately available funds an amount equal to the purchase price for the
Certificates, computed as above provided, and provide notice of such deposit to
the Trustee. The Trustee will withdraw from such account the amount specified in
subsection (c) below and distribute such amount to the Certificateholders as
specified in subsection (c) below. The Master Servicer shall provide to the
Trustee written notification of any change to the anticipated Final Distribution
Date as soon as practicable. If the Trust Fund is not terminated on the
anticipated Final Distribution Date, for any reason, the Trustee shall promptly
mail notice thereof to each affected Certificateholder.
(c) In the case of the Senior Certificates, upon presentation and
surrender of the Certificates by the Certificateholders thereof, and in the case
of the Class M Certificates and Class SB Certificates, upon presentation and
surrender of the Certificates by the Certificateholders thereof in connection
with the exercise by the Master Servicer of its right to purchase the
Certificates, and otherwise in accordance with Section 4.01(a), the Trustee and
the Supplemental Interest Trust Trustee, as applicable, shall distribute to the
Certificateholders (i) the amount otherwise distributable on such Distribution
Date, if not in connection with the Master Servicer's election to repurchase the
assets of the Trust Fund or the outstanding Certificates, or (ii) if the Master
Servicer elected to so repurchase the Mortgage Loans or the outstanding Class A
Certificates, Class M Certificates and Class SB Certificates, an amount equal to
the price paid pursuant to Section 9.01(a) as follows: (A) with respect to each
Class A Certificates and Class M Certificates the outstanding Certificate
Principal Balance thereof, plus Accrued Certificate Interest for the related
Interest Accrual Period thereon and any previously unpaid Accrued Certificate
Interest, subject to the priority set forth in Section 4.02(a), (B) with respect
to the Class A Certificates and Class M Certificates, the amount of any
Prepayment Interest Shortfalls allocated thereto for such Distribution Date or
remaining unpaid from prior Distribution Dates and accrued interest thereon at
the applicable Pass Through Rate, on a pro rata basis based on Prepayment
Interest Shortfalls allocated thereto for such Distribution Date or remaining
115
unpaid from prior Distribution Dates, (C) to the Swap Counterparty (without
duplication of amounts payable to the Swap Counterparty on such date in
accordance with Section 4.02) any Swap Termination Payment payable to the Swap
Counterparty then remaining unpaid or which is due to the exercise of any early
termination of the Trust Fund pursuant to this Section 9.01, and (D) to the
Class SB Certificates, all remaining amounts on a pro rata basis in accordance
with the respective Certificate Principal Balances thereof. Notwithstanding the
reduction of the Certificate Principal Balance of any Class of Subordinate
Certificates to zero, such Class will be outstanding hereunder until the
termination of the respective obligations and responsibilities of the Company,
the Master Servicer and the Trustee hereunder in accordance with Article IX.
(d) In the event that any Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before the Final
Distribution Date, the Master Servicer (if it exercised its right to purchase
the Mortgage Loans) or the Trustee (in any other case), shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice any Certificate shall not
have been surrendered for cancellation, the Trustee shall take appropriate steps
as directed by the Master Servicer to contact the remaining Certificateholders
concerning surrender of their Certificates. The costs and expenses of
maintaining the Certificate Account and of contacting Certificateholders shall
be paid out of the assets which remain in the Certificate Account. If within
nine months after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee shall pay to the Master Servicer all
amounts distributable to the holders thereof and the Master Servicer shall
thereafter hold such amounts until distributed to such Holders. No interest
shall accrue or be payable to any Certificateholder on any amount held in the
Certificate Account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 9.01 and the Certificateholders shall
look only to the Master Servicer for such payment.
(e) If any Certificateholders do not surrender their Certificates on or
before the Distribution Date on which a purchase of the outstanding Certificates
is to be made, the Master Servicer shall give a second written notice to such
Certificateholders to surrender their Certificates for payment of the purchase
price therefor. If within six months after the second notice any Certificate
shall not have been surrendered for cancellation, the Trustee shall take
appropriate steps as directed by the Master Servicer to contact the Holders of
such Certificates concerning surrender of their Certificates. The costs and
expenses of maintaining the Certificate Account and of contacting
Certificateholders shall be paid out of the assets which remain in the
Certificate Account. If within nine months after the second notice any
Certificates shall not have been surrendered for cancellation in accordance with
this Section 9.01, the Trustee shall pay to the Master Servicer all amounts
distributable to the Holders thereof and shall have no further obligation or
liability therefor and the Master Servicer shall thereafter hold such amounts
until distributed to such Holders. No interest shall accrue or be payable to any
Certificateholder on any amount held in the Certificate Account or by the Master
Servicer as a result of such Certificateholder's failure to surrender its
Certificate(s) for payment in accordance with this Section 9.01. Any Certificate
116
that is not surrendered on the Distribution Date on which a purchase pursuant to
this Section 9.01 occurs as provided above will be deemed to have been purchased
and the Holder as of such date will have no rights with respect thereto except
to receive the purchase price therefor minus any costs and expenses associated
with such Certificate Account and notices allocated thereto. Any Certificates so
purchased or deemed to have been purchased on such Distribution Date shall
remain outstanding hereunder. The Master Servicer shall be for all purposes the
Holder thereof as of such date.
117
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC ADMINISTRATION. (See Section 10.01 of the Standard
Terms.)
Section 10.02. MASTER SERVICER; REMIC ADMINISTRATOR AND TRUSTEE
INDEMNIFICATION. (See Section 10.02 of the Standard
Terms.)
Section 10.03. DESIGNATION OF REMICS.
The REMIC Administrator will make an election to treat the segregated
pool of assets described in the definition of REMIC I (as defined herein)
(including the Mortgage Loans but excluding the Supplemental Interest Trust
Account, the Swap Agreement and the SB-AM Swap Agreement), and subject to this
Agreement, as a REMIC (REMIC I) for federal income tax purposes. The REMIC
Administrator will make an election to treat the segregated pool of assets
consisting of the REMIC I Regular Interests as a REMIC (REMIC II) for federal
income tax purposes. The REMIC Administrator will make an election to treat the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC (REMIC III) for federal income tax purposes. The REMIC Administrator will
make an election to treat the segregated pool of assets consisting of the REMIC
III Regular Interests as a REMIC (REMIC IV) for federal income tax purposes. The
REMIC Administrator will make an election to treat the segregated pool of assets
consisting of REMIC IV Regular Interests SB-PO, SB-IO and IO as a REMIC (REMIC
V) for federal income tax purposes.
The REMIC I Regular Interests will be "regular interests" in REMIC I and
the Class R-I Certificates will be the sole class of "residual interests" in
REMIC I for purposes of the REMIC Provisions under the federal income tax law.
The REMIC II Regular Interests will be "regular interests" in REMIC II
and the Class R-II Certificates will be the sole class of "residual interests"
in REMIC II for purposes of the REMIC Provisions under the federal income tax
law.
The REMIC III Regular Interests will be "regular interests" in REMIC III
and the Class R-III Certificates will be the sole class of "residual interests"
in REMIC III for purposes of the REMIC Provisions under the federal income tax
law.
The REMIC IV Regular Interests will be the "regular interests" in REMIC
IV, ownership of which, except in the case of REMIC IV Regular Interests SB-IO,
SB-PO and IO, will be represented by the Class A Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7
Certificates, Class M-8 Certificates, Class M-9 Certificates, Class M-10
Certificates, and 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.
118
The REMIC V Regular Interests will be the "regular interests" in REMIC
V, ownership of which will be represented by the Class SB Certificates, and the
Class R-X Certificates will represent the sole class of "residual interests" in
REMIC V for purposes of the REMIC Provisions under federal income tax law.
Section 10.04. DISTRIBUTIONS ON THE UNCERTIFICATED REMIC REGULAR
INTERESTS. (See Section 4.02(c) of this Series
Supplement.)
Section 10.05. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of this Agreement, the Trustee or
any Paying Agent, as applicable, shall comply with all federal withholding
requirements respecting payments to Certificateholders, including interest or
original issue discount payments or advances thereof that the Trustee or any
Paying Agent, as applicable, reasonably believes are applicable under the Code.
The consent of Certificateholders shall not be required for such withholding. In
the event the Trustee or any Paying Agent, as applicable, does withhold any
amount from interest or original issue discount payments or advances thereof to
any Certificateholder pursuant to federal withholding requirements, the Trustee
or any Paying Agent, as applicable, shall indicate the amount withheld to such
Certificateholder pursuant to the terms of such requirements.
119
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. AMENDMENT.
(a) (See Section 11.01(a) of the Standard Terms.)
(b) (See Section 11.01(b) of the Standard Terms.)
(c) (See Section 11.01(c) of the Standard Terms.)
(d) (See Section 11.01(d) of the Standard Terms.)
(e) (See Section 11.01(e) of the Standard Terms.)
(f) Notwithstanding anything to the contrary set forth in Sections 11.01
(b), (c), (d), and (e), any amendment of Sections 4.02(c)(vi), 4.09 and 11.10 of
this Agreement shall require the consent of the Swap Counterparty as a
third-party beneficiary of Sections 4.02(c)(x) and 4.09 of this Agreement.
Section 11.02. RECORDATION OF AGREEMENT; COUNTERPARTS. (See Section
11.02 of the Standard Terms.)
Section 11.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (See Section
11.03 of the Standard Terms.)
Section 11.04. GOVERNING LAW. (See Section 11.04 of the Standard Terms.)
Section 11.05. NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by registered mail, postage prepaid (except for notices to the Trustee
which shall be deemed to have been duly given only when received), to the
appropriate address for each recipient listed in the table below or, in each
case, such other address as may hereafter be furnished in writing to the Master
Servicer, the Trustee and the Company, as applicable:
------------------------- ------------------------------------------------------
RECIPIENT ADDRESS
------------------------- ------------------------------------------------------
Company 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: President
------------------------- ------------------------------------------------------
Master Servicer 0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Managing Director/Master Servicing
------------------------- ------------------------------------------------------
120
------------------------- ------------------------------------------------------
Trustee Corporate Trust Xxxxxx
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000,
Attention: Residential Accredit Loans, Inc. Series
2006-QA7
The Trustee designates its offices located
at DB Services Tennessee, 000 Xxxxxxxxx
Xxxx Xxxx, Xxxxxxxxx, XX 00000-0000, Attn:
Transfer Unit, for the purposes of Section
8.12 of the Standard Terms
------------------------- ------------------------------------------------------
Moody's Investors 00 Xxxxxx Xxxxxx, 0xx Xxxxx
Service, Inc. Xxx Xxxx, Xxx Xxxx 00000
------------------------- ------------------------------------------------------
Standard & Poor's 00 Xxxxx Xxxxxx
Ratings Services, 41st Floor
a division of Xxx Xxx Xxxx, Xxx Xxxx 00000
XxXxxx-Xxxx Companies,
Inc.
------------------------- ------------------------------------------------------
Any notice required or permitted to be mailed to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of such holder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder receives such notice.
Section 11.06. REQUIRED NOTICES TO RATING AGENCY AND SUBSERVICER.
(See Section 11.06 of the Standard Terms.)
Section 11.07. SEVERABILITY OF PROVISIONS. (See Section 11.07 of the
Standard Terms.)
Section 11.08. SUPPLEMENTAL PROVISIONS FOR RESECURITIZATION. (See
Section 11.08 of the Standard Terms.)
Section 11.09. ALLOCATION OF VOTING RIGHTS.
98.0% of all of the Voting Rights shall be allocated among Holders of
the Class A Certificates and Class M Certificates, in proportion to the
outstanding Certificate Principal Balances of their respective Certificates;
1.0% of all Voting Rights shall be allocated among the Holders of Class SB
Certificates; 0.20% of all Voting Rights shall be allocated among the Holders of
the Class R-I Certificates, in accordance with their respective Percentage
Interests; 0.20% of all Voting Rights shall be allocated among the Holders of
the Class R-II Certificates, in accordance with their respective Percentage
Interests; 0.20% of all Voting Rights shall be allocated among the Holders of
the Class R-III Certificates, in accordance with their respective Percentage
Interests; 0.20% of all Voting Rights shall be allocated among the Holders of
the Class R-IV Certificates, in accordance with their respective Percentage
Interests; and 0.20% of all Voting Rights shall be allocated among the Holders
of the Class R-X Certificates, in accordance with their respective Percentage
Interests.
121
Section 11.10. NO PETITION.
The Depositor, Master Servicer and the Trustee, by entering into this
Agreement, and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against the Trust
Fund, or join in any institution against the Trust Fund of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligation with respect to the Certificates or this
Agreement.
122
ARTICLE XII
COMPLIANCE WITH REGULATION AB
(See Article XII of the Standard Terms)
123
IN WITNESS WHEREOF, the Company, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized and their respective seals, duly
attested, to be hereunto affixed, all as of the day and year first above
written.
RESIDENTIAL ACCREDIT LOANS, INC.
[Seal]
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Vice President
Attest: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
RESIDENTIAL FUNDING CORPORATION
[Seal]
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Associate
Attest: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Associate
DEUTSCHE BANK TRUST COMPANY
[Seal] AMERICAS, as Trustee
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Authorized Signer
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Signer
Attest: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Wilaman
Title: Vice President
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 30th day of August, 2006 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxx known to me to be a Vice President
of Residential Accredit Loans, Inc., one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxx Xxxxx
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 30th day of August, 2006 before me, a notary public in and for
said State, personally appeared Xxxxxxx Xxxxxxxx known to me to be a(n)
Associate of Residential Funding Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxx Xxxxx
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 30th day of August, 2006 before me, a notary public in and for
said State, personally appeared Xxxxxxx Xxxxxxxxx known to me to be a(n)
Authorized Signer of DEUTSCHE BANK TRUST COMPANY AMERICAS, the national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national banking association and
acknowledged to me that such national banking association executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx Xxxxxx
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On the 30th day of August, 2006 before me, a notary public in and for
said State, personally appeared Xxxxxxx Xxxxxx known to me to be a(n) Vice
President of DEUTSCHE BANK TRUST COMPANY AMERICAS, the national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national banking association and
acknowledged to me that such national banking association executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxx Xxxxxx
Notary Public
[Notarial Seal]
EXHIBIT ONE
MORTGAGE LOAN SCHEDULE
(On file with RFC)
EXHIBIT TWO
INFORMATION TO BE INCLUDED IN
MONTHLY DISTRIBUTION DATE STATEMENT
(i) the applicable Record Date, Determination Date and Distribution
Date, and the date on which the applicable interest accrual period
commenced;
(ii) the aggregate amount of payments received with respect to the
Mortgage Loans, including prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the Master
Servicer and the Subservicer;
(iv) the amount of any other fees or expenses paid, and the identity of
the party receiving such fees or expenses;
(v) (a) the amount of such distribution to the Certificateholders of
such Class applied to reduce the Certificate Principal Balance thereof,
and (b) the aggregate amount included therein representing Principal
Prepayments;
(vi) the amount of such distribution to Holders of such Class of
Certificates allocable to interest;
(vii) if the distribution to the Holders of such Class of Certificates
is less than the full amount that would be distributable to such Holders
if there were sufficient funds available therefor, the amount of the
shortfall;
(viii) the aggregate Certificate Principal Balance of each Class of
Certificates, before and after giving effect to the amounts distributed
on such Distribution Date, separately identifying any reduction thereof
due to Realized Losses other than pursuant to an actual distribution of
principal;
(ix) the aggregate Certificate Principal Balance of each of the Class A,
Class M and Class SB Certificates as of the Closing Date.
(x) the weighted average remaining term to maturity of the Mortgage
Loans after giving effect to the amounts distributed on such
Distribution Date;
(xi) the weighted average Mortgage Rates of the Mortgage Loans after
giving effect to the amounts distributed on such Distribution Date;
(xii) the number and Pool Stated Principal Balance of the Mortgage Loans
after giving effect to the distribution of principal on such
Distribution Date and the number of Mortgage Loans at the beginning and
end of the related Due Period;
(xiii) on the basis of the most recent reports furnished to it by
Sub-Servicers, the number and Stated Principal Balances of Mortgage
Loans that are Delinquent (A) 30-59 days, (B) 60-89 days and (C) 90 or
more days and the number and Stated Principal Balances of Mortgage Loans
that are in foreclosure;
(xiv) the aggregate amount of Realized Losses for such Distribution
Date;
(xv) the amount, terms and general purpose of any Advance by the Master
Servicer pursuant to Section 4.04 and the amount of all Advances that
have been reimbursed during the related Due Period;
(xvi) any material modifications, extensions or waivers to the terms of
the Mortgage Loans during the Due Period or that have cumulatively
become material over time;
(xvii) any material breaches of Mortgage Loan representations or
warranties or covenants in the Agreement.
(xviii) the number, stated and aggregate principal balance of any REO
Properties;
(xix) the aggregate Accrued Certificate Interest remaining unpaid, if
any, for each Class of Certificates, after giving effect to the
distribution made on such Distribution Date;
(xx) the Pass-Through Rates on each Class of Certificates and the Net
WAC Cap Rate for such Distribution Date, separately identifying LIBOR
for such Distribution Date;
(xxi) the Basis Risk Shortfall and Prepayment Interest Shortfalls;
(xxii) the related Senior Enhancement Percentage for such Distribution
Date;
(xxiii) the Overcollateralization Amount and Required
Overcollateralization Amount following such Distribution Date;
(xxiv) the occurrence of the Stepdown Date, and the aggregate amount of
Realized Losses since the Cut-off Date for the Mortgage Loans;
(xxv) the occurrence of the Credit Support Depletion Date;
(xxvi) the aggregate amount of any recoveries on previously foreclosed
loans from Sellers; and
(xxvii) the amount of any Net Swap Payment payable to the Trustee on
behalf of the Trust, any Net Swap Payment payable to the Swap
Counterparty, any Swap Termination Payment payable to the Trustee on
behalf of the Trust and any Swap Termination Payment payable to the Swap
Counterparty.
In the case of information furnished pursuant to clauses (v)(a) and (vi)
above, the amounts shall be expressed as a dollar amount per Certificate with a
$1,000 denomination.
The Trustee's internet website will initially be located at
xxx.xxx.xx.xxx/xxxx. To receive this statement via first class mail, telephone
the trustee at (000) 000-0000.
EXHIBIT THREE
STANDARD TERMS OF POOLING AND SERVICING
AGREEMENT DATED AS OF MARCH 1, 2006
================================================================================
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2006
Residential Accredit Loans, Inc.
Mortgage Asset-Backed Pass-Through Certificates
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................................2
Section 1.01. Definitions...........................................................2
Section 1.02. Use of Words and Phrases.............................................34
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..........35
Section 2.01. Conveyance of Mortgage Loans.........................................35
Section 2.02. Acceptance by Trustee................................................41
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Company.........................................42
Section 2.04. Representations and Warranties of Residential Funding................44
Section 2.05. Execution and Authentication of Certificates/Issuance of
Certificates Evidencing Interests in REMIC I Certificates........46
Section 2.06. Conveyance of Uncertificated REMIC I and REMIC II Regular
Interests; Acceptance by the Trustee.............................46
Section 2.07. Issuance of Certificates Evidencing Interests in REMIC II............46
Section 2.08. Purposes and Powers of the Trust.....................................46
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...........................46
Section 3.01. Master Servicer to Act as Servicer...................................46
Section 3.02. Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' and Sellers'
Obligations......................................................48
Section 3.03. Successor Subservicers...............................................49
Section 3.04. Liability of the Master Servicer.....................................49
Section 3.05. No Contractual Relationship Between Subservicer and Trustee or
Certificateholders...............................................50
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee......50
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to
Custodial Account................................................50
Section 3.08. Subservicing Accounts; Servicing Accounts............................53
Section 3.09. Access to Certain Documentation and Information Regarding the
Mortgage Loans...................................................55
Section 3.10. Permitted Withdrawals from the Custodial Account.....................55
Section 3.11. Maintenance of the Primary Insurance Policies; Collections
Thereunder.......................................................57
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity
Coverage.........................................................58
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.....................59
Section 3.14. Realization Upon Defaulted Mortgage Loans............................61
Section 3.15. Trustee to Cooperate; Release of Mortgage Files......................65
Section 3.16. Servicing and Other Compensation; Compensating Interest..............66
Section 3.17. Reports to the Trustee and the Company...............................67
Section 3.18. Annual Statement as to Compliance and Servicing Assessment...........67
Section 3.19. Annual Independent Public Accountants' Servicing Report..............68
Section 3.20. Rights of the Company in Respect of the Master Servicer..............68
Section 3.21. Administration of Buydown Funds......................................68
Section 3.22. Advance Facility.....................................................69
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...........................................73
Section 4.01. Certificate Account..................................................73
Section 4.02. Distributions. As provided in Section 4.02 of the Series
Supplement.......................................................74
Section 4.03. Statements to Certificateholders; Statements to Rating
Agencies; Exchange Act Reporting.................................74
Section 4.04. Distribution of Reports to the Trustee and the Company;
Advances by the Master Servicer..................................76
Section 4.05. Allocation of Realized Losses........................................78
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property........78
Section 4.07. Optional Purchase of Defaulted Mortgage Loans........................78
Section 4.08. Surety Bond..........................................................79
ARTICLE V THE CERTIFICATES.........................................................79
Section 5.01. The Certificates.....................................................79
Section 5.02. Registration of Transfer and Exchange of Certificates................81
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates....................87
Section 5.04. Persons Deemed Owners................................................88
Section 5.05. Appointment of Paying Agent..........................................88
Section 5.06. U.S.A. Patriot Act Compliance........................................88
ARTICLE VI THE COMPANY AND THE MASTER SERVICER......................................89
Section 6.01. Respective Liabilities of the Company and the Master Servicer........89
Section 6.02. Merger or Consolidation of the Company or the Master Servicer;
Assignment of Rights and Delegation of Duties by Master
Servicer.........................................................89
Section 6.03. Limitation on Liability of the Company, the Master Servicer
and Others.......................................................90
Section 6.04. Company and Master Servicer Not to Resign............................91
ARTICLE VII DEFAULT..................................................................92
Section 7.01. Events of Default....................................................92
Section 7.02. Trustee or Company to Act; Appointment of Successor..................94
Section 7.03. Notification to Certificateholders...................................95
Section 7.04. Waiver of Events of Default..........................................95
ARTICLE VIII CONCERNING THE TRUSTEE...................................................96
Section 8.01. Duties of Trustee....................................................96
Section 8.02. Certain Matters Affecting the Trustee................................97
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans................99
Section 8.04. Trustee May Own Certificates.........................................99
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification..................................................99
Section 8.06. Eligibility Requirements for Trustee................................100
Section 8.07. Resignation and Removal of the Trustee..............................101
Section 8.08. Successor Trustee...................................................102
Section 8.09. Merger or Consolidation of Trustee..................................102
Section 8.10. Appointment of Co-Trustee or Separate Trustee.......................102
Section 8.11. Appointment of Custodians...........................................103
Section 8.12. Appointment of Office or Agency.....................................104
ARTICLE IX TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES....................105
Section 9.01. Optional Purchase by the Master Servicer of All Certificates;
Termination Upon Purchase by the Master Servicer or
Liquidation of All Mortgage Loans...............................105
Section 9.02. Additional Termination Requirements.................................108
Section 9.03. Termination of Multiple REMICs......................................109
ARTICLE X REMIC PROVISIONS........................................................110
Section 10.01.REMIC Administration................................................110
Section 10.02.Master Servicer, REMIC Administrator and Trustee Indemnification....113
Section 10.03.Designation of REMIC(s). As provided in Section 10.03 of the
Series Supplement...............................................114
Section 10.04.Distributions on the Uncertificated REMIC I and REMIC II
Regular Interests. As provided in Section 10.04 of the
Series Supplement...............................................114
Section 10.05.Compliance with Withholding Requirements. As provided in
Section 10.05 of the Series Supplement..........................114
ARTICLE XI MISCELLANEOUS PROVISIONS................................................115
Section 11.01.Amendment...........................................................115
Section 11.02.Recordation of Agreement; Counterparts..............................117
Section 11.03.Limitation on Rights of Certificateholders..........................118
Section 11.04.Governing Law.......................................................118
Section 11.05.Notices. As provided in Section 11.05 of the Series Supplement......119
Section 11.06.Required Notices to Rating Agency and Subservicer...................119
Section 11.07.Severability of Provisions..........................................120
Section 11.08.Supplemental Provisions for Resecuritization........................120
Section 11.09.Allocation of Voting Rights.........................................120
Section 00.00.Xx Petition.........................................................120
ARTICLE XII COMPLIANCE WITH REGULATION AB...........................................121
Section 12.01.Intent of the Parties; Reasonableness...............................121
Section 12.02.Additional Representations and Warranties of the Trustee............121
Section 12.03.Information to Be Provided by the Trustee...........................122
Section 00.00.Xxxxxx on Assessment of Compliance and Attestation..................122
Section 12.05.Indemnification; Remedies...........................................123
EXHIBITS
Exhibit A: Form of Class A Certificate
Exhibit A-I: Form of Class X Certificate
Exhibit B: Form of Class M Certificate
Exhibit C: Form of Class B Certificate
Exhibit C-I: Form of Class P Certificate
Exhibit D: Form of Class R Certificate
Exhibit E: Form of Seller/Servicer Contract
Exhibit F: Forms of Request for Release
Exhibit G-1: Form of Transfer Affidavit and Agreement
Exhibit G-2: Form of Transferor Certificate
Exhibit H: Form of Investor Representation Letter
Exhibit I: Form of Transferor Representation Letter
Exhibit J: Form of Rule 144A Investment Representation Letter
Exhibit K: Text of Amendment to Pooling and Servicing Agreement Pursuant to
Section 11.01(e) for a Limited Guaranty
Exhibit L: Form of Limited Guaranty
Exhibit M: Form of Lender Certification for Assignment of Mortgage Loan
Exhibit N: Request for Exchange Form
Exhibit O: Form of Form 10-K Certification
Exhibit P: Form of Back-Up Certification to Form 10-K Certificate
Exhibit Q: Information to be Provided by the Master Servicer to the Rating
Agencies Relating to Reportable Modified Mortgage Loans
Exhibit R: Servicing Criteria
This is the Standard Terms of Pooling and Servicing Agreement, dated as
of March 1, 2006 (the "Standard Terms", and as incorporated by reference into a
Series Supplement dated as of the Cut-off Date, the "Pooling and Servicing
Agreement" or "Agreement"), among RESIDENTIAL ACCREDIT LOANS, INC., as the
company (together with its permitted successors and assigns, the "Company"),
RESIDENTIAL FUNDING CORPORATION, as master servicer (together with its permitted
successors and assigns, the "Master Servicer"), and the trustee named in the
applicable Series Supplement (together with its permitted successors and
assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell certain mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued under the
Agreement in multiple classes, which in the aggregate will evidence the entire
beneficial ownership interest in the Mortgage Loans.
In consideration of the mutual agreements herein contained, the Company,
the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
Accretion Termination Date: As defined in the Series Supplement.
Accrual Certificates: As defined in the Series Supplement.
Accrued Certificate Interest: With respect to each Distribution Date, as
to any Class or Subclass of Certificates (other than any Principal Only
Certificates), interest accrued during the related Interest Accrual Period at
the related Pass-Through Rate on the Certificate Principal Balance or Notional
Amount thereof immediately prior to such Distribution Date. Accrued Certificate
Interest will be calculated on the basis of a 360-day year, consisting of twelve
30-day months. In each case Accrued Certificate Interest on any Class or
Subclass of Certificates will be reduced by the amount of:
(i) Prepayment Interest Shortfalls on all Mortgage Loans or, if the
Mortgage Pool is comprised of two or more Loan Groups, on the
Mortgage Loans in the related Loan Group (to the extent not
offset by the Master Servicer with a payment of Compensating
Interest as provided in Section 4.01),
(ii) the interest portion (adjusted to the Net Mortgage Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan)) of Realized Losses on all Mortgage Loans or, if the
Mortgage Pool is comprised of two or more Loan Groups, on the
Mortgage Loans in the related Loan Group (including Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
Losses and Extraordinary Losses) not allocated solely to one or
more specific Classes of Certificates pursuant to Section 4.05,
(iii) the interest portion of Advances that were (A) previously made
with respect to a Mortgage Loan or REO Property on all Mortgage
Loans or, if the Mortgage Pool is comprised of two or more Loan
Groups, on the Mortgage Loans in the related Loan Group, which
remained unreimbursed following the Cash Liquidation or REO
Disposition of such Mortgage Loan or REO Property and (B) made
with respect to delinquencies that were ultimately determined to
be Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses or Extraordinary Losses, and
(iv) any other interest shortfalls not covered by the subordination
provided by the Class M Certificates and Class B Certificates,
including interest that is not collectible from the Mortgagor
pursuant to the Servicemembers Civil Relief Act of 1940, as
amended, or similar legislation or regulations as in effect from
time to time,
with all such reductions allocated (A) among all of the Certificates in
proportion to their respective amounts of Accrued Certificate Interest payable
on such Distribution Date absent such reductions or (B) if the Mortgage Pool is
comprised of two or more Loan Groups, the related Senior Percentage of such
reductions among the related Senior Certificates in proportion to the amounts of
Accrued Certificate Interest payable from the related Loan Group on such
Distribution Date absent such reductions, with the remainder of such reductions
allocated among the holders of the Class M Certificates and Class B Certificates
in proportion to their respective amounts of Accrued Certificate Interest
payable on such Distribution Date absent such reductions. In addition to that
portion of the reductions described in the preceding sentence that are allocated
to any Class of Class B Certificates or any Class of Class M Certificates,
Accrued Certificate Interest on such Class of Class B Certificates or such Class
of Class M Certificates will be reduced by the interest portion (adjusted to the
Net Mortgage Rate) of Realized Losses that are allocated solely to such Class of
Class B Certificates or such Class of Class M Certificates pursuant to Section
4.05.
Addendum and Assignment Agreement: The Addendum and Assignment
Agreement, dated as of January 31, 1995, between MLCC and the Master Servicer.
Additional Collateral: Any of the following held, in addition to the
related Mortgaged Property, as security for a Mortgage Loan: (i) all money,
securities, security entitlements, accounts, general intangibles, payment
rights, instruments, documents, deposit accounts, certificates of deposit,
commodities contracts and other investment property and other property of
whatever kind or description now existing or hereafter acquired which is pledged
as security for the repayment of such Mortgage Loan, (ii) third-party
guarantees, and (A) all money, securities, security entitlements, accounts,
general intangibles, payment rights, instruments, documents, deposit accounts,
certificates of deposit, commodities contracts and other investment property and
other property of whatever kind or description now existing or hereafter
acquired which is pledged as collateral for such guarantee or (B) any mortgaged
property securing the performance of such guarantee, or (iii) such other
collateral as may be set forth in the Series Supplement.
Additional Collateral Loan: Each Mortgage Loan that is supported by
Additional Collateral.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and any date
of determination, the Mortgage Rate borne by the related Mortgage Note, less the
rate at which the related Subservicing Fee accrues.
Advance: As to any Mortgage Loan, any advance made by the Master
Servicer, pursuant to Section 4.04.
Advance Facility: As defined in Section 3.22.
Advance Facility Notice: As defined in Section 3.22.
Advance Facility Trustee: As defined in Section 3.22.
Advancing Person: As defined in Section 3.22.
Advance Reimbursement Amounts: As defined in Section 3.22.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Ambac: Ambac Assurance Corporation (formerly known as AMBAC Indemnity
Corporation).
Amount Held for Future Distribution: As to any Distribution Date and,
with respect to any Mortgage Pool that is comprised of two or more Loan Groups,
each Loan Group, the total of the amounts held in the Custodial Account at the
close of business on the preceding Determination Date on account of (i)
Liquidation Proceeds, Subsequent Recoveries, Insurance Proceeds, Curtailments,
Mortgage Loan purchases made pursuant to Section 2.02, 2.03, 2.04 or 4.07 and
Mortgage Loan substitutions made pursuant to Section 2.03 or 2.04 received or
made in the month of such Distribution Date (other than such Liquidation
Proceeds, Insurance Proceeds and purchases of Mortgage Loans that the Master
Servicer has deemed to have been received in the preceding month in accordance
with Section 3.07(b)), and Principal Prepayments in Full made after the related
Prepayment Period, and (ii) payments which represent early receipt of scheduled
payments of principal and interest due on a date or dates subsequent to the
related Due Date.
Appraised Value: As to any Mortgaged Property, the lesser of (i) the
appraised value of such Mortgaged Property based upon the appraisal made at the
time of the origination of the related Mortgage Loan, and (ii) the sales price
of the Mortgaged Property at such time of origination, except in the case of a
Mortgaged Property securing a refinanced or modified Mortgage Loan as to which
it is either the appraised value determined above or the appraised value
determined in an appraisal at the time of refinancing or modification, as the
case may be.
Assigned Contracts: With respect to any Pledged Asset Loan: the Credit
Support Pledge Agreement; the Funding and Pledge Agreement, among GMAC Mortgage
Corporation, National Financial Services Corporation and the Mortgagor or other
person pledging the related Pledged Assets; the Additional Collateral Agreement,
between GMAC Mortgage Corporation and the Mortgagor or other person pledging the
related Pledged Assets; or such other contracts as may be set forth in the
Series Supplement.
Assignment: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage Loan to the Trustee for the benefit of
Certificateholders, which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering
Mortgages secured by Mortgaged Properties located in the same county, if
permitted by law and accompanied by an Opinion of Counsel to that effect.
Assignment Agreement: The Assignment and Assumption Agreement, dated the
Closing Date, between Residential Funding and the Company relating to the
transfer and assignment of the Mortgage Loans.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, the
assignment of the related Cooperative Lease from the Mortgagor to the originator
of the Cooperative Loan.
Available Distribution Amount: As to any Distribution Date and, with
respect to any Mortgage Pool comprised of two or more Loan Groups, each Loan
Group, an amount equal to (a) the sum of (i) the amount relating to the Mortgage
Loans on deposit in the Custodial Account as of the close of business on the
immediately preceding Determination Date, including any Subsequent Recoveries,
and amounts deposited in the Custodial Account in connection with the
substitution of Qualified Substitute Mortgage Loans, (ii) the amount of any
Advance made on the immediately preceding Certificate Account Deposit Date,
(iii) any amount deposited in the Certificate Account on the related Certificate
Account Deposit Date pursuant to the second paragraph of Section 3.12(a), (iv)
any amount deposited in the Certificate Account pursuant to Section 4.07 or
Section 9.01, (v) any amount that the Master Servicer is not permitted to
withdraw from the Custodial Account or the Certificate Account pursuant to
Section 3.16(e), (vi) any amount received by the Trustee pursuant to the Surety
Bond in respect of such Distribution Date and (vii) the proceeds of any Pledged
Assets received by the Master Servicer, reduced by (b) the sum as of the close
of business on the immediately preceding Determination Date of (w) aggregate
Foreclosure Profits, (x) the Amount Held for Future Distribution, and (y)
amounts permitted to be withdrawn by the Master Servicer from the Custodial
Account in respect of the Mortgage Loans pursuant to clauses (ii)-(x),
inclusive, of Section 3.10(a). Such amount shall be determined separately for
each Loan Group. Additionally, with respect to any Mortgage Pool that is
comprised of two or more Loan Groups, if on any Distribution Date Compensating
Interest provided pursuant to this Section 3.16(e) is less than Prepayment
Interest Shortfalls incurred on the Mortgage Loans in connection with Principal
Prepayments in Full and Curtailments made in the prior calendar month, such
Compensating Interest shall be allocated on such Distribution Date to the
Available Distribution Amount for each Loan Group on a pro rata basis in
accordance with the respective amounts of such Prepayment Interest Shortfalls
incurred on the Mortgage Loans in such Loan Group in respect of such
Distribution Date.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction; provided, however, that neither a Deficient
Valuation nor a Debt Service Reduction shall be deemed a Bankruptcy Loss
hereunder so long as the Master Servicer has notified the Trustee in writing
that the Master Servicer is diligently pursuing any remedies that may exist in
connection with the representations and warranties made regarding the related
Mortgage Loan and either (A) the related Mortgage Loan is not in default with
regard to payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any premiums on any applicable
primary hazard insurance policy and any related escrow payments in respect of
such Mortgage Loan are being advanced on a current basis by the Master Servicer
or a Subservicer, in either case without giving effect to any Debt Service
Reduction.
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee, and designated as such in the Preliminary Statement
to the Series Supplement.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the State of New York, the State of
Michigan, the State of California, the State of Illinois or the State of
Minnesota (and such other state or states in which the Custodial Account or the
Certificate Account are at the time located) are required or authorized by law
or executive order to be closed.
Buydown Funds: Any amount contributed by the seller of a Mortgaged
Property, the Company or other source in order to enable the Mortgagor to reduce
the payments required to be made from the Mortgagor's funds in the early years
of a Mortgage Loan. Buydown Funds are not part of the Trust Fund prior to
deposit into the Custodial or Certificate Account.
Buydown Mortgage Loan: Any Mortgage Loan as to which a specified amount
of interest is paid out of related Buydown Funds in accordance with a related
buydown agreement.
Calendar Quarter: A Calendar Quarter shall consist of one of the
following time periods in any given year: January 1 through March 31, April 1
through June 30, July 1 through September 30, and October 1 through December 31.
Capitalization Reimbursement Amount: With respect to any Distribution
Date and, with respect to any Mortgage Pool comprised of two or more Loan
Groups, each Loan Group, the amount of Advances or Servicing Advances that were
added to the Stated Principal Balance of all Mortgage Loans or, if the Mortgage
Pool is comprised of two or more Loan Groups, on the Mortgage Loans in the
related Loan Group, during the prior calendar month and reimbursed to the Master
Servicer or Subservicer on or prior to such Distribution Date pursuant to
Section 3.10(a)(vii), plus the Capitalization Reimbursement Shortfall Amount
remaining unreimbursed from any prior Distribution Date and reimbursed to the
Master Servicer or Subservicer on or prior to such Distribution Date.
Capitalization Reimbursement Shortfall Amount: With respect to any
Distribution Date and, with respect to any Mortgage Pool comprised of two or
more Loan Groups, each Loan Group, the amount, if any, by which the amount of
Advances or Servicing Advances that were added to the Stated Principal Balance
of all Mortgage Loans (or, if the Mortgage Pool is comprised of two or more Loan
Groups, on the Mortgage Loans in the related Loan Group) during the preceding
calendar month exceeds the amount of principal payments on the Mortgage Loans
included in the Available Distribution Amount (or, if the Mortgage Pool is
comprised of two or more Loan Groups, Available Distribution Amount for the
related Loan Group) for that Distribution Date.
Cash Liquidation: As to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.
Certificate Account Deposit Date: As to any Distribution Date, the
Business Day prior thereto.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, and, in respect of any Insured
Certificates, the Certificate Insurer to the extent of Cumulative Insurance
Payments, except that neither a Disqualified Organization nor a Non-United
States Person shall be a holder of a Class R Certificate for purposes hereof
and, solely for the purpose of giving any consent or direction pursuant to this
Agreement, any Certificate, other than a Class R Certificate, registered in the
name of the Company, the Master Servicer or any Subservicer or any Affiliate
thereof shall be deemed not to be outstanding and the Percentage Interest or
Voting Rights evidenced thereby shall not be taken into account in determining
whether the requisite amount of Percentage Interests or Voting Rights necessary
to effect any such consent or direction has been obtained. All references herein
to "Holders" or "Certificateholders" shall reflect the rights of Certificate
Owners as they may indirectly exercise such rights through the Depository and
participating members thereof, except as otherwise specified herein; provided,
however, that the Trustee shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
Certificate Insurer: As defined in the Series Supplement.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate, as reflected on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent, if any, and otherwise on the books of a Depository Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to each Certificate (other
than any Interest Only Certificate), on any date of determination, an amount
equal to:
(i) the Initial Certificate Principal Balance of such Certificate as
specified on the face thereof, plus
(ii) any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 4.02, plus
(iii) in the case of each Accrual Certificate, an amount equal to the
aggregate Accrued Certificate Interest added to the Certificate
Principal Balance thereof prior to such date of determination,
minus
(iv) the sum of (x) the aggregate of all amounts previously
distributed with respect to such Certificate (or any predecessor
Certificate) and applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.02(a) and (y) the aggregate
of all reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses which were previously
allocated to such Certificate (or any predecessor Certificate)
pursuant to Section 4.05;
provided, that the Certificate Principal Balance of each Certificate of the
Class of Subordinate Certificates with the Lowest Priority at any given time
shall be further reduced by an amount equal to the Percentage Interest
represented by such Certificate multiplied by the excess, if any, of (A) the
then aggregate Certificate Principal Balance of all Classes of Certificates then
outstanding over (B) the then aggregate Stated Principal Balance of the Mortgage
Loans.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates bearing the same
designation. The initial Class A-V Certificates and any Subclass thereof issued
pursuant to Section 5.01(c) shall be a single Class for purposes of this
Agreement.
Class A-P Certificate: Any one of the Certificates designated as a Class
A-P Certificate.
Class A-P Collection Shortfall: With respect to the Cash Liquidation or
REO Disposition of a Discount Mortgage Loan, any Distribution Date and, with
respect to any Mortgage Pool comprised of two or more Loan Groups, each Loan
Group, the excess of the amount described in clause (C)(1) of the definition of
Class A-P Principal Distribution Amount (for the related Loan Group, if
applicable) over the amount described in clause (C)(2) of such definition.
Class A-P Principal Distribution Amount: With respect to any
Distribution Date and, with respect to any Mortgage Pool comprised of two or
more Loan Groups, each Loan Group, an amount equal to the aggregate of:
(A) the related Discount Fraction of the principal portion of
each Monthly Payment on each Discount Mortgage Loan (or, with respect to
any Mortgage Pool comprised of two or more Loan Groups, each Discount
Mortgage Loan in the related Loan Group) due during the related Due
Period, whether or not received on or prior to the related Determination
Date, minus the Discount Fraction of the principal portion of any
related Debt Service Reduction which together with other Bankruptcy
Losses exceeds the Bankruptcy Amount;
(B) the related Discount Fraction of the principal portion of all
unscheduled collections on each Discount Mortgage Loan (or, with respect
to any Mortgage Pool comprised of two or more Loan Groups, each Discount
Mortgage Loan in the related Loan Group) received during the preceding
calendar month or, in the case of Principal Prepayments in Full, during
the related Prepayment Period (other than amounts received in connection
with a Cash Liquidation or REO Disposition of a Discount Mortgage Loan
described in clause (C) below), including Principal Prepayments in Full,
Curtailments, Subsequent Recoveries and repurchases (including deemed
repurchases under Section 3.07(b)) of such Discount Mortgage Loans (or,
in the case of a substitution of a Deleted Mortgage Loan, the Discount
Fraction of the amount of any shortfall deposited in the Custodial
Account in connection with such substitution);
(C) in connection with the Cash Liquidation or REO Disposition of
a Discount Mortgage Loan (or, with respect to any Mortgage Pool
comprised of two or more Loan Groups, each Discount Mortgage Loan in the
related Loan Group) that occurred during the preceding calendar month
(or was deemed to have occurred during such period in accordance with
Section 3.07(b)) that did not result in any Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary
Losses, an amount equal to the lesser of (1) the applicable Discount
Fraction of the Stated Principal Balance of such Discount Mortgage Loan
immediately prior to such Distribution Date and (2) the aggregate amount
of the collections on such Mortgage Loan to the extent applied as
recoveries of principal;
(D) any amounts allocable to principal for any previous
Distribution Date (calculated pursuant to clauses (A) through (C) above)
that remain undistributed; and
(E) the amount of any Class A-P Collection Shortfalls for such
Distribution Date and the related Loan Group, if applicable, and the
amount of any Class A-P Collection Shortfalls (for the related Loan
Group, if applicable) remaining unpaid for all previous Distribution
Dates, but only to the extent of the Eligible Funds for such
Distribution Date; minus
(F) the related Discount Fraction of the portion of the
Capitalization Reimbursement Amount (for the related Loan Group, if
applicable) for such Distribution Date, if any, related to each Discount
Mortgage Loan (in the related Loan Group, if applicable).
Notwithstanding the foregoing, with respect to any Distribution Date on
and after the Credit Support Depletion Date, the Class A-P Principal
Distribution Amount (for a Loan Group, if applicable) shall equal the excess of
(i) the sum of (a) the related Discount Fraction of the principal portion of
each Monthly Payment on each Discount Mortgage Loan (in the related Loan Group,
if applicable) received or advanced prior to the related Determination Date and
not previously distributed minus the Discount Fraction of the principal portion
of any related Debt Service Reduction which together with other Bankruptcy
Losses exceeds the Bankruptcy Amount and (b) the related Discount Fraction of
the aggregate amount of unscheduled collections described in clauses (B) and (C)
above over (ii) the amount calculated pursuant to clause (F) above.
Class A-V Certificate: Any one of the Certificates designated as a Class
A-V Certificate, including any Subclass thereof.
Class B Certificate: Any one of the Certificates designated as a Class
B-1 Certificate, Class B-2 Certificate or Class B-3 Certificate.
Class M Certificate: Any one of the Certificates designated as a Class
M-1 Certificate, Class M-2 Certificate or Class M-3 Certificate.
Closing Date: As defined in the Series Supplement.
Code: The Internal Revenue Code of 1986, as amended.
Combined Collateral LLC: Combined Collateral LLC, a Delaware limited
liability company.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date, an amount
equal to Prepayment Interest Shortfalls resulting from Principal Prepayments in
Full during the related Prepayment Period and Curtailments during the prior
calendar month and included in the Available Distribution Amount for such
Distribution Date, but not more than the lesser of (a) one-twelfth of 0.125% of
the Stated Principal Balance of the Mortgage Loans immediately preceding such
Distribution Date and (b) the sum of the Servicing Fee and all income and gain
on amounts held in the Custodial Account and the Certificate Account and payable
to the Certificateholders with respect to such Distribution Date; provided that
for purposes of this definition the amount of the Servicing Fee will not be
reduced pursuant to Section 7.02(a) except as may be required pursuant to the
last sentence of such Section.
Compliance With Laws Representation: The following representation and
warranty (or any representation and warranty that is substantially similar) made
by Residential Funding in Section 4 of Assignment Agreement: "Each Mortgage Loan
at the time it was made complied in all material respects with applicable local,
state, and federal laws, including, but not limited to, all applicable
anti-predatory lending laws".
Cooperative: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an exclusive
right to occupy pursuant to the terms of a proprietary lease or occupancy
agreement.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements and (v) a stock
power (or other similar instrument), and ancillary thereto, a recognition
agreement between the Cooperative and the originator of the Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.
Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.
Credit Repository: Equifax, Transunion and Experian, or their successors
in interest.
Credit Support Depletion Date: The first Distribution Date on which the
Certificate Principal Balances of the Subordinate Certificates have been reduced
to zero.
Credit Support Pledge Agreement: The Credit Support Pledge Agreement,
dated as of November 24, 1998, among the Master Servicer, GMAC Mortgage
Corporation, Combined Collateral LLC and The First National Bank of Chicago (now
known as Bank One, National Association), as custodian.
Cumulative Insurance Payments: As defined in the Series Supplement.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and
maintained pursuant to Section 3.07 in the name of a depository institution, as
custodian for the holders of the Certificates, for the holders of certain other
interests in mortgage loans serviced or sold by the Master Servicer and for the
Master Servicer, into which the amounts set forth in Section 3.07 shall be
deposited directly. Any such account or accounts shall be an Eligible Account.
Custodial Agreement: An agreement that may be entered into among the
Company, the Master Servicer, the Trustee and a Custodian pursuant to which the
Custodian will hold certain documents relating to the Mortgage Loans on behalf
of the Trustee.
Custodian: A custodian appointed pursuant to a Custodial Agreement.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof at the Cut-off Date after giving effect to all
installments of principal due on or prior thereto (or due during the month of
the Cut-off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificate: Any Certificate other than a Book-Entry
Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to
59 days" or "30 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the last business day
immediately prior to the next following monthly scheduled due date; "60 to 89
days" or "60 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the last business day
immediately prior to the second following monthly scheduled due date; and so on.
The determination as to whether a Mortgage Loan falls into these categories is
made as of the close of business on the last business day of each month. For
example, a Mortgage Loan with a payment due on July 1 that remained unpaid as of
the close of business on July 31 would then be considered to be 30 to 59 days
delinquent. Delinquency information as of the Cut-off Date is determined and
prepared as of the close of business on the last business day immediately prior
to the Cut-off Date.
Depository: The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York and
a "clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Determination Date: As defined in the Series Supplement.
Discount Fraction: With respect to each Discount Mortgage Loan, the
fraction expressed as a percentage, the numerator of which is the Discount Net
Mortgage Rate minus the Net Mortgage Rate (or the initial Net Mortgage Rate with
respect to any Discount Mortgage Loans as to which the Mortgage Rate is modified
pursuant to 3.07(a)) for such Mortgage Loan and the denominator of which is the
Discount Net Mortgage Rate. The Discount Fraction with respect to each Discount
Mortgage Loan is set forth as an exhibit attached to the Series Supplement.
Discount Mortgage Loan: Any Mortgage Loan having a Net Mortgage Rate (or
the initial Net Mortgage Rate) of less than the Discount Net Mortgage Rate per
annum and any Mortgage Loan deemed to be a Discount Mortgage Loan pursuant to
the definition of Qualified Substitute Mortgage Loan.
Discount Net Mortgage Rate: As defined in the Series Supplement.
Disqualified Organization: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, and if not otherwise
included, any of the following: (i) the United States, any State or political
subdivision thereof, any possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which is
a corporation if all of its activities are subject to tax and, except for
Xxxxxxx Mac, a majority of its board of directors is not selected by such
governmental unit), (ii) a foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code, (v) any "electing large partnership," as defined in Section 775(a) of
the Code and (vi) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the holding of an Ownership Interest in a Class R
Certificate by such Person may cause the Trust Fund or any Person having an
Ownership Interest in any Class of Certificates (other than such Person) to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of an Ownership Interest in a Class R
Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
Distribution Date: The 25th day of any month beginning in the month
immediately following the month of the initial issuance of the Certificates or,
if such 25th day is not a Business Day, the Business Day immediately following
such 25th day.
Due Date: With respect to any Distribution Date and any Mortgage Loan,
the day during the related Due Period on which the Monthly Payment is due.
Due Period: With respect to any Distribution Date, the one-month period
set forth in the Series Supplement.
Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the debt obligations of which have been
rated by each Rating Agency in its highest rating available, or (ii) an account
or accounts in a depository institution in which such accounts are fully insured
to the limits established by the FDIC, provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Trustee and each Rating Agency) the registered Holders of Certificates have a
claim with respect to the funds in such account or a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (iii) in the case of the Custodial Account, a trust account or
accounts maintained in the corporate trust department of the Trustee, or (iv) in
the case of the Certificate Account, a trust account or accounts maintained in
the corporate trust department of the Trustee, or (v) an account or accounts of
a depository institution acceptable to each Rating Agency (as evidenced in
writing by each Rating Agency that use of any such account as the Custodial
Account or the Certificate Account will not reduce the rating assigned to any
Class of Certificates by such Rating Agency below the then-current rating
assigned to such Certificates).
Event of Default: As defined in Section 7.01.
Excess Bankruptcy Loss: Any Bankruptcy Loss, or portion thereof, which
exceeds the then applicable Bankruptcy Amount.
Excess Fraud Loss: Any Fraud Loss, or portion thereof, which exceeds the
then applicable Fraud Loss Amount.
Excess Special Hazard Loss: Any Special Hazard Loss, or portion thereof,
that exceeds the then applicable Special Hazard Amount.
Excess Subordinate Principal Amount: With respect to any Distribution
Date on which the aggregate Certificate Principal Balance of the Class of
Subordinate Certificates then outstanding with the Lowest Priority is to be
reduced to zero and on which Realized Losses are to be allocated to such class
or classes, the excess, if any, of (i) the amount that would otherwise be
distributable in respect of principal on such class or classes of Certificates
on such Distribution Date over (ii) the excess, if any, of the aggregate
Certificate Principal Balance of such class or classes of Certificates
immediately prior to such Distribution Date over the aggregate amount of
Realized Losses to be allocated to such classes of Certificates on such
Distribution Date as reduced by any amount calculated pursuant to clause (E) of
the definition of Class A-P Principal Distribution Amount. With respect to any
Mortgage Pool that is comprised of two or more Loan Groups, the Excess
Subordinate Principal Amount will be allocated between each Loan Group on a pro
rata basis in accordance with the amount of Realized Losses attributable to each
Loan Group and allocated to the Certificates on such Distribution Date.
Exchange Act: The Securities and Exchange Act of 1934, as amended.
Extraordinary Events: Any of the following conditions with respect to a
Mortgaged Property (or, with respect to a Cooperative Loan, the Cooperative
Apartment) or Mortgage Loan causing or resulting in a loss which causes the
liquidation of such Mortgage Loan:
(a) losses that are of the type that would be covered by the fidelity bond
and the errors and omissions insurance policy required to be maintained
pursuant to Section 3.12(b) but are in excess of the coverage maintained
thereunder;
(b) nuclear reaction or nuclear radiation or radioactive contamination, all
whether controlled or uncontrolled, and whether such loss be direct or
indirect, proximate or remote or be in whole or in part caused by,
contributed to or aggravated by a peril covered by the definition of the
term "Special Hazard Loss";
(c) hostile or warlike action in time of peace or war, including action in
hindering, combating or defending against an actual, impending or
expected attack:
1. by any government or sovereign power, de jure or de facto, or by any
authority maintaining or using military, naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or forces;
(d) any weapon of war employing atomic fission or radioactive force whether
in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped power or action
taken by governmental authority in hindering, combating or defending
against such an occurrence, seizure or destruction under quarantine or
customs regulations, confiscation by order of any government or public
authority; or risks of contraband or illegal transportation or trade.
Extraordinary Losses: Any loss incurred on a Mortgage Loan caused by or
resulting from an Extraordinary Event.
Xxxxxx Mae: Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
9.01, which Final Distribution Date shall in no event be later than the end of
the 90-day liquidation period described in Section 9.02.
Fitch: Fitch Ratings or its successor in interest.
Foreclosure Profits: As to any Distribution Date or related
Determination Date and any Mortgage Loan, the excess, if any, of Liquidation
Proceeds, Insurance Proceeds and REO Proceeds (net of all amounts reimbursable
therefrom pursuant to Section 3.10(a)(ii)) in respect of each Mortgage Loan or
REO Property for which a Cash Liquidation or REO Disposition occurred in the
related Prepayment Period over the sum of the unpaid principal balance of such
Mortgage Loan or REO Property (determined, in the case of an REO Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest at the Mortgage
Rate on such unpaid principal balance from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month in
which such Cash Liquidation or REO Disposition occurred.
Form 10-K Certification: As defined in Section 4.03(e).
Fraud Losses: Realized Losses on Mortgage Loans as to which there was
fraud in the origination of such Mortgage Loan.
Xxxxxxx Mac: Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Highest Priority: As of any date of determination, the Class of
Subordinate Certificates then outstanding with a Certificate Principal Balance
greater than zero, with the earliest priority for payments pursuant to Section
4.02(a), in the following order: Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates.
Independent: When used with respect to any specified Person, means such
a Person who (i) is in fact independent of the Company, the Master Servicer and
the Trustee, or any Affiliate thereof, (ii) does not have any direct financial
interest or any material indirect financial interest in the Company, the Master
Servicer or the Trustee or in an Affiliate thereof, and (iii) is not connected
with the Company, the Master Servicer or the Trustee as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
Initial Certificate Principal Balance: With respect to each Class of
Certificates, the Certificate Principal Balance of such Class of Certificates as
of the Cut-off Date, as set forth in the Series Supplement.
Initial Monthly Payment Fund: An amount representing scheduled principal
amortization and interest at the Net Mortgage Rate for the Due Date in the first
Due Period commencing subsequent to the Cut-off Date for those Mortgage Loans
for which the Trustee will not be entitled to receive such payment, and as more
specifically defined in the Series Supplement.
Initial Notional Amount: With respect to any Class or Subclass of
Interest Only Certificates, the amount initially used as the principal basis for
the calculation of any interest payment amount, as more specifically defined in
the Series Supplement.
Initial Subordinate Class Percentage: As defined in the Series
Supplement.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Insurance Policy or any other related insurance policy
covering a Mortgage Loan (excluding any Certificate Policy (as defined in the
Series Supplement)), to the extent such proceeds are payable to the mortgagee
under the Mortgage, any Subservicer, the Master Servicer or the Trustee and are
not applied to the restoration of the related Mortgaged Property (or, with
respect to a Cooperative Loan, the related Cooperative Apartment) or released to
the Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing mortgage loans held for its own account.
Insurer: Any named insurer under any Primary Insurance Policy or any
successor thereto or the named insurer in any replacement policy.
Interest Accrual Period: As defined in the Series Supplement.
Interest Only Certificates: A Class or Subclass of Certificates not
entitled to payments of principal, and designated as such in the Series
Supplement. The Interest Only Certificates will have no Certificate Principal
Balance.
Interim Certification: As defined in Section 2.02.
International Borrower: In connection with any Mortgage Loan, a borrower
who is (a) a United States citizen employed in a foreign country, (b) a
non-permanent resident alien employed in the United States or (c) a citizen of a
country other than the United States with income derived from sources outside
the United States.
Junior Certificateholder: The Holder of not less than 95% of the
Percentage Interests of the Junior Class of Certificates.
Junior Class of Certificates: The Class of Subordinate Certificates
outstanding as of the date of the repurchase of a Mortgage Loan pursuant to
Section 4.07 herein that has the Lowest Priority.
Late Collections: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
Liquidation Proceeds: Amounts (other than Insurance Proceeds) received
by the Master Servicer in connection with the taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or in
connection with the liquidation of a defaulted Mortgage Loan through trustee's
sale, foreclosure sale or otherwise, other than REO Proceeds.
Loan Group: Any group of Mortgage Loans designated as a separate loan
group in the Series Supplement. The Certificates relating to each Loan Group
will be designated in the Series Supplement.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Appraised Value of the related Mortgaged Property.
Lower Priority: As of any date of determination and any Class of
Subordinate Certificates, any other Class of Subordinate Certificates then
outstanding with a later priority for payments pursuant to Section 4.02 (a).
Lowest Priority: As of any date of determination, the Class of
Subordinate Certificates then outstanding with a Certificate Principal Balance
greater than zero, with the latest priority for payments pursuant to Section
4.02(a), in the following order: Class B-3, Class B-2, Class B-1, Class M-3,
Class M-2 and Class M-1 Certificates.
Maturity Date: The latest possible maturity date, solely for purposes of
Section 1.860G-1(a)(4)(iii) of the Treasury regulations, by which the
Certificate Principal Balance of each Class of Certificates (other than the
Interest Only Certificates which have no Certificate Principal Balance) and each
Uncertificated REMIC Regular Interest would be reduced to zero, as designated in
the Series Supplement.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.
MLCC: Xxxxxxx Xxxxx Credit Corporation, or its successor in interest.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject of a
Servicing Modification.
Modified Net Mortgage Rate: As to any Mortgage Loan that is the subject
of a Servicing Modification, the Net Mortgage Rate minus the rate per annum by
which the Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO
Property) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization schedule at the time applicable thereto (after
adjustment, if any, for Curtailments and for Deficient Valuations occurring
prior to such Due Date but before any adjustment to such amortization schedule
by reason of any bankruptcy, other than a Deficient Valuation, or similar
proceeding or any moratorium or similar waiver or grace period and before any
Servicing Modification that constitutes a reduction of the interest rate on such
Mortgage Loan).
Moody's: Xxxxx'x Investors Service, Inc., or its successor in interest.
Mortgage: With respect to each Mortgage Note related to a Mortgage Loan
which is not a Cooperative Loan, the mortgage, deed of trust or other comparable
instrument creating a first lien on an estate in fee simple or leasehold
interest in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to Section 2.01 as from time to time are held or deemed to
be held as a part of the Trust Fund, the Mortgage Loans originally so held being
identified in the initial Mortgage Loan Schedule, and Qualified Substitute
Mortgage Loans held or deemed held as part of the Trust Fund including, without
limitation, (i) with respect to each Cooperative Loan, the related Mortgage
Note, Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate, Cooperative Lease and Mortgage File and all rights appertaining
thereto, and (ii) with respect to each Mortgage Loan other than a Cooperative
Loan, each related Mortgage Note, Mortgage and Mortgage File and all rights
appertaining thereto.
Mortgage Loan Schedule: As defined in the Series Supplement.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
together with any modification thereto.
Mortgage Pool: The pool of mortgage loans, including all Loan Groups, if
any, consisting of the Mortgage Loans.
Mortgage Rate: As to any Mortgage Loan, the interest rate borne by the
related Mortgage Note, or any modification thereto other than a Servicing
Modification.
Mortgaged Property: The underlying real property securing a Mortgage
Loan or, with respect to a Cooperative Loan, the related Cooperative Lease and
Cooperative Stock.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, a per annum rate of
interest equal to the Adjusted Mortgage Rate less the per annum rate at which
the Servicing Fee is calculated.
Non-Discount Mortgage Loan: A Mortgage Loan that is not a Discount
Mortgage Loan.
Non-Primary Residence Loans: The Mortgage Loans designated as secured by
second or vacation residences, or by non-owner occupied residences, on the
Mortgage Loan Schedule.
Non-United States Person: Any Person other than a United States Person.
Nonrecoverable Advance: Any Advance previously made or proposed to be
made by the Master Servicer or Subservicer in respect of a Mortgage Loan (other
than a Deleted Mortgage Loan) which, in the good faith judgment of the Master
Servicer, will not, or, in the case of a proposed Advance, would not, be
ultimately recoverable by the Master Servicer from related Late Collections,
Insurance Proceeds, Liquidation Proceeds, REO Proceeds or amounts reimbursable
to the Master Servicer pursuant to Section 4.02(a) hereof. To the extent that
any Mortgagor is not obligated under the related Mortgage documents to pay or
reimburse any portion of any Servicing Advances that are outstanding with
respect to the related Mortgage Loan as a result of a modification of such
Mortgage Loan by the Master Servicer, which forgives amounts which the Master
Servicer or Subservicer had previously advanced, and the Master Servicer
determines that no other source of payment or reimbursement for such advances is
available to it, such Servicing Advances shall be deemed to be Nonrecoverable
Advances. The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance would constitute a
Nonrecoverable Advance, shall be evidenced by an Officers' Certificate delivered
to the Company, the Trustee and any Certificate Insurer.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is not subject to a Subservicing Agreement.
Notional Amount: With respect to any Class or Subclass of Interest Only
Certificates, an amount used as the principal basis for the calculation of any
interest payment amount, as more specifically defined in the Series Supplement.
Officers' Certificate: A certificate signed by the Chairman of the
Board, the President or a Vice President or Assistant Vice President, or a
Director or Managing Director, and by the Treasurer, the Secretary, or one of
the Assistant Treasurers or Assistant Secretaries of the Company or the Master
Servicer, as the case may be, and delivered to the Trustee, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the
Trustee and the Master Servicer, who may be counsel for the Company or the
Master Servicer, provided that any opinion of counsel (i) referred to in the
definition of "Disqualified Organization" or (ii) relating to the qualification
of any REMIC formed under the Series Supplement or compliance with the REMIC
Provisions must, unless otherwise specified, be an opinion of Independent
counsel.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Principal Prepayment
in Full, Cash Liquidation or REO Disposition and which was not purchased,
deleted or substituted for prior to such Due Date pursuant to Section 2.02,
2.03, 2.04 or 4.07.
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: As defined in the Series Supplement.
Paying Agent: The Trustee or any successor Paying Agent appointed by the
Trustee.
Percentage Interest: With respect to any Certificate (other than a Class
R Certificate), the undivided percentage ownership interest in the related Class
evidenced by such Certificate, which percentage ownership interest shall be
equal to the Initial Certificate Principal Balance thereof or Initial Notional
Amount (in the case of any Interest Only Certificate) thereof divided by the
aggregate Initial Certificate Principal Balance or the aggregate of the Initial
Notional Amounts, as applicable, of all the Certificates of the same Class. With
respect to a Class R Certificate, the interest in distributions to be made with
respect to such Class evidenced thereby, expressed as a percentage, as stated on
the face of each such Certificate.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to timely payment of principal and
interest by the United States or any agency or instrumentality thereof
when such obligations are backed by the full faith and credit of the
United States;
(ii) repurchase agreements on obligations specified in clause (i) maturing
not more than one month from the date of acquisition thereof, provided
that the unsecured short-term debt obligations of the party agreeing to
repurchase such obligations are at the time rated by each Rating Agency
in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits, time deposits
and bankers' acceptances (which shall each have an original maturity of
not more than 90 days and, in the case of bankers' acceptances, shall in
no event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars of
any U.S. depository institution or trust company incorporated under the
laws of the United States or any state thereof or of any domestic branch
of a foreign depository institution or trust company; provided that the
debt obligations of such depository institution or trust company at the
date of acquisition thereof have been rated by each Rating Agency in its
highest short-term rating available; and, provided further that, if the
original maturity of such short-term obligations of a domestic branch of
a foreign depository institution or trust company shall exceed 30 days,
the short-term rating of such institution shall be A-1+ in the case of
Standard & Poor's if Standard & Poor's is a Rating Agency;
(iv) commercial paper and demand notes (having original maturities of not
more than 365 days) of any corporation incorporated under the laws of
the United States or any state thereof which on the date of acquisition
has been rated by each Rating Agency in its highest short-term rating
available; provided that such commercial paper shall have a remaining
maturity of not more than 30 days;
(v) any mutual fund, money market fund, common trust fund or other pooled
investment vehicle, the assets of which are limited to instruments that
otherwise would constitute Permitted Investments hereunder and have been
rated by each Rating Agency in its highest short-term rating available
(in the case of Standard & Poor's such rating shall be either AAAm or
AAAm-G), including any such fund that is managed by the Trustee or any
affiliate of the Trustee or for which the Trustee or any of its
affiliates acts as an adviser; and
(vi) other obligations or securities that are acceptable to each Rating
Agency as a Permitted Investment hereunder and will not reduce the
rating assigned to any Class of Certificates by such Rating Agency
(without giving effect to any Certificate Policy (as defined in the
Series Supplement) in the case of Insured Certificates (as defined in
the Series Supplement) below the lower of the then-current rating
assigned to such Certificates by such Rating Agency, as evidenced in
writing;
provided, however, no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations. References herein to the highest rating available on unsecured
long-term debt shall mean AAA in the case of Standard & Poor's and Fitch and Aaa
in the case of Moody's, and for purposes of this Agreement, any references
herein to the highest rating available on unsecured commercial paper and
short-term debt obligations shall mean the following: A-1 in the case of
Standard & Poor's, P-1 in the case of Moody's and F-1 in the case of Fitch;
provided, however, that any Permitted Investment that is a short-term debt
obligation rated A-1 by Standard & Poor's must satisfy the following additional
conditions: (i) the total amount of debt from A-1 issuers must be limited to the
investment of monthly principal and interest payments (assuming fully amortizing
collateral); (ii) the total amount of A-1 investments must not represent more
than 20% of the aggregate outstanding Certificate Principal Balance of the
Certificates and each investment must not mature beyond 30 days; (iii) the terms
of the debt must have a predetermined fixed dollar amount of principal due at
maturity that cannot vary; and (iv) if the investments may be liquidated prior
to their maturity or are being relied on to meet a certain yield, interest must
be tied to a single interest rate index plus a single fixed spread (if any) and
must move proportionately with that index. Any Permitted Investment may be held
by or through the Trustee or its Affiliates.
Permitted Transferee: Any Transferee of a Class R Certificate, other
than a Disqualified Organization or Non-United States Person.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pledged Amount: With respect to any Pledged Asset Loan, the amount of
money remitted to Combined Collateral LLC, at the direction of or for the
benefit of the related Mortgagor.
Pledged Asset Loan: Any Mortgage Loan supported by Pledged Assets or
such other collateral, other than the related Mortgaged Property, set forth in
the Series Supplement.
Pledged Assets: With respect to any Mortgage Loan, all money,
securities, security entitlements, accounts, general intangibles, payment
intangibles, instruments, documents, deposit accounts, certificates of deposit,
commodities contracts and other investment property and other property of
whatever kind or description pledged by Combined Collateral LLC as security in
respect of any Realized Losses in connection with such Mortgage Loan up to the
Pledged Amount for such Mortgage Loan, and any related collateral, or such other
collateral as may be set forth in the Series Supplement.
Pledged Asset Mortgage Servicing Agreement: The Pledged Asset Mortgage
Servicing Agreement, dated as of February 28, 1996 between MLCC and the Master
Servicer.
Pooling and Servicing Agreement or Agreement: With respect to any
Series, this Standard Terms together with the related Series Supplement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of each Mortgage Loan.
Pool Strip Rate: With respect to each Mortgage Loan, a per annum rate
equal to the excess of (a) the Net Mortgage Rate of such Mortgage Loan over (b)
the Discount Net Mortgage Rate (but not less than 0.00%) per annum.
Prepayment Distribution Trigger: With respect to any Distribution Date
and any Class of Subordinate Certificates (other than the Class M-1
Certificates), a test that shall be satisfied if the fraction (expressed as a
percentage) equal to the sum of the Certificate Principal Balances of such Class
and each Class of Subordinate Certificates with a Lower Priority than such Class
immediately prior to such Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date is greater than or equal to the sum
of the related Initial Subordinate Class Percentages of such Classes of
Subordinate Certificates.
Prepayment Interest Shortfall: As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the portion of the
related Prepayment Period that falls during the prior calendar month, an amount
equal to the excess of one month's interest at the Net Mortgage Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) on the
Stated Principal Balance of such Mortgage Loan over the amount of interest
(adjusted to the Net Mortgage Rate (or Modified Net Mortgage Rate in the case of
a Modified Mortgage Loan)) paid by the Mortgagor for such month to the date of
such Principal Prepayment in Full or (b) a Curtailment during the prior calendar
month, an amount equal to one month's interest at the Net Mortgage Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) on the
amount of such Curtailment.
Prepayment Period: As to any Distribution Date and Principal Prepayment
in Full, the period commencing on the 16th day of the month prior to the month
in which that Distribution Date occurs and ending on the 15th day of the month
in which such Distribution Date occurs.
Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance or any replacement policy therefor referred to in Section 2.03(b)(iv)
and (v).
Principal Only Certificates: A Class of Certificates not entitled to
payments of interest, and more specifically designated as such in the Series
Supplement.
Principal Prepayment: Any payment of principal or other recovery on a
Mortgage Loan, including a recovery that takes the form of Liquidation Proceeds
or Insurance Proceeds, which is received in advance of its scheduled Due Date
and is not accompanied by an amount as to interest representing scheduled
interest on such payment due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment of the entire
principal balance of a Mortgage Loan that is made by the Mortgagor.
Program Guide: Collectively, the Client Guide and the Servicer Guide for
Residential Funding's Expanded Criteria Mortgage Program.
Purchase Price: With respect to any Mortgage Loan (or REO Property)
required to be or otherwise purchased on any date pursuant to Section 2.02,
2.03, 2.04 or 4.07, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof plus the principal portion of any related unreimbursed
Advances and (ii) unpaid accrued interest at the Adjusted Mortgage Rate (or
Modified Net Mortgage Rate plus the rate per annum at which the Servicing Fee is
calculated in the case of a Modified Mortgage Loan) (or at the Net Mortgage Rate
(or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) in the
case of a purchase made by the Master Servicer) on the Stated Principal Balance
thereof to the Due Date in the Due Period related to the Distribution Date
occurring in the month following the month of purchase from the Due Date to
which interest was last paid by the Mortgagor.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by
Residential Funding or the Company for a Deleted Mortgage Loan which must, on
the date of such substitution, as confirmed in an Officers' Certificate
delivered to the Trustee, with a copy to the Custodian,
(i) have an outstanding principal balance, after deduction of the
principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than one
Mortgage Loan for a Deleted Mortgage Loan, an aggregate
outstanding principal balance, after such deduction), not in
excess of the Stated Principal Balance of the Deleted Mortgage
Loan (the amount of any shortfall to be deposited by Residential
Funding in the Custodial Account in the month of substitution);
(ii) have a Mortgage Rate and a Net Mortgage Rate no lower than and
not more than 1% per annum higher than the Mortgage Rate and Net
Mortgage Rate, respectively, of the Deleted Mortgage Loan as of
the date of substitution;
(iii) have a Loan-to-Value Ratio at the time of substitution no higher
than that of the Deleted Mortgage Loan at the time of
substitution;
(iv) have a remaining term to stated maturity not greater than (and
not more than one year less than) that of the Deleted Mortgage
Loan;
(v) comply with each representation and warranty set forth in
Sections 2.03 and 2.04 hereof and Section 4 of the Assignment
Agreement; and
(vi) have a Pool Strip Rate equal to or greater than that of the
Deleted Mortgage Loan.
Notwithstanding any other provisions herein, (x) with respect to any Qualified
Substitute Mortgage Loan substituted for a Deleted Mortgage Loan which was a
Discount Mortgage Loan, such Qualified Substitute Mortgage Loan shall be deemed
to be a Discount Mortgage Loan and to have a Discount Fraction equal to the
Discount Fraction of the Deleted Mortgage Loan and (y) in the event that the
"Pool Strip Rate" of any Qualified Substitute Mortgage Loan as calculated
pursuant to the definition of "Pool Strip Rate" is greater than the Pool Strip
Rate of the related Deleted Mortgage Loan
(i) the Pool Strip Rate of such Qualified Substitute Mortgage Loan
shall be equal to the Pool Strip Rate of the related Deleted
Mortgage Loan for purposes of calculating the Pass-Through Rate
on the Class A-V Certificates and
(ii) the excess of the Pool Strip Rate on such Qualified Substitute
Mortgage Loan as calculated pursuant to the definition of "Pool
Strip Rate" over the Pool Strip Rate on the related Deleted
Mortgage Loan shall be payable to the Class R Certificates
pursuant to Section 4.02 hereof.
Rating Agency: Each of the statistical credit rating agencies specified
in the Preliminary Statement of the Series Supplement. If any agency or a
successor is no longer in existence, "Rating Agency" shall be such statistical
credit rating agency, or other comparable Person, designated by the Company,
notice of which designation shall be given to the Trustee and the Master
Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO Property):
(a) as to which a Cash Liquidation or REO Disposition has occurred,
an amount (not less than zero) equal to (i) the Stated Principal
Balance of the Mortgage Loan (or REO Property) as of the date of
Cash Liquidation or REO Disposition, plus (ii) interest (and REO
Imputed Interest, if any) at the Net Mortgage Rate from the Due
Date as to which interest was last paid or advanced to
Certificateholders up to the Due Date in the Due Period related
to the Distribution Date on which such Realized Loss will be
allocated pursuant to Section 4.05 on the Stated Principal
Balance of such Mortgage Loan (or REO Property) outstanding
during each Due Period that such interest was not paid or
advanced, minus (iii) the proceeds, if any, received during the
month in which such Cash Liquidation (or REO Disposition)
occurred, to the extent applied as recoveries of interest at the
Net Mortgage Rate and to principal of the Mortgage Loan, net of
the portion thereof reimbursable to the Master Servicer or any
Subservicer with respect to related Advances, Servicing Advances
or other expenses as to which the Master Servicer or Subservicer
is entitled to reimbursement thereunder but which have not been
previously reimbursed,
(b) which is the subject of a Servicing Modification, (i) (1) the
amount by which the interest portion of a Monthly Payment or the
principal balance of such Mortgage Loan was reduced or (2) the
sum of any other amounts owing under the Mortgage Loan that were
forgiven and that constitute Servicing Advances that are
reimbursable to the Master Servicer or a Subservicer, and (ii)
any such amount with respect to a Monthly Payment that was or
would have been due in the month immediately following the month
in which a Principal Prepayment or the Purchase Price of such
Mortgage Loan is received or is deemed to have been received,
(c) which has become the subject of a Deficient Valuation, the
difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the
Deficient Valuation, or
(d) which has become the object of a Debt Service Reduction, the
amount of such Debt Service Reduction.
Notwithstanding the above, neither a Deficient Valuation nor a Debt Service
Reduction shall be deemed a Realized Loss hereunder so long as the Master
Servicer has notified the Trustee in writing that the Master Servicer is
diligently pursuing any remedies that may exist in connection with the
representations and warranties made regarding the related Mortgage Loan and
either (A) the related Mortgage Loan is not in default with regard to payments
due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any premiums on any applicable primary hazard
insurance policy and any related escrow payments in respect of such Mortgage
Loan are being advanced on a current basis by the Master Servicer or a
Subservicer, in either case without giving effect to any Debt Service Reduction.
To the extent the Master Servicer receives Subsequent Recoveries with respect to
any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage
Loan will be reduced to the extent such recoveries are applied to reduce the
Certificate Principal Balance of any Class of Certificates on any Distribution
Date.
Record Date: With respect to each Distribution Date, the close of
business on the last Business Day of the month next preceding the month in which
the related Distribution Date occurs.
Regular Certificate: Any of the Certificates other than a Class R
Certificate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Reimbursement Amounts: As defined in Section 3.22.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Administrator: Residential Funding Corporation. If Residential
Funding Corporation is found by a court of competent jurisdiction to no longer
be able to fulfill its obligations as REMIC Administrator under this Agreement
the Master Servicer or Trustee acting as Master Servicer shall appoint a
successor REMIC Administrator, subject to assumption of the REMIC Administrator
obligations under this Agreement.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
temporary and final regulations (or, to the extent not inconsistent with such
temporary or final regulations, proposed regulations) and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
REO Acquisition: The acquisition by the Master Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.14.
REO Disposition: As to any REO Property, a determination by the Master
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds, REO
Proceeds and other payments and recoveries (including proceeds of a final sale)
which the Master Servicer expects to be finally recoverable from the sale or
other disposition of the REO Property.
REO Imputed Interest: As to any REO Property, for any period, an amount
equivalent to interest (at the Net Mortgage Rate that would have been applicable
to the related Mortgage Loan had it been outstanding) on the unpaid principal
balance of the Mortgage Loan as of the date of acquisition thereof for such
period.
REO Proceeds: Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged Property or, with respect to a Cooperative Loan, the related
Cooperative Apartment) which proceeds are required to be deposited into the
Custodial Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed in lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i) has been
subject to an interest rate reduction, (ii) has been subject to a term extension
or (iii) has had amounts owing on such Mortgage Loan capitalized by adding such
amount to the Stated Principal Balance of such Mortgage Loan; provided, however,
that a Mortgage Loan modified in accordance with clause (i) above for a
temporary period shall not be a Reportable Modified Mortgage Loan if such
Mortgage Loan has not been delinquent in payments of principal and interest for
six months since the date of such modification if that interest rate reduction
is not made permanent thereafter.
Request for Release: A request for release, the forms of which are
attached as Exhibit F hereto, or an electronic request in a form acceptable to
the Custodian.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement, the Program Guide or the related Subservicing Agreement in respect of
such Mortgage Loan.
Required Surety Payment: With respect to any Additional Collateral Loan
that becomes a Liquidated Mortgage Loan, the lesser of (i) the principal portion
of the Realized Loss with respect to such Mortgage Loan and (ii) the excess, if
any, of (a) the amount of Additional Collateral required at origination with
respect to such Mortgage Loan over (b) the net proceeds realized by the
Subservicer from the related Additional Collateral.
Residential Funding: Residential Funding Corporation, a Delaware
corporation, in its capacity as seller of the Mortgage Loans to the Company and
any successor thereto.
Responsible Officer: When used with respect to the Trustee, any officer
of the Corporate Trust Department of the Trustee, including any Senior Vice
President, any Vice President, any Assistant Vice President, any Assistant
Secretary, any Trust Officer or Assistant Trust Officer, or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers to whom, with respect to a particular matter,
such matter is referred, in each case with direct responsibility for the
administration of the Agreement.
Retail Certificates: A Senior Certificate, if any, offered in smaller
minimum denominations than other Senior Certificates, and designated as such in
the Series Supplement.
Schedule of Discount Fractions: The schedule setting forth the Discount
Fractions with respect to the Discount Mortgage Loans, attached as an exhibit to
the Series Supplement.
Securitization Transaction: Any transaction involving a sale or other
transfer of mortgage loans directly or indirectly to an issuing entity in
connection with an issuance of publicly offered or privately placed, rated or
unrated mortgage-backed securities.
Security Agreement: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
Seller: As to any Mortgage Loan, a Person, including any Subservicer,
that executed a Seller's Agreement applicable to such Mortgage Loan.
Seller's Agreement: An agreement for the origination and sale of
Mortgage Loans generally in the form of the Seller Contract referred to or
contained in the Program Guide, or in such other form as has been approved by
the Master Servicer and the Company, each containing representations and
warranties in respect of one or more Mortgage Loans consistent in all material
respects with those set forth in the Program Guide.
Senior Accelerated Distribution Percentage: With respect to any
Distribution Date occurring on or prior to the 60th Distribution Date and, with
respect to any Mortgage Pool comprised of two or more Loan Groups, any Loan
Group, 100%. With respect to any Distribution Date thereafter and any such Loan
Group, if applicable, as follows:
(i) for any Distribution Date after the 60th Distribution Date but on or
prior to the 72nd Distribution Date, the related Senior Percentage for
such Distribution Date plus 70% of the related Subordinate Percentage
for such Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date but on or
prior to the 84th Distribution Date, the related Senior Percentage for
such Distribution Date plus 60% of the related Subordinate Percentage
for such Distribution Date;
(iii) for any Distribution Date after the 84th Distribution Date but on or
prior to the 96th Distribution Date, the related Senior Percentage for
such Distribution Date plus 40% of the related Subordinate Percentage
for such Distribution Date;
(iv) for any Distribution Date after the 96th Distribution Date but on or
prior to the 108th Distribution Date, the related Senior Percentage for
such Distribution Date plus 20% of the related Subordinate Percentage
for such Distribution Date; and
(v) for any Distribution Date thereafter, the Senior Percentage for such
Distribution Date;
provided, however,
(i) that any scheduled reduction to the Senior Accelerated Distribution
Percentage described above shall not occur as of any Distribution Date unless
either
(a)(1)(X) the outstanding principal balance of the Mortgage Loans
delinquent 60 days or more (including Mortgage Loans which are in
foreclosure, have been foreclosed or otherwise liquidated, or with
respect to which the Mortgagor is in bankruptcy and any REO Property)
averaged over the last six months, as a percentage of the aggregate
outstanding Certificate Principal Balance of the Subordinate
Certificates, is less than 50% or (Y) the outstanding principal balance
of Mortgage Loans delinquent 60 days or more (including Mortgage Loans
which are in foreclosure, have been foreclosed or otherwise liquidated,
or with respect to which the Mortgagor is in bankruptcy and any REO
Property) averaged over the last six months, as a percentage of the
aggregate outstanding principal balance of all Mortgage Loans averaged
over the last six months, does not exceed 2% and (2) Realized Losses on
the Mortgage Loans to date for such Distribution Date if occurring
during the sixth, seventh, eighth, ninth or tenth year (or any year
thereafter) after the Closing Date are less than 30%, 35%, 40%, 45% or
50%, respectively, of the sum of the Initial Certificate Principal
Balances of the Subordinate Certificates or
(b)(1) the outstanding principal balance of Mortgage Loans
delinquent 60 days or more (including Mortgage Loans which are in
foreclosure, have been foreclosed or otherwise liquidated, or with
respect to which the Mortgagor is in bankruptcy and any REO Property)
averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the
last six months, does not exceed 4% and (2) Realized Losses on the
Mortgage Loans to date for such Distribution Date, if occurring during
the sixth, seventh, eighth, ninth or tenth year (or any year thereafter)
after the Closing Date are less than 10%, 15%, 20%, 25% or 30%,
respectively, of the sum of the Initial Certificate Principal Balances
of the Subordinate Certificates, and
(ii) that for any Distribution Date on which the Senior Percentage is
greater than the Senior Percentage as of the Closing Date, the Senior
Accelerated Distribution Percentage for such Distribution Date shall be 100%,
or, if the Mortgage Pool is comprised of two or more Loan Groups, for any
Distribution Date on which the weighted average of the Senior Percentages for
each Loan Group, weighted on the basis of the Stated Principal Balances of the
Mortgage Loans in the related Loan Group (excluding the Discount Fraction of the
Discount Mortgage Loans in such Loan Group) exceeds the weighted average of the
initial Senior Percentages (calculated on such basis) for each Loan Group, each
of the Senior Accelerated Distribution Percentages for such Distribution Date
will equal 100%.
Notwithstanding the foregoing, upon the reduction of the Certificate Principal
Balances of the related Senior Certificates (other than the Class A-P
Certificates, if any) to zero, the related Senior Accelerated Distribution
Percentage shall thereafter be 0%.
Senior Certificate: As defined in the Series Supplement.
Senior Percentage: As defined in the Series Supplement.
Senior Support Certificate: A Senior Certificate that provides
additional credit enhancement to certain other classes of Senior Certificates
and designated as such in the Preliminary Statement of the Series Supplement.
Series: All of the Certificates issued pursuant to a Pooling and
Servicing Agreement and bearing the same series designation.
Series Supplement: The agreement into which this Standard Terms is
incorporated and pursuant to which, together with this Standard Terms, a Series
of Certificates is issued.
Servicing Accounts: The account or accounts created and maintained
pursuant to Section 3.08.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other unanticipated event by the Master Servicer or a Subservicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged Property
or, with respect to a Cooperative Loan, the related Cooperative Apartment, (ii)
any enforcement or judicial proceedings, including foreclosures, including any
expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered on the MERS System, (iii) the management and
liquidation of any REO Property, (iv) any mitigation procedures implemented in
accordance with Section 3.07, and (v) compliance with the obligations under
Sections 3.01, 3.08, 3.11, 3.12(a) and 3.14, including, if the Master Servicer
or any Affiliate of the Master Servicer provides services such as appraisals and
brokerage services that are customarily provided by Persons other than servicers
of mortgage loans, reasonable compensation for such services.
Servicing Advance Reimbursement Amounts: As defined in Section 3.22.
Servicing Fee: With respect to any Mortgage Loan and Distribution Date,
the fee payable monthly to the Master Servicer in respect of master servicing
compensation that accrues at an annual rate designated on the Mortgage Loan
Schedule as the "MSTR SERV FEE" for such Mortgage Loan, as may be adjusted with
respect to successor Master Servicers as provided in Section 7.02.
Servicing Modification: Any reduction of the interest rate on or the
outstanding principal balance of a Mortgage Loan, any extension of the final
maturity date of a Mortgage Loan, and any increase to the outstanding principal
balance of a Mortgage Loan by adding to the Stated Principal Balance unpaid
principal and interest and other amounts owing under the Mortgage Loan, in each
case pursuant to a modification of a Mortgage Loan that is in default, or for
which, in the judgment of the Master Servicer, default is reasonably foreseeable
in accordance with Section 3.07(a).
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer, as such list may from time to time be
amended.
Special Hazard Loss: Any Realized Loss not in excess of the cost of the
lesser of repair or replacement of a Mortgaged Property (or, with respect to a
Cooperative Loan, the related Cooperative Apartment) suffered by such Mortgaged
Property (or Cooperative Apartment) on account of direct physical loss,
exclusive of (i) any loss of a type covered by a hazard policy or a flood
insurance policy required to be maintained in respect of such Mortgaged Property
pursuant to Section 3.12(a), except to the extent of the portion of such loss
not covered as a result of any coinsurance provision and (ii) any Extraordinary
Loss.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or its successor in interest.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property, as of any Distribution Date, (i) the sum of (a) the Cut-off Date
Principal Balance of the Mortgage Loan plus (b) any amount by which the Stated
Principal Balance of the Mortgage Loan has been increased pursuant to a
Servicing Modification, minus (ii) the sum of (a) the principal portion of the
Monthly Payments due with respect to such Mortgage Loan or REO Property during
each Due Period ending with the Due Period related to the previous Distribution
Date which were received or with respect to which an Advance was made, and (b)
all Principal Prepayments with respect to such Mortgage Loan or REO Property,
and all Insurance Proceeds, Liquidation Proceeds and REO Proceeds, to the extent
applied by the Master Servicer as recoveries of principal in accordance with
Section 3.14 with respect to such Mortgage Loan or REO Property, in each case
which were distributed pursuant to Section 4.02 on any previous Distribution
Date, and (c) any Realized Loss allocated to Certificateholders with respect
thereto for any previous Distribution Date.
Subclass: With respect to the Class A-V Certificates, any Subclass
thereof issued pursuant to Section 5.01(c). Any such Subclass will represent the
Uncertificated Class A-V REMIC Regular Interest or Interests specified by the
initial Holder of the Class A-V Certificates pursuant to Section 5.01(c).
Subordinate Certificate: Any one of the Class M Certificates or Class B
Certificates, executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B and Exhibit C,
respectively.
Subordinate Class Percentage: With respect to any Distribution Date and
any Class of Subordinate Certificates, a fraction, expressed as a percentage,
the numerator of which is the aggregate Certificate Principal Balance of such
Class of Subordinate Certificates immediately prior to such date and the
denominator of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans (or related REO Properties) (other than the related Discount
Fraction of each Discount Mortgage Loan) immediately prior to such Distribution
Date.
Subordinate Percentage: As of any Distribution Date and, with respect to
any Mortgage Pool comprised of two or more Loan Groups, any Loan Group, 100%
minus the related Senior Percentage as of such Distribution Date.
Subsequent Recoveries: As of any Distribution Date, amounts received by
the Master Servicer (net of any related expenses permitted to be reimbursed
pursuant to Section 3.10) or surplus amounts held by the Master Servicer to
cover estimated expenses (including, but not limited to, recoveries in respect
of the representations and warranties made by the related Seller pursuant to the
applicable Seller's Agreement and assigned to the Trustee pursuant to Section
2.04) specifically related to a Mortgage Loan that was the subject of a Cash
Liquidation or an REO Disposition prior to the related Prepayment Period that
resulted in a Realized Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement and who generally satisfied the requirements set forth in
the Program Guide in respect of the qualification of a Subservicer as of the
date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and
interest on a Mortgage Loan which is advanced by the related Subservicer (net of
its Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in
accordance with Section 3.08.
Subservicing Agreement: The written contract between the Master Servicer
and any Subservicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02, generally in the form of the servicer
contract referred to or contained in the Program Guide or in such other form as
has been approved by the Master Servicer and the Company. With respect to
Additional Collateral Loans subserviced by MLCC, the Subservicing Agreement
shall also include the Addendum and Assignment Agreement and the Pledged Asset
Mortgage Servicing Agreement. With respect to any Pledged Asset Loan subserviced
by GMAC Mortgage Corporation, the Addendum and Assignment Agreement, dated as of
November 24, 1998, between the Master Servicer and GMAC Mortgage Corporation, as
such agreement may be amended from time to time.
Subservicing Fee: As to any Mortgage Loan, the fee payable monthly to
the related Subservicer (or, in the case of a Nonsubserviced Mortgage Loan, to
the Master Servicer) in respect of subservicing and other compensation that
accrues at an annual rate equal to the excess of the Mortgage Rate borne by the
related Mortgage Note over the rate per annum designated on the Mortgage Loan
Schedule as the "CURR NET" for such Mortgage Loan.
Successor Master Servicer: As defined in Section 3.22.
Surety: Ambac, or its successors in interest, or such other surety as
may be identified in the Series Supplement.
Surety Bond: The Limited Purpose Surety Bond (Policy No. AB0039BE),
dated February 28, 1996 in respect to Mortgage Loans originated by MLCC, or the
Surety Bond (Policy No. AB0240BE), dated March 17, 1999 in respect to Mortgage
Loans originated by Novus Financial Corporation, in each case issued by Ambac
for the benefit of certain beneficiaries, including the Trustee for the benefit
of the Holders of the Certificates, but only to the extent that such Surety Bond
covers any Additional Collateral Loans, or such other Surety Bond as may be
identified in the Series Supplement.
Tax Returns: The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of any REMIC formed under the Series Supplement and under the REMIC
Provisions, together with any and all other information, reports or returns that
may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.
Transaction Party: As defined in Section 12.02(a).
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
Trust Fund: The segregated pool of assets related to a Series, with
respect to which one or more REMIC elections are to be made pursuant to this
Agreement, consisting of:
(i) the Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(ii) all payments on and collections in respect of the Mortgage Loans due
after the Cut-off Date as shall be on deposit in the Custodial Account
or in the Certificate Account and identified as belonging to the Trust
Fund, including the proceeds from the liquidation of Additional
Collateral for any Additional Collateral Loan or Pledged Assets for any
Pledged Asset Loan, but not including amounts on deposit in the Initial
Monthly Payment Fund,
(iii) property that secured a Mortgage Loan and that has been acquired for the
benefit of the Certificateholders by foreclosure or deed in lieu of
foreclosure,
(iv) the hazard insurance policies and Primary Insurance Policies, if any,
the Pledged Assets with respect to each Pledged Asset Loan, and the
interest in the Surety Bond transferred to the Trustee pursuant to
Section 2.01, and
(v) all proceeds of clauses (i) through (iv) above.
Trustee Information: As specified in Section 12.05(a)(i)(A).
Uninsured Cause: Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies.
United States Person or U.S. Person: (i) A citizen or resident of the
United States, (ii) a corporation, partnership or other entity treated as a
corporation or partnership for United States federal income tax purposes
organized in or under the laws of the United States or any state thereof or the
District of Columbia (unless, in the case of a partnership, Treasury regulations
provide otherwise), provided that, for purposes solely of the restrictions on
the transfer of residual interests, no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated as a
United States Person or U.S. Person unless all persons that own an interest in
such partnership either directly or indirectly through any chain of entities no
one of which is a corporation for United States federal income tax purposes are
required by the applicable operating agreement to be United States Persons,
(iii) an estate the income of which is includible in gross income for United
States tax purposes, regardless of its source, or (iv) a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trust. Notwithstanding the preceding
sentence, to the extent provided in Treasury regulations, certain Trusts in
existence on August 20, 1996, and treated as United States persons prior to such
date, that elect to continue to be treated as United States persons will also be
a U.S. Person.
U.S.A. Patriot Act: Uniting and Strengthening America by Providing
Appropriate Tools to Intercept and Obstruct Terrorism Act of 2001, as amended.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate, and more specifically
designated in Article XI of the Series Supplement.
Section 1.02. Use of Words and Phrases.
"Herein," "hereby," "hereunder," `hereof," "hereinbefore," "hereinafter"
and other equivalent words refer to the Pooling and Servicing Agreement as a
whole. All references herein to Articles, Sections or Subsections shall mean the
corresponding Articles, Sections and Subsections in the Pooling and Servicing
Agreement. The definitions set forth herein include both the singular and the
plural.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Company, concurrently with the execution and delivery hereof, does
hereby assign to the Trustee for the benefit of the Certificateholders
without recourse all the right, title and interest of the Company in and
to the Mortgage Loans, including all interest and principal received on
or with respect to the Mortgage Loans after the Cut-off Date (other than
payments of principal and interest due on the Mortgage Loans in the
month of the Cut-off Date). In connection with such transfer and
assignment, the Company does hereby deliver to the Trustee the
Certificate Policy (as defined in the Series Supplement), if any for the
benefit of the Holders of the Insured Certificates (as defined in the
Series Supplement).
(b) In connection with such assignment, except as set forth in Section
2.01(c) and subject to Section 2.01(d) below, the Company does hereby
deliver to, and deposit with, the Trustee, or to and with one or more
Custodians, as the duly appointed agent or agents of the Trustee for
such purpose, the following documents or instruments (or copies thereof
as permitted by this Section) (I) with respect to each Mortgage Loan so
assigned (other than a Cooperative Loan):
(i) The original Mortgage Note, endorsed without recourse in blank or to the
order of the Trustee, and showing an unbroken chain of endorsements from
the originator thereof to the Person endorsing it to the Trustee, or
with respect to any Destroyed Mortgage Note, an original lost note
affidavit from the related Seller or Residential Funding stating that
the original Mortgage Note was lost, misplaced or destroyed, together
with a copy of the related Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of the Mortgage
Loan and language indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan, with evidence of recording indicated
thereon or a copy of the Mortgage with evidence of recording indicated
thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R) System, an
original Assignment of the Mortgage to the Trustee with evidence of
recording indicated thereon or a copy of such assignment with evidence
of recording indicated thereon;
(iv) The original recorded assignment or assignments of the Mortgage showing
an unbroken chain of title from the originator thereof to the Person
assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS(R) System and noting the presence of a MIN) with
evidence of recordation noted thereon or attached thereto, or a copy of
such assignment or assignments of the Mortgage with evidence of
recording indicated thereon; and
(v) The original of each modification, assumption agreement or preferred
loan agreement, if any, relating to such Mortgage Loan or a copy of each
modification, assumption agreement or preferred loan agreement.
and (II) with respect to each Cooperative Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to the order of
the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or with
respect to any Destroyed Mortgage Note, an original lost note affidavit
from the related Seller or Residential Funding stating that the original
Mortgage Note was lost, misplaced or destroyed, together with a copy of
the related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the Assignment of Proprietary
Lease to the originator of the Cooperative Loan with intervening
assignments showing an unbroken chain of title from such originator to
the Trustee;
(iii) The related Cooperative Stock Certificate, representing the related
Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument)
executed in blank;
(iv) The original recognition agreement by the Cooperative of the interests
of the mortgagee with respect to the related Cooperative Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any continuation
statements, filed by the originator of such Cooperative Loan as secured
party, each with evidence of recording thereof, evidencing the interest
of the originator under the Security Agreement and the Assignment of
Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security interest
referenced in clause (vi) above showing an unbroken chain of title from
the originator to the Trustee, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the originator in the Security
Agreement, Assignment of Proprietary Lease and the recognition agreement
referenced in clause (iv) above, showing an unbroken chain of title from
the originator to the Trustee;
(ix) The original of each modification, assumption agreement or preferred
loan agreement, if any, relating to such Cooperative Loan; and
(x) A duly completed UCC-1 financing statement showing the Master Servicer
as debtor, the Company as secured party and the Trustee as assignee and
a duly completed UCC-1 financing statement showing the Company as debtor
and the Trustee as secured party, each in a form sufficient for filing,
evidencing the interest of such debtors in the Cooperative Loans.
(c) The Company may, in lieu of delivering the original of the documents set
forth in Section 2.01(b)(I)(ii), (iii), (iv) and (v) and Section
(b)(II)(ii), (iv), (vii), (ix) and (x) (or copies thereof as permitted
by Section 2.01(b)) to the Trustee or the Custodian or Custodians,
deliver such documents to the Master Servicer, and the Master Servicer
shall hold such documents in trust for the use and benefit of all
present and future Certificateholders until such time as is set forth in
the next sentence. Within thirty Business Days following the earlier of
(i) the receipt of the original of all of the documents or instruments
set forth in Section 2.01(b)(I)(ii), (iii), (iv) and (v) and Section
(b)(II)(ii), (iv), (vii), (ix) and (x) (or copies thereof as permitted
by such Section) for any Mortgage Loan and (ii) a written request by the
Trustee to deliver those documents with respect to any or all of the
Mortgage Loans then being held by the Master Servicer, the Master
Servicer shall deliver a complete set of such documents to the Trustee
or the Custodian or Custodians that are the duly appointed agent or
agents of the Trustee.
The parties hereto agree that it is not intended that any Mortgage Loan
be included in the Trust Fund that is either (i) a "High-Cost Home Loan" as
defined in the New Jersey Home Ownership Act effective November 27, 2003, (ii) a
"High-Cost Home Loan" as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004, (iii) a "High Cost Home Mortgage Loan" as defined in
the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004
or (iv) a "High-Cost Home Loan" as defined in the Indiana House Enrolled Act No.
1229, effective as of January 1, 2005.
(d) Notwithstanding the provisions of Section 2.01(c), in connection with any
Mortgage Loan, if the Company cannot deliver the original of the Mortgage, any
assignment, modification, assumption agreement or preferred loan agreement (or
copy thereof as permitted by Section 2.01(b)) with evidence of recording thereon
concurrently with the execution and delivery of this Agreement because of (i) a
delay caused by the public recording office where such Mortgage, assignment,
modification, assumption agreement or preferred loan agreement as the case may
be, has been delivered for recordation, or (ii) a delay in the receipt of
certain information necessary to prepare the related assignments, the Company
shall deliver or cause to be delivered to the Trustee or the respective
Custodian a copy of such Mortgage, assignment, modification, assumption
agreement or preferred loan agreement.
The Company shall promptly cause to be recorded in the appropriate
public office for real property records the Assignment referred to in clause
(I)(iii) of Section 2.01(b), except (a) in states where, in the opinion of
counsel acceptable to the Trustee and the Master Servicer, such recording is not
required to protect the Trustee's interests in the Mortgage Loan against the
claim of any subsequent transferee or any successor to or creditor of the
Company or the originator of such Mortgage Loan or (b) if MERS is identified on
the Mortgage or on a properly recorded assignment of the Mortgage as the
mortgagee of record solely as nominee for the Seller and its successors and
assigns, and shall promptly cause to be filed the Form UCC-3 assignment and
UCC-1 financing statement referred to in clause (II)(vii) and (x), respectively,
of Section 2.01(b). If any Assignment, Form UCC-3 or Form UCC-1, as applicable,
is lost or returned unrecorded to the Company because of any defect therein, the
Company shall prepare a substitute Assignment, Form UCC-3 or Form UCC-1, as
applicable, or cure such defect, as the case may be, and cause such Assignment
to be recorded in accordance with this paragraph. The Company shall promptly
deliver or cause to be delivered to the Trustee or the respective Custodian such
Mortgage or Assignment or Form UCC-3 or Form UCC-1, as applicable, (or copy
thereof as permitted by Section 2.01(b)) with evidence of recording indicated
thereon at the time specified in Section 2.01(c). In connection with its
servicing of Cooperative Loans, the Master Servicer will use its best efforts to
file timely continuation statements with regard to each financing statement and
assignment relating to Cooperative Loans as to which the related Cooperative
Apartment is located outside of the State of New York.
If the Company delivers to the Trustee or Custodian any Mortgage Note or
Assignment of Mortgage in blank, the Company shall, or shall cause the Custodian
to, complete the endorsement of the Mortgage Note and the Assignment of Mortgage
in the name of the Trustee in conjunction with the Interim Certification issued
by the Custodian, as contemplated by Section 2.02.
Any of the items set forth in Sections 2.01(b)(I)(ii), (iii), (iv) and
(v) and (II)(vi) and (vii) and that may be delivered as a copy rather than the
original may be delivered to the Trustee or the Custodian.
In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Company further agrees that it will cause, at the Company's
own expense, within 30 Business Days after the Closing Date, the MERS(R) System
to indicate that such Mortgage Loans have been assigned by the Company to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Company further agrees that it will
not, and will not permit the Master Servicer to, and the Master Servicer agrees
that it will not, alter the codes referenced in this paragraph with respect to
any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
(e) Residential Funding hereby assigns to the Trustee its security interest in
and to any Additional Collateral or Pledged Assets, its right to receive amounts
due or to become due in respect of any Additional Collateral or Pledged Assets
pursuant to the related Subservicing Agreement and its rights as beneficiary
under the Surety Bond in respect of any Additional Collateral Loans. With
respect to any Additional Collateral Loan or Pledged Asset Loan, Residential
Funding shall cause to be filed in the appropriate recording office a UCC-3
statement giving notice of the assignment of the related security interest to
the Trust Fund and shall thereafter cause the timely filing of all necessary
continuation statements with regard to such financing statements.
(f) It is intended that the conveyance by the Company to the Trustee of the
Mortgage Loans as provided for in this Section 2.01 be and the Uncertificated
REMIC Regular Interests, if any (as provided for in Section 2.06), be construed
as a sale by the Company to the Trustee of the Mortgage Loans and any
Uncertificated REMIC Regular Interests for the benefit of the
Certificateholders. Further, it is not intended that such conveyance be deemed
to be a pledge of the Mortgage Loans and any Uncertificated REMIC Regular
Interests by the Company to the Trustee to secure a debt or other obligation of
the Company. Nonetheless, (a) this Agreement is intended to be and hereby is a
security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in Section 2.01 shall be deemed to
be, and hereby is, (1) a grant by the Company to the Trustee of a security
interest in all of the Company's right (including the power to convey title
thereto), title and interest, whether now owned or hereafter acquired, in and to
any and all general intangibles, payment intangibles, accounts, chattel paper,
instruments, documents, money, deposit accounts, certificates of deposit, goods,
letters of credit, advices of credit and investment property and other property
of whatever kind or description now existing or hereafter acquired consisting
of, arising from or relating to any of the following: (A) the Mortgage Loans,
including (i) with respect to each Cooperative Loan, the related Mortgage Note,
Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate and Cooperative Lease, (ii) with respect to each Mortgage Loan other
than a Cooperative Loan, the related Mortgage Note and Mortgage, and (iii) any
insurance policies and all other documents in the related Mortgage File, (B) all
amounts payable pursuant to the Mortgage Loans in accordance with the terms
thereof, (C) any Uncertificated REMIC Regular Interests and (D) all proceeds of
the conversion, voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property, including without limitation all
amounts from time to time held or invested in the Certificate Account or the
Custodial Account, whether in the form of cash, instruments, securities or other
property and (2) an assignment by the Company to the Trustee of any security
interest in any and all of Residential Funding's right (including the power to
convey title thereto), title and interest, whether now owned or hereafter
acquired, in and to the property described in the foregoing clauses (1)(A), (B),
(C) and (D) granted by Residential Funding to the Company pursuant to the
Assignment Agreement; (c) the possession by the Trustee, the Custodian or any
other agent of the Trustee of Mortgage Notes or such other items of property as
constitute instruments, money, payment intangibles, negotiable documents, goods,
deposit accounts, letters of credit, advices of credit, investment property,
certificated securities or chattel paper shall be deemed to be "possession by
the secured party," or possession by a purchaser or a person designated by such
secured party, for purposes of perfecting the security interest pursuant to the
Minnesota Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction as in effect (including, without limitation, Sections
8-106, 9-313, 9-314 and 9-106 thereof); and (d) notifications to persons holding
such property, and acknowledgments, receipts or confirmations from persons
holding such property, shall be deemed notifications to, or acknowledgments,
receipts or confirmations from, securities intermediaries, bailees or agents of,
or persons holding for (as applicable) the Trustee for the purpose of perfecting
such security interest under applicable law.
The Company and, at the Company's direction, Residential Funding and the
Trustee shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
determined to create a security interest in the Mortgage Loans, any
Uncertificated REMIC Regular Interests and the other property described above,
such security interest would be determined to be a perfected security interest
of first priority under applicable law and will be maintained as such throughout
the term of this Agreement. Without limiting the generality of the foregoing,
the Company shall prepare and deliver to the Trustee not less than 15 days prior
to any filing date and, the Trustee shall forward for filing, or shall cause to
be forwarded for filing, at the expense of the Company, all filings necessary to
maintain the effectiveness of any original filings necessary under the Uniform
Commercial Code as in effect in any jurisdiction to perfect the Trustee's
security interest in or lien on the Mortgage Loans and any Uncertificated REMIC
Regular Interests, as evidenced by an Officers' Certificate of the Company,
including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of Residential
Funding, the Company or the Trustee (such preparation and filing shall be at the
expense of the Trustee, if occasioned by a change in the Trustee's name), (2)
any change of type or jurisdiction of organization of Residential Funding or the
Company, (3) any transfer of any interest of Residential Funding or the Company
in any Mortgage Loan or (4) any transfer of any interest of Residential Funding
or the Company in any Uncertificated REMIC Regular Interest.
(g) The Master Servicer hereby acknowledges the receipt by it of the Initial
Monthly Payment Fund. The Master Servicer shall hold such Initial Monthly
Payment Fund in the Custodial Account and shall include such Initial Monthly
Payment Fund in the Available Distribution Amount for the initial Distribution
Date. Notwithstanding anything herein to the contrary, the Initial Monthly
Payment Fund shall not be an asset of any REMIC. To the extent that the Initial
Monthly Payment Fund constitutes a reserve fund for federal income tax purposes,
(1) it shall be an outside reserve fund and not an asset of any REMIC, (2) it
shall be owned by the Seller and (3) amounts transferred by any REMIC to the
Initial Monthly Payment Fund shall be treated as transferred to the Seller or
any successor, all within the meaning of Section 1.860G-2(h) of the Treasury
Regulations.
(h) The Company agrees that the sale of each Pledged Asset Loan pursuant to this
Agreement will also constitute the assignment, sale, setting-over, transfer and
conveyance to the Trustee, without recourse (but subject to the Company's
covenants, representations and warranties specifically provided herein), of all
of the Company's obligations and all of the Company's right, title and interest
in, to and under, whether now existing or hereafter acquired as owner of the
Mortgage Loan with respect to any and all money, securities, security
entitlements, accounts, general intangibles, payment intangibles, instruments,
documents, deposit accounts, certificates of deposit, commodities contracts, and
other investment property and other property of whatever kind or description
consisting of, arising from or related to (i) the Assigned Contracts, (ii) all
rights, powers and remedies of the Company as owner of such Mortgage Loan under
or in connection with the Assigned Contracts, whether arising under the terms of
such Assigned Contracts, by statute, at law or in equity, or otherwise arising
out of any default by the Mortgagor under or in connection with the Assigned
Contracts, including all rights to exercise any election or option or to make
any decision or determination or to give or receive any notice, consent,
approval or waiver thereunder, (iii) the Pledged Amounts and all money,
securities, security entitlements, accounts, general intangibles, payment
intangibles, instruments, documents, deposit accounts, certificates of deposit,
commodities contracts, and other investment property and other property of
whatever kind or description and all cash and non-cash proceeds of the sale,
exchange, or redemption of, and all stock or conversion rights, rights to
subscribe, liquidation dividends or preferences, stock dividends, rights to
interest, dividends, earnings, income, rents, issues, profits, interest payments
or other distributions of cash or other property that secures a Pledged Asset
Loan, (iv) all documents, books and records concerning the foregoing (including
all computer programs, tapes, disks and related items containing any such
information) and (v) all insurance proceeds (including proceeds from the Federal
Deposit Insurance Corporation or the Securities Investor Protection Corporation
or any other insurance company) of any of the foregoing or replacements thereof
or substitutions therefor, proceeds of proceeds and the conversion, voluntary or
involuntary, of any thereof. The foregoing transfer, sale, assignment and
conveyance does not constitute and is not intended to result in the creation, or
an assumption by the Trustee, of any obligation of the Company, or any other
person in connection with the Pledged Assets or under any agreement or
instrument relating thereto, including any obligation to the Mortgagor, other
than as owner of the Mortgage Loan.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage Loans
subject to a Custodial Agreement, and based solely upon a receipt or
certification executed by the Custodian, receipt by the respective Custodian as
the duly appointed agent of the Trustee) of the documents referred to in Section
2.01(b)(i) above (except that for purposes of such acknowledgement only, a
Mortgage Note may be endorsed in blank) and declares that it, or a Custodian as
its agent, holds and will hold such documents and the other documents
constituting a part of the Mortgage Files delivered to it, or a Custodian as its
agent, and the rights of Residential Funding with respect to any Pledged Assets,
Additional Collateral and the Surety Bond assigned to the Trustee pursuant to
Section 2.01, in trust for the use and benefit of all present and future
Certificateholders. The Trustee or Custodian (such Custodian being so obligated
under a Custodial Agreement) agrees, for the benefit of Certificateholders, to
review each Mortgage File delivered to it pursuant to Section 2.01(b) within 45
days after the Closing Date to ascertain that all required documents
(specifically as set forth in Section 2.01(b)), have been executed and received,
and that such documents relate to the Mortgage Loans identified on the Mortgage
Loan Schedule, as supplemented, that have been conveyed to it, and to deliver to
the Trustee a certificate (the "Interim Certification") to the effect that all
documents required to be delivered pursuant to Section 2.01(b) above have been
executed and received and that such documents relate to the Mortgage Loans
identified on the Mortgage Loan Schedule, except for any exceptions listed on
Schedule A attached to such Interim Certification. Upon delivery of the Mortgage
Files by the Company or the Master Servicer, the Trustee shall acknowledge
receipt (or, with respect to Mortgage Loans subject to a Custodial Agreement,
and based solely upon a receipt or certification executed by the Custodian,
receipt by the respective Custodian as the duly appointed agent of the Trustee)
of the documents referred to in Section 2.01(c) above.
If the Custodian, as the Trustee's agent, finds any document or
documents constituting a part of a Mortgage File to be missing or defective, the
Trustee shall promptly so notify the Master Servicer and the Company. Pursuant
to Section 2.3 of the Custodial Agreement, the Custodian will notify the Master
Servicer, the Company and the Trustee of any such omission or defect found by it
in respect of any Mortgage File held by it in respect of the items reviewed by
it pursuant to the Custodial Agreement. If such omission or defect materially
and adversely affects the interests of the Certificateholders, the Master
Servicer shall promptly notify Residential Funding of such omission or defect
and request Residential Funding to correct or cure such omission or defect
within 60 days from the date the Master Servicer was notified of such omission
or defect and, if Residential Funding does not correct or cure such omission or
defect within such period, require Residential Funding to purchase such Mortgage
Loan from the Trust Fund at its Purchase Price, within 90 days from the date the
Master Servicer was notified of such omission or defect; provided that if the
omission or defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure or
repurchase must occur within 90 days from the date such breach was discovered.
The Purchase Price for any such Mortgage Loan shall be deposited by the Master
Servicer in the Custodial Account maintained by it pursuant to Section 3.07 and,
upon receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee or any Custodian, as the case may be, shall
release to Residential Funding the related Mortgage File and the Trustee shall
execute and deliver such instruments of transfer or assignment prepared by the
Master Servicer, in each case without recourse, as shall be necessary to vest in
Residential Funding or its designee any Mortgage Loan released pursuant hereto
and thereafter such Mortgage Loan shall not be part of the Trust Fund. It is
understood and agreed that the obligation of Residential Funding to so cure or
purchase any Mortgage Loan as to which a material and adverse defect in or
omission of a constituent document exists shall constitute the sole remedy
respecting such defect or omission available to Certificateholders or the
Trustee on behalf of the Certificateholders.
Section 2.03. Representations, Warranties and Covenants
of the Master Servicer and the Company.
(a) The Master Servicer hereby represents and warrants to the Trustee for
the benefit of the Certificateholders that:
(i) The Master Servicer is a corporation duly organized, validly existing
and in good standing under the laws governing its creation and existence
and is or will be in compliance with the laws of each state in which any
Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan in accordance with the terms of
this Agreement;
(ii) The execution and delivery of this Agreement by the Master Servicer and
its performance and compliance with the terms of this Agreement will not
violate the Master Servicer's Certificate of Incorporation or Bylaws or
constitute a material default (or an event which, with notice or lapse
of time, or both, would constitute a material default) under, or result
in the material breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or which may be
applicable to the Master Servicer or any of its assets;
(iii) This Agreement, assuming due authorization, execution and delivery by
the Trustee and the Company, constitutes a valid, legal and binding
obligation of the Master Servicer, enforceable against it in accordance
with the terms hereof subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally and to general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law;
(iv) The Master Servicer is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Master Servicer or its
properties or might have consequences that would materially adversely
affect its performance hereunder;
(v) No litigation is pending or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer which would prohibit
its entering into this Agreement or performing its obligations under
this Agreement;
(vi) The Master Servicer will comply in all material respects in the
performance of this Agreement with all reasonable rules and requirements
of each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement furnished in
writing or report delivered to the Company, any Affiliate of the Company
or the Trustee by the Master Servicer will, to the knowledge of the
Master Servicer, contain any untrue statement of a material fact or omit
a material fact necessary to make the information, certificate,
statement or report not misleading;
(viii) The Master Servicer has examined each existing, and will examine each
new, Subservicing Agreement and is or will be familiar with the terms
thereof. The terms of each existing Subservicing Agreement and each
designated Subservicer are acceptable to the Master Servicer and any new
Subservicing Agreements will comply with the provisions of Section 3.02;
and
(ix) The Master Servicer is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered
with MERS.
It is understood and agreed that the representations and warranties set forth in
this Section 2.03(a) shall survive delivery of the respective Mortgage Files to
the Trustee or any Custodian.
Upon discovery by either the Company, the Master Servicer, the Trustee
or any Custodian of a breach of any representation or warranty set forth in this
Section 2.03(a) which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties (any Custodian being so
obligated under a Custodial Agreement). Within 90 days of its discovery or its
receipt of notice of such breach, the Master Servicer shall either (i) cure such
breach in all material respects or (ii) to the extent that such breach is with
respect to a Mortgage Loan or a related document, purchase such Mortgage Loan
from the Trust Fund at the Purchase Price and in the manner set forth in Section
2.02; provided that if the omission or defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from the date such
breach was discovered. The obligation of the Master Servicer to cure such breach
or to so purchase such Mortgage Loan shall constitute the sole remedy in respect
of a breach of a representation and warranty set forth in this Section 2.03(a)
available to the Certificateholders or the Trustee on behalf of the
Certificateholders.
(b) Representations and warranties relating to the Mortgage Loans are set forth
in Section 2.03(b) of the Series Supplement.
Section 2.04. Representations and Warranties of Residential Funding.
The Company, as assignee of Residential Funding under the Assignment
Agreement, hereby assigns to the Trustee for the benefit of Certificateholders
all of its right, title and interest in respect of the Assignment Agreement
applicable to a Mortgage Loan. Insofar as the Assignment Agreement relates to
the representations and warranties made by Residential Funding in respect of
such Mortgage Loan and any remedies provided thereunder for any breach of such
representations and warranties, such right, title and interest may be enforced
by the Master Servicer on behalf of the Trustee and the Certificateholders. Upon
the discovery by the Company, the Master Servicer, the Trustee or any Custodian
of a breach of any of the representations and warranties made in the Assignment
Agreement (which, for purposes hereof, will be deemed to include any other cause
giving rise to a repurchase obligation under the Assignment Agreement) in
respect of any Mortgage Loan which materially and adversely affects the
interests of the Certificateholders in such Mortgage Loan, the party discovering
such breach shall give prompt written notice to the other parties (any Custodian
being so obligated under a Custodial Agreement). The Master Servicer shall
promptly notify Residential Funding of such breach and request that Residential
Funding either (i) cure such breach in all material respects within 90 days from
the date the Master Servicer was notified of such breach or (ii) purchase such
Mortgage Loan from the Trust Fund at the Purchase Price and in the manner set
forth in Section 2.02; provided that Residential Funding shall have the option
to substitute a Qualified Substitute Mortgage Loan or Loans for such Mortgage
Loan if such substitution occurs within two years following the Closing Date;
provided that if the breach would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such
cure, repurchase or substitution must occur within 90 days from the date the
breach was discovered. If a breach of the Compliance With Laws Representation
has given rise to the obligation to repurchase or substitute a Mortgage Loan
pursuant to Section 4 of the Assignment Agreement, then the Master Servicer
shall request that Residential Funding pay to the Trust Fund, concurrently with
and in addition to the remedies provided in the preceding sentence, an amount
equal to any liability, penalty or expense that was actually incurred and paid
out of or on behalf of the Trust Fund, and that directly resulted from such
breach, or if incurred and paid by the Trust Fund thereafter, concurrently with
such payment. In the event that Residential Funding elects to substitute a
Qualified Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant
to this Section 2.04, Residential Funding shall deliver to the Trustee or the
Custodian for the benefit of the Certificateholders with respect to such
Qualified Substitute Mortgage Loan or Loans, the original Mortgage Note, the
Mortgage, an Assignment of the Mortgage in recordable form, if required pursuant
to Section 2.01, and such other documents and agreements as are required by
Section 2.01, with the Mortgage Note endorsed as required by Section 2.01. No
substitution will be made in any calendar month after the Determination Date for
such month. Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution shall not be part of the Trust Fund and will
be retained by the Master Servicer and remitted by the Master Servicer to
Residential Funding on the next succeeding Distribution Date. For the month of
substitution, distributions to the Certificateholders will include the Monthly
Payment due on a Deleted Mortgage Loan for such month and thereafter Residential
Funding shall be entitled to retain all amounts received in respect of such
Deleted Mortgage Loan. The Master Servicer shall amend or cause to be amended
the Mortgage Loan Schedule, and, if the Deleted Mortgage Loan was a Discount
Mortgage Loan, the Schedule of Discount Fractions, for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Qualified Substitute Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule, and, if the Deleted
Mortgage Loan was a Discount Mortgage Loan, the amended Schedule of Discount
Fractions, to the Trustee. Upon such substitution, the Qualified Substitute
Mortgage Loan or Loans shall be subject to the terms of this Agreement and the
related Subservicing Agreement in all respects, Residential Funding shall be
deemed to have made the representations and warranties with respect to the
Qualified Substitute Mortgage Loan contained in the related Assignment
Agreement, and the Company and the Master Servicer shall be deemed to have made
with respect to any Qualified Substitute Mortgage Loan or Loans, as of the date
of substitution, the covenants, representations and warranties set forth in this
Section 2.04, in Section 2.03 hereof and in Section 4 of the Assignment
Agreement, and the Master Servicer shall be obligated to repurchase or
substitute for any Qualified Substitute Mortgage Loan as to which a Repurchase
Event (as defined in the Assignment Agreement) has occurred pursuant to Section
4 of the Assignment Agreement.
In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Qualified Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans
(in each case after application of the principal portion of the Monthly Payments
due in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). Residential Funding shall
deposit the amount of such shortfall into the Custodial Account on the day of
substitution, without any reimbursement therefor. Residential Funding shall give
notice in writing to the Trustee of such event, which notice shall be
accompanied by an Officers' Certificate as to the calculation of such shortfall
and (subject to Section 10.01(f)) by an Opinion of Counsel to the effect that
such substitution will not cause (a) any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code or (b) any portion of any
REMIC to fail to qualify as such at any time that any Certificate is
outstanding.
It is understood and agreed that the obligation of Residential Funding
to cure such breach or purchase, or to substitute for, a Mortgage Loan as to
which such a breach has occurred and is continuing and to make any additional
payments required under the Assignment Agreement in connection with a breach of
the Compliance With Laws Representation shall constitute the sole remedy
respecting such breach available to the Certificateholders or the Trustee on
behalf of Certificateholders. If the Master Servicer is Residential Funding,
then the Trustee shall also have the right to give the notification and require
the purchase or substitution provided for in the second preceding paragraph in
the event of such a breach of a representation or warranty made by Residential
Funding in the Assignment Agreement. In connection with the purchase of or
substitution for any such Mortgage Loan by Residential Funding, the Trustee
shall assign to Residential Funding all of the Trustee's right, title and
interest in respect of the Assignment Agreement applicable to such Mortgage
Loan.
Section 2.05. Execution and Authentication of Certificates/Issuance of
Certificates Evidencing Interests in REMIC I Certificates.
As provided in Section 2.05 of the Series Supplement.
Section 2.06. Conveyance of Uncertificated REMIC I and REMIC II Regular
Interests; Acceptance by the Trustee.
As provided in Section 2.06 of the Series Supplement.
Section 2.07. Issuance of Certificates Evidencing Interests in REMIC II.
As provided in Section 2.07 of the Series Supplement.
Section 2.08. Purposes and Powers of the Trust.
The purpose of the trust, as created hereunder, is to engage in the
following activities:
(a) to sell the Certificates to the Company in exchange for the Mortgage Loans;
(b) to enter into and perform its obligations under this Agreement;
(c) to engage in those activities that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith; and
(d) subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust Fund
and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing
activities. Notwithstanding the provisions of Section 11.01, the trust shall not
engage in any activity other than in connection with the foregoing or other than
as required or authorized by the terms of this Agreement while any Certificate
is outstanding, and this Section 2.08 may not be amended, without the consent of
the Certificateholders evidencing a majority of the aggregate Voting Rights of
the Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer.
(a) The Master Servicer shall service and administer the Mortgage Loans in
accordance with the terms of this Agreement and the respective Mortgage Loans
and shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do any and all things which it may deem necessary
or desirable in connection with such servicing and administration. Without
limiting the generality of the foregoing, the Master Servicer in its own name or
in the name of a Subservicer is hereby authorized and empowered by the Trustee
when the Master Servicer or the Subservicer, as the case may be, believes it
appropriate in its best judgment, to execute and deliver, on behalf of the
Certificateholders and the Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, or of
consent to assumption or modification in connection with a proposed conveyance,
or of assignment of any Mortgage and Mortgage Note in connection with the
repurchase of a Mortgage Loan and all other comparable instruments, or with
respect to the modification or re-recording of a Mortgage for the purpose of
correcting the Mortgage, the subordination of the lien of the Mortgage in favor
of a public utility company or government agency or unit with powers of eminent
domain, the taking of a deed in lieu of foreclosure, the commencement,
prosecution or completion of judicial or non-judicial foreclosure, the
conveyance of a Mortgaged Property to the related Insurer, the acquisition of
any property acquired by foreclosure or deed in lieu of foreclosure, or the
management, marketing and conveyance of any property acquired by foreclosure or
deed in lieu of foreclosure with respect to the Mortgage Loans and with respect
to the Mortgaged Properties. The Master Servicer further is authorized and
empowered by the Trustee, on behalf of the Certificateholders and the Trustee,
in its own name or in the name of the Subservicer, when the Master Servicer or
the Subservicer, as the case may be, believes it appropriate in its best
judgment to register any Mortgage Loan on the MERS(R) System, or cause the
removal from the registration of any Mortgage Loan on the MERS(R) System, to
execute and deliver, on behalf of the Trustee and the Certificateholders or any
of them, any and all instruments of assignment and other comparable instruments
with respect to such assignment or re-recording of a Mortgage in the name of
MERS, solely as nominee for the Trustee and its successors and assigns. Any
expenses incurred in connection with the actions described in the preceding
sentence shall be borne by the Master Servicer in accordance with Section
3.16(c), with no right of reimbursement; provided, that if, as a result of MERS
discontinuing or becoming unable to continue operations in connection with the
MERS System, it becomes necessary to remove any Mortgage Loan from registration
on the MERS System and to arrange for the assignment of the related Mortgages to
the Trustee, then any related expenses shall be reimbursable to the Master
Servicer. Notwithstanding the foregoing, subject to Section 3.07(a), the Master
Servicer shall not permit any modification with respect to any Mortgage Loan
that would both constitute a sale or exchange of such Mortgage Loan within the
meaning of Section 1001 of the Code and any proposed, temporary or final
regulations promulgated thereunder (other than in connection with a proposed
conveyance or assumption of such Mortgage Loan that is treated as a Principal
Prepayment in Full pursuant to Section 3.13(d) hereof) and cause any REMIC
formed under the Series Supplement to fail to qualify as a REMIC under the Code.
The Trustee shall furnish the Master Servicer with any powers of attorney and
other documents necessary or appropriate to enable the Master Servicer to
service and administer the Mortgage Loans. The Trustee shall not be liable for
any action taken by the Master Servicer or any Subservicer pursuant to such
powers of attorney. In servicing and administering any Nonsubserviced Mortgage
Loan, the Master Servicer shall, to the extent not inconsistent with this
Agreement, comply with the Program Guide as if it were the originator of such
Mortgage Loan and had retained the servicing rights and obligations in respect
thereof. In connection with servicing and administering the Mortgage Loans, the
Master Servicer and any Affiliate of the Master Servicer (i) may perform
services such as appraisals and brokerage services that are not customarily
provided by servicers of mortgage loans, and shall be entitled to reasonable
compensation therefor in accordance with Section 3.10 and (ii) may, at its own
discretion and on behalf of the Trustee, obtain credit information in the form
of a "credit score" from a credit repository.
(b) All costs incurred by the Master Servicer or by Subservicers in effecting
the timely payment of taxes and assessments on the properties subject to the
Mortgage Loans shall not, for the purpose of calculating monthly distributions
to the Certificateholders, be added to the amount owing under the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loan so permit,
and such costs shall be recoverable to the extent permitted by Section
3.10(a)(ii).
(c) The Master Servicer may enter into one or more agreements in connection with
the offering of pass-through certificates evidencing interests in one or more of
the Certificates providing for the payment by the Master Servicer of amounts
received by the Master Servicer as servicing compensation hereunder and required
to cover certain Prepayment Interest Shortfalls on the Mortgage Loans, which
payment obligation will thereafter be an obligation of the Master Servicer
hereunder.
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement of Subservicers' and Sellers' Obligations.
(a) The Master Servicer may continue in effect Subservicing Agreements entered
into by Residential Funding and Subservicers prior to the execution and delivery
of this Agreement, and may enter into new Subservicing Agreements with
Subservicers, for the servicing and administration of all or some of the
Mortgage Loans. Each Subservicer of a Mortgage Loan shall be entitled to receive
and retain, as provided in the related Subservicing Agreement and in Section
3.07, the related Subservicing Fee from payments of interest received on such
Mortgage Loan after payment of all amounts required to be remitted to the Master
Servicer in respect of such Mortgage Loan. For any Mortgage Loan that is a
Nonsubserviced Mortgage Loan, the Master Servicer shall be entitled to receive
and retain an amount equal to the Subservicing Fee from payments of interest.
Unless the context otherwise requires, references in this Agreement to actions
taken or to be taken by the Master Servicer in servicing the Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf of the Master
Servicer. Each Subservicing Agreement will be upon such terms and conditions as
are generally required or permitted by the Program Guide and are not
inconsistent with this Agreement and as the Master Servicer and the Subservicer
have agreed. A representative form of Subservicing Agreement is attached hereto
as Exhibit E. With the approval of the Master Servicer, a Subservicer may
delegate its servicing obligations to third-party servicers, but such
Subservicer will remain obligated under the related Subservicing Agreement. The
Master Servicer and a Subservicer may enter into amendments thereto or a
different form of Subservicing Agreement, and the form referred to or included
in the Program Guide is merely provided for information and shall not be deemed
to limit in any respect the discretion of the Master Servicer to modify or enter
into different Subservicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not violate the
provisions of either this Agreement or the Program Guide in a manner which would
materially and adversely affect the interests of the Certificateholders. The
Program Guide and any other Subservicing Agreement entered into between the
Master Servicer and any Subservicer shall require the Subservicer to accurately
and fully report its borrower credit files to each of the Credit Repositories in
a timely manner.
(b) As part of its servicing activities hereunder, the Master Servicer, for the
benefit of the Trustee and the Certificateholders, shall use its best reasonable
efforts to enforce the obligations of each Subservicer under the related
Subservicing Agreement and of each Seller under the related Seller's Agreement
insofar as the Company's rights with respect to Seller's obligation has been
assigned to the Trustee hereunder, to the extent that the non-performance of any
such Seller's obligation would have a material and adverse effect on a Mortgage
Loan, including, without limitation, the obligation to purchase a Mortgage Loan
on account of defective documentation, as described in Section 2.02, or on
account of a breach of a representation or warranty, as described in Section
2.04. Such enforcement, including, without limitation, the legal prosecution of
claims, termination of Subservicing Agreements or Seller's Agreements, as
appropriate, and the pursuit of other appropriate remedies, shall be in such
form and carried out to such an extent and at such time as the Master Servicer
would employ in its good faith business judgment and which are normal and usual
in its general mortgage servicing activities. The Master Servicer shall pay the
costs of such enforcement at its own expense, and shall be reimbursed therefor
only (i) from a general recovery resulting from such enforcement to the extent,
if any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loan or (ii) from a specific recovery of costs, expenses or attorneys
fees against the party against whom such enforcement is directed. For purposes
of clarification only, the parties agree that the foregoing is not intended to,
and does not, limit the ability of the Master Servicer to be reimbursed for
expenses that are incurred in connection with the enforcement of a Seller's
obligations (insofar as the Company's rights with respect to such Seller's
obligations have been assigned to the Trustee hereunder) and are reimbursable
pursuant to Section 3.10(a)(viii).
Section 3.03. Successor Subservicers.
The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and conditions of such
Subservicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Subservicing
Agreement by the Master Servicer or the Subservicer, the Master Servicer shall
either act as servicer of the related Mortgage Loan or enter into a Subservicing
Agreement with a successor Subservicer which will be bound by the terms of the
related Subservicing Agreement. If the Master Servicer or any Affiliate of
Residential Funding acts as servicer, it will not assume liability for the
representations and warranties of the Subservicer which it replaces. If the
Master Servicer enters into a Subservicing Agreement with a successor
Subservicer, the Master Servicer shall use reasonable efforts to have the
successor Subservicer assume liability for the representations and warranties
made by the terminated Subservicer in respect of the related Mortgage Loans and,
in the event of any such assumption by the successor Subservicer, the Master
Servicer may, in the exercise of its business judgment, release the terminated
Subservicer from liability for such representations and warranties.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer or a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Master Servicer shall remain obligated and liable to the Trustee
and the Certificateholders for the servicing and administering of the Mortgage
Loans in accordance with the provisions of Section 3.01 without diminution of
such obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer or the Company
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Subservicer or
Seller for indemnification of the Master Servicer and nothing contained in this
Agreement shall be deemed to limit or modify such indemnification.
Section 3.05. No Contractual Relationship Between Subservicer and
Trustee or Certificateholders.
Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Master Servicer alone and the Trustee and the
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Subservicer in
its capacity as such except as set forth in Section 3.06. The foregoing
provision shall not in any way limit a Subservicer's obligation to cure an
omission or defect or to repurchase a Mortgage Loan as referred to in Section
2.02 hereof.
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee.
(a) If the Master Servicer shall for any reason no longer be the master servicer
(including by reason of an Event of Default), the Trustee, its designee or its
successor shall thereupon assume all of the rights and obligations of the Master
Servicer under each Subservicing Agreement that may have been entered into. The
Trustee, its designee or the successor servicer for the Trustee shall be deemed
to have assumed all of the Master Servicer's interest therein and to have
replaced the Master Servicer as a party to the Subservicing Agreement to the
same extent as if the Subservicing Agreement had been assigned to the assuming
party except that the Master Servicer shall not thereby be relieved of any
liability or obligations under the Subservicing Agreement.
(b) The Master Servicer shall, upon request of the Trustee but at the expense of
the Master Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement and the Mortgage Loans then being
serviced and an accounting of amounts collected and held by it and otherwise use
its best efforts to effect the orderly and efficient transfer of each
Subservicing Agreement to the assuming party.
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to Custodial Account.
(a) The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage
Loans, and shall, to the extent such procedures shall be consistent with
this Agreement and the terms and provisions of any related Primary
Insurance Policy, follow such collection procedures as it would employ
in its good faith business judgment and which are normal and usual in
its general mortgage servicing activities. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the
Due Date for payments due on a Mortgage Loan in accordance with the
Program Guide; provided, however, that the Master Servicer shall first
determine that any such waiver or extension will not impair the coverage
of any related Primary Insurance Policy or materially adversely affect
the lien of the related Mortgage. Notwithstanding anything in this
Section to the contrary, the Master Servicer shall not enforce any
prepayment charge to the extent that such enforcement would violate any
applicable law. In the event of any such arrangement, the Master
Servicer shall make timely advances on the related Mortgage Loan during
the scheduled period in accordance with the amortization schedule of
such Mortgage Loan without modification thereof by reason of such
arrangements unless otherwise agreed to by the Holders of the Classes of
Certificates affected thereby; provided, however, that no such extension
shall be made if any such advance would be a Nonrecoverable Advance.
Consistent with the terms of this Agreement, the Master Servicer may
also waive, modify or vary any term of any Mortgage Loan or consent to
the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor if in the Master Servicer's
determination such waiver, modification, postponement or indulgence is
not materially adverse to the interests of the Certificateholders
(taking into account any estimated Realized Loss that might result
absent such action); provided, however, that the Master Servicer may not
modify materially or permit any Subservicer to modify any Mortgage Loan,
including without limitation any modification that would change the
Mortgage Rate, forgive the payment of any principal or interest (unless
in connection with the liquidation of the related Mortgage Loan or
except in connection with prepayments to the extent that such
reamortization is not inconsistent with the terms of the Mortgage Loan),
capitalize any amounts owing on the Mortgage Loan by adding such amount
to the outstanding principal balance of the Mortgage Loan, or extend the
final maturity date of such Mortgage Loan, unless such Mortgage Loan is
in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable; provided, further, that (1) no such modification
shall reduce the interest rate on a Mortgage Loan below one-half of the
Mortgage Rate as in effect on the Cut-off Date, but not less than the
sum of the rates at which the Servicing Fee and the Subservicing Fee
with respect to such Mortgage Loan accrues plus the rate at which the
premium paid to the Certificate Insurer, if any, accrues, (2) the final
maturity date for any Mortgage Loan shall not be extended beyond the
Maturity Date, (3) the Stated Principal Balance of all Reportable
Modified Mortgage Loans subject to Servicing Modifications (measured at
the time of the Servicing Modification and after giving effect to any
Servicing Modification) can be no more than five percent of the
aggregate principal balance of the Mortgage Loans as of the Cut-off
Date, unless such limit is increased from time to time with the consent
of the Rating Agencies and the Certificate Insurer, if any. In addition,
any amounts owing on a Mortgage Loan added to the outstanding principal
balance of such Mortgage Loan must be fully amortized over the remaining
term of such Mortgage Loan, and such amounts may be added to the
outstanding principal balance of a Mortgage Loan only once during the
life of such Mortgage Loan. Also, the addition of such amounts described
in the preceding sentence shall be implemented in accordance with the
Program Guide and may be implemented only by Subservicers that have been
approved by the Master Servicer for such purpose. In connection with any
Curtailment of a Mortgage Loan, the Master Servicer, to the extent not
inconsistent with the terms of the Mortgage Note and local law and
practice, may permit the Mortgage Loan to be reamortized such that the
Monthly Payment is recalculated as an amount that will fully amortize
the remaining Stated Principal Balance thereof by the original Maturity
Date based on the original Mortgage Rate; provided, that such
re-amortization shall not be permitted if it would constitute a
reissuance of the Mortgage Loan for federal income tax purposes, except
if such reissuance is described in Treasury Regulation Section
1.860G-2(b)(3).
(b) The Master Servicer shall establish and maintain a Custodial Account in
which the Master Servicer shall deposit or cause to be deposited on a
daily basis, except as otherwise specifically provided herein, the
following payments and collections remitted by Subservicers or received
by it in respect of the Mortgage Loans subsequent to the Cut-off Date
(other than in respect of principal and interest on the Mortgage Loans
due on or before the Cut-off Date):
(i) All payments on account of principal, including Principal Prepayments
made by Mortgagors on the Mortgage Loans and the principal component of
any Subservicer Advance or of any REO Proceeds received in connection
with an REO Property for which an REO Disposition has occurred;
(ii) All payments on account of interest at the Adjusted Mortgage Rate on the
Mortgage Loans, including Buydown Funds, if any, and the interest
component of any Subservicer Advance or of any REO Proceeds received in
connection with an REO Property for which an REO Disposition has
occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation Proceeds (net
of any related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to Section 2.02,
2.03, 2.04 or 4.07 (including amounts received from Residential Funding
pursuant to the last paragraph of Section 4 of the Assignment Agreement
in respect of any liability, penalty or expense that resulted from a
breach of the Compliance With Laws Representation and all amounts
required to be deposited in connection with the substitution of a
Qualified Substitute Mortgage Loan pursuant to Section 2.03 or 2.04;
(v) Any amounts required to be deposited pursuant to Section 3.07(c) or
3.21;
(vi) All amounts transferred from the Certificate Account to the Custodial
Account in accordance with Section 4.02(a);
(vii) Any amounts realized by the Subservicer and received by the Master
Servicer in respect of any Additional Collateral; and
(viii) Any amounts received by the Master Servicer in respect of Pledged
Assets.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments on the Mortgage Loans which are not part of the Trust
Fund (consisting of payments in respect of principal and interest on the
Mortgage Loans due on or before the Cut-off Date) and payments or collections in
the nature of prepayment charges or late payment charges or assumption fees may
but need not be deposited by the Master Servicer in the Custodial Account. In
the event any amount not required to be deposited in the Custodial Account is so
deposited, the Master Servicer may at any time withdraw such amount from the
Custodial Account, any provision herein to the contrary notwithstanding. The
Custodial Account may contain funds that belong to one or more trust funds
created for mortgage pass-through certificates of other series and may contain
other funds respecting payments on mortgage loans belonging to the Master
Servicer or serviced or master serviced by it on behalf of others.
Notwithstanding such commingling of funds, the Master Servicer shall keep
records that accurately reflect the funds on deposit in the Custodial Account
that have been identified by it as being attributable to the Mortgage Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds
and the proceeds of the purchase of any Mortgage Loan pursuant to Sections 2.02,
2.03, 2.04 and 4.07 received in any calendar month, the Master Servicer may
elect to treat such amounts as included in the Available Distribution Amount for
the Distribution Date in the month of receipt, but is not obligated to do so. If
the Master Servicer so elects, such amounts will be deemed to have been received
(and any related Realized Loss shall be deemed to have occurred) on the last day
of the month prior to the receipt thereof.
(c) The Master Servicer shall use its best efforts to cause the institution
maintaining the Custodial Account to invest the funds in the Custodial Account
attributable to the Mortgage Loans in Permitted Investments which shall mature
not later than the Certificate Account Deposit Date next following the date of
such investment (with the exception of the Amount Held for Future Distribution)
and which shall not be sold or disposed of prior to their maturities. All income
and gain realized from any such investment shall be for the benefit of the
Master Servicer as additional servicing compensation and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments attributable to the investment of amounts in
respect of the Mortgage Loans shall be deposited in the Custodial Account by the
Master Servicer out of its own funds immediately as realized without any right
of reimbursement.
(d) The Master Servicer shall give notice to the Trustee and the Company of any
change in the location of the Custodial Account and the location of the
Certificate Account prior to the use thereof.
Section 3.08. Subservicing Accounts; Servicing Accounts.
(a) In those cases where a Subservicer is servicing a Mortgage Loan pursuant to
a Subservicing Agreement, the Master Servicer shall cause the Subservicer,
pursuant to the Subservicing Agreement, to establish and maintain one or more
Subservicing Accounts which shall be an Eligible Account or, if such account is
not an Eligible Account, shall generally satisfy the requirements of the Program
Guide and be otherwise acceptable to the Master Servicer and each Rating Agency.
The Subservicer will be required thereby to deposit into the Subservicing
Account on a daily basis all proceeds of Mortgage Loans received by the
Subservicer, less its Subservicing Fees and unreimbursed advances and expenses,
to the extent permitted by the Subservicing Agreement. If the Subservicing
Account is not an Eligible Account, the Master Servicer shall be deemed to have
received such monies upon receipt thereof by the Subservicer. The Subservicer
shall not be required to deposit in the Subservicing Account payments or
collections in the nature of prepayment charges or late charges or assumption
fees. On or before the date specified in the Program Guide, but in no event
later than the Determination Date, the Master Servicer shall cause the
Subservicer, pursuant to the Subservicing Agreement, to remit to the Master
Servicer for deposit in the Custodial Account all funds held in the Subservicing
Account with respect to each Mortgage Loan serviced by such Subservicer that are
required to be remitted to the Master Servicer. The Subservicer will also be
required, pursuant to the Subservicing Agreement, to advance on such scheduled
date of remittance amounts equal to any scheduled monthly installments of
principal and interest less its Subservicing Fees on any Mortgage Loans for
which payment was not received by the Subservicer. This obligation to advance
with respect to each Mortgage Loan will continue up to and including the first
of the month following the date on which the related Mortgaged Property is sold
at a foreclosure sale or is acquired by the Trust Fund by deed in lieu of
foreclosure or otherwise. All such advances received by the Master Servicer
shall be deposited promptly by it in the Custodial Account.
(b) The Subservicer may also be required, pursuant to the Subservicing
Agreement, to remit to the Master Servicer for deposit in the Custodial Account
interest at the Adjusted Mortgage Rate (or Modified Net Mortgage Rate plus the
rate per annum at which the Servicing Fee accrues in the case of a Modified
Mortgage Loan) on any Curtailment received by such Subservicer in respect of a
Mortgage Loan from the related Mortgagor during any month that is to be applied
by the Subservicer to reduce the unpaid principal balance of the related
Mortgage Loan as of the first day of such month, from the date of application of
such Curtailment to the first day of the following month. Any amounts paid by a
Subservicer pursuant to the preceding sentence shall be for the benefit of the
Master Servicer as additional servicing compensation and shall be subject to its
withdrawal or order from time to time pursuant to Sections 3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate Account, the Master
Servicer shall for any Nonsubserviced Mortgage Loan, and shall cause the
Subservicers for Subserviced Mortgage Loans to, establish and maintain one or
more Servicing Accounts and deposit and retain therein all collections from the
Mortgagors (or advances from Subservicers) for the payment of taxes,
assessments, hazard insurance premiums, Primary Insurance Policy premiums, if
applicable, or comparable items for the account of the Mortgagors. Each
Servicing Account shall satisfy the requirements for a Subservicing Account and,
to the extent permitted by the Program Guide or as is otherwise acceptable to
the Master Servicer, may also function as a Subservicing Account. Withdrawals of
amounts related to the Mortgage Loans from the Servicing Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
Primary Insurance Policy premiums, if applicable, or comparable items, to
reimburse the Master Servicer or Subservicer out of related collections for any
payments made pursuant to Sections 3.11 (with respect to the Primary Insurance
Policy) and 3.12(a) (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required, to Mortgagors on balances in the Servicing Account or to clear and
terminate the Servicing Account at the termination of this Agreement in
accordance with Section 9.01 or in accordance with the Program Guide. As part of
its servicing duties, the Master Servicer shall, and the Subservicers will,
pursuant to the Subservicing Agreements, be required to pay to the Mortgagors
interest on funds in this account to the extent required by law.
(d) The Master Servicer shall advance the payments referred to in the preceding
subsection that are not timely paid by the Mortgagors or advanced by the
Subservicers on the date when the tax, premium or other cost for which such
payment is intended is due, but the Master Servicer shall be required so to
advance only to the extent that such advances, in the good faith judgment of the
Master Servicer, will be recoverable by the Master Servicer out of Insurance
Proceeds, Liquidation Proceeds or otherwise.
Section 3.09. Access to Certain Documentation and
Information Regarding the Mortgage Loans.
If compliance with this Section 3.09 shall make any Class of
Certificates legal for investment by federally insured savings and loan
associations, the Master Servicer shall provide, or cause the Subservicers to
provide, to the Trustee, the Office of Thrift Supervision or the FDIC and the
supervisory agents and examiners thereof access to the documentation regarding
the Mortgage Loans required by applicable regulations of the Office of Thrift
Supervision, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices designated by the Master
Servicer. The Master Servicer shall permit such representatives to photocopy any
such documentation and shall provide equipment for that purpose at a charge
reasonably approximating the cost of such photocopying to the Master Servicer.
Section 3.10. Permitted Withdrawals from the Custodial Account.
(a) The Master Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit therein
pursuant to Section 3.07 that are attributable to the Mortgage Loans for
the following purposes:
(i) to make deposits into the Certificate Account in the amounts and in the
manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for previously
unreimbursed Advances, Servicing Advances or other expenses made
pursuant to Sections 3.01, 3.07(a), 3.08, 3.11, 3.12(a), 3.14 and 4.04
or otherwise reimbursable pursuant to the terms of this Agreement, such
withdrawal right being limited to amounts received on the related
Mortgage Loans (including, for this purpose, REO Proceeds, Insurance
Proceeds, Liquidation Proceeds and proceeds from the purchase of a
Mortgage Loan pursuant to Section 2.02, 2.03, 2.04 or 4.07) which
represent (A) Late Collections of Monthly Payments for which any such
advance was made in the case of Subservicer Advances or Advances
pursuant to Section 4.04 and (B) recoveries of amounts in respect of
which such advances were made in the case of Servicing Advances;
(iii) to pay to itself or the related Subservicer (if not previously retained
by such Subservicer) out of each payment received by the Master Servicer
on account of interest on a Mortgage Loan as contemplated by Sections
3.14 and 3.16, an amount equal to that remaining portion of any such
payment as to interest (but not in excess of the Servicing Fee and the
Subservicing Fee, if not previously retained) which, when deducted, will
result in the remaining amount of such interest being interest at the
Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan) on the amount specified in the amortization
schedule of the related Mortgage Loan as the principal balance thereof
at the beginning of the period respecting which such interest was paid
after giving effect to any previous Curtailments;
(iv) to pay to itself as additional servicing compensation any interest or
investment income earned on funds and other property deposited in or
credited to the Custodial Account that it is entitled to withdraw
pursuant to Section 3.07(c);
(v) to pay to itself as additional servicing compensation any Foreclosure
Profits, any amounts remitted by Subservicers as interest in respect of
Curtailments pursuant to Section 3.08(b), and any amounts paid by a
Mortgagor in connection with a Principal Prepayment in Full in respect
of interest for any period during the calendar month in which such
Principal Prepayment in Full is to be distributed to the
Certificateholders;
(vi) to pay to itself, a Subservicer, a Seller, Residential Funding, the
Company or any other appropriate Person, as the case may be, with
respect to each Mortgage Loan or property acquired in respect thereof
that has been purchased or otherwise transferred pursuant to Section
2.02, 2.03, 2.04, 4.07 or 9.01, all amounts received thereon and not
required to be distributed to the Certificateholders as of the date on
which the related Stated Principal Balance or Purchase Price is
determined;
(vii) to reimburse itself or the related Subservicer for any Nonrecoverable
Advance or Advances in the manner and to the extent provided in
subsection (c) below, and any Advance or Servicing Advance made in
connection with a modified Mortgage Loan that is in default or, in the
judgment of the Master Servicer, default is reasonably foreseeable
pursuant to Section 3.07(a), to the extent the amount of the Advance or
Servicing Advance was added to the Stated Principal Balance of the
Mortgage Loan in a prior calendar month, or any Advance reimbursable to
the Master Servicer pursuant to Section 4.02(a);
(viii) to reimburse itself or the Company for expenses incurred by and
reimbursable to it or the Company pursuant to Sections 3.01(a), 3.11,
3.13, 3.14(c), 6.03, 10.01 or otherwise, or in connection with
enforcing, in accordance with this Agreement, any repurchase,
substitution or indemnification obligation of any Seller (other than an
Affiliate of the Company) pursuant to the related Seller's Agreement;
(ix) to reimburse itself for Servicing Advances expended by it (a) pursuant
to Section 3.14 in good faith in connection with the restoration of
property damaged by an Uninsured Cause, and (b) in connection with the
liquidation of a Mortgage Loan or disposition of an REO Property to the
extent not otherwise reimbursed pursuant to clause (ii) or (viii) above;
and
(x) to withdraw any amount deposited in the Custodial Account that was not
required to be deposited therein pursuant to Section 3.07.
(b) Since, in connection with withdrawals pursuant to clauses (ii), (iii),
(v) and (vi), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Master
Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal
from the Custodial Account pursuant to such clauses.
(c) The Master Servicer shall be entitled to reimburse itself or the related
Subservicer for any advance made in respect of a Mortgage Loan that the
Master Servicer determines to be a Nonrecoverable Advance by withdrawal
from the Custodial Account of amounts on deposit therein attributable to
the Mortgage Loans on any Certificate Account Deposit Date succeeding
the date of such determination. Such right of reimbursement in respect
of a Nonrecoverable Advance relating to an Advance pursuant to Section
4.04 on any such Certificate Account Deposit Date shall be limited to an
amount not exceeding the portion of such Advance previously paid to
Certificateholders (and not theretofore reimbursed to the Master
Servicer or the related Subservicer).
Section 3.11. Maintenance of the Primary Insurance
Policies; Collections Thereunder.
(a) The Master Servicer shall not take, or permit any Subservicer to take, any
action which would result in non-coverage under any applicable Primary Insurance
Policy of any loss which, but for the actions of the Master Servicer or
Subservicer, would have been covered thereunder. To the extent coverage is
available, the Master Servicer shall keep or cause to be kept in full force and
effect each such Primary Insurance Policy until the principal balance of the
related Mortgage Loan secured by a Mortgaged Property is reduced to 80% or less
of the Appraised Value in the case of such a Mortgage Loan having a
Loan-to-Value Ratio at origination in excess of 80%, provided that such Primary
Insurance Policy was in place as of the Cut-off Date and the Company had
knowledge of such Primary Insurance Policy. The Master Servicer shall be
entitled to cancel or permit the discontinuation of any Primary Insurance Policy
as to any Mortgage Loan, if the Stated Principal Balance of the Mortgage Loan is
reduced below an amount equal to 80% of the appraised value of the related
Mortgaged Property as determined in any appraisal thereof after the Closing
Date, or if the Loan-to-Value Ratio is reduced below 80% as a result of
principal payments on the Mortgage Loan after the Closing Date. In the event
that the Company gains knowledge that as of the Closing Date, a Mortgage Loan
had a Loan-to-Value Ratio at origination in excess of 80% and is not the subject
of a Primary Insurance Policy (and was not included in any exception to the
representation in Section 2.03(b)(iv)) and that such Mortgage Loan has a current
Loan-to-Value Ratio in excess of 80% then the Master Servicer shall use its
reasonable efforts to obtain and maintain a Primary Insurance Policy to the
extent that such a policy is obtainable at a reasonable price. The Master
Servicer shall not cancel or refuse to renew any such Primary Insurance Policy
applicable to a Nonsubserviced Mortgage Loan, or consent to any Subservicer
canceling or refusing to renew any such Primary Insurance Policy applicable to a
Mortgage Loan subserviced by it, that is in effect at the date of the initial
issuance of the Certificates and is required to be kept in force hereunder
unless the replacement Primary Insurance Policy for such canceled or non-renewed
policy is maintained with an insurer whose claims-paying ability is acceptable
to each Rating Agency for mortgage pass-through certificates having a rating
equal to or better than the lower of the then-current rating or the rating
assigned to the Certificates as of the Closing Date by such Rating Agency.
(b) In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present or to cause the related
Subservicer to present, on behalf of the Master Servicer, the Subservicer, if
any, the Trustee and Certificateholders, claims to the related Insurer under any
Primary Insurance Policies, in a timely manner in accordance with such policies,
and, in this regard, to take or cause to be taken such reasonable action as
shall be necessary to permit recovery under any Primary Insurance Policies
respecting defaulted Mortgage Loans. Pursuant to Section 3.07, any Insurance
Proceeds collected by or remitted to the Master Servicer under any Primary
Insurance Policies shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 3.10.
Section 3.12. Maintenance of Fire Insurance and
Omissions and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each Mortgage Loan
(other than a Cooperative Loan) fire insurance with extended coverage in an
amount which is equal to the lesser of the principal balance owing on such
Mortgage Loan or 100 percent of the insurable value of the improvements;
provided, however, that such coverage may not be less than the minimum amount
required to fully compensate for any loss or damage on a replacement cost basis.
To the extent it may do so without breaching the related Subservicing Agreement,
the Master Servicer shall replace any Subservicer that does not cause such
insurance, to the extent it is available, to be maintained. The Master Servicer
shall also cause to be maintained on property acquired upon foreclosure, or deed
in lieu of foreclosure, of any Mortgage Loan (other than a Cooperative Loan),
fire insurance with extended coverage in an amount which is at least equal to
the amount necessary to avoid the application of any co-insurance clause
contained in the related hazard insurance policy. Pursuant to Section 3.07, any
amounts collected by the Master Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
3.10. Any cost incurred by the Master Servicer in maintaining any such insurance
shall not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Master Servicer out of related late payments by the
Mortgagor or out of Insurance Proceeds and Liquidation Proceeds to the extent
permitted by Section 3.10. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. Whenever the improvements securing a Mortgage
Loan (other than a Cooperative Loan) are located at the time of origination of
such Mortgage Loan in a federally designated special flood hazard area, the
Master Servicer shall cause flood insurance (to the extent available) to be
maintained in respect thereof. Such flood insurance shall be in an amount equal
to the lesser of (i) the amount required to compensate for any loss or damage to
the Mortgaged Property on a replacement cost basis and (ii) the maximum amount
of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).
If the Master Servicer shall obtain and maintain a blanket fire
insurance policy with extended coverage insuring against hazard losses on all of
the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.12(a), it being
understood and agreed that such policy may contain a deductible clause, in which
case the Master Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with the first
sentence of this Section 3.12(a) and there shall have been a loss which would
have been covered by such policy, deposit in the Certificate Account the amount
not otherwise payable under the blanket policy because of such deductible
clause. Any such deposit by the Master Servicer shall be made on the Certificate
Account Deposit Date next preceding the Distribution Date which occurs in the
month following the month in which payments under any such policy would have
been deposited in the Custodial Account. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
present, on behalf of itself, the Trustee and the Certificateholders, claims
under any such blanket policy.
(b) The Master Servicer shall obtain and maintain at its own expense and keep in
full force and effect throughout the term of this Agreement a blanket fidelity
bond and an errors and omissions insurance policy covering the Master Servicer's
officers and employees and other persons acting on behalf of the Master Servicer
in connection with its activities under this Agreement. The amount of coverage
shall be at least equal to the coverage that would be required by Xxxxxx Xxx or
Xxxxxxx Mac, whichever is greater, with respect to the Master Servicer if the
Master Servicer were servicing and administering the Mortgage Loans for Xxxxxx
Mae or Xxxxxxx Mac. In the event that any such bond or policy ceases to be in
effect, the Master Servicer shall obtain a comparable replacement bond or policy
from an issuer or insurer, as the case may be, meeting the requirements, if any,
of the Program Guide and acceptable to the Company. Coverage of the Master
Servicer under a policy or bond obtained by an Affiliate of the Master Servicer
and providing the coverage required by this Section 3.12(b) shall satisfy the
requirements of this Section 3.12(b).
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Master
Servicer or Subservicer, to the extent it has knowledge of such
conveyance, shall enforce any due-on-sale clause contained in any
Mortgage Note or Mortgage, to the extent permitted under applicable law
and governmental regulations, but only to the extent that such
enforcement will not adversely affect or jeopardize coverage under any
Required Insurance Policy. Notwithstanding the foregoing:
(i) the Master Servicer shall not be deemed to be in default under this
Section 3.13(a) by reason of any transfer or assumption which the Master
Servicer is restricted by law from preventing; and
(ii) if the Master Servicer determines that it is reasonably likely that any
Mortgagor will bring, or if any Mortgagor does bring, legal action to
declare invalid or otherwise avoid enforcement of a due-on-sale clause
contained in any Mortgage Note or Mortgage, the Master Servicer shall
not be required to enforce the due-on-sale clause or to contest such
action.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.13(a), in any case in which a
Mortgaged Property is to be conveyed to a Person by a Mortgagor, and
such Person is to enter into an assumption or modification agreement or
supplement to the Mortgage Note or Mortgage which requires the signature
of the Trustee, or if an instrument of release signed by the Trustee is
required releasing the Mortgagor from liability on the Mortgage Loan,
the Master Servicer is authorized, subject to the requirements of the
sentence next following, to execute and deliver, on behalf of the
Trustee, the assumption agreement with the Person to whom the Mortgaged
Property is to be conveyed and such modification agreement or supplement
to the Mortgage Note or Mortgage or other instruments as are reasonable
or necessary to carry out the terms of the Mortgage Note or Mortgage or
otherwise to comply with any applicable laws regarding assumptions or
the transfer of the Mortgaged Property to such Person; provided,
however, none of such terms and requirements shall either (i) both (A)
constitute a "significant modification" effecting an exchange or
reissuance of such Mortgage Loan under the REMIC Provisions and (B)
cause any portion of any REMIC formed under the Series Supplement to
fail to qualify as a REMIC under the Code or (subject to Section
10.01(f)), result in the imposition of any tax on "prohibited
transactions" or (ii) constitute "contributions" after the start-up date
under the REMIC Provisions. The Master Servicer shall execute and
deliver such documents only if it reasonably determines that (i) its
execution and delivery thereof will not conflict with or violate any
terms of this Agreement or cause the unpaid balance and interest on the
Mortgage Loan to be uncollectible in whole or in part, (ii) any required
consents of insurers under any Required Insurance Policies have been
obtained and (iii) subsequent to the closing of the transaction
involving the assumption or transfer (A) the Mortgage Loan will continue
to be secured by a first mortgage lien pursuant to the terms of the
Mortgage, (B) such transaction will not adversely affect the coverage
under any Required Insurance Policies, (C) the Mortgage Loan will fully
amortize over the remaining term thereof, (D) no material term of the
Mortgage Loan (including the interest rate on the Mortgage Loan) will be
altered nor will the term of the Mortgage Loan be changed and (E) if the
seller/transferor of the Mortgaged Property is to be released from
liability on the Mortgage Loan, such release will not (based on the
Master Servicer's or Subservicer's good faith determination) adversely
affect the collectability of the Mortgage Loan. Upon receipt of
appropriate instructions from the Master Servicer in accordance with the
foregoing, the Trustee shall execute any necessary instruments for such
assumption or substitution of liability as directed in writing by the
Master Servicer. Upon the closing of the transactions contemplated by
such documents, the Master Servicer shall cause the originals or true
and correct copies of the assumption agreement, the release (if any), or
the modification or supplement to the Mortgage Note or Mortgage to be
delivered to the Trustee or the Custodian and deposited with the
Mortgage File for such Mortgage Loan. Any fee collected by the Master
Servicer or such related Subservicer for entering into an assumption or
substitution of liability agreement will be retained by the Master
Servicer or such Subservicer as additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may be,
shall be entitled to approve a request from a Mortgagor for a partial
release of the related Mortgaged Property, the granting of an easement
thereon in favor of another Person, any alteration or demolition of the
related Mortgaged Property (or, with respect to a Cooperative Loan, the
related Cooperative Apartment) without any right of reimbursement or
other similar matters if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of
the related Mortgage Loan, that the security for, and the timely and
full collectability of, such Mortgage Loan would not be adversely
affected thereby and that any portion of any REMIC formed under the
Series Supplement would not fail to continue to qualify as a REMIC under
the Code as a result thereof and (subject to Section 10.01(f)) that no
tax on "prohibited transactions" or "contributions" after the startup
day would be imposed on any such REMIC as a result thereof. Any fee
collected by the Master Servicer or the related Subservicer for
processing such a request will be retained by the Master Servicer or
such Subservicer as additional servicing compensation.
(d) Subject to any other applicable terms and conditions of this Agreement,
the Trustee and Master Servicer shall be entitled to approve an
assignment in lieu of satisfaction with respect to any Mortgage Loan,
provided the obligee with respect to such Mortgage Loan following such
proposed assignment provides the Trustee and Master Servicer with a
"Lender Certification for Assignment of Mortgage Loan" in the form
attached hereto as Exhibit M, in form and substance satisfactory to the
Trustee and Master Servicer, providing the following: (i) that the
substance of the assignment is, and is intended to be, a refinancing of
such Mortgage; (ii) that the Mortgage Loan following the proposed
assignment will have a rate of interest at least 0.25 percent below or
above the rate of interest on such Mortgage Loan prior to such proposed
assignment; and (iii) that such assignment is at the request of the
borrower under the related Mortgage Loan. Upon approval of an assignment
in lieu of satisfaction with respect to any Mortgage Loan, the Master
Servicer shall receive cash in an amount equal to the unpaid principal
balance of and accrued interest on such Mortgage Loan and the Master
Servicer shall treat such amount as a Principal Prepayment in Full with
respect to such Mortgage Loan for all purposes hereof.
Section 3.14. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall foreclose upon or otherwise comparably convert
(which may include an REO Acquisition) the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. Alternatively, the Master Servicer may take other
actions in respect of a defaulted Mortgage Loan, which may include (i) accepting
a short sale (a payoff of the Mortgage Loan for an amount less than the total
amount contractually owed in order to facilitate a sale of the Mortgaged
Property by the Mortgagor) or permitting a short refinancing (a payoff of the
Mortgage Loan for an amount less than the total amount contractually owed in
order to facilitate refinancing transactions by the Mortgagor not involving a
sale of the Mortgaged Property), (ii) arranging for a repayment plan or (iii)
agreeing to a modification in accordance with Section 3.07. In connection with
such foreclosure or other conversion, the Master Servicer shall, consistent with
Section 3.11, follow such practices and procedures as it shall deem necessary or
advisable, as shall be normal and usual in its general mortgage servicing
activities and as shall be required or permitted by the Program Guide; provided
that the Master Servicer shall not be liable in any respect hereunder if the
Master Servicer is acting in connection with any such foreclosure or other
conversion in a manner that is consistent with the provisions of this Agreement.
The Master Servicer, however, shall not be required to expend its own funds or
incur other reimbursable charges in connection with any foreclosure, or
attempted foreclosure which is not completed, or towards the restoration of any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan to Holders of
Certificates of one or more Classes after reimbursement to itself for such
expenses or charges and (ii) that such expenses or charges will be recoverable
to it through Liquidation Proceeds, Insurance Proceeds, or REO Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 3.10, whether or not such expenses and
charges are actually recoverable from related Liquidation Proceeds, Insurance
Proceeds or REO Proceeds). In the event of such a determination by the Master
Servicer pursuant to this Section 3.14(a), the Master Servicer shall be entitled
to reimbursement of such amounts pursuant to Section 3.10.
In addition to the foregoing, the Master Servicer shall use its
best reasonable efforts to realize upon any Additional Collateral for such of
the Additional Collateral Loans as come into and continue in default and as to
which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.07; provided that the Master Servicer shall not,
on behalf of the Trustee, obtain title to any such Additional Collateral as a
result of or in lieu of the disposition thereof or otherwise; and provided
further that (i) the Master Servicer shall not proceed with respect to such
Additional Collateral in any manner that would impair the ability to recover
against the related Mortgaged Property, and (ii) the Master Servicer shall
proceed with any REO Acquisition in a manner that preserves the ability to apply
the proceeds of such Additional Collateral against amounts owed under the
defaulted Mortgage Loan. Any proceeds realized from such Additional Collateral
(other than amounts to be released to the Mortgagor or the related guarantor in
accordance with procedures that the Master Servicer would follow in servicing
loans held for its own account, subject to the terms and conditions of the
related Mortgage and Mortgage Note and to the terms and conditions of any
security agreement, guarantee agreement, mortgage or other agreement governing
the disposition of the proceeds of such Additional Collateral) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
3.10. Any other payment received by the Master Servicer in respect of such
Additional Collateral shall be deposited in the Custodial Account subject to
withdrawal pursuant to Section 3.10.
For so long as the Master Servicer is the Master Servicer under
the Credit Support Pledge Agreement, the Master Servicer shall perform its
obligations under the Credit Support Pledge Agreement in accordance with such
Agreement and in a manner that is in the best interests of the
Certificateholders. Further, the Master Servicer shall use its best reasonable
efforts to realize upon any Pledged Assets for such of the Pledged Asset Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07; provided that the Master Servicer shall not, on behalf of the
Trustee, obtain title to any such Pledged Assets as a result of or in lieu of
the disposition thereof or otherwise; and provided further that (i) the Master
Servicer shall not proceed with respect to such Pledged Assets in any manner
that would impair the ability to recover against the related Mortgaged Property,
and (ii) the Master Servicer shall proceed with any REO Acquisition in a manner
that preserves the ability to apply the proceeds of such Pledged Assets against
amounts owed under the defaulted Mortgage Loan. Any proceeds realized from such
Pledged Assets (other than amounts to be released to the Mortgagor or the
related guarantor in accordance with procedures that the Master Servicer would
follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note and to the terms and
conditions of any security agreement, guarantee agreement, mortgage or other
agreement governing the disposition of the proceeds of such Pledged Assets)
shall be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 3.10. Any other payment received by the Master Servicer in respect of
such Pledged Assets shall be deposited in the Custodial Account subject to
withdrawal pursuant to Section 3.10.
Concurrently with the foregoing, the Master Servicer may pursue
any remedies that may be available in connection with a breach of a
representation and warranty with respect to any such Mortgage Loan in accordance
with Sections 2.03 and 2.04. However, the Master Servicer is not required to
continue to pursue both foreclosure (or similar remedies) with respect to the
Mortgage Loans and remedies in connection with a breach of a representation and
warranty if the Master Servicer determines in its reasonable discretion that one
such remedy is more likely to result in a greater recovery as to the Mortgage
Loan. Upon the occurrence of a Cash Liquidation or REO Disposition, following
the deposit in the Custodial Account of all Insurance Proceeds, Liquidation
Proceeds and other payments and recoveries referred to in the definition of
"Cash Liquidation" or "REO Disposition," as applicable, upon receipt by the
Trustee of written notification of such deposit signed by a Servicing Officer,
the Trustee or any Custodian, as the case may be, shall release to the Master
Servicer the related Mortgage File and the Trustee shall execute and deliver
such instruments of transfer or assignment prepared by the Master Servicer, in
each case without recourse, as shall be necessary to vest in the Master Servicer
or its designee, as the case may be, the related Mortgage Loan, and thereafter
such Mortgage Loan shall not be part of the Trust Fund. Notwithstanding the
foregoing or any other provision of this Agreement, in the Master Servicer's
sole discretion with respect to any defaulted Mortgage Loan or REO Property as
to either of the following provisions, (i) a Cash Liquidation or REO Disposition
may be deemed to have occurred if substantially all amounts expected by the
Master Servicer to be received in connection with the related defaulted Mortgage
Loan or REO Property have been received, and (ii) for purposes of determining
the amount of any Liquidation Proceeds, Insurance Proceeds, REO Proceeds or any
other unscheduled collections or the amount of any Realized Loss, the Master
Servicer may take into account minimal amounts of additional receipts expected
to be received or any estimated additional liquidation expenses expected to be
incurred in connection with the related defaulted Mortgage Loan or REO Property.
(b) If title to any Mortgaged Property is acquired by the Trust Fund as an REO
Property by foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be issued to the Trustee or to its nominee on behalf
of Certificateholders. Notwithstanding any such acquisition of title and
cancellation of the related Mortgage Loan, such REO Property shall (except as
otherwise expressly provided herein) be considered to be an Outstanding Mortgage
Loan held in the Trust Fund until such time as the REO Property shall be sold.
Consistent with the foregoing for purposes of all calculations hereunder so long
as such REO Property shall be considered to be an Outstanding Mortgage Loan it
shall be assumed that, notwithstanding that the indebtedness evidenced by the
related Mortgage Note shall have been discharged, such Mortgage Note and the
related amortization schedule in effect at the time of any such acquisition of
title (after giving effect to any previous Curtailments and before any
adjustment thereto by reason of any bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period) remain in effect.
(c) If the Trust Fund acquires any REO Property as aforesaid or otherwise in
connection with a default or imminent default on a Mortgage Loan, the Master
Servicer on behalf of the Trust Fund shall dispose of such REO Property as soon
as practicable, giving due consideration to the interests of the
Certificateholders, but in all cases within three full years after the taxable
year of its acquisition by the Trust Fund for purposes of Section 860G(a)(8) of
the Code (or such shorter period as may be necessary under applicable state
(including any state in which such property is located) law to maintain the
status of any portion of any REMIC formed under the Series Supplement as a REMIC
under applicable state law and avoid taxes resulting from such property failing
to be foreclosure property under applicable state law) or, at the expense of the
Trust Fund, request, more than 60 days before the day on which such grace period
would otherwise expire, an extension of such grace period unless the Master
Servicer (subject to Section 10.01(f)) obtains for the Trustee an Opinion of
Counsel, addressed to the Trustee and the Master Servicer, to the effect that
the holding by the Trust Fund of such REO Property subsequent to such period
will not result in the imposition of taxes on "prohibited transactions" as
defined in Section 860F of the Code or cause any REMIC formed under the Series
Supplement to fail to qualify as a REMIC (for federal (or any applicable State
or local) income tax purposes) at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such REO Property
(subject to any conditions contained in such Opinion of Counsel). The Master
Servicer shall be entitled to be reimbursed from the Custodial Account for any
costs incurred in obtaining such Opinion of Counsel, as provided in Section
3.10. Notwithstanding any other provision of this Agreement, no REO Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used by or on behalf of the Trust Fund in such a manner or pursuant
to any terms that would (i) cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
(ii) subject the Trust Fund to the imposition of any federal income taxes on the
income earned from such REO Property, including any taxes imposed by reason of
Section 860G(c) of the Code, unless the Master Servicer has agreed to indemnify
and hold harmless the Trust Fund with respect to the imposition of any such
taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or purchase or
repurchase of any Mortgage Loan pursuant to the terms of this Agreement, as well
as any recovery resulting from a collection of Liquidation Proceeds, Insurance
Proceeds or REO Proceeds, will be applied in the following order of priority:
first, to reimburse the Master Servicer or the related Subservicer in accordance
with Section 3.10(a)(ii); second, to the Certificateholders to the extent of
accrued and unpaid interest on the Mortgage Loan, and any related REO Imputed
Interest, at the Net Mortgage Rate (or the Modified Net Mortgage Rate in the
case of a Modified Mortgage Loan) to the Due Date prior to the Distribution Date
on which such amounts are to be distributed; third, to the Certificateholders as
a recovery of principal on the Mortgage Loan (or REO Property); fourth, to all
Servicing Fees and Subservicing Fees payable therefrom (and the Master Servicer
and the Subservicer shall have no claims for any deficiencies with respect to
such fees which result from the foregoing allocation); and fifth, to Foreclosure
Profits.
(e) In the event of a default on a Mortgage Loan one or more of whose obligors
is not a United States Person, in connection with any foreclosure or acquisition
of a deed in lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan, the Master Servicer will cause compliance with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the proceeds
of such foreclosure except to the extent, if any, that proceeds of such
foreclosure are required to be remitted to the obligors on such Mortgage Loan.
Section 3.15. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or upon the
receipt by the Master Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes, the Master Servicer will
immediately notify the Trustee (if it holds the related Mortgage File) or the
Custodian by a certification of a Servicing Officer (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the Custodial
Account pursuant to Section 3.07 have been or will be so deposited),
substantially in one of the forms attached hereto as Exhibit F, or, in the case
of the Custodian, an electronic request in a form acceptable to the Custodian,
requesting delivery to it of the Mortgage File. Within two Business Days of
receipt of such certification and request, the Trustee shall release, or cause
the Custodian to release, the related Mortgage File to the Master Servicer. The
Master Servicer is authorized to execute and deliver to the Mortgagor the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage, together with
the Mortgage Note with, as appropriate, written evidence of cancellation thereon
and to cause the removal from the registration on the MERS(R) System of such
Mortgage and to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Custodial Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or foreclosure of any
Mortgage Loan, the Master Servicer shall deliver to the Custodian, with a copy
to the Trustee, a certificate of a Servicing Officer substantially in one of the
forms attached as Exhibit F hereto, or, in the case of the Custodian, an
electronic request in a form acceptable to the Custodian, requesting that
possession of all, or any document constituting part of, the Mortgage File be
released to the Master Servicer and certifying as to the reason for such release
and that such release will not invalidate any insurance coverage provided in
respect of the Mortgage Loan under any Required Insurance Policy. Upon receipt
of the foregoing, the Trustee shall deliver, or cause the Custodian to deliver,
the Mortgage File or any document therein to the Master Servicer. The Master
Servicer shall cause each Mortgage File or any document therein so released to
be returned to the Trustee, or the Custodian as agent for the Trustee when the
need therefor by the Master Servicer no longer exists, unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or (ii) the Mortgage File or
such document has been delivered directly or through a Subservicer to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Master Servicer has delivered directly or through a Subservicer to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. In the event of the liquidation of
a Mortgage Loan, the Trustee shall deliver the Request for Release with respect
thereto to the Master Servicer upon deposit of the related Liquidation Proceeds
in the Custodial Account.
(c) The Trustee or the Master Servicer on the Trustee's behalf shall execute and
deliver to the Master Servicer, if necessary, any court pleadings, requests for
trustee's sale or other documents necessary to the foreclosure or trustee's sale
in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity. Together
with such documents or pleadings (if signed by the Trustee), the Master Servicer
shall deliver to the Trustee a certificate of a Servicing Officer requesting
that such pleadings or documents be executed by the Trustee and certifying as to
the reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate any insurance coverage under
any Required Insurance Policy or invalidate or otherwise affect the lien of the
Mortgage, except for the termination of such a lien upon completion of the
foreclosure or trustee's sale.
Section 3.16. Servicing and Other Compensation; Compensating Interest.
(a) The Master Servicer, as compensation for its activities hereunder, shall be
entitled to receive on each Distribution Date the amounts provided for by
clauses (iii), (iv), (v) and (vi) of Section 3.10(a), subject to clause (e)
below. The amount of servicing compensation provided for in such clauses shall
be accounted for on a Mortgage Loan-by-Mortgage Loan basis. In the event that
Liquidation Proceeds, Insurance Proceeds and REO Proceeds (net of amounts
reimbursable therefrom pursuant to Section 3.10(a)(ii)) in respect of a Cash
Liquidation or REO Disposition exceed the unpaid principal balance of such
Mortgage Loan plus unpaid interest accrued thereon (including REO Imputed
Interest) at a per annum rate equal to the related Net Mortgage Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan), the Master
Servicer shall be entitled to retain therefrom and to pay to itself and/or the
related Subservicer, any Foreclosure Profits and any Servicing Fee or
Subservicing Fee considered to be accrued but unpaid.
(b) Additional servicing compensation in the form of prepayment charges,
assumption fees, late payment charges, investment income on amounts in the
Custodial Account or the Certificate Account or otherwise shall be retained by
the Master Servicer or the Subservicer to the extent provided herein, subject to
clause (e) below.
(c) The Master Servicer shall be required to pay, or cause to be paid, all
expenses incurred by it in connection with its servicing activities hereunder
(including payment of premiums for the Primary Insurance Policies, if any, to
the extent such premiums are not required to be paid by the related Mortgagors,
and the fees and expenses of the Trustee and any co-trustee (as provided in
Section 8.05) and the fees and expense of any Custodian) and shall not be
entitled to reimbursement therefor except as specifically provided in Sections
3.10 and 3.14.
(d) The Master Servicer's right to receive servicing compensation may not be
transferred in whole or in part except in connection with the transfer of all of
its responsibilities and obligations of the Master Servicer under this
Agreement.
(e) Notwithstanding any other provision herein, the amount of servicing
compensation that the Master Servicer shall be entitled to receive for its
activities hereunder for the period ending on each Distribution Date shall be
reduced (but not below zero) by an amount equal to Compensating Interest (if
any) for such Distribution Date. Such reduction shall be applied during such
period as follows: first, to any Servicing Fee or Subservicing Fee to which the
Master Servicer is entitled pursuant to Section 3.10(a)(iii), and second, to any
income or gain realized from any investment of funds held in the Custodial
Account or the Certificate Account to which the Master Servicer is entitled
pursuant to Sections 3.07(c) or 4.01(b), respectively. In making such reduction,
the Master Servicer (i) will not withdraw from the Custodial Account any such
amount representing all or a portion of the Servicing Fee to which it is
entitled pursuant to Section 3.10(a)(iii), and (ii) will not withdraw from the
Custodial Account or Certificate Account any such amount to which it is entitled
pursuant to Section 3.07(c) or 4.01(b).
Section 3.17. Reports to the Trustee and the Company.
Not later than fifteen days after it receives a written request from the
Trustee or the Company, the Master Servicer shall forward to the Trustee and the
Company a statement, certified by a Servicing Officer, setting forth the status
of the Custodial Account as of the close of business on the immediately
preceding Distribution Date as it relates to the Mortgage Loans and showing, for
the period covered by such statement, the aggregate of deposits in or
withdrawals from the Custodial Account in respect of the Mortgage Loans for each
category of deposit specified in Section 3.07 and each category of withdrawal
specified in Section 3.10.
Section 3.18. Annual Statement as to Compliance and Servicing Assessment.
The Master Servicer will deliver to the Company and the Trustee on or
before the earlier of (a) March 31 of each year or (b) with respect to any
calendar year during which the Company's annual report on Form 10-K is required
to be filed in accordance with the Exchange Act and the rules and regulations of
the Commission, the date on which the annual report on Form 10-K is required to
be filed in accordance with the Exchange Act and the rules and regulations of
the Commission, (i) a servicing assessment as described in Section 4.03(f)(ii)
and (ii) a servicer compliance statement, signed by an authorized officer of the
Master Servicer, as described in Items 1122(a), 1122(b) and 1123 of Regulation
AB, to the effect that:
(A) A review of the Master Servicer's activities during the reporting
period and of its performance under this Agreement has been made under such
officer's supervision.
(B) To the best of such officer's knowledge, based on such review, the
Master Servicer has fulfilled all of its obligations under this Agreement in all
material respects throughout the reporting period or, if there has been a
failure to fulfill any such obligation in any material respect, specifying each
such failure known to such officer and the nature and status thereof.
The Master Servicer shall use commercially reasonable efforts to obtain
from all other parties participating in the servicing function any additional
certifications required under Item 1122 and Item 1123 of Regulation AB to the
extent required to be included in a Report on Form 10-K; provided, however, that
a failure to obtain such certifications shall not be a breach of the Master
Servicer's duties hereunder if any such party fails to deliver such a
certification.
Section 3.19. Annual Independent Public Accountants' Servicing Report.
On or before the earlier of (a) March 31 of each year or (b) with
respect to any calendar year during which the Company's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, the date on which the annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, the Master Servicer at its expense shall
cause a firm of independent public accountants, which shall be members of the
American Institute of Certified Public Accountants, to furnish to the Company
and the Trustee the attestation required under Item 1122(b) of Regulation AB. In
rendering such statement, such firm may rely, as to matters relating to the
direct servicing of mortgage loans by Subservicers, upon comparable statements
for examinations conducted by independent public accountants substantially in
accordance with standards established by the American Institute of Certified
Public Accountants (rendered within one year of such statement) with respect to
such Subservicers.
Section 3.20. Rights of the Company in Respect of the Master Servicer.
The Master Servicer shall afford the Company, upon reasonable notice,
during normal business hours access to all records maintained by the Master
Servicer in respect of its rights and obligations hereunder and access to
officers of the Master Servicer responsible for such obligations. Upon request,
the Master Servicer shall furnish the Company with its most recent financial
statements and such other information as the Master Servicer possesses regarding
its business, affairs, property and condition, financial or otherwise. The
Master Servicer shall also cooperate with all reasonable requests for
information including, but not limited to, notices, tapes and copies of files,
regarding itself, the Mortgage Loans or the Certificates from any Person or
Persons identified by the Company or Residential Funding. The Company may, but
is not obligated to, enforce the obligations of the Master Servicer hereunder
and may, but is not obligated to, perform, or cause a designee to perform, any
defaulted obligation of the Master Servicer hereunder or exercise the rights of
the Master Servicer hereunder; provided that the Master Servicer shall not be
relieved of any of its obligations hereunder by virtue of such performance by
the Company or its designee. The Company shall not have any responsibility or
liability for any action or failure to act by the Master Servicer and is not
obligated to supervise the performance of the Master Servicer under this
Agreement or otherwise.
Section 3.21. Administration of Buydown Funds
(a) With respect to any Buydown Mortgage Loan, the Subservicer has deposited
Buydown Funds in an account that satisfies the requirements for a Subservicing
Account (the "Buydown Account"). The Master Servicer shall cause the
Subservicing Agreement to require that upon receipt from the Mortgagor of the
amount due on a Due Date for each Buydown Mortgage Loan, the Subservicer will
withdraw from the Buydown Account the predetermined amount that, when added to
the amount due on such date from the Mortgagor, equals the full Monthly Payment
and transmit that amount in accordance with the terms of the Subservicing
Agreement to the Master Servicer together with the related payment made by the
Mortgagor or advanced by the Subservicer.
(b) If the Mortgagor on a Buydown Mortgage Loan prepays such loan in its
entirety during the period (the "Buydown Period") when Buydown Funds are
required to be applied to such Buydown Mortgage Loan, the Subservicer shall be
required to withdraw from the Buydown Account and remit any Buydown Funds
remaining in the Buydown Account in accordance with the related buydown
agreement. The amount of Buydown Funds which may be remitted in accordance with
the related buydown agreement may reduce the amount required to be paid by the
Mortgagor to fully prepay the related Mortgage Loan. If the Mortgagor on a
Buydown Mortgage Loan defaults on such Mortgage Loan during the Buydown Period
and the property securing such Buydown Mortgage Loan is sold in the liquidation
thereof (either by the Master Servicer or the insurer under any related Primary
Insurance Policy), the Subservicer shall be required to withdraw from the
Buydown Account the Buydown Funds for such Buydown Mortgage Loan still held in
the Buydown Account and remit the same to the Master Servicer in accordance with
the terms of the Subservicing Agreement for deposit in the Custodial Account or,
if instructed by the Master Servicer, pay to the insurer under any related
Primary Insurance Policy if the Mortgaged Property is transferred to such
insurer and such insurer pays all of the loss incurred in respect of such
default. Any amount so remitted pursuant to the preceding sentence will be
deemed to reduce the amount owed on the Mortgage Loan.
Section 3.22. Advance Facility
(a) The Master Servicer is hereby authorized to enter into a financing or other
facility (any such arrangement, an "Advance Facility") under which (1) the
Master Servicer sells, assigns or pledges to another Person (an "Advancing
Person") the Master Servicer's rights under this Agreement to be reimbursed for
any Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all Advances and/or Servicing Advances required to be made by the Master
Servicer pursuant to this Agreement. No consent of the Depositor, the Trustee,
the Certificateholders or any other party shall be required before the Master
Servicer may enter into an Advance Facility. Notwithstanding the existence of
any Advance Facility under which an Advancing Person agrees to fund Advances
and/or Servicing Advances on the Master Servicer's behalf, the Master Servicer
shall remain obligated pursuant to this Agreement to make Advances and Servicing
Advances pursuant to and as required by this Agreement. If the Master Servicer
enters into an Advance Facility, and for so long as an Advancing Person remains
entitled to receive reimbursement for any Advances including Nonrecoverable
Advances ("Advance Reimbursement Amounts") and/or Servicing Advances including
Nonrecoverable Advances ("Servicing Advance Reimbursement Amounts" and together
with Advance Reimbursement Amounts, "Reimbursement Amounts") (in each case to
the extent such type of Reimbursement Amount is included in the Advance
Facility), as applicable, pursuant to this Agreement, then the Master Servicer
shall identify such Reimbursement Amounts consistent with the reimbursement
rights set forth in Section 3.10(a)(ii) and (vii) and remit such Reimbursement
Amounts in accordance with this Section 3.22 or otherwise in accordance with the
documentation establishing the Advance Facility to such Advancing Person or to a
trustee, agent or custodian (an "Advance Facility Trustee") designated by such
Advancing Person in an Advance Facility Notice described below in Section
3.22(b). Notwithstanding the foregoing, if so required pursuant to the terms of
the Advance Facility, the Master Servicer may direct, and if so directed in
writing the Trustee is hereby authorized to and shall pay to the Advance
Facility Trustee the Reimbursement Amounts identified pursuant to the preceding
sentence. An Advancing Person whose obligations hereunder are limited to the
funding of Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Master Servicer or a Subservicer pursuant to Section 3.02(a)
or 6.02(c) hereof and shall not be deemed to be a Subservicer under this
Agreement. Notwithstanding anything to the contrary herein, in no event shall
Advance Reimbursement Amounts or Servicing Advance Reimbursement Amounts be
included in the Available Distribution Amount or distributed to
Certificateholders.
(b) If the Master Servicer enters into an Advance Facility and makes the
election set forth in Section 3.22(a), the Master Servicer and the related
Advancing Person shall deliver to the Certificate Insurer and the Trustee a
written notice and payment instruction (an "Advance Facility Notice"), providing
the Trustee with written payment instructions as to where to remit Advance
Reimbursement Amounts and/or Servicing Advance Reimbursement Amounts (each to
the extent such type of Reimbursement Amount is included within the Advance
Facility) on subsequent Distribution Dates. The payment instruction shall
require the applicable Reimbursement Amounts to be distributed to the Advancing
Person or to an Advance Facility Trustee designated in the Advance Facility
Notice. An Advance Facility Notice may only be terminated by the joint written
direction of the Master Servicer and the related Advancing Person (and any
related Advance Facility Trustee). The Master Servicer shall provide the
Certificate Insurer, if any, with notice of any termination of any Advance
Facility pursuant to this Section 3.22(b).
(c) Reimbursement Amounts shall consist solely of amounts in respect of Advances
and/or Servicing Advances made with respect to the Mortgage Loans for which the
Master Servicer would be permitted to reimburse itself in accordance with
Section 3.10(a)(ii) and (vii) hereof, assuming the Master Servicer or the
Advancing Person had made the related Advance(s) and/or Servicing Advance(s).
Notwithstanding the foregoing, except with respect to reimbursement of
Nonrecoverable Advances as set forth in Section 3.10(c) of this Agreement, no
Person shall be entitled to reimbursement from funds held in the Collection
Account for future distribution to Certificateholders pursuant to this
Agreement. Neither the Company nor the Trustee shall have any duty or liability
with respect to the calculation of any Reimbursement Amount, nor shall the
Company or the Trustee have any responsibility to track or monitor the
administration of the Advance Facility or have any responsibility to track,
monitor or verify the payment of Reimbursement Amounts to the related Advancing
Person or Advance Facility Trustee. The Master Servicer shall maintain and
provide to any Successor Master Servicer a detailed accounting on a loan-by-loan
basis as to amounts advanced by, sold, pledged or assigned to, and reimbursed to
any Advancing Person. The Successor Master Servicer shall be entitled to rely on
any such information provided by the Master Servicer and the Successor Master
Servicer shall not be liable for any errors in such information.
(d) Upon the direction of and at the expense of the Master Servicer, the Trustee
agrees to execute such acknowledgments, certificates and other documents
reasonably satisfactory to the Trustee provided by the Master Servicer
recognizing the interests of any Advancing Person or Advance Facility Trustee in
such Reimbursement Amounts as the Master Servicer may cause to be made subject
to Advance Facilities pursuant to this Section 3.22.
(e) Reimbursement Amounts collected with respect to each Mortgage Loan shall be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
("FIFO") basis, subject to the qualifications set forth below:
(i) Any successor Master Servicer to Residential Funding (a
"Successor Master Servicer") and the Advancing Person or Advance
Facility Trustee shall be required to apply all amounts available in
accordance with this Section 3.22(e) to the reimbursement of Advances
and Servicing Advances in the manner provided for herein; provided,
however, that after the succession of a Successor Master Servicer, (A)
to the extent that any Advances or Servicing Advances with respect to
any particular Mortgage Loan are reimbursed from payments or recoveries,
if any, from the related Mortgagor, and Liquidation Proceeds or
Insurance Proceeds, if any, with respect to that Mortgage Loan,
reimbursement shall be made, first, to the Advancing Person or Advance
Facility Trustee in respect of Advances and/or Servicing Advances
related to that Mortgage Loan to the extent of the interest of the
Advancing Person or Advance Facility Trustee in such Advances and/or
Servicing Advances, second to the Master Servicer in respect of Advances
and/or Servicing Advances related to that Mortgage Loan in excess of
those in which the Advancing Person or Advance Facility Trustee Person
has an interest, and third, to the Successor Master Servicer in respect
of any other Advances and/or Servicing Advances related to that Mortgage
Loan, from such sources as and when collected, and (B) reimbursements of
Advances and Servicing Advances that are Nonrecoverable Advances shall
be made pro rata to the Advancing Person or Advance Facility Trustee, on
the one hand, and any such Successor Master Servicer, on the other hand,
on the basis of the respective aggregate outstanding unreimbursed
Advances and Servicing Advances that are Nonrecoverable Advances owed to
the Advancing Person, Advance Facility Trustee or Master Servicer
pursuant to this Agreement, on the one hand, and any such Successor
Master Servicer, on the other hand, and without regard to the date on
which any such Advances or Servicing Advances shall have been made. In
the event that, as a result of the FIFO allocation made pursuant to this
Section 3.22(e), some or all of a Reimbursement Amount paid to the
Advancing Person or Advance Facility Trustee relates to Advances or
Servicing Advances that were made by a Person other than Residential
Funding or the Advancing Person or Advance Facility Trustee, then the
Advancing Person or Advance Facility Trustee shall be required to remit
any portion of such Reimbursement Amount to the Person entitled to such
portion of such Reimbursement Amount. Without limiting the generality of
the foregoing, Residential Funding shall remain entitled to be
reimbursed by the Advancing Person or Advance Facility Trustee for all
Advances and Servicing Advances funded by Residential Funding to the
extent the related Reimbursement Amount(s) have not been assigned or
pledged to an Advancing Person or Advance Facility Trustee. The
documentation establishing any Advance Facility shall require
Residential Funding to provide to the related Advancing Person or
Advance Facility Trustee loan by loan information with respect to each
Reimbursement Amount distributed to such Advancing Person or Advance
Facility Trustee on each date of remittance thereof to such Advancing
Person or Advance Facility Trustee, to enable the Advancing Person or
Advance Facility Trustee to make the FIFO allocation of each
Reimbursement Amount with respect to each Mortgage Loan.
(ii) By way of illustration, and not by way of limiting the
generality of the foregoing, if the Master Servicer resigns or is
terminated at a time when the Master Servicer is a party to an Advance
Facility, and is replaced by a Successor Master Servicer, and the
Successor Master Servicer directly funds Advances or Servicing Advances
with respect to a Mortgage Loan and does not assign or pledge the
related Reimbursement Amounts to the related Advancing Person or Advance
Facility Trustee, then all payments and recoveries received from the
related Mortgagor or received in the form of Liquidation Proceeds with
respect to such Mortgage Loan (including Insurance Proceeds collected in
connection with a liquidation of such Mortgage Loan) will be allocated
first to the Advancing Person or Advance Facility Trustee until the
related Reimbursement Amounts attributable to such Mortgage Loan that
are owed to the Master Servicer and the Advancing Person, which were
made prior to any Advances or Servicing Advances made by the Successor
Master Servicer, have been reimbursed in full, at which point the
Successor Master Servicer shall be entitled to retain all related
Reimbursement Amounts subsequently collected with respect to that
Mortgage Loan pursuant to Section 3.10 of this Agreement. To the extent
that the Advances or Servicing Advances are Nonrecoverable Advances to
be reimbursed on an aggregate basis pursuant to Section 3.10 of this
Agreement, the reimbursement paid in this manner will be made pro rata
to the Advancing Person or Advance Facility Trustee, on the one hand,
and the Successor Master Servicer, on the other hand, as described in
clause (i)(B) above.
(f) The Master Servicer shall remain entitled to be reimbursed for all
Advances and Servicing Advances funded by the Master Servicer to the extent the
related rights to be reimbursed therefor have not been sold, assigned or pledged
to an Advancing Person.
(g) Any amendment to this Section 3.22 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.22, including amendments to
add provisions relating to a successor Master Servicer, may be entered into by
the Trustee, the Certificate Insurer, Company and the Master Servicer without
the consent of any Certificateholder, with written confirmation from each Rating
Agency that the amendment will not result in the reduction of the ratings on any
class of the Certificates below the lesser of the then current or original
ratings on such Certificates, and an opinion of counsel as required by Section
11.01(c), notwithstanding anything to the contrary in Section 11.01 of or
elsewhere in this Agreement.
(h) Any rights of set-off that the Trust Fund, the Trustee, the Company,
any Successor Master Servicer or any other Person might otherwise have against
the Master Servicer under this Agreement shall not attach to any rights to be
reimbursed for Advances or Servicing Advances that have been sold, transferred,
pledged, conveyed or assigned to any Advancing Person.
(i) At any time when an Advancing Person shall have ceased funding
Advances and/or Servicing Advances (as the case may be) and the Advancing Person
or related Advance Facility Trustee shall have received Reimbursement Amounts
sufficient in the aggregate to reimburse all Advances and/or Servicing Advances
(as the case may be) the right to reimbursement for which were assigned to the
Advancing Person, then upon the delivery of a written notice signed by the
Advancing Person and the Master Servicer or its successor or assign) to the
Trustee terminating the Advance Facility Notice (the "Notice of Facility
Termination"), the Master Servicer or its Successor Master Servicer shall again
be entitled to withdraw and retain the related Reimbursement Amounts from the
Custodial Account pursuant to Section 3.10.
(j) After delivery of any Advance Facility Notice, and until any such
Advance Facility Notice has been terminated by a Notice of Facility Termination,
this Section 3.22 may not be amended or otherwise modified without the prior
written consent of the related Advancing Person.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account.
(a) The Master Servicer on behalf of the Trustee shall establish and maintain a
Certificate Account in which the Master Servicer shall cause to be deposited on
behalf of the Trustee on or before 2:00 P.M. New York time on each Certificate
Account Deposit Date by wire transfer of immediately available funds an amount
equal to the sum of (i) any Advance for the immediately succeeding Distribution
Date, (ii) any amount required to be deposited in the Certificate Account
pursuant to Section 3.12(a), (iii) any amount required to be deposited in the
Certificate Account pursuant to Section 3.16(e) or Section 4.07, (iv) any amount
required to be paid pursuant to Section 9.01 and (v) all other amounts
constituting the Available Distribution Amount for the immediately succeeding
Distribution Date.
(b) The Trustee shall, upon written request from the Master Servicer, invest or
cause the institution maintaining the Certificate Account to invest the funds in
the Certificate Account in Permitted Investments designated in the name of the
Trustee for the benefit of the Certificateholders, which shall mature or be
payable on demand not later than the Business Day next preceding the
Distribution Date next following the date of such investment (except that (i)
any investment in the institution with which the Certificate Account is
maintained may mature or be payable on demand on such Distribution Date and (ii)
any other investment may mature or be payable on demand on such Distribution
Date if the Trustee shall advance funds on such Distribution Date to the
Certificate Account in the amount payable on such investment on such
Distribution Date, pending receipt thereof to the extent necessary to make
distributions on the Certificates) and shall not be sold or disposed of prior to
maturity. Subject to Section 3.16(e), all income and gain realized from any such
investment shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of any such investments shall be deposited in the Certificate Account
by the Master Servicer out of its own funds immediately as realized without any
right of reimbursement. The Trustee or its Affiliates are permitted to receive
compensation that could be deemed to be in the Trustee's economic self-interest
for (i) serving as investment adviser (with respect to investments made through
its Affiliates), administrator, shareholder servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments, (ii) using
Affiliates to effect transactions in certain Permitted Investments and (iii)
effecting transactions in certain Permitted Investments.
Section 4.02. Distributions.
As provided in Section 4.02 of the Series Supplement.
Section 4.03. Statements to Certificateholders; Statements to Rating Agencies;
Exchange Act Reporting.
(a) Concurrently with each distribution charged to the Certificate Account
and with respect to each Distribution Date the Master Servicer shall
forward to the Trustee and the Trustee shall either forward by mail or
make available to each Holder and the Company, via the Trustee's
internet website, a statement (and at its option, any additional files
containing the same information in an alternative format) setting forth
information as to each Class of Certificates, the Mortgage Pool and, if
the Mortgage Pool is comprised of two or more Loan Groups, each Loan
Group, to the extent applicable. This statement will include the
information set forth in an exhibit to the Series Supplement. The
Trustee shall mail to each Holder that requests a paper copy by
telephone a paper copy via first class mail. The Trustee may modify the
distribution procedures set forth in this Section provided that such
procedures are no less convenient for the Certificateholders. The
Trustee shall provide prior notification to the Company, the Master
Servicer and the Certificateholders regarding any such modification. In
addition, the Master Servicer shall provide to any manager of a trust
fund consisting of some or all of the Certificates, upon reasonable
request, such additional information as is reasonably obtainable by the
Master Servicer at no additional expense to the Master Servicer. Also,
at the request of a Rating Agency, the Master Servicer shall provide the
information relating to the Reportable Modified Mortgage Loans
substantially in the form attached hereto as Exhibit Q to such Rating
Agency within a reasonable period of time; provided, however, that the
Master Servicer shall not be required to provide such information more
than four times in a calendar year to any Rating Agency.
(b) Within a reasonable period of time after it receives a written request
from a Holder of a Certificate, other than a Class R Certificate, the
Master Servicer shall prepare, or cause to be prepared, and shall
forward, or cause to be forwarded, to each Person who at any time during
the calendar year was the Holder of a Certificate, other than a Class R
Certificate, a statement containing the information set forth in clauses
(v) and (vi) of the exhibit to the Series Supplement referred to in
subsection (a) above aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Master Servicer shall be deemed to have been satisfied
to the extent that substantially comparable information shall be
provided by the Master Servicer pursuant to any requirements of the
Code.
(c) Within a reasonable period of time after it receives a written request
from a Holder of a Class R Certificate, the Master Servicer shall
prepare, or cause to be prepared, and shall forward, or cause to be
forwarded, to each Person who at any time during the calendar year was
the Holder of a Class R Certificate, a statement containing the
applicable distribution information provided pursuant to this Section
4.03 aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class R Certificate. Such
obligation of the Master Servicer shall be deemed to have been satisfied
to the extent that substantially comparable information shall be
provided by the Master Servicer pursuant to any requirements of the
Code.
(d) Upon the written request of any Certificateholder, the Master Servicer,
as soon as reasonably practicable, shall provide the requesting
Certificateholder with such information as is necessary and appropriate,
in the Master Servicer's sole discretion, for purposes of satisfying
applicable reporting requirements under Rule 144A.
(e) The Master Servicer shall, on behalf of the Company and in respect of
the Trust Fund, sign and cause to be filed with the Commission any
periodic reports required to be filed under the provisions of the
Exchange Act, and the rules and regulations of the Commission thereunder
including, without limitation, reports on Form 10-K, Form 10-D and Form
8-K. In connection with the preparation and filing of such periodic
reports, the Trustee shall timely provide to the Master Servicer (I) a
list of Certificateholders as shown on the Certificate Register as of
the end of each calendar year, (II) copies of all pleadings, other legal
process and any other documents relating to any claims, charges or
complaints involving the Trustee, as trustee hereunder, or the Trust
Fund that are received by a Responsible Officer of the Trustee, (III)
notice of all matters that, to the actual knowledge of a Responsible
Officer of the Trustee, have been submitted to a vote of the
Certificateholders, other than those matters that have been submitted to
a vote of the Certificateholders at the request of the Company or the
Master Servicer, and (IV) notice of any failure of the Trustee to make
any distribution to the Certificateholders as required pursuant to the
Series Supplement. Neither the Master Servicer nor the Trustee shall
have any liability with respect to the Master Servicer's failure to
properly prepare or file such periodic reports resulting from or
relating to the Master Servicer's inability or failure to obtain any
information not resulting from the Master Servicer's own negligence or
willful misconduct.
(f) Any Form 10-K filed with the Commission in connection with this Section
4.03 shall include, with respect to the Certificates relating to such
10-K:
(i) A certification, signed by the senior officer in charge of the servicing
functions of the Master Servicer, in the form attached as Exhibit O
hereto or such other form as may be required or permitted by the
Commission (the "Form 10-K Certification"), in compliance with Rules
13a-14 and 15d-14 under the Exchange Act and any additional directives
of the Commission.
(ii) A report regarding its assessment of compliance during the preceding
calendar year with all applicable servicing criteria set forth in
relevant Commission regulations with respect to mortgage-backed
securities transactions taken as a whole involving the Master Servicer
that are backed by the same types of assets as those backing the
certificates, as well as similar reports on assessment of compliance
received from other parties participating in the servicing function as
required by relevant Commission regulations, as described in Item
1122(a) of Regulation AB. The Master Servicer shall obtain from all
other parties participating in the servicing function any required
assessments.
(iii) With respect to each assessment report described immediately above, a
report by a registered public accounting firm that attests to, and
reports on, the assessment made by the asserting party, as set forth in
relevant Commission regulations, as described in Regulation 1122(b) of
Regulation AB and Section 3.19.
(iv) The servicer compliance certificate required to be delivered pursuant
Section 3.18.
(g) In connection with the Form 10-K Certification, the Trustee shall
provide the Master Servicer with a back-up certification substantially
in the form attached hereto as Exhibit P.
(h) This Section 4.03 may be amended in accordance with this Agreement
without the consent of the Certificateholders.
(i) The Trustee shall make available on the Trustee's internet website each
of the reports filed with the Commission by or on behalf of the Company
under the Exchange Act, as soon as reasonably practicable upon delivery
of such reports to the Trustee.
Section 4.04. Distribution of Reports to the Trustee and the Company; Advances
by the Master Servicer.
(a) Prior to the close of business on the Determination Date, the Master
Servicer shall furnish a written statement to the Trustee, any Paying Agent and
the Company (the information in such statement to be made available to any
Certificate Insurer and Certificateholders by the Master Servicer on request)
setting forth (i) the Available Distribution Amount and (ii) the amounts
required to be withdrawn from the Custodial Account and deposited into the
Certificate Account on the immediately succeeding Certificate Account Deposit
Date pursuant to clause (iii) of Section 4.01(a). The determination by the
Master Servicer of such amounts shall, in the absence of obvious error, be
presumptively deemed to be correct for all purposes hereunder and the Trustee
shall be protected in relying upon the same without any independent check or
verification.
(b) On or before 2:00 P.M. New York time on each Certificate Account Deposit
Date, the Master Servicer shall either (i) deposit in the Certificate Account
from its own funds, or funds received therefor from the Subservicers, an amount
equal to the Advances to be made by the Master Servicer in respect of the
related Distribution Date, which shall be in an aggregate amount equal to the
aggregate amount of Monthly Payments (with each interest portion thereof
adjusted to the Net Mortgage Rate), less the amount of any related Servicing
Modifications, Debt Service Reductions or reductions in the amount of interest
collectable from the Mortgagor pursuant to the Servicemembers Civil Relief Act,
as amended, or similar legislation or regulations then in effect, on the
Outstanding Mortgage Loans as of the related Due Date, which Monthly Payments
were not received as of the close of business as of the related Determination
Date; provided that no Advance shall be made if it would be a Nonrecoverable
Advance, (ii) withdraw from amounts on deposit in the Custodial Account and
deposit in the Certificate Account all or a portion of the Amount Held for
Future Distribution in discharge of any such Advance, or (iii) make advances in
the form of any combination of (i) and (ii) aggregating the amount of such
Advance. Any portion of the Amount Held for Future Distribution so used shall be
replaced by the Master Servicer by deposit in the Certificate Account on or
before 11:00 A.M. New York time on any future Certificate Account Deposit Date
to the extent that funds attributable to the Mortgage Loans that are available
in the Custodial Account for deposit in the Certificate Account on such
Certificate Account Deposit Date shall be less than payments to
Certificateholders required to be made on the following Distribution Date. The
Master Servicer shall be entitled to use any Advance made by a Subservicer as
described in Section 3.07(b) that has been deposited in the Custodial Account on
or before such Distribution Date as part of the Advance made by the Master
Servicer pursuant to this Section 4.04. The amount of any reimbursement pursuant
to Section 4.02(a) in respect of outstanding Advances on any Distribution Date
shall be allocated to specific Monthly Payments due but delinquent for previous
Due Periods, which allocation shall be made, to the extent practicable, to
Monthly Payments which have been delinquent for the longest period of time. Such
allocations shall be conclusive for purposes of reimbursement to the Master
Servicer from recoveries on related Mortgage Loans pursuant to Section 3.10.
The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officers' Certificate of the
Master Servicer delivered to the Company and the Trustee.
If the Master Servicer determines as of the Business Day preceding any
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date, it shall give notice to the Trustee of
its inability to advance (such notice may be given by telecopy), not later than
3:00 P.M., New York time, on such Business Day, specifying the portion of such
amount that it will be unable to deposit. Not later than 3:00 P.M., New York
time, on the Certificate Account Deposit Date the Trustee shall, unless by 12:00
Noon, New York time, on such day the Trustee shall have been notified in writing
(by telecopy) that the Master Servicer shall have directly or indirectly
deposited in the Certificate Account such portion of the amount of the Advance
as to which the Master Servicer shall have given notice pursuant to the
preceding sentence, pursuant to Section 7.01, (a) terminate all of the rights
and obligations of the Master Servicer under this Agreement in accordance with
Section 7.01 and (b) assume the rights and obligations of the Master Servicer
hereunder, including the obligation to deposit in the Certificate Account an
amount equal to the Advance for the immediately succeeding Distribution Date.
The Trustee shall deposit all funds it receives pursuant to this Section
4.04 into the Certificate Account.
Section 4.05. Allocation of Realized Losses.
As provided in Section 4.05 of the Series Supplement.
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property.
The Master Servicer or the Subservicers shall file information returns
with respect to the receipt of mortgage interests received in a trade or
business, the reports of foreclosures and abandonments of any Mortgaged Property
and the information returns relating to cancellation of indebtedness income with
respect to any Mortgaged Property required by Sections 6050H, 6050J and 6050P,
respectively, of the Code, and deliver to the Trustee an Officers' Certificate
on or before March 31 of each year stating that such reports have been filed.
Such reports shall be in form and substance sufficient to meet the reporting
requirements imposed by Sections 6050H, 6050J and 6050P of the Code.
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.
(a) With respect to any Mortgage Loan that is delinquent in payment by 90 days
or more, the Master Servicer may, at its option, purchase such Mortgage Loan
from the Trustee at the Purchase Price therefor; provided, that such Mortgage
Loan that becomes 90 days or more delinquent during any given Calendar Quarter
shall only be eligible for purchase pursuant to this Section during the period
beginning on the first Business Day of the following Calendar Quarter, and
ending at the close of business on the second-to-last Business Day of such
following Calendar Quarter; and provided, further, that such Mortgage Loan is 90
days or more delinquent at the time of repurchase. Such option if not exercised
shall not thereafter be reinstated as to any Mortgage Loan, unless the
delinquency is cured and the Mortgage Loan thereafter again becomes delinquent
in payment by 90 days or more in a subsequent Calendar Quarter.
(b) If at any time the Master Servicer makes a payment to the Certificate
Account covering the amount of the Purchase Price for such a Mortgage Loan as
provided in clause (a) above, and the Master Servicer provides to the Trustee a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Certificate Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the request of the Master
Servicer, without recourse, to the Master Servicer, which shall succeed to all
the Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Master Servicer will thereupon own such
Mortgage, and all such security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto.
If, however, the Master Servicer shall have exercised its right to
repurchase a Mortgage Loan pursuant to this Section 4.07 upon the written
request of and with funds provided by the Junior Certificateholder and thereupon
transferred such Mortgage Loan to the Junior Certificateholder, the Master
Servicer shall so notify the Trustee in writing.
Section 4.08. Surety Bond.
(a) If a Required Surety Payment is payable pursuant to the Surety Bond with
respect to any Additional Collateral Loan, the Master Servicer shall so notify
the Trustee as soon as reasonably practicable and the Trustee shall promptly
complete the notice in the form of Attachment 1 to the Surety Bond and shall
promptly submit such notice to the Surety as a claim for a Required Surety. The
Master Servicer shall upon request assist the Trustee in completing such notice
and shall provide any information requested by the Trustee in connection
therewith.
(b) Upon receipt of a Required Surety Payment from the Surety on behalf of the
Holders of Certificates, the Trustee shall deposit such Required Surety Payment
in the Certificate Account and shall distribute such Required Surety Payment, or
the proceeds thereof, in accordance with the provisions of Section 4.02.
(c) The Trustee shall (i) receive as attorney-in-fact of each Holder of a
Certificate any Required Surety Payment from the Surety and (ii) disburse the
same to the Holders of such Certificates as set forth in Section 4.02.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Senior, Class X, Class M, Class B, Class P and Class R Certificates
shall be substantially in the forms set forth in Exhibits A, A-I, B, C, C-I and
D, respectively, and shall, on original issue, be executed and delivered by the
Trustee to the Certificate Registrar for authentication and delivery to or upon
the order of the Company upon receipt by the Trustee or one or more Custodians
of the documents specified in Section 2.01. The Certificates shall be issuable
in the minimum denominations designated in the Preliminary Statement to the
Series Supplement.
The Certificates shall be executed by manual or facsimile signature on
behalf of an authorized officer of the Trustee. Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Trustee shall bind the Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Certificate or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Certificate Registrar by manual signature, and such certificate
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
(b) Except as provided below, registration of Book-Entry Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold such
Certificates for the respective Certificate Owners with Ownership Interests
therein. The Holders of the Book-Entry Certificates shall hold their respective
Ownership Interests in and to each of such Certificates through the book-entry
facilities of the Depository and, except as provided below, shall not be
entitled to Definitive Certificates in respect of such Ownership Interests. All
transfers by Certificate Owners of their respective Ownership Interests in the
Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall transfer the Ownership
Interests only in the Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
The Trustee, the Master Servicer and the Company may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of
Book-Entry Certificates with respect to any particular matter shall not be
deemed inconsistent if they are made with respect to different Certificate
Owners. The Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.
If (i)(A) the Company advises the Trustee in writing that the Depository
is no longer willing or able to properly discharge its responsibilities as
Depository and (B) the Company is unable to locate a qualified successor or (ii)
the Company notifies the Depository and the Trustee of its intent to terminate
the book-entry system and, upon receipt of notice of such intent from the
Depository, the Depository Participants holding beneficial interests in the
Book-Entry Certificates agree to such termination through the Depository, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same. Upon surrender to the Trustee of the
Book-Entry Certificates by the Depository, accompanied by registration
instructions from the Depository for registration of transfer, the Trustee shall
execute, authenticate and deliver the Definitive Certificates. In addition, if
an Event of Default has occurred and is continuing, each Certificate Owner
materially adversely affected thereby may at its option request a Definitive
Certificate evidencing such Certificate Owner's Percentage Interest in the
related Class of Certificates. In order to make such a request, such Certificate
Owner shall, subject to the rules and procedures of the Depository, provide the
Depository or the related Depository Participant with directions for the
Certificate Registrar to exchange or cause the exchange of the Certificate
Owner's interest in such Class of Certificates for an equivalent Percentage
Interest in fully registered definitive form. Upon receipt by the Certificate
Registrar of instructions from the Depository directing the Certificate
Registrar to effect such exchange (such instructions shall contain information
regarding the Class of Certificates and the Certificate Principal Balance being
exchanged, the Depository Participant account to be debited with the decrease,
the registered holder of and delivery instructions for the Definitive
Certificate, and any other information reasonably required by the Certificate
Registrar), (i) the Certificate Registrar shall instruct the Depository to
reduce the related Depository Participant's account by the aggregate Certificate
Principal Balance of the Definitive Certificate, (ii) the Trustee shall execute
and the Certificate Registrar shall authenticate and deliver, in accordance with
the registration and delivery instructions provided by the Depository, a
Definitive Certificate evidencing such Certificate Owner's Percentage Interest
in such Class of Certificates and (iii) the Trustee shall execute and the
Certificate Registrar shall authenticate a new Book-Entry Certificate reflecting
the reduction in the aggregate Certificate Principal Balance of such Class of
Certificates by the Certificate Principal Balance of the Definitive Certificate.
None of the Company, the Master Servicer or the Trustee shall be liable
for any actions taken by the Depository or its nominee, including, without
limitation, any delay in delivery of any instructions required under Section
5.01 and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, the Trustee and the
Master Servicer shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
(c) If the Class A-V Certificates are Definitive Certificates, from time to time
Residential Funding, as the initial Holder of the Class A-V Certificates, may
exchange such Holder's Class A-V Certificates for Subclasses of Class A-V
Certificates to be issued under this Agreement by delivering a "Request for
Exchange" substantially in the form attached to this Agreement as Exhibit N
executed by an authorized officer, which Subclasses, in the aggregate, will
represent the Uncertificated Class A-V REMIC Regular Interests corresponding to
the Class A-V Certificates so surrendered for exchange. Any Subclass so issued
shall bear a numerical designation commencing with Class A-V-1 and continuing
sequentially thereafter, and will evidence ownership of the Uncertificated REMIC
Regular Interest or Interests specified in writing by such initial Holder to the
Trustee. The Trustee may conclusively, without any independent verification,
rely on, and shall be protected in relying on, Residential Funding's
determinations of the Uncertificated Class A-V REMIC Regular Interests
corresponding to any Subclass, the Initial Notional Amount and the initial
Pass-Through Rate on a Subclass as set forth in such Request for Exchange and
the Trustee shall have no duty to determine if any Uncertificated Class A-V
REMIC Regular Interest designated on a Request for Exchange corresponds to a
Subclass which has previously been issued. Each Subclass so issued shall be
substantially in the form set forth in Exhibit A and shall, on original issue,
be executed and delivered by the Trustee to the Certificate Registrar for
authentication and delivery in accordance with Section 5.01(a). Every
Certificate presented or surrendered for exchange by the initial Holder shall
(if so required by the Trustee or the Certificate Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer attached to such
Certificate and shall be completed to the satisfaction of the Trustee and the
Certificate Registrar duly executed by, the initial Holder thereof or his
attorney duly authorized in writing. The Certificates of any Subclass of Class
A-V Certificates may be transferred in whole, but not in part, in accordance
with the provisions of Section 5.02.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or
agencies to be appointed by the Trustee in accordance with the
provisions of Section 8.12 a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The
Trustee is initially appointed Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges
of Certificates as herein provided. The Certificate Registrar, or
the Trustee, shall provide the Master Servicer with a certified
list of Certificateholders as of each Record Date prior to the
related Determination Date.
(b) Upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose
pursuant to Section 8.12 and, in the case of any Class M, Class
B, Class P or Class R Certificate, upon satisfaction of the
conditions set forth below, the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new
Certificates of a like Class (or Subclass) and aggregate
Percentage Interest.
(c) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a
like Class (or Subclass) and aggregate Percentage Interest, upon
surrender of the Certificates to be exchanged at any such office
or agency. Whenever any Certificates are so surrendered for
exchange the Trustee shall execute and the Certificate Registrar
shall authenticate and deliver the Certificates of such Class
which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for transfer
or exchange shall (if so required by the Trustee or the
Certificate Registrar) be duly endorsed by, or be accompanied by
a written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the
Holder thereof or his attorney duly authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class B
Certificate or Class P Certificate shall be made unless such
transfer, sale, pledge or other disposition is exempt from the
registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that a transfer
of a Class B Certificate or Class P Certificate is to be made
either (i)(A) the Trustee shall require a written Opinion of
Counsel acceptable to and in form and substance satisfactory to
the Trustee and the Company that such transfer may be made
pursuant to an exemption, describing the applicable exemption and
the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not
be an expense of the Trustee, the Company or the Master Servicer
(except that, if such transfer is made by the Company or the
Master Servicer or any Affiliate thereof, the Company or the
Master Servicer shall provide such Opinion of Counsel at their
own expense); provided that such Opinion of Counsel will not be
required in connection with the initial transfer of any such
Certificate by the Company or any Affiliate thereof to the
Company or an Affiliate of the Company and (B) the Trustee shall
require the transferee to execute a representation letter,
substantially in the form of Exhibit H (with respect to any Class
B Certificate) or Exhibit G-1 (with respect to any Class P
Certificate) hereto, and the Trustee shall require the transferor
to execute a representation letter, substantially in the form of
Exhibit I hereto, each acceptable to and in form and substance
satisfactory to the Company and the Trustee certifying to the
Company and the Trustee the facts surrounding such transfer,
which representation letters shall not be an expense of the
Trustee, the Company or the Master Servicer; provided, however,
that such representation letters will not be required in
connection with any transfer of any such Certificate by the
Company or any Affiliate thereof to the Company or an Affiliate
of the Company, and the Trustee shall be entitled to conclusively
rely upon a representation (which, upon the request of the
Trustee, shall be a written representation) from the Company, of
the status of such transferee as an Affiliate of the Company or
(ii) the prospective transferee of such a Certificate shall be
required to provide the Trustee, the Company and the Master
Servicer with an investment letter substantially in the form of
Exhibit J attached hereto (or such other form as the Company in
its sole discretion deems acceptable), which investment letter
shall not be an expense of the Trustee, the Company or the Master
Servicer, and which investment letter states that, among other
things, such transferee (A) is a "qualified institutional buyer"
as defined under Rule 144A, acting for its own account or the
accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (B) is aware that the proposed transferor
intends to rely on the exemption from registration requirements
under the Securities Act of 1933, as amended, provided by Rule
144A. The Holder of any such Certificate desiring to effect any
such transfer, sale, pledge or other disposition shall, and does
hereby agree to, indemnify the Trustee, the Company, the Master
Servicer and the Certificate Registrar against any liability that
may result if the transfer, sale, pledge or other disposition is
not so exempt or is not made in accordance with such federal and
state laws.
(e) (i) In the case of any Class B, Class P or Class R Certificate
presented for registration in the name of any Person, either (A)
the Trustee shall require an Opinion of Counsel acceptable to
and in form and substance satisfactory to the Trustee, the
Company and the Master Servicer to the effect that the purchase
or holding of such Class B, Class P or Class R Certificate is
permissible under applicable law, will not constitute or result
in any non-exempt prohibited transaction under Section 406 of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Code (or comparable provisions
of any subsequent enactments), and will not subject the Trustee,
the Company or the Master Servicer to any obligation or
liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in
this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Master Servicer or (B) the
prospective Transferee shall be required to provide the Trustee,
the Company and the Master Servicer with a certification to the
effect set forth in paragraph six of Exhibit H (with respect to
any Class B Certificate) or paragraph fifteen of Exhibit G-1
(with respect to any Class R Certificate or Class P
Certificate), which the Trustee may rely upon without further
inquiry or investigation, or such other certifications as the
Trustee may deem desirable or necessary in order to establish
that such Transferee or the Person in whose name such
registration is requested either (a) is not an employee benefit
plan or other plan subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code, or any Person
(including an investment manager, a named fiduciary or a trustee
of any such plan) who is using "plan assets" of any such plan to
effect such acquisition (each, a "Plan Investor") or (b) in the
case of any Class B Certificate, the following conditions are
satisfied: (i) such Transferee is an insurance company, (ii) the
source of funds used to purchase or hold such Certificate (or
interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60, and (iii) the conditions set forth in
Sections I and III of PTCE 95-60 have been satisfied (each
entity that satisfies this clause (b), a "Complying Insurance
Company").
(ii) Any Transferee of a Class M Certificate will be deemed to
have represented by virtue of its purchase or holding of such
Certificate (or interest therein) that either (a) such Transferee
is not a Plan Investor, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption
("PTE") 94-29, as most recently amended, PTE 2002-41, 67 Fed.
Reg. 54487 (August 22, 2002) (the "RFC Exemption"), and that it
understands that there are certain conditions to the availability
of the RFC Exemption including that such Certificate must be
rated, at the time of purchase, not lower than "BBB-" (or its
equivalent) by Standard & Poor's, Fitch or Moody's or (c) such
Transferee is a Complying Insurance Company.
(iii) (A) If any Class M Certificate (or any interest therein) is
acquired or held by any Person that does not satisfy the
conditions described in paragraph (ii) above, then the last
preceding Transferee that either (i) is not a Plan Investor, (ii)
acquired such Certificate in compliance with the RFC Exemption,
or (iii) is a Complying Insurance Company shall be restored, to
the extent permitted by law, to all rights and obligations as
Certificate Owner thereof retroactive to the date of such
Transfer of such Class M Certificate. The Trustee shall be under
no liability to any Person for making any payments due on such
Certificate to such preceding Transferee.
(B) Any purported Certificate Owner whose acquisition or
holding of any Class M Certificate (or interest therein) was
effected in violation of the restrictions in this Section 5.02(e)
shall indemnify and hold harmless the Company, the Trustee, the
Master Servicer, any Subservicer, the Underwriters and the Trust
Fund from and against any and all liabilities, claims, costs or
expenses incurred by such parties as a result of such acquisition
or holding.
(f) (i) Each Person who has or who acquires any Ownership Interest in
a Class R Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound
by the following provisions and to have irrevocably authorized
the Trustee or its designee under clause (iii)(A) below to
deliver payments to a Person other than such Person and to
negotiate the terms of any mandatory sale under clause (iii)(B)
below and to execute all instruments of transfer and to do all
other things necessary in connection with any such sale. The
rights of each Person acquiring any Ownership Interest in a Class
R Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require
delivery to it, and shall not register the Transfer of any Class
R Certificate until its receipt of, (I) an affidavit and
agreement (a "Transfer Affidavit and Agreement," in the form
attached hereto as Exhibit G-1) from the proposed Transferee, in
form and substance satisfactory to the Master Servicer,
representing and warranting, among other things, that it is a
Permitted Transferee, that it is not acquiring its Ownership
Interest in the Class R Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person
who is not a Permitted Transferee, that for so long as it
retains its Ownership Interest in a Class R Certificate, it will
endeavor to remain a Permitted Transferee, and that it has
reviewed the provisions of this Section 5.02(f) and agrees to be
bound by them, and (II) a certificate, in the form attached
hereto as Exhibit G-2, from the Holder wishing to transfer the
Class R Certificate, in form and substance satisfactory to the
Master Servicer, representing and warranting, among other
things, that no purpose of the proposed Transfer is to impede
the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of the Trustee who is assigned to this
Agreement has actual knowledge that the proposed Transferee is
not a Permitted Transferee, no Transfer of an Ownership Interest
in a Class R Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (x) to require a Transfer
Affidavit and Agreement from any other Person to whom such Person
attempts to transfer its Ownership Interest in a Class R
Certificate and (y) not to transfer its Ownership Interest unless
it provides a certificate to the Trustee in the form attached
hereto as Exhibit G-2.
(E) Each Person holding or acquiring an Ownership Interest in a Class
R Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is
a "pass-through interest holder" within the meaning of Temporary
Treasury Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring an Ownership Interest in a Class R Certificate, if it
is, or is holding an Ownership Interest in a Class R Certificate
on behalf of, a "pass-through interest holder."
(ii) The Trustee shall register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit
and Agreement, a certificate of the Holder requesting such
transfer in the form attached hereto as Exhibit G-2 and all of
such other documents as shall have been reasonably required by
the Trustee as a condition to such registration. Transfers of the
Class R Certificates to Non-United States Persons and
Disqualified Organizations (as defined in Section 860E(e)(5) of
the Code) are prohibited.
(iii)
(A) If any Disqualified Organization shall become a holder of a
Class R Certificate, then the last preceding Permitted
Transferee shall be restored, to the extent permitted by law, to
all rights and obligations as Holder thereof retroactive to the
date of registration of such Transfer of such Class R
Certificate. If a Non-United States Person shall become a holder
of a Class R Certificate, then the last preceding United States
Person shall be restored, to the extent permitted by law, to all
rights and obligations as Holder thereof retroactive to the date
of registration of such Transfer of such Class R Certificate. If
a transfer of a Class R Certificate is disregarded pursuant to
the provisions of Treasury Regulations Section 1.860E-1 or
Section 1.860G-3, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights
and obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Class R Certificate. The
Trustee shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in
fact not permitted by this Section 5.02(f) or for making any
payments due on such Certificate to the holder thereof or for
taking any other action with respect to such holder under the
provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Class R
Certificate in violation of the restrictions in this Section
5.02(f) and to the extent that the retroactive restoration of
the rights of the Holder of such Class R Certificate as
described in clause (iii)(A) above shall be invalid, illegal or
unenforceable, then the Master Servicer shall have the right,
without notice to the holder or any prior holder of such Class R
Certificate, to sell such Class R Certificate to a purchaser
selected by the Master Servicer on such terms as the Master
Servicer may choose. Such purported Transferee shall promptly
endorse and deliver each Class R Certificate in accordance with
the instructions of the Master Servicer. Such purchaser may be
the Master Servicer itself or any Affiliate of the Master
Servicer. The proceeds of such sale, net of the commissions
(which may include commissions payable to the Master Servicer or
its Affiliates), expenses and taxes due, if any, shall be
remitted by the Master Servicer to such purported Transferee.
The terms and conditions of any sale under this clause (iii)(B)
shall be determined in the sole discretion of the Master
Servicer, and the Master Servicer shall not be liable to any
Person having an Ownership Interest in a Class R Certificate as
a result of its exercise of such discretion.
(iv) The Master Servicer, on behalf of the Trustee, shall make available,
upon written request from the Trustee, all information necessary to
compute any tax imposed (A) as a result of the Transfer of an Ownership
Interest in a Class R Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of
such Class R Certificates required to be provided to the Internal
Revenue Service and certain Persons as described in Treasury Regulations
Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result of any
regulated investment company, real estate investment trust, common trust
fund, partnership, trust, estate or organization described in Section
1381 of the Code that holds an Ownership Interest in a Class R
Certificate having as among its record holders at any time any Person
who is a Disqualified Organization. Reasonable compensation for
providing such information may be required by the Master Servicer from
such Person.
(v) The provisions of this Section 5.02(f) set forth prior to this clause
(v) may be modified, added to or eliminated, provided that there shall
have been delivered to the Trustee the following:
(A) written notification from each Rating Agency to the effect that the
modification, addition to or elimination of such provisions will not
cause such Rating Agency to downgrade its then-current ratings, if any,
of any Class of the Senior (in the case of the Insured Certificates (as
defined in the Series Supplement), such determination shall be made
without giving effect to the Certificate Policy (as defined in the
Series Supplement)), Class M or Class B Certificates below the lower of
the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency; and
(B) subject to Section 10.01(f), an Officers' Certificate of the Master
Servicer stating that the Master Servicer has received an Opinion of
Counsel, in form and substance satisfactory to the Master Servicer, to
the effect that such modification, addition to or absence of such
provisions will not cause any portion of any REMIC formed under the
Series Supplement to cease to qualify as a REMIC and will not cause (x)
any portion of any REMIC formed under the Series Supplement to be
subject to an entity-level tax caused by the Transfer of any Class R
Certificate to a Person that is a Disqualified Organization or (y) a
Certificateholder or another Person to be subject to a REMIC-related tax
caused by the Transfer of a Class R Certificate to a Person that is not
a Permitted Transferee.
(g) No service charge shall be made for any transfer or exchange of
Certificates of any Class, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) there is delivered to the Trustee and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor, Class and Percentage Interest but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 5.04. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of transfer,
the Company, the Master Servicer, the Trustee, any Certificate Insurer, the
Certificate Registrar and any agent of the Company, the Master Servicer, the
Trustee, any Certificate Insurer or the Certificate Registrar may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.02
and for all other purposes whatsoever, except as and to the extent provided in
the definition of "Certificateholder," and neither the Company, the Master
Servicer, the Trustee, any Certificate Insurer, the Certificate Registrar nor
any agent of the Company, the Master Servicer, the Trustee, any Certificate
Insurer or the Certificate Registrar shall be affected by notice to the contrary
except as provided in Section 5.02(f).
Section 5.05. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making
distributions to the Certificateholders pursuant to Section 4.02. In the event
of any such appointment, on or prior to each Distribution Date the Master
Servicer on behalf of the Trustee shall deposit or cause to be deposited with
the Paying Agent a sum sufficient to make the payments to the Certificateholders
in the amounts and in the manner provided for in Section 4.02, such sum to be
held in trust for the benefit of the Certificateholders.
The Trustee shall cause each Paying Agent to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee
that such Paying Agent shall hold all sums held by it for the payment to the
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be distributed to such Certificateholders. Any
sums so held by such Paying Agent shall be held only in Eligible Accounts to the
extent such sums are not distributed to the Certificateholders on the date of
receipt by such Paying Agent.
Section 5.06. U.S.A. Patriot Act Compliance.
In order for it to comply with its duties under the U.S.A. Patriot Act,
the Trustee may obtain and verify certain information from the other parties
hereto, including but not limited to such parties' name, address and other
identifying information.
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Company and the Master Servicer.
The Company and the Master Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by the Company and the Master Servicer herein. By
way of illustration and not limitation, the Company is not liable for the
servicing and administration of the Mortgage Loans, nor is it obligated by
Section 7.01 or Section 10.01 to assume any obligations of the Master Servicer
or to appoint a designee to assume such obligations, nor is it liable for any
other obligation hereunder that it may, but is not obligated to, assume unless
it elects to assume such obligation in accordance herewith.
Section 6.02. Merger or Consolidation of the Company or the Master Servicer;
Assignment of Rights and Delegation of Duties by Master Servicer.
(a) The Company and the Master Servicer shall each keep in full effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and shall each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
(b) Any Person into which the Company or the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Company or the Master Servicer shall be a party, or any Person
succeeding to the business of the Company or the Master Servicer, shall be the
successor of the Company or the Master Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person to the Master Servicer
shall be qualified to service mortgage loans on behalf of Xxxxxx Xxx or Xxxxxxx
Mac; and provided further that each Rating Agency's ratings, if any, of the
Senior (in the case of the Insured Certificates (as defined in the Series
Supplement), such determination shall be made without giving effect to the
Certificate Policy (as defined in the Series Supplement)), Class M or Class B
Certificates in effect immediately prior to such merger or consolidation will
not be qualified, reduced or withdrawn as a result thereof (as evidenced by a
letter to such effect from each Rating Agency).
(c) Notwithstanding anything else in this Section 6.02 and Section 6.04 to the
contrary, the Master Servicer may assign its rights and delegate its duties and
obligations under this Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of Xxxxxx Mae or Xxxxxxx Mac, is reasonably
satisfactory to the Trustee and the Company, is willing to service the Mortgage
Loans and executes and delivers to the Company and the Trustee an agreement, in
form and substance reasonably satisfactory to the Company and the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Master Servicer under this Agreement; provided further that each Rating Agency's
rating of the Classes of Certificates (in the case of the Insured Certificates
(as defined in the Series Supplement), such determination shall be made without
giving effect to the Certificate Policy (as defined in the Series Supplement))
that have been rated in effect immediately prior to such assignment and
delegation will not be qualified, reduced or withdrawn as a result of such
assignment and delegation (as evidenced by a letter to such effect from each
Rating Agency). In the case of any such assignment and delegation, the Master
Servicer shall be released from its obligations under this Agreement, except
that the Master Servicer shall remain liable for all liabilities and obligations
incurred by it as Master Servicer hereunder prior to the satisfaction of the
conditions to such assignment and delegation set forth in the next preceding
sentence. Notwithstanding the foregoing, in the event of a pledge or assignment
by the Master Servicer solely of its rights to purchase all assets of the Trust
Fund under Section 9.01(a) (or, if so specified in Section 9.01(a), its rights
to purchase the Mortgage Loans and property acquired related to such Mortgage
Loans or its rights to purchase the Certificates related thereto), the provisos
of the first sentence of this paragraph will not apply.
Section 6.03. Limitation on Liability of the Company, the Master Servicer and
Others.
Neither the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Company or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Company, the Master Servicer or any such Person
against any breach of warranties or representations made herein or any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. The Company, the Master Servicer and any
director, officer, employee or agent of the Company or the Master Servicer may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Company,
the Master Servicer and any director, officer, employee or agent of the Company
or the Master Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder.
Neither the Company nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal or administrative action,
proceeding, hearing or examination that is not incidental to its respective
duties under this Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Company or the Master Servicer
may in its discretion undertake any such action, proceeding, hearing or
examination that it may deem necessary or desirable in respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action, proceeding, hearing or examination and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Company and the Master Servicer shall be entitled to be reimbursed therefor out
of amounts attributable to the Mortgage Loans on deposit in the Custodial
Account as provided by Section 3.10 and, on the Distribution Date(s) following
such reimbursement, the aggregate of such expenses and costs shall be allocated
in reduction of the Accrued Certificate Interest on each Class entitled thereto
in the same manner as if such expenses and costs constituted a Prepayment
Interest Shortfall.
Section 6.04. Company and Master Servicer Not to Resign.
Subject to the provisions of Section 6.02, neither the Company nor the
Master Servicer shall resign from its respective obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Company or the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
by the Master Servicer shall become effective until the Trustee or a successor
servicer shall have assumed the Master Servicer's responsibilities and
obligations in accordance with Section 7.02.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
Event of Default, wherever used herein, means any one of the following
events (whatever reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Master Servicer shall fail to deposit or cause to be deposited into
the Certificate Account any amounts required to be so deposited therein
at the time required pursuant to Section 4.01 or otherwise or the Master
Servicer shall fail to distribute or cause to be distributed to the
Holders of Certificates of any Class any distribution required to be
made under the terms of the Certificates of such Class and this
Agreement and, in each case, such failure shall continue unremedied for
a period of 5 days after the date upon which written notice of such
failure, requiring such failure to be remedied, shall have been given to
the Master Servicer by the Trustee or the Company or to the Master
Servicer, the Company and the Trustee by the Holders of Certificates of
such Class evidencing Percentage Interests aggregating not less than
25%; or
(ii) the Master Servicer shall fail to observe or perform in any material
respect any other of the covenants or agreements on the part of the
Master Servicer contained in the Certificates of any Class or in this
Agreement and such failure shall continue unremedied for a period of 30
days (except that such number of days shall be 15 in the case of a
failure to pay the premium for any Required Insurance Policy) after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee or
the Company, or to the Master Servicer, the Company and the Trustee by
the Holders of Certificates of any Class evidencing, in the case of any
such Class, Percentage Interests aggregating not less than 25%; or
(iii) a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or
appointing a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Master Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60
days; or
(iv) the Master Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings of, or
relating to, the Master Servicer or of, or relating to, all or
substantially all of the property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) the Master Servicer shall notify the Trustee pursuant to Section 4.04(b)
that it is unable to deposit in the Certificate Account an amount equal
to the Advance.
If an Event of Default described in clauses (i)-(v) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, either the Company or the Trustee may, and
at the direction of Holders of Certificates entitled to at least 51% of the
Voting Rights, the Trustee shall, by notice in writing to the Master Servicer
(and to the Company if given by the Trustee or to the Trustee if given by the
Company), terminate all of the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. If an Event of Default
described in clause (vi) hereof shall occur, the Trustee shall, by notice to the
Master Servicer and the Company, immediately terminate all of the rights and
obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder as provided in Section 4.04(b). On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder thereof) or the Mortgage Loans or
otherwise, shall subject to Section 7.02 pass to and be vested in the Trustee or
the Trustee's designee appointed pursuant to Section 7.02; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee or its designee for administration by it of all cash
amounts which shall at the time be credited to the Custodial Account or the
Certificate Account or thereafter be received with respect to the Mortgage
Loans. No such termination shall release the Master Servicer for any liability
that it would otherwise have hereunder for any act or omission prior to the
effective time of such termination.
Notwithstanding any termination of the activities of Residential Funding
in its capacity as Master Servicer hereunder, Residential Funding shall be
entitled to receive, out of any late collection of a Monthly Payment on a
Mortgage Loan which was due prior to the notice terminating Residential
Funding's rights and obligations as Master Servicer hereunder and received after
such notice, that portion to which Residential Funding would have been entitled
pursuant to Sections 3.10(a)(ii), (vi) and (vii) as well as its Servicing Fee in
respect thereof, and any other amounts payable to Residential Funding hereunder
the entitlement to which arose prior to the termination of its activities
hereunder. Upon the termination of Residential Funding as Master Servicer
hereunder the Company shall deliver to the Trustee a copy of the Program Guide.
Section 7.02. Trustee or Company to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of termination
pursuant to Section 7.01 or resigns in accordance with Section 6.04, the Trustee
or, upon notice to the Company and with the Company's consent (which shall not
be unreasonably withheld) a designee (which meets the standards set forth below)
of the Trustee, shall be the successor in all respects to the Master Servicer in
its capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer (except for the
responsibilities, duties and liabilities contained in Sections 2.02 and 2.03(a),
excluding the duty to notify related Subservicers or Sellers as set forth in
such Sections, and its obligations to deposit amounts in respect of losses
incurred prior to such notice or termination on the investment of funds in the
Custodial Account or the Certificate Account pursuant to Sections 3.07(c) and
4.01(b) by the terms and provisions hereof); provided, however, that any failure
to perform such duties or responsibilities caused by the preceding Master
Servicer's failure to provide information required by Section 4.04 shall not be
considered a default by the Trustee hereunder. As compensation therefor, the
Trustee shall be entitled to all funds relating to the Mortgage Loans which the
Master Servicer would have been entitled to charge to the Custodial Account or
the Certificate Account if the Master Servicer had continued to act hereunder
and, in addition, shall be entitled to the income from any Permitted Investments
made with amounts attributable to the Mortgage Loans held in the Custodial
Account or the Certificate Account. If the Trustee has become the successor to
the Master Servicer in accordance with Section 6.04 or Section 7.01, then
notwithstanding the above, the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution,
which is also a Xxxxxx Xxx- or Xxxxxxx Mac-approved mortgage servicing
institution, having a net worth of not less than $10,000,000 as the successor to
the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall become successor to the Master Servicer and shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
initial Master Servicer hereunder. The Company, the Trustee, the Custodian and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. The Servicing Fee for any
successor Master Servicer appointed pursuant to this Section 7.02 will be
lowered with respect to those Mortgage Loans, if any, where the Subservicing Fee
accrues at a rate of less than 0.20% per annum in the event that the successor
Master Servicer is not servicing such Mortgage Loans directly and it is
necessary to raise the related Subservicing Fee to a rate of 0.20% per annum in
order to hire a Subservicer with respect to such Mortgage Loans. The Master
Servicer shall pay the reasonable expenses of the Trustee in connection with any
servicing transition hereunder.
(b) In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, in which case the predecessor Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to revise its records to reflect the
transfer of servicing to the successor Master Servicer as necessary under MERS'
rules and regulations, or (ii) the predecessor Master Servicer shall cooperate
with the successor Master Servicer in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS to
the Trustee and to execute and deliver such other notices, documents and other
instruments as may be necessary or desirable to effect a transfer of such
Mortgage Loan or servicing of such Mortgage Loan on the MERS(R) System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Master Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this subsection (b). The
successor Master Servicer shall cause such assignment to be delivered to the
Trustee or the Custodian promptly upon receipt of the original with evidence of
recording thereon or a copy certified by the public recording office in which
such assignment was recorded.
Section 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to the
Certificateholders at their respective addresses appearing in the Certificate
Register.
(b) Within 60 days after the occurrence of any Event of Default, the Trustee
shall transmit by mail to all Holders of Certificates notice of each such Event
of Default hereunder known to the Trustee, unless such Event of Default shall
have been cured or waived.
Section 7.04. Waiver of Events of Default.
The Holders representing at least 66% of the Voting Rights affected by a
default or Event of Default hereunder may waive such default or Event of
Default; provided, however, that (a) a default or Event of Default under clause
(i) of Section 7.01 may be waived only by all of the Holders of Certificates
affected by such default or Event of Default and (b) no waiver pursuant to this
Section 7.04 shall affect the Holders of Certificates in the manner set forth in
Section 11.01(b)(i) or (ii). Upon any such waiver of a default or Event of
Default by the Holders representing the requisite percentage of Voting Rights
affected by such default or Event of Default, such default or Event of Default
shall cease to exist and shall be deemed to have been remedied for every purpose
hereunder. No such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent investor would exercise or use under the circumstances in the
conduct of such investor's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. The Trustee shall notify the
Certificateholders of any such documents which do not materially conform to the
requirements of this Agreement in the event that the Trustee, after so
requesting, does not receive satisfactorily corrected documents.
The Trustee shall forward or cause to be forwarded in a timely fashion
the notices, reports and statements required to be forwarded by the Trustee
pursuant to Sections 4.03, 4.06, 7.03 and 10.01. The Trustee shall furnish in a
timely fashion to the Master Servicer such information as the Master Servicer
may reasonably request from time to time for the Master Servicer to fulfill its
duties as set forth in this Agreement. The Trustee covenants and agrees that it
shall perform its obligations hereunder in a manner so as to maintain the status
of any portion of any REMIC formed under the Series Supplement as a REMIC under
the REMIC Provisions and (subject to Section 10.01(f)) to prevent the imposition
of any federal, state or local income, prohibited transaction, contribution or
other tax on the Trust Fund to the extent that maintaining such status and
avoiding such taxes are reasonably within the control of the Trustee and are
reasonably within the scope of its duties under this Agreement.
(c) No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the curing or
waiver of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Trustee by the Company or the Master Servicer and which on their face,
do not contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Certificateholders of any Class holding
Certificates which evidence, as to such Class, Percentage Interests
aggregating not less than 25% as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iv) The Trustee shall not be charged with knowledge of any default (other
than a default in payment to the Trustee) specified in clauses (i) and
(ii) of Section 7.01 or an Event of Default under clauses (iii), (iv)
and (v) of Section 7.01 unless a Responsible Officer of the Trustee
assigned to and working in the Corporate Trust Office obtains actual
knowledge of such failure or event or the Trustee receives written
notice of such failure or event at its Corporate Trust Office from the
Master Servicer, the Company or any Certificateholder; and
(v) Except to the extent provided in Section 7.02, no provision in this
Agreement shall require the Trustee to expend or risk its own funds
(including, without limitation, the making of any Advance) or otherwise
incur any personal financial liability in the performance of any of its
duties as Trustee hereunder, or in the exercise of any of its rights or
powers, if the Trustee shall have reasonable grounds for believing that
repayment of funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(d) The Trustee shall timely pay, from its own funds, the amount of any and
all federal, state and local taxes imposed on the Trust Fund or its
assets or transactions including, without limitation, (A) "prohibited
transaction" penalty taxes as defined in Section 860F of the Code, if,
when and as the same shall be due and payable, (B) any tax on
contributions to a REMIC after the Closing Date imposed by Section
860G(d) of the Code and (C) any tax on "net income from foreclosure
property" as defined in Section 860G(c) of the Code, but only if such
taxes arise out of a breach by the Trustee of its obligations hereunder,
which breach constitutes negligence or willful misconduct of the
Trustee.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or refraining from
acting upon any resolution, Officers' Certificate, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby; nothing contained herein shall, however, relieve the Trustee of
the obligation, upon the occurrence of an Event of Default (which has
not been cured or waived), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and
skill in their exercise as a prudent investor would exercise or use
under the circumstances in the conduct of such investor's own affairs;
(iv) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and after the
curing or waiver of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by Holders
of Certificates of any Class evidencing, as to such Class, Percentage
Interests, aggregating not less than 50%; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding. The reasonable
expense of every such examination shall be paid by the Master Servicer,
if an Event of Default shall have occurred and is continuing, and
otherwise by the Certificateholder requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or
attorneys; and
(vii) To the extent authorized under the Code and the regulations promulgated
thereunder, each Holder of a Class R Certificate hereby irrevocably
appoints and authorizes the Trustee to be its attorney-in-fact for
purposes of signing any Tax Returns required to be filed on behalf of
the Trust Fund. The Trustee shall sign on behalf of the Trust Fund and
deliver to the Master Servicer in a timely manner any Tax Returns
prepared by or on behalf of the Master Servicer that the Trustee is
required to sign as determined by the Master Servicer pursuant to
applicable federal, state or local tax laws, provided that the Master
Servicer shall indemnify the Trustee for signing any such Tax Returns
that contain errors or omissions.
(b) Following the issuance of the Certificates, the Trustee shall not accept
any contribution of assets to the Trust Fund unless (subject to Section
10.01(f)) it shall have obtained or been furnished with an Opinion of
Counsel to the effect that such contribution will not (i) cause any
portion of any REMIC formed under the Series Supplement to fail to
qualify as a REMIC at any time that any Certificates are outstanding or
(ii) cause the Trust Fund to be subject to any federal tax as a result
of such contribution (including the imposition of any federal tax on
"prohibited transactions" imposed under Section 860F(a) of the Code).
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
execution of the Certificates and relating to the acceptance and receipt of the
Mortgage Loans) shall be taken as the statements of the Company or the Master
Servicer as the case may be, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates (except that the
Certificates shall be duly and validly executed and authenticated by it as
Certificate Registrar) or of any Mortgage Loan or related document, or of MERS
or the MERS(R) System. Except as otherwise provided herein, the Trustee shall
not be accountable for the use or application by the Company or the Master
Servicer of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Company or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Custodial Account or the Certificate Account by the Company or the Master
Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights it would have if it were not
Trustee.
Section 8.05. Master Servicer to Pay Trustee's Fees
and Expenses; Indemnification.
(a) The Master Servicer covenants and agrees to pay to the Trustee and any
co-trustee from time to time, and the Trustee and any co-trustee shall
be entitled to, reasonable compensation (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by each of them in the
execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee and
any co-trustee, and the Master Servicer will pay or reimburse the
Trustee and any co-trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee or any
co-trustee in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its
employ, and the expenses incurred by the Trustee or any co-trustee in
connection with the appointment of an office or agency pursuant to
Section 8.12) except any such expense, disbursement or advance as may
arise from its negligence or bad faith.
(b) The Master Servicer agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense incurred
without negligence or willful misconduct on the Trustee's part, arising
out of, or in connection with, the acceptance and administration of the
Trust Fund, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against any claim in connection
with the exercise or performance of any of its powers or duties under
this Agreement and the Custodial Agreement, and the Master Servicer
further agrees to indemnify the Trustee for, and to hold the Trustee
harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the second paragraph of
Section 2.01(c) hereof, including, without limitation, all costs,
liabilities and expenses (including reasonable legal fees and expenses)
of investigating and defending itself against any claim, action or
proceeding, pending or threatened, relating to the provisions of this
paragraph, provided that:
(i) with respect to any such claim, the Trustee shall have given the Master
Servicer written notice thereof promptly after the Trustee shall have
actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee shall
cooperate and consult fully with the Master Servicer in preparing such
defense; and
(iii) notwithstanding anything in this Agreement to the contrary, the Master
Servicer shall not be liable for settlement of any claim by the Trustee
entered into without the prior consent of the Master Servicer which
consent shall not be unreasonably withheld.
No termination of this Agreement shall affect the obligations created by this
Section 8.05(b) of the Master Servicer to indemnify the Trustee under the
conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the
Master Servicer in this Section 8.05(b) shall not be available (A) for any loss,
liability or expense of the Trustee, including the costs and expenses of
defending itself against any claim, incurred in connection with any actions
taken by the Trustee at the direction of the Certificateholders pursuant to the
terms of this Agreement or (B) where the Trustee is required to indemnify the
Master Servicer pursuant to Section 12.05(a).
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a national
banking association having its principal office in a state and city acceptable
to the Company and organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and 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. If such corporation or national
banking association publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 8.07.
Section 8.07. Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Company. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.06 and shall fail to resign after written request
therefor by the Company, or if at any time the Trustee shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Company may remove the
Trustee and appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee. In addition, in the event that the Company
determines that the Trustee has failed (i) to distribute or cause to be
distributed to the Certificateholders any amount required to be distributed
hereunder, if such amount is held by the Trustee or its Paying Agent (other than
the Master Servicer or the Company) for distribution or (ii) to otherwise
observe or perform in any material respect any of its covenants, agreements or
obligations hereunder, and such failure shall continue unremedied for a period
of 5 days (in respect of clause (i) above) or 30 days (in respect of clause (ii)
above other than any failure to comply with the provisions of Article XII, in
which case no notice or grace period shall be applicable) after the date on
which written notice of such failure, requiring that the same be remedied, shall
have been given to the Trustee by the Company, then the Company may remove the
Trustee and appoint a successor trustee by written instrument delivered as
provided in the preceding sentence. In connection with the appointment of a
successor trustee pursuant to the preceding sentence, the Company shall, on or
before the date on which any such appointment becomes effective, obtain from
each Rating Agency written confirmation that the appointment of any such
successor trustee will not result in the reduction of the ratings on any class
of the Certificates below the lesser of the then current or original ratings on
such Certificates.
(c) The Holders of Certificates entitled to at least 51% of the Voting Rights
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Company, one complete set to the Trustee so removed and one
complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
8.08.
Section 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as if
originally named as trustee herein. The predecessor trustee shall deliver to the
successor trustee all Mortgage Files and related documents and statements held
by it hereunder (other than any Mortgage Files at the time held by a Custodian,
which shall become the agent of any successor trustee hereunder), and the
Company, the Master Servicer and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as provided in this
Section, the Company shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Company fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Company.
Section 8.09. Merger or Consolidation of Trustee.
Any corporation or national banking association into which the Trustee
may be merged or converted or with which it may be consolidated or any
corporation or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or national banking association succeeding to the business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of Section 8.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee shall mail notice of any such merger or
consolidation to the Certificateholders at their address as shown in the
Certificate Register.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the Master
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 8.10 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee, and such separate trustee or co-trustee jointly,
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be deemed to
have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the Trustee,
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11. Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer and the
Company, or shall, at the direction of the Company and the Master Servicer,
appoint one or more Custodians who are not Affiliates of the Company, the Master
Servicer or any Seller to hold all or a portion of the Mortgage Files as agent
for the Trustee, by entering into a Custodial Agreement. Subject to Article
VIII, the Trustee agrees to comply with the terms of each Custodial Agreement
and to enforce the terms and provisions thereof against the Custodian for the
benefit of the Certificateholders. Each Custodian shall be a depository
institution subject to supervision by federal or state authority, shall have a
combined capital and surplus of at least $15,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any Mortgage File. Each
Custodial Agreement may be amended only as provided in Section 11.01. The
Trustee shall notify the Certificateholders of the appointment of any Custodian
(other than the Custodian appointed as of the Closing Date) pursuant to this
Section 8.11.
Section 8.12. Appointment of Office or Agency.
The Trustee will maintain an office or agency in the United States at
the address designated in Section 11.05 of the Series Supplement where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee will maintain an office at the address stated in Section 11.05 of the
Series Supplement where notices and demands to or upon the Trustee in respect of
this Agreement may be served.
ARTICLE IX
TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES
Section 9.01. Optional Purchase by the Master Servicer of All Certificates;
Termination Upon Purchase by the Master Servicer or Liquidation of All
Mortgage Loans
(a) Subject to Section 9.02, the respective obligations and responsibilities
of the Company, the Master Servicer and the Trustee created hereby in
respect of the Certificates (other than the obligation of the Trustee to
make certain payments after the Final Distribution Date to
Certificateholders and the obligation of the Company to send certain
notices as hereinafter set forth) shall terminate upon the last action
required to be taken by the Trustee on the Final Distribution Date
pursuant to this Article IX following the earlier of:
(i) the later of the final payment or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund
or the disposition of all property acquired upon foreclosure or deed in
lieu of foreclosure of any Mortgage Loan, or
(ii) the purchase by the Master Servicer of all Mortgage Loans and all
property acquired in respect of any Mortgage Loan remaining in the Trust
Fund at a price equal to 100% of the unpaid principal balance of each
Mortgage Loan or, if less than such unpaid principal balance, the fair
market value of the related underlying property of such Mortgage Loan
with respect to Mortgage Loans as to which title has been acquired if
such fair market value is less than such unpaid principal balance (net
of any unreimbursed Advances attributable to principal) on the day of
repurchase plus accrued interest thereon at the Net Mortgage Rate (or
Modified Net Mortgage Rate in the case of any Modified Mortgage Loan)
to, but not including, the first day of the month in which such
repurchase price is distributed, provided, however, that in no event
shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Xxxxxx
X. Xxxxxxx, the late ambassador of the United States to the Court of St.
Xxxxx, living on the date hereof and provided further that the purchase
price set forth above shall be increased as is necessary, as determined
by the Master Servicer, to avoid disqualification of any portion of any
REMIC formed under the Series Supplement as a REMIC. The purchase price
paid by the Master Servicer shall also include any amounts owed by
Residential Funding pursuant to the last paragraph of Section 4 of the
Assignment Agreement in respect of any liability, penalty or expense
that resulted from a breach of the Compliance With Laws Representation,
that remain unpaid on the date of such purchase.
The right of the Master Servicer to purchase all the assets of the Trust
Fund pursuant to clause (ii) above is conditioned upon the Pool Stated Principal
Balance as of the Final Distribution Date, prior to giving effect to
distributions to be made on such Distribution Date, being less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans.
If such right is exercised by the Master Servicer, the Master Servicer
shall be deemed to have been reimbursed for the full amount of any unreimbursed
Advances theretofore made by it with respect to the Mortgage Loans. In addition,
the Master Servicer shall provide to the Trustee the certification required by
Section 3.15 and the Trustee and any Custodian shall, promptly following payment
of the purchase price, release to the Master Servicer the Mortgage Files
pertaining to the Mortgage Loans being purchased.
In addition to the foregoing, on any Distribution Date on which the Pool
Stated Principal Balance, prior to giving effect to distributions to be made on
such Distribution Date, is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans, the Master Servicer shall have the right, at its
option, to purchase the Certificates in whole, but not in part, at a price equal
to the outstanding Certificate Principal Balance of such Certificates plus the
sum of Accrued Certificate Interest thereon for the related Interest Accrual
Period and any previously unpaid Accrued Certificate Interest. If the Master
Servicer exercises this right to purchase the outstanding Certificates, the
Master Servicer will promptly terminate the respective obligations and
responsibilities created hereby in respect of the Certificates pursuant to this
Article IX.
(b) The Master Servicer shall give the Trustee not less than 40
days' prior notice of the Distribution Date on which the Master Servicer
anticipates that the final distribution will be made to
Certificateholders (whether as a result of the exercise by the Master
Servicer of its right to purchase the assets of the Trust Fund or
otherwise) or on which the Master Servicer anticipates that the
Certificates will be purchased (as a result of the exercise by the
Master Servicer to purchase the outstanding Certificates). Notice of any
termination specifying the anticipated Final Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Trustee
(if so required by the terms hereof) for payment of the final
distribution and cancellation or notice of any purchase of the
outstanding Certificates, specifying the Distribution Date upon which
the Holders may surrender their Certificates to the Trustee for payment,
shall be given promptly by the Master Servicer (if it is exercising its
right to purchase the assets of the Trust Fund or to purchase the
outstanding Certificates), or by the Trustee (in any other case) by
letter. Such notice shall be prepared by the Master Servicer (if it is
exercising its right to purchase the assets of the Trust Fund or to
purchase the outstanding Certificates), or by the Trustee (in any other
case) and mailed by the Trustee to the Certificateholders not earlier
than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution specifying:
(iii) the anticipated Final Distribution Date upon which final payment of the
Certificates is anticipated to be made upon presentation and surrender
of Certificates at the office or agency of the Trustee therein
designated where required pursuant to this Agreement or, in the case of
the purchase by the Master Servicer of the outstanding Certificates, the
Distribution Date on which such purchase is to be made,
(iv) the amount of any such final payment, or in the case of the purchase of
the outstanding Certificates, the purchase price, in either case, if
known, and
(v) that the Record Date otherwise applicable to such Distribution Date is
not applicable, and in the case of the Senior Certificates, or in the
case of all of the Certificates in connection with the exercise by the
Master Servicer of its right to purchase the Certificates, that payment
will be made only upon presentation and surrender of the Certificates at
the office or agency of the Trustee therein specified.
If the Master Servicer is obligated to give notice to Certificateholders as
aforesaid, it shall give such notice to the Certificate Registrar at the time
such notice is given to Certificateholders and, if the Master Servicer is
exercising its rights to purchase the outstanding Certificates, it shall give
such notice to each Rating Agency at the time such notice is given to
Certificateholders. As a result of the exercise by the Master Servicer of its
right to purchase the assets of the Trust Fund, the Master Servicer shall
deposit in the Certificate Account, before the Final Distribution Date in
immediately available funds an amount equal to the purchase price for the assets
of the Trust Fund, computed as provided above. As a result of the exercise by
the Master Servicer of its right to purchase the outstanding Certificates, the
Master Servicer shall deposit in an Eligible Account, established by the Master
Servicer on behalf of the Trustee and separate from the Certificate Account in
the name of the Trustee in trust for the registered holders of the Certificates,
before the Distribution Date on which such purchase is to occur in immediately
available funds an amount equal to the purchase price for the Certificates,
computed as above provided, and provide notice of such deposit to the Trustee.
The Trustee will withdraw from such account the amount specified in subsection
(c) below.
(b) In the case of the Senior Certificates, upon presentation and surrender of
the Certificates by the Certificateholders thereof, and in the case of the Class
M and Class B Certificates, upon presentation and surrender of the Certificates
by the Certificateholders thereof in connection with the exercise by the Master
Servicer of its right to purchase the Certificates, and otherwise in accordance
with Section 4.01(a), the Trustee shall distribute to the Certificateholders (i)
the amount otherwise distributable on such Distribution Date, if not in
connection with the Master Servicer's election to repurchase the assets of the
Trust Fund or the outstanding Certificates, or (ii) if the Master Servicer
elected to so repurchase the assets of the Trust Fund or the outstanding
Certificates, an amount determined as follows: (A) with respect to each
Certificate the outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest for the related Interest Accrual Period thereon and any
previously unpaid Accrued Certificate Interest, subject to the priority set
forth in Section 4.02(a), and (B) with respect to the Class R Certificates, any
excess of the amounts available for distribution (including the repurchase price
specified in clause (ii) of subsection (a) of this Section) over the total
amount distributed under the immediately preceding clause (A). Notwithstanding
the reduction of the Certificate Principal Balance of any Class of Subordinate
Certificates to zero, such Class will be outstanding hereunder until the
termination of the respective obligations and responsibilities of the Company,
the Master Servicer and the Trustee hereunder in accordance with Article IX.
(c) If any Certificateholders shall not surrender their Certificates for final
payment and cancellation on or before the Final Distribution Date (if so
required by the terms hereof), the Trustee shall on such date cause all funds in
the Certificate Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the Master Servicer (if it exercised its
right to purchase the assets of the Trust Fund), or the Trustee (in any other
case) shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within six months after the second notice any
Certificate shall not have been surrendered for cancellation, the Trustee shall
take appropriate steps as directed by the Master Servicer to contact the
remaining Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the escrow account and of contacting
Certificateholders shall be paid out of the assets which remain in the escrow
account. If within nine months after the second notice any Certificates shall
not have been surrendered for cancellation, the Trustee shall pay to the Master
Servicer all amounts distributable to the holders thereof and the Master
Servicer shall thereafter hold such amounts until distributed to such Holders.
No interest shall accrue or be payable to any Certificateholder on any amount
held in the escrow account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 9.01.
(d) If any Certificateholders do not surrender their Certificates on or before
the Distribution Date on which a purchase of the outstanding Certificates is to
be made, the Trustee shall on such date cause all funds in the Certificate
Account deposited therein by the Master Servicer pursuant to Section 9.01(b) to
be withdrawn therefrom and deposited in a separate escrow account for the
benefit of such Certificateholders, and the Master Servicer shall give a second
written notice to such Certificateholders to surrender their Certificates for
payment of the purchase price therefor. If within six months after the second
notice any Certificate shall not have been surrendered for cancellation, the
Trustee shall take appropriate steps as directed by the Master Servicer to
contact the Holders of such Certificates concerning surrender of their
Certificates. The costs and expenses of maintaining the escrow account and of
contacting Certificateholders shall be paid out of the assets which remain in
the escrow account. If within nine months after the second notice any
Certificates shall not have been surrendered for cancellation in accordance with
this Section 9.01, the Trustee shall pay to the Master Servicer all amounts
distributable to the Holders thereof and the Master Servicer shall thereafter
hold such amounts until distributed to such Holders. No interest shall accrue or
be payable to any Certificateholder on any amount held in the escrow account or
by the Master Servicer as a result of such Certificateholder's failure to
surrender its Certificate(s) for payment in accordance with this Section 9.01.
Any Certificate that is not surrendered on the Distribution Date on which a
purchase pursuant to this Section 9.01 occurs as provided above will be deemed
to have been purchased and the Holder as of such date will have no rights with
respect thereto except to receive the purchase price therefor minus any costs
and expenses associated with such escrow account and notices allocated thereto.
Any Certificates so purchased or deemed to have been purchased on such
Distribution Date shall remain outstanding hereunder until the Master Servicer
has terminated the respective obligations and responsibilities created hereby in
respect of the Certificates pursuant to this Article IX. The Master Servicer
shall be for all purposes the Holder thereof as of such date.
Section 9.02. Additional Termination Requirements.
(a) Each REMIC that comprises the Trust Fund shall be terminated in
accordance with the following additional requirements, unless (subject
to Section 10.01(f)) the Trustee and the Master Servicer have received
an Opinion of Counsel (which Opinion of Counsel shall not be an expense
of the Trustee) to the effect that the failure of each such REMIC to
comply with the requirements of this Section 9.02 will not (i) result in
the imposition on the Trust Fund of taxes on "prohibited transactions,"
as described in Section 860F of the Code, or (ii) cause any such REMIC
to fail to qualify as a REMIC at any time that any Certificate is
outstanding:
(i) The Master Servicer shall establish a 90-day liquidation period for each
such REMIC and specify the first day of such period in a statement
attached to the Trust Fund's final Tax Return pursuant to Treasury
regulations Section 1.860F-1. The Master Servicer also shall satisfy all
of the requirements of a qualified liquidation for a REMIC under Section
860F of the Code and regulations thereunder;
(ii) The Master Servicer shall notify the Trustee at the commencement of such
90-day liquidation period and, at or prior to the time of making of the
final payment on the Certificates, the Trustee shall sell or otherwise
dispose of all of the remaining assets of the Trust Fund in accordance
with the terms hereof; and
(iii) If the Master Servicer or the Company is exercising its right to
purchase the assets of the Trust Fund, the Master Servicer shall, during
the 90-day liquidation period and at or prior to the Final Distribution
Date, purchase all of the assets of the Trust Fund for cash.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably approves
and appoints the Master Servicer as its attorney-in-fact to adopt a plan
of complete liquidation for each REMIC at the expense of the Trust Fund
in accordance with the terms and conditions of this Agreement.
Section 9.03. Termination of Multiple REMICs.
If the REMIC Administrator makes two or more separate REMIC elections,
the applicable REMIC shall be terminated on the earlier of the Final
Distribution Date and the date on which it is deemed to receive the last deemed
distributions on the related Uncertificated REMIC Regular Interests and the last
distribution due on the Certificates is made.
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The REMIC Administrator shall make an election to treat the Trust Fund as
one or more REMICs under the Code and, if necessary, under applicable state law.
The assets of each such REMIC will be set forth in the Series Supplement. Such
election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of each REMIC election in respect of
the Trust Fund, Certificates and interests to be designated as the "regular
interests" and the sole class of "residual interests" in the REMIC will be set
forth in Section 10.03 of the Series Supplement. The REMIC Administrator and the
Trustee shall not permit the creation of any "interests" (within the meaning of
Section 860G of the Code) in any REMIC elected in respect of the Trust Fund
other than the "regular interests" and "residual interests" so designated.
(b) The Closing Date is hereby designated as the "startup day" of the Trust Fund
within the meaning of Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate representing a
0.01% Percentage Interest each Class of the Class R Certificates and shall be
designated as "the tax matters person" with respect to each REMIC in the manner
provided under Treasury regulations section 1.860F-4(d) and Treasury regulations
section 301.6231(a)(7)-1. The REMIC Administrator, as tax matters person, shall
(i) act on behalf of each REMIC in relation to any tax matter or controversy
involving the Trust Fund and (ii) represent the Trust Fund in any administrative
or judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto. The legal expenses, including without
limitation attorneys' or accountants' fees, and costs of any such proceeding and
any liability resulting therefrom shall be expenses of the Trust Fund and the
REMIC Administrator shall be entitled to reimbursement therefor out of amounts
attributable to the Mortgage Loans on deposit in the Custodial Account as
provided by Section 3.10 unless such legal expenses and costs are incurred by
reason of the REMIC Administrator's willful misfeasance, bad faith or gross
negligence. If the REMIC Administrator is no longer the Master Servicer
hereunder, at its option the REMIC Administrator may continue its duties as
REMIC Administrator and shall be paid reasonable compensation not to exceed
$3,000 per year by any successor Master Servicer hereunder for so acting as the
REMIC Administrator.
(d) The REMIC Administrator shall prepare or cause to be prepared all of the Tax
Returns that it determines are required with respect to each REMIC created
hereunder and deliver such Tax Returns in a timely manner to the Trustee and the
Trustee shall sign and file such Tax Returns in a timely manner. The expenses of
preparing such returns shall be borne by the REMIC Administrator without any
right of reimbursement therefor. The REMIC Administrator agrees to indemnify and
hold harmless the Trustee with respect to any tax or liability arising from the
Trustee's signing of Tax Returns that contain errors or omissions. The Trustee
and Master Servicer shall promptly provide the REMIC Administrator with such
information as the REMIC Administrator may from time to time request for the
purpose of enabling the REMIC Administrator to prepare Tax Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a Class R
Certificate such information as is necessary for the application of any tax
relating to the transfer of a Class R Certificate to any Person who is not a
Permitted Transferee, (ii) to the Trustee, and the Trustee shall forward to the
Certificateholders, such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption) and
(iii) to the Internal Revenue Service the name, title, address and telephone
number of the person who will serve as the representative of each REMIC.
(f) The Master Servicer and the REMIC Administrator shall take such actions and
shall cause each REMIC created hereunder to take such actions as are reasonably
within the Master Servicer's or the REMIC Administrator's control and the scope
of its duties more specifically set forth herein as shall be necessary or
desirable to maintain the status of each REMIC as a REMIC under the REMIC
Provisions (and the Trustee shall assist the Master Servicer and the REMIC
Administrator, to the extent reasonably requested by the Master Servicer and the
REMIC Administrator to do so). The Master Servicer and the REMIC Administrator
shall not knowingly or intentionally take any action, cause the Trust Fund to
take any action or fail to take (or fail to cause to be taken) any action
reasonably within their respective control that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of any
portion of any REMIC formed under the Series Supplement as a REMIC or (ii)
result in the imposition of a tax upon any such REMIC (including but not limited
to the tax on prohibited transactions as defined in Section 860F(a)(2) of the
Code and the tax on contributions to a REMIC set forth in Section 860G(d) of the
Code) (either such event, in the absence of an Opinion of Counsel or the
indemnification referred to in this sentence, an "Adverse REMIC Event") unless
the Master Servicer or the REMIC Administrator, as applicable, has received an
Opinion of Counsel (at the expense of the party seeking to take such action or,
if such party fails to pay such expense, and the Master Servicer or the REMIC
Administrator, as applicable, determines that taking such action is in the best
interest of the Trust Fund and the Certificateholders, at the expense of the
Trust Fund, but in no event at the expense of the Master Servicer, the REMIC
Administrator or the Trustee) to the effect that the contemplated action will
not, with respect to each REMIC created hereunder, endanger such status or,
unless the Master Servicer, the REMIC Administrator or both, as applicable,
determine in its or their sole discretion to indemnify the Trust Fund against
the imposition of such a tax, result in the imposition of such a tax. Wherever
in this Agreement a contemplated action may not be taken because the timing of
such action might result in the imposition of a tax on the Trust Fund, or may
only be taken pursuant to an Opinion of Counsel that such action would not
impose a tax on the Trust Fund, such action may nonetheless be taken provided
that the indemnity given in the preceding sentence with respect to any taxes
that might be imposed on the Trust Fund has been given and that all other
preconditions to the taking of such action have been satisfied. The Trustee
shall not take or fail to take any action (whether or not authorized hereunder)
as to which the Master Servicer or the REMIC Administrator, as applicable, has
advised it in writing that it has received an Opinion of Counsel to the effect
that an Adverse REMIC Event could occur with respect to such action. In
addition, prior to taking any action with respect to any REMIC created hereunder
or any related assets thereof, or causing any such REMIC to take any action,
which is not expressly permitted under the terms of this Agreement, the Trustee
will consult with the Master Servicer or the REMIC Administrator, as applicable,
or its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to any such REMIC, and the Trustee
shall not take any such action or cause any such REMIC to take any such action
as to which the Master Servicer or the REMIC Administrator, as applicable, has
advised it in writing that an Adverse REMIC Event could occur. The Master
Servicer or the REMIC Administrator, as applicable, may consult with counsel to
make such written advice, and the cost of same shall be borne by the party
seeking to take the action not expressly permitted by this Agreement, but in no
event at the expense of the Master Servicer or the REMIC Administrator. At all
times as may be required by the Code, the Master Servicer will to the extent
within its control and the scope of its duties more specifically set forth
herein, maintain substantially all of the assets of each REMIC created hereunder
as "qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of any
REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on "net
income from foreclosure property" of any such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the Startup
Day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Master Servicer, if such tax arises out of
or results from a breach by the Master Servicer of any of its obligations under
this Agreement or the Master Servicer has in its sole discretion determined to
indemnify the Trust Fund against such tax, (ii) to the Trustee, if such tax
arises out of or results from a breach by the Trustee of any of its obligations
under this Article X, or (iii) otherwise against amounts on deposit in the
Custodial Account as provided by Section 3.10 and on the Distribution Date(s)
following such reimbursement the aggregate of such taxes shall be allocated in
reduction of the Accrued Certificate Interest on each Class entitled thereto in
the same manner as if such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Master Servicer shall, for federal income tax purposes,
maintain books and records with respect to each REMIC created hereunder on a
calendar year and on an accrual basis or as otherwise may be required by the
REMIC Provisions.
(i) Following the Startup Day, neither the Master Servicer nor the Trustee shall
accept any contributions of assets to any REMIC created hereunder unless
(subject to Section 10.01(f)) the Master Servicer and the Trustee shall have
received an Opinion of Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in such REMIC will
not cause the REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject the REMIC to any tax under the REMIC
Provisions or other applicable provisions of federal, state and local law or
ordinances.
(j) Neither the Master Servicer nor the Trustee shall (subject to Section
10.01(f)) enter into any arrangement by which any REMIC created hereunder will
receive a fee or other compensation for services nor permit any such REMIC to
receive any income from assets other than "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the Certificate
Principal Balance of each Class of Certificates (other than the Interest Only
Certificates) representing a regular interest in the applicable REMIC and the
Uncertificated Principal Balance of each Uncertificated REMIC Regular Interest
(other than each Uncertificated REMIC Regular Interest represented by a Class
A-V Certificate, if any) and the rights to the Interest Only Certificates and
Uncertificated REMIC Regular Interest represented by a Class A-V Certificate
would be reduced to zero is the Maturity Date for each such Certificate and
Interest.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall prepare
and file with the Internal Revenue Service Form 8811, "Information Return for
Real Estate Mortgage Investment Conduits (REMIC) and Issuers of Collateralized
Debt Obligations" for each REMIC created hereunder.
(m) Neither the Trustee nor the Master Servicer shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
default, imminent default or foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of any REMIC created hereunder, (iii)
the termination of any such REMIC pursuant to Article IX of this Agreement or
(iv) a purchase of Mortgage Loans pursuant to Article II or III of this
Agreement) nor acquire any assets for any such REMIC, nor sell or dispose of any
investments in the Custodial Account or the Certificate Account for gain nor
accept any contributions to any such REMIC after the Closing Date unless it has
received an Opinion of Counsel that such sale, disposition, substitution or
acquisition will not (a) affect adversely the status of such REMIC as a REMIC or
(b) unless the Master Servicer has determined in its sole discretion to
indemnify the Trust Fund against such tax, cause such REMIC to be subject to a
tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions.
Section 10.02. Master Servicer, REMIC Administrator and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Company, the REMIC
Administrator and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Company or the Master Servicer, as a result of a breach of the
Trustee's covenants set forth in Article VIII or this Article X.
(b) The REMIC Administrator agrees to indemnify the Trust Fund, the Company, the
Master Servicer and the Trustee for any taxes and costs (including, without
limitation, any reasonable attorneys' fees) imposed on or incurred by the Trust
Fund, the Company, the Master Servicer or the Trustee, as a result of a breach
of the REMIC Administrator's covenants set forth in this Article X with respect
to compliance with the REMIC Provisions, including without limitation, any
penalties arising from the Trustee's execution of Tax Returns prepared by the
REMIC Administrator that contain errors or omissions; provided, however, that
such liability will not be imposed to the extent such breach is a result of an
error or omission in information provided to the REMIC Administrator by the
Master Servicer in which case Section 10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund, the Company, the
REMIC Administrator and the Trustee for any taxes and costs (including, without
limitation, any reasonable attorneys' fees) imposed on or incurred by the Trust
Fund, the Company, the REMIC Administrator or the Trustee, as a result of a
breach of the Master Servicer's covenants set forth in this Article X or in
Article III with respect to compliance with the REMIC Provisions, including
without limitation, any penalties arising from the Trustee's execution of Tax
Returns prepared by the Master Servicer that contain errors or omissions.
Section 10.03. Designation of REMIC(s).
As provided in Section 10.03 of the Series Supplement.
Section 10.04. Distributions on the Uncertificated REMIC I and REMIC II Regular
Interests.
As provided in Section 10.04 of the Series Supplement.
Section 10.05. Compliance with Withholding Requirements.
As provided in Section 10.05 of the Series Supplement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
(a) This Agreement or any Custodial Agreement may be amended from time to
time by the Company, the Master Servicer and the Trustee, without the
consent of any of the Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein, which may be
inconsistent with any other provisions herein or therein or to correct
any error,
(iii) to modify, eliminate or add to any of its provisions to such extent as
shall be necessary or desirable to maintain the qualification of the
Trust Fund as a REMIC at all times that any Certificate is outstanding
or to avoid or minimize the risk of the imposition of any tax on the
Trust Fund pursuant to the Code that would be a claim against the Trust
Fund, provided that the Trustee has received an Opinion of Counsel to
the effect that (A) such action is necessary or desirable to maintain
such qualification or to avoid or minimize the risk of the imposition of
any such tax and (B) such action will not adversely affect in any
material respect the interests of any Certificateholder,
(iv) to change the timing and/or nature of deposits into the Custodial
Account or the Certificate Account or to change the name in which the
Custodial Account is maintained, provided that (A) the Certificate
Account Deposit Date shall in no event be later than the related
Distribution Date, (B) such change shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the interests of
any Certificateholder and (C) such change shall not result in a
reduction of the rating assigned to any Class of Certificates below the
lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date (in the case of the Insured
Certificates (as defined in the Series Supplement), such determination
shall be made without giving effect to the Certificate Policy (as
defined in the Series Supplement)), as evidenced by a letter from each
Rating Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section 5.02(f) or any
other provision hereof restricting transfer of the Class R Certificates,
by virtue of their being the "residual interests" in a REMIC, provided
that (A) such change shall not result in reduction of the rating
assigned to any such Class of Certificates below the lower of the
then-current rating or the rating assigned to such Certificates as of
the Closing Date (in the case of the Insured Certificates (as defined in
the Series Supplement), such determination shall be made without giving
effect to the Certificate Policy (as defined in the Series Supplement)),
as evidenced by a letter from each Rating Agency to such effect, and (B)
such change shall not (subject to Section 10.01(f)), as evidenced by an
Opinion of Counsel (at the expense of the party seeking so to modify,
eliminate or add such provisions), cause any REMIC created hereunder or
any of the Certificateholders (other than the transferor) to be subject
to a federal tax caused by a transfer to a Person that is not a
Permitted Transferee,
(vi) to make any other provisions with respect to matters or questions
arising under this Agreement or such Custodial Agreement which shall not
be materially inconsistent with the provisions of this Agreement,
provided that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder or
(vii) to amend any provision herein or therein that is not
material to any of the Certificateholders.
(b) This Agreement or any Custodial Agreement may also be amended from time
to time by the Company, the Master Servicer and the Trustee with the
consent of the Holders of Certificates evidencing in the aggregate not
less than 66% of the Percentage Interests of each Class of Certificates
with a Certificate Principal Balance greater than zero affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or such Custodial
Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment
shall:
(i) reduce in any manner the amount of, or delay the timing of, payments
which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate,
(ii) reduce the aforesaid percentage of Certificates of any Class the Holders
of which are required to consent to any such amendment, in any such case
without the consent of the Holders of all Certificates of such Class
then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (subject to Section 10.01(f)
and at the expense of the party seeking such amendment) to the effect
that such amendment or the exercise of any power granted to the Master
Servicer, the Company or the Trustee in accordance with such amendment
is permitted hereunder and will not result in the imposition of a
federal tax on the Trust Fund or cause any REMIC created under the
Series Supplement to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(d) Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to the
Custodian and each Certificateholder. It shall not be necessary for the
consent of Certificateholders under this Section 11.01 to approve the
particular form of any proposed amendment, but it shall be sufficient if
such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such
reasonable regulations as the Trustee may prescribe.
(e) The Company shall have the option, in its sole discretion, to obtain and
deliver to the Trustee any corporate guaranty, payment obligation,
irrevocable letter of credit, surety bond, insurance policy or similar
instrument or a reserve fund, or any combination of the foregoing, for
the purpose of protecting the Holders of the Class B Certificates
against any or all Realized Losses or other shortfalls. Any such
instrument or fund shall be held by the Trustee for the benefit of the
Class B Certificateholders, but shall not be and shall not be deemed to
be under any circumstances included in the Trust Fund. To the extent
that any such instrument or fund constitutes a reserve fund for federal
income tax purposes, (i) any reserve fund so established shall be an
outside reserve fund and not an asset of the Trust Fund, (ii) any such
reserve fund shall be owned by the Company, and (iii) amounts
transferred by the Trust Fund to any such reserve fund shall be treated
as amounts distributed by the Trust Fund to the Company or any
successor, all within the meaning of Treasury Regulations Section
1.860G-2(h) as it reads as of the Cut-off Date. In connection with the
provision of any such instrument or fund, this Agreement and any
provision hereof may be modified, added to, deleted or otherwise amended
in any manner that is related or incidental to such instrument or fund
or the establishment or administration thereof, such amendment to be
made by written instrument executed or consented to by the Company but
without the consent of any Certificateholder and without the consent of
the Master Servicer or the Trustee being required unless any such
amendment would impose any additional obligation on, or otherwise
adversely affect the interests of the Senior Certificateholders, the
Class M Certificateholders, the Master Servicer or the Trustee, as
applicable; provided that the Company obtains (subject to Section
10.01(f)) an Opinion of Counsel (which need not be an opinion of
Independent counsel) to the effect that any such amendment will not
cause (a) any federal tax to be imposed on the Trust Fund, including
without limitation, any federal tax imposed on "prohibited transactions"
under Section 860F(a)(1) of the Code or on "contributions after the
startup date" under Section 860G(d)(1) of the Code and (b) any REMIC
created hereunder to fail to qualify as a REMIC at any time that any
Certificate is outstanding. In the event that the Company elects to
provide such coverage in the form of a limited guaranty provided by
General Motors Acceptance Corporation, the Company may elect that the
text of such amendment to this Agreement shall be substantially in the
form attached hereto as Exhibit K (in which case Residential Funding's
Subordinate Certificate Loss Obligation as described in such exhibit
shall be established by Residential Funding's consent to such amendment)
and that the limited guaranty shall be executed in the form attached
hereto as Exhibit L, with such changes as the Company shall deem to be
appropriate; it being understood that the Trustee has reviewed and
approved the content of such forms and that the Trustee's consent or
approval to the use thereof is not required.
Section 11.02. Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer and at its expense on direction by the Trustee (pursuant to the
request of Holders of Certificates entitled to at least 25% of the Voting
Rights), but only upon direction accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
(b) For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
Section 11.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of any of the parties
hereto.
(b) No Certificateholder shall have any right to vote (except as expressly
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision of this
Agreement to institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Agreement, unless such Holder previously shall
have given to the Trustee a written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of Certificates
of any Class evidencing in the aggregate not less than 25% of the related
Percentage Interests of such Class, shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
of any Class shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates of such Class or any other Class, or
to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the common benefit of Certificateholders of such Class
or all Classes, as the case may be. For the protection and enforcement of the
provisions of this Section 11.03, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04. Governing Law.
This agreement and the Certificates shall be governed by and construed
in accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 11.05. Notices.
As provided in Section 11.05 of the Series Supplement.
Section 11.06. Required Notices to Rating Agency and Subservicer.
The Company, the Master Servicer or the Trustee, as applicable, (i)
shall notify each Rating Agency at such time as it is otherwise required
pursuant to this Agreement to give notice of the occurrence of, any of the
events described in clause (a), (b), (c), (d), (g), (h), (i) or (j) below, (ii)
shall notify the Subservicer at such time as it is otherwise required pursuant
to this Agreement to give notice of the occurrence of, any of the events
described in clause (a), (b), (c)(1), (g)(1), or (i) below, or (iii) provide a
copy to each Rating Agency at such time as otherwise required to be delivered
pursuant to this Agreement of any of the statements described in clauses (e) and
(f) below:
(a) a material change or amendment to this Agreement,
(b) the occurrence of an Event of Default,
(c) (1) the termination or appointment of a successor Master Servicer or (2)
the termination or appointment of a successor Trustee or a change in the
majority ownership of the Trustee,
(d) the filing of any claim under the Master Servicer's blanket fidelity
bond and the errors and omissions insurance policy required by Section
3.12 or the cancellation or modification of coverage under any such
instrument,
(e) the statement required to be delivered to the Holders of each Class of
Certificates pursuant to Section 4.03,
(f) the statements required to be delivered pursuant to Sections 3.18 and
3.19,
(g) (1) a change in the location of the Custodial Account or (2) a change in
the location of the Certificate Account,
(h) the occurrence of any monthly cash flow shortfall to the Holders of any
Class of Certificates resulting from the failure by the Master Servicer
to make an Advance pursuant to Section 4.04,
(i) the occurrence of the Final Distribution Date, and
(j) the repurchase of or substitution for any Mortgage Loan,
provided, however, that with respect to notice of the occurrence of the events
described in clauses (d), (g) or (h) above, the Master Servicer shall provide
prompt written notice to each Rating Agency and the Subservicer, if applicable,
of any such event known to the Master Servicer.
Section 11.07. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.08. Supplemental Provisions for Resecuritization.
This Agreement may be supplemented by means of the addition of a
separate Article hereto (a "Supplemental Article") for the purpose of
resecuritizing any of the Certificates issued hereunder, under the following
circumstances. With respect to any Class or Classes of Certificates issued
hereunder, or any portion of any such Class, as to which the Company or any of
its Affiliates (or any designee thereof) is the registered Holder (the
"Resecuritized Certificates"), the Company may deposit such Resecuritized
Certificates into a new REMIC, grantor trust or custodial arrangement (a
"Restructuring Vehicle") to be held by the Trustee pursuant to a Supplemental
Article. The instrument adopting such Supplemental Article shall be executed by
the Company, the Master Servicer and the Trustee; provided, that neither the
Master Servicer nor the Trustee shall withhold their consent thereto if their
respective interests would not be materially adversely affected thereby. To the
extent that the terms of the Supplemental Article do not in any way affect any
provisions of this Agreement as to any of the Certificates initially issued
hereunder, the adoption of the Supplemental Article shall not constitute an
"amendment" of this Agreement.
Each Supplemental Article shall set forth all necessary provisions
relating to the holding of the Resecuritized Certificates by the Trustee, the
establishment of the Restructuring Vehicle, the issuing of various classes of
new certificates by the Restructuring Vehicle and the distributions to be made
thereon, and any other provisions necessary for the purposes thereof. In
connection with each Supplemental Article, the Company shall deliver to the
Trustee an Opinion of Counsel to the effect that (i) the Restructuring Vehicle
will qualify as a REMIC, grantor trust or other entity not subject to taxation
for federal income tax purposes and (ii) the adoption of the Supplemental
Article will not endanger the status of the Trust Fund as a REMIC or (subject to
Section 10.01(f)) result in the imposition of a tax upon the Trust Fund
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC as set
forth in Section 860G(d) of the Code).
Section 11.09. Allocation of Voting Rights.
As provided in Section 11.09 of the Series Supplement.
Section 11.10. No Petition.
As provided in Section 11.10 of the Series Supplement.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01. Intent of the Parties; Reasonableness.
The Company, the Trustee and the Master Servicer acknowledge and
agree that the purpose of this Article XII is to facilitate compliance by the
Company with the provisions of Regulation AB and related rules and regulations
of the Commission. The Company shall not exercise its right to request delivery
of information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission under the
Securities Act and the Exchange Act. Each of the Master Servicer and the Trustee
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
reasonable requests made by the Company in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. Each of the Master Servicer and the Trustee shall cooperate
reasonably with the Company to deliver to the Company (including any of its
assignees or designees), any and all disclosure, statements, reports,
certifications, records and any other information necessary in the reasonable,
good faith determination of the Company to permit the Company to comply with the
provisions of Regulation AB.
Section 12.02. Additional Representations and Warranties of the Trustee.
(a)....The Trustee shall be deemed to represent and warrant to
the Company as of the date hereof and on each date on which information is
provided to the Company under Sections 12.01, 12.02(b) or 12.03 that, except as
disclosed in writing to the Company prior to such date: (i) it is not aware and
has not received notice that any default, early amortization or other
performance triggering event has occurred as to any other Securitization
Transaction due to any default of the Trustee; (ii) there are no aspects of its
financial condition that could have a material adverse effect on the performance
by it of its trustee obligations under this Agreement or any other
Securitization Transaction as to which it is the trustee; (iii) there are no
material legal or governmental proceedings pending (or known to be contemplated)
against it that would be material to Certificateholders; (iv) there are no
relationships or transactions (as described in Item 1119(b) of Regulation AB)
relating to the Trustee with respect to the Company or any sponsor, issuing
entity, servicer, trustee, originator, significant obligor, enhancement or
support provider or other material transaction party (as each of such terms are
used in Regulation AB) relating to the Securitization Transaction contemplated
by the Agreement, as identified by the Company to the Trustee in writing as of
the Closing Date (each, a "Transaction Party") that are outside the ordinary
course of business or on terms other than would be obtained in an arm's length
transaction with an unrelated third party, apart from the Securitization
Transaction, and that are material to the investors' understanding of the
Certificates; and (v) the Trustee is not an affiliate (as contemplated by Item
1119(a) of Regulation AB) of any Transaction Party. The Company shall notify the
Trustee of any change in the identity of a Transaction Party after the Closing
Date.
(b)....If so requested by the Company on any date following the
Closing Date, the Trustee shall, within five Business Days following such
request, confirm in writing the accuracy of the representations and warranties
set forth in paragraph (a) of this Section or, if any such representation and
warranty is not accurate as of the date of such confirmation, provide the
pertinent facts, in writing, to the Company. Any such request from the Company
shall not be given more than once each calendar quarter, unless the Company
shall have a reasonable basis for questioning the accuracy of any of the
representations and warranties.
Section 12.03. Information to Be Provided by the Trustee.
For so long as the Certificates are outstanding, for the purpose
of satisfying the Company's reporting obligation under the Exchange Act with
respect to any class of Certificates, the Trustee shall provide to the Company a
written description of (a) any litigation or governmental proceedings pending
against the Trustee as of the last day of each calendar month that would be
material to Certificateholders, and (b) any affiliations or relationships (as
described in Item 1119 of Regulation AB) that develop following the Closing Date
between the Trustee and any Transaction Party of the type described in Section
12.02(a)(iv) or 12.02(a)(v) as of the last day of each calendar year. Any
descriptions required with respect to legal proceedings, as well as updates to
previously provided descriptions, under this Section 12.03 shall be given no
later than five Business Days prior to the Determination Date following the
month in which the relevant event occurs, and any notices and descriptions
required with respect to affiliations, as well as updates to previously provided
descriptions, under this Section 12.03 shall be given no later than January 31
of the calendar year following the year in which the relevant event occurs. As
of the related Distribution Date with respect to each Report on Form 10-D with
respect to the Certificates filed by or on behalf of the Company, and as of
March 15 preceding the date each Report on Form 10-K with respect to the
Certificates is filed, the Trustee shall be deemed to represent and warrant that
any information previously provided by the Trustee under this Article XII is
materially correct and does not have any material omissions unless the Trustee
has provided an update to such information. The Company will allow the Trustee
to review any disclosure relating to material litigation against the Trustee
prior to filing such disclosure with the Commission to the extent the Company
changes the information provided by the Trustee.
Section 12.04. Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Trustee shall:
(a) deliver to the Company a report (in form and substance reasonably
satisfactory to the Company) regarding the Trustee's assessment of compliance
with the applicable Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB. Such report shall be signed by an authorized officer of
the Trustee, and shall address each of the Servicing Criteria specified on
Exhibit R hereto; and
(b) deliver to the Company a report of a registered public accounting firm
satisfying the requirements of Rule 2-01 of Regulation S-X under the Securities
Act and the Exchange Act that attests to, and reports on, the assessment of
compliance made by the Trustee and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and
2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.
Section 12.05. Indemnification; Remedies.
(a) The Trustee shall indemnify the Company, each affiliate of the Company, the
Master Servicer and each affiliate of the Master Servicer, and the respective
present and former directors, officers, employees and agents of each of the
foregoing, and shall hold each of them harmless from and against any losses,
damages, penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain arising out of or based upon:
.......................(i)(A) any untrue statement of a material fact contained
or alleged to be contained in any information, report, certification,
accountants' attestation or other material provided under this Article XII by or
on behalf of the Trustee (collectively, the "Trustee Information"), or (B) the
omission or alleged omission to state in the Trustee Information a material fact
required to be stated in the Trustee Information or necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; or
.......................(ii) any failure by the Trustee to deliver any
information, report, certification or other material when and as required under
this Article XII, other than a failure by the Trustee to deliver an accountants'
attestation.
(b) In the case of any failure of performance described in clause (ii) of
Section 12.05(a), as well as a failure to deliver an accountants' attestation,
the Trustee shall (i) promptly reimburse the Company for all costs reasonably
incurred by the Company in order to obtain the information, report,
certification, accountants' attestation or other material not delivered by the
Trustee as required and (ii) cooperate with the Company to mitigate any damages
that may result from such failure.
(c) The Company and the Master Servicer shall indemnify the Trustee, each
affiliate of the Trustee and the respective present and former directors,
officers, employees and agents of the Trustee, and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that any of them may sustain arising out of or based upon (i) any
untrue statement of a material fact contained or alleged to be contained in any
information provided under this Agreement by or on behalf of the Company or
Master Servicer for inclusion in any report filed with Commission under the
Exchange Act (collectively, the "RFC Information"), or (ii) the omission or
alleged omission to state in the RFC Information a material fact required to be
stated in the RFC Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(d) Notwithstanding any provision in this Section 12.05 to the contrary, the
parties agree that none of the Trustee, the Company or the Master Servicer shall
be liable to the other for any consequential or punitive damages whatsoever,
whether in contract, tort (including negligence and strict liability), or any
other legal or equitable principle; provided, however, that such limitation
shall not be applicable with respect to third party claims made against a party.
EXHIBIT A
FORM OF CLASS A CERTIFICATE, [PRINCIPAL ONLY/CLASS A-P] CERTIFICATE AND
[INTEREST ONLY/CLASS A-V] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS ___________ __, ____.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [___]% OF THE PREPAYMENT SPEED
ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT
PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $[ ] OF OID PER [$1,000] [$100,000] OF [INITIAL
CERTIFICATE PRINCIPAL BALANCE] [NOTIONAL AMOUNT], THE YIELD TO MATURITY IS [ ]%
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN
$[ ] PER [$1,000] [$100,000] OF [INITIAL CERTIFICATE PRINCIPAL BALANCE]
[NOTIONAL AMOUNT], COMPUTED USING THE APPROXIMATE METHOD. NO REPRESENTATION IS
MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT SPEED
ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY OF THE PASS-THROUGH
RATE.]
Certificate No. [ %][Variable] Pass-Through Rate
[based on a Notional Amount]
Class A- Senior
Date of Pooling and Servicing [Percentage Interest: %]
Agreement and Cut-off Date:
___________ 1, ____ Aggregate Initial [Certificate Principal
Balance] [[Interest Only/Class
A-V] Notional
First Distribution Date: Amount] [Subclass Notional Amount] of the
_________ 25, ____ Class A- Certificates:
Master Servicer: [Initial] [Certificate Principal
Residential Funding Balance] [Interest Only/Class A-V] [Subclass]
Corporation Notional Amount] of this Certificate:
$ ]
Assumed Final
Distribution Date: CUSIP 76110F-
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES ____-___
evidencing a percentage interest in the distributions allocable
to the Class A- Certificates with respect to a Trust Fund
consisting primarily of a pool of [conventional one- to
four-family fixed interest rate first mortgage loans] formed and
sold by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Residential
Accredit Loans, Inc., the Master Servicer, the Trustee referred to below or GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Accredit Loans, Inc., the Master
Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their affiliates.
None of the Company, the Master Servicer, GMAC Mortgage Group, Inc. or any of
their affiliates will have any obligation with respect to any certificate or
other obligation secured by or payable from payments on the Certificates.
This certifies that is the registered owner of the Percentage
Interest evidenced by this Certificate [(obtained by dividing the [Initial
Certificate Principal Balance] [Initial [Interest Only/Class A-V] Notional
Amount] of this Certificate by the aggregate [Initial Certificate Principal
Balance of all Class A- Certificates] [Initial [Interest Only/Class A-V]
Notional Amounts of all [Interest Only/Class A-V] Certificates], both as
specified above)] in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a pool of [conventional one- to
four-family fixed interest rate first mortgage loans] (the "Mortgage Loans"),
formed and sold by Residential Accredit Loans, Inc. (hereinafter called the
"Company," which term includes any successor entity under the Agreement referred
to below). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as specified above (the "Agreement") among the Company, the
Master Servicer and __________________, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount [(of interest
and principal, if any)] required to be distributed to Holders of Class A-
Certificates on such Distribution Date. [The [Interest Only/Class A-V] Notional
Amount of the [Interest Only/Class A-V] Certificates as of any date of
determination is equal to the aggregate Stated Principal Balance of the Mortgage
Loans corresponding to the Uncertificated REMIC Regular Interests represented by
such [Interest Only/Class A-V] Certificates.] [The Subclass Notional Amount of
the [Interest Only/Class A-V]- Certificates as of any date of determination is
equal to the aggregate Stated Principal Balance of the Mortgage Loans
corresponding to the Uncertificated REMIC Regular Interests represented by such
[Interest Only/Class A-V]- Certificates immediately prior to such date.] [The
[Interest Only/Class A-V][- ] Certificates have no Certificate Principal
Balance.]
Distributions on this Certificate will be made either by the
Master Servicer acting on behalf of the Trustee or by a Paying Agent appointed
by the Trustee in immediately available funds (by wire transfer or otherwise)
for the account of the Person entitled thereto if such Person shall have so
notified the Master Servicer or such Paying Agent, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this
Certificate will be made after due notice of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose in the City and State of New
York. The [Initial Certificate Principal Balance] [Initial [Interest Only/Class
A-V] Notional Amount] [initial Subclass Notional Amount] of this Certificate is
set forth above.] [The Certificate Principal Balance hereof will be reduced to
the extent of distributions allocable to principal and any Realized Losses
allocable hereto.]
This Certificate is one of a duly authorized issue of
Certificates issued in several Classes designated as Mortgage Asset-Backed
Pass-Through Certificates of the Series specified hereon (herein collectively
called the "Certificates").
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial
Account and/or the Certificate Account created for the benefit of
Certificateholders may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes including
without limitation reimbursement to the Company and the Master Servicer of
advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided,
the amendment of the Agreement and the modification of the rights and
obligations of the Company, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee in the City and
State of New York, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Pool Stated
Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Principal Balance of the Mortgage Loans.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: [_________________________],
as Trustee
By:____________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the
within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: _______________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated: ________________________
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________ for the
account of ___________________ account number __________________, or, if mailed
by check, to _________________________.
Applicable statements should be mailed to _______________.
This information is provided by ______________, the assignee named
above, or ___________________, as its agent.
EXHIBIT A-1
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
Certificate No. ____ Variable Pass-Through Rate
Class X Senior
Date of Pooling and Servicing Agreement Percentage Interest: 100%
and Cut-off Date: __________ 1, ____
Master Servicer: Aggregate Initial Notional Amount of the
Residential Funding Corporation Class X Certificates: $__________
First Distribution Date: Initial Notional Amount of this Certificate:
__________ 25, ____ $_____________
Assumed Final Distribution Date: CUSIP ________
_____________
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE
SERIES ____-____
Evidencing a percentage interest in the distributions allocable to the
Class X Certificates with respect to a Trust Fund consisting primarily
of a pool of [one- to four-family residential, payment-option,
adjustable-rate first lien mortgage loans with a negative amortization
feature] formed and sold by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Residential Accredit
Loans, Inc., the Master Servicer, the Trustee referred to below or GMAC Mortgage
Group, Inc. or any of their affiliates. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental agency
or instrumentality or by Residential Accredit Loans, Inc., the Master Servicer,
the Trustee or GMAC Mortgage Group, Inc. or any of their affiliates. None of the
Company, the Master Servicer, GMAC Mortgage Group, Inc. or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that _________________________ is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Notional Amount of this Certificate by the Aggregate Notional Amount of
all Class X Certificates, both as specified above) in certain distributions with
respect to the Trust Fund consisting primarily of an interest in a pool of [one-
to four-family residential, payment-option, adjustable-rate first lien mortgage
loans with a negative amortization feature] (the "Mortgage Loans"), formed and
sold by Residential Accredit Loans, Inc. (hereinafter called the "Company,"
which term includes any successor entity under the Agreement referred to below).
The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") among the Company, the Master Servicer and
________________________, as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Class X Certificates on such Distribution Date. The
Class X Certificates have no Certificate Principal Balance.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Notional Amount of this Certificate is set forth above.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Asset-Backed Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Pool Stated
Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Principal Balance of the Mortgage Loans.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: [_________________________],
as Trustee
By:____________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the
within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: _______________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated: ________________________
_____________________________________
Signature by or on behalf of assignor
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________ for the
account of ___________________ account number __________________, or, if mailed
by check, to _________________________.
Applicable statements should be mailed to _______________.
This information is provided by ______________, the assignee named
above, or ___________________, as its agent.
EXHIBIT B
FORM OF CLASS M CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES [CLASS M-1 CERTIFICATES] [AND CLASS M-2 CERTIFICATES] AS DESCRIBED
IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS ___________ __, ____.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [___]% OF THE PREPAYMENT SPEED
ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $[____] OF OID PER $[1,000] OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS [_____]% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $[____] PER $[1,000]
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE PREPAYMENT SPEED ASSUMPTION OR AT ANY OTHER RATE.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY
VIRTUE OF ITS PURCHASE OR HOLDING OF THIS CERTIFICATE (OR INTEREST HEREIN) THAT
EITHER (A) SUCH TRANSFEREE IS NOT AN INVESTMENT MANAGER, A NAMED FIDUCIARY OR A
TRUSTEE OF ANY PLAN, OR ANY OTHER PERSON, ACTING, DIRECTLY OR INDIRECTLY, ON
BEHALF OF OR PURCHASING ANY CERTIFICATE WITH "PLAN ASSETS" OF ANY PLAN (A "PLAN
INVESTOR"), (B) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN RELIANCE ON
PROHIBITED TRANSACTION EXEMPTION ("PTE") 94-29, AS MOST RECENTLY AMENDED, PTE
2002-41, 67 FED. REG. 54487 (AUGUST 22, 2002) (THE "RFC EXEMPTION"), AND THAT IT
UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE RFC
EXEMPTION INCLUDING THAT SUCH CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY STANDARD & POOR'S, FITCH
OR XXXXX'X OR (C) (I) THE TRANSFEREE IS AN INSURANCE COMPANY, (II) THE SOURCE OF
FUNDS TO BE USED BY IT TO PURCHASE THE CERTIFICATE IS AN "INSURANCE COMPANY
GENERAL ACCOUNT" (WITHIN THE MEANING OF U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION ("PTCE") 95-60), AND (III) THE CONDITIONS SET FORTH
IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED (EACH ENTITY THAT
SATISFIES THIS CLAUSE (C), A "COMPLYING INSURANCE COMPANY).
IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR HELD BY ANY
PERSON THAT DOES NOT SATISFY THE CONDITIONS DESCRIBED IN THE PRECEDING
PARAGRAPH, THEN THE LAST PRECEDING TRANSFEREE THAT EITHER (I) IS NOT A PLAN
INVESTOR, (II) ACQUIRED SUCH CERTIFICATE IN COMPLIANCE WITH THE RFC EXEMPTION,
OR (III) IS A COMPLYING INSURANCE COMPANY SHALL BE RESTORED, TO THE EXTENT
PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS AS CERTIFICATE OWNER THEREOF
RETROACTIVE TO THE DATE OF SUCH TRANSFER OF THIS CERTIFICATE. THE TRUSTEE SHALL
BE UNDER NO LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS DUE ON THIS
CERTIFICATE TO SUCH PRECEDING TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS
CERTIFICATE (OR INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS
IN SECTION 5.02(e) OF THE POOLING AND SERVICING AGREEMENT SHALL INDEMNIFY AND
HOLD HARMLESS THE COMPANY, THE TRUSTEE, THE MASTER SERVICER, ANY SUBSERVICER,
AND THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.
Certificate No. [ ]% Pass-Through Rate
Class M- Subordinate Aggregate Certificate
Principal Balance
Date of Pooling and Servicing of the Class M Certificates:
Agreement and Cut-off Date: $
___________ 1, ____
Initial Certificate Principal
First Distribution Date: Balance of this Certificate:
_________ 25, ____ $
Master Servicer: CUSIP: 76110F-
Residential Funding Corporation
Assumed Final Distribution Date:
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the
Class M- Certificates with respect to the Trust Fund consisting
primarily of a pool of [conventional one- to four-family fixed interest
rate first mortgage loans] formed and sold by RESIDENTIAL ACCREDIT
LOANS, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Residential
Accredit Loans, Inc., the Master Servicer, the Trustee referred to below or GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Accredit Loans, Inc., the Master
Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their affiliates.
None of the Company, the Master Servicer, GMAC Mortgage Group, Inc. or any of
their affiliates will have any obligation with respect to any certificate or
other obligation secured by or payable from payments on the Certificates.
This certifies that is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Certificate
Principal Balance of this Certificate by the aggregate Certificate Principal
Balance of all Class M- Certificates, both as specified above) in certain
distributions with respect to a Trust Fund consisting primarily of a pool of
[conventional one- to four-family fixed interest rate first mortgage loans] (the
"Mortgage Loans"), formed and sold by Residential Accredit Loans, Inc.
(hereinafter called the "Company," which term includes any successor entity
under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among
the Company, the Master Servicer and __________________, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to Holders of Class M-
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the
Master Servicer acting on behalf of the Trustee or by a Paying Agent appointed
by the Trustee in immediately available funds (by wire transfer or otherwise)
for the account of the Person entitled thereto if such Person shall have so
notified the Master Servicer or such Paying Agent, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this
Certificate will be made after due notice of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose in the City and State of New
York. The Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the extent of
the distributions allocable to principal and any Realized Losses allocable
hereto.
Any transferee of this Certificate will be deemed to have
represented by virtue of its purchase or holding of this Certificate (or
interest herein) that either (a) such transferee is not an investment manager, a
named fiduciary or a trustee of any plan, or any other person, acting, directly
or indirectly, on behalf of or purchasing any Certificate with "plan assets" of
any plan (a "plan investor"), (b) it has acquired and is holding such
Certificate in reliance on prohibited transaction exemption ("PTE") 94-29, as
most recently amended, PTE 2002-41, 67 fed. Reg. 54487 (August 22, 2002) (the
"RFC Exemption"), and that it understands that there are certain conditions to
the availability of the RFC Exemption including that such Certificate must be
rated, at the time of purchase, not lower than "BBB-" (or its equivalent) by
Standard & Poor's, Fitch or Xxxxx'x or (c) (i) the transferee is an insurance
company, (ii) the source of funds to be used by it to purchase the Certificate
is an "insurance company general account" (within the meaning of U.S. Department
of Labor prohibited transaction class exemption ("PTCE") 95-60), and (iii) the
conditions set forth in Sections I and III of PTCE 95-60 have been satisfied
(each entity that satisfies this clause (c), a "complying insurance company).
If this Certificate (or any interest herein) is acquired or held
by any person that does not satisfy the conditions described in the preceding
paragraph, then the last preceding transferee that either (i) is not a plan
investor, (ii) acquired such Certificate in compliance with the RFC Exemption,
or (iii) is a complying insurance company shall be restored, to the extent
permitted by law, to all rights and obligations as Certificate owner thereof
retroactive to the date of such transfer of this Certificate. The Trustee shall
be under no liability to any person for making any payments due on this
Certificate to such preceding transferee.
This Certificate is one of a duly authorized issue of
Certificates issued in several Classes designated as Mortgage Asset-Backed
Pass-Through Certificates of the Series specified hereon (herein collectively
called the "Certificates").
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial
Account and/or the Certificate Account created for the benefit of
Certificateholders may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes including
without limitation reimbursement to the Company and the Master Servicer of
advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided,
the amendment of the Agreement and the modification of the rights and
obligations of the Company, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee in the City and
State of New York, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Pool Stated
Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: [_________________________],
as Trustee
By:___________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the
within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: _______________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated: ________________________
_____________________________________
Signature by or on behalf of assignor
____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________ for the
account of ___________________ account number __________________, or, if mailed
by check, to _________________________.
Applicable statements should be mailed to _______________.
This information is provided by ______________, the assignee named
above, or ___________________, as its agent.
EXHIBIT C
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES
AND CLASS M CERTIFICATES [AND CLASS B-1] [CLASS B-2 CERTIFICATES] DESCRIBED IN
THE AGREEMENT (AS DEFINED HEREIN).
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE COMPANY AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE CODE. THE FOLLOWING
INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE U.S. FEDERAL
INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE. THE ISSUE
DATE OF THIS CERTIFICATE IS ___________ __, ____. ASSUMING THAT THE MORTGAGE
LOANS PREPAY AT 100% OF THE PREPAYMENT SPEED ASSUMPTION (AS DESCRIBED IN THE
PROSPECTUS SUPPLEMENT), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $[ ]
OF OID PER $[1,000] OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO
MATURITY IS [ ]% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL
PERIOD IS NO MORE THAN $[ ] PER $[1,000] OF INITIAL CERTIFICATE PRINCIPAL
BALANCE, COMPUTED UNDER THE APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT
THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT SPEED
ASSUMPTION OR AT ANY OTHER RATE.
Certificate No. [ ]% Pass-Through Rate
Class B- Subordinate Aggregate Certificate
Principal Balance
Date of Pooling and Servicing of the Class B-
Agreement and Cut-off Date: Certificates as of
___________ 1, ____ the Cut-off Date:
$_________________
First Distribution Date:
_________ 25, ____ Initial Certificate Principal
Balance of this Certificate:
Master Servicer: $_________________
Residential Funding Corporation
Assumed Final Distribution Date:
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the
Class B- Certificates with respect to the Trust Fund consisting primarily
of a pool of [conventional one- to four-family fixed interest rate first
mortgage loans] formed and sold by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Residential
Accredit Loans, Inc., the Master Servicer, the Trustee referred to below or GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Accredit Loans, Inc., the Master
Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their affiliates.
None of the Company, the Master Servicer, GMAC Mortgage Group, Inc. or any of
their affiliates will have any obligation with respect to any certificate or
other obligation secured by or payable from payments on the Certificates.
This certifies that Residential Accredit Loans, Inc. is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the Certificate Principal Balance of this Certificate by
the aggregate Certificate Principal Balance of all Class B- Certificates, both
as specified above) in certain distributions with respect to a Trust Fund
consisting primarily of a pool of [conventional one- to four-family fixed
interest rate first mortgage loans] (the "Mortgage Loans"), formed and sold by
Residential Accredit Loans, Inc. (hereinafter called the "Company," which term
includes any successor entity under the Agreement referred to below). The Trust
Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Company, the Master Servicer and
__________________, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such last
day) of the month next preceding the month of such distribution (the "Record
Date"), from the Available Distribution Amount in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount (of
interest and principal, if any) required to be distributed to Holders of Class B
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the
Master Servicer acting on behalf of the Trustee or by a Paying Agent appointed
by the Trustee in immediately available funds (by wire transfer or otherwise)
for the account of the Person entitled thereto if such Person shall have so
notified the Master Servicer or such Paying Agent, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this
Certificate will be made after due notice of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose in the City and State of New
York. The Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the extent of
the distributions allocable to principal and any Realized Losses allocable
hereto.
No transfer of this Class B Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Trustee or the Company may require an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Company that such transfer is exempt (describing the applicable exemption and
the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, and of any applicable
statute of any state and (ii) the transferee shall execute an investment letter
in the form described by the Agreement. The Holder hereof desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Company, the Master Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with such Federal and state laws. In
connection with any such transfer, the Trustee will also require either (i) an
opinion of counsel acceptable to and in form and substance satisfactory to the
Trustee, the Company and the Master Servicer with respect to the permissibility
of such transfer under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Internal Revenue Code (the "Code")
and stating, among other things, that the transferee's acquisition of a Class B
Certificate will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code or (ii) a representation
letter, in the form as described by Section 5.02(e) of the Agreement, either
stating that the transferee is not an employee benefit or other plan subject to
the prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan, or stating that the
transferee is an insurance company, the source of funds to be used by it to
purchase the Certificate is an "insurance company general account" (within the
meaning of Department of Labor Prohibited Transaction Class Exemption ("PTCE")
95-60), and the purchase is being made in reliance upon the availability of the
exemptive relief afforded under Sections I and III of PTCE 95-60..
This Certificate is one of a duly authorized issue of
Certificates issued in several Classes designated as Mortgage Asset-Backed
Pass-Through Certificates of the Series specified hereon (herein collectively
called the "Certificates").
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial
Account and/or the Certificate Account created for the benefit of
Certificateholders may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes including
without limitation reimbursement to the Company and the Master Servicer of
advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided,
the amendment of the Agreement and the modification of the rights and
obligations of the Company, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee in the City and
State of New York, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Pool Stated
Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: [_________________________],
as Trustee
By:____________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the
within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: _______________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated: ________________________
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________ for the
account of ___________________ account number __________________, or, if mailed
by check, to _________________________.
Applicable statements should be mailed to _______________.
This information is provided by ______________, the assignee named
above, or ___________________, as its agent.
EXHIBIT C-I
FORM OF CLASS P CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT).
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE COMPANY AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No. ___ Prepayment Charge
Class P - Prepayment Charge Aggregate Certificate Principal Balance
of the Class P
Date of Pooling and Servicing Certificates as of
Agreement and Cut-off Date: the Cut-off Date:
__________ 1, ____ $0.00
First Distribution Date: Initial Certificate Principal Balance of this
__________ 25, ____ Certificate: $____
Master Servicer: Percentage Interest of this Certificate:
Residential Funding Corporation 100%
Assumed Final Distribution Date: CUSIP: __________
__________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the
Class P Certificates with respect to the Trust Fund consisting primarily
of a pool of [one- to four-family residential, payment-option,
adjustable-rate first lien mortgage loans with a negative amortization
feature] formed and sold by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Residential
Accredit Loans, Inc., the Master Servicer, the Trustee referred to below or GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Accredit Loans, Inc., the Master
Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their affiliates.
None of the Company, the Master Servicer, GMAC Mortgage Group, Inc. or any of
their affiliates will have any obligation with respect to any certificate or
other obligation secured by or payable from payments on the Certificates.
This certifies that ____________________________ is the
registered owner of the Percentage Interest evidenced by this Certificate (as
specified above) in certain distributions with respect to a Trust Fund
consisting primarily of a pool of [one- to four-family residential,
payment-option, adjustable-rate first lien mortgage loans with a negative
amortization feature] (the "Mortgage Loans"), formed and sold by Residential
Accredit Loans, Inc. (hereinafter called the "Company," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Company, the Master Servicer and
____________________, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Class P
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the
Master Servicer acting on behalf of the Trustee or by a Paying Agent appointed
by the Trustee in immediately available funds (by wire transfer or otherwise)
for the account of the Person entitled thereto if such Person shall have so
notified the Master Servicer or such Paying Agent, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this
Certificate will be made after due notice of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose in the City and State of New
York.
No transfer of this Class P Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Trustee or the Company may require an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Company that such transfer is exempt (describing the applicable exemption and
the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, and of any applicable
statute of any state and (ii) the transferee shall execute an investment letter
in the form described by the Agreement. The Holder hereof desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Company, the Master Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with such Federal and state laws. In
connection with any such transfer, the Trustee will also require either (i) an
opinion of counsel acceptable to and in form and substance satisfactory to the
Trustee, the Company and the Master Servicer with respect to the permissibility
of such transfer under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Internal Revenue Code (the "Code")
and stating, among other things, that the transferee's acquisition of a Class P
Certificate will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code or (ii) a representation
letter, in the form as described by Section 5.02(e) of the Agreement, either
stating that the transferee is not an employee benefit or other plan subject to
the prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan.
This Certificate is one of a duly authorized issue of
Certificates issued in several Classes designated as Mortgage Asset-Backed
Pass-Through Certificates of the Series specified hereon (herein collectively
called the "Certificates").
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial
Account and/or the Certificate Account created for the benefit of
Certificateholders may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes including
without limitation reimbursement to the Company and the Master Servicer of
advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided,
the amendment of the Agreement and the modification of the rights and
obligations of the Company, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee in the City and
State of New York, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Pool Stated
Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: [_________________________],
as Trustee
By:____________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the
within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: _______________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated: ________________________
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________ for the
account of ___________________ account number __________________, or, if mailed
by check, to _________________________.
Applicable statements should be mailed to _______________.
This information is provided by ______________, the assignee named
above, or ___________________, as its agent.
EXHIBIT D
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON
OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE COMPANY AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER SERVICER
AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE
OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY
WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO TAX AND EXCEPT
FOR XXXXXXX MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY SUCH
GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C) ANY ORGANIZATION
(OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING
THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE
INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER SECTION
775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B),
(C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR
(F) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
Certificate No. [ ]% Pass-Through Rate
Class R Senior Aggregate Initial Certificate
Principal Balance of the
Date of Pooling and Servicing Class R Certificates:
Agreement and Cut-off Date: $100.00
___________ 1, ____
Initial Certificate Principal
First Distribution Date: Balance of this Certificate:
_________ 25, ____ $____________________
Master Servicer: Percentage Interest:
Residential Funding Corporation ___________%
Assumed Final Distribution Date: CUSIP 76110F-
___________ 25, ____
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATE,
SERIES ____-___
evidencing a percentage interest in any distributions allocable to the
Class R Certificates with respect to the Trust Fund consisting primarily
of a pool of [conventional one- to four-family fixed interest rate first
mortgage loans] formed and sold by RESIDENTIAL ACCREDIT LOANS, INC.
This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Residential
Accredit Loans, Inc., the Master Servicer, the Trustee referred to below or GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Accredit Loans, Inc., the Master
Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their affiliates.
None of the Company, the Master Servicer, GMAC Mortgage Group, Inc. or any of
their affiliates will have any obligation with respect to any certificate or
other obligation secured by or payable from payments on the Certificates.
This certifies that is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Initial
Certificate Principal Balance of this Certificate by the aggregate Initial
Certificate Principal Balance of all Class R Certificates, both as specified
above) in certain distributions with respect to the Trust Fund consisting
primarily of a pool of [conventional one- to four-family fixed interest rate
first mortgage loans] (the "Mortgage Loans"), formed and sold by Residential
Accredit Loans, Inc. (hereinafter called the "Company," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Company, the Master Servicer and __________________,
as trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to Holders of Class R
Certificates on such Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to
be bound by the restrictions set forth in the Agreement to the effect that (i)
each person holding or acquiring any Ownership Interest in this Certificate must
be a United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Company will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Company, or any affiliate of the Company, on such terms and conditions as
the Company may choose.
Notwithstanding the above, the final distribution on this
Certificate will be made after due notice of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose in the City and State of New
York. The Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
Notwithstanding the reduction of the Certificate Principal Balance hereof to
zero, this Certificate will remain outstanding under the Agreement and the
Holder hereof may have additional obligations with respect to this Certificate,
including tax liabilities, and may be entitled to certain additional
distributions hereon, in accordance with the terms and provisions of the
Agreement.
No transfer of this Class R Certificate will be made unless the
Trustee has received either (i) an opinion of counsel acceptable to and in form
and substance satisfactory to the Trustee, the Company and the Master Servicer
with respect to the permissibility of such transfer under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975
of the Internal Revenue Code (the "Code") and stating, among other things, that
the transferee's acquisition of a Class R Certificate will not constitute or
result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code or (ii) a representation letter, in the form as
described by the Agreement, stating that the transferee is not an employee
benefit or other plan subject to the prohibited transaction provisions of ERISA
or Section 4975 of the Code (a "Plan"), or any other person (including an
investment manager, a named fiduciary or a trustee of any Plan) acting, directly
or indirectly, on behalf of or purchasing any Certificate with "plan assets" of
any Plan.
This Certificate is one of a duly authorized issue of
Certificates issued in several Classes designated as Mortgage Asset-Backed
Pass-Through Certificates of the Series specified hereon (herein collectively
called the "Certificates").
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial
Account and/or the Certificate Account created for the benefit of
Certificateholders may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes including
without limitation reimbursement to the Company and the Master Servicer of
advances made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided,
the amendment of the Agreement and the modification of the rights and
obligations of the Company, the Master Servicer and the Trustee and the rights
of the Certificateholders under the Agreement at any time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee in the City and
State of New York, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in Classes and in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.
The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Pool Stated
Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Principal Balance of the Mortgage Loans.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purpose have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: [_________________________],
as Trustee
By:____________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the
within-mentioned Agreement.
[___________________________],
as Certificate Registrar
By: _______________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Asset-Backed Pass-Through Certificate and hereby authorizes the transfer of
registration of such interest to assignee on the Certificate Register of the
Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
Dated: ________________________
_____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________ for the
account of ___________________ account number __________________, or, if mailed
by check, to _________________________.
Applicable statements should be mailed to _______________.
This information is provided by ______________, the assignee named
above, or ___________________, as its agent.
EXHIBIT E
FORM OF SELLER/SERVICER CONTRACT
This Seller/Servicer Contract (as may be amended, supplemented or
otherwise modified from time to time, this "Contract") is made this day of , 20
, by and between Residential Funding Corporation, its successors and assigns
("Residential Funding") and (the "Seller/Servicer," and, together with
Residential Funding, the "parties" and each, individually, a "party").
WHEREAS, the Seller/Servicer desires to sell Loans to, and/or service
Loans for, Residential Funding, and Residential Funding desires to purchase
Loans from the Seller/Servicer and/or have the Seller/Servicer service various
of its Loans, pursuant to the terms of this Contract and the Residential Funding
Seller and Servicer Guides incorporated herein by reference, as amended,
supplemented or otherwise modified, from time to time (together, the "Guides").
NOW, THEREFORE, in consideration of the premises, and the terms,
conditions and agreements set forth below, the parties agree as follows:
1. INCORPORATION OF GUIDES BY REFERENCE.
The Seller/Servicer acknowledges that it has received and read the
Guides. All provisions of the Guides are incorporated by reference into and made
a part of this Contract, and shall be binding upon the parties; provided,
however, that the Seller/Servicer shall be entitled to sell Loans to and/or
service Loans for Residential Funding only if and for so long as it shall have
been authorized to do so by Residential Funding in writing. Specific reference
in this Contract to particular provisions of the Guides and not to other
provisions does not mean that those provisions of the Guides not specifically
cited in this Contract are not applicable. All terms used herein shall have the
same meanings as such terms have in the Guides, unless the context clearly
requires otherwise.
2. AMENDMENTS.
This Contract may not be amended or modified orally, and no provision of
this Contract may be waived or amended except in writing signed by the party
against whom enforcement is sought. Such a written waiver or amendment must
expressly reference this Contract. However, by their terms, the Guides may be
amended or supplemented by Residential Funding from time to time. Any such
amendment(s) to the Guides shall be binding upon the parties hereto.
3. REPRESENTATIONS AND WARRANTIES.
a. Reciprocal Representations and Warranties.
The Seller/Servicer and Residential Funding each represents and
warrants to the other that as of the date of this Contract:
(1) Each party is duly organized, validly existing, and in good standing
under the laws of its jurisdiction of organization, is qualified, if
necessary, to do business and in good standing in each jurisdiction in
which it is required to be so qualified, and has the requisite power and
authority to enter into this Contract and all other agreements which are
contemplated by this Contract and to carry out its obligations hereunder
and under the Guides and under such other agreements.
(2) This Contract has been duly authorized, executed and delivered by each
party and constitutes a valid and legally binding agreement of each
party enforceable in accordance with its terms.
(3) There is no action, proceeding or investigation pending or threatened,
and no basis therefor is known to either party, that could affect the
validity or prospective validity of this Contract.
(4) Insofar as its capacity to carry out any obligation under this Contract
is concerned, neither party is in violation of any charter, articles of
incorporation, bylaws, mortgage, indenture, indebtedness, agreement,
instrument, judgment, decree, order, statute, rule or regulation and
none of the foregoing adversely affects its capacity to fulfill any of
its obligations under this Contract. Its execution of, and performance
pursuant to, this Contract will not result in a violation of any of the
foregoing.
b. Seller/Servicer's Representations, Warranties and
Covenants.
In addition to the representations, warranties and covenants made
by the Seller/Servicer pursuant to subparagraph (a) of this
paragraph 3, the Seller/Servicer makes the representations,
warranties and covenants set forth in the Guides and, upon
request, agrees to deliver to Residential Funding the certified
Resolution of Board of Directors which authorizes the execution
and delivery of this Contract.
4. REMEDIES OF RESIDENTIAL FUNDING.
If an Event of Seller Default or an Event of Servicer Default shall
occur, Residential Funding may, at its option, exercise one or more of those
remedies set forth in the Guides.
5. SELLER/SERVICER'S STATUS AS INDEPENDENT CONTRACTOR.
At no time shall the Seller/Servicer represent that it is acting as an
agent of Residential Funding. The Seller/Servicer shall, at all times, act as an
independent contractor.
6. PRIOR AGREEMENTS SUPERSEDED.
This Contract restates, amends and supersedes any and all prior Seller
Contracts or Servicer Contracts between the parties except that any subservicing
agreement executed by the Seller/Servicer in connection with any loan-security
exchange transaction shall not be affected.
7. ASSIGNMENT.
This Contract may not be assigned or transferred, in whole or in part,
by the Seller/Servicer without the prior written consent of Residential Funding.
Residential Funding may sell, assign, convey, hypothecate, pledge or in any
other way transfer, in whole or in part, without restriction, its rights under
this Contract and the Guides with respect to any Commitment or Loan.
8. NOTICES.
All notices, requests, demands or other communications that are to be
given under this Contract shall be in writing, addressed to the appropriate
parties and sent by telefacsimile or by overnight courier or by United States
mail, postage prepaid, to the addresses and telefacsimile numbers specified
below. However, another name, address and/or telefacsimile number may be
substituted by the Seller/Servicer pursuant to the requirements of this
paragraph 8, or Residential Funding pursuant to an amendment to the Guides.
If to Residential Funding, notices must be sent to the appropriate address or
telefacsimile number specified in the Guides.
If to the Seller/Servicer, notice must be sent to:
Attention:
Telefacsimile Number: (___) ____ - _______
9. JURISDICTION AND VENUE.
Each of the parties irrevocably submits to the jurisdiction of any state
or federal court located in Hennepin County, Minnesota, over any action, suit or
proceeding to enforce or defend any right under this Contract or otherwise
arising from any loan sale or servicing relationship existing in connection with
this Contract, and each of the parties irrevocably agrees that all claims in
respect of any such action or proceeding may be heard or determined in such
state or federal court. Each of the parties irrevocably waives the defense of an
inconvenient forum to the maintenance of any such action or proceeding and any
other substantive or procedural rights or remedies it may have with respect to
the maintenance of any such action or proceeding in any such forum. Each of the
parties agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by law. Each of the parties further agrees not
to institute any legal actions or proceedings against the other party or any
director, officer, employee, attorney, agent or property of the other party,
arising out of or relating to this Contract in any court other than as
hereinabove specified in this paragraph 9.
10. MISCELLANEOUS.
This Contract, including all documents incorporated by reference herein,
constitutes the entire understanding between the parties hereto and supersedes
all other agreements, covenants, representations, warranties, understandings and
communications between the parties, whether written or oral, with respect to the
transactions contemplated by this Contract. All paragraph headings contained
herein are for convenience only and shall not be construed as part of this
Contract. Any provision of this Contract that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction, and, to this end, the provisions hereof are severable. This
Contract shall be governed by, and construed and enforced in accordance with,
applicable federal laws and the laws of the State of Minnesota.
IN WITNESS WHEREOF, the duly authorized officers of the Seller/Servicer
and Residential Funding have executed this Seller/Servicer Contract as of the
date first above written.
ATTEST: SELLER/SERVICER
[Corporate Seal]
(Name of Seller/Servicer)
By: By:
(Signature) (Signature)
By: By:
(Typed Name) (Typed Name)
Title: Title:
======================================= ========================================
ATTEST: RESIDENTIAL FUNDING CORPORATION
[Corporate Seal]
By: By:
(Signature) (Signature)
By: By:
(Typed Name) (Typed Name)
Title: Title:
EXHIBIT F
FORMS OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you
for the referenced pool, we request the release of the Mortgage Loan File
described below.
Pooling and Servicing Agreement Dated:
Series#:
Account#:
Pool#:
Loan#:
MIN#:
Borrower Name(s):
Reason for Document Request: (circle one)
Mortgage Loan Prepaid in Full Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Pooling and Servicing Agreement."
Residential Funding Corporation
Authorized Signature
******************************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off documents
being enclosed with a copy of this form. You should retain this form for your
files in accordance with the terms of the Pooling and Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other:
Name: ________________
Title:
Date:
EXHIBIT G-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or beneficial owner
of the Mortgage Asset-Backed Pass-Through Certificates, Series ____-___, Class R
(the "Owner")), a [savings institution] [corporation] duly organized and
existing under the laws of [the State of ] [the United States], on behalf of
which he makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified organization" or an
electing large partnership as of [date of transfer] within the meaning of
Sections 860E(e)(5) and 775, respectively, of the Internal Revenue Code of 1986,
as amended (the "Code") or an electing large partnership under Section 775(a) of
the Code, (ii) will endeavor to remain other than a disqualified organization
for so long as it retains its ownership interest in the Class R Certificates,
and (iii) is acquiring the Class R Certificates for its own account or for the
account of another Owner from which it has received an affidavit and agreement
in substantially the same form as this affidavit and agreement. (For this
purpose, a "disqualified organization" means an electing large partnership under
Section 775 of the Code, the United States, any state or political subdivision
thereof, any agency or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to tax and, except
for the Federal Home Loan Mortgage Corporation, a majority of whose board of
directors is not selected by any such governmental entity) or any foreign
government, international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on transfers of
Class R Certificates to disqualified organizations or electing large
partnerships, under the Code, that applies to all transfers of Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
(or, with respect to transfers to electing large partnerships, on each such
partnership), or, if such transfer is through an agent (which person includes a
broker, nominee or middleman) for a disqualified organization, on the agent;
(iii) that the person (other than with respect to transfers to electing large
partnerships) otherwise liable for the tax shall be relieved of liability for
the tax if the transferee furnishes to such person an affidavit that the
transferee is not a disqualified organization and, at the time of transfer, such
person does not have actual knowledge that the affidavit is false; and (iv) that
the Class R Certificates may be "noneconomic residual interests" within the
meaning of Treasury regulations promulgated pursuant to the Code and that the
transferor of a noneconomic residual interest will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer was to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through entity" holding
Class R Certificates if either the pass-through entity is an electing large
partnership under Section 775 of the Code or if at any time during the taxable
year of the pass-through entity a disqualified organization is the record holder
of an interest in such entity. (For this purpose, a "pass through entity"
includes a regulated investment company, a real estate investment trust or
common trust fund, a partnership, trust or estate, and certain cooperatives.)
5. The Owner is either (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity treated as a corporation or a
partnership for U.S. federal income tax purposes and created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia (other than a partnership that is not treated as a United States person
under any applicable Treasury regulations), (iii) an estate that is described in
Section 7701(a)(30)(D) of the Code, or (iv) a trust that is described in Section
7701(a)(30)(E) of the Code.
6. The Owner hereby agrees that it will not cause income from the Class R
Certificates to be attributable to a foreign permanent establishment or fixed
base (within the meaning of an applicable income tax treaty) of the Owner or
another United States taxpayer.
7. That the Owner is aware that the Trustee will not register the transfer of
any Class R Certificates unless the transferee, or the transferee's agent,
delivers to it an affidavit and agreement, among other things, in substantially
the same form as this affidavit and agreement. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
8. That the Owner has reviewed the restrictions set forth on the face of the
Class R Certificates and the provisions of Section 5.02(f) of the Pooling and
Servicing Agreement under which the Class R Certificates were issued (in
particular, clause (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event the Owner holds such Certificates in
violation of Section 5.02(f)). The Owner expressly agrees to be bound by and to
comply with such restrictions and provisions.
9. That the Owner consents to any additional restrictions or arrangements that
shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is not a disqualified organization.
10. The Owner's Taxpayer Identification Number is __________.
11. This affidavit and agreement relates only to the Class R Certificates held
by the Owner and not to any other holder of the Class R Certificates. The Owner
understands that the liabilities described herein relate only to the Class R
Certificates.
12. That no purpose of the Owner relating to the transfer of any of the Class R
Certificates by the Owner is or will be to impede the assessment or collection
of any tax; in making this representation, the Owner warrants that the Owner is
familiar with (i) Treasury Regulation Section 1.860E-1(c) and recent amendments
thereto, effective as of July 19, 2002, and (ii) the preamble describing the
adoption of the amendments to such regulation, which is attached hereto as
Exhibit 1.
13. That the Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class R Certificate
that the Owner intends to pay taxes associated with holding such Class R
Certificate as they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class R Certificate.
14. That the Owner has no present knowledge or expectation that it will become
insolvent or subject to a bankruptcy proceeding for so long as any of the Class
R Certificates remain outstanding.
15. The Purchaser is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or Section 4975 of the Code, or an investment
manager, named fiduciary or a trustee of any such plan, or any other Person
acting, directly or indirectly, on behalf of or purchasing any Certificate with
"plan assets" of any such plan.
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Title of Officer] and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this day of , 200 .
[NAME OF OWNER]
By:____________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
____________________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer],
known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Owner, and acknowledged to me
that he executed the same as his free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this day of _______, 200__.
NOTARY PUBLIC
COUNTY OF _______________
STATE OF _________________
My Commission expires the ______
day of ____,20___.
EXHIBIT 1
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9004]
RIN 1545-AW98
Real Estate Mortgage Investment Conduits
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations relating to safe harbor
transfers of noneconomic residual interests in real estate mortgage investment
conduits (REMICs). The final regulations provide additional limitations on the
circumstances under which transferors may claim safe harbor treatment.
DATES: Effective Date: These regulations are effective July 19, 2002.
Applicability Date: For dates of applicability, see Sec. 1.860E-
(1)(c)(10).
FOR FURTHER INFORMATION CONTACT: Xxxxxxxx Xxxxxxxxxx at (000) 000-0000
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information in this final rule has been reviewed and,
pending receipt and evaluation of public comments, approved by the Office of
Management and Budget (OMB) under 44 U.S.C. 3507 and assigned control number
1545-1675.
The collection of information in this regulation is in Sec. 1.860E-
1(c)(5)(ii). This information is required to enable the IRS to verify that a
taxpayer is complying with the conditions of this regulation. The collection of
information is mandatory and is required. Otherwise, the taxpayer will not
receive the benefit of safe harbor treatment as provided in the regulation. The
likely respondents are businesses and other for-profit institutions.
Comments on the collection of information should be sent to the Office of
Management and Budget, Attn: Desk Officer for the Department of the Treasury,
Office of Information and Regulatory Affairs, Xxxxxxxxxx, XX, 00000, with copies
to the Internal Revenue Service, Attn: IRS Reports Clearance Officer,
W:CAR:MP:FP:S, Xxxxxxxxxx, XX 00000. Comments on the collection of information
should be received by September 17, 2002. Comments are specifically requested
concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including whether
the information will have practical utility;
The accuracy of the estimated burden associated with the collection of
information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced;
How the burden of complying with the collection of information may be
minimized, including through the application of automated collection techniques
or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation, maintenance,
and purchase of service to provide information.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid control
number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on an
estimated number of respondents of 470 and an estimated average annual burden
hours per respondent of one hour.
Books or records relating to a collection of information must be retained as
long as their contents may become material in the administration of any internal
revenue law. Generally, tax returns and tax return information are confidential,
as required by 26 U.S.C. 6103.
Background
This document contains final regulations regarding the proposed amendments
to 26 CFR part 1 under section 860E of the Internal Revenue Code (Code). The
regulations provide the circumstances under which a transferor of a noneconomic
REMIC residual interest meeting the investigation and representation
requirements may avail itself of the safe harbor by satisfying either the
formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules governing
the transfer of noneconomic REMIC residual interests. In general, a transfer of
a noneconomic residual interest is disregarded for all tax purposes if a
significant purpose of the transfer is to
[[Page 47452]]
enable the transferor to impede the assessment or collection of tax. A purpose
to impede the assessment or collection of tax (a wrongful purpose) exists if the
transferor, at the time of the transfer, either knew or should have known that
the transferee would be unwilling or unable to pay taxes due on its share of the
REMIC's taxable income.
Under a safe harbor, the transferor of a REMIC noneconomic residual interest
is presumed not to have a wrongful purpose if two requirements are satisfied:
(1) the transferor conducts a reasonable investigation of the transferee's
financial condition (the investigation requirement); and (2) the transferor
secures a representation from the transferee to the effect that the transferee
understands the tax obligations associated with holding a residual interest and
intends to pay those taxes (the representation requirement).
The IRS and Treasury have been concerned that some transferors of
noneconomic residual interests claim they satisfy the safe harbor even in
situations where the economics of the transfer clearly indicate the transferee
is unwilling or unable to pay the tax associated with holding the interest. For
this reason, on February 7, 2000, the IRS published in the Federal Register (65
FR 5807) a notice of proposed rulemaking (REG-100276-97; REG-122450-98) designed
to clarify the safe harbor by adding the "formula test," an economic test. The
proposed regulation provides that the safe harbor is unavailable unless the
present value of the anticipated tax liabilities associated with holding the
residual interest does not exceed the sum of: (1) The present value of any
consideration given to the transferee to acquire the interest; (2) the present
value of the expected future distributions on the interest; and (3) the present
value of the anticipated tax savings associated with holding the interest as the
REMIC generates losses.
The notice of proposed rulemaking also contained rules for FASITs. Section
1.860H-6(g) of the proposed regulations provides requirements for transfers of
FASIT ownership interests and adopts a safe harbor by reference to the safe
harbor provisions of the REMIC regulations.
In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3 I.R.B. 335) to
set forth an alternative safe harbor that taxpayers could use while the IRS and
the Treasury considered comments on the proposed regulations. Under the
alternative safe harbor, if a transferor meets the investigation requirement and
the representation requirement but the transfer fails to meet the formula test,
the transferor may invoke the safe harbor if the transferee meets a two- prong
test (the asset test). A transferee generally meets the first prong of this test
if, at the time of the transfer, and in each of the two years preceding the year
of transfer, the transferee's gross assets exceed $100 million and its net
assets exceed $10 million. A transferee generally meets the second prong of this
test if it is a domestic, taxable corporation and agrees in writing not to
transfer the interest to any person other than another domestic, taxable
corporation that also satisfies the requirements of the asset test. A transferor
cannot rely on the asset test if the transferor knows, or has reason to know,
that the transferee will not comply with its written agreement to limit the
restrictions on subsequent transfers of the residual interest.
Rev. Proc. 2001-12 provides that the asset test fails to be satisfied in the
case of a transfer or assignment of a noneconomic residual interest to a foreign
branch of an otherwise eligible transferee. If such a transfer or assignment
were permitted, a corporate taxpayer might seek to claim that the provisions of
an applicable income tax treaty would resource excess inclusion income as
foreign source income, and that, as a consequence, any U.S. tax liability
attributable to the excess inclusion income could be offset by foreign tax
credits. Such a claim would impede the assessment or collection of U.S. tax on
excess inclusion income, contrary to the congressional purpose of assuring that
such income will be taxable in all events. See, e.g., sections 860E(a)(1), (b),
(e) and 860G(b) of the Code.
The Treasury and the IRS have learned that certain taxpayers transferring
noneconomic residual interests to foreign branches have attempted to rely on the
formula test to obtain safe harbor treatment in an effort to impede the
assessment or collection of U.S. tax on excess inclusion income. Accordingly,
the final regulations provide that if a noneconomic residual interest is
transferred to a foreign permanent establishment or fixed base of a U.S.
taxpayer, the transfer is not eligible for safe harbor treatment under either
the asset test or the formula test. The final regulations also require a
transferee to represent that it will not cause income from the noneconomic
residual interest to be attributable to a foreign permanent establishment or
fixed base.
Section 1.860E-1(c)(8) provides computational rules that a taxpayer may use
to qualify for safe harbor status under the formula test. Section
1.860E-1(c)(8)(i) provides that the transferee is presumed to pay tax at a rate
equal to the highest rate of tax specified in section 11(b). Some commentators
were concerned that this presumed rate of taxation was too high because it does
not take into consideration taxpayers subject to the alternative minimum tax
rate. In light of the comments received, this provision has been amended in the
final regulations to allow certain transferees that compute their taxable income
using the alternative minimum tax rate to use the alternative minimum tax rate
applicable to corporations.
Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present values in
the formula test are to be computed using a discount rate equal to the
applicable Federal short-term rate prescribed by section 1274(d). This is a
change from the proposed regulation and Rev. Proc. 2001-12. In those
publications the provision stated that "present values are computed using a
discount rate equal to the applicable Federal rate prescribed in section 1274(d)
compounded semiannually" and that "[a] lower discount rate may be used if the
transferee can demonstrate that it regularly borrows, in the course of its trade
or business, substantial funds at such lower rate from an unrelated third
party." The IRS and the Treasury Department have learned that, based on this
provision, certain taxpayers have been attempting to use unrealistically low or
zero interest rates to satisfy the formula test, frustrating the intent of the
test. Furthermore, the Treasury Department and the IRS believe that a rule
allowing for a rate other than a rate based on an objective index would add
unnecessary complexity to the safe harbor. As a result, the rule in the proposed
regulations that permits a transferee to use a lower discount rate, if the
transferee can demonstrate that it regularly borrows substantial funds at such
lower rate, is not included in the final regulations; and the Federal short-term
rate has been substituted for the applicable Federal rate. To simplify
taxpayers' computations, the final regulations allow use of any of the published
short-term rates, provided that the present values are computed with a
corresponding period of compounding. With the exception of the provisions
relating to transfers to foreign branches, these changes generally have the
proposed applicability date of February 4, 2000, but taxpayers may choose to
apply the interest rate formula set forth in the proposed regulation and Rev.
Proc. 2001-12 for transfers occurring before August 19, 2002.
It is anticipated that when final regulations are adopted with respect to
[[Page 47453]]
FASITs, Sec. 1.860H-6(g) of the proposed regulations will be adopted in
substantially its present form, with the result that the final regulations
contained in this document will also govern transfers of FASIT ownership
interests with substantially the same applicability date as is contained in this
document.
Effect on Other Documents
Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is obsolete for transfers of
noneconomic residual interests in REMICs occurring on or after August 19, 2002.
Special Analyses
It is hereby certified that these regulations will not have a significant
economic impact on a substantial number of small entities. This certification is
based on the fact that it is unlikely that a substantial number of small
entities will hold REMIC residual interests. Therefore, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not
required. It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It also has been determined that sections
553(b) and 553(d) of the Administrative Procedure Act (5 U.S.C. chapter 5) do
not apply to these regulations.
Drafting Information
The principal author of these regulations is Xxxxxxxx Xxxxxxxxxx. However,
other personnel from the IRS and Treasury Department participated in their
development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record keeping requirements.
26 CFR Part 602
Reporting and record keeping requirements.
Adoption of Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602 are amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in part as
follows:
Authority: 26 U.S.C. 7805 * * *
EXHIBIT G-2
FORM OF TRANSFEROR CERTIFICATE
_______ , 20__
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
__________________
__________________
__________________
Attention: Residential Funding Corporation Series ____-___
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___, Class R
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer
by (the "Seller") to (the "Purchaser") of $ Initial Certificate Principal
Balance of Mortgage Asset-Backed Pass-Through Certificates, Series ____-___,
Class R (the "Certificates"), pursuant to Section 5.02 of the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
___________ 1, ____ among Residential Accredit Loans, Inc., as seller (the
"Company"), Residential Funding Corporation, as master servicer (the "Master
Servicer"), and __________________, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the transfer of the Certificate by the
Seller to the Purchaser is or will be to impede the assessment or collection of
any tax.
2. The Seller understands that the Purchaser has delivered to the Trustee and
the Master Servicer a transfer affidavit and agreement in the form attached to
the Pooling and Servicing Agreement as Exhibit G-1. The Seller does not know or
believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Seller has determined that the Purchaser has historically
paid its debts as they become due and has found no significant evidence to
indicate that the Purchaser will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of a Class R
Certificate may not be respected for United States income tax purposes (and the
Seller may continue to be liable for United States income taxes associated
therewith) unless the Seller has conducted such an investigation.
4. The Seller has no actual knowledge that the proposed Transferee is not both a
United States Person and a Permitted Transferee.
Very truly yours,
(Seller)
By: _________________
Name:
Title:
EXHIBIT H
FORM OF INVESTOR REPRESENTATION LETTER
_____, 20___
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
__________________
__________________
__________________
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Residential Funding Corporation Series ____-___
RE: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___, [Class B-]
Ladies and Gentlemen:
(the "Purchaser") intends to purchase from (the "Seller") $
Initial Certificate Principal Balance of Mortgage Asset-Backed Pass-Through
Certificates, Series ____-___, Class (the "Certificates"), issued pursuant to
the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of ___________ 1, ____ among Residential Accredit Loans, Inc., as
seller (the "Company"), Residential Funding Corporation, as master servicer (the
"Master Servicer"), and __________________, as trustee (the "Trustee"). All
terms used herein and not otherwise defined shall have the meanings set forth in
the Pooling and Servicing Agreement. The Purchaser hereby certifies, represents
and warrants to, and covenants with, the Company, the Trustee and the Master
Servicer that:
1. The Purchaser understands that (a) the Certificates have not been and
will not be registered or qualified under the Securities Act of 1933, as
amended (the "Act") or any state securities law, (b) the Company is not
required to so register or qualify the Certificates, (c) the
Certificates may be resold only if registered and qualified pursuant to
the provisions of the Act or any state securities law, or if an
exemption from such registration and qualification is available, (d) the
Pooling and Servicing Agreement contains restrictions regarding the
transfer of the Certificates and (e) the Certificates will bear a legend
to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own account for
investment only and not with a view to or for sale in connection with
any distribution thereof in any manner that would violate the Act or any
applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks
of investment in the Certificates, (b) able to bear the economic risks
of such an investment and (c) an "accredited investor" within the
meaning of Rule 501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity to
review (a) [a copy of the Private Placement Memorandum, dated _____,
20___, relating to the Certificates (b)] a copy of the Pooling and
Servicing Agreement and [b] [c] such other information concerning the
Certificates, the Mortgage Loans and the Company as has been requested
by the Purchaser from the Company or the Seller and is relevant to the
Purchaser's decision to purchase the Certificates. The Purchaser has had
any questions arising from such review answered by the Company or the
Seller to the satisfaction of the Purchaser. [If the Purchaser did not
purchase the Certificates from the Seller in connection with the initial
distribution of the Certificates and was provided with a copy of the
Private Placement Memorandum (the "Memorandum") relating to the original
sale (the "Original Sale") of the Certificates by the Company, the
Purchaser acknowledges that such Memorandum was provided to it by the
Seller, that the Memorandum was prepared by the Company solely for use
in connection with the Original Sale and the Company did not participate
in or facilitate in any way the purchase of the Certificates by the
Purchaser from the Seller, and the Purchaser agrees that it will look
solely to the Seller and not to the Company with respect to any damage,
liability, claim or expense arising out of, resulting from or in
connection with (a) error or omission, or alleged error or omission,
contained in the Memorandum, or (b) any information, development or
event arising after the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any offer to
buy or to accept a pledge, disposition of other transfer of any
Certificate, any interest in any Certificate or any other similar
security from any person in any manner, (c) otherwise approach or
negotiate with respect to any Certificate, any interest in any
Certificate or any other similar security with any person in any manner,
(d) make any general solicitation by means of general advertising or in
any other manner or (e) take any other action, that (as to any of (a)
through (e) above) would constitute a distribution of any Certificate
under the Act, that would render the disposition of any Certificate a
violation of Section 5 of the Act or any state securities law, or that
would require registration or qualification pursuant thereto. The
Purchaser will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing
Agreement.
6. The Purchaser
(a) is not an employee benefit or other plan subject to the prohibited
transaction provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code
of 1986, as amended (a "Plan"), or any other person (including an
investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with
"plan assets" of any Plan within the meaning of the Department of Labor
("DOL") regulation at 29 C.F.R. ss.2510.3-101; or
(b) is an insurance company, the source of funds to be used by it to
purchase the Certificates is an "insurance company general account"
(within the meaning of DOL Prohibited Transaction Class Exemption
("PTCE") 95-60), and the purchase is being made in reliance upon the
availability of the exemptive relief afforded under Sections I and III
of PTCE 95-60.
In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Company, the Trustee and the Master Servicer that the
Purchaser will not transfer such Certificates to any Plan or person unless such
Plan or person meets the requirements set forth in either 6(a) or (b) above.
Very truly yours,
By: _________________________
Name:
Title:
EXHIBIT I
FORM OF TRANSFEROR REPRESENTATION LETTER
___________, 20____
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
__________________
__________________
__________________
Attention: Residential Funding Corporation Series ____-___
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___, [Class B-]
Ladies and Gentlemen:
In connection with the sale by (the "Seller") to (the
"Purchaser") of $ Initial Certificate Principal Balance of Mortgage Asset-Backed
Pass-Through Certificates, Series ____-___, Class (the "Certificates"), issued
pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of ___________ 1, ____ among Residential Accredit Loans,
Inc., as seller (the "Company"), Residential Funding Corporation, as master
servicer, and __________________, as trustee (the "Trustee"). The Seller hereby
certifies, represents and warrants to, and covenants with, the Company and the
Trustee that:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act, in any manner set forth in the foregoing sentence with respect to
any Certificate. The Seller has not and will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.
Very truly yours,
(Seller)
By: _____________________
Name:
Title:
EXHIBIT J
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
1. In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone
acting on its behalf has offered, transferred, pledged, sold or
otherwise disposed of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security to, or solicited any offer
to buy or accept a transfer, pledge or other disposition of the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with
respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any manner,
or made any general solicitation by means of general advertising or in
any other manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the Securities Act of
1933, as amended (the "1933 Act"), or that would render the disposition
of the Rule 144A Securities a violation of Section 5 of the 1933 Act or
require registration pursuant thereto, and that the Seller has not
offered the Rule 144A Securities to any person other than the Buyer or
another "qualified institutional buyer" as defined in Rule 144A under
the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the Seller,
the Trustee and the Master Servicer (as defined in the Pooling and
Servicing Agreement (the "Agreement"), dated as of ___________ 1, ____
among Residential Funding Corporation as Master Servicer, Residential
Accredit Loans, Inc. as depositor pursuant to Section 5.02 of the
Agreement and __________________, as trustee, as follows:
(a) The Buyer understands that the Rule 144A Securities have not been
registered under the 1933 Act or the securities laws of any state.
(b) The Buyer considers itself a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of
investment in the Rule 144A Securities.
(c) The Buyer has been furnished with all information regarding the Rule
144A Securities that it has requested from the Seller, the Trustee or
the Servicer.
(d) Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Rule 144A Securities, any interest in
the Rule 144A Securities or any other similar security from, or
otherwise approached or negotiated with respect to the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Rule
144A Securities under the 1933 Act or that would render the disposition
of the Rule 144A Securities a violation of Section 5 of the 1933 Act or
require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner with
respect to the Rule 144A Securities.
(e) The Buyer is a "qualified institutional buyer" as that term is defined
in Rule 144A under the 1933 Act and has completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. The
Buyer is aware that the sale to it is being made in reliance on Rule
144A. The Buyer is acquiring the Rule 144A Securities for its own
account or the accounts of other qualified institutional buyers,
understands that such Rule 144A Securities may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A,
or (ii) pursuant to another exemption from registration under the 1933
Act.
[3. The Buyer
[(a) is not an employee benefit or other plan subject to
the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (a "Plan"), or any other
person (including an investment manager, a named fiduciary or a trustee
of any Plan) acting, directly or indirectly, on behalf of or purchasing
any Certificate with "plan assets" of any Plan within the meaning of the
Department of Labor ("DOL") regulation at 29 C.F.R. ss. 2510.3-101](1);
or
(b) is an insurance company, the source of funds to be
used by it to purchase the Certificates is an "insurance company general
account" (within the meaning of DOL Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the purchase is being made in reliance
upon the availability of the exemptive relief afforded under Sections I
and III of PTCE 95-60.](2)
4. This document may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
Print Name of Seller Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification:
No. No:
Date: Date:
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $ in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A) and (ii) the Buyer satisfies the
criteria in the category marked below.
-- Corporation, etc. The Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code.
-- Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is supervised
by the State or territorial banking commission or similar official or is
a foreign bank or equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
-- Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements.
-- Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
-- Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the District of Columbia.
-- State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of
the State or its political subdivisions, for the benefit of its
employees.
-- ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
-- Investment Adviser. The Buyer is an investment adviser registered under
the Investment Advisers Act of 1940.
-- SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
-- Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers Act
of 1940.
-- Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Buyer, the Buyer used the cost of such
securities to the Buyer and did not include any of the securities referred to in
the preceding paragraph. Further, in determining such aggregate amount, the
Buyer may have included securities owned by subsidiaries of the Buyer, but only
if such subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands
that the seller to it and other parties related to the Certificates are relying
and will continue to rely on the statements made herein because one or more
sales to the Buyer may be in reliance on Rule 144A.
Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that, in
connection with any purchase of securities sold to the Buyer for the account of
a third party (including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Buyer agrees that the Buyer will not purchase securities for a third party
unless the Buyer has obtained a current representation letter from such third
party or taken other appropriate steps contemplated by Rule 144A to conclude
that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification is made
of any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification as of the date of such purchase.
Print Name of Buyer
By: ___________________
Name:
Title:
Date:__________________
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:
8. As indicated below, the undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because Buyer is part of a Family of Investment
Companies (as defined below), is such an officer of the Adviser.
9. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
-- The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
-- The Buyer is part of a Family of Investment Companies which owned
in the aggregate $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
10. The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
11. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) bank deposit notes and certificates of deposit, (iii)
loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
12. The Buyer is familiar with Rule 144A and understands that each of the
parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
13. The undersigned will notify each of the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.
Print Name of Buyer
By: ________________________
Title:
IF AN ADVISER:
Print Name of Buyer
Date: _____________________
EXHIBIT K
[TEXT OF AMENDMENT TO POOLING AND SERVICING
AGREEMENT PURSUANT TO SECTION 11.01(E) FOR A
LIMITED GUARANTY]
ARTICLE XIII
Subordinate Certificate Loss Coverage; Limited Guaranty
Section 13.01. Subordinate Certificate Loss Coverage; Limited
Guaranty. (a) Subject to subsection (c) below, prior to the later of the third
Business Day prior to each Distribution Date or the related Determination Date,
the Master Servicer shall determine whether it or any Sub-Servicer will be
entitled to any reimbursement pursuant to Section 4.02(a) on such Distribution
Date for Advances or Sub-Servicer Advances previously made, (which will not be
Advances or Sub-Servicer Advances that were made with respect to delinquencies
which were subsequently determined to be Excess Special Hazard Losses, Excess
Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses) and, if so, the
Master Servicer shall demand payment from Residential Funding of an amount equal
to the amount of any Advances or Sub-Servicer Advances reimbursed pursuant to
Section 4.02(a), to the extent such Advances or Sub-Servicer Advances have not
been included in the amount of the Realized Loss in the related Mortgage Loan,
and shall distribute the same to the Class B Certificateholders in the same
manner as if such amount were to be distributed pursuant to Section 4.02(a).
(b) Subject to subsection (c) below, prior to the later of the
third Business Day prior to each Distribution Date or the related Determination
Date, the Master Servicer shall determine whether any Realized Losses (other
than Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses
and Extraordinary Losses) will be allocated to the Class B Certificates on such
Distribution Date pursuant to Section 4.05, and, if so, the Master Servicer
shall demand payment from Residential Funding of the amount of such Realized
Loss and shall distribute the same to the Class B Certificateholders in the same
manner as if such amount were to be distributed pursuant to Section 4.02(a);
provided, however, that the amount of such demand in respect of any Distribution
Date shall in no event be greater than the sum of (i) the additional amount of
Accrued Certificate Interest that would have been paid for the Class B
Certificateholders on such Distribution Date had such Realized Loss or Losses
not occurred plus (ii) the amount of the reduction in the Certificate Principal
Balances of the Class B Certificates on such Distribution Date due to such
Realized Loss or Losses. Notwithstanding such payment, such Realized Losses
shall be deemed to have been borne by the Certificateholders for purposes of
Section 4.05. Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses and Extraordinary Losses allocated to the Class B Certificates
will not be covered by the Subordinate Certificate Loss Obligation.
(c) Demands for payments pursuant to this Section shall be made
prior to the later of the third Business Day prior to each Distribution Date or
the related Determination Date by the Master Servicer with written notice
thereof to the Trustee. The maximum amount that Residential Funding shall be
required to pay pursuant to this Section on any Distribution Date (the "Amount
Available") shall be equal to the lesser of (X) minus the sum of (i) all
previous payments made under subsections (a) and (b) hereof and (ii) all draws
under the Limited Guaranty made in lieu of such payments as described below in
subsection (d) and (Y) the then outstanding Certificate Principal Balances of
the Class B Certificates, or such lower amount as may be established pursuant to
Section 13.02. Residential Funding's obligations as described in this Section
are referred to herein as the "Subordinate Certificate Loss Obligation."
(d) The Trustee will promptly notify General Motors Acceptance
Corporation of any failure of Residential Funding to make any payments hereunder
and shall demand payment pursuant to the limited guaranty (the "Limited
Guaranty"), executed by General Motors Acceptance Corporation, of Residential
Funding's obligation to make payments pursuant to this Section, in an amount
equal to the lesser of (i) the Amount Available and (ii) such required payments,
by delivering to General Motors Acceptance Corporation a written demand for
payment by wire transfer, not later than the second Business Day prior to the
Distribution Date for such month, with a copy to the Master Servicer.
(e) All payments made by Residential Funding pursuant to this
Section or amounts paid under the Limited Guaranty shall be deposited directly
in the Certificate Account, for distribution on the Distribution Date for such
month to the Class B Certificateholders.
(f) The Company shall have the option, in its sole discretion, to
substitute for either or both of the Limited Guaranty or the Subordinate
Certificate Loss Obligation another instrument in the form of a corporate
guaranty, an irrevocable letter of credit, a surety bond, insurance policy or
similar instrument or a reserve fund; provided that (i) the Company obtains
(subject to the provisions of Section 10.01(f) as if the Company was substituted
for the Master Servicer solely for the purposes of such provision) an Opinion of
Counsel (which need not be an opinion of Independent counsel) to the effect that
obtaining such substitute corporate guaranty, irrevocable letter of credit,
surety bond, insurance policy or similar instrument or reserve fund will not
cause either (a) any federal tax to be imposed on the Trust Fund, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860(F)(a)(1) of the Code or on "contributions after the startup date"
under Section 860(G)(d)(1) of the Code or (b) the Trust Fund to fail to qualify
as a REMIC at any time that any Certificate is outstanding, and (ii) no such
substitution shall be made unless (A) the substitute Limited Guaranty or
Subordinate Certificate Loss Obligation is for an initial amount not less than
the then current Amount Available and contains provisions that are in all
material respects equivalent to the original Limited Guaranty or Subordinate
Certificate Loss Obligation (including that no portion of the fees,
reimbursements or other obligations under any such instrument will be borne by
the Trust Fund), (B) the long term debt obligations of any obligor of any
substitute Limited Guaranty or Subordinate Certificate Loss Obligation (if not
supported by the Limited Guaranty) shall be rated at least the lesser of (a) the
rating of the long term debt obligations of General Motors Acceptance
Corporation as of the date of issuance of the Limited Guaranty and (b) the
rating of the long term debt obligations of General Motors Acceptance
Corporation at the date of such substitution and (C) the Company obtains written
confirmation from each nationally recognized credit rating agency that rated the
Class B Certificates at the request of the Company that such substitution shall
not lower the rating on the Class B Certificates below the lesser of (a) the
then-current rating assigned to the Class B Certificates by such rating agency
and (b) the original rating assigned to the Class B Certificates by such rating
agency. Any replacement of the Limited Guaranty or Subordinate Certificate Loss
Obligation pursuant to this Section shall be accompanied by a written Opinion of
Counsel to the substitute guarantor or obligor, addressed to the Master Servicer
and the Trustee, that such substitute instrument constitutes a legal, valid and
binding obligation of the substitute guarantor or obligor, enforceable in
accordance with its terms, and concerning such other matters as the Master
Servicer and the Trustee shall reasonably request. Neither the Company, the
Master Servicer nor the Trustee shall be obligated to substitute for or replace
the Limited Guaranty or Subordinate Certificate Loss Obligation under any
circumstance.
Section 13.02. Amendments Relating to the Limited Guaranty.
Notwithstanding Sections 11.01 or 13.01: (i) the provisions of this Article XIII
may be amended, superseded or deleted, (ii) the Limited Guaranty or Subordinate
Certificate Loss Obligation may be amended, reduced or canceled, and (iii) any
other provision of this Agreement which is related or incidental to the matters
described in this Article XIII may be amended in any manner; in each case by
written instrument executed or consented to by the Company and Residential
Funding but without the consent of any Certificateholder and without the consent
of the Master Servicer or the Trustee being required unless any such amendment
would impose any additional obligation on, or otherwise adversely affect the
interests of, the Master Servicer or the Trustee, as applicable; provided that
the Company shall also obtain a letter from each nationally recognized credit
rating agency that rated the Class B Certificates at the request of the Company
to the effect that such amendment, reduction, deletion or cancellation will not
lower the rating on the Class B Certificates below the lesser of (a) the
then-current rating assigned to the Class B Certificates by such rating agency
and (b) the original rating assigned to the Class B Certificates by such rating
agency, unless (A) the Holder of 100% of the Class B Certificates is Residential
Funding or an Affiliate of Residential Funding, or (B) such amendment,
reduction, deletion or cancellation is made in accordance with Section 11.01(e)
and, provided further that the Company obtains (subject to the provisions of
Section 10.01(f) as if the Company was substituted for the Master Servicer
solely for the purposes of such provision), in the case of a material amendment
or supercession (but not a reduction, cancellation or deletion of the Limited
Guaranty or the Subordinate Certificate Loss Obligation), an Opinion of Counsel
(which need not be an opinion of Independent counsel) to the effect that any
such amendment or supercession will not cause either (a) any federal tax to be
imposed on the Trust Fund, including without limitation, any federal tax imposed
on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code or
(b) the Trust Fund to fail to qualify as a REMIC at any time that any
Certificate is outstanding. A copy of any such instrument shall be provided to
the Trustee and the Master Servicer together with an Opinion of Counsel that
such amendment complies with this Section 13.02.
EXHIBIT L
[FORM OF LIMITED GUARANTY]
LIMITED GUARANTY
RESIDENTIAL ACCREDIT LOANS, INC.
Mortgage Asset-Backed Pass-Through Certificates
Series ____-___
______, 200__
__________________
__________________
__________________
Attention: Residential Funding Corporation Series ____-___
Ladies and Gentlemen:
WHEREAS, Residential Funding Corporation, a Delaware corporation
("Residential Funding"), an indirect wholly-owned subsidiary of General Motors
Acceptance Corporation, a New York corporation ("GMAC"), plans to incur certain
obligations as described under Section 13.01 of the Pooling and Servicing
Agreement dated as of ___________ 1, ____ (the "Servicing Agreement"), among
Residential Accredit Loans, Inc. (the "Company"), Residential Funding and
__________________ (the "Trustee") as amended by Amendment No. thereto, dated as
of , with respect to the Mortgage Asset-Backed Pass-Through Certificates, Series
____-___ (the "Certificates"); and
WHEREAS, pursuant to Section 13.01 of the Servicing Agreement,
Residential Funding agrees to make payments to the Holders of the Class B
Certificates with respect to certain losses on the Mortgage Loans as described
in the Servicing Agreement; and
WHEREAS, GMAC desires to provide certain assurances with respect
to the ability of Residential Funding to secure sufficient funds and faithfully
to perform its Subordinate Certificate Loss Obligation;
NOW THEREFORE, in consideration of the premises herein contained
and certain other good and valuable consideration, the receipt of which is
hereby acknowledged, GMAC agrees as follows:
1. Provision of Funds. (a) GMAC agrees to contribute and deposit in the
Certificate Account on behalf of Residential Funding (or otherwise provide to
Residential Funding, or to cause to be made available to Residential Funding),
either directly or through a subsidiary, in any case prior to the related
Distribution Date, such moneys as may be required by Residential Funding to
perform its Subordinate Certificate Loss Obligation when and as the same arises
from time to time upon the demand of the Trustee in accordance with Section
13.01 of the Servicing Agreement.
(b) The agreement set forth in the preceding clause (a) shall be
absolute, irrevocable and unconditional and shall not be affected by the
transfer by GMAC or any other person of all or any part of its or their interest
in Residential Funding, by any insolvency, bankruptcy, dissolution or other
proceeding affecting Residential Funding or any other person, by any defense or
right of counterclaim, set-off or recoupment that GMAC may have against
Residential Funding or any other person or by any other fact or circumstance.
Notwithstanding the foregoing, GMAC's obligations under clause (a) shall
terminate upon the earlier of (x) substitution for this Limited Guaranty
pursuant to Section 13.01(f) of the Servicing Agreement, or (y) the termination
of the Trust Fund pursuant to the Servicing Agreement.
2. Waiver. GMAC hereby waives any failure or delay on the part of Residential
Funding, the Trustee or any other person in asserting or enforcing any rights or
in making any claims or demands hereunder. Any defective or partial exercise of
any such rights shall not preclude any other or further exercise of that or any
other such right. GMAC further waives demand, presentment, notice of default,
protest, notice of acceptance and any other notices with respect to this Limited
Guaranty, including, without limitation, those of action or nonaction on the
part of Residential Funding or the Trustee.
3. Modification, Amendment and Termination. This Limited Guaranty may be
modified, amended or terminated only by the written agreement of GMAC and the
Trustee and only if such modification, amendment or termination is permitted
under Section 13.02 of the Servicing Agreement. The obligations of GMAC under
this Limited Guaranty shall continue and remain in effect so long as the
Servicing Agreement is not modified or amended in any way that might affect the
obligations of GMAC under this Limited Guaranty without the prior written
consent of GMAC.
4. Successor. Except as otherwise expressly provided herein, the guarantee
herein set forth shall be binding upon GMAC and its respective successors.
5. Governing Law. This Limited Guaranty shall be governed by the laws of the
State of New York.
6. Authorization and Reliance. GMAC understands that a copy of this Limited
Guaranty shall be delivered to the Trustee in connection with the execution of
Amendment No. 1 to the Servicing Agreement and GMAC hereby authorizes the
Company and the Trustee to rely on the covenants and agreements set forth
herein.
7. Definitions. Capitalized terms used but not otherwise defined herein shall
have the meaning given them in the Servicing Agreement.
8. Counterparts. This Limited Guaranty may be executed in any number of
counterparts, each of which shall be deemed to be an original and such
counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, GMAC has caused this Limited Guaranty to be
executed and delivered by its respective officers thereunto duly authorized as
of the day and year first above written.
GENERAL MOTORS ACCEPTANCE
CORPORATION
By: ______________________
Name:
Title:
Acknowledged by:
__________________,
as Trustee
By:
Name:
Title:
RESIDENTIAL ACCREDIT LOANS, INC.
By:
Name:
Title:
EXHIBIT M
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
_____, 20___
Residential Accredit Loans, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
__________________
__________________
__________________
Attention: Residential Funding Corporation Series ____-___
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___ Assignment of Mortgage Loan
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment
by (the "Trustee") to (the "Lender") of (the "Mortgage Loan") pursuant to
Section 3.13(d) of the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of ___________ 1, ____ among Residential
Accredit Loans, Inc., as seller (the "Company"), Residential Funding
Corporation, as Master Servicer, and the Trustee. All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Lender hereby certifies, represents and warrants to, and
covenants with, the Master Servicer and the Trustee that:
(i) the Mortgage Loan is secured by Mortgaged Property located in a jurisdiction
in which an assignment in lieu of satisfaction is required to preserve lien
priority, minimize or avoid mortgage recording taxes or otherwise comply with,
or facilitate a refinancing under, the laws of such jurisdiction;
(ii) the substance of the assignment is, and is intended to be, a refinancing of
such Mortgage Loan and the form of the transaction is solely to comply with, or
facilitate the transaction under, such local laws;
(iii) the Mortgage Loan following the proposed assignment will be modified to
have a rate of interest at least 0.25 percent below or above the rate of
interest on such Mortgage Loan prior to such proposed assignment; and
(iv) such assignment is at the request of the borrower under the related
Mortgage Loan.
Very truly yours,
(Lender)
By:________________________
Name:
Title:
EXHIBIT N
FORM OF REQUEST FOR EXCHANGE
[DATE]
__________________
__________________
__________________
Re: Residential Accredit Loans, Inc.,
Mortgage Asset-Backed Pass-Through Certificates,
Series ____-___
Residential Funding Corporation, as the Holder of a % Percentage
Interest of the [Interest Only/Class A-V][-1] Certificates, hereby requests the
Trustee to exchange the above-referenced Certificates for the Subclasses
referred to below:
1. [Interest Only/Class A-V]- Certificates, corresponding to
the following Uncertificated REMIC Regular Interests:
[List numbers corresponding to the related loans and Pool
Strip Rates from the Mortgage Loan Schedule]. The initial
Subclass Notional Amount and the Initial Pass-Through Rate
on the [Interest Only/Class A-V]- Certificates will be $
and %, respectively.
2. [Repeat as appropriate.]
The Subclasses requested above will represent in the aggregate
all of the Uncertificated REMIC Regular Interests represented by the [Interest
Only/Class A-V][-1] Certificates surrendered for exchange.
All capitalized terms used but not defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement, dated as of
___________ 1, ____, among Residential Accredit Loans, Inc., Residential Funding
Corporation and __________________, as trustee.
RESIDENTIAL FUNDING CORPORATION
By: ____________________________
Name:
Title:
EXHIBIT O
Form of Form 10-K Certification
I, [identify the certifying individual], certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of the trust (the "Exchange Act periodic reports") created pursuant to the
Series Supplement dated ___________________ to the Standard Terms of Pooling and
Servicing Agreement dated ____________________ (together, the "P&S Agreement")
among Residential Accredit Loans, Inc., Residential Funding Corporation (the
"Master Servicer") and [Name of Trustee] (the "Trustee");
2. Based on my knowledge, the Exchange Act periodic reports, taken as a
whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer and based on my knowledge and the compliance review conducted in
preparing the servicer compliance statement required in this report under Item
1123 of Regulation AB, and except a disclosed in the Exchange Act periodic
reports, the Master Servicer has fulfilled its obligations under the P&S
Agreement; and
5. All of the reports on assessment of compliance with servicing
criteria for asset-backed securities and their related attestation reports on
assessment of compliance with servicing criteria for asset-backed securities
required to be included in this report in accordance with Item 1122 of
Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been included as an
exhibit to this report, except as otherwise disclosed in this report. Any
material instances of noncompliance described in such reports have been
disclosed in this report on Form 10-K.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: [the Trustee].
Date:_______________________
____________________________*
[Signature] [Title:]
* to be signed by the senior officer in charge of the servicing functions of the
Master Servicer
EXHIBIT P
[FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE]
The undersigned, a Responsible Officer of [_________] (the "Trustee")
certifies that:
(a) The Trustee has performed all of the duties specifically required to
be performed by it pursuant to the provisions of the Pooling and Servicing
Agreement dated as of [_________], 20[__] (the "Agreement") by and among
[__________], as depositor, Residential Funding Corporation, as Master Servicer,
and the Trustee in accordance with the standards set forth therein.
(b) Based on my knowledge, the list of Certificateholders as shown on
the Certificate Register as of the end of each calendar year that is provided by
the Trustee pursuant to the Agreement is accurate as of the last day of the
20[__] calendar year.
Capitalized terms used and not defined herein shall have the meanings given such
terms in the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of
_________, 20__.]
Name:______________________
Title:
EXHIBIT Q
INFORMATION TO BE PROVIDED BY THE MASTER SERVICER TO THE RATING AGENCIES
RELATING TO REPORTABLE MODIFIED MORTGAGE LOANS
Account number
Transaction Identifier
Unpaid Principal Balance prior to Modification
Next Due Date
Monthly Principal and Interest Payment
Total Servicing Advances
Current Interest Rate
Original Maturity Date
Original Term to Maturity (Months)
Remaining Term to Maturity (Months)
Trial Modification Indicator
Mortgagor Equity Contribution
Total Servicer Advances
Trial Modification Term (Months)
Trial Modification Start Date
Trial Modification End Date
Trial Modification Period Principal and Interest Payment
Trial Modification Interest Rate
Trial Modification Term
Rate Reduction Indicator
Interest Rate Post Modification
Rate Reduction Start Date
Rate Reduction End Date
Rate Reduction Term
Term Modified Indicator
Modified Amortization Period
Modified Final Maturity Date
Total Advances Written Off
Unpaid Principal Balance Written Off
Other Past Due Amounts Written Off
Write Off Date
Unpaid Principal Balance Post Write Off
Capitalization Indicator
Mortgagor Contribution
Total Capitalized Amount
Modification Close Date
Unpaid Principal Balance Post Capitalization Modification
Next Payment Due Date per Modification Plan
Principal and Interest Payment Post Modification
Interest Rate Post Modification
Payment Made Post Capitalization
Delinquency Status to Modification Plan
EXHIBIT R
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Trustee shall
address, at a minimum, the criteria identified as below as "Applicable Servicing
Criteria":
-------------------------------------------------------------------------- ------------------
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
-------------------------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
REFERENCE CRITERIA
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
GENERAL SERVICING CONSIDERATIONS
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
activities.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the pool assets are maintained.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
CASH COLLECTION AND ADMINISTRATION
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(i) Payments on pool assets are deposited into the |X| (as to
appropriate custodial bank accounts and related bank clearing
accounts no more than two business days following receipt, or
such other number of days accounts held by specified in the
transaction agreements. Trustee)
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an |X| (as
to obligor or to an investor are made only by authorized
investors only) personnel.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees charged
for such advances, are made, reviewed and approved as
specified in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of |X| (as to
overcollateralization, are separately maintained accounts held by
(e.g., with respect to commingling of cash) as set Trustee)
1122(d)(2)(iv) forth in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally insured
depository institution" with respect to a foreign financial
institution means a foreign financial institution that meets
the requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
INVESTOR REMITTANCES AND REPORTING
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance with
timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number of
pool assets serviced by the servicer.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in |X|
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Disbursements made to an investor are posted within two
business days to the servicer's investor records, or such
other number of days specified in the |X|
1122(d)(3)(iii) transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, |X|
1122(d)(3)(iv) or custodial bank statements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
POOL ASSET ADMINISTRATION
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(i) Collateral or security on pool assets is maintained as
required by the transaction agreements or related asset pool
documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Pool assets and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions
or requirements in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made in
accordance with the related pool asset documents are posted to
the servicer's obligor records maintained no more than two
business days after receipt, or such other number of days
specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in
accordance with the related pool asset documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(v) The servicer's records regarding the pool assets agree with
the servicer's records with respect to an obligor's unpaid
principal balance.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
pool asset (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance
with the transaction agreements and related pool asset
documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during
the period a pool asset is delinquent in accordance with the
transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent pool assets including, for example,
phone calls, letters and payment rescheduling plans in cases
where delinquency is deemed temporary (e.g., illness or
unemployment).
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for pool
assets with variable rates are computed based on the related
pool asset documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's pool asset documents, on at least an annual
basis, or such other period specified in the transaction
agreements; (B) interest on such funds is paid, or credited,
to obligors in accordance with applicable pool asset documents
and state laws; and (C) such funds are returned to the obligor
within 30 calendar days of full repayment of the related pool
asset, or such other number of days specified in the
transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has been
received by the servicer at least 30 calendar days prior to
these dates, or such other number of days specified in the
transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late payment
was due to the obligor's error or omission.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the
servicer, or such other number of
1122(d)(4)(xiii) days specified in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the |X|
1122(d)(4)(xv) transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
(1) Only paragraph (a) for Class P Certificates.
(2) Class B Certificateholders may represent to either (a) or (b).
EXHIBIT FOUR:
SWAP AGREEMENT
(See Tab 7)
EXHIBIT FIVE:
SB-AM SWAP AGREEMENT
(See Tab 6
EXHIBIT SIX
FORM OF CERTIFICATE TO BE GIVEN BY CERTIFICATE OWNER
Euroclear Cedel, societe anonyme
000 Xxxxxxxxx Xxxxxxxx 00 Xxxxxxxxx Xxxxx-Xxxxxxxx Xxxxxxxxx
X-0000 Xxxxxxxx, Xxxxxxx X-0000 Xxxxxxxxxx
Re: Residential Asset Securities Corporation, Home Equity
Mortgage Asset-Backed Pass-Through Certificates, Series 2006-QA7,
Class SB-1, issued pursuant to the Pooling and Servicing
Agreement dated as of August 1, 2006 among RESIDENTIAL ACRREDIT
LOANS, INC., RESIDENTIAL FUNDING CORPORATION, and DEUTSCHE BANK
TRUST COMPANY AMERICAS, as Trustee (the "Certificates").
This is to certify that as of the date hereof and except as set forth
below, the beneficial interest in the Certificates held by you for our account
is owned by persons that are not U.S. persons (as defined in Rule 901 under the
Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the Certificates held by you in which the undersigned has acquired, or intends
to acquire, a beneficial interest in accordance with your operating procedures
if any applicable statement herein is not correct on such date. In the absence
of any such notification, it may be assumed that this certification applies as
of such date.
[This certification excepts beneficial interests in and does not relate
to U.S. $_________ principal amount of the Certificates appearing in your books
as being held for our account but that we have sold or as to which we are not
yet able to certify.]
We understand that this certification is required in connection with
certain securities laws in the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy thereof to any interested party in such
proceedings.
Dated:________________ , By:_______________________________ ,*-/
Account Holder
* Certification must be dated on or after the 15th day before the date of the
Euroclear or Cedel certificate to which this certification releases.
EXHIBIT SEVEN
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR OR CEDEL
Deutsche Bank Trust Company Americas
Re: RESIDENTIAL ACCREDIT LOANS, INC., Mortgage Asset-Backed
Pass-Through Certificates, Series 2005-QA7, Class SB-1, Issued
Pursuant To The Pooling And Servicing Agreement Dated As Of
August 1, 2006 Among RESIDENTIAL ACCREDIT LOANS, INC.,
RESIDENTIAL FUNDING CORPORATION, and DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Trustee (The "Certificates").
This is to certify that, based solely on certifications we have received
in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") as of the date
hereof, $____________ principal amount of the Certificates is owned by persons
(a) that are not U.S. persons (as defined in Rule 901 under the Securities Act
of 1933. as amended (the "Securities Act")) or (b) who purchased their
Certificates (or interests therein) in a transaction or transactions that did
not require registration under the Securities Act.
We further certify (a) that we are not making available herewith for
exchange any portion of the related Temporary Regulation S Global Class SB
Certificate excepted in such certifications and (b) that as of the date hereof
we have not received any notification from any of our Member Organizations to
the effect that the statements made by them with respect to any portion of the
part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof
We understand that this certification is required in connection with
certain securities laws of the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy hereof to any interested party in such proceedings.
Date:_________________ * Yours faithfully,
* To be dated no earlier By:_________________________________
than the Effective Date. Xxxxxx Guaranty Trust Company of New York,
Brussels Office, as Operator
of the Euroclear Clearance System
Cedel, Societe anonyme
EXHIBIT EIGHT
FORM OF
CERTIFICATE TO BE GIVEN BY TRANSFEREE
OF BENEFICIAL INTEREST IN A REGULATION S
BOOK-ENTRY CERTIFICATE
Euroclear Cedel, societe anonyme
000 Xxxxxxxxx Xxxxxxxx 00 Xxxxxxxxx Xxxxx-Xxxxxxxx Xxxxxxxxx
X- 0000 Xxxxxxxx, Xxxxxxx X- 0000 Xxxxxxxxxx
Re: RESIDENTIAL ACCREDIT LOANS, INC., Mortgage Asset-Backed
Pass-Through Certificates, Series 2005-QA7, Class SB-1,
Issued Pursuant To The Pooling And Servicing Agreement
Dated As Of August 1, 2006 Among RESIDENTIAL ACCREDIT
LOANS, INC., RESIDENTIAL FUNDING CORPORATION, and
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee (The
"Certificates").
This is to certify that as of the date hereof, and except as set forth
below, for purposes of acquiring a beneficial interest in the Certificates, the
undersigned certifies that it is not a U.S. person (as defined in Rule 901 under
the Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the Certificates held by you in which the undersigned intends to acquire a
beneficial interest in accordance with your operating procedures if any
applicable statement herein is not correct on such date. In the absence of any
such notification, it may be assumed that this certification applies as of such
date.
We understand that this certification is required in connection with
certain securities laws in the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy thereof to any interested party in such
proceedings.
Dated:_________________ By:___________________________
EXHIBIT NINE
FORM OF
TRANSFER CERTIFICATE FOR EXCHANGE OR
TRANSFER FROM 144A BOOK-ENTRY CERTIFICATE
TO REGULATION S BOOK-ENTRY CERTIFICATE
Re: RESIDENTIAL ACCREDIT LOANS, INC., Mortgage Asset-Backed
Pass-Through Certificates, Series 2005-QA7, Class SB-1,
Issued Pursuant To The Pooling And Servicing Agreement
Dated As Of August 1, 2006 Among RESIDENTIAL ACCREDIT
LOANS, INC., RESIDENTIAL FUNDING CORPORATION, and
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee (The
"Certificates").
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
This letter relates to U.S. $____________ principal amount of
Certificates that are held as a beneficial interest in the 144A Book-Entry
Certificate (CUSIP No. ________) with DTC in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of the beneficial interest for an interest in the Permanent Regulation
S Global Class SB Certificate (CUSIP No. ________) to be held with [Euroclear]
[Cedel] through DTC.
In connection with the request and in receipt of the Certificates, the
Transferor does hereby certify that the exchange or transfer has been effected
in accordance with the transfer restrictions set forth in the Agreement and the
Certificates and:
(a) pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and
accordingly the Transferor does hereby certify that:
(i) the offer of the Certificates was not made to a person
in the United States of America,
[(ii) at the time the buy order was originated, the
transferee was outside the United States of America or the
Transferor and any person acting on its behalf reasonably
believed that the transferee was outside the United States of
America,
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither
the Transferor nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States of
America,]**-/
(iii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation 5, as applicable,
(iv) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act, and
(b) with respect to transfers made in reliance on Rule 144 under
the Securities Act, the Transferor does hereby certify that the
Certificates are being transferred in a transaction permitted by Rule
144 under the Securities Act.
This certification and the statements contained herein are made for your
benefit and the benefit of the issuer and the [placement agent].
[Insert name of Transferor]
Date:_________________ By:_________________________________________
Title:______________________________________
** Insert one of these two provisions, which come from the definition of
"offshore transactions" in Regulation S.
EXHIBIT TEN
FORM OF
INITIAL PURCHASER EXCHANGE INSTRUCTIONS
Depository Trust Company
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: RESIDENTIAL ACCREDIT LOANS, INC., Mortgage Asset-Backed
Pass-Through Certificates, Series 2005-QA7, Class SB-1,
Issued Pursuant To The Pooling And Servicing Agreement
Dated As Of August 1, 2006 Among RESIDENTIAL ACCREDIT
LOANS, INC., RESIDENTIAL FUNDING CORPORATION, and
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee (The
"Certificates").
Pursuant to Section 5.02(g) of the Agreement, ________________________
(the "Initial Purchaser") hereby requests that $______________ aggregate
principal amount of the Certificates held by you for our account and represented
by the Temporary Regulation S Global Class SB Certificate (CUSIP No. ________)
(as defined in the Agreement) be exchanged for an equal principal amount
represented by the Rule 144A Global Class SB Certificate (CUSIP No. _______) to
be held by you for our account.
Date:_______________________________ [Initial Purchaser]
By:_________________________
Title:______________________
EXHIBIT ELEVEN-A
FORM OF RULE 144A GLOBAL CLASS SB-[_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED
HEREIN).
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE") COUPLED WITH INTERESTS IN THE SWAP AGREEMENT
AND THE SB-AM SWAP AGREEMENT.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY
VIRTUE OF ITS PURCHASE OR HOLDING OF THIS CERTIFICATE (OR INTEREST THEREIN) THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN OR ARRANGEMENT
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
OR A PERSON (INCLUDING AN INSURANCE COMPANY INVESTING ITS GENERAL ACCOUNT, AN
INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY SUCH PLAN) WHO IS
USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A
HOLDER OF THIS CERTIFICATE UNLESS THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR IS MADE IN A
TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION.
FURTHERMORE, THE AGREEMENT PROVIDES THAT NO TRANSFER OF THIS CERTIFICATE OR
INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE EXCEPT (I) OUTSIDE
THE UNITED STATES TO ENTITIES WHICH ARE NOT U.S. PERSONS WITHIN THE MEANING OF
REGULATION S UNDER THE 1933 ACT OR (II) IN RELIANCE ON RULE 144A UNDER THE 1933
ACT ("RULE 144A") TO A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A)
THAT IS ACQUIRING THIS CERTIFICATE OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND
AGREED THAT (I) IT IS (A) A QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS
CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE ACCOUNT OR ACCOUNTS OF
A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); AND
(II) IT UNDERSTANDS THAT THIS CERTIFICATE IS BEING TRANSFERRED TO IT IN A
TRANSACTION NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933
ACT, AND THAT, IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE
TRANSFER THIS CERTIFICATE, THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR
TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS
OWN ACCOUNT (OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER)
AND TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE
903 OR RULE 904 OF REGULATION S.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE,
PLEDGE OR OTHER DISPOSITION SHALL, AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE
DEEMED TO HAVE AGREED 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 THE AGREEMENT.
CUSIP: _____________________ Certificate No. SB-[__]-1
Date of Pooling and Servicing Agreement Percentage Interest: 100.00%
and Cut-off Date: August 1, 2006
First Distribution Date: June 26, 2006 Aggregate Initial Notional Balance
of the Class SB-[_] Certificates:
$___________________________
Master Servicer: Initial Notional Balance
Residential Funding Corporation of this Class SB-[_] Certificate:
$___________________________
Maturity Date:
__________ __, 20__
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-QA7
evidencing a percentage interest in the distributions allocable
to the Class SB-[_] Certificates with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable interest
rate, first lien mortgage loans on one- to four-family
residential properties sold by RESIDENTIAL ACCREDIT LOANS
INCORPORATED
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in RESIDENTIAL ACCREDIT
LOANS INCORPORATED, the Master Servicer, the Trustee referred to below or any of
their affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by
RESIDENTIAL ACCREDIT LOANS INCORPORATED, the Master Servicer, the Trustee or any
of their affiliates. None of the Depositor, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of adjustable
interest rate, first lien mortgage loans on one- to four-family residential
properties, sold by RESIDENTIAL ACCREDIT LOANS INCORPORATED (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement
referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement") among the
Depositor, the Master Servicer and Deutsche Bank Trust Company Americas, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), from
the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any, required to be distributed to Holders of Class SB-[_]
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in St. Xxxx, Minnesota. The Notional Amount of
this Class SB-[_] Certificate as of any date of determination will be calculated
as described in the Agreement. This Class SB-[_] Certificate will accrue
interest at the Pass-Through Rate on the Notional Amount as indicated in the
definition of Accrued Certificate Interest in the Agreement. This Class SB-[_]
Certificate will not accrue interest on its Certificate Principal Balance.
Any Transferee of this Certificate will be deemed to have represented by
virtue of its purchase or holding of this Certificate (or interest therein) that
either such transferee is not an employee benefit plan or other plan or
arrangement subject to the prohibited transaction provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Code or a person (including an insurance company investing its general
account, an investment manager, a named fiduciary or a trustee of any such plan)
who is using "plan assets" of any such plan to effect such acquisition.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Asset-Backed Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in St. Xxxx, Minnesota, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee or any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Holder of the
Class SB Certificates or the Master Servicer, as described in the Agreement,
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans or the Certificates, in either case thereby
effecting early retirement of the Certificates. The Agreement permits, but does
not require, the Holder of the Class SB Certificates or the Master Servicer, as
described in the Agreement, (i) to purchase, at a price determined as provided
in the Agreement, all remaining Mortgage Loans and all property acquired in
respect of any Mortgage Loan or (ii) to purchase in whole, but not in part, all
of the Certificates from the Holders thereof, provided, that any such option may
only be exercised if the Stated Principal Balance before giving effect to the
distributions to be made on such Distribution Date of the Mortgage Loans, as of
the Distribution Date upon which the proceeds of any such purchase are
distributed is less than ten percent of the Cut-off Date Principal Balance.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By:__________________________________________
Authorized Signatory
Dated:_____________________
CERTIFICATE OF AUTHENTICATION
This is one of the Class SB-[_] Certificates referred to in the
within-mentioned Agreement.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Certificate Registrar
By:_________________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
Dated:_____________________ _____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available fund to_______________________________________________________________
for the account of______________________________________________________________
account number__________________________________________________________________
or, if mailed by check, to______________________________________________________
Applicable statements should be mailed to:______________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
EXHIBIT ELEVEN -B
FORM OF PERMANENT REGULATION S GLOBAL CLASS SB-[_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED
HEREIN).
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE") COUPLED WITH INTERESTS IN THE SWAP AGREEMENT
AND THE SB-AM SWAP AGREEMENT.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY
VIRTUE OF ITS PURCHASE OR HOLDING OF THIS CERTIFICATE (OR INTEREST THEREIN) THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN OR ARRANGEMENT
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
OR A PERSON (INCLUDING AN INSURANCE COMPANY INVESTING ITS GENERAL ACCOUNT, AN
INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY SUCH PLAN) WHO IS
USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A
HOLDER OF THIS CERTIFICATE UNLESS THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR IS MADE IN A
TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION.
FURTHERMORE, THE AGREEMENT PROVIDES THAT NO TRANSFER OF THIS CERTIFICATE OR
INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE EXCEPT (I) OUTSIDE
THE UNITED STATES TO ENTITIES WHICH ARE NOT U.S. PERSONS WITHIN THE MEANING OF
REGULATION S UNDER THE 1933 ACT OR (II) IN RELIANCE ON RULE 144A UNDER THE 1933
ACT ("RULE 144A") TO A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A)
THAT IS ACQUIRING THIS CERTIFICATE OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND
AGREED THAT (I) IT IS (A) A QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS
CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE ACCOUNT OR ACCOUNTS OF
A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); (II) IT
UNDERSTANDS THAT THIS CERTIFICATE IS BEING TRANSFERRED TO IT IN A TRANSACTION
NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933 ACT, AND THAT,
IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE TRANSFER THIS
CERTIFICATE, THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT
(OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER) AND TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE
904 OF REGULATION S; AND (III) IF THE HOLDER IS A REGULATION S PURCHASER, IT
UNDERSTANDS THAT THIS CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE
1933 ACT, THAT ANY OFFERS, SALES OR DELIVERIES OF THIS CERTIFICATE IN THE UNITED
STATES OR TO U.S. PERSONS PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE CLOSING
DATE MAY CONSTITUTE A VIOLATION OF UNITED STATES LAW, AND THAT DISTRIBUTIONS OF
PRINCIPAL AND INTEREST WILL BE MADE IN RESPECT OF SUCH CERTIFICATES ONLY
FOLLOWING THE DELIVERY BY THE HOLDER OF A CERTIFICATION OF NON-U.S. BENEFICIAL
OWNERSHIP OR THE EXCHANGE OF BENEFICIAL INTEREST IN TEMPORARY REGULATION S
GLOBAL OFFERED CERTIFICATES FOR BENEFICIAL INTERESTS IN THE RELATED PERMANENT
REGULATION S GLOBAL OFFERED CERTIFICATES (WHICH IN EACH CASE WILL ITSELF REQUIRE
A CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP), AT THE TIMES AND IN THE
MANNER SET FORTH IN THE AGREEMENT.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE,
PLEDGE OR OTHER DISPOSITION SHALL, AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE
DEEMED TO HAVE AGREED 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 THE AGREEMENT.
CUSIP: _____________________ Certificate No. SB-[__]-1
Date of Pooling and Servicing Agreement Percentage Interest: [__]%
and Cut-off Date: August 1, 2006
First Distribution Date: June 26, 2006 Aggregate Initial Notional Balance
of the Class SB-[_] Certificates:
$___________________________
Master Servicer: Initial Notional Balance
Residential Funding Corporation of this Class SB-[_] Certificate:
$___________________________
Maturity Date:
__________ __, 20__
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-QA7
evidencing a percentage interest in the distributions allocable
to the Class SB-[_] Certificates with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable interest
rate, first lien mortgage loans on one- to four-family
residential properties sold by RESIDENTIAL ACCREDIT LOANS
INCORPORATED
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in RESIDENTIAL ACCREDIT
LOANS INCORPORATED, the Master Servicer, the Trustee referred to below or any of
their affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by
RESIDENTIAL ACCREDIT LOANS INCORPORATED, the Master Servicer, the Trustee or any
of their affiliates. None of the Depositor, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of adjustable
interest rate, first lien mortgage loans on one- to four-family residential
properties, sold by RESIDENTIAL ACCREDIT LOANS INCORPORATED (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement
referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement") among the
Depositor, the Master Servicer and Deutsche Bank Trust Company Americas, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such distribution (the "Record Date"), from
the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any, required to be distributed to Holders of Class SB-[_]
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in St. Xxxx, Minnesota. The Notional Amount of
this Class SB-[_] Certificate as of any date of determination will be calculated
as described in the Agreement. This Class SB-[_] Certificate will accrue
interest at the Pass-Through Rate on the Notional Amount as indicated in the
definition of Accrued Certificate Interest in the Agreement. This Class SB-[_]
Certificate will not accrue interest on its Certificate Principal Balance.
Any Transferee of this Certificate will be deemed to have represented by
virtue of its purchase or holding of this Certificate (or interest therein) that
either such transferee is not an employee benefit plan or other plan or
arrangement subject to the prohibited transaction provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Code or a person (including an insurance company investing its general
account, an investment manager, a named fiduciary or a trustee of any such plan)
who is using "plan assets" of any such plan to effect such acquisition.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Asset-Backed Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in St. Xxxx, Minnesota, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee or any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Holder of the
Class SB Certificates or the Master Servicer, as described in the Agreement,
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans or the Certificates, in either case thereby
effecting early retirement of the Certificates. The Agreement permits, but does
not require, the Holder of the Class SB Certificates or the Master Servicer, as
described in the Agreement, (i) to purchase, at a price determined as provided
in the Agreement, all remaining Mortgage Loans and all property acquired in
respect of any Mortgage Loan or (ii) to purchase in whole, but not in part, all
of the Certificates from the Holders thereof, provided, that any such option may
only be exercised if the Stated Principal Balance before giving effect to the
distributions to be made on such Distribution Date of the Mortgage Loans, as of
the Distribution Date upon which the proceeds of any such purchase are
distributed is less than ten percent of the Cut-off Date Principal Balance.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By:__________________________________________
Authorized Signatory
Dated:_____________________
CERTIFICATE OF AUTHENTICATION
This is one of the Class SB-[_] Certificates referred to in the
within-mentioned Agreement.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Certificate Registrar
By:_________________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
Dated:_____________________ _____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available fund to_______________________________________________________________
for the account of______________________________________________________________
account number__________________________________________________________________
or, if mailed by check, to______________________________________________________
Applicable statements should be mailed to:______________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
EXHIBIT ELEVEN-C
TEMPORARY REGULATION S GLOBAL CLASS SB CERTIFICATE
THIS CERTIFICATE IS A TEMPORARY REGULATION S GLOBAL CERTIFICATE FOR
PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). NEITHER THIS TEMPORARY REGULATION S GLOBAL CLASS SB
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS
PERMITTED UNDER THE POOLING AND SERVICING AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE") COUPLED WITH INTERESTS IN THE SWAP AGREEMENT
AND THE SB-AM SWAP AGREEMENT.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY
VIRTUE OF ITS PURCHASE OR HOLDING OF THIS CERTIFICATE (OR INTEREST THEREIN) THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN OR ARRANGEMENT
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
OR A PERSON (INCLUDING AN INSURANCE COMPANY INVESTING ITS GENERAL ACCOUNT, AN
INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY SUCH PLAN) WHO IS
USING "PLAN ASSETS" OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A
HOLDER OF THIS CERTIFICATE UNLESS THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR IS MADE IN A
TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION.
FURTHERMORE, THE AGREEMENT PROVIDES THAT NO TRANSFER OF THIS CERTIFICATE OR
INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE EXCEPT (I) OUTSIDE
THE UNITED STATES TO ENTITIES WHICH ARE NOT U.S. PERSONS WITHIN THE MEANING OF
REGULATION S UNDER THE 1933 ACT OR (II) IN RELIANCE ON RULE 144A UNDER THE 1933
ACT ("RULE 144A") TO A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A)
THAT IS ACQUIRING THIS CERTIFICATE OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND
AGREED THAT (I) IT IS (A) A QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS
CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE ACCOUNT OR ACCOUNTS OF
A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); (II) IT
UNDERSTANDS THAT THIS CERTIFICATE IS BEING TRANSFERRED TO IT IN A TRANSACTION
NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933 ACT, AND THAT,
IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE TRANSFER THIS
CERTIFICATE, THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT
(OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER) AND TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE
904 OF REGULATION S; AND (III) IF THE HOLDER IS A REGULATION S PURCHASER, IT
UNDERSTANDS THAT THIS CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE
1933 ACT, THAT ANY OFFERS, SALES OR DELIVERIES OF THIS CERTIFICATE IN THE UNITED
STATES OR TO U.S. PERSONS PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE CLOSING
DATE MAY CONSTITUTE A VIOLATION OF UNITED STATES LAW, AND THAT DISTRIBUTIONS OF
PRINCIPAL AND INTEREST WILL BE MADE IN RESPECT OF SUCH CERTIFICATES ONLY
FOLLOWING THE DELIVERY BY THE HOLDER OF A CERTIFICATION OF NON-U.S. BENEFICIAL
OWNERSHIP OR THE EXCHANGE OF BENEFICIAL INTEREST IN TEMPORARY REGULATION S
GLOBAL OFFERED CERTIFICATES FOR BENEFICIAL INTERESTS IN THE RELATED PERMANENT
REGULATION S GLOBAL OFFERED CERTIFICATES (WHICH IN EACH CASE WILL ITSELF REQUIRE
A CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP), AT THE TIMES AND IN THE
MANNER SET FORTH IN THE AGREEMENT.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE,
PLEDGE OR OTHER DISPOSITION SHALL, AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE
DEEMED TO HAVE AGREED 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 THE AGREEMENT.
CUSIP: 748939 AM 7 Certificate No. SB
Date of Pooling and Servicing Agreement Percentage Interest: 100.00%
and Cut-off Date: August 1, 2006
First Distribution Date: June 25, 2006 Aggregate Initial Notional Balance
of the Class SB Certificates:
$1,997,504.80
Master Servicer: Initial Notional Balance
Residential Funding Corporation of this Class SB Certificate:
$1,997,504.80
Maturity Date:
August 25, 2036
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-QA7
evidencing a percentage interest in the distributions allocable
to the Class SB Certificates with respect to a Trust Fund
consisting primarily of a pool of fixed and adjustable interest
rate, first lien mortgage loans mortgage loans on one- to
four-family residential properties sold by RESIDENTIAL ACCREDIT
LOANS, INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Residential Accredit
Loans, Inc., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by
Residential Accredit Loans, Inc., the Master Servicer, the Trustee or any of
their affiliates. None of the Depositor, the Master Servicer or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of adjustable
interest rate, first lien mortgage loans on one- to four-family residential
properties, sold by Residential Accredit Loans, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement
referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement") among the
Depositor, the Master Servicer and U.S. Bank National Association, as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the Business Day immediately preceding
that Distribution Date (the "Record Date"), from the related Available
Distribution Amount in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount of interest and principal, if any,
required to be distributed to Holders of Class SB Certificates on such
Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in St. Xxxx, Minnesota. The Notional Amount of
this Class SB Certificate as of any date of determination will be calculated as
described in the Agreement. This Class SB Certificate will accrue interest at
the Pass-Through Rate on the Notional Amount as indicated in the definition of
Accrued Certificate Interest in the Agreement. This Class SB Certificate will
not accrue interest on its Certificate Principal Balance.
Any Transferee of this Certificate will be deemed to have represented by
virtue of its purchase or holding of this Certificate (or interest therein) that
either such transferee is not an employee benefit plan or other plan or
arrangement subject to the prohibited transaction provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Code or a person (including an insurance company investing its general
account, an investment manager, a named fiduciary or a trustee of any such plan)
who is using "plan assets" of any such plan to effect such acquisition.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Asset-Backed Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in St. Xxxx, Minnesota, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee or any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Holder of the
Class SB Certificates or the Master Servicer, as described in the Agreement,
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans or the Certificates, in either case thereby
effecting early retirement of the Certificates. The Agreement permits, but does
not require the Holder of the Class SB Certificates or the Master Servicer, as
described in the Agreement, (i) to purchase, at a price determined as provided
in the Agreement, all remaining Mortgage Loans and all property acquired in
respect of any Mortgage Loan or (ii) to purchase in whole, but not in part, all
of the Certificates from the Holders thereof, provided, that any such option may
only be exercised if the Stated Principal Balance before giving effect to the
distributions to be made on such Distribution Date of the Mortgage Loans, as of
the Distribution Date upon which the proceeds of any such purchase are
distributed is less than ten percent of the Cut-off Date Principal Balance.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Trustee
By:__________________________________________
Authorized Signatory
Dated:_____________________
CERTIFICATE OF AUTHENTICATION
This is one of the Class SB Certificates referred to in the
within-mentioned Agreement.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Certificate Registrar
By:_________________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
________________________________________________________________________________
Dated:_____________________ _____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available fund to_______________________________________________________________
for the account of______________________________________________________________
account number__________________________________________________________________
or, if mailed by check, to______________________________________________________
Applicable statements should be mailed to:______________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
