RESIDENTIAL ASSET SECURITIES CORPORATION,
Depositor,
RESIDENTIAL FUNDING COMPANY, LLC,
Master Servicer,
and
U.S. BANK NATIONAL ASSOCIATION
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2007
Home Equity Mortgage Asset-Backed Pass-Through Certificates
Series 2007-EMX1
ARTICLE I DEFINITIONS............................................................................................5
Section 1.01. Definitions.......................................................................5
Section 1.02. Determination of LIBOR...........................................................55
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES......................................57
Section 2.01. Conveyance of Mortgage Loans.....................................................57
Section 2.02. Acceptance by Trustee............................................................60
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the
Depositor........................................................................61
Section 2.04. Representations and Warranties of Sellers........................................63
Section 2.05. Execution and Authentication of Certificates; Conveyance of REMIC-I
Regular Interests................................................................65
Section 2.06. Purposes and Powers of the Trust.................................................66
Section 2.07. Agreement Regarding Ability to Disclose..........................................66
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS......................................................67
Section 3.01. Master Servicer to Act as Servicer...............................................67
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement of Subservicers’ Obligations.........................................69
Section 3.03. Successor Subservicers...........................................................70
Section 3.04. Liability of the Master Servicer.................................................70
Section 3.05. No Contractual Relationship Between Subservicer and Trustee or
Certificateholders...............................................................71
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee..................71
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to Custodial
Account..........................................................................71
Section 3.08. Subservicing Accounts; Servicing Accounts........................................74
Section 3.09. Access to Certain Documentation and Information Regarding the Mortgage
Loans............................................................................75
Section 3.10. Permitted Withdrawals from the Custodial Account.................................75
Section 3.11. Maintenance of Primary Insurance Coverage........................................77
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage................77
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain Assignments..................................................78
Section 3.14. Realization Upon Defaulted Mortgage Loans........................................80
Section 3.15. Trustee to Cooperate; Release of Custodial Files.................................82
Section 3.16. Servicing and Other Compensation; Compensating Interest..........................83
Section 3.17. Reports to the Trustee and the Depositor.........................................84
Section 3.18. Annual Statement as to Compliance and Servicing Assessment.......................85
Section 3.19. Annual Independent Public Accountants’ Servicing Report..........................85
Section 3.20. Right of the Depositor in Respect of the Master Servicer.........................85
Section 3.21. [Reserved].......................................................................86
Section 3.22. Advance Facility.................................................................86
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS.......................................................................90
Section 4.01. Certificate Account..............................................................90
Section 4.02. Distributions....................................................................90
Section 4.03. Statements to Certificateholders; Statements to Rating Agencies; Exchange
Act Reporting....................................................................93
Section 4.04. Distribution of Reports to the Trustee and the Depositor; Advances by the
Master Servicer..................................................................97
Section 4.05. Allocation of Realized Losses....................................................99
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property...................100
Section 4.07. Optional Purchase of Defaulted Mortgage Loans...................................100
Section 4.08. [Reserved]......................................................................101
Section 4.09. [Reserved]......................................................................101
Section 4.10. Supplemental Interest Trust; Swap Agreement.....................................101
Section 4.11. The Certificate Guaranty Insurance Policy.......................................103
Section 4.12. Posted Collateral Account.......................................................104
ARTICLE V THE CERTIFICATES.....................................................................................105
Section 5.01. The Certificates................................................................105
Section 5.02. Registration of Transfer and Exchange of Certificates...........................106
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates...............................111
Section 5.04. Persons Deemed Owners...........................................................111
Section 5.05. Appointment of Paying Agent.....................................................111
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER...............................................................113
Section 6.01. Respective Liabilities of the Depositor and the Master Servicer.................113
Section 6.02. Merger or Consolidation of the Depositor or the Master Servicer;
Assignment of Rights and Delegation of Duties by Master Servicer................113
Section 6.03. Limitation on Liability of the Depositor, the Master Servicer and Others........114
Section 6.04. Depositor and Master Servicer Not to Resign.....................................114
ARTICLE VII DEFAULT............................................................................................116
Section 7.01. Events of Default...............................................................116
Section 7.02. Trustee or Depositor to Act; Appointment of Successor...........................117
Section 7.03. Notification to Certificateholders..............................................119
Section 7.04. Waiver of Events of Default.....................................................119
Section 7.05. Servicing Trigger; Removal of Master Servicer...................................119
ARTICLE VIII CONCERNING THE TRUSTEE............................................................................121
Section 8.01. Duties of Trustee...............................................................121
Section 8.02. Certain Matters Affecting the Trustee...........................................123
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans...........................124
Section 8.04. Trustee May Own Certificates....................................................124
Section 8.05. Master Servicer to Pay Trustee’s Fees and Expenses; Indemnification.............124
Section 8.06. Eligibility Requirements for Trustee............................................125
Section 8.07. Resignation and Removal of the Trustee..........................................125
Section 8.08. Successor Trustee...............................................................126
Section 8.09. Merger or Consolidation of Trustee..............................................127
Section 8.10. Appointment of Co-Trustee or Separate Trustee...................................127
Section 8.11. Appointment of the Custodian....................................................128
Section 8.12. Appointment of Office or Agency.................................................128
Section 8.13. DTC Letter of Representations...................................................128
Section 8.14. Swap Agreements.................................................................128
ARTICLE IX TERMINATION.........................................................................................130
Section 9.01. Termination Upon Purchase or Liquidation of All Mortgage Loans..................130
Section 9.02. Additional Termination Requirements.............................................133
ARTICLE X REMIC PROVISIONS.....................................................................................134
Section 10.01. REMIC Administration............................................................134
Section 10.02. Master Servicer, REMIC Administrator and Trustee Indemnification................137
ARTICLE XI MISCELLANEOUS PROVISIONS............................................................................138
Section 11.01. Amendment.......................................................................138
Section 11.02. Recordation of Agreement; Counterparts..........................................140
Section 11.03. Limitation on Rights of Certificateholders......................................140
Section 11.04. Governing Law...................................................................141
Section 11.05. Notices.........................................................................141
Section 11.06. Notices to Rating Agencies and the Certificate Insurer..........................142
Section 11.07. Severability of Provisions......................................................142
Section 11.08. Supplemental Provisions for Resecuritization....................................143
Section 11.09. Third Party Beneficiary.........................................................143
Section 11.10. Rights of the Certificate Insurer...............................................143
ARTICLE XII COMPLIANCE WITH REGULATION AB......................................................................144
Section 12.01. Intent of Parties; Reasonableness...............................................144
Section 12.02. Additional Representations and Warranties of the Trustee........................144
Section 12.03. Information to be Provided by the Trustee.......................................145
Section 12.04. Report on Assessment of Compliance and Attestation..............................145
Section 12.05. Indemnification; Remedies.......................................................145
EXHIBIT A FORM OF CLASS A CERTIFICATE..................................................................A-1
EXHIBIT B [RESERVED]...................................................................................B-1
EXHIBIT C FORM OF CLASS SB CERTIFICATE.................................................................C-1
EXHIBIT D FORM OF CLASS R CERTIFICATE..................................................................D-1
EXHIBIT E FORM OF CUSTODIAL AGREEMENT..................................................................E-1
EXHIBIT F-1 GROUP I LOAN SCHEDULE........................................................................F-1
EXHIBIT F-2 GROUP II LOAN SCHEDULE.......................................................................F-2
EXHIBIT G FORM OF REQUEST FOR RELEASE..................................................................G-1
EXHIBIT H-1 FORM OF TRANSFER AFFIDAVIT AND AGREEMENT...................................................H-1-1
EXHIBIT H-2 FORM OF TRANSFEROR CERTIFICATE.............................................................H-2-1
EXHIBIT I FORM OF INVESTOR REPRESENTATION LETTER.......................................................I-1
EXHIBIT J FORM OF TRANSFEROR REPRESENTATION LETTER.....................................................J-1
EXHIBIT K TEXT OF AMENDMENT TO POOLING AND SERVICING AGREEMENT PURSUANT TO SECTION 11.01(E)
FOR A LIMITED GUARANTY.......................................................................K-1
EXHIBIT L FORM OF LIMITED GUARANTY.....................................................................L-1
EXHIBIT M FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN.................................M-1
EXHIBIT N FORM OF RULE 144A INVESTMENT REPRESENTATION..................................................N-1
EXHIBIT O [RESERVED]...................................................................................O-1
EXHIBIT P FORM OF ERISA LETTER.........................................................................P-1
EXHIBIT Q FORM OF CLASS SB-A SWAP AGREEMENT............................................................Q-1
EXHIBIT R ASSIGNMENT AGREEMENT.........................................................................R-1
EXHIBIT S SERVICING CRITERIA...........................................................................S-1
EXHIBIT T-1 FORM OF 10-K CERTIFICATION.................................................................T-1-1
EXHIBIT T-2 FORM OF BACK-UP CERTIFICATION..............................................................T-2-1
EXHIBIT U INFORMATION TO BE PROVIDED BY THE MASTER SERVICER TO THE RATING AGENCIES RELATING
TO REPORTABLE MODIFIED MORTGAGE LOANS........................................................U-1
EXHIBIT V CERTIFICATE GUARANTY INSURANCE POLICY........................................................U-1
This Pooling and Servicing Agreement, effective as of February 1, 2007, among RESIDENTIAL ASSET
SECURITIES CORPORATION, as the depositor (together with its permitted successors and assigns, the “Depositor”),
RESIDENTIAL FUNDING COMPANY, LLC, as master servicer (together with its permitted successors and assigns, the
“Master Servicer”), and U.S. BANK NATIONAL ASSOCIATION, a banking association organized under the laws of the
United States, as trustee and supplemental interest trust trustee (together with its permitted successors and
assigns, the “Trustee” and the “Supplemental Interest Trust Trustee,” respectively).
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage asset-backed pass-through certificates (collectively, the
“Certificates”), to be issued hereunder in seven Classes, which in the aggregate will evidence the entire
beneficial ownership interest in the Mortgage Loans (as defined herein) and certain other related assets.
REMIC I
As provided herein, the REMIC Administrator will make an election to treat the segregated pool of assets
consisting of the Mortgage Loans and certain other related assets (exclusive of the Supplemental Interest Trust
Account, the Swap Agreement and the SB-A 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.” Component I of the Class R Certificates will represent the sole Class of “residual
interests” in REMIC I for purposes of the REMIC Provisions (as defined herein) under federal income tax law. The
following table irrevocably sets forth the designation, remittance rate (the “Uncertificated REMIC I Pass-Through
Rate”) and initial Uncertificated Principal Balance for each of the “regular interests” in REMIC I
(the “REMIC I Regular Interests”). The “latest possible maturity date” (determined solely for purposes of
satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii)) for each REMIC I Regular Interest shall be the
Maturity Date. None of the REMIC I Regular Interests will be certificated.
Uncertificated REMIC I Initial Uncertificated
Designation Pass-Through Rate Principal Balance
I-1-A Variable(1) $ 8,816,250.440
I-2-A Variable(1) $10,063,326.490
I-3-A Variable(1) $11,261,846.965
I-4-A Variable(1) $12,308,021.085
I-5-A Variable(1) $13,149,518.170
I-6-A Variable(1) $13,799,220.295
I-7-A Variable(1) $13,250,837.850
I-8-A Variable(1) $12,642,761.470
I-9-A Variable(1) $12,058,856.110
I-10-A Variable(1) $11,502,269.140
I-11-A Variable(1) $10,971,709.350
I-12-A Variable(1) $10,465,947.015
I-13-A Variable(1) $ 9,983,810.995
I-14-A Variable(1) $ 9,526,655.255
I-15-A Variable(1) $ 9,104,937.495
I-16-A Variable(1) $ 9,064,832.285
I-17-A Variable(1) $17,505,133.585
I-18-A Variable(1) $91,921,463.245
I-19-A Variable(1) $10,537,350.260
I-20-A Variable(1) $ 3,566,421.465
I-21-A Variable(1) $ 3,129,069.105
I-22-A Variable(1) $ 2,368,254.440
I-23-A Variable(1) $ 2,225,082.620
I-24-A Variable(1) $ 2,117,195.725
I-25-A Variable(1) $ 2,024,563.260
I-26-A Variable(1) $ 1,936,282.160
I-27-A Variable(1) $ 1,865,106.650
I-28-A Variable(1) $ 1,830,385.510
I-29-A Variable(1) $ 2,332,080.030
I-30-A Variable(1) $ 670,297.145
I-31-A Variable(1) $ 646,396.405
I-32-A Variable(1) $ 623,352.240
I-33-A Variable(1) $ 601,133.595
I-34-A Variable(1) $ 579,710.560
I-35-A Variable(1) $ 559,054.340
I-36-A Variable(1) $ 539,137.195
I-37-A Variable(1) $ 519,932.410
I-38-A Variable(1) $ 520,438.120
I-39-A Variable(1) $ 509,786.740
I-40-A Variable(1) $ 5,547,502.135
I-1-B Variable(1) $ 8,816,250.440
I-2-B Variable(1) $10,063,326.490
I-3-B Variable(1) $11,261,846.965
I-4-B Variable(1) $12,308,021.085
I-5-B Variable(1) $13,149,518.170
I-6-B Variable(1) $13,799,220.295
I-7-B Variable(1) $13,250,837.850
I-8-B Variable(1) $12,642,761.470
I-9-B Variable(1) $12,058,856.110
I-10-B Variable(1) $11,502,269.140
I-11-B Variable(1) $10,971,709.350
I-12-B Variable(1) $10,465,947.015
I-13-B Variable(1) $ 9,983,810.995
I-14-B Variable(1) $ 9,526,655.255
I-15-B Variable(1) $ 9,104,937.495
I-16-B Variable(1) $ 9,064,832.285
I-17-B Variable(1) $17,505,133.585
I-18-B Variable(1) $91,921,463.245
I-19-B Variable(1) $10,537,350.260
I-20-B Variable(1) $ 3,566,421.465
I-21-B Variable(1) $ 3,129,069.105
I-22-B Variable(1) $ 2,368,254.440
I-23-B Variable(1) $ 2,225,082.620
I-24-B Variable(1) $ 2,117,195.725
I-25-B Variable(1) $ 2,024,563.260
I-26-B Variable(1) $ 1,936,282.160
I-27-B Variable(1) $ 1,865,106.650
I-28-B Variable(1) $ 1,830,385.510
I-29-B Variable(1) $ 2,332,080.030
I-30-B Variable(1) $ 670,297.145
I-31-B Variable(1) $ 646,396.405
I-32-B Variable(1) $ 623,352.240
I-33-B Variable(1) $ 601,133.595
I-34-B Variable(1) $ 579,710.560
I-35-B Variable(1) $ 559,054.340
I-36-B Variable(1) $ 539,137.195
I-37-B Variable(1) $ 519,932.410
I-38-B Variable(1) $ 520,438.120
I-39-B Variable(1) $ 509,786.740
I-40-B Variable(1) $ 5,547,502.135
I Variable(1) $ 39,571.931
II Variable(1) $ 35,331.009
A-I Variable(1) $83,662,636.590
_______________
(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.” Component II of the Class R Certificates will represent the sole
Class of “residual interests” in REMIC II for purposes of the REMIC Provisions (as defined herein) under federal
income tax law. The following table irrevocably sets forth the designation, remittance rate (the “Uncertificated
REMIC II Pass Through Rate”) and initial Uncertificated Principal Balance for each of the “regular interests” in
REMIC II (the “REMIC II Regular Interests”). The “latest possible maturity date” (determined solely for purposes
of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each REMIC II Regular Interest shall be the
Maturity Date. None of the REMIC II Regular Interests will be certificated.
Uncertificated REMIC II Initial Uncertificated Principal
Designation Pass-Through Rate Balance
LT1 Variable(1) $395,645,938.44
LT2 Variable(1) $5,771.29
LT3 0.00% $33,800.64
LT4 Variable(1) $33,800.64
LT5 Variable(1) $353,244,614.16
LT6 Variable(1) $5,188.96
LT7 0.00% $30,142.05
LT8 Variable(1) $30,142.05
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.
REMIC III
As provided herein, the REMIC Administrator will elect 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. Component III of the Class R Certificates will represent the sole Class of
“residual interests” in REMIC III for purposes of the REMIC Provisions under federal income tax law. The
following table irrevocably sets forth the designation, Pass Through Rate, aggregate Initial Certificate
Principal Balance, certain features, month of Final Scheduled Distribution Date and initial ratings for each
Class of Certificates comprising the interests representing “regular interests” in REMIC III. The “latest
possible maturity date” (determined solely for purposes of satisfying Treasury Regulation Section 1.860G
1(a)(4)(iii)) for each of REMIC III Regular Interest shall be the Maturity Date.
Aggregate Initial Month of
Pass-Through Certificate Principal Final Scheduled
Designation Type Rate Balance Features Distribution Date Rating
S&P Moody's
Class A-I-1 Regular(1) Adjustable(2)(3) $ 185,876,000 Senior/Adjustable Rate January 2033 AAA Aaa
Class A-I-2 Regular(1) Adjustable(2)(3) $ 27,665,000 Senior/Adjustable Rate September 2034 AAA Aaa
Class A-I-3 Regular(1) Adjustable(2)(3) $ 105,994,000 Senior/Adjustable Rate October 2036 AAA Aaa
Class A-I-4 Regular(1) Adjustable(2)(3) $ 46,505,000 Senior/Adjustable Rate January 2037 AAA Aaa
Class A-II Regular(1) Adjustable (2)(3) $ 326,812,000 Senior/Adjustable Rate January 2037 AAA Aaa
Class SB Regular (4) (4) $ 56,177,398.23 Subordinate N/A N/A N/A
IO Regular (5) (6) (7) Interest Only N/A N/A
_______________
(1) This Class of Certificates represents ownership of a REMIC III Regular Interest together with (i) 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 III by the holder of the Class SB Certificates as the owner 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 III 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 III
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 4.10 hereof.
(2) The REMIC III Regular Interests, ownership of which is represented by the Class A Certificates, will accrue
interest at a per annum rate equal to LIBOR plus the applicable Margin, each subject to a payment cap as
described in the definition of “Pass Through Rate” and the provisions for the payment of Basis Risk
Shortfalls herein, which payments will not be part of the entitlement of the REMIC III Regular Interests
related to such Certificates.
(3) The Class A-I and Class A-II Certificates will also entitle their holders to certain payments from the
Holder of the Class SB Certificates from amounts to which the related REMIC III Regular Interest is entitled
and from amounts received under the Swap Agreement, which will not be a part of their ownership of the REMIC
III Regular Interests.
(4) The Class SB Certificates will accrue interest as described in the definition of Accrued Certificate
Interest. The Class SB Certificates will not accrue interest on their Certificate Principal Balance. The
Class SB Certificates will be comprised of four REMIC III Regular Interests, two principal only Regular
Interests designated SB-PO-I and SB-PO-II and two interest only Regular Interests designated SB-IO-I and
SB-IO-II, which will be entitled to distributions as set forth herein. The rights of the Holder of the Class
SB Certificates to payments from the Swap Agreement shall be outside and apart from its rights under the
REMIC III Regular Interests SB-IO-I, SB-IO-II, SB-PO-I and SB-PO-II.
(5) REMIC III 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 holder of the
Class SB Certificates.
(6) For federal income tax purposes, REMIC III Regular Interest IO will not have a Pass Through Rate, but will
be entitled to 100% of the amounts distributed on REMIC II Regular Interest LT-IO.
(7) For federal income tax purposes, REMIC III Regular Interest IO will not have an Uncertificated Principal
Balance, but will have a notional amount equal to the Uncertificated Notional Amount of REMIC II Regular
Interest LT-IO.
In consideration of the mutual agreements herein contained, the Depositor, the Master Servicer and the
Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires,
shall have the meanings specified in this Article.
Accrued Certificate Interest: With respect to each Distribution Date and each Class of Class A
Certificates, an amount equal to the interest accrued during the related Interest Accrual Period on the
Certificate Principal Balance thereof immediately prior to such Distribution Date at the related Pass-Through
Rate for that Distribution Date.
The amount of Accrued Certificate Interest on each Class of Certificates shall be reduced by the amount
of Prepayment Interest Shortfalls on the 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 based upon the related Senior Percentage of all such reductions
with respect to the related Mortgage Loans, such reductions will be allocated among the related Class A
Certificates, pro rata, on the basis of Accrued Certificate Interest payable on such Distribution Date absent
such reductions.
Accrued Certificate Interest for any Distribution Date shall further be reduced by the interest portion
of Realized Losses allocated to any Class of Certificates pursuant to Section 4.05.
Accrued Certificate Interest shall accrue on the basis of a 360-day year and the actual number of days
in the related Interest Accrual Period.
With respect to each Distribution Date and the Class SB Certificates, interest accrued during the
preceding Interest Accrual Period at the related Pass-Through Rate on the Uncertificated Notional Amount as
specified in the definition of Pass-Through Rate, immediately prior to such Distribution Date, reduced by any
interest shortfalls with respect to the Mortgage Loans, including Prepayment Interest Shortfalls to the extent
not covered by Compensating Interest pursuant to Section 3.16 or by Excess Cash Flow pursuant to
Section 4.02(c)(iv) and (v). Accrued Certificate Interest on the Class SB Certificates shall accrue on the basis
of a 360-day year and the actual number of days in the related Interest Accrual Period.
Adjusted Available Distribution Amount: With respect to any Distribution Date, the Available
Distribution Amount increased by the excess, if any, of the Net Swap Payment owed to the Swap Counterparty over
the amount distributable on such Distribution Date in respect of REMIC III Regular Interest IO.
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.
Adjusted Strip 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:
Distribution Date REMIC I Regular Interest Rate
1 I-1-A through I-40-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
2 I-1-A through I-40-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
3 I-1-A through I-40-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
4 I-2-A through I-40-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
5 I-3-A through I-40-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
6 I-4-A through I-40-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
7 I-5-A through I-40-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
8 I-6-A through I-40-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
9 I-7-A through I-40-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
10 I-8-A through I-40-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
11 I-9-A through I-40-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
12 I-10-A through I-40-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
13 I-11-A through I-40-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
14 I-12-A through I-40-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
15 I-13-A through I-40-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
16 I-14-A through I-40-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
17 I-15-A through I-40-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
18 I-16-A through I-40-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
19 I-17-A through I-40-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
20 I-18-A through I-40-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
21 I-19-A through I-40-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
22 I-20-A through I-40-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-19-A Uncertificated REMIC I Pass-Through Rate
23 I-21-A through I-40-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
24 I-22-A through I-40-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
25 I-23-A through I-40-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
26 I-24-A through I-40-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
27 I-25-A through I-40-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
28 I-26-A through I-40-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
29 I-27-A through I-40-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
30 I-28-A through I-40-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
31 I-29-A through I-40-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
32 I-29-A through I-40-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
33 I-29-A through I-40-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
34 I-29-A through I-40-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
35 I-29-A through I-40-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
36 I-29-A through I-40-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
37 I-29-A through I-40-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
38 I-29-A through I-40-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
39 I-29-A through I-40-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
40 I-29-A through I-40-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
41 I-29-A through I-40-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
42 I-29-A through I-40-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
43 I-29-A through I-40-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
44 I-29-A through I-40-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
45 I-29-A through I-40-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
46 I-29-A through I-40-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
47 I-30-A through I-40-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
48 I-31-A through I-40-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
49 I-32-A through I-40-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
50 I-33-A through I-40-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
51 I-34-A through I-40-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
52 I-35-A through I-40-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
53 I-36-A through I-40-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
54 I-37-A through I-40-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
55 I-38-A through I-40-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
56 I-39-A through I-40-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
57 I-40-A 2 multiplied by Swap LIBOR, subject to a maximum rate of
Uncertificated REMIC I Pass-Through Rate
I-1-A through I-39-A Uncertificated REMIC I Pass-Through Rate
Thereafter I-1-A through I-40-A Uncertificated REMIC I Pass-Through Rate
Adjustment Date: With respect to each adjustable-rate Mortgage Loan, each date set forth in the related
Mortgage Note on which an adjustment to the interest rate on such Mortgage Loan becomes effective.
Advance: With respect to any Mortgage Loan, any advance made by the Master Servicer, pursuant to
Section 4.04.
Affected Party: As defined in the Swap Agreement.
Affiliate: With respect to any Person, any other Person controlling, controlled by or under common
control with such first Person. For purposes of this definition, “control” means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to
the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments hereof and supplements hereto.
Amount Held for Future Distribution: With respect to any Distribution Date, the total of the amounts
held in the Custodial Account at the close of business on the preceding Determination Date on account of
(i) Liquidation Proceeds, Subsequent Recoveries, Insurance Proceeds, REO Proceeds, Principal Prepayments, Mortgage
Loan purchases made pursuant to Section 2.02, 2.03, 2.04 or 4.07 and Mortgage Loan substitutions made pursuant to
Section 2.03 or 2.04 received or made in the month of such Distribution Date (other than such Liquidation
Proceeds, Subsequent Recoveries, Insurance Proceeds, REO 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 (ii)
payments which represent early receipt of scheduled payments of principal and interest due on a date or dates
subsequent to the Due Date in the related Due Period.
Appraised Value: With respect to any Mortgaged Property, 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 based upon
the appraisal made at the time of origination of the loan which was refinanced or modified or the appraised value
determined in an appraisal at the time of refinancing or modification, as the case may be.
Assignment: An assignment of the Mortgage, notice of transfer or equivalent instrument, in recordable
form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect
of record the sale of the Mortgage Loan to the Trustee for the benefit of Certificateholders, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering
Mortgages secured by Mortgaged Properties located in the same county, if permitted by law and accompanied by an
Opinion of Counsel to that effect.
Assignment Agreement: The Assignment and Assumption Agreement, dated the Closing Date, between
Residential Funding and the Depositor relating to the transfer and assignment of the Mortgage Loans, attached
hereto as Exhibit R.
Available Distribution Amount: With respect to any Distribution Date, an amount equal to (a) the sum of
(i) the amount relating to the Mortgage Loans on deposit in the Custodial Account as of the close of business on
the immediately preceding Determination Date, including any Subsequent Recoveries, and amounts deposited in the
Custodial Account in connection with the substitution of Qualified Substitute Mortgage Loans, (ii) the amount of
any Advance made on the immediately preceding Certificate Account Deposit Date with respect to the Mortgage
Loans, (iii) any amount deposited in the Certificate Account on the related Certificate Account Deposit Date
pursuant to the second paragraph of Section 3.12(a) in respect of the Mortgage Loans, (iv) any amount that the
Master Servicer is not permitted to withdraw from the Custodial Account pursuant to Section 3.16(e) in respect of
the Mortgage Loans, (v) any amount deposited in the Certificate Account pursuant to Section 4.07 or 9.01 in
respect of the Mortgage Loans and (vi) amounts on deposit in the Certificate Account in respect of an Insured
Payment pursuant to Section 4.11(b) in accordance with the Certificate Guaranty Insurance Policy, reduced by (b)
the sum as of the close of business on the immediately preceding Determination Date of (w) the Amount Held for
Future Distribution with respect to the Mortgage Loans, (x) 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), (y) 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 and (z) the Certificate Insurer
Premium payable.
Balloon Loan: Each of the Mortgage Loans having an original term to maturity that is shorter than the
related amortization term.
Balloon Payment: With respect to any Balloon Loan, the related Monthly Payment payable on the stated
maturity date of such Balloon Loan.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basis Risk Shortfalls: Group I Basis Risk Shortfalls or Group II Basis Risk Shortfalls, as applicable.
Book-Entry Certificate: Any Certificate registered in the name of the Depository or its nominee.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions
in the State of California, the State of Minnesota, the State of Texas, the State of New York or the State of
Illinois (and such other state or states in which the Custodial Account or the Certificate Account are at the
time located) are required or authorized by law or executive order to be closed.
Calendar Quarter: A Calendar Quarter shall consist of one of the following time periods in any given
year: January 1 through March 31, April 1 through June 30, July 1 through September 30, and October 1 through
December 31.
Capitalization Reimbursement Amount: With respect to any Distribution Date, the amount of Advances or
Servicing Advances that were added to the Stated Principal Balance of the Mortgage Loans during the prior
calendar month and reimbursed to the Master Servicer or Subservicer on or prior to such Distribution Date
pursuant to Section 3.10(a)(vii).
Cash Liquidation: With respect to any defaulted Mortgage Loan other than a Mortgage Loan as to which an
REO Acquisition occurred, a determination by the Master Servicer that it has received all Insurance Proceeds,
Liquidation Proceeds and other payments or cash recoveries which the Master Servicer reasonably and in good faith
expects to be finally recoverable with respect to such Mortgage Loan.
Certificate: Any Class A Certificate, Class SB Certificate or Class R Certificate.
Certificate Account: The account or accounts created and maintained pursuant to Section 4.01, which
shall be entitled “U.S. Bank National Association, as trustee, in trust for the registered holders of Residential
Asset Securities Corporation, Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2007-EMX1 and
Financial Guaranty Insurance Company” and which account shall be held for the benefit of the Certificateholders
and the Certificate Insurer and which must be an Eligible Account. Any such account or accounts created and
maintained subsequent to the Closing Date shall be subject to the approval of the Certificate Insurer, which
approval shall not be unreasonably withheld.
Certificate Account Deposit Date: With respect to any Distribution Date, the Business Day prior thereto.
Certificate Guaranty Insurance Policy: The Financial Guaranty Insurance Policy, Policy No. 07030010,
issued by the Certificate Insurer in respect of the Class A Certificates, a copy of which is attached hereto as
Exhibit V.
Certificateholder or Holder: The Person in whose name a Certificate is registered in the Certificate
Register, except that neither a Disqualified Organization nor a Non-United States Person shall be a holder of a
Class R Certificate for any purpose hereof. Solely for the purpose of giving any consent or direction pursuant
to this Agreement, any Certificate, other than a Class R Certificate, registered in the name of the Depositor,
the Master Servicer or any Subservicer or any Affiliate thereof shall be deemed not to be outstanding and the
Percentage Interest or Voting Rights evidenced thereby shall not be taken into account in determining whether the
requisite amount of Percentage Interests or Voting Rights necessary to effect any such consent or direction has
been obtained. All references herein to “Holders” or “Certificateholders” shall reflect the rights of
Certificate Owners as they may indirectly exercise such rights through the Depository and participating members
thereof, except as otherwise specified herein; provided, however, that the Trustee shall be required to recognize
as a “Holder” or “Certificateholder” only the Person in whose name a Certificate is registered in the Certificate
Register. Unless otherwise indicated in this Agreement, the Custodial Agreement or the Assignment Agreement,
whenever reference is made to the actions taken by the Trustee on behalf of the Certificateholders, such
reference to Certificateholders shall include the Certificate Insurer as long as there is no continuing
Certificate Insurer Default.
Certificate Insurer: Financial Guaranty Insurance Company, a New York-domiciled stock insurance
corporation or its successors in interest.
Certificate Insurer Account: An account of the Certificate Insurer maintained at XX Xxxxxx Xxxxx Bank
(ABA No. 000000000), Account No. 904951812, Attention: Policy No. 07030010, or such other account as may be
designated by the Certificate Insurer to the Trustee in writing not less than five Business Days prior to the
related Distribution Date.
Certificate Insurer Default: The existence and continuance of any of the following: (a) a failure by
the Certificate Insurer to make a payment required under the Certificate Guaranty Insurance Policy in accordance
with its terms; or (b)(i) the Certificate Insurer (A) files any petition or commences any case or proceeding
under any provision or chapter of the Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (B) makes a general assignment for the
benefit of its creditors, or (C) has an order for relief entered against it under the Bankruptcy Code or any
other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or (ii) a court of competent jurisdiction, the New York
insurance department or other competent regulatory authority enters a final and nonappealable order, judgment or
decree (A) appointing a custodian, trustee, agent or receiver for the Certificate Insurer or for all or any
material portion of its property or (B) authorizing the taking of possession by a custodian, trustee, agent or
receiver of the Certificate Insurer (or the taking of possession of all or any material portion of the property
of the Certificate Insurer).
Certificate Insurer Premium: The premium payable in accordance with the Certificate Guaranty Insurance
Policy, which shall be payable in accordance with Section 4.02 in an amount equal to (i) on the first
Distribution Date, an amount calculated by multiplying the Certificate Insurer Premium Rate converted to a daily
rate by the aggregate initial Certificate Principal Balance of the Class A Certificates for the number of days
from and including the Closing Date to but excluding the first Distribution Date, and (ii) for subsequent
Distribution Dates, one twelfth of the product of (A) the Certificate Insurer Premium Rate and (B) the aggregate
Certificate Principal Balance of the Class A Certificates on the previous Distribution Date (after giving effect
to any distributions of principal to be made on such previous Distribution Date).
Certificate Insurer Premium Modified Rate: With respect to any Distribution Date, the Certificate
Insurer Premium Rate for the Class A Certificates times a fraction equal to (x) the aggregate Certificate
Principal Balance of the Class A Certificates as of such date over (y) the aggregate Stated Principal Balance of
the Mortgage Loans as of such date.
Certificate Insurer Premium Rate: Shall mean 0.22% per annum.
Certificate Owner: With respect to a Book-Entry Certificate, the Person who is the beneficial owner of
such Certificate, as reflected on the books of an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository Participant, if any, and otherwise
on the books of the Depository.
Certificate Principal Balance: With respect to any Class A Certificate, 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
(including such amounts paid pursuant to the Certificate Guaranty Insurance Policy) pursuant to Section 4.02(c)
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 (other than any amounts included in an Insured Payment and paid pursuant to the
Certificate Guaranty Insurance Policy); provided, that with respect to any Distribution Date, the Certificate
Principal Balances of: (i) the Class A-I Certificates will be increased, in each case to the extent to which a
Realized Loss was previously allocated thereto and remaining unreimbursed, by the Subsequent Recovery Allocation
Amount for Loan Group I to the Class A-I Certificates, pro rata, based on the amount of Realized Losses
previously allocated thereto and remaining unreimbursed, and (ii) the Class A-II 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 to the Class A-II Certificates.
With respect to any Class SB Certificate, on any date of determination, an amount equal to the
Percentage Interest evidenced by such Certificate, multiplied by an amount equal to (i) the excess, if any, of
(A) the then aggregate Stated Principal Balance of the Mortgage Loans over (B) the then aggregate Certificate
Principal Balance of the Class A Certificates then outstanding, which represents the sum of (i) the aggregate
initial principal balance of REMIC III Regular Interests SB-PO-I and SB-PO-II, as reduced by Realized Losses
allocated thereto and payments deemed made thereon, and (ii) aggregate accrued and unpaid interest on REMIC III
Regular Interests SB-IO-I and SB-IO-II, as reduced by Realized Losses allocated thereto. The Class R
Certificates will not have a Certificate Principal Balance.
Certificate Register and Certificate Registrar: The register maintained and the registrar appointed
pursuant to Section 5.02.
Class: Collectively, all of the Certificates or uncertificated interests bearing the same designation.
Class A Certificates: Collectively, the Class A-I-1 Certificates, Class A-I-2 Certificates, Class A-I-3
Certificates, Class A-I-4 Certificates and Class A-II Certificates.
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:
(i) first, concurrently, to the Class A-I Certificates, pro rata, from the Class A-I Interest
Remittance Amount, and to the Class A-II Certificates, from the Class A-II Interest Remittance
Amount;
(ii) second, to the Class A-I Certificates, pro rata, from the remaining Class A-II Interest
Remittance Amount, or to the Class A-II Certificates, 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;
(iii) third, concurrently, to the Class A-I Certificates, pro rata, from the Principal Remittance
Amount related to Loan Group I, and to the Class A-II Certificates, from the Principal
Remittance Amount related to Loan Group II, as needed after taking into account any
distributions in respect of interest on the Class A Certificates made in first and second
above; and
(iv) fourth, to the Class A-I Certificates, pro rata, from the remaining Principal Remittance Amount
related to Loan Group II, or to the Class A-II Certificates, from the remaining Principal
Remittance Amount related to Loan Group I, 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-I-1 Certificate: Any one of the Class A-I-1 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit A, senior to the
Class 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 III for purposes of the REMIC Provisions, (ii) the right to receive payments under the
Swap Agreement and the SB-A Swap Agreement and (iii) the obligation to pay the Class IO Distribution Amount.
Class A-I-1 Margin: 0.1000% per annum.
Class A-I-2 Certificate: Any one of the Class A-I-2 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit A, senior to the
Class 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 III for purposes of the REMIC Provisions, (ii) the right to receive payments under the
Swap Agreement and the SB-A Swap Agreement and (iii) the obligation to pay the Class IO Distribution Amount.
Class A-I-2 Margin: 0.1400% per annum.
Class A-I-3 Certificate: Any one of the Class A-I-3 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit A, senior to the
Class 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 III for purposes of the REMIC Provisions, (ii) the right to receive payments under the
Swap Agreement and the SB-A Swap Agreement and (iii) the obligation to pay the Class IO Distribution Amount.
Class A-I-3 Margin: Initially, 0.2000% per annum, and on any Distribution Date on and after the second
Distribution Date after the first possible Optional Termination Date, 0.4000% per annum.
Class A-I-4 Certificate: Any one of the Class A-I-4 Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit A, senior to the
Class 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 III for purposes of the REMIC Provisions, (ii) the right to receive payments under the
Swap Agreement and the SB-A Swap Agreement and (iii) the obligation to pay the Class IO Distribution Amount.
Class A-I-4 Margin: Initially, 0.3000% per annum, and on any Distribution Date on and after the second
Distribution Date after the first possible Optional Termination Date, 0.6000% per annum.
Class A-I Certificates: Collectively, the Class A-I-1 Certificates, Class A-I-2 Certificates,
Class A-I-3 Certificates and Class A-I-4 Certificates.
Class A-I 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.
Class A-II Certificate: Any one of the Class A-II Certificates executed by the Trustee and
authenticated by the Certificate Registrar substantially in the form annexed hereto as Exhibit A, senior to the
Class 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 III for purposes of the REMIC Provisions, (ii) the right to receive payments under the
Swap Agreement and the SB-A Swap Agreement and (iii) the obligation to pay the Class IO Distribution Amount.
Class A-II 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.
Class A-II Margin: Initially, 0.2075% per annum, and on any Distribution Date on and after the second
Distribution Date after the first possible Optional Termination Date, 0.4150% per annum.
Class R Certificate: Any one of the Class R Certificates executed by the Trustee and authenticated by
the Certificate Registrar substantially in the form annexed hereto as Exhibit D and evidencing an interest
designated as a “residual interest” in the REMICs for purposes of the REMIC Provisions. Component I of the Class
R Certificates is designated as the sole class of “residual interest” in REMIC I, Component II of the Class R
Certificates is designated as the sole class of “residual interest” in REMIC II, and Component III of the Class R
Certificates is designated as the sole class of “residual interest” in REMIC III.
Class SB Certificate: Any one of the Class SB Certificates executed by the Trustee and authenticated by
the Certificate Registrar substantially in the form annexed hereto as Exhibit C, subordinate to the Class A
Certificates with respect to distributions and the allocation of Realized Losses as set forth in Section 4.05,
and evidencing an interest comprised of “regular interests” in REMIC III together with certain rights to payments
under the Swap Agreements for purposes of the REMIC Provisions.
Closing Date: March 12, 2007.
Code: The Internal Revenue Code of 1986.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date, any amount paid by the Master Servicer in
accordance with Section 3.16(f).
Corporate Trust Office: The principal office of the Trustee at which at any particular time its
corporate trust business with respect to this Agreement shall be administered, which office at the date of the
execution of this instrument is located at U.S. Bank National Association, EP-MN-WS3D, 00 Xxxxxxxxxx Xxxxxx, Xx.
Xxxx, Xxxxxxxxx 00000, Attn: Structured Finance/RASC 2007-EMX1.
Credit Repository: Equifax, Transunion and Experian, or their successors in interest.
Cumulative Insurance Payments: As of any time of determination, the aggregate amount of all Insured
Payments previously paid by the Certificate Insurer under the Certificate Guaranty Insurance Policy minus (a) the
aggregate of all payments previously made to the Certificate Insurer pursuant to Sections 4.02(c)(iii) hereof as
reimbursement for such Insured Payments, plus (b) interest thereon from the date such amounts became due until
paid in full, at a rate of interest equal to the rate set forth in the Insurance Agreement.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and maintained pursuant to Section 3.07 in
the name of a depository institution, as custodian for the holders of the Certificates, for the holders of
certain other interests in mortgage loans serviced or sold by the Master Servicer and for the Master Servicer,
into which the amounts set forth in Section 3.07 shall be deposited directly. Any such account or accounts shall
be an Eligible Account.
Custodial Agreement: An agreement that may be entered into among the Depositor, the Master Servicer,
the Trustee and a Custodian in substantially the form of Exhibit E hereto.
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.
Custodian: Xxxxx Fargo Bank, N.A., or any successor custodian appointed pursuant to a Custodial
Agreement and reasonably acceptable to the Certificate Insurer.
Cut-off Date: February 1, 2006.
Cut-off Date Balance: $749,029,398.23.
Cut-off Date Principal Balance: With respect to any Mortgage Loan, the unpaid principal balance thereof
at the Cut-off Date after giving effect to all installments of principal due on or prior thereto (or due in the
month of the Cut-off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment
for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, except
such a reduction constituting a Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Defaulting Party: As defined in the Swap Agreement.
Deficiency Amount: As defined in the Certificate Guaranty Insurance Policy.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a court of competent
jurisdiction of the Mortgaged Property in an amount less than the then outstanding indebtedness under the
Mortgage Loan, or any reduction in the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation or reduction results from a
proceeding under the Bankruptcy Code.
Definitive Certificate: Any definitive, fully registered Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a Qualified Substitute Mortgage
Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: “30 to 59 days” or “30 or more days”
delinquent when a payment due on any scheduled due date remains unpaid as of the close of business on the next
following monthly scheduled due date; “60 to 89 days” or “60 or more days” delinquent when a payment due on any
scheduled due date remains unpaid as of the close of business on the second following monthly scheduled due date;
and so on. The determination as to whether a Mortgage Loan falls into these categories is made as of the close
of business on the last business day of each month. For example, a Mortgage Loan with a payment due on July 1
that remained unpaid as of the close of business on August 31 would then be considered to be 30 to 59 days
delinquent. Delinquency information as of the Cut-off Date is determined and prepared as of the close of
business on the last business day immediately prior to the Cut-off Date.
Depositor: As defined in the preamble hereto.
Depository: The Depository Trust Company, or any successor Depository hereafter named. The nominee of
the initial Depository for purposes of registering those Certificates that are to be Book-Entry Certificates is
Cede & Co. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(a)(5) of
the Uniform Commercial Code of the State of New York and a “clearing agency” registered pursuant to the
provisions of Section 17A of the Exchange Act.
Depository Participant: A broker, dealer, bank or other financial institution or other Person for whom
from time to time a Depository effects book-entry transfers and pledges of securities deposited with the
Depository.
Derivative Contract: Any ISDA Master Agreement, together with the related Schedule and Confirmation,
entered into by the Trustee and a Derivative Counterparty in accordance with Section 4.09.
Derivative Counterparty: Any counterparty to a Derivative Contract as provided in Section 4.09.
Destroyed Mortgage Note: A Mortgage Note the original of which was permanently lost or destroyed and
has not been replaced.
Determination Date: With respect to any Distribution Date, the 20th day (or if such 20th day is not a
Business Day, the Business Day immediately following such 20th day) of the month of the related Distribution Date.
Disqualified Organization: Any organization defined as a “disqualified organization” under
Section 860E(e)(5) of the Code, including, 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) and (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code. A Disqualified Organization also includes
any “electing large partnership,” as defined in Section 775(a) of the Code and any other Person so designated by
the Trustee based upon an Opinion of Counsel that the holding of an Ownership Interest in a Class R Certificate
by such Person may cause any REMIC or any Person having an Ownership Interest in any Class of Certificates (other
than such Person) to incur a liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the Transfer of an Ownership Interest in a Class R Certificate to such Person. The terms “United
States,” “State” and “international organization” shall have the meanings set forth in Section 7701 of the Code
or successor provisions.
Distribution Date: The 25th day of any month beginning in March 2007 or, if such 25th day is not a
Business Day, the Business Day immediately following such 25th day.
DTC Letter: The Letter of Representations, dated March 9, 2007, among the Trustee, on behalf of the
Trust Fund, U.S. Bank National Association, in its individual capacity as agent thereunder and the Depository.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the day during the related Due
Period on which the Monthly Payment is due.
Due Period: With respect to any Distribution Date, the calendar month of such Distribution Date.
Early Termination Date: Shall have the meaning set forth in the Swap Agreement.
Eligible Account: An account that is any of the following: (i) maintained with a depository institution
the debt obligations of which have been rated by each Rating Agency in its highest rating available, or (ii) an
account or accounts in a depository institution in which such accounts are fully insured to the limits
established by the FDIC, provided that any deposits not so insured shall, to the extent acceptable to each Rating
Agency, as evidenced in writing, be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Trustee and each Rating Agency) the registered Holders of Certificates have a claim with respect to the funds in
such account or a perfected first security interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, or (iii) in the case of the Custodial Account, a
trust account or accounts maintained in the corporate trust department of U.S. Bank National Association, or (iv)
in the case of the Certificate Account, a trust account or accounts maintained in the corporate trust department
of U.S. Bank National Association, or (v) an account or accounts of a depository institution acceptable to each
Rating Agency (as evidenced in writing by each Rating Agency that use of any such account as the Custodial
Account or the Certificate Account will not reduce the rating assigned to any Class of Certificates by such
Rating Agency below the then-current rating assigned to such Certificates by such Rating Agency, in each case,
without regard to the Certificate Guaranty Insurance Policy).
Eligible Master Servicing Compensation: With respect to any Distribution Date and each Loan Group, the
lesser of (a) one-twelfth of 0.125% of the Stated Principal Balance of the related 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, in each case with respect to the related Loan Group; provided that for purposes of this
definition the amount of the Servicing Fee will not be reduced pursuant to Section 7.02(a) except as may be
required pursuant to the last sentence of such Section.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: As defined in Section 7.01.
Excess Cash Flow: With respect to 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 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 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 4.10(c).
Excess Overcollateralization Amount: With respect to any Distribution Date, the excess, if any, of (a)
the Overcollateralization Amount on such Distribution Date over (b) the Required Overcollateralization Amount for
such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: With respect to any Mortgage Loan as of any date of determination, the sum of the
applicable Servicing Fee Rate and the per annum rate at which the applicable Subservicing Fee accrues.
Xxxxxx Mae: Xxxxxx Xxx, a federally chartered and privately owned corporation organized and existing
under the Federal National Mortgage Association Charter Act, or any successor thereto.
FDIC: 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.
Final Scheduled Distribution Date: Solely for purposes of the face of the Certificates, as follows:
with respect to the Class A-I-1 Certificates, the Distribution Date occurring in January 2033; with respect to
the Class A-I-2 Certificates, the Distribution Date occurring in September 2034; with respect to the Class A-I-3
Certificates, the Distribution Date occurring in October 2036; and with respect to the Class A-I-4 Certificates
and Class A-II Certificates, the Distribution Date occurring in January 2037. No event of default under this
Agreement will arise or become applicable solely by reason of the failure to retire the entire Certificate
Principal Balance of any Class of Class A Certificates on or before its Final Scheduled Distribution Date.
Fitch: Fitch Ratings, or its successors in interest.
Fixed Swap Payment: With respect to each Distribution Date commencing with the Distribution Date in May
2007 and ending with the Distribution Date in November 2011, an amount equal to the product of (x) a fixed rate
equal to approximately 5.065% per annum, (y) the Swap Agreement Notional Balance for that Distribution Date and
(z) a fraction, the numerator of which is 30, and the denominator of which is 360. As described in the Swap
Agreement, the fixed rate payer period end dates are not adjusted in accordance with the business day convention.
Floating Swap Payment: With respect to each Distribution Date commencing with the Distribution Date in
May 2007 and ending with the distribution date in November 2011, an amount equal to the product of (x) Swap
LIBOR, (y) the Swap Agreement Notional Balance for that Distribution Date and (z) a fraction, the numerator of
which is equal to the number of days in the related calculation period as provided in the Swap Agreement and the
denominator of which is 360. As described in the Swap Agreement, the floating rate payer period end dates are
adjusted in accordance with the business day convention.
Foreclosure Profits: With respect to any Distribution Date or related Determination Date and any
Mortgage Loan, the excess, if any, of Liquidation Proceeds, Insurance Proceeds and REO Proceeds (net of all
amounts reimbursable therefrom pursuant to Section 3.10(a)(ii)) in respect of each Mortgage Loan or REO Property
for which a Cash Liquidation or REO Disposition occurred in the related Prepayment Period over the sum of the
unpaid principal balance of such Mortgage Loan or REO Property (determined, in the case of an REO Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest at the Mortgage Rate on such unpaid principal
balance from the Due Date to which interest was last paid by the Mortgagor to the first day of the month
following the month in which such Cash Liquidation or REO Disposition occurred.
Form 10-K Certification: As defined in Section 4.03(f)(i).
Xxxxxxx Mac: Xxxxxxx Mac, a corporate instrumentality of the United States created and existing under
Title III of the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Group I Basis Risk Shortfall: With respect to any Class of Class A-I Certificates and any Distribution
Date, an amount equal to the excess of (x) Accrued Certificate Interest for that Class calculated at a per annum
rate (which shall not exceed 14.000% per annum) equal to LIBOR plus the related Margin for that Distribution Date
over (y)Accrued Certificate Interest for that Class if the Pass-Through Rate for that Distribution Date is
calculated using the Group I Net WAC Cap Rate for that Distribution Date; plus any unpaid Group I Basis Risk
Shortfall from prior Distribution Dates, plus interest thereon to the extent previously unreimbursed by Excess
Cash Flow calculated at a per annum rate (which shall not exceed 14.000% per annum) equal to LIBOR plus the
related Margin for that Distribution Date.
Group I Loans: The Mortgage Loans designated on the Mortgage Loan Schedule attached hereto as Exhibit
F-1. The Group I Loans relate to the Class A-I Certificates and Class SB Certificates.
Group I Net WAC Cap Rate: With respect to any Distribution Date, a per annum rate equal to (i) the
product of (a) 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 (or, if applicable, the Modified 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 that Distribution Date and (b) 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 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, minus (iii) the product
of (a) the premium rate for the Certificate Guaranty Insurance Policy due to the Certificate Insurer, (b) a
fraction expressed as a percentage the numerator of which is the aggregate Certificate Principal Balance of the
Class A-I Certificates 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 (in each case prior to distributions of
principal to be made for such Distribution Date) and (c) a fraction expressed as a percentage, the numerator of
which is 30 and the denominator of which is the actual number of days in the related Interest Accrual Period.
Group I Principal Distribution Amount: For any Distribution Date, the product of (x) the Principal
Distribution Amount for that Distribution Date and (y) a fraction, the numerator of which is the portion of the
Principal Allocation Amount related to Loan Group I for that Distribution Date and the denominator of which is
the Principal Allocation Amount for all of the Mortgage Loans for that 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 Adjusted Strip Rate.
Group II Basis Risk Shortfall: With respect to any Class of Class A-II Certificates and any
Distribution Date, an amount equal to the excess of (x) Accrued Certificate Interest for that Class calculated at
a per annum rate (which shall not exceed 14.000% per annum) equal to LIBOR plus the related Margin for that
Distribution Date over (y) Accrued Certificate Interest for that Class if the Pass-Through Rate for such
Distribution Date is calculated using the Group II Net WAC Cap Rate for that Distribution Date; plus any unpaid
Group II Basis Risk Shortfall from prior Distribution Dates, plus interest thereon to the extent previously
unreimbursed by Excess Cash Flow calculated at a per annum rate (which shall not exceed 14.000% per annum) equal
to LIBOR plus the related Margin for that Distribution Date.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan Schedule attached hereto as Exhibit
F-2. The Group II Loans relate to the Class A-II Certificates and Class SB Certificates.
Group II Net WAC Cap Rate: With respect to any Distribution Date, a per annum rate equal to (i) the
product of (a) 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 (or, if applicable, the Modified 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 that Distribution Date and (b) 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 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, minus (iii) the product
of (a) the premium rate for the Certificate Guaranty Insurance Policy due to the Certificate Insurer, (b) a
fraction expressed as a percentage the numerator of which is the amount of Certificate Principal Balance of the
Class A-II Certificates 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 (in each case prior to distributions of
principal to be made for such Distribution Date) and (c) a fraction expressed as a percentage, the numerator of
which is 30 and the denominator of which is the actual number of days in the related Interest Accrual Period.
Group II Principal Distribution Amount: For any Distribution Date, the product of (x) the Principal
Distribution Amount for that Distribution Date and (y) a fraction, the numerator of which is the portion of the
Principal Allocation Amount related to Loan Group II for that Distribution Date and the denominator of which is
the Principal Allocation Amount for all of the Mortgage Loans for that 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 Adjusted Strip Rate.
HUD: The United States Department of Housing and Urban Development.
Independent: When used with respect to any specified Person, means such a Person who (i) is in fact
independent of the Depositor, the Master Servicer and the Trustee, or any Affiliate thereof, (ii) does not have
any direct financial interest or any material indirect financial interest in the Depositor, the Master Servicer
or the Trustee or in an Affiliate thereof, and (iii) is not connected with the Depositor, the Master Servicer or
the Trustee as an officer, employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
Index: With respect to any adjustable-rate Mortgage Loan and as to any Adjustment Date therefor, the
related index as stated in the related Mortgage Note.
Initial Certificate Principal Balance: With respect to each Class of Certificates (other than the Class
R Certificates), the Certificate Principal Balance of such Class of Certificates as of the Closing Date as set
forth in the Preliminary Statement hereto.
Insurance Account: The account or accounts created and maintained pursuant to Section 4.11, which shall
be entitled “U.S. Bank National Association, as trustee, in trust for the registered holders of Residential Asset
Securities Corporation, Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2007-EMX1,” and which
must be an Eligible Account.
Insurance Agreement: The Insurance and Indemnity Agreement, dated as of March 12, 2007, among the
Certificate Insurer, the Trustee, the Sponsor and Master Servicer and the Depositor.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans pursuant to any Primary Insurance
Policy or any other related insurance policy covering a Mortgage Loan, to the extent such proceeds are payable to
the mortgagee under the Mortgage, any Subservicer, the Master Servicer or the Trustee and are not applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the procedures that
the Master Servicer would follow in servicing mortgage loans held for its own account.
Insured Payment: As defined in the Certificate Guaranty Insurance Policy.
Interest Accrual Period: With respect to the Distribution Date in March 2007, the period commencing the
Closing Date and ending on the day preceding the Distribution Date in March 2007, and with respect to any
Distribution Date after the Distribution Date in March 2007, the period commencing on the Distribution Date in
the month immediately preceding the month in which such Distribution Date occurs and ending on the day preceding
such Distribution Date.
Interest Distribution Amount: For any Distribution Date, the amounts payable pursuant to Section
4.02(c)(i).
Interim Certification: As defined in Section 2.02.
Late Collections: With respect to any Mortgage Loan, all amounts received during any Due Period,
whether as late payments of Monthly Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of Monthly Payments due but delinquent for a previous Due Period and not
previously recovered.
LIBOR: With respect to any Distribution Date, the arithmetic mean of the London interbank offered rate
quotations for one-month U.S. Dollar deposits, expressed on a per annum basis, determined in accordance with
Section1.02.
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 by law to be closed.
LIBOR Certificates: The Class A 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: 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 and Subsequent Recoveries.
Loan Group: Loan Group I or Loan Group II, as applicable.
Loan Group I: The Mortgage Loans designated on the Mortgage Loan Schedule attached hereto as Exhibit
F-1.
Loan Group II: The Mortgage Loans designated on the Mortgage Loan Schedule attached hereto as Exhibit
F-2.
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.
Margin: The Class A-I-1 Margin, Class A-I-2 Margin, Class A-I-3 Margin, Class A-I-4 Margin or Class
A-II Margin, as applicable.
Marker Rate: With respect to the Class SB Certificates or REMIC III Regular Interest SB-IO-I and any
Distribution Date, in relation to REMIC II Regular Interests LT1, LT2, LT3 and LT4, a per annum rate equal to two
(2) times the weighted average of the Uncertificated REMIC II Pass-Through Rates for REMIC II Regular Interest
LT2 and REMIC II Regular Interest LT3. With respect to the Class SB Certificates or REMIC III Regular Interest
SB-IO-II and any Distribution Date, in relation to REMIC II Regular Interests LT5, LT6, LT7 and LT8, a per annum
rate equal to two (2) times the weighted average of the Uncertificated REMIC II Pass-Through Rates for REMIC II
Regular Interest LT6 and REMIC II Regular Interest LT7.
Master Servicer: As defined in the preamble hereto.
Maturity Date: With respect to each Class of Certificates representing ownership of Regular Interests
or Uncertificated Regular Interest issued by each of REMIC I, REMIC II and REMIC III the latest possible maturity
date, solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, by which the Certificate
Principal Balance of each such Class of Certificates representing a regular interest in the Trust Fund would be
reduced to zero, which is, for each such regular interest, January 25, 2037, which is the Distribution Date
occurring in the month following the last scheduled monthly payment of the Mortgage Loans.
Maximum Mortgage Rate: With respect to any adjustable-rate Mortgage Loan, the per annum rate indicated
on the Mortgage Loan Schedule 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.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the
laws of the State of Delaware, or any successor thereto.
MERS® 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® System.
Minimum Mortgage Rate: With respect to any adjustable-rate Mortgage Loan, a per annum rate equal to the
greater of (i) the Note Margin and (ii) the rate indicated on the Mortgage Loan Schedule as the “NOTE FLOOR,”
which rate may be applicable to such Mortgage Loan at any time during the life of such Mortgage Loan.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject of a Servicing Modification.
Modified Net Mortgage Rate: With respect to any Mortgage Loan that is the subject of a Servicing
Modification, the Net Mortgage Rate minus the rate per annum by which the Mortgage Rate on such Mortgage Loan was
reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely
as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO Property) and the Due Date in any
Due Period, the payment of principal and interest due thereon in accordance with the amortization schedule at the
time applicable thereto (after adjustment, if any, for Curtailments and for Deficient Valuations occurring prior
to such Due Date but before any adjustment to such amortization schedule by reason of any bankruptcy, other than
a Deficient Valuation, or similar proceeding or any moratorium or similar waiver or grace period and before any
Servicing Modification that constitutes a reduction of the interest rate on such Mortgage Loan).
Moody’s: Xxxxx’x Investors Service, Inc., or its successors in interest.
Mortgage: With respect to each Mortgage Note, the mortgage, deed of trust or other comparable
instrument creating a first or junior lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining to a particular Mortgage Loan
and any additional documents required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the Trustee pursuant to Section
2.01 as from time to time are held or deemed to be held as a part of the Trust Fund, the Mortgage Loans
originally so held being identified in the initial Mortgage Loan Schedule, and Qualified Substitute Mortgage
Loans held or deemed held as part of the Trust Fund including, without limitation, each related Mortgage Note,
Mortgage and Mortgage File and all rights appertaining thereto.
Mortgage Loan Schedule: The lists of the Mortgage Loans attached hereto as Exhibit F-1 and Exhibit F-2
(as amended from time to time to reflect the addition of Qualified Substitute Mortgage Loans), which lists shall
set forth at a minimum the following information as to each Mortgage Loan:
(i) the Mortgage Loan identifying number (“RFC LOAN #”);
(ii) [reserved];
(iii) the maturity of the Mortgage Note (“MATURITY DATE,” or “MATURITY DT”);
(iv) for the adjustable-rate Mortgage Loans, the Mortgage Rate as of origination (“ORIG RATE”);
(v) the Mortgage Rate as of the Cut-off Date (“CURR RATE”);
(vi) the Net Mortgage Rate as of the Cut-off Date (“CURR NET”);
(vii) the scheduled monthly payment of principal, if any, and interest as of the Cut-off Date (“ORIGINAL
P & I” or “CURRENT P & I”);
(viii)the Cut-off Date Principal Balance (“PRINCIPAL BAL”);
(ix) the Loan-to-Value Ratio at origination (“LTV”);
(x) a code “T,” “BT” or “CT” under the column “LN FEATURE,” indicating that the Mortgage Loan is
secured by a second or vacation residence (the absence of any such code means the Mortgage Loan is
secured by a primary residence);
(xi) a code “N” under the column “OCCP CODE,” indicating that the Mortgage Loan is secured by a
non-owner occupied residence (the absence of any such code means the Mortgage Loan is secured by an
owner occupied residence);
(xii) for the adjustable-rate Mortgage Loans, the Maximum Mortgage Rate (“NOTE CEILING”);
(xiii)for the adjustable-rate Mortgage Loans, the maximum Net Mortgage Rate (“NET CEILING”);
(xiv) for the adjustable-rate Mortgage Loans, the Note Margin (“NOTE MARGIN”);
(xv) for the adjustable-rate Mortgage Loans, the first Adjustment Date after the Cut-off Date (“NXT INT
CHG DT”);
(xvi) for the adjustable-rate Mortgage Loans, the Periodic Cap (“PERIODIC DECR” or “PERIODIC INCR”);
(xvii)[reserved]; and
(xviii) for the adjustable-rate Mortgage Loans, the rounding of the semi-annual or annual adjustment to
the Mortgage Rate (“NOTE METHOD”).
Such schedules may consist of multiple reports that collectively set forth all of the information
required.
Mortgage Note: The originally executed note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan, together with any modification thereto.
Mortgage Rate: With respect to any Mortgage Loan, the interest rate borne by the related Mortgage Note,
or any modification thereto other than a Servicing Modification. The Mortgage Rate on the adjustable-rate
Mortgage Loans will adjust on each Adjustment Date to equal the sum (rounded to the nearest multiple of
one-eighth of one percent (0.125%) or up to the nearest one-eighth of one percent, which are indicated by a “U” on
the Mortgage Loan Schedule, except in the case of the adjustable-rate 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.
Mortgaged Property: The underlying real property securing a Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: With respect to any Mortgage Loan as of any date of determination, a per annum rate
equal to the Mortgage Rate for such Mortgage Loan as of such date minus the 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: The Group I Net WAC Cap Rate or Group II Net WAC Cap Rate, as applicable.
Non-United States Person: Any Person other than a United States Person.
Nonrecoverable Advance: Any Advance previously made or proposed to be made by the Master Servicer or
Subservicer in respect of a Mortgage Loan (other than a Deleted Mortgage Loan) which, in the good faith judgment
of the Master Servicer, will not, or, in the case of a proposed Advance, would not, be ultimately recoverable by
the Master Servicer from related Late Collections, Insurance Proceeds, Liquidation Proceeds or REO Proceeds. To
the extent that any Mortgagor is not obligated under the related Mortgage documents to pay or reimburse any
portion of any Servicing Advances that are outstanding with respect to the related Mortgage Loan as a result of a
modification of such Mortgage Loan by the Master Servicer, which forgives amounts which the Master Servicer or
Subservicer had previously advanced, and the Master Servicer determines that no other source of payment or
reimbursement for such advances is available to it, such Servicing Advances shall be deemed to be Nonrecoverable
Advances. The determination by the Master Servicer that it has made a Nonrecoverable Advance shall be evidenced
by a certificate of a Servicing Officer, Responsible Officer or Vice President or its equivalent or senior
officer of the Master Servicer, delivered to the Depositor, the Trustee, the Certificate Insurer and the Master
Servicer setting forth such determination, which shall include any other information or reports obtained by the
Master Servicer such as property operating statements, rent rolls, property inspection reports and engineering
reports, which may support such determinations. Notwithstanding the above, the Trustee shall be entitled to rely
upon any determination by the Master Servicer that any Advance previously made is a Nonrecoverable Advance or
that any proposed Advance, if made, would constitute a Nonrecoverable Advance.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of reference thereto, is not subject
to a Subservicing Agreement.
Note Margin: With respect to each adjustable-rate Mortgage Loan, the fixed percentage set forth in the
related Mortgage Note and indicated on the Mortgage Loan Schedule as the “NOTE MARGIN,” which percentage is added
to the Index on each Adjustment Date to determine (subject to rounding in accordance with the related Mortgage
Note, the Periodic Cap, the Maximum Mortgage Rate and the Minimum Mortgage Rate) the interest rate to be borne by
such adjustable-rate Mortgage Loan until the next Adjustment Date.
Notice: A Notice of Nonpayment and Demand for Insured Payment, a form of which is attached as Exhibit A
to the Certificate Guaranty Insurance Policy.
Notional Amount: With respect to the Class SB Certificates, immediately prior to any Distribution Date,
the aggregate of the Uncertificated Principal Balances of the REMIC II Regular Interests. With respect to REMIC
III Regular Interest SB-IO-I, immediately prior to any Distribution Date, the aggregate of the Uncertificated
Principal Balances of REMIC II Regular Interests LT1, LT2, LT3 and LT4. With respect to REMIC III Regular
Interest SB-IO-II, immediately prior to any Distribution Date, the aggregate of the Uncertificated Principal
Balances of REMIC II Regular Interests LT5, LT6, LT7 and LT8.
Officers’ Certificate: A certificate signed by the Chairman of the Board, the President, a Vice
President, Assistant Vice President, Director, Managing Director, the Treasurer, the Secretary, an Assistant
Treasurer or an Assistant Secretary of the Depositor or the Master Servicer, as the case may be, and delivered to
the Trustee, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the Trustee and the Master Servicer and
which counsel may be counsel for the Depositor or the Master Servicer, provided that any Opinion of Counsel (i)
referred to in the definition of “Disqualified Organization” or (ii) relating to the qualification of any REMIC
hereunder as a REMIC or compliance with the REMIC Provisions must, unless otherwise specified, be an opinion of
Independent counsel.
Optional Termination Date: Any Distribution Date on or after which the Stated Principal Balance (after
giving effect to distributions to be made on such Distribution Date) of the Mortgage Loans is less than 10.00% of
the Cut-off Date Balance.
Outstanding Mortgage Loan: With respect to the Due Date in any Due Period, a Mortgage Loan (including
an REO Property) that was not the subject of a Principal Prepayment in Full, Cash Liquidation or REO Disposition
and that was not purchased, deleted or substituted for prior to such Due Date pursuant to Section 2.02, 2.03,
2.04 or 4.07.
Overcollateralization Amount: With respect to any Distribution Date, the excess, if any, of (a)the
aggregate Stated Principal Balance of the Mortgage Loans before giving effect to distributions of principal to be
made on such Distribution Date over (b) the aggregate Certificate Principal Balance of the Class A Certificates
immediately prior to such date.
Overcollateralization Floor: An amount equal to the product of 2.00% and the Cut-off Date Balance.
Overcollateralization Increase Amount: With respect to any Distribution Date, the lesser of (a) Excess
Cash Flow for that Distribution Date (to the extent not used to cover the amounts described in clauses (iv) and
(v) 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.
Ownership Interest: With respect to any Certificate, any ownership or security interest in such
Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein,
whether direct or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Rate: With respect to each Class of Class A Certificates and any Distribution Date, the
least of (i) a per annum rate equal to LIBOR plus the related Margin for such Distribution Date, (ii) 14.000% per
annum and (iii) the related Net WAC Cap Rate for such Distribution Date.
With respect to the Class SB Certificates 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 (vi) below, and the denominator of which is the aggregate principal balance of the REMIC II
Regular Interests. For purposes of calculating the Pass-Through Rate for the Class SB Certificates, the
numerator is equal to the sum of the following components:
(i) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT1 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT2 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT2;
(iii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT4 minus twice the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT4;
(iv) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT5 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT5;
(v) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT6 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT6; and
(vi) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT8 minus twice the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT8.
With respect to REMIC III Regular Interest SB-IO-I 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 (iii) below, and the denominator of which is the aggregate principal balance of REMIC II
Regular Interests LT1, LT2, LT3 and LT4. For purposes of calculating the Pass-Through Rate for REMIC III Regular
Interest SB-IO-I, the numerator is equal to the sum of the following components:
(i) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT1 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT2 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT2; and
(iii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT4 minus twice the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT4;
With respect to REMIC III Regular Interest SB-IO-II 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 (iii) below, and the denominator of which is the aggregate principal balance of REMIC II
Regular Interests LT5, LT6, LT7 and LT8. For purposes of calculating the Pass-Through Rate for REMIC III Regular
Interest SB-IO-II, the numerator is equal to the sum of the following components:
(i) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT5 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT5;
(ii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT6 minus the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT6; and
(iii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT8 minus twice the
related Marker Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC
II Regular Interest LT8.
Paying Agent: U.S. Bank National Association or any successor Paying Agent appointed by the Trustee.
Percentage Interest: With respect to any Class A Certificate, the undivided percentage ownership
interest in the related Class evidenced by such Certificate, which percentage ownership interest shall be equal
to the Initial Certificate Principal Balance thereof divided by the aggregate Initial Certificate Principal
Balance of all of the Certificates of the same Class. The Percentage Interest with respect to a Class SB
Certificate or Class R Certificate shall be stated on the face thereof.
Periodic Cap: With respect to each adjustable-rate Mortgage Loan, the periodic rate cap that limits the
increase or the decrease of the related Mortgage Rate on any Adjustment Date pursuant to the terms of the related
Mortgage Note.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the United States or any agency or
instrumentality thereof when such obligations are backed by the full faith and credit of the
United States;
(ii) repurchase agreements on obligations specified in clause (i) maturing not more than one month
from the date of acquisition thereof, provided that the unsecured obligations of the party
agreeing to repurchase such obligations are at the time rated by each Rating Agency in its
highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits, time deposits and bankers’ acceptances
(which shall each have an original maturity of not more than 90 days and, in the case of
bankers’ acceptances, shall in no event have an original maturity of more than 365 days or a
remaining maturity of more than 30 days) denominated in United States dollars of any U.S.
depository institution or trust company incorporated under the laws of the United States or any
state thereof or of any domestic branch of a foreign depository institution or trust company;
provided that the debt obligations of such depository institution or trust company at the date
of acquisition thereof have been rated by each Rating Agency in its highest short-term rating
available; and, provided further that, if the original maturity of such short-term obligations
of a domestic branch of a foreign depository institution or trust company shall exceed 30 days,
the short-term rating of such institution shall be A-1+ in the case of Standard & Poor’s if
Standard & Poor’s is a Rating Agency;
(iv) commercial paper and demand notes (having original maturities of not more than 365 days) of any
corporation incorporated under the laws of the United States or any state thereof which on the
date of acquisition has been rated by each Rating Agency in its highest short term rating
available; provided that such commercial paper and demand notes shall have a remaining maturity
of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by each Rating Agency in its highest
long-term rating available (which may be managed by the Trustee or one of its Affiliates); and
(vi) other obligations or securities that are acceptable to each Rating Agency and the Certficate
Insurer as a Permitted Investment hereunder and will not reduce the rating assigned to any
Class of Certificates by such Rating Agency below the then-current rating (without regard to
the Certificate Guaranty Insurance Policy) assigned to such Certificates by such Rating Agency,
as evidenced in writing;
provided, however, that no instrument shall be a Permitted Investment if it represents, either (1) the right to
receive only interest payments with respect to the underlying debt instrument or (2) the right to receive both
principal and interest payments derived from obligations underlying such instrument and the principal and
interest payments with respect to such instrument provide a yield to maturity greater than 120% of the yield to
maturity at par of such underlying obligations. References herein to the highest rating available on unsecured
long-term debt shall mean AAA in the case of Standard & Poor’s and Aaa in the case of Moody’s, and for purposes
of this Agreement, any references herein to the highest rating available on unsecured commercial paper and
short-term debt obligations shall mean the following: A-1 in the case of Standard & Poor’s and P-1 in the case of
Moody’s; provided, however, that any Permitted Investment that is a short-term debt obligation rated A-1 by
Standard & Poor’s must satisfy the following additional conditions: (i) the total amount of debt from A-1 issuers
must be limited to the investment of monthly principal and interest payments (assuming fully amortizing
collateral); (ii) the total amount of A-1 investments must not represent more than 20% of the aggregate
outstanding Certificate Principal Balance of the Certificates and each investment must not mature beyond 30 days;
(iii)the terms of the debt must have a predetermined fixed dollar amount of principal due at maturity that cannot
vary; and (iv) if the investments may be liquidated prior to their maturity or are being relied on to meet a
certain yield, interest must be tied to a single interest rate index plus a single fixed spread (if any) and must
move proportionately with that index. Any Permitted Investment may be purchased by or through the Trustee or its
Affiliates.
Permitted Transferee: Any Transferee of a Class R Certificate, other than a Disqualified Organization
or Non-United States Person.
Person: Any individual, corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or government or any agency or political
subdivision thereof.
Posted Collateral Account: The separate account created and maintained by the Supplemental Interest
Trust Trustee, on behalf of the Supplemental Interest Trust, pursuant to Section 4.12.
Preference Amount: As defined in the Certificate Guaranty Insurance Policy.
Prepayment Assumption: With respect to the Class A Certificates, the prepayment assumption to be used
for determining the accrual of original issue discount and premium and market discount on such Certificates for
federal income tax purposes, which (a) with respect to the fixed-rate Mortgage Loans, assumes a constant
prepayment rate of one-tenth of 23% per annum of the then outstanding Stated Principal Balance of the fixed-rate
Mortgage Loans in the first month of the life of such Mortgage Loans and an additional one-tenth of 23% per annum
in each month thereafter until the tenth month, and beginning in the tenth month and in each month thereafter
during the life of the fixed-rate Mortgage Loans, a constant prepayment rate of 23% per annum each month (“23%
HEP”) and (b) with respect to the adjustable-rate Mortgage Loans assumes a prepayment assumption of 2% of the
constant prepayment rate in month one, increasing by approximately 2.545% from month 2 until month 12, a constant
prepayment rate of 30% from month 12 to month 22, a constant prepayment rate of 50% from month 23 to month 27,
and a constant prepayment rate of 35% thereafter, used for determining the accrual of original issue discount and
premium and market discount on the Class A Certificates for federal income tax purposes. The constant prepayment
rate assumes that the stated percentage of the outstanding Stated Principal Balance of the adjustable-rate
Mortgage Loans is prepaid over the course of a year.
Prepayment Interest Shortfall: With respect to any Distribution Date and any Mortgage Loan (other than
a Mortgage Loan relating to an REO Property) that was the subject of (a) a Principal Prepayment in Full during
the related Prepayment Period, an amount equal to the excess of one month’s interest at the related Net Mortgage
Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) on the Stated Principal Balance of
such Mortgage Loan over the amount of interest (adjusted to the related Net Mortgage Rate (or Modified Net
Mortgage Rate in the case of a Modified Mortgage Loan)) paid by the Mortgagor for such Prepayment Period to the
date of such Principal Prepayment in Full or (b) a Curtailment during the prior calendar month, an amount equal
to one month’s interest at the related Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan) on the amount of such Curtailment.
Prepayment Period: With respect to any Distribution Date, the calendar month preceding the month of
distribution.
Primary Insurance Policy: Each primary policy of mortgage guaranty insurance as indicated by a numeric
code on the Mortgage Loan Schedule with the exception of code “A23,” “A34” or “A96” under the column “MI CO CODE.”
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, (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 A-I Certificates and Class A-II 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) above or (i) of this proviso, as
applicable, will be allocated to the Class A-I Certificates and Class A-II 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) the sum of (A) the Available Distribution Amount and (B) with respect to clauses (b)(v) and (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 related Prepayment Period;
(iii)the principal portion of all other unscheduled collections, other than Subsequent Recoveries, on
the Mortgage Loans (including, without limitation, Principal Prepayments in Full, Curtailments,
Insurance Proceeds, Liquidation Proceeds and REO Proceeds) received during the related Prepayment
Period (or deemed to have been so received) to the extent applied by the Master Servicer as
recoveries of principal of the Mortgage Loans pursuant to Section 3.14;
(iv) the lesser of (1) Subsequent Recoveries for such Distribution Date and (2) the principal portion of
any Realized Losses allocated to any Class of Certificates on a prior Distribution Date and
remaining unpaid;
(v) the lesser of (1) the Excess Cash Flow for such Distribution Date (to the extent not used pursuant
to clause (iv) of this definition on such Distribution Date) and (2) the principal portion of any
Realized Losses incurred (or deemed to have been incurred) on any Mortgage Loans in the calendar
month preceding such Distribution Date; and
(vi) the lesser of (1) the Excess Cash Flow for that Distribution Date (to the extent not used pursuant
to clauses (iv) and (v) of this definition on such Distribution Date or required to pay any
Cumulative Insurance Payment on such Distribution Date pursuant to Section 4.02(c)(iv) herein) and
(2) the 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 Prepayment: Any payment of principal or other recovery on a Mortgage Loan, including a
recovery that takes the form of Liquidation Proceeds or Insurance Proceeds, which is received in advance of its
scheduled Due Date and is not accompanied by an amount as to interest representing scheduled interest on such
payment due on any date or dates in any month or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor of the entire principal
balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date, all amounts described in clauses
(b)(i) through (iii) of the definition of Principal Distribution Amount for that Distribution Date.
Program Guide: The AlterNet Seller Guide as incorporated into the Residential Funding Seller Guide for
mortgage collateral sellers that participate in Residential Funding’s AlterNet Mortgage Program, and Residential
Funding’s Servicing Guide and any other subservicing arrangements which Residential Funding has arranged to
accommodate the servicing of the Mortgage Loans and in each case all supplements and amendments thereto published
by Residential Funding.
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 either (a) the Adjusted Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan) plus the rate per annum at which the Servicing Fee and the Certificate Insurer Premium
Modified Rate is calculated, or (b) in the case of a purchase made by the Master Servicer, at the Net Mortgage
Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) plus the Certificate Insurer Premium
Modified Rate, in each case on the Stated Principal Balance thereof to the first day of the month following the
month of purchase from the Due Date to which interest was last paid by the Mortgagor. With respect to any
Mortgage Loan (or REO Property) required to be or otherwise purchased on any date pursuant to Section 4.08, an
amount equal to the greater of (i) the sum of (a) 100% of the Stated Principal Balance thereof plus the principal
portion of any related unreimbursed Advances of such Mortgage Loan (or REO Property) and (b) unpaid accrued
interest at either (1) the Adjusted Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan) plus the rate per annum at which the Servicing Fee is calculated, or (2) in the case of a purchase
made by the Master Servicer, at the Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan), in each case on the Stated Principal Balance thereof to the first day of the month following the
month of purchase from the Due Date to which interest was last paid by the Mortgagor, and (ii) the fair market
value of such Mortgage Loan (or REO Property).
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by Residential Funding or the Depositor
for a Deleted Mortgage Loan which must, on the date of such substitution, as confirmed in an Officers’
Certificate delivered to the Trustee, (i) have an outstanding principal balance, after deduction of the principal
portion of the monthly payment due in the month of substitution (or in the case of a substitution of more than
one Mortgage Loan for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after such deduction),
not in excess of the Stated Principal Balance of the Deleted Mortgage Loan (the amount of any shortfall to be
deposited by Residential Funding, in the Custodial Account in the month of substitution); (ii) have a Mortgage
Rate and a Net Mortgage Rate no lower than and not more than 1% per annum higher than the Mortgage Rate and Net
Mortgage Rate, respectively, of the Deleted Mortgage Loan as of the date of substitution; (iii) have a
Loan-to-Value Ratio at the time of substitution no higher than that of the Deleted Mortgage Loan at the time of
substitution; (iv) have a remaining term to stated maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (v) comply with each representation and warranty set forth in Sections
2.03 and 2.04 hereof and Section 4 of the Assignment Agreement, (other than the representations and warranties
set forth therein with respect to the number of loans (including the related percentage) in excess of zero which
meet or do not meet a specified criteria); (vi) not be 30 days or more Delinquent; (vii) not be subject to the
requirements of HOEPA (as defined in the Assignment Agreement); (viii) have a policy of title insurance, in the
form and amount that is in material compliance with the Program Guide, that was effective as of the closing of
such Mortgage Loan, is valid and binding, and remains in full force and effect, unless the Mortgage Property is
located in the State of Iowa where an attorney’s certificate has been provided as described in the Program Guide;
(ix) if the Deleted Loan is not a Balloon Loan, not be a Balloon Loan; (x) with respect to adjustable rate
Mortgage Loans, have a Mortgage Rate that adjusts with the same frequency and based upon the same Index as that
of the Deleted Mortgage Loan; (xi) with respect to adjustable rate Mortgage Loans, have a Note Margin not less
than that of the Deleted Mortgage Loan; (xii) with respect to adjustable rate Mortgage Loans, have a Periodic
Rate Cap that is equal to that of the Deleted Mortgage Loan; (xiii) with respect to adjustable-rate Mortgage
Loans, have a next Adjustment Date no later than that of the Deleted Mortgage Loan, and (xiv) be secured by a
lien with the same lien priority as the Deleted Loan.
Rating Agency: Each of Standard & Poor’s and Moody’s. If any agency or a successor is no longer in
existence, “Rating Agency” shall be such statistical credit rating agency, or other comparable Person, designated
by the Depositor, notice of which designation shall be given to the Trustee and the Master Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO Property) as to which a Cash Liquidation or
REO Disposition has occurred, an amount (not less than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan (or REO Property) as of the date of Cash Liquidation or REO Disposition, plus (ii) interest (and
REO Imputed Interest, if any) at the Net Mortgage Rate plus the Certificate Insurer Premium Modified Rate from
the Due Date as to which interest was last paid or advanced to Certificateholders up to the last day of the month
in which the Cash Liquidation (or REO Disposition) occurred on the Stated Principal Balance of such Mortgage Loan
(or REO Property) outstanding during each Due Period that such interest was not paid or advanced, minus (iii) the
proceeds, if any, received during the month in which such Cash Liquidation (or REO Disposition) occurred, to the
extent applied as recoveries of interest at the Net Mortgage Rate plus the Certificate Insurer Premium Modified
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.
With respect to each Mortgage Loan which is the subject of a Servicing Modification, (a) (1) the amount by which
the interest portion of a Monthly Payment or the principal balance of such Mortgage Loan was reduced or (2) the
sum of any other amounts owing under the Mortgage Loan that were forgiven and that constitute Servicing Advances
that are reimbursable to the Master Servicer or a Subservicer, and (b) any such amount with respect to a Monthly
Payment that was or would have been due in the month immediately following the month in which a Principal
Prepayment or the Purchase Price of such Mortgage Loan is received or is deemed to have been received. With
respect to each Mortgage Loan which has become the subject of a Deficient Valuation, the difference between the
principal balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect to each Mortgage Loan
which has become the object of a Debt Service Reduction, the amount of such Debt Service Reduction.
Notwithstanding the above, neither a Deficient Valuation nor a Debt Service Reduction shall be deemed a Realized
Loss hereunder so long as the Master Servicer has notified the Trustee in writing that the Master Servicer is
diligently pursuing any remedies that may exist in connection with the representations and warranties made
regarding the related Mortgage Loan and either (A) the related Mortgage Loan is not in default with regard to
payments due thereunder or (B) delinquent payments of principal and interest under the related Mortgage Loan and
any premiums on any applicable primary hazard insurance policy and any related escrow payments in respect of such
Mortgage Loan are being advanced on a current basis by the Master Servicer or a Subservicer, in either case
without giving effect to any Debt Service Reduction.
Realized Losses in respect of Group I Loans allocated to the Class SB Certificates shall be allocated
first to REMIC III Regular Interest SB-IO-I in reduction of the accrued but unpaid interest thereon until such
accrued and unpaid interest shall have been reduced to zero and then to REMIC III Regular Interest SB-PO-I in
reduction of the Principal Balance thereof. Realized Losses in respect of Group II Loans allocated to the Class
SB Certificates shall be allocated first to REMIC III Regular Interest SB-IO-II in reduction of the accrued but
unpaid interest thereon until such accrued and unpaid interest shall have been reduced to zero and then to REMIC
III Regular Interest SB-PO-II in reduction of the Principal Balance thereof.
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 and the LIBOR Certificates, the Business Day
immediately preceding such Distribution Date. With respect to each Distribution Date and the Certificates (other
than the LIBOR Certificates), the close of business on the last Business Day of the month next preceding the
month in which the related Distribution Date occurs, except in the case of the first Record Date which shall be
the Closing Date.
Reference Bank Rate: As defined in Section1.02.
Regular Certificates: The Class A Certificates and Class SB Certificates.
Regular Interest: Any one of the regular interests in the REMICs.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and
interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time to time.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Shortfalls: Interest shortfalls on the Mortgage Loans resulting from the Relief Act or
similar legislation or regulations.
REMIC: A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code. As
used herein, the term “REMIC” shall mean REMIC I, REMIC II or REMIC III.
REMIC Administrator: Residential Funding Company, LLC. If Residential Funding Company, LLC is found by
a court of competent jurisdiction to no longer be able to fulfill its obligations as REMIC Administrator under
this Agreement the Master Servicer or Trustee acting as successor Master Servicer shall appoint a successor REMIC
Administrator, subject to assumption of the REMIC Administrator obligations under this Agreement
REMIC I: The segregated pool of assets subject hereto (exclusive of the Supplemental Interest Trust
Account, the Swap Agreement and the SB-A Swap Agreement), 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:
(i) the Mortgage Loans and the related Mortgage Files;
(ii) all payments on and collections in respect of the Mortgage Loans due after the Cut-off
Date (other than Monthly Payments due in the month of the Cut-off Date) as shall be on deposit in the
Custodial Account or in the Certificate Account and identified as belonging to the Trust Fund;
(iii) property which secured a Mortgage Loan and which has been acquired for the benefit of
the Certificateholders by foreclosure or deed in lieu of foreclosure;
(iv) the hazard insurance policies and Primary Insurance Policies pertaining to the
Mortgage Loans, if any; and
(v) all proceeds of clauses (i) through (iv) above.
REMIC I 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 to the Class R Certificateholders in
respect of Component I thereof 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 Interest for such Distribution Date, plus (B) any amounts payable in
respect thereof remaining unpaid from previous Distribution Dates;
(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 to REMIC I Regular Interest A-I until the Uncertificated
Principal Balance of such REMIC I Regular Interest is reduced to zero;
(iii) third, any remainder, in the case of Distribution Dates occurring in March 2007 and
April 2007, to REMIC I Regular Interests I-1-A and I-1-B, in the case of Distribution Dates occurring
in May 2007 through September 2009, 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
less two, in the case of Distribution Dates occurring in October 2009 through December 2010,
sequentially to REMIC I Regular Interests I-1-A and I-1-B through REMIC I Regular Interests I-29-A and
I-29-B, and in the case of any Distribution Date occurring in or after January 2011, 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 less seventeen, 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;
(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;
(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 Certificates in respect of Component I thereof, such remaining amount.
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-40-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 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: 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 to the Class R
Certificateholders in respect of Component II thereof in the following amounts and priority:
(a) to REMIC III as the holder of REMIC II 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 II Available Distribution Amount related to Loan
Group I remaining after the distributions made pursuant to clause (a) above, to REMIC III as the holder of REMIC
II Regular Interests LT1, LT2, LT3 and LT4, allocated as follows:
(i) to REMIC II Regular Interests LT1, LT2, LT3 and LT4, 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 II Regular Interests LT1, LT2, LT3 and LT4, in an amount equal to the
remainder of such portion of the REMIC II 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 II Regular Interests LT2, LT3 and LT4, their respective
Principal Distribution Amounts;;
(B) in respect of REMIC II Regular Interest LT1 any remainder until the
Uncertificated Principal Balance thereof is reduced to zero;
(C) any remainder in respect of REMIC II Regular Interests LT2, LT3 and LT4, pro
rata according to their respective Uncertificated Principal Balances as reduced by the distributions deemed made
pursuant to (A) above, until their respective Uncertificated Principal Balances are reduced to zero;
(c) to the extent of the portion of the REMIC II Available Distribution Amount related to Loan
Group II remaining after the distributions made pursuant to clause (a) above, to REMIC III as the holder of REMIC
II Regular Interests LT5, LT6, LT7 and LT8, allocated as follows:
(i) to REMIC II Regular Interests LT5, LT6, LT7 and LT8, 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 II Regular Interests LT5, LT6, LT7 and LT8, in an amount equal to the
remainder of such portion of the REMIC II 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 II Regular Interests LT6, LT7 and LT8, their respective
Principal Distribution Amounts;
(B) in respect of REMIC II Regular Interest LT5 any remainder until the
Uncertificated Principal Balance thereof is reduced to zero;
(C) any remainder in respect of REMIC II Regular Interests LT6, LT7 and LT8, pro
rata according to their respective Uncertificated Principal Balances as reduced by the distributions deemed made
pursuant to (A) above, until their respective Uncertificated Principal Balances are reduced to zero; and
(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 II Regular Interests, pro rata according to the amount of
unreimbursed Realized Losses allocable to principal previously allocated to each such REMIC II Regular Interest,
the aggregate amount of any distributions to the Certificates as reimbursement of such Realized Losses on such
Distribution Date pursuant to clause (ix) 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 Certificates in respect of Component II thereof, any remaining
amount.
REMIC II Principal Reduction Amounts: For any Distribution Date, the amounts by which the
Uncertificated Principal Balances of REMIC II Regular Interests LT1, LT2, LT3, LT4, LT5, LT6, LT7, and LT8,
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 Uncertificated Principal Balance of REMIC II Regular Interests LT1 after distributions on
the prior Distribution Date.
Y2 = the Uncertificated Principal Balance of REMIC II Regular Interest LT2 after distributions on
the prior Distribution Date.
Y3 = the Uncertificated Principal Balance of REMIC II Regular Interest LT3 after distributions on
the prior Distribution Date.
Y4 = the Uncertificated Principal Balance of REMIC II Regular Interest LT4 after distributions on
the prior Distribution Date (note: Y3 = Y4).
ΔY1 = the REMIC II Regular Interest LT1 Principal Reduction Amount.
ΔY2 = the REMIC II Regular Interest LT2 Principal Reduction Amount.
ΔY3 = the REMIC II Regular Interest LT3 Principal Reduction Amount.
ΔY4 = the REMIC II Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate Uncertificated Principal Balance of REMIC II Regular Interests LT1, LT2, LT3 and
LT4 after distributions and the allocation of Realized Losses on the prior Distribution Date.
P1 = the aggregate Uncertificated Principal Balance of REMIC II Regular Interests LT1, LT2, LT3 and
LT4 after distributions and the allocation of Realized Losses to be made on such Distribution Date.
ΔP = P0 - P1 = the aggregate of the REMIC II Regular Interests LT1, LT2, LT3 and LT4 Principal
Reduction Amounts.
= the aggregate of the principal portions of Realized Losses to be allocated to, and the
principal distributions to be made on, the Group I 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 II Net WAC Cap Rate (stated as a monthly rate) after giving effect to amounts
distributed and Realized Losses allocated on the prior Distribution Date.
R1 = the Group I REMIC II Net WAC Cap Rate (stated as a monthly rate) after giving effect to amounts
to be distributed and Realized Losses to be allocated on such Distribution Date.
α = (Y2 + Y3)/P0. The initial value of α on the Closing Date for use on the first Distribution
Date shall be 0.0001.
γ0 = 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 Group I Net WAC Cap Rate, if applicable) for such
Class applicable for distributions to be made on such Distribution Date and (ii) the aggregate Certificate
Principal Balance for such Class after distributions and the allocation of Realized Losses on the prior
Distribution Date, and (2) the amount, if any, by which the sum of the amounts in clauses (A)(1), (2) and (3) of
the definition of Γ0 exceeds S0*Q0 and (B) R0*P0.
γ1 = 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 Group I Net WAC Cap Rate, if applicable) for such
Class applicable for distributions to be made on the next succeeding Distribution Date and (ii) the aggregate
Certificate Principal Balance for such Class after distributions and the allocation of Realized Losses to be made
on such Distribution Date, and (2) the amount, if any, by which the sum of the amounts in clauses (A)(1), (2) and
(3) of the definition of Γ1 exceeds S1*Q1 and (B) R1*P1.
Then, based on the foregoing definitions:
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4;
ΔY2 = (α/2){( γ0R1 - γ1R0)/R0R1};
ΔY3 = αΔP - ΔY2; and
ΔY4 = ΔY3.
if both ΔY2 and ΔY3, as so determined, are non-negative numbers. Otherwise:
(1) If ΔY2, as so determined, is negative, then
ΔY2 = 0;
ΔY3 = α{γ1R0P0 - γ0R1P1}/{γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
(2) If ΔY3, as so determined, is negative, then
ΔY3 = 0;
ΔY2 = α{γ1R0P0 - γ0R1P1}/{2R1R0P1 - γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
For purposes of the succeeding formulas the following symbols shall have the meanings set forth below:
Y5 = the Uncertificated Principal Balance of REMIC II Regular Interests LT5 after distributions on
the prior Distribution Date.
Y6 = the Uncertificated Principal Balance of REMIC II Regular Interest LT6 after distributions on
the prior Distribution Date.
Y7 = the Uncertificated Principal Balance of REMIC II Regular Interest LT7 after distributions on
the prior Distribution Date.
Y8 = the Uncertificated Principal Balance of REMIC II Regular Interest LT8 after distributions on
the prior Distribution Date (note: Y7 = Y8).
ΔY5 = the REMIC II Regular Interest LT5 Principal Reduction Amount.
ΔY6 = the REMIC II Regular Interest LT6 Principal Reduction Amount.
ΔY7 = the REMIC II Regular Interest LT7 Principal Reduction Amount.
ΔY8 = the REMIC II Regular Interest LT8 Principal Reduction Amount.
Q0 = the aggregate Uncertificated Principal Balance of REMIC II Regular Interests LT5, LT6, LT7 and
LT8 after distributions and the allocation of Realized Losses on the prior Distribution Date.
Q1 = the aggregate Uncertificated Principal Balance of REMIC II Regular Interests LT5, LT6, LT7 and
LT8 after distributions and the allocation of Realized Losses to be made on such Distribution Date.
ΔQ = Q0 - Q1 = the aggregate of the REMIC II Regular Interests LT5, LT6, LT7 and LT8 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 Group II 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 II Net WAC Cap 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 II Net WAC Cap Rate (stated as a monthly rate) after giving effect to
amounts to be distributed and Realized Losses to be allocated on such Distribution Date.
β = (Y6 + Y7)/Q0. The initial value of β on the Closing Date for use on the first Distribution
Date shall be 0.0001.
Γ0 = 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 Group II Net WAC Cap Rate, if applicable) for such
Class applicable for distributions to be made on such Distribution Date and (ii) the aggregate Certificate
Principal Balance for such Class after distributions and the allocation of Realized Losses on the prior
Distribution Date and (2) the amount, if any, by which the sum of the amounts in clauses (A)(1), (2) and (3) of
the definition of γ0 exceeds R0*P0 and (B) S0*Q0.
Γ1 = 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 Group II Net WAC Cap Rate, if applicable) for such
Class applicable for distributions to be made on the next succeeding Distribution Date and (ii)the aggregate
Certificate Principal Balance for such Class after distributions and the allocation of Realized Losses to be made
on such Distribution Date and (2) the amount, if any, by which the sum of the amounts in clauses (A)(1), (2) and
(3) of the definition of γ1 exceeds R1*P1 and (B) S1*Q1.
Then, based on the foregoing definitions:
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8;
ΔY6 = (β/2){(Γ0S1 - Γ1S0)/S0S1};
ΔY7 = βΔQ - ΔY6; and
ΔY8 = ΔY7.
if both ΔY6 and ΔY7, as so determined, are non-negative numbers. Otherwise:
(1) If ΔY6, as so determined, is negative, then
ΔY6 = 0;
ΔY7 = β{Γ1S0Q0 - Γ0S1Q1}/{Γ1S0};
ΔY8 = ΔY7; and
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8.
(2) If ΔY7, as so determined, is negative, then
ΔY7 = 0;
ΔY6 = β{Γ0S1Q1 - Γ1S0Q0}/{2S1S0Q1 - Γ1S0};
ΔY8 = ΔY7; and
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8.
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 LT1, LT2 and LT4, 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 LT5, LT6 and LT8, 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 with
respect to Loan Group I and Loan Group II 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
Interests LT2, LT3 and LT4 pro-rata according to their respective REMIC II Principal Reduction Amounts to the
extent thereof in reduction of the Uncertificated Principal Balance of such REMIC II Regular Interests and,
third, the remainder, if any, of such principal portion of such Realized Losses shall be allocated to REMIC II
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 II Regular Interests LT6, LT7 and LT8
pro-rata according to their respective REMIC II Principal Reduction Amounts to the extent thereof in reduction of
the Uncertificated Principal Balance of such REMIC II Regular Interests and, third, the remainder, if any, of
such principal portion of such Realized Losses shall be allocated to REMIC II Regular Interest LT5 in reduction
of the Uncertificated Principal Balance thereof.
REMIC II Regular Interests: 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 Regular Interest LT1 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC II Regular Interest LT1 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest LT1 on such Distribution Date.
REMIC II Regular Interest LT2 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC II Regular Interest LT2 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest LT2 on such Distribution Date.
REMIC II Regular Interest LT3 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC II Regular Interest LT3 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest LT3 on such Distribution Date.
REMIC II Regular Interest LT4 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC II Regular Interest LT4 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest LT4 on such Distribution Date.
REMIC II Regular Interest LT5 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC II Regular Interest LT5 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest LT5 on such Distribution Date.
REMIC II Regular Interest LT6 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC II Regular Interest LT6 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest LT6 on such Distribution Date.
REMIC II Regular Interest LT7 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC II Regular Interest LT7 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest LT7 on such Distribution Date.
REMIC II Regular Interest LT8 Principal Distribution Amount: For any Distribution Date, the excess, if
any, of the REMIC II Regular Interest LT8 Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to REMIC II Regular Interest LT8 on such Distribution Date.
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 deemed distributed to Class A and Class SB Certificates in respect of the portion of such Certificates
representing ownership of REMIC III Regular Interests and the Class R Certificates in respect of Component III
thereof in the following amounts and priority:
(i) to the Class SB Certificateholders in respect of REMIC III Regular Interest IO, the amount
distributable with respect to such REMIC III Regular Interest as described in the Preliminary Statement, being
paid from and in reduction of the REMIC III 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 III
Available Distribution Amount for such Distribution Date;
(iii) the Principal Distribution Amount shall be distributed as follows, to be applied to reduce the
principal balance of the REMIC III 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 A-II Certificateholders, in that order, the Class A-II Principal
Distribution Amount, in each case until the Certificate Principal Balance thereof has been reduced to zero;
(iv) to the Class A 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
(v) to the Class A 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;
(vi) to the Class SB Certificates, (A) from the amount, if any, of the REMIC III 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 of Class A 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
(vii) to the Class R Certificateholders in respect of Component III thereof, the balance, if any, of
the REMIC III Available Distribution Amount.
REMIC III Regular Interest SB-PO-I: A separate beneficial ownership interest in REMIC III issued
hereunder and designated as a Regular Interest in REMIC III, the ownership of which is evidenced by the Class SB
Certificates. REMIC III Regular Interest SB-PO-I 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 Stated Principal Balance of the Group I Loans as of the Cut-off Date less the aggregate initial
Certificate Principal Balance of the Class A-1 Certificates.
REMIC III Regular Interest SB-PO-II: A separate beneficial ownership interest in REMIC III issued
hereunder and designated as a Regular Interest in REMIC III, the ownership of which is evidenced by the Class SB
Certificates. REMIC III Regular Interest SB-PO-II 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 Stated Principal Balance of the Group II Mortgage Loans as of the Cut-off Date less the initial
Certificate Principal Balance of the Class A-II Certificates.
REMIC III Regular Interest SB-IO-I: A separate beneficial ownership interest in REMIC III issued
hereunder and designated as a Regular Interest in REMIC III, the ownership of which is evidenced by the Class SB
Certificates. REMIC III Regular Interest SB-IO-I 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 less the amount of interest distributable on
REMIC III Regular Interest SB-IO-II pursuant to the terms and conditions hereof.
REMIC III Regular Interest SB-IO-II: A separate beneficial ownership interest in REMIC III issued
hereunder and designated as a Regular Interest in REMIC III, the ownership of which is evidenced by the Class SB
Certificates. REMIC III Regular Interest SB-IO-II 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 less the amount of interest distributable on
REMIC III Regular Interest SB-IO-I pursuant to the terms and conditions hereof.
REMIC III Regular Interest IO: A separate beneficial ownership interest in REMIC III issued hereunder
and designated as a Regular Interest in REMIC III, the ownership of which is evidenced by the Class SB
Certificates. REMIC III 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 II Regular Interest LT-IO.
REMIC III Regular Interests: REMIC III Regular Interests SB-IO-I, SB-PO-I, SB-IO-II, SB-PO-II and IO,
together with the Class A Certificates, exclusive of their respective rights to receive the payment of Basis Risk
Shortfalls and other amounts pursuant to the SB-A Swap 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 Chapter1 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: With respect to any REO Property, a determination by the Master Servicer that it has
received substantially all Insurance Proceeds, Liquidation Proceeds, REO Proceeds and other payments and
recoveries (including proceeds of a final sale) which the Master Servicer expects to be finally recoverable from
the sale or other disposition of the REO Property.
REO Imputed Interest: With respect to any REO Property, for any period, an amount equivalent to
interest (at a rate equal to the sum of the Net Mortgage Rate and the Certificate Insurer Premium Modified Rate
that would have been applicable to the related Mortgage Loan had it been outstanding) on the unpaid principal
balance of the Mortgage Loan as of the date of acquisition thereof for such period.
REO Proceeds: Proceeds, net of expenses, received in respect of any REO Property (including, without
limitation, proceeds from the rental of the related Mortgaged Property) which proceeds are required to be
deposited into the Custodial Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master Servicer on behalf of the Trust Fund for the
benefit of the Certificateholders and the Certificate Insurer through foreclosure or deed in lieu of foreclosure
in connection with a defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (a) has been subject to an interest rate
reduction, (b) has been subject to a term extension or (c) 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 (a) above for a temporary period shall not be a Reportable Modified
Mortgage Loan if such Mortgage Loan has not been delinquent in payments of principal and interest for six months
since the date of such modification if that interest rate reduction is not made permanent thereafter.
Repurchase Event: As defined in the Assignment Agreement.
Request for Release: A request for release, the form of which is attached as Exhibit G hereto, or an
electronic request in a form acceptable to the Custodian.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance policy which is required to
be maintained from time to time under this Agreement, the Program Guide or the related Subservicing Agreement in
respect of such Mortgage Loan.
Required Overcollateralization Amount: With respect to any Distribution Date, (a) prior to the Stepdown
Date, an amount equal to 7.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date, (b) on or after the Stepdown Date if a Trigger Event is not in effect, the greater of (i) an amount equal
to 15.00% of the aggregate outstanding Stated Principal Balance of the Mortgage Loans after giving effect to
distributions made on that Distribution Date and (ii) the Overcollateralization Floor and (c) on or after the
Stepdown Date if a Trigger Event is in effect, an amount equal to the Required Overcollateralization Amount from
the immediately preceding Distribution Date. The Required Overcollateralization Amount may be reduced with the
prior written consent of the Certificate Insurer so long as written confirmation is obtained from each Rating
Agency that the reduction will not reduce the rating assigned to any Class of Certificates by that Rating Agency
below the lower of the then current rating assigned to those Certificates by that rating agency or the rating
assigned to those Certificates as of the Closing Date by that Rating Agency, in each case, without regard to the
Certificate Guaranty Insurance Policy.
Residential Funding: Residential Funding Company, LLC, a Delaware limited liability company, in its
capacity as seller of the Mortgage Loans to the Depositor and any successor thereto.
Responsible Officer: When used with respect to the Trustee, any officer of the Corporate Trust
Department of the Trustee, including any Senior Vice President, any Vice President, any Assistant Vice President,
any Assistant Secretary, any Trust Officer or Assistant Trust Officer, or any other officer of the Trustee, in
each case with direct responsibility for the administration of this Agreement.
RFC Exemption: As defined in Section 5.02(e)(ii).
Rule 144A: Rule 144A under the Securities Act of 1933, as in effect from time to time.
SB-A Swap Agreement: The swap between the Class SB Certificateholder and the Class A Certificateholders
evidenced by the confirmation attached hereto as Exhibit Q and incorporated herein by reference.
Securities Act: The Securities Act of 1933, as amended.
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.
Seller: With respect 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 Depositor.
Senior Percentage: With respect to each Loan Group and any Distribution Date, the percentage equal to
the lesser of (x) the aggregate Certificate Principal Balance of the related Class A Certificates immediately
prior to that Distribution Date divided by the aggregate Stated Principal Balance of the Mortgage Loans in that
Loan Group immediately prior to that Distribution Date and (y) 100%.
Servicing Accounts: The account or accounts created and maintained pursuant to Section 3.08.
Servicing Advances: All customary, reasonable and necessary “out of pocket” costs and expenses incurred
in connection with a default, delinquency or other unanticipated event by the Master Servicer or a Subservicer in
the performance of its servicing obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of a
Mortgaged Property 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 Criteria: The “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing Fee: With respect to any Mortgage Loan and Distribution Date, the fee payable monthly to the
Master Servicer in respect of master servicing compensation that accrues at an annual rate equal to the Servicing
Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the related Due Date in the
related Due Period, as may be adjusted pursuant to Section 3.16(e).
Servicing Fee Rate: With respect to any Mortgage Loan, the per annum rate designated on the Mortgage
Loan Schedule as the “MSTR SERV FEE,” as may be adjusted with respect to successor Master Servicers as provided
in Section 7.02, which rate shall never be greater than the Mortgage Rate of such Mortgage Loan.
Servicing Modification: Any reduction of the interest rate on or the outstanding principal balance of a
Mortgage Loan, any extension of the final maturity date of a Mortgage Loan, and any increase to the Stated
Principal Balance of a Mortgage Loan by adding to the Stated Principal Balance unpaid principal and interest and
other amounts owing under the Mortgage Loan, in each case pursuant to a modification of a Mortgage Loan that is
in default, or 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 on the Closing Date, as such list may from
time to time be amended.
Servicing Trigger: As of any Distribution Date, for purposes of Section 7.05 hereof, the occurrence of
any of the following scenarios:
(a) the Sixty-Plus Delinquency Percentage is greater than 30% for the current Distribution Date; or
(b) on or after the Distribution Date in September 2009, the aggregate amount of Realized Losses on
the Mortgage Loans as a percentage of the Cut-Off Date Balance exceeds the applicable amount set forth below:
September 2009 to February 2010: 2.25% with respect to September 2009, plus an additional
1/6th of 1.25% for each month thereafter.
March 2010 to February 2011: 3.50% with respect to March 2010, plus an additional
1/12th of 2.00% for each month thereafter.
March 2011 to February 2012: 5.50% with respect to March 2011, plus an additional
1/12th of 1.25% for each month thereafter.
March 2012 to February 2013: 6.75% with respect to March 2012, plus an additional
1/12th of 0.75% for each month thereafter.
March 2013 and thereafter: 7.50%.
Sixty-Plus Delinquency Percentage: With respect to any Distribution Date and the Mortgage Loans, the
arithmetic average, for each of the three Distribution Dates ending with such Distribution Date, of the fraction,
expressed as a percentage, equal to (x) the aggregate Stated Principal Balance of the Mortgage Loans that are 60
or more days delinquent in payment of principal and interest for that Distribution Date, including Mortgage Loans
in bankruptcy that are 60 or more days delinquent, in foreclosure and REO Mortgage Loans, over (y) the aggregate
Stated Principal Balance of all of the Mortgage Loans immediately preceding that Distribution Date.
Standard & Poor’s: Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. or
its successors in interest.
Startup Date: The day designated as such pursuant to Article X hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related REO Property, as of any date of
determination, (i) the sum of (a) the Cut-off Date Principal Balance of the Mortgage Loan and (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 later to occur of (x) the Distribution Date in September 2009 and (y) the first
Distribution Date on which the aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
related Due Period is equal to less than one-half of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.
Subordinate Component: With respect to each Loan Group and any Distribution Date, 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.
Subordination: The provisions described in Section 4.05 relating to the allocation of Realized Losses.
Subsequent Recoveries: As of any Distribution Date, amounts received by the Master Servicer (net of any
related expenses permitted to be reimbursed pursuant to Section 3.10) or surplus amounts held by the Master
Servicer to cover estimated expenses (including, but not limited to, recoveries in respect of the representations
and warranties made by the related Seller pursuant to the applicable Seller’s Agreement and assigned to the
Trustee pursuant to Section 2.04) specifically related to a Mortgage Loan that was the subject of a Cash
Liquidation or an REO Disposition prior to the related Prepayment Period and that resulted in a Realized Loss.
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.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of reference thereto, is subject to a
Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered into a Subservicing Agreement and who
generally satisfied the requirements set forth in the Program Guide in respect of the qualification of a
Subservicer as of the date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and interest on a Mortgage Loan which is
advanced by the related Subservicer (net of its Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in accordance with Section 3.08.
Subservicing Agreement: The written contract between the Master Servicer and any Subservicer relating
to servicing and administration of certain Mortgage Loans as provided in Section 3.02, generally in the form of
the servicer contract referred to or contained in the Program Guide or in such other form as has been approved by
the Master Servicer and the Depositor.
Subservicing Fee: With respect to any Mortgage Loan, the fee payable monthly to the related Subservicer
(or, in the case of a Nonsubserviced Mortgage Loan, to the Master Servicer) in respect of subservicing and other
compensation that accrues with respect to each Distribution Date at an annual rate designated as “SUBSERV FEE” on
the Mortgage Loan Schedule.
Supplemental Interest Trust: The separate trust created and maintain by the Supplemental Interest Trust
Trustee pursuant to Section 4.10(a). The primary activities of the Supplemental Interest Trust created pursuant
to this Agreement shall be:
(i) holding the Swap Agreement and the SB-A Swap Agreement;
(ii) receiving collections or making payments with respect to the Swap Agreement
and the SB-A 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 Account: The separate trust account created and maintained by the
Supplemental Interest Trust Trustee pursuant to Section 4.10(a).
Supplemental Interest Trust Trustee: As defined in the preamble hereto.
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, credit
support annexes, confirmations or other agreements relating thereto, or any replacement, substitute, collateral
or other arrangement in lieu thereof, attached hereto as Exhibit O.
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.
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 Bear Xxxxxxx Financial Products Inc.
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: One-Month LIBOR as determined pursuant to the Swap Agreement; provided that with respect to
the first and second Distribution Dates and for federal income tax purposes only, Swap LIBOR shall be deemed to
be equal to the actual/360 equivalent of the fixed swap rate.
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.
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 hereunder due to its classification as a REMIC under the REMIC Provisions, together with any and all
other information, reports or returns that may be required to be furnished to the Certificateholders or filed
with the Internal Revenue Service or any other governmental taxing authority under any applicable provisions of
federal, state or local tax laws.
Telerate Screen Page 3750: As defined in Section 1.02.
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation or other form of assignment of
any Ownership Interest in a Certificate.
Transfer Affidavit and Agreement: As defined in Section 5.02(f).
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.
Trigger Event: A Trigger Event is in effect with respect to any Distribution Date on or after the
Stepdown Date if either (a) the Certificate Insurer pays any Insured Payment under the Certificate Guaranty
Insurance Policy, (b) the related Sixty-Plus Delinquency Percentage, as determined on that Distribution Date,
equals or exceeds 30.00% of the Stated Principal Balance of the Mortgage Loans for that Distribution Date or (c)
on or after the Distribution Date in September 2009, the aggregate amount of Realized Losses on the Mortgage
Loans as a percentage of the Cut-off Date Balance exceeds the applicable amount set forth below:
September 2009 to February 2010: 2.25% with respect to September 2009, plus an additional
1/6th of 1.00% for each month thereafter.
March 2010 to February 2011: 3.25% with respect to March 2010, plus an additional
1/12th of 1.75% for each month thereafter.
March 2011 to February 2012: 5.00% with respect to March 2011, plus an additional
1/12th of 1.50% for each month thereafter.
March 2012 to February 2013: 6.50% with respect to March 2012, plus an additional
1/12th of 0.75% for each month thereafter.
March 2013 and thereafter: 7.25%.
Trustee: As defined in the preamble hereto.
Trust Fund: Collectively, the assets of each REMIC hereunder and the assets in the Supplemetnal
Interest Trust.
Uncertificated Accrued Interest: With respect to any Uncertificated Regular Interest for any
Distribution Date, one month’s interest at the related Uncertificated Pass-Through Rate for such Distribution
Date, accrued on the Uncertificated Principal Balance or Uncertificated Notional Amount, as applicable,
immediately prior to such Distribution Date. Uncertificated Accrued Interest for the Uncertificated Regular
Interests shall accrue on the basis of a 360-day year consisting of twelve 30-day months. For purposes of
calculating the amount of Uncertificated Accrued Interest for the REMIC I Regular Interests for any Distribution
Date, any Prepayment Interest Shortfalls and Relief Act Shortfalls (to the extent not covered by Compensating
Interest) shall be allocated among REMIC I Regular Interests, pro rata, based on, and to the extent of,
Uncertificated Accrued Interest, as calculated without application of this sentence. For purposes of calculating
the amount of Uncertificated Accrued Interest for the REMIC II 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 II Regular Interests, pro rata, based on, and to the extent of, Uncertificated
Accrued Interest, as calculated without application of this sentence. Uncertificated Accrued Interest on REMIC
III Regular Interests SB-PO-I and SB-PO-II shall be zero. Aggregate Uncertificated Accrued Interest on REMIC III
Regular Interests SB-IO-I and SB-IO-II for each Distribution Date shall equal Accrued Certificate Interest for
the Class SB Certificates.
Uncertificated Notional Amount: With respect to the Class SB Certificates, immediately prior to any
Distribution Date, the aggregate of the Uncertificated Principal Balances of the REMIC II Regular Interests.
With respect to REMIC III Regular Interest SB-IO-I, immediately prior to any Distribution Date, the aggregate of
the Uncertificated Principal Balances of REMIC II Regular Interests LT1, LT2, LT3 and LT4. With respect to REMIC
III Regular Interest SB-IO-II, immediately prior to any Distribution Date, the aggregate of the Uncertificated
Principal Balances of REMIC II Regular Interests LT5, LT6, LT7 and LT8.
With respect to REMIC II 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 I-40-A
6 I-4-A through X-00-X
0 X-0-X xxxxxxx X-00X
0 X-0-X through X-00-X
0 X-0-X xxxxxxx X-00-X
00 X-0-X through X-00-X
00 X-0-X through I-40-A
12 I-10-A through I-40-A
13 I-11-A through I-40-A
14 I-12-A through I-40-A
15 I-13-A through I-40-A
16 I-14-A through I-40-A
17 I-15-A through I-40-A
18 I-16-A through I-40-A
19 I-17-A through I-40-A
20 I-18-A through I-40-A
21 I-19-A through I-40-A
22 I-20-A through I-40-A
23 I-21-A through I-40-A
24 I-22-A through I-40-A
25 I-23-A through I-40-A
26 I-24-A through I-40-A
27 I-25-A through I-40-A
28 I-26-A through I-40-A
29 I-27-A through I-40-A
30 I-28-A through I-40-A
31 I-29-A through I-40-A
32 I-29-A through I-40-A
33 I-29-A through I-40-A
34 I-29-A through I-40-A
35 I-29-A through I-40-A
36 I-29-A through I-40-A
37 I-29-A through I-40-A
38 I-29-A through I-40-A
39 I-29-A through I-40-A
40 I-29-A through I-40-A
41 I-29-A through I-40-A
42 I-29-A through I-40-A
43 I-29-A through I-40-A
44 I-29-A through I-40-A
45 I-29-A through I-40-A
46 I-29-A through I-40-A
47 I-30-A through I-40-A
48 I-31-A through I-40-A
49 I-32-A through I-40-A
50 I-33-A through I-40-A
51 I-34-A through I-40-A
52 I-35-A through I-40-A
53 I-36-A through I-40-A
54 I-37-A through I-40-A
55 I-38-A through I-40-A
56 I-39-A through I-40-A
57 I-40-A
thereafter $0.00
With respect to REMIC III Regular Interest IO, immediately prior to any Distribution Date, an amount
equal to the Uncertificated Notional Amount of REMIC II Regular Interest LT-IO.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I Pass-Through Rate or the Uncertificated
REMIC II 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 REMIC Regular Interest
shall never be less than zero. With respect to REMIC III Regular Interest SB-PO-I, the aggregate initial Stated
Principal Balance of the Group I Mortgage Loans as of the Cut-off Date less the aggregate initial Certificate
Principal Balance of the Class A-I Certificates, as reduced by distributions deemed made in respect thereof
pursuant to Section 4.02 and Realized Losses allocated thereto pursuant to Section 4.05. With respect to REMIC
III Regular Interest SB-PO-II, the aggregate initial Stated Principal Balance of the Group II Mortgage Loans as
of the Cut-off Date less the initial Certificate Principal Balance of the Class A-II Certificates, 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 Regular Interests: The REMIC I Regular Interests and the REMIC II Regular Interests.
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 of the Net Mortgage Rates on the Mortgage Loans
multiplied by two (2), subject to a maximum rate of 10.13%. 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 of the Net Mortgage Rates on the Mortgage Loans over (ii) 10.13% 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 LT1 and LT2, the Group I REMIC II Net WAC Rate, (ii) REMIC II Regular Interests LT5 and LT6,
the Group II REMIC II Net WAC Rate, (iii) REMIC II Regular Interests LT3 and LT7, zero (0.00%), (iv) REMIC II
Regular Interest LT4, twice the Group I REMIC II Net WAC Rate, (v) REMIC II Regular Interest LT8, twice the Group
II REMIC II Net WAC Rate; and (vi) 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.
Uniform Single Attestation Program for Mortgage Bankers: The Uniform Single Attestation Program for
Mortgage Bankers, as published by the Mortgage Bankers Association of America and effective with respect to
fiscal periods ending on or after December 15, 1995.
Uninsured Cause: Any cause of damage to property subject to a Mortgage such that the complete
restoration of such property is not fully reimbursable by the hazard insurance policies.
United States Person: A citizen or resident of the United States, a corporation, partnership or other
entity (treated as a corporation or partnership for United States federal income tax purposes) created or
organized in, or under the laws of, the United States, any state thereof, or the District of Columbia (except in
the case of a partnership, to the extent provided in Treasury regulations) provided that, for purposes solely of
the restrictions on the transfer of Class R Certificates, no partnership or other entity treated as a partnership
for United States federal income tax purposes shall be treated as a United States Person unless all persons that
own an interest in such partnership either directly or through any entity that is not a corporation for United
States federal income tax purposes are required by the applicable operative agreement to be United States
Persons, or an estate that is described in Section 7701(a)(30)(D) of the Code, or a trust that is described in
Section 7701(a)(30)(E) of the Code.
Voting Rights: The portion of the voting rights of all of the Certificates which is allocated to any
Certificate. 98.00% of all of the Voting Rights shall be allocated among the Holders of the Class A Certificates,
in proportion to the outstanding Certificate Principal Balances of their respective Certificates, 1% of all of
the Voting Rights shall be allocated to the Holders of the Class SB Certificates, and 1% of all of the Voting
Rights shall be allocated to the Holders of the Class R Certificates, in each case to be allocated among the
Certificates of such Class in accordance with their respective Percentage Interests; provided that so long as
there is no Certificate Insurer Default, the Voting Rights of the Class A Certificateholders may be exercised by
the Certificate Insurer without the consent of such Holders and may only be exercised by such Holders with the
prior written consent of the Certificate Insurer.
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 Telerate Screen Page 3750 as of 11:00 a.m., London time, on such LIBOR
Rate Adjustment Date. “Telerate Screen Page 3750” means the display designated as page 3750 on the Bridge
Telerate Service (or such other page as may replace page 3750 on that service for the purpose of displaying
London interbank offered rates of major banks). If such rate does not appear on such page (or such other page as
may replace that page on that service, or if such service is no longer offered, LIBOR shall be so established by
use of such other service for displaying LIBOR or comparable rates as may be selected by the Trustee after
consultation with the Master Servicer and the Certificate Insurer), 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 and the Certificate
Insurer) 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 shall request the principal London office of each of the
reference banks to provide a quotation of its rate. If at least two such quotations are provided, the rate will
be the arithmetic mean of the quotations rounded up to the next multiple of 1/16%. If on such date fewer than
two quotations are provided as requested, the rate will be the arithmetic mean of the rates quoted by one or more
major banks in New York City, selected by the Trustee after consultation with the Master Servicer and the
Certificate Insurer, 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 and the Certificate Insurer, shall
select an alternative comparable index (over which the Trustee has no control), used for determining one-month
Eurodollar lending rates that is calculated and published (or otherwise made available) by an independent party.
The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment Date and the Trustee’s subsequent
calculation of the Pass-Through Rates applicable to the 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 shall supply to any Certificateholder so requesting by calling
1-800-934-6802, the Pass-Through Rate on the LIBOR Certificates for the current and the immediately preceding
Interest Accrual Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof, does hereby assign to the
Trustee in respect of the Trust Fund without recourse all the right, title and interest of the Depositor in and
to (i) the Mortgage Loans, including all interest and principal on or with respect to the Mortgage Loans due on
or after the Cut-off Date (other than Monthly Payments due in the month of the Cut-off Date); and (ii) all
proceeds of the foregoing. The Depositor, the Master Servicer and the Trustee agree that it is not intended that
any Mortgage Loan be included in the Trust Fund that is either (i) a High-Cost Home Loan as defined in the New
Jersey Home Ownership 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 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 High Cost Home Loan Law Act effective January 1, 2005.
(b) In connection with such assignment, and contemporaneously with the delivery of this Agreement,
except as set forth in Section 2.01(c) below and subject to Section 2.01(d) below, the Depositor does hereby (1)
with respect to each Mortgage Loan, deliver to the Master Servicer (or an Affiliate of the Master Servicer) each
of the documents or instruments described in clause (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, as the duly appointed agent of the Trustee for such purpose, the documents or instruments described in
clauses (i) and (v) below, (3) with respect to each Mortgage Loan that is not a MOM Loan but is registered on the
MERS® System, deliver to, and deposit with, the Trustee, or the Custodian, as the duly appointed agent of the
Trustee for such purpose, the documents or instruments described in clauses (i), (iv) and (v) below and (4) with
respect to each Mortgage Loan that is not a MOM Loan and is not registered on the MERS® System, deliver to, and
deposit with, the Trustee, or the Custodian, as the duly appointed agent of the Trustee for such purpose, the
documents or instruments described in clauses (i), (iii), (iv) and (v) below.
(i) The original Mortgage Note, endorsed without recourse to the order of the Trustee and
showing an unbroken chain of endorsements from the originator thereof to the Person endorsing it to the Trustee,
or with respect to any Destroyed Mortgage Note, an original lost note affidavit from the related Seller or
Residential Funding stating that the original Mortgage Note was lost, misplaced or destroyed, together with a
copy of the related Mortgage Note.
(ii) The original Mortgage, noting the presence of the MIN of the Mortgage Loan and
language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon or a copy of the original Mortgage with evidence of recording indicated thereon.
(iii) The assignment (which may be included in one or more blanket assignments if permitted
by applicable law) of the Mortgage to the Trustee with evidence of recording indicated thereon or a copy of such
assignment with evidence of recording indicated thereon.
(iv) The original recorded assignment or assignments of the Mortgage showing an unbroken
chain of title from the originator to the Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS® 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.
(v) The original of each modification, assumption agreement or preferred loan agreement,
if any, relating to such Mortgage Loan, or a copy of each modification, assumption agreement or preferred loan
agreement.
The Depositor may, in lieu of delivering the original of the documents set forth in Section
2.01(b)(iii), (iv) and (v) (or copies thereof) to the Trustee or the Custodian, deliver such documents to the
Master Servicer, and the Master Servicer shall hold such documents in trust for the use and benefit of all
present and future Certificateholders until such time as is set forth in the next sentence. Within thirty
Business Days following the earlier of (i) the receipt of the original of all of the documents or instruments set
forth in Section 2.01(b)(iii), (iv) and (v) (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 the
Custodian, as duly appointed agent of the Trustee.
(c) Notwithstanding the provisions of Section 2.01(b), in the event that in connection with any
Mortgage Loan, if the Depositor cannot deliver the original of the Mortgage, any assignment, modification,
assumption agreement or preferred loan agreement (or copy thereof as permitted by Section 2.01(b)) with evidence
of recording thereon concurrently with the execution and delivery of this Agreement because of (i) a delay caused
by the public recording office where such Mortgage, assignment, modification, assumption agreement or preferred
loan agreement as the case may be, has been delivered for recordation, or (ii) a delay in the receipt of certain
information necessary to prepare the related assignments, the Depositor shall deliver or cause to be delivered to
the Trustee or the respective Custodian a copy of such Mortgage, assignment, modification, assumption agreement
or preferred loan agreement.
The Depositor shall promptly cause to be recorded in the appropriate public office for real property
records the Assignment referred to in clause (iii) of Section 2.01(b), except (a) in states where, in an Opinion
of Counsel acceptable to the Master Servicer and the Certificate Insurer, such recording is not required to
protect the Trustee’s interests in the Mortgage Loan or (b) if MERS is identified on the Mortgage or on a
properly recorded assignment of the Mortgage, as applicable, as the mortgagee of record solely as nominee for
Residential Funding and its successors and assigns. If any Assignment is lost or returned unrecorded to the
Depositor because of any defect therein, the Depositor shall prepare a substitute Assignment or cure such defect,
as the case may be, and cause such Assignment to be recorded in accordance with this paragraph. The Depositor
shall promptly deliver or cause to be delivered to the applicable person described in Section 2.01(b), any
Assignment or substitute Assignment (or copy thereof) recorded in connection with this paragraph, with evidence
of recording indicated thereon upon receipt thereof from the public recording office or from the related
Subservicer or Seller.
If the Depositor delivers to the Trustee or Custodian any Mortgage Note or Assignment of Mortgage in
blank, the Depositor shall, or shall cause the Custodian to, complete the endorsement of the Mortgage Note and
the Assignment of Mortgage in the name of the Trustee in conjunction with the Interim Certification issued by the
Custodian, as contemplated by Section 2.02.
In connection with the assignment of any Mortgage Loan registered on the MERS® System, the Depositor
further agrees that it will cause, at the Depositor’s own expense, within 30 Business Days after the Closing
Date, the MERS® System to indicate that such Mortgage Loans have been assigned by the Depositor to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders by including (or deleting, in the case
of Mortgage Loans which are repurchased in accordance with this Agreement) in such computer files (a) the code in
the field which identifies the specific Trustee and (b)the code in the field “Pool Field” which identifies the
series of the Certificates issued in connection with such Mortgage Loans. The Depositor further agrees that it
will not, and will not permit the Master Servicer to, and the Master Servicer agrees that it will not, alter the
codes referenced in this paragraph with respect to any Mortgage Loan during the term of this Agreement unless and
until such Mortgage Loan is repurchased in accordance with the terms of this Agreement.
(d) It is intended that the conveyances by the Depositor to the Trustee of the Mortgage Loans as
provided for in this Section 2.01 and the Uncertificated Regular Interests be construed as a sale by the
Depositor to the Trustee of the Mortgage Loans and the Uncertificated Regular Interests for the benefit of the
Certificateholders and the Certificate Insurer. Further, it is not intended that any such conveyance be deemed
to be a pledge of the Mortgage Loans and the Uncertificated Regular Interests by the Depositor to the Trustee to
secure a debt or other obligation of the Depositor. 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 conveyances provided for in this Section
2.01 shall be deemed to be (1) a grant by the Depositor to the Trustee of a security interest in all of the
Depositor’s right (including the power to convey title thereto), title and interest, whether now owned or
hereafter acquired, in and to (A) the Mortgage Loans, including the related Mortgage Note, the Mortgage, 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) the Swap Agreement, including without limitation all
amounts received thereunder and amounts from time to time held or invested in the Supplemental Interest Trust
Account, whether in the form of cash, instruments, securities or other property, (D) any Uncertificated Regular
Interests and any and all general intangibles, payment intangibles, accounts, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods, letters of credit, advices of credit and
investment property and other property of whatever kind or description now existing or hereafter acquired
consisting of, arising from or relating to any of the foregoing, and (E) all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the Certificate Account or the Custodial
Account, whether in the form of cash, instruments, securities or other property and (2) an assignment by the
Depositor to the Trustee of any security interest in any and all of Residential Funding’s right (including the
power to convey title thereto), title and interest, whether now owned or hereafter acquired, in and to the
property described in the foregoing clauses (1)(A), (B), (C), (D) and (E) granted by Residential Funding to the
Depositor pursuant to the Assignment Agreement; (c) the possession by the Trustee, the Custodian or any other
agent of the Trustee of Mortgage Notes or such other items of property as 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 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 Depositor and, at the Depositor’s direction, Residential Funding and the Trustee shall, to the
extent consistent with this Agreement, take such reasonable actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans and the Uncertificated Regular
Interests and the other property described above, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained as such throughout the term of
this Agreement. Without limiting the generality of the foregoing, the Depositor shall prepare and deliver to the
Trustee not less than 15 days prior to any filing date and, the Trustee shall forward for filing, or shall cause
to be forwarded for filing, at the expense of the Depositor, all filings necessary to maintain the effectiveness
of any original filings necessary under the Uniform Commercial Code as in effect in any jurisdiction to perfect
the Trustee’s security interest in or lien on the Mortgage Loans and the Uncertificated Regular Interests, as
evidenced by an Officers’ Certificate of the Depositor, with a copy delivered to the Certificate Insurer,
including without limitation (x) continuation statements, and (y) such other statements as may be occasioned by
(1)any change of name of Residential Funding, the Depositor or the Trustee (such preparation and filing shall be
at the expense of the Trustee, if occasioned by a change in the Trustee’s name), (2) any change of location of
the place of business or the chief executive office of Residential Funding or the Depositor, (3)any transfer of
any interest of Residential Funding or the Depositor in any Mortgage Loan or (4) any transfer of any interest of
Residential Funding or the Depositor in any Uncertificated Regular Interests.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage Loans subject to a Custodial Agreement,
and based solely upon a receipt or certification executed by the Custodian, receipt by the respective Custodian
as the duly appointed agent of the Trustee) of the documents referred to in Section 2.01(b)(i) above (except that
for purposes of such acknowledgement only, a Mortgage Note may be endorsed in blank and an Assignment of Mortgage
may be in blank) and declares that it, or the 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 the Custodian as its agent, in
trust for the use and benefit of all present and future Certificateholders and the Certificate Insurer. The
Trustee or Custodian (the Custodian being so obligated under a Custodial Agreement) agrees, for the benefit of
Certificateholders and the Certificate Insurer, to review each Custodial File delivered to it pursuant to Section
2.01(b) within 90 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 Custodial Files by the Depositor or the Master Servicer, the Trustee
shall acknowledge receipt (or, with respect to Mortgage Loans subject to a Custodial Agreement, and based solely
upon a receipt or certification executed by the Custodian, receipt by the respective Custodian as the duly
appointed agent of the Trustee) of the documents referred to in Section 2.01(b) 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, upon receipt of notification from the Custodian as specified in the
succeeding sentence, the Trustee shall promptly so notify or cause the Custodian to notify the Master Servicer
and the Depositor. Pursuant to Section 2.3 of the Custodial Agreement, the Custodian will notify the Master
Servicer, the Depositor and the Trustee of any such omission or defect found by it in respect of any Custodial
File held by it in respect of the items received by it pursuant to the Custodial Agreement. If such omission or
defect materially and adversely affects the interests in the related Mortgage Loan of the Certificateholders or
the Certificate Insurer, the Master Servicer shall promptly notify the related Subservicer or Seller of such
omission or defect and request that such Subservicer or Seller correct or cure such omission or defect within 60
days from the date the Master Servicer was notified of such omission or defect and, if such Subservicer or Seller
does not correct or cure such omission or defect within such period, that such Subservicer or Seller purchase
such Mortgage Loan from the Trust Fund at its Purchase Price, in either case within 90 days from the date the
Master Servicer was notified of such omission or defect; provided that if the omission or defect would cause the
Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure
or repurchase must occur within 90 days from the date such breach was discovered. The Purchase Price for any
such Mortgage Loan shall be deposited or caused to be deposited by the Master Servicer in the Custodial Account
maintained by it pursuant to Section 3.07 and, upon receipt by the Trustee of written notification of such
deposit signed by a Servicing Officer, 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 the Subservicer or Seller
or its designee, as the case may be, any Mortgage Loan released pursuant hereto and thereafter such Mortgage Loan
shall not be part of the Trust Fund. In furtherance of the foregoing and Section 2.04, if the Subservicer or
Seller or Residential Funding that repurchases the Mortgage Loan is not a member of MERS and the Mortgage is
registered on the MERS® System, the Master Servicer, at its own expense and without any right of reimbursement,
shall cause MERS to execute and deliver an assignment of the Mortgage in recordable form to transfer the Mortgage
from MERS to such Subservicer or Seller or Residential Funding and shall cause such Mortgage to be removed from
registration on the MERS® System in accordance with MERS’ rules and regulations. It is understood and agreed
that the obligation of the Subservicer or Seller, to so cure or purchase any Mortgage Loan as to which a material
and adverse defect in or omission of a constituent document exists shall constitute the sole remedy respecting
such defect or omission available to Certificateholders or the Trustee on behalf of Certificateholders (except
for the Certificate Insurer’s rights under the Insurance Agreement).
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the Depositor.
(a) The Master Servicer hereby represents and warrants to the Trustee for the benefit of the
Certificateholders and the Certificate Insurer that as of the Closing Date:
(i) The Master Servicer is a limited liability company 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
Formation or Limited Liability Company Agreement or constitute a material default (or an event which, with notice
or lapse of time, or both, would constitute a material default) under, or result in the material breach of, any
material contract, agreement or other instrument to which the Master Servicer is a party or which may be
applicable to the Master Servicer or any of its assets;
(iii) This Agreement, assuming due authorization, execution and delivery by the Trustee and
the Depositor, constitutes a valid, legal and binding obligation of the Master Servicer, enforceable against it
in accordance with the terms hereof subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors’ rights generally and to general principles of equity,
regardless of whether such enforcement is considered in a proceeding in equity or at law;
(iv) The Master Servicer is not in default with respect to any order or decree of any court
or any order, regulation or demand of any federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the condition (financial or other) or operations of
the Master Servicer or its properties or might have consequences that would materially adversely affect its
performance hereunder;
(v) No litigation is pending or, to the best of the Master Servicer’s knowledge,
threatened against the Master Servicer which would prohibit its entering into this Agreement or performing its
obligations under this Agreement;
(vi) The Master Servicer shall comply in all material respects in the performance of this
Agreement with all reasonable rules and requirements of each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement furnished in writing or report
delivered to the Depositor, any Affiliate of the Depositor, the Trustee or the Certificate Insurer 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;
(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; and
(x) The Servicing Guide of the Master Servicer requires that the Subservicer for each
Mortgage Loan accurately and fully reports its borrower credit files to each of the Credit Repositories in a
timely manner.
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
Depositor, the Master Servicer, the Certificate Insurer, 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 or the Certificate Insurer 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 90days of its discovery or its receipt of notice of such breach, the Master Servicer shall
either (i) cure such breach in all material respects or (ii) to the extent that such breach is with respect to a
Mortgage Loan or a related document, purchase such Mortgage Loan from the Trust Fund at the Purchase Price and in
the manner set forth in Section 2.02; provided that if the breach would cause the Mortgage Loan to be other than
a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such cure or repurchase must occur
within 90 days from the date such breach was discovered. The obligation of the Master Servicer to cure such
breach or to so purchase such Mortgage Loan shall constitute the sole remedy in respect of a breach of a
representation and warranty set forth in this Section 2.03(a) available to the Certificateholders or the Trustee
on behalf of the Certificateholders (except for the Certificate Insurer’s rights under Section 3.03 of the
Insurance Agreement.
(b) The Depositor hereby represents and warrants to the Trustee for the benefit of the
Certificateholders and the Certificate Insurer that as of the Closing Date (or, if otherwise specified below, as
of the date so specified): (i) immediately prior to the conveyance of the Mortgage Loans to the Trustee, the
Depositor had good title to, and was the sole owner of, each Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest (other than rights to servicing and related compensation) and such conveyance
validly transfers ownership of the Mortgage Loans to the Trustee free and clear of any pledge, lien, encumbrance
or security interest; and (ii) 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).
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 the Custodian.
Upon discovery by any of the Depositor, the Master Servicer, the Certificate Insurer, the Trustee or the
Custodian of a breach of any of the representations and warranties set forth in this Section 2.03(b) which
materially and adversely affects the interests of the Certificateholders or the Certificate Insurer in any
Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties and the
Certificate Insurer (the 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)(ii), the party discovering
such breach shall give such notice within five days of discovery. Within 90 days of its discovery or its receipt
of notice of breach, the Depositor shall either (i) cure such breach in all material respects or (ii) purchase
such Mortgage Loan from the Trust Fund at the Purchase Price and in the manner set forth in Section 2.02;
provided that the Depositor shall have the option to substitute a Qualified Substitute Mortgage Loan or Loans for
such Mortgage Loan if such substitution occurs within two years following the Closing Date; provided that if the
omission or defect would cause the Mortgage Loan to be other than a “qualified mortgage” as defined in Section
860G(a)(3) of the Code, any such cure, substitution or repurchase must occur within 90 days from the date such
breach was discovered. Any such substitution shall be effected by the Depositor under the same terms and
conditions as provided in Section 2.04 for substitutions by Residential Funding. It is understood and agreed
that the obligation of the Depositor to cure such breach or to so purchase or substitute for any Mortgage Loan as
to which such a breach has occurred and is continuing shall constitute the sole remedy respecting such breach
available to the Certificateholders (other than the Certificate Insurer) or the Trustee on behalf of the
Certificateholders (other than the Certificate Insurer).
Section 2.04. Representations and Warranties of Sellers.
The Depositor, as assignee of Residential Funding under the Assignment Agreement, hereby assigns to the
Trustee for the benefit of the Certificateholders and the Certificate Insurer all of its right, title and
interest in respect of the Assignment Agreement applicable to a Mortgage Loan as and to the extent set forth in
the Assignment Agreement. 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, the Certificate Insurer and the Certificateholders. Upon the discovery by the Depositor,
the Master Servicer, the Certificate Insurer, the Trustee or the Custodian of a breach of any of the
representations and warranties made in the Assignment Agreement in respect of any Mortgage Loan or of any
Repurchase Event which materially and adversely affects the interests of the Certificateholders or the
Certificate Insurer in such Mortgage Loan, the party discovering such breach shall give prompt written notice to
the other parties and the Certificate Insurer (the Custodian being so obligated under a Custodial Agreement).
The Master Servicer shall promptly notify Residential Funding of such breach or Repurchase Event and request that
Residential Funding either (i) cure such breach or Repurchase Event in all material respects within 90 days from
the date the Master Servicer was notified of such breach or Repurchase Event or (ii) purchase such Mortgage Loan
from the Trust Fund at the Purchase Price and in the manner set forth in Section 2.02.
Upon the discovery by the Depositor, the Master Servicer, the Trustee or the Custodian of a breach of
any of such representations and warranties set forth in the Assignment Agreement in respect of any Mortgage Loan
which materially and adversely affects the interests of the Certificateholders or the Certificate Insurer in such
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). The Master Servicer shall promptly notify Residential
Funding of such breach of a representation or warranty set forth in the Assignment Agreement 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 within 90 days of
the date of such written notice of such breach 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 or substitution must occur within 90 days from the date the breach was
discovered. If the breach of representation and warranty that gave rise to the obligation to repurchase or
substitute a Mortgage Loan pursuant to Section 4 of the Assignment Agreement was the representation and warranty
set forth in clause (xliii) of Section 4 thereof, then the Master Servicer shall request that Residential Funding
pay to the Trust Fund, concurrently with and in addition to the remedies provided in the preceding sentence, an
amount equal to any liability, penalty or expense that was actually incurred and paid out of or on behalf of the
Trust Fund, and that directly resulted from such breach, or if incurred and paid by the Trust Fund thereafter,
concurrently with such payment. In the event that Residential Funding elects to substitute a Qualified
Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this Section 2.04, Residential Funding
shall deliver to the Trustee for the benefit of the Certificateholders and the Certificate Insurer with respect
to such Qualified Substitute Mortgage Loan or Loans, the original Mortgage Note, the Mortgage, an Assignment of
the Mortgage in recordable form, and such other documents and agreements as are required by Section 2.01, with
the Mortgage Note endorsed as required by Section 2.01. No substitution will be made in any calendar month after
the Determination Date for such month. Monthly Payments due with respect to Qualified Substitute Mortgage Loans
in the month of substitution shall not be part of the Trust Fund and will be retained by the Master Servicer and
remitted by the Master Servicer to Residential Funding on the next succeeding Distribution Date. For the month
of substitution, distributions to the Certificateholders will include the Monthly Payment due on a Deleted
Mortgage Loan for such month and thereafter Residential Funding shall be entitled to retain all amounts received
in respect of such Deleted Mortgage Loan. The Master Servicer shall amend or cause to be amended the Mortgage
Loan Schedule for the benefit of the Certificateholders and the Certificate Insurer to reflect the removal of
such Deleted Mortgage Loan and the substitution of the Qualified Substitute Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee. 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 (other than those of a statistical nature) contained in
the Assignment Agreement as of the date of substitution, and the covenants, representations and warranties set
forth in this Section 2.04, and in Section 2.03(b) hereof.
In connection with the substitution of one or more Qualified Substitute Mortgage Loans for one or more
Deleted Mortgage Loans, the Master Servicer shall determine the amount (if any) by which the aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate
Stated Principal Balance of all such Deleted Mortgage Loans (in each case after application of the principal
portion of the Monthly Payments due in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). Residential Funding shall deposit or cause the related Seller
to deposit the amount of such shortfall into the Custodial Account on the day of substitution, without any
reimbursement therefor. Residential Funding shall give notice in writing to the Trustee of such event, which
notice shall be accompanied by an Officers’ Certificate as to the calculation of such shortfall and (subject to
Section 10.01(f)) by an Opinion of Counsel to the effect that such substitution will not cause (a) any federal
tax to be imposed on the Trust Fund, including without limitation, any federal tax imposed on “prohibited
transactions” under Section 860F(a)(1) of the Code or on “contributions after the startup date” under Section
860G(d)(1) of the Code or (b) any portion of any REMIC created hereunder to fail to qualify as a REMIC at any
time that any Certificate is outstanding.
It is understood and agreed that the obligation of Residential Funding to cure such breach or purchase
(and in the case of Residential Funding to substitute for) such Mortgage Loan as to which such a breach has
occurred and is continuing and to make any additional payments required under the Assignment Agreement in
connection with a breach of the representation and warranty in clause (xliii) of Section 4 thereof shall
constitute the sole remedy respecting such breach available to the Certificateholders (other than the Certificate
Insurer) or the Trustee on behalf of the Certificateholders (other than the Certificate Insurer). If the Master
Servicer is Residential Funding, then the Trustee shall also have the right, and, if directed by the Certificate
Insurer, the obligation, 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; Conveyance of REMIC-I Regular Interests.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery of the
Custodial Files to it, or the Custodian on its behalf, subject to any exceptions noted, together with the
assignment to it of all other assets included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such delivery and in exchange therefor, the Trustee, pursuant to the written request of the
Depositor executed by an officer of the Depositor, has executed and caused to be authenticated and delivered to
or upon the order of the Depositor the Certificates in authorized denominations which evidence ownership of the
entire Trust Fund.
(b) The Depositor, concurrently with the execution and delivery hereof, does hereby transfer,
assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest
of the Depositor in and to the REMIC I Regular Interests and the REMIC II Regular Interests for the benefit of
the Holders of each Class of Certificates (other than the Class R Certificates in respect of Components I and II
thereof). The Trustee acknowledges receipt of the REMIC I Regular Interests, and the REMIC II Regular Interests,
and declares that it holds and will hold the same in trust for the exclusive use and benefit of the Holders of
each Class of Certificates (other than the Class R Certificates in respect of Components I and II thereof). The
interests evidenced by Component III of the Class R Certificates, together with the REMIC III Regular Interests,
constitute the entire beneficial ownership interest in REMIC III.
Section 2.06. Purposes and Powers of the Trust.
The purpose of the trust, as created hereunder, is to engage in the following activities:
(a) to sell the Certificates to the Depositor in exchange for the Mortgage Loans;
(b) to enter into and perform its obligations under this Agreement;
(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 2.06 may not be amended, without the consent of the Certificateholders evidencing a majority of the
aggregate Voting Rights of the Certificates.
Section 2.07. Agreement Regarding Ability to Disclose.
The Depositor, the Master Servicer and the Trustee hereby agree that, notwithstanding any other express
or implied agreement to the contrary, 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,” “tax treatment,” “tax structure,”
and “tax benefit” are defined under Treasury Regulation § 1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer.
(a) The Master Servicer shall service and administer the Mortgage Loans in accordance with the
terms of this Agreement and the respective Mortgage Loans, following such procedures as it would employ in its
good faith business judgment and which are normal and usual in its general mortgage servicing activities, and
shall have full power and authority, acting alone or through Subservicers as provided in Section 3.02, to do any
and all things which it may deem necessary or desirable in connection with such servicing and administration.
Without limiting the generality of the foregoing, the Master Servicer in its own name or in the name of a
Subservicer is hereby authorized and empowered by the Trustee when the Master Servicer or the Subservicer, as the
case may be, believes it appropriate in its best judgment, to execute and deliver, on behalf of the
Certificateholders and the Trustee or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, or of consent to assumption or modification in connection with a proposed
conveyance, or of assignment of any Mortgage and Mortgage Note in connection with the repurchase of a Mortgage
Loan and all other comparable instruments, or with respect to the modification or re-recording of a Mortgage for
the purpose of correcting the Mortgage, the subordination of the lien of the Mortgage in favor of a public
utility company or government agency or unit with powers of eminent domain, the taking of a deed in lieu of
foreclosure, the commencement, prosecution or completion of judicial or non-judicial foreclosure, the conveyance
of a Mortgaged Property to the related insurer, the acquisition of any property acquired by foreclosure or deed
in lieu of foreclosure, or the management, marketing and conveyance of any property acquired by foreclosure or
deed in lieu of foreclosure with respect to the Mortgage Loans and with respect to the Mortgaged Properties. The
Master Servicer further is authorized and empowered by the Trustee, on behalf of the Certificateholders and the
Trustee, in its own name or in the name of the Subservicer, when the Master Servicer or the Subservicer, as the
case may be, believes it is appropriate in its best judgment to register any Mortgage Loan on the MERS® System,
or cause the removal from the registration of any Mortgage Loan on the MERS® 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 as set forth in Section 3.10(a)(ii).
Notwithstanding the foregoing, subject to Section 3.07(a), the Master Servicer shall not permit any modification
with respect to any Mortgage Loan that would both constitute a sale or exchange of such Mortgage Loan within the
meaning of Section 1001 of the Code and any proposed, temporary or final regulations promulgated thereunder
(other than in connection with a proposed conveyance or assumption of such Mortgage Loan that is treated as a
Principal Prepayment in Full pursuant to Section 3.13(d) hereof) and cause any REMIC created hereunder to fail to
qualify as a REMIC under the Code. The Trustee shall furnish the Master Servicer with any powers of attorney and
other documents necessary or appropriate to enable the Master Servicer to service and administer the Mortgage
Loans. The Trustee shall not be liable for any action taken by the Master Servicer or any Subservicer pursuant to
such powers of attorney or other documents. In servicing and administering any Nonsubserviced Mortgage Loan, the
Master Servicer shall, to the extent not inconsistent with this Agreement, comply with the Program Guide as if it
were the originator of such Mortgage Loan and had retained the servicing rights and obligations in respect
thereof.
If the Mortgage relating to a Mortgage Loan did not have a lien senior to the Mortgage Loan on the
related Mortgaged Property as of the Cut-off Date, then the Master Servicer, in such capacity, may not consent to
the placing of a lien senior to that of the Mortgage on the related Mortgaged Property. If the Mortgage relating
to a Mortgage Loan had a lien senior to the Mortgage Loan on the related Mortgaged Property as of the Cut-off
Date, then the Master Servicer, in such capacity, may consent to the refinancing of the prior senior lien,
provided that the following requirements are met:
(i) (A) the Mortgagor’s debt-to-income ratio resulting from such refinancing is less
than the original debt-to-income ratio as set forth on the Mortgage Loan Schedule; provided, however, that in no
instance shall the resulting Combined Loan-to-Value Ratio (“Combined Loan-to-Value Ratio”) of such Mortgage Loan
be higher than that permitted by the Program Guide; or
(B) the resulting Combined Loan-to-Value Ratio of such Mortgage Loan is no higher
than the Combined Loan-to-Value Ratio prior to such refinancing; provided, however, if such refinanced mortgage
loan is a “rate and term” mortgage loan (meaning, the Mortgagor does not receive any cash from the refinancing),
the Combined Loan-to-Value Ratio may increase to the extent of either (x) the reasonable closing costs of such
refinancing or (y) any decrease in the value of the related Mortgaged Property, if the Mortgagor is in good
standing as defined by the Program Guide;
(ii) the interest rate, or, in the case of an adjustable rate existing senior lien, the
maximum interest rate, for the loan evidencing the refinanced senior lien is no more than 2.0% higher than the
interest rate or the maximum interest rate, as the case may be, on the loan evidencing the existing senior lien
immediately prior to the date of such refinancing; provided, however (A) if the loan evidencing the existing
senior lien prior to the date of refinancing has an adjustable rate and the loan evidencing the refinanced senior
lien has a fixed rate, then the current interest rate on the loan evidencing the refinanced senior lien may be up
to 2.0% higher than the then-current loan rate of the loan evidencing the existing senior lien and (B) if the
loan evidencing the existing senior lien prior to the date of refinancing has a fixed rate and the loan
evidencing the refinanced senior lien has an adjustable rate, then the maximum interest rate on the loan
evidencing the refinanced senior lien shall be less than or equal to (x) the interest rate on the loan evidencing
the existing senior lien prior to the date of refinancing plus (y)2.0%; and
(iii) the loan evidencing the refinanced senior lien is not subject to negative
amortization.
(b) The Master Servicer shall, to the extent consistent with the servicing standards set forth
herein, take whatever actions as may be necessary to file a claim under or enforce or allow the Trustee to file a
claim under or enforce any title insurance policy with respect to any Mortgage Loan including, without
limitation, joining in or causing any Seller or Subservicer (or any other party in possession of any title
insurance policy) to join in any claims process, negotiations, actions or proceedings necessary to make a claim
under or enforce any title insurance policy. Notwithstanding anything in this Agreement to the contrary, the
Master Servicer shall not (unless the Mortgagor is in default with respect to the Mortgage Loan or such default
is, in the judgment of the Master Servicer, reasonably foreseeable) make or permit any modification, waiver, or
amendment of any term of any Mortgage Loan that would both (i)effect an exchange or reissuance of such Mortgage
Loan under Section 1001 of the Code (or final, temporary or proposed Treasury regulations promulgated thereunder)
(other than in connection with a proposed conveyance or assumption of such Mortgage Loan that is treated as a
Principal Prepayment in Full pursuant to Section 3.13(d) hereof) and (ii) cause any REMIC formed hereunder to
fail to qualify as a REMIC under the Code or the imposition of any tax on “prohibited transactions” or
“contributions” after the startup date under the REMIC Provisions.
(c) In connection with servicing and administering the Mortgage Loans, the Master Servicer and any
Affiliate of the Master Servicer (i) may perform services such as appraisals and brokerage services that are
customarily provided by Persons other than servicers of mortgage loans, and shall be entitled to reasonable
compensation therefor in accordance with Section 3.10 and (ii) may, at its own discretion and on behalf of the
Trustee, obtain credit information in the form of a “credit score” from a Credit Repository.
(d) All costs incurred by the Master Servicer or by Subservicers in effecting the timely payment of
taxes and assessments on the properties subject to the Mortgage Loans shall not, for the purpose of calculating
monthly distributions to the Certificateholders, be added to the amount owing under the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loan so permit, and such costs shall be recoverable to the extent
permitted by Section 3.10(a)(ii).
(e) The Master Servicer may enter into one or more agreements in connection with the offering of
pass-through certificates evidencing interests in one or more of the Certificates providing for the payment by
the Master Servicer of amounts received by the Master Servicer as servicing compensation hereunder and required
to cover certain Prepayment Interest Shortfalls on the Mortgage Loans, which payment obligation will thereafter
be an obligation of the Master Servicer hereunder.
(f) The relationship of the Master Servicer (and of any successor to the Master Servicer) to the
Depositor under this Agreement is intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or agent.
(g) The Master Servicer shall comply with the terms of Section 9 of the Assignment Agreement.
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers; Enforcement of
Subservicers’ Obligations.
(a) The Master Servicer may continue in effect Subservicing Agreements entered into by Residential
Funding and Subservicers prior to the execution and delivery of this Agreement, and may enter into new
Subservicing Agreements with Subservicers, for the servicing and administration of all or some of the Mortgage
Loans. Each Subservicer shall be either (i) an institution the accounts of which are insured by the FDIC or (ii)
another entity that engages in the business of originating or servicing mortgage loans, and in either case shall
be authorized to transact business in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable the Subservicer to perform its
obligations hereunder and under the Subservicing Agreement, and in either case shall be a Xxxxxxx Mac, Xxxxxx Xxx
or HUD approved mortgage servicer. Each Subservicer of a Mortgage Loan shall be entitled to receive and retain,
as provided in the related Subservicing Agreement and in Section 3.07, the related Subservicing Fee from payments
of interest received on such Mortgage Loan after payment of all amounts required to be remitted to the Master
Servicer in respect of such Mortgage Loan. For any Mortgage Loan that is a Nonsubserviced Mortgage Loan, the
Master Servicer shall be entitled to receive and retain an amount equal to the Subservicing Fee from payments of
interest. Unless the context otherwise requires, references in this Agreement to actions taken or to be taken by
the Master Servicer in servicing the Mortgage Loans include actions taken or to be taken by a Subservicer on
behalf of the Master Servicer. Each Subservicing Agreement will be upon such terms and conditions as are
generally required by, permitted by or consistent with the Program Guide and are not inconsistent with this
Agreement and as the Master Servicer and the Subservicer have agreed. With the approval of the Master Servicer,
a Subservicer may delegate its servicing obligations to third-party servicers, but such Subservicer will remain
obligated under the related Subservicing Agreement. The Master Servicer and a Subservicer may enter into
amendments thereto or a different form of Subservicing Agreement, and the form referred to or included in the
Program Guide is merely provided for information and shall not be deemed to limit in any respect the discretion
of the Master Servicer to modify or enter into different Subservicing Agreements; provided, however, that any
such amendments or different forms shall be consistent with and not violate the provisions of either this
Agreement or the Program Guide in a manner which would materially and adversely affect the interests of the
Certificateholders or the Certificate Insurer. 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, the Certificateholders and the Certificate Insurer, 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, to the extent that the non-performance of any such obligation would have a material and
adverse effect on a Mortgage Loan, including, without limitation, the obligation to purchase a Mortgage Loan on
account of defective documentation, as described in Section 2.02, or on account of a breach of a representation
or warranty, as described in Section 2.04. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements 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 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,
Certificateholders and the Certificate Insurer for the servicing and administering of the Mortgage Loans in
accordance with the provisions of Section 3.01 without diminution of such obligation or liability by virtue of
such Subservicing Agreements or arrangements or by virtue of indemnification from the Subservicer or the
Depositor and to the same extent and under the same terms and conditions as if the Master Servicer alone were
servicing and administering the Mortgage Loans. The Master Servicer shall be entitled to enter into any
agreement with a Subservicer 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 Certificateholders shall not be deemed
parties thereto and shall have no claims, rights, obligations, duties or liabilities with respect to the
Subservicer in its capacity as such except as set forth in Section 3.06. The foregoing provision shall not in
any way limit a Subservicer’s obligation to cure an omission or defect or to repurchase a Mortgage Loan as
referred to in Section 2.02 hereof.
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee.
(a) In the event the Master Servicer shall for any reason no longer be the master servicer
(including by reason of an Event of Default), the Trustee, as successor Master Servicer, its designee or its
successor shall thereupon assume all of the rights and obligations of the Master Servicer under each Subservicing
Agreement that may have been entered into. The Trustee, its designee or the successor servicer for the Trustee
shall be deemed to have assumed all of the Master Servicer’s interest therein and to have replaced the Master
Servicer as a party to the Subservicing Agreement to the same extent as if the Subservicing Agreement had been
assigned to the assuming party except that the Master Servicer shall not thereby be relieved of any liability or
obligations under the Subservicing Agreement.
(b) The Master Servicer shall, upon request of the Trustee but at the expense of the Master
Servicer, deliver to the assuming party all documents and records relating to each Subservicing Agreement and the
Mortgage Loans then being serviced and an accounting of amounts collected and held by it and otherwise use its
best efforts to effect the orderly and efficient transfer of each Subservicing Agreement to the assuming party.
(c) Unless a Certificate Insurer Default exists, the Master Servicer will, if it is authorized to
do so under the relevant Subservicing Agreement, upon request of the Certificate Insurer at a time when the
Certificate Insurer may remove the Master Servicer under the terms hereof, terminate any Subservicing Agreement.
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 or a Subservicer may in its
discretion (subject to the terms and conditions of the Assignment Agreement) (i)waive any late payment charge or
any prepayment charge or penalty interest in connection with the prepayment of a Mortgage Loan and (ii) extend
the Due Date for payments due on a Mortgage Loan in accordance with the Program Guide, provided, however, that
the Master Servicer shall first determine that any such waiver or extension will not impair the coverage of any
related Primary Insurance Policy or materially adversely affect the lien of the related Mortgage.
Notwithstanding anything in this Section to the contrary, the Master Servicer or any Subservicer shall not
enforce any prepayment charge to the extent that such enforcement would violate any applicable law. In the event
of any such arrangement, the Master Servicer shall make timely advances on the related Mortgage Loan during the
scheduled period in accordance with the amortization schedule of such Mortgage Loan without modification thereof
by reason of such arrangements unless otherwise agreed to by the Holders of the Classes of Certificates affected
thereby; provided, however, that no such extension shall be made if any advance would be a Nonrecoverable
Advance. Consistent with the terms of this Agreement, the Master Servicer may also waive, modify or vary any
term of any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any manner
grant indulgence to any Mortgagor if in the Master Servicer’s determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of the Certificateholders or the
Certificate Insurer (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.
No such modification shall reduce the Mortgage Rate on a Mortgage Loan below the greater of (A) one-half of the
Mortgage Rate as in effect on the Cut-off Date and (B) one-half of the Mortgage Rate as in effect on the date of
such modification, but not less than the sum of the Servicing Fee Rate, the Certificate Insurer Premium Modified
Rate and the per annum rate at which the Subservicing Fee accrues. The final maturity date for any Mortgage Loan
shall not be extended beyond the Maturity Date. Also, the aggregate 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, provided, that such limit may be increased from time to time if
each Rating Agency provides written confirmation that an increase in excess of that limit will not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the lower of the then-current rating or
the rating assigned to such Certificates as of the Closing Date by such Rating Agency (without regard to the
Certificate Guaranty Insurance Policy). In addition, any amounts owing on a Mortgage Loan added to the
outstanding principal balance of such Mortgage Loan must be fully amortized over the term of such Mortgage Loan,
and such amounts may be added to the outstanding principal balance of a Mortgage Loan only once during the life
of such Mortgage Loan. Also, the addition of such amounts described in the preceding sentence shall be
implemented in accordance with the Program Guide and may be implemented only by Subservicers that have been
approved by the Master Servicer for such purposes. In connection with any Curtailment of a Mortgage Loan, the
Master Servicer, to the extent not inconsistent with the terms of the Mortgage Note and local law and practice,
may permit the Mortgage Loan to be re-amortized such that the Monthly Payment is recalculated as an amount that
will fully amortize the remaining principal balance thereof by the original maturity date based on the original
Mortgage Rate; provided, that such reamortization shall not be permitted if it would constitute a reissuance of
the Mortgage Loan for federal income tax purposes.
(b) The Master Servicer shall establish and maintain a Custodial Account in which the Master
Servicer shall deposit or cause to be deposited on a daily basis, except as otherwise specifically provided
herein, the following payments and collections remitted by Subservicers or received by it in respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in respect of Monthly Payments due before or in the
month of the Cut-off Date):
(i) All payments on account of principal, including Principal Prepayments made by
Mortgagors on the Mortgage Loans and the principal component of any Subservicer Advance or of any REO Proceeds
received in connection with an REO Property for which an REO Disposition has occurred;
(ii) All payments on account of interest at the Adjusted Mortgage Rate on the Mortgage
Loans, including the interest component of any Subservicer Advance or of any REO Proceeds received in connection
with an REO Property for which an REO Disposition has occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation Proceeds (net of any related
expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to Section 2.02, 2.03, 2.04 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
representation and warranty set forth in clause (xliii) of Section 4 of the Assignment Agreement) and all amounts
required to be deposited in connection with the substitution of a Qualified Substitute Mortgage Loan pursuant to
Section 2.03 or 2.04; and
(v) Any amounts required to be deposited pursuant to Section 3.07(c) and any payments or
collections received in the nature of prepayment charges.
The foregoing requirements for deposit in the Custodial Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments on the Mortgage Loans which are not part
of the Trust Fund (consisting of Monthly Payments due before or in the month of the Cut-off Date) and payments or
collections consisting of late payment charges or assumption fees may but need not be deposited by the Master
Servicer in the Custodial Account. In the event any amount not required to be deposited in the Custodial Account
is so deposited, the Master Servicer may at any time withdraw such amount from the Custodial Account, any
provision herein to the contrary notwithstanding. The Custodial Account may contain funds that belong to one or
more trust funds created for mortgage pass-through certificates of other series and may contain other funds
respecting payments on mortgage loans belonging to the Master Servicer or serviced or master serviced by it on
behalf of others. Notwithstanding such commingling of funds, the Master Servicer shall keep records that
accurately reflect the funds on deposit in the Custodial Account that have been identified by it as being
attributable to the Mortgage Loans. With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds,
Subsequent Recoveries and the proceeds of the purchase of any Mortgage Loan pursuant to Sections 2.02, 2.03, 2.04
and 4.07 received in any calendar month, the Master Servicer may elect to treat such amounts as included in the
Available Distribution Amount for the Distribution Date in the month of receipt, but is not obligated to do so.
If the Master Servicer so elects, such amounts will be deemed to have been received (and any related Realized
Loss shall be deemed to have occurred) on the last day of the month prior to the receipt thereof.
(c) The Master Servicer shall use its best efforts to cause the institution maintaining the
Custodial Account to invest the funds in the Custodial Account attributable to the Mortgage Loans in Permitted
Investments which shall mature not later than the Certificate Account Deposit Date next following the date of
such investment (with the exception of the Amount Held for Future Distribution) and which shall not be sold or
disposed of prior to their maturities. All income and gain realized from any such investment shall be for the
benefit of the Master Servicer as additional servicing compensation and shall be subject to its withdrawal or
order from time to time. The amount of any losses incurred in respect of any such investments attributable to
the investment of amounts in respect of the Mortgage Loans shall be deposited in the Custodial Account by the
Master Servicer out of its own funds immediately as realized.
(d) The Master Servicer shall give written notice to the Trustee and the Depositor of any change in
the location of the Custodial Account and the location of the Certificate Account prior to the use thereof.
Section 3.08. Subservicing Accounts; Servicing Accounts.
(a) In those cases where a Subservicer is servicing a Mortgage Loan pursuant to a Subservicing
Agreement, the Master Servicer shall cause the Subservicer, pursuant to the Subservicing Agreement, to establish
and maintain one or more Subservicing Accounts which shall be an Eligible Account or, if such account is not an
Eligible Account, shall generally satisfy the requirements of the Program Guide and be otherwise acceptable to
the Master Servicer, the Certificate Insurer and each Rating Agency. The Subservicer will be required thereby to
deposit into the Subservicing Account on a daily basis all proceeds of Mortgage Loans received by the
Subservicer, less its Subservicing Fees and unreimbursed advances and expenses, to the extent permitted by the
Subservicing Agreement. If the Subservicing Account is not an Eligible Account, the Master Servicer shall be
deemed to have received such monies upon receipt thereof by the Subservicer. The Subservicer shall not be
required to deposit in the Subservicing Account payments or collections in the nature of late charges or
assumption fees, or payments or collections received in the nature of prepayment charges to the extent that the
Subservicer is entitled to retain such amounts pursuant to the Subservicing Agreement. On or before the date
specified in the Program Guide, but in no event later than the Determination Date, the Master Servicer shall
cause the Subservicer, pursuant to the Subservicing Agreement, to remit to the Master Servicer for deposit in the
Custodial Account all funds held in the Subservicing Account with respect to each Mortgage Loan serviced by such
Subservicer that are required to be remitted to the Master Servicer. The Subservicer will also be required,
pursuant to the Subservicing Agreement, to advance on such scheduled date of remittance amounts equal to any
scheduled monthly installments of principal and interest less its Subservicing Fees on any Mortgage Loans for
which payment was not received by the Subservicer. This obligation to advance with respect to each Mortgage Loan
will continue up to and including the first of the month following the date on which the related Mortgaged
Property is sold at a foreclosure sale or is acquired by the Trust Fund by deed in lieu of foreclosure or
otherwise. All such advances received by the Master Servicer shall be deposited promptly by it in the Custodial
Account.
(b) The Subservicer may also be required, pursuant to the Subservicing Agreement, to remit to the
Master Servicer for deposit in the Custodial Account interest at the Adjusted Mortgage Rate (or Modified Net
Mortgage Rate plus the rate per annum at which the Servicing Fee and the Certificate Insurer Premium Modified
Rate accrues in the case of a Modified Mortgage Loan) on any Curtailment received by such Subservicer in respect
of a Mortgage Loan from the related Mortgagor during any month that is to be applied by the Subservicer to reduce
the unpaid principal balance of the related Mortgage Loan as of the first day of such month, from the date of
application of such Curtailment to the first day of the following month. Any amounts paid by a Subservicer
pursuant to the preceding sentence shall be for the benefit of the Master Servicer as additional servicing
compensation and shall be subject to its withdrawal or order from time to time pursuant to Sections 3.10(a)(iv)
and (v).
(c) In addition to the Custodial Account and the Certificate Account, the Master Servicer shall for
any Nonsubserviced Mortgage Loan, and shall cause the Subservicers for Subserviced Mortgage Loans to, establish
and maintain one or more Servicing Accounts and deposit and retain therein all collections from the Mortgagors
(or advances from Subservicers) for the payment of taxes, assessments, hazard insurance premiums, Primary
Insurance Policy premiums, if applicable, or comparable items for the account of the Mortgagors. Each Servicing
Account shall satisfy the requirements for a Subservicing Account and, to the extent permitted by the Program
Guide or as is otherwise acceptable to the Master Servicer, may also function as a Subservicing Account.
Withdrawals of amounts related to the Mortgage Loans from the Servicing Accounts may be made only to effect
timely payment of taxes, assessments, hazard insurance premiums, Primary Insurance Policy premiums, if
applicable, or comparable items, to reimburse the Master Servicer or Subservicer out of related collections for
any payments made pursuant to Sections 3.11 (with respect to the Primary Insurance Policy) and 3.12(a) (with
respect to hazard insurance), to refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required, to Mortgagors on balances in the Servicing Account or to clear and terminate the Servicing
Account at the termination of this Agreement in accordance with Section 9.01 or in accordance with the Program
Guide. As part of its servicing duties, the Master Servicer shall, and the Subservicers will, pursuant to the
Subservicing Agreements, be required to pay to the Mortgagors interest on funds in this account to the extent
required by law.
(d) The Master Servicer shall advance the payments referred to in the preceding subsection that are
not timely paid by the Mortgagors or advanced by the Subservicers on the date when the tax, premium or other cost
for which such payment is intended is due, but the Master Servicer shall be required so to advance only to the
extent that such advances, in the good faith judgment of the Master Servicer, will be recoverable by the Master
Servicer out of Insurance Proceeds, Liquidation Proceeds or otherwise.
Section 3.09. Access to Certain Documentation and Information Regarding the Mortgage Loans.
In the event that compliance with this Section 3.09 shall make any Class of Certificates legal for
investment by federally insured savings and loan associations, the Master Servicer shall provide, or cause the
Subservicers to provide, to the Trustee, the Office of Thrift Supervision or the FDIC and the supervisory agents
and examiners thereof access to the documentation regarding the Mortgage Loans required by applicable regulations
of the Office of Thrift Supervision, such access being afforded without charge but only upon reasonable request
and during normal business hours at the offices designated by the Master Servicer. The Master Servicer shall
permit such representatives to photocopy any such documentation and shall provide equipment for that purpose at a
charge reasonably approximating the cost of such photocopying to the Master Servicer.
Section 3.10. Permitted Withdrawals from the Custodial Account.
(a) The Master Servicer may, from time to time as provided herein, make withdrawals from the
Custodial Account of amounts on deposit therein pursuant to Section 3.07 that are attributable to the Mortgage
Loans for the following purposes:
(i) to 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 a rate per annum equal to
the Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) plus the
Certificate Insurer Premium Modified Rate, 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, and any
amounts remitted by Subservicers as interest in respect of Curtailments pursuant to Section 3.08(b);
(vi) to pay to itself, a Subservicer, a Seller, Residential Funding, the Depositor or any
other appropriate Person, as the case may be, with respect to each Mortgage Loan or property acquired in respect
thereof that has been purchased or otherwise transferred pursuant to Section 2.02, 2.03, 2.04, 4.07 or 9.01, all
amounts received thereon and not required to be distributed to Certificateholders as of the date on which the
related Stated Principal Balance or Purchase Price is determined;
(vii) to reimburse itself or the related Subservicer for any Nonrecoverable Advance or
Advances in the manner and to the extent provided in subsection (c) below, and any Advance or Servicing Advance
made in connection with a modified Mortgage Loan that is in default or, in the judgment of the Master Servicer,
default is reasonably foreseeable pursuant to Section 3.07(a), to the extent the amount of the Advance or
Servicing Advance was added to the Stated Principal Balance of the Mortgage Loan in a prior calendar month;
(viii) to reimburse itself or the Depositor for expenses incurred by and reimbursable to it
or the Depositor pursuant to Section 3.01(a), 3.11, 3.13, 3.14(c), 6.03, 10.01 or otherwise, or in connection
with enforcing any repurchase, substitution or indemnification obligation of any Seller (other than the Depositor
or an Affiliate of the Depositor) pursuant to the related Seller’s Agreement;
(ix) to reimburse itself for amounts expended by it (a) pursuant to Section 3.14 in good
faith in connection with the restoration of property damaged by an Uninsured Cause, and (b)in connection with the
liquidation of a Mortgage Loan or disposition of an REO Property to the extent not otherwise reimbursed pursuant
to clause (ii) or (viii) above; and
(x) to withdraw any amount deposited in the Custodial Account that was not required to be
deposited therein pursuant to Section 3.07, including any payoff fees or penalties or any other additional
amounts payable to the Master Servicer or Subservicer pursuant to the terms of the Mortgage Note.
(b) Since, in connection with withdrawals pursuant to clauses (ii), (iii), (v) and (vi), the Master
Servicer’s entitlement thereto is limited to collections or other recoveries on the related Mortgage Loan, the
Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the
purpose of justifying any withdrawal from the Custodial Account pursuant to such clauses.
(c) The Master Servicer shall be entitled to reimburse itself or the related Subservicer for any
advance made in respect of a Mortgage Loan that the Master Servicer determines to be a Nonrecoverable Advance by
withdrawal from the Custodial Account of amounts on deposit therein attributable to the Mortgage Loans on any
Certificate Account Deposit Date succeeding the date of such determination. Such right of reimbursement in
respect of a Nonrecoverable Advance relating to an Advance made pursuant to Section 4.04 on any such Certificate
Account Deposit Date shall be limited to an amount not exceeding the portion of such advance previously paid to
Certificateholders (and not theretofore reimbursed to the Master Servicer or the related Subservicer).
Section 3.11. Maintenance of Primary Insurance Coverage.
(a) The Master Servicer shall not take, or permit any Subservicer to take, any action which would
result in noncoverage under any applicable Primary Insurance Policy of any loss which, but for the actions of the
Master Servicer or Subservicer, would have been covered thereunder. To the extent coverage is available, the
Master Servicer shall keep or cause to be kept in full force and effect each such Primary Insurance Policy until
the principal balance of the related Mortgage Loan secured by a Mortgaged Property is reduced to 80% or less of
the Appraised Value at origination in the case of such a Mortgage Loan having a Loan-to-Value Ratio at
origination in excess of 80%, provided that such Primary Insurance Policy was in place as of the Cut-off Date and
the Master Servicer had knowledge of such Primary Insurance Policy. The Master Servicer shall not cancel or
refuse to renew any such Primary Insurance Policy applicable to a Nonsubserviced Mortgage Loan, or consent to any
Subservicer canceling or refusing to renew any such Primary Insurance Policy applicable to a Mortgage Loan
subserviced by it, that is in effect at the date of the initial issuance of the Certificates and is required to
be kept in force hereunder unless the replacement Primary Insurance Policy for such canceled or non-renewed
policy is maintained with an insurer whose claims-paying ability is acceptable to each Rating Agency for mortgage
pass-through certificates having a rating equal to or better than the lower of the then-current rating or the
rating assigned to the Certificates as of the Closing Date by such Rating Agency.
(b) In connection with its activities as administrator and servicer of the Mortgage Loans, the
Master Servicer agrees to present or to cause the related Subservicer to present, on behalf of the Master
Servicer, the Subservicer, if any, the Trustee and Certificateholders, claims to the insurer under any Primary
Insurance Policies, in a timely manner in accordance with such policies, and, in this regard, to take or cause to
be taken such reasonable action as shall be necessary to permit recovery under any Primary Insurance Policies
respecting defaulted Mortgage Loans. Pursuant to Section 3.07, any Insurance Proceeds collected by or remitted
to the Master Servicer under any Primary Insurance Policies shall be deposited in the Custodial Account, subject
to withdrawal pursuant to Section 3.10.
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each Mortgage Loan fire insurance with
extended coverage in an amount which is equal to the lesser of the principal balance owing on such Mortgage Loan
(together with the principal balance of any mortgage loan secured by a lien that is senior to the Mortgage Loan)
or 100% of the insurable value of the improvements; provided, however, that such coverage may not be less than
the minimum amount required to fully compensate for any loss or damage on a replacement cost basis. To the
extent it may do so without breaching the related Subservicing Agreement, the Master Servicer shall replace any
Subservicer that does not cause such insurance, to the extent it is available, to be maintained. The Master
Servicer shall also cause to be maintained on property acquired upon foreclosure, or deed in lieu of foreclosure,
of any Mortgage Loan, fire insurance with extended coverage in an amount which is at least equal to the amount
necessary to avoid the application of any co-insurance clause contained in the related hazard insurance policy.
Pursuant to Section 3.07, any amounts collected by the Master Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged Property or property thus acquired or
amounts released to the Mortgagor in accordance with the Master Servicer’s normal servicing procedures) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section 3.10. Any cost incurred by the
Master Servicer in maintaining any such insurance shall not, for the purpose of calculating monthly distributions
to Certificateholders, be added to the amount owing under the Mortgage Loan, notwithstanding that the terms of
the Mortgage Loan so permit. Such costs shall be recoverable by the Master Servicer out of related late payments
by the Mortgagor or out of Insurance Proceeds and Liquidation Proceeds to the extent permitted by Section 3.10.
It is understood and agreed that no earthquake or other additional insurance is to be required of any Mortgagor
or maintained on property acquired in respect of a Mortgage Loan other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such additional insurance. Whenever the
improvements securing a Mortgage Loan are located at the time of origination of such Mortgage Loan in a federally
designated special flood hazard area, the Master Servicer shall cause flood insurance (to the extent available)
to be maintained in respect thereof. Such flood insurance shall be in an amount equal to the lesser of (i) the
amount required to compensate for any loss or damage to the Mortgaged Property on a replacement cost basis and
(ii) the maximum amount of such insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is located is participating in such
program).
In the event that the Master Servicer shall obtain and maintain a blanket fire insurance policy with
extended coverage insuring against hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first sentence of this Section 3.12(a), it being understood
and agreed that such policy may contain a deductible clause, in which case the Master Servicer shall, in the
event that there shall not have been maintained on the related Mortgaged Property a policy complying with the
first sentence of this Section 3.12(a) and there shall have been a loss which would have been covered by such
policy, deposit in the Certificate Account the amount not otherwise payable under the blanket policy because of
such deductible clause. Any such deposit by the Master Servicer shall be made on the Certificate Account Deposit
Date next preceding the Distribution Date which occurs in the month following the month in which payments under
any such policy would have been deposited in the Custodial Account. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to present, on behalf of itself, the
Trustee and Certificateholders, claims under any such blanket policy.
(b) The Master Servicer shall obtain and maintain at its own expense and keep in full force and
effect throughout the term of this Agreement a blanket fidelity bond and an errors and omissions insurance policy
covering the Master Servicer’s officers and employees and other persons acting on behalf of the Master Servicer
in connection with its activities under this Agreement. The amount of coverage shall be at least equal to the
coverage that would be required by Xxxxxx Xxx or Xxxxxxx Mac, whichever is greater, with respect to the Master
Servicer if the Master Servicer were servicing and administering the Mortgage Loans for Xxxxxx Mae or Xxxxxxx
Mac. In the event that any such bond or policy ceases to be in effect, the Master Servicer shall obtain a
comparable replacement bond or policy from an issuer or insurer, as the case may be, meeting the requirements, if
any, of the Program Guide and acceptable to the Depositor. Coverage of the Master Servicer under a policy or
bond obtained by an Affiliate of the Master Servicer and providing the coverage required by this Section 3.12(b)
shall satisfy the requirements of this Section 3.12(b).
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements; Certain
Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Master Servicer or Subservicer,
to the extent it has knowledge of such conveyance, shall enforce any due-on-sale clause contained in any Mortgage
Note or Mortgage, to the extent permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage under any Required Insurance
Policy. Notwithstanding the foregoing: (i) the Master Servicer shall not be deemed to be in default under this
Section 3.13(a) by reason of any transfer or assumption which the Master Servicer is restricted by law from
preventing; and (ii) if the Master Servicer determines that it is reasonably likely that any Mortgagor will
bring, or if any Mortgagor does bring, legal action to declare invalid or otherwise avoid enforcement of a
due-on-sale clause contained in any Mortgage Note or Mortgage, the Master Servicer shall not be required to
enforce the due-on-sale clause or to contest such action.
(b) Subject to the Master Servicer’s or related Subservicer’s duty to enforce any due-on-sale
clause to the extent set forth in Section 3.13(a), in any case in which a Mortgaged Property is to be conveyed to
a Person by a Mortgagor, and such Person is to enter into an assumption or modification agreement or supplement
to the Mortgage Note or Mortgage which requires the signature of the Trustee, or if an instrument of release
signed by the Trustee is required releasing the Mortgagor from liability on the Mortgage Loan, the Master
Servicer is authorized, subject to the requirements of the sentence next following, to execute and deliver, on
behalf of the Trustee, the assumption agreement with the Person to whom the Mortgaged Property is to be conveyed
and such modification agreement or supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property to such Person; provided,
however, none of such terms and requirements shall both constitute a “significant modification” effecting an
exchange or reissuance of such Mortgage Loan under the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and cause any REMIC created hereunder to fail to qualify as a REMIC under the Code or the
imposition of any tax on “prohibited transactions” or “contributions” after the Startup Date under the REMIC
Provisions. The Master Servicer shall execute and deliver such documents only if it reasonably determines that
(i) its execution and delivery thereof will not conflict with or violate any terms of this Agreement or cause the
unpaid balance and interest on the Mortgage Loan to be uncollectible in whole or in part, (ii) any required
consents of insurers under any Required Insurance Policies have been obtained and (iii) subsequent to the closing
of the transaction involving the assumption or transfer (A) the Mortgage Loan will continue to be secured by a
first mortgage lien (or, with respect to any junior lien, a junior lien of the same priority in relation to any
senior lien on such Mortgage Loan) pursuant to the terms of the Mortgage, (B) such transaction will not adversely
affect the coverage under any Required Insurance Policies, (C) the Mortgage Loan will fully amortize over the
remaining term thereof, (D) no material term of the Mortgage Loan (including the interest rate on the Mortgage
Loan) will be altered nor will the term of the Mortgage Loan be changed and (E) if the seller/transferor of the
Mortgaged Property is to be released from liability on the Mortgage Loan, the buyer/transferee of the Mortgaged
Property would be qualified to assume the Mortgage Loan based on generally comparable credit quality and such
release will not (based on the Master Servicer’s or related Subservicer’s good faith determination) adversely
affect the collectability of the Mortgage Loan. Upon receipt of appropriate instructions from the Master
Servicer in accordance with the foregoing, the Trustee shall execute any necessary instruments for such
assumption or substitution of liability as directed by the Master Servicer. Upon the closing of the transactions
contemplated by such documents, the Master Servicer shall cause the originals or true and correct copies of the
assumption agreement, the release (if any), or the modification or supplement to the Mortgage Note or Mortgage to
be 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 related Subservicer as additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may be, shall be entitled to
approve a request from a Mortgagor for a partial release of the related Mortgaged Property, the granting of an
easement thereon in favor of another Person, any alteration or demolition of the related Mortgaged Property or
other similar matters if it has determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be adversely affected thereby and that any REMIC created
hereunder 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 Date would be
imposed on any REMIC created hereunder as a result thereof. Any fee collected by the Master Servicer or the
related Subservicer for processing such a request will be retained by the Master Servicer or such Subservicer as
additional servicing compensation.
(d) Subject to any other applicable terms and conditions of this Agreement, the Trustee and Master
Servicer shall be entitled to approve an assignment in lieu of satisfaction with respect to any Mortgage Loan,
provided the obligee with respect to such Mortgage Loan following such proposed assignment provides the Trustee
and Master Servicer with a “Lender Certification for Assignment of Mortgage Loan” in the form attached hereto as
Exhibit M, in form and substance satisfactory to the Trustee and Master Servicer, providing the following: (i)
that the Mortgage Loan is secured by Mortgaged Property located in a jurisdiction in which an assignment in lieu
of satisfaction is required to preserve lien priority, minimize or avoid mortgage recording taxes or otherwise
comply with, or facilitate a refinancing under, the laws of such jurisdiction; (ii) that the substance of the
assignment is, and is intended to be, a refinancing of such Mortgage Loan and that the form of the transaction is
solely to comply with, or facilitate the transaction under, such local laws; (iii) that the Mortgage Loan
following the proposed assignment will have a rate of interest more than the greater of (A) 3% and (B) 5% of the
annual yield of the unmodified Mortgage Loan, below or above the rate of interest on such Mortgage Loan prior to
such proposed assignment; and (iv) that such assignment is at the request of the borrower under the related
Mortgage Loan. Upon approval of an assignment in lieu of satisfaction with respect to any Mortgage Loan, the
Master Servicer shall receive cash in an amount equal to the unpaid principal balance of and accrued interest on
such Mortgage Loan, and the Master Servicer shall treat such amount as a Principal Prepayment in Full with
respect to such Mortgage Loan for all purposes hereof.
Section 3.14. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall foreclose upon or otherwise comparably convert (which may include an
REO Acquisition) the ownership of properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant
to Section 3.07. Alternatively, the Master Servicer may take other actions in respect of a defaulted Mortgage
Loan, which may include (i) accepting a short sale (a payoff of the Mortgage Loan for an amount less than the
total amount contractually owed in order to facilitate a sale of the Mortgaged Property by the Mortgagor) or
permitting a short refinancing (a payoff of the Mortgage Loan for an amount less than the total amount
contractually owed in order to facilitate refinancing transactions by the Mortgagor not involving a sale of the
Mortgaged Property), (ii) arranging for a repayment plan or (iii) agreeing to a modification in accordance with
Section 3.07. In connection with such foreclosure or other conversion or action, the Master Servicer shall,
consistent with Section 3.11, follow such practices and procedures as it shall deem necessary or advisable, as
shall be normal and usual in its general mortgage servicing activities and as shall be required or permitted by
the Program Guide; provided that the Master Servicer shall not be liable in any respect hereunder if the Master
Servicer is acting in connection with any such foreclosure or other conversion or action in a manner that is
consistent with the provisions of this Agreement. The Master Servicer, however, shall not be required to expend
its own funds or incur other reimbursable charges in connection with any foreclosure, or attempted foreclosure
which is not completed, or towards the correction of any default on a related senior mortgage loan, or towards
the restoration of any property unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan to Holders of Certificates of one or more Classes or
the Certificate Insurer after reimbursement to itself for such expenses or charges and (ii) that such expenses
and charges will be recoverable to it through Liquidation Proceeds, Insurance Proceeds, or REO Proceeds
(respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to
Section 3.10, whether or not such expenses and charges are actually recoverable from related Liquidation
Proceeds, Insurance Proceeds or REO Proceeds). In the event of such a determination by the Master Servicer
pursuant to this Section 3.14(a), the Master Servicer shall be entitled to reimbursement of its funds so expended
pursuant to Section 3.10. In addition, the Master Servicer may pursue any remedies that may be available in
connection with a breach of a representation and warranty with respect to any such Mortgage Loan in accordance
with Sections 2.03 and 2.04. However, the Master Servicer is not required to continue to pursue both foreclosure
(or similar remedies) with respect to the Mortgage Loans and remedies in connection with a breach of a
representation and warranty if the Master Servicer determines in its reasonable discretion that one such remedy
is more likely to result in a greater recovery as to the Mortgage Loan. Upon the occurrence of a Cash
Liquidation or REO Disposition, following the deposit in the Custodial Account of all Insurance Proceeds,
Liquidation Proceeds and other payments and recoveries referred to in the definition of “Cash Liquidation” or
“REO Disposition,” as applicable, upon receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee or the Custodian, as the case may be, shall release to the Master Servicer the
related Custodial File and the Trustee shall execute and deliver such instruments of transfer or assignment
prepared by the Master Servicer, in each case without recourse, as shall be necessary to vest in the Master
Servicer or its designee, as the case may be, the related Mortgage Loan, and thereafter such Mortgage Loan shall
not be part of the Trust Fund. Notwithstanding the foregoing or any other provision of this Agreement, in the
Master Servicer’s sole discretion with respect to any defaulted Mortgage Loan or REO Property as to either of the
following provisions, (i) a Cash Liquidation or REO Disposition may be deemed to have occurred if substantially
all amounts expected by the Master Servicer to be received in connection with the related defaulted Mortgage Loan
or REO Property have been received, and (ii) for purposes of determining the amount of any Liquidation Proceeds,
Insurance Proceeds, REO Proceeds or other unscheduled collections or the amount of any Realized Loss, the Master
Servicer may take into account minimal amounts of additional receipts expected to be received or any estimated
additional liquidation expenses expected to be incurred in connection with the related defaulted Mortgage Loan or
REO Property.
(b) In the event that title to any Mortgaged Property is acquired by the Trust Fund as an REO
Property by foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the
Trustee or to its nominee on behalf of Certificateholders. Notwithstanding any such acquisition of title and
cancellation of the related Mortgage Loan, such REO Property shall (except as otherwise expressly provided
herein) be considered to be an Outstanding Mortgage Loan held in the Trust Fund until such time as the REO
Property shall be sold. Consistent with the foregoing for purposes of all calculations hereunder so long as such
REO Property shall be considered to be an Outstanding Mortgage Loan it shall be assumed that, notwithstanding
that the indebtedness evidenced by the related Mortgage Note shall have been discharged, such Mortgage Note and
the related amortization schedule in effect at the time of any such acquisition of title (after giving effect to
any previous Curtailments and before any adjustment thereto by reason of any bankruptcy or similar proceeding or
any moratorium or similar waiver or grace period) remain in effect.
(c) In the event that the Trust Fund acquires any REO Property as aforesaid or otherwise in
connection with a default or imminent default on a Mortgage Loan, the Master Servicer on behalf of the Trust Fund
shall dispose of such REO Property as soon as practicable, giving due consideration to the interests of the
Certificateholders and the Certificate Insurer, but in all cases, within three full years after the taxable year
of its acquisition by the Trust Fund for purposes of Section 860G(a)(8) of the Code (or such shorter period as
may be necessary under applicable state (including any state in which such property is located) law to maintain
the status of each REMIC created hereunder as a REMIC under applicable state law and avoid taxes resulting from
such property failing to be foreclosure property under applicable state law) or, at the expense of the Trust
Fund, request, more than 60 days before the day on which such grace period would otherwise expire, an extension
of such grace period unless the Master Servicer (subject to Section 10.01(f)) obtains for the Trustee and the
Certificate Insurer an Opinion of Counsel, addressed to the Trustee, the Certificate Insurer and the Master
Servicer, to the effect that the holding by the Trust Fund of such REO Property subsequent to such period will
not result in the imposition of taxes on “prohibited transactions” as defined in Section 860F of the Code or
cause any REMIC created hereunder to fail to qualify as a REMIC (for federal (or any applicable State or local)
income tax purposes) at any time that any Certificates are outstanding, in which case the Trust Fund may continue
to hold such REO Property (subject to any conditions contained in such Opinion of Counsel). The Master Servicer
shall be entitled to be reimbursed from the Custodial Account for any costs incurred in obtaining such Opinion of
Counsel, as provided in Section 3.10. Notwithstanding any other provision of this Agreement, no REO Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented) or otherwise used by or on
behalf of the Trust Fund in such a manner or pursuant to any terms that would (i) cause such REO Property to fail
to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code or (ii) subject any
REMIC created hereunder to the imposition of any federal income taxes on the income earned from such REO
Property, including any taxes imposed by reason of Section 860G(c) of the Code, unless the Master Servicer has
agreed to indemnify and hold harmless the Trust Fund with respect to the imposition of any such taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or purchase or repurchase of any Mortgage
Loan pursuant to the terms of this Agreement, as well as any recovery (other than Subsequent Recoveries)
resulting from a collection of Liquidation Proceeds, Insurance Proceeds or REO Proceeds, will be applied in the
following order of priority: first, to reimburse the Master Servicer or the related Subservicer in accordance
with Section 3.10(a)(ii); second, to the Certificateholders to the extent of accrued and unpaid interest on the
Mortgage Loan, and any related REO Imputed Interest, at the Net Mortgage Rate (or the Modified Net Mortgage Rate
in the case of a Modified Mortgage Loan), to the Due Date in the related Due Period prior to the Distribution
Date on which such amounts are to be distributed; third, to the Certificateholders as a recovery of principal on
the Mortgage Loan (or REO Property); fourth, to all Servicing Fees and Subservicing Fees payable therefrom (and
the Master Servicer and the Subservicer shall have no claims for any deficiencies with respect to such fees which
result from the foregoing allocation); and fifth, to the Certificate Insurer for reimbursement for any payments
made pursuant to the Certificate Guaranty Insurance Policy to the extent not reimbursed pursuant to Section
4.02(c)(iii) and sixth, to Foreclosure Profits.
(e) In the event of a default on a Mortgage Loan one or more of whose obligors is not a United
States Person, in connection with any foreclosure or acquisition of a deed in lieu of foreclosure (together,
“foreclosure”) in respect of such Mortgage Loan, the Master Servicer shall cause compliance with the provisions of
Treasury Regulation Section1.1445-2(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 Custodial Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or upon the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a manner customary for such purposes,
the Master Servicer shall immediately notify the Trustee (if it holds the related 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 the form
attached hereto as Exhibit G, or, in the case of a Custodian, an electronic request in a form acceptable to the
Custodian, requesting delivery to it of the Custodial File. Upon receipt of such certification and request, the
Trustee shall promptly 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® System of such Mortgage and to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release, including any applicable UCC termination statements. No expenses
incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the
Custodial Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or foreclosure of any Mortgage Loan, the
Master Servicer shall deliver to the Custodian, with a copy to the Trustee, a certificate of a Servicing Officer
substantially in the form attached as Exhibit G hereto, or, in the case of a 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 the Trustee’s receipt of notification from the Master Servicer of the deposit of the related
Liquidation Proceeds in the Custodial Account.
(c) The Trustee or the Master Servicer on the Trustee’s behalf shall execute and deliver to the
Master Servicer, if necessary, any court pleadings, requests for trustee’s sale or other documents necessary to
the foreclosure or trustee’s sale in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce
any other remedies or rights provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Together with such documents or pleadings (if signed by the Trustee), the Master Servicer shall deliver
to the Trustee a certificate of a Servicing Officer requesting that such pleadings or documents be executed by
the Trustee and certifying as to the reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee shall not invalidate any insurance coverage under any Required Insurance Policy
or invalidate or otherwise affect the lien of the Mortgage, except for the termination of such a lien upon
completion of the foreclosure or trustee’s sale.
Section 3.16. Servicing and Other Compensation; 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), plus the Certificate Insurer
Premium Modified Rate, the Master Servicer shall be entitled to retain therefrom and to pay to itself and/or the
related Subservicer, any Foreclosure Profits and any Servicing Fee or Subservicing Fee considered to be accrued
but unpaid.
(b) Additional servicing compensation in the form of assumption fees, late payment charges,
investment income on amounts in the Custodial Account or the Certificate Account or otherwise shall be retained
by the Master Servicer or the Subservicer to the extent provided herein, subject to clause (e) below. Prepayment
charges shall be deposited into the Certificate Account and shall be paid on each Distribution Date to the
holders of the Class SB Certificates.
(c) The Master Servicer shall be required to pay, or cause to be paid, all expenses incurred by it
in connection with its servicing activities hereunder (including payment of premiums for the Primary Insurance
Policies, if any, to the extent such premiums are not required to be paid by the related Mortgagors, and the fees
and expenses of the Trustee and the Custodian) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.10 and 3.14.
(d) The Master Servicer’s right to receive servicing compensation may not be transferred in whole
or in part except in connection with the transfer of all of its responsibilities and obligations of the Master
Servicer under this Agreement.
(e) Notwithstanding clauses (a) and (b) above, the amount of servicing compensation that the Master
Servicer shall be entitled to receive for its activities hereunder for the period ending on each Distribution
Date shall be reduced (but not below zero) by the amount of Compensating Interest (if any) for such Distribution
Date used to cover Prepayment Interest Shortfalls as provided in Section 3.16(f) below. 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
shall not withdraw from the Custodial Account any such amount representing all or a portion of the Servicing Fee
to which it is entitled pursuant to Section 3.10(a)(iii) and shall not withdraw from the Custodial Account or
Certificate Account any such amount to which it is entitled pursuant to Section 3.07(c) or 4.01(b).
(f) With respect to any Distribution Date, Prepayment Interest Shortfalls on the Mortgage Loans
will be covered first, by the Master Servicer, but only to the extent such Prepayment Interest Shortfalls do not
exceed Eligible Master Servicing Compensation.
(g) With respect to any Distribution Date, Compensating Interest derived from a particular Loan
Group shall be used on such Distribution Date to cover any Prepayment Interest Shortfalls in such Loan Group and
then to cover any Prepayment Interest Shortfalls on the other Loan Group, in the same manner and priority as
Excess Cash Flow would cover such shortfalls pursuant to Section 4.02.
Section 3.17. Reports to the Trustee and the Depositor.
Not later than fifteen days after it receives a written request from the Trustee, the Certificate
Insurer or the Depositor, the Master Servicer shall forward to the Trustee, the Certificate Insurer and the
Depositor a statement, certified by a Servicing Officer, setting forth the status of the Custodial Account as of
the close of business on such Distribution Date as it relates to the Mortgage Loans and showing, for the period
covered by such statement, the aggregate of deposits in or withdrawals from the Custodial Account in respect of
the Mortgage Loans for each category of deposit specified in Section 3.07 and each category of withdrawal
specified in Section 3.10.
Section 3.18. Annual Statement as to Compliance and Servicing Assessment.
The Master Servicer shall deliver to the Depositor, the Certificate Insurer and the Trustee on or before
the earlier of (a) March 31 of each year or (b) with respect to any calendar year during which the Depositor’s
annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the date on which the annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the Commission, (i) a servicing assessment as
described in Section 4.03(f)(ii) and (ii) a servicer compliance statement, signed by an authorized officer of the
Master Servicer, as described in Items 1122(a), 1122(b) and 1123 of Regulation AB, to the effect that:
(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 1123 of Regulation AB
to the extent required to be included in a Report on Form 10-K; provided, however, that a failure to obtain such
certifications shall not be a breach of the Master Servicer's duties hereunder if any such party fails to deliver
such a certification.
Section 3.19. Annual Independent Public Accountants’ Servicing Report.
On or before the earlier of (a) March 31 of each year or (b) with respect to any calendar year during
which the Depositor’s annual report on Form 10-K is required to be filed in accordance with the Exchange Act and
the rules and regulations of the Commission, the date on which the annual report is required to be filed in
accordance with the Exchange Act and the rules and regulations of the Commission, the Master Servicer at its
expense shall cause a firm of independent public accountants, which shall be members of the American Institute of
Certified Public Accountants, to furnish to the Depositor, the Certificate Insurer and the Trustee the
attestation required under Item 1122(b) of Regulation AB. In rendering such statement, such firm may rely, as to
matters relating to the direct servicing of mortgage loans by Subservicers, upon comparable statements for
examinations conducted by independent public accountants substantially in accordance with standards established
by the American Institute of Certified Public Accountants (rendered within one year of such statement) with
respect to such Subservicers.
Section 3.20. Right of the Depositor in Respect of the Master Servicer.
The Master Servicer shall afford the Depositor and the Trustee, upon reasonable notice, during normal
business hours access to all records maintained by the Master Servicer in respect of its rights and obligations
hereunder and access to officers of the Master Servicer responsible for such obligations. Upon request, the
Master Servicer shall furnish the Depositor with its most recent financial statements and such other information
as the Master Servicer possesses regarding its business, affairs, property and condition, financial or
otherwise. The Master Servicer shall also cooperate with all reasonable requests for information including, but
not limited to, notices, tapes and copies of files, regarding itself, the Mortgage Loans or the Certificates from
any Person or Persons identified by the Depositor or Residential Funding. The Certificate Insurer hereby is so
identified. The Depositor may enforce the obligation of the Master Servicer hereunder and may, but it is not
obligated to, perform or cause a designee to perform, any defaulted obligation of the Master Servicer hereunder
or exercise the rights of the Master Servicer hereunder; provided that the Master Servicer shall not be relieved
of any of its obligations hereunder by virtue of such performance by the Depositor or its designee. Neither the
Depositor nor the Trustee shall have the responsibility or liability for any action or failure to act by the
Master Servicer and they are not obligated to supervise the performance of the Master Servicer under this
Agreement or otherwise.
Section 3.21. [Reserved].
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 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 Depositor nor the Trustee shall have any duty or
liability with respect to the calculation of any Reimbursement Amount, nor shall the Depositor or the Trustee
have any responsibility to track or monitor the administration of the Advance Facility and the Depositor shall
not have any responsibility to track, monitor or verify the payment of Reimbursement Amounts to the related
Advancing Person or Advance Facility Trustee. The Master Servicer shall maintain and provide to any successor
master servicer a detailed accounting on a loan-by-loan basis as to amounts advanced by, sold, pledged or
assigned to, and reimbursed to any Advancing Person. The successor master servicer shall be entitled to rely on
any such information provided by the Master Servicer, and the successor master servicer shall not be liable for
any errors in such information.
(d) Upon the direction of and at the expense of the Master Servicer, the Trustee agrees to execute
such acknowledgments, certificates, and other documents reasonably satisfactory to the Trustee provided by the
Master Servicer and reasonably satisfactory to the Trustee recognizing the interests of any Advancing Person or
Advance Facility Trustee in such Reimbursement Amounts as the Master Servicer may cause to be made subject to
Advance Facilities pursuant to this Section 3.22, and such other documents in connection with such Advance
Facility as may be reasonably requested from time to time by any Advancing Person or Advance Facility Trustee and
reasonably satisfactory to the Trustee.
(e) Reimbursement Amounts collected with respect to each Mortgage Loan shall be allocated to
outstanding unreimbursed Advances or Servicing Advances (as the case may be) made with respect to that Mortgage
Loan on a “first-in, first out” (“FIFO”) basis, subject to the qualifications set forth below:
(i) Any successor Master Servicer to Residential Funding (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 Depositor and the Master Servicer with the consent of the Certificate Insurer but 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 (without giving effect to the Certificate
Guaranty Insurance Policy) below the lesser of the then-current or original ratings on such Certificates and
delivery of an Opinion of Counsel as required under Section 11.01(c), notwithstanding anything to the contrary in
Section 11.01 of or elsewhere in this Agreement.
(h) Any rights of set-off that the Trust Fund, the Trustee, the Depositor, any Successor Master
Servicer or any other Person might otherwise have against the Master Servicer under this Agreement shall not
attach to any rights to be reimbursed for Advances or Servicing Advances that have been sold, transferred,
pledged, conveyed or assigned to any Advancing Person.
(i) At any time when an Advancing Person shall have ceased funding Advances and/or Servicing
Advances (as the case may be) and the Advancing Person or related Advance Facility Trustee shall have received
Reimbursement Amounts sufficient in the aggregate to reimburse all Advances and/or Servicing Advances (as the
case may be) the right to reimbursement for which were assigned to the Advancing Person, then upon the delivery
of a written notice signed by the Advancing Person and the Master Servicer or its successor or assign) to the
Trustee terminating the Advance Facility Notice (the “Notice of Facility Termination”), the Master Servicer or
its Successor Master Servicer shall again be entitled to withdraw and retain the related Reimbursement Amounts
from the Custodial Account pursuant to Section 3.10.
(j) After delivery of any Advance Facility Notice, and until any such Advance Facility Notice has
been terminated by a Notice of Facility Termination, this Section 3.22 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 acting as agent of the Trustee shall establish and maintain a Certificate
Account in which the Master Servicer shall cause to be deposited on behalf of the Trustee on or before 2:00 P.M.
New York time on each Certificate Account Deposit Date by wire transfer of immediately available funds an amount
equal to the sum of (i) any Advance for the immediately succeeding Distribution Date, (ii) any amount required to
be deposited in the Certificate Account pursuant to Section 3.12(a), (iii) any amount required to be deposited in
the Certificate Account pursuant to Section 3.16(e) or Section 4.07, (iv) any amount required to be paid pursuant
to Section 9.01, (v) an amount equal to the Certificate Insurer Premium payable for such Distribution Date, and
(vi) other amounts constituting the Available Distribution Amount for the immediately succeeding Distribution
Date. In addition, as and to the extent required pursuant to Section 4.11(b), the Trustee shall withdraw from
the Insurance Account any Insured Payment then on deposit in the Insurance Account and deposit such amount into
the Certificate Account.
(b) On each Distribution Date, prior to making any other distributions referred to in Section 4.02
herein, the Trustee shall withdraw from the Certificate Account and pay to the Certificate Insurer, by wire
transfer of immediately available funds to the Certificate Insurer Account, the Certificate Insurer Premium for
such 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.
(c) The Trustee shall, upon written request from the Master Servicer, invest or cause the
institution maintaining the Certificate Account to invest the funds in the Certificate Account in Permitted
Investments designated in the name of the Trustee for the benefit of the Certificateholders and the Certificate
Insurer, which shall mature not later than the Business Day next preceding the Distribution Date next following
the date of such investment (except that (i) if such Permitted Investment is an obligation of the institution
that maintains such account or fund for which such institution serves as custodian, then such Permitted
Investment may mature on such Distribution Date and (ii) any other investment may mature on such Distribution
Date if the Trustee shall advance funds on such Distribution Date to the Certificate Account in the amount
payable on such investment on such Distribution Date, pending receipt thereof to the extent necessary to make
distributions on the Certificates) and shall not be sold or disposed of prior to maturity. All income and gain
realized from any such investment shall be for the benefit of the Master Servicer and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in respect of any such investments
shall be deposited in the Certificate Account by the Master Servicer out of its own funds immediately as realized.
Section 4.02. Distributions.
(a) On each Distribution Date, the Trustee (or the Paying Agent on behalf of the Trustee) shall
allocate and distribute the Available Distribution Amount, if any, for such date to the interests issued in
respect of REMIC I, REMIC II and REMIC III as specified in this Section.
(b) (1) On each Distribution Date, the REMIC I Distribution Amount shall be deemed to be
distributed by REMIC I to REMIC II on account of the REMIC I Regular Interests represented thereby 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 deemed to be
distributed by REMIC II to REMIC III on account of the REMIC II Regular Interests represented thereby 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 amount, if any, deemed received by the Class SB
Certificates in respect of REMIC III Regular Interest IO and under the SB-A Swap Agreement shall be deemed
to have been paid on behalf of the Class SB Certificates by the Supplemental Interest Trust Trustee
pursuant to Section 4.10 in respect of the Net Swap Payment owed to the Swap Counterparty. On each
Distribution Date, the amount, if any, received by the Supplemental Interest Trust 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 Certificate. On each Distribution Date, amounts paid to
the Class A Certificates pursuant to Section 4.02(c)(vii) in respect of Basis Risk Shortfall shall be
deemed to have been paid by the Class SB Certificateholders pursuant to the SB-A Swap Agreement.
(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 Trust Trustee, shall distribute to each
Certificateholder of record on the next preceding Record Date (other than as provided in Section 9.01 respecting
the final distribution) either in immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities therefor, if such
Certificateholder has so notified the Master Servicer or the Paying Agent, as the case may be, or, if such
Certificateholder has not so notified the Master Servicer or the Paying Agent by the Record Date, by check mailed
to such Certificateholder at the address of such Holder appearing in the Certificate Register such
Certificateholder’s share (which share with respect to each Class of Certificates, shall be based on the
aggregate of the Percentage Interests represented by Certificates of the applicable Class held by such Holder of
the following amounts), in the following order of priority, in each case to the extent of the Available
Distribution Amount on deposit in the Certificate Account (except, with respect to clause (i) below, to the
extent of and in the priority of the Class A Interest Distribution Priority) and the Supplemental Interest Trust
Account pursuant to Section 4.10(c) or, with respect to clause (xii)(B) below, to the extent of prepayment
charges on deposit in the Certificate Account:
(i) 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, which amount shall be allocated pursuant to the
Class A Interest Distribution Priority, being paid from and in reduction of the Available Distribution Amount for
such Distribution Date;
(ii) [reserved];
(iii) the Principal Distribution Amount shall be distributed as follows, to be applied to
reduce the Certificate Principal Balance of the applicable Certificates in each case to the extent of the
remaining Principal Distribution Amount:
(A) first, concurrently, the Group I Principal Distribution Amount, 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 has been reduced to zero, and the Group II Principal
Distribution Amount, to the Class A-II Certificateholders, until the Certificate Principal
Balance thereof has been reduced to zero; and
(B) second, after application of payments pursuant to clause (A) above, the Group
II Principal Distribution Amount, 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 has been reduced to
zero, or the Group I Principal Distribution Amount, to the Class A-II Certificateholders, until
the Certificate Principal Balance thereof has been reduced to zero;
(iv) to the Certificate Insurer, the amount of any Cumulative Insurance Payments;
(v) to the Class A 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, 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) concurrently, (1) to the Class A-I Certificateholders, the amount of any unpaid Group
I Basis Risk Shortfalls allocated thereto, on a pro rata basis based on the amount of unpaid Group I Basis Risk
Shortfalls allocated thereto, and (2) to the Class A-II Certificateholders, the amount of any unpaid Group II
Basis Risk Shortfalls allocated thereto;
(viii) to the Class A Certificateholders, Relief Act Shortfalls allocated thereto for such
Distribution Date, on a pro rata basis based on Relief Act Shortfalls allocated thereto for such Distribution
Date;
(ix) 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;
(x) to the Certificate Insurer, from the amount, if any, remaining after the foregoing
distributions, any amounts due and unpaid under the Insurance Agreement that remain unreimbursed;
(xi) (x) to the Supplemental Interest Trust Account for payment to the Swap
Counterparty, any Swap Termination Payments due to a Swap Counterparty Trigger Event;
(xii) to the Class SB Certificates, (A) from the amount, if any, of the Excess Cash Flow
remaining after the foregoing distributions, the sum of (I) Accrued Certificate Interest thereon, (II)the amount
of any Overcollateralization Reduction Amount for such Distribution Date, and (III) for any Distribution Date
after the Certificate Principal Balance of each Class of Class A Certificates 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 Net Swap Payments
received by the Supplemental Interest Trust Trustee, if any, the amount of such Net Swap Payments remaining after
the foregoing distributions; and
(xiii) to the Class R Certificateholders, the balance, if any, of the Excess Cash Flow.
(d) Notwithstanding the foregoing clause (c), upon the reduction of the Certificate Principal
Balance of a Class of Class A Certificates to zero, such Class of Certificates will not be entitled to further
distributions pursuant to Section 4.02.
(e) Each distribution with respect to a Book-Entry Certificate shall be paid to the Depository, as
Holder thereof, and the Depository shall be responsible for crediting the amount of such distribution to the
accounts of its Depository Participants in accordance with its normal procedures. Each Depository Participant
shall be responsible for disbursing such distribution to the Certificate Owners that it represents and to each
indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as
agent. Each brokerage firm shall be responsible for disbursing funds to the Certificate Owners that it
represents. None of the Trustee, the Certificate Registrar, the Depositor, the Certificate Insurer or the Master
Servicer shall have any responsibility therefor except as otherwise provided by this Agreement or applicable law.
(f) Except as otherwise provided in Section 9.01, if the Master Servicer anticipates that a final
distribution with respect to any Class of Certificates will be made on a Distribution Date, the Master Servicer
shall, no later than 40 days’ prior to such 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 preceding such Distribution Date,
distribute, or cause to be distributed, on such date to each Holder of such Class of Certificates a notice to the
effect that: (i) the Trustee anticipates that the final distribution with respect to such Class of Certificates
will be made on such Distribution Date but only upon presentation and surrender of such Certificates at the
office of the Trustee or as otherwise specified therein, and (ii) no interest shall accrue on such Certificates
from and after the end of the prior calendar month. In the event that Certificateholders required to surrender
their Certificates pursuant to Section 9.01(c) do not surrender their Certificates for final cancellation, the
Trustee shall cause funds distributable with respect to such Certificates to be withdrawn from the Certificate
Account and credited to a separate escrow account for the benefit of such Certificateholders as provided in
Section 9.01(d).
Section 4.03. Statements to Certificateholders; Statements to Rating Agencies; Exchange Act
Reporting.
(a) Concurrently with each distribution charged to the Certificate Account and with respect to each
Distribution Date the Master Servicer shall forward to the Trustee and the Trustee shall forward by mail or
otherwise make available electronically on its website (which may be obtained by any Certificateholder by
telephoning the Trustee at (000) 000-0000) to each Holder, the Certificate Insurer and the Depositor a statement
setting forth the following information as to each Class of Certificates, in each case to the extent applicable:
(i) the applicable Record Date, Determination Date 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 (including amounts payable as a portion of the Excess Cash Flow);
(vii) if the distribution to the Holders of such Class of Certificates is less than the full
amount that would be distributable to such Holders if there were sufficient funds available therefor, the amount
of the shortfall;
(viii) the amount of any Advance by the Master Servicer with respect to the Group I Loans and
Group II Loans pursuant to Section 4.04;
(ix) the number and Stated Principal Balance of the Group I Loans, the Group II Loans and
the Mortgage Loans in the aggregate after giving effect to the distribution of principal on such Distribution
Date;
(x) the Certificate Principal Balance of each Class of the Certificates, before and after
giving effect to the amounts distributed on such Distribution Date;
(xi) the Certificate Principal Balance of each Class of Class A Certificates as of the
Closing Date;
(xii) [reserved];
(xiii) the number and 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;
(xiv) on the basis of the most recent reports furnished to it by Subservicers, (A)the number
and Stated Principal Balances of Group I Loans and Group II Loans that are Delinquent (1)30-59 days, (2) 60-89
days and (3) 90 or more days and the number and Stated Principal Balances of Group I Loans and Group II Loans
that are in foreclosure, (B)the number and aggregate principal balances of the Group I Loans, Group II Loans and
the Mortgage Loans in the aggregate that are Reportable Modified Mortgage Loans that are in foreclosure and are
REO Property, indicating in each case capitalized Mortgage Loans, other Servicing Modifications and totals, and
(C) for all Reportable Modified Mortgage Loans, the number and aggregate principal balances of the Group I Loans,
Group II Loans and the Mortgage Loans in the aggregate that have been liquidated, the subject of pay-offs and
that have been repurchased by the Master Servicer or Seller;
(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, aggregate principal balance and Stated Principal Balance of any REO
Properties with respect to the Group I Loans and Group II Loans;
(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 aggregate amount of Realized Losses with respect to the Group I Loans and Group II
Loans for such Distribution Date and the aggregate amount of Realized Losses with respect to the Group I Loans
and Group II Loans incurred since the Cut-off Date;
(xxi) the aggregate amount of any Insured Payment paid on such Distribution Date and the
portion paid to each Class A Certificate, the amount of any reimbursement payment made to the Certificate Insurer
on such Distribution Date pursuant to Section 4.02(c)(iii) and the amount of Cumulative Insurance Payments after
giving effect to any such Insured Payment or any such reimbursement payment to the Certificate Insurer;
(xxii) the Pass-Through Rate on each Class of Certificates, the Group I Net WAC Cap Rate and
the Group II Net WAC Cap Rate;
(xxiii) the Group I Basis Risk Shortfalls, Group II Basis Risk Shortfalls and Prepayment
Interest Shortfalls;
(xxiv) the Overcollateralization Amount and the Required Overcollateralization Amount
following such Distribution Date;
(xxv) the number and aggregate principal balance of the Group I Loans and Group II Loans
repurchased under Section 4.07;
(xxvi) the aggregate amount of any recoveries with respect to the Group I Loans and Group II
Loans on previously foreclosed loans from Residential Funding;
(xxvii) the weighted average remaining term to maturity of the Group I Loans and Group II
Loans after giving effect to the amounts distributed on such Distribution Date;
(xxviii) the weighted average Mortgage Rates of the Group I Loans and Group II Loans after
giving effect to the amounts distributed on such Distribution Date;
(xxix) the amount of any Net Swap Payment payable to the Supplemental Interest Trust Trustee
on behalf of the Supplemental Interest Trust, any Net Swap Payment payable to the Swap Counterparty, any Swap
Termination Payment payable to the Trustee on behalf of the Supplemental Interest Trust and any Swap Termination
Payment payable to the Swap Counterparty; and
(xxx) the occurrence of the Stepdown Date;
(xxxi) the aggregate amount of Realized Losses since the Cut-off Date for the Mortgage Loans;
and
(xxxii) the current Sixty-Plus Delinquency Percentage.
In the case of information furnished pursuant to clauses (i) and (ii) above, the amounts shall be
expressed as a dollar amount per Certificate with a $1,000 denomination. In addition to the statement provided
to the Trustee as set forth in this Section 4.03(a), the Master Servicer shall provide to any manager of a trust
fund consisting of some or all of the Certificates, upon reasonable request, such additional information as is
reasonably obtainable by the Master Servicer at no additional expense to the Master Servicer. Also, at the
request of a Rating Agency, the Master Servicer shall provide the information relating to the Reportable Modified
Mortgage Loans substantially in the form attached hereto as Exhibit U 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 (iv)
and (v) of subsection (a) above aggregated for such calendar year or applicable portion thereof during which such
Person was a Certificateholder. Such obligation of the Master Servicer 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 the Master Servicer receives a written request from
any Holder of a Class R Certificate, the Master Servicer shall prepare, or cause to be prepared, and shall
forward, or cause to be forwarded, to each Person who at any time during the calendar year was the Holder of a
Class R Certificate, a statement containing the applicable distribution information provided pursuant to this
Section 4.03 aggregated for such calendar year or applicable portion thereof during which such Person was the
Holder of a Class R Certificate. Such obligation of the Master Servicer shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the Master Servicer pursuant to any
requirements of the Code.
(d) Upon the written request of any Certificateholder, the Master Servicer, as soon as reasonably
practicable, shall provide the requesting Certificateholder with such information as is necessary and
appropriate, in the Master Servicer’s sole discretion, for purposes of satisfying applicable reporting
requirements under Rule 144A.
(e) The Master Servicer shall, on behalf of the Depositor and in respect of the Trust Fund, sign
and cause to be filed with the Commission any periodic reports required to be filed under the provisions of the
Exchange Act, and the rules and regulations of the Commission thereunder, including without limitation, reports
on Form 10-K, Form 10-D and Form 8-K. In connection with the preparation and filing of such periodic reports, the
Trustee shall timely provide to the Master Servicer (I) a list of Certificateholders as shown on the Certificate
Register as of the end of each calendar year, (II) copies of all pleadings, other legal process and any other
documents relating to any claims, charges or complaints involving the Trustee, as trustee hereunder, or the Trust
Fund that are received by a Responsible Officer of the Trustee, (III) notice of all matters that, to the actual
knowledge of a Responsible Officer of the Trustee, have been submitted to a vote of the Certificateholders, other
than those matters that have been submitted to a vote of the Certificateholders at the request of the Depositor
or the Master Servicer, and (IV) notice of any failure of the Trustee to make any distribution to the
Certificateholders as required pursuant to this Agreement. Neither the Master Servicer nor the Trustee shall have
any liability with respect to the Master Servicer’s failure to properly prepare or file such periodic reports
resulting from or relating to the Master Servicer’s inability or failure to obtain any information not resulting
from the Master Servicer’s own negligence or willful misconduct.
(f) Any Form 10-K filed with the Commission in connection with this Section 4.03 shall include,
with respect to the Certificates relating to such 10-K:
(i) A certification, signed by the senior officer in charge of the servicing functions of
the Master Servicer, in the form attached as Exhibit T-1 hereto or such other form as may be required or
permitted by the Commission (the “Form 10-K Certification”), in compliance with Rules 13a-14 and 15d-14 under the
Exchange Act and any additional directives of the Commission.
(ii) A report regarding its assessment of compliance during the preceding calendar year
with all applicable servicing criteria set forth in relevant Commission regulations with respect to
mortgage-backed securities transactions taken as a whole involving the Master Servicer that are backed by the same
types of assets as those backing the certificates, as well as similar reports on assessment of compliance
received from other parties participating in the servicing function as required by relevant Commission
regulations, as described in Item 1122(a) of Regulation AB. The Master Servicer shall obtain from all other
parties participating in the servicing function any required assessments.
(iii) With respect to each assessment report described immediately above, a report by a
registered public accounting firm that attests to, and reports on, the assessment made by the asserting party, as
set forth in relevant Commission regulations, as described in Regulation 1122(b) of Regulation AB and Section
3.19.
(iv) The servicer compliance certificate required to be delivered pursuant Section 3.18.
(g) In connection with the Form 10-K Certification, the Trustee shall provide the Master Servicer
with a back-up certification substantially in the form attached hereto as Exhibit T-2.
(h) This Section 4.03 may be amended in accordance with this Agreement without the consent of the
Certificateholders.
(i) The Trustee shall make available on the Trustee’s internet website each of the reports filed
with the Commission by or on behalf of the Depositor under the Exchange Act, as soon as reasonably practicable
upon delivery of such report to the Trustee.
Section 4.04. Distribution of Reports to the Trustee and the Depositor; Advances by the Master
Servicer.
(a) Prior to the close of business on the Business Day next succeeding each Determination Date, the
Master Servicer shall furnish a written statement (which may be in a mutually agreeable electronic format) to the
Trustee, the Certificate Insurer, any Paying Agent and the Depositor (the information in such statement to be
made available to Certificateholders by the Master Servicer on request) (provided that the Master Servicer shall
use its best efforts to deliver such written statement not later than 12:00 p.m. New York time on the second
Business Day prior to the Distribution Date) setting forth (i) the Available Distribution Amount, (ii) the
amounts required to be withdrawn from the Custodial Account and deposited into the Certificate Account on the
immediately succeeding Certificate Account Deposit Date pursuant to clause (iii) of Section 4.01(a), (iii) the
amount of Prepayment Interest Shortfalls, Group I Basis Risk Shortfalls, Group II Basis Risk Shortfalls, (iv) the
Net Swap Payments and Swap Termination Payments, if any, for such Distribution Date and (v) the Certificate
Insurer Premium and, if the Master Servicer determines that an Insured Payment exists for such Distribution Date,
the amounts needed to complete the Notice related to such Insured Payment. The determination by the Master
Servicer of such amounts shall, in the absence of obvious error, be presumptively deemed to be correct for all
purposes hereunder and the Trustee shall be protected in relying upon the same without any independent check or
verification.
(b) On or before 2:00 P.M. New York time on each Certificate Account Deposit Date, the Master
Servicer shall either (i) remit to the Trustee for deposit in the Certificate Account from its own funds, or
funds received therefor from the Subservicers, an amount equal to the Advances to be made by the Master Servicer
in respect of the related Distribution Date, which shall be in an aggregate amount equal to the sum of (A) the
aggregate amount of Monthly Payments other than Balloon Payments (with each interest portion thereof adjusted to
a per annum rate equal to the Net Mortgage Rate plus the Certificate Insurer Premium Modified Rate), less the
amount of any related Servicing Modifications, Debt Service Reductions or Relief Act Shortfalls, on the
Outstanding Mortgage Loans as of the related Due Date in the related Due Period, which Monthly Payments were due
during the related Due Period and not received as of the close of business as of the related Determination Date;
provided that no Advance shall be made if it would be a Nonrecoverable Advance and (B) with respect to each
Balloon Loan delinquent in respect of its Balloon Payment as of the close of business on the related
Determination Date, an amount equal to the assumed Monthly Payment (with each interest portion thereof adjusted
to a per annum rate equal to the Net Mortgage Rate plus the Certificate Insurer Premium Modified Rate) that would
have been due on the related Due Date based on the original amortization schedule for such Balloon Loan until
such Balloon Loan is finally liquidated, over any payments of interest or principal (with each interest portion
thereof adjusted to a per annum rate equal to the Net Mortgage Rate plus the Certificate Insurer Premium Modified
Rate) received from the related Mortgagor as of the close of business on the related Determination Date and
allocable to the Due Date during the related Due Period for each month until such Balloon Loan is finally
liquidated, (ii) withdraw from amounts on deposit in the Custodial Account and remit to the Trustee for deposit
in the Certificate Account all or a portion of the Amount Held for Future Distribution in discharge of any such
Advance, or (iii) make advances in the form of any combination of clauses (i) and (ii) aggregating the amount of
such Advance. Any portion of the Amount Held for Future Distribution so used shall be replaced by the Master
Servicer by deposit in the Certificate Account on or before 11:00 A.M. New York time on any future Certificate
Account Deposit Date to the extent that funds attributable to the Mortgage Loans that are available in the
Custodial Account for deposit in the Certificate Account on such Certificate Account Deposit Date shall be less
than payments to Certificateholders required to be made on the following Distribution Date. The Master Servicer
shall be entitled to use any Advance made by a Subservicer as described in Section 3.07(b) that has been
deposited in the Custodial Account on or before such Distribution Date as part of the Advance made by the Master
Servicer pursuant to this Section 4.04. The determination by the Master Servicer that it has made a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute a Nonrecoverable Advance, shall be
evidenced by a certificate of a Servicing Officer delivered to the Depositor, the Certificate Insurer and the
Trustee. In the event that the Master Servicer determines as of the Business Day preceding any Certificate
Account Deposit Date that it will be unable to deposit in the Certificate Account an amount equal to the Advance
required to be made for the immediately succeeding Distribution Date, it shall give notice to the Trustee and the
Certificate Insurer 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(b) into the Certificate Account.
Section 4.05. Allocation of Realized Losses.
(a) Prior to each Distribution Date, the Master Servicer shall determine the total amount of
Realized Losses, if any, that resulted from any Cash Liquidation, Servicing Modifications, Debt Service
Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period or, in the
case of a Servicing Modification that constitutes a reduction of the interest rate on a Mortgage Loan, the amount
of the reduction in the interest portion of the Monthly Payment due in the month in which such Distribution Date
occurs. The amount of each Realized Loss shall be evidenced by an Officers’ Certificate.
(b) All Realized Losses on the Mortgage Loans shall be allocated as follows:
(i) first, to Excess Cash Flow in the amounts and priority as provided in Section 4.02;
(ii) second, in reduction of the Overcollateralization Amount, until such amount has been
reduced to zero; and
(iii) third, for losses on the Group I Loans, to the Class A-I-1 Certificates, Class A-I-2
Certificates, Class A-I-3 Certificates and Class A-I-4 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 and for
losses on the Group II Loans, to the Class A-II Certificates, until the Certificate
Principal Balance thereof has been reduced to zero.
(c) An allocation of a Realized Loss on a “pro rata basis” among two or more specified Classes of
Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class
of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to
distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or
based on the Accrued Certificate Interest thereon payable on such Distribution Date in the case of an interest
portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service
Reductions) to the Class A Certificates shall be made by reducing the Certificate Principal Balance thereof by
the amount so allocated, which allocation shall be deemed to have occurred on such Distribution Date; provided,
that no such reduction shall reduce the 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) 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). Allocations of the principal portion of Debt Service Reductions 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.
(d) All Realized Losses on the Mortgage Loans shall be allocated on each Distribution Date to the
REMIC I Regular Interests and the REMIC II Regular Interests as provided in the definition of REMIC I Realized
Losses and REMIC II Realized Losses, respectively.
(e) Realized Losses allocated to the Excess Cash Flow or the Overcollateralization Amount pursuant
to paragraphs (a), (b) or (c) of this Section, the definition of Accrued Certificate Interest and the operation
of Section 4.02(c) shall be deemed allocated to the Class SB Certificates. Realized Losses in respect of Group I
Loans allocated to the Class SB Certificates shall, to the extent such Realized Losses represent Realized Losses
on an interest portion, be allocated to REMIC III Regular Interest SB-IO-I. Realized Losses in respect of Group I
Loans allocated to the Excess Cash Flow pursuant to paragraph (b) of this Section shall be deemed to reduce
Accrued Certificate Interest on REMIC III Regular Interest SB-IO-I. Realized Losses in respect of Group I Loans
allocated to the Overcollateralization Amount pursuant to paragraph (b) of this Section shall be deemed first to
reduce the principal balance of REMIC III Regular Interest SB-PO-I until such principal balance shall have been
reduced to zero and thereafter to reduce accrued and unpaid interest on REMIC III Regular Interest SB-IO-I.
Realized Losses in respect of Group II Loans allocated to the Class SB Certificates shall, to the extent such
Realized Losses represent Realized Losses on an interest portion, be allocated to REMIC III Regular Interest
SB-IO-II. Realized Losses in respect of Group II Loans allocated to the Excess Cash Flow pursuant to paragraph (b)
of this Section shall be deemed to reduce Accrued Certificate Interest on REMIC III Regular Interest SB-IO-II.
Realized Losses in respect of Group II Loans allocated to the Overcollateralization Amount pursuant to paragraph
(b) of this Section shall be deemed first to reduce the principal balance of REMIC III Regular Interest SB-PO-II
until such principal balance shall have been reduced to zero and thereafter to reduce accrued and unpaid interest
on REMIC III Regular Interest SB-IO-II.
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property.
The Master Servicer or the Subservicers shall file information returns with respect to the receipt of
mortgage interest received in a trade or business, the reports of foreclosures and abandonments of any Mortgaged
Property and the informational returns relating to cancellation of indebtedness income with respect to any
Mortgaged Property required by Sections 6050H, 6050J and 6050P of the Code, respectively, and deliver to the
Trustee an Officers’ Certificate on or before March 31 of each year, beginning with the first March 31 that
occurs at least six months after the Cut-off Date, stating that such reports have been filed. Such reports shall
be in form and substance sufficient to meet the reporting requirements imposed by such Sections 6050H, 6050J and
6050P of the Code.
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.
(a) With respect to any Mortgage Loan 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.
Section 4.08. [Reserved].
Section 4.09. [Reserved].
Section 4.10. Supplemental Interest Trust; 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. It is intended that the Supplemental Interest Trust be classified for federal income tax purposes as
a grantor trust under Subpart E, part I of subchapter J of chapter 1 of the Code, of which the Class SB
Certificateholders are owners, rather than a partnership, an association taxable as a corporation or a taxable
mortgage pool; and the powers granted and obligations undertaken in this Agreement shall be construed so as to
further such intent.
(b) The Supplemental Interest Trust Trustee shall deposit in the Supplemental Interest Trust
Account all payments that are payable to the Supplemental Interest Trust 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, and such amounts (plus any amounts deposited into the Supplemental Interest Trust Account pursuant
to Section 4.02(c)(xi)) shall be paid to the Swap Counterparty in the following order of priority: 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 III Regular Interest IO to the extent of the amount
distributable on such REMIC III 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-A 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 a and shall be
paid as set forth under Section 4.02.
(c) Net Swap Payments payable by the Swap Counterparty to the Supplemental Interest Trust Trustee
on behalf of the Supplemental Interest Trust 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. Neither the Swap Agreement nor any Net Swap Payments (including Swap Termination
Payments) constitute a part of any REMIC created hereunder and to the extent any Net Swap Payments are included
as a part of Excess Cash Flow they are so for definition purposes only.
(d) Subject to Sections 8.01 and 8.02 hereof, 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 Supplemental
Interest Trust, but not of the REMICs, until released from the Supplemental Interest Trust Account pursuant to
this Section 4.10. 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. Notwithstanding the foregoing, the Supplemental Interest Trust
Account shall be terminated at such time when there are no payments due or payable pursuant to the Swap Agreement.
(f) The Supplemental Interest Trust Trustee shall, on behalf of the holders of each Class of
Certificates (other than the Class SB Certificates and Class R Certificates) enter into the SB-A Swap Agreement,
with itself, on behalf of the holders of the Class SB Certificates. The holders of the Class SB Certificates
hereby appoint the Supplemental Interest Trust Trustee to act on their behalf with respect to entering into the
SB-A Swap Agreement. Pursuant to the SB-A 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 III 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-A Swap Agreement, the holder 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 Certificates and Class R Certificates) in accordance with the terms of this Agreement.
Any payments to the Certificates from amounts deemed received in respect of the SB-A 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 III 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-A Swap Agreement. Thus, each
Certificate (other than the Class R Certificates) shall be treated as representing not only ownership of regular
interests in REMIC III, but also ownership of an interest in, and obligations with respect to, a notional
principal contract.
(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 Supplemental Interest 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 Supplemental Interest 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 Supplemental Interest 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.
(h) The Supplemental Interest Trust Trustee is hereby directed by the Depositor, on or before the
Closing Date, to sign the Swap Agreement and the SB-A Swap Agreement on behalf of the Supplemental Interest Trust
for the benefit of the Certificateholders, in the form presented to it by the Depositor. The Supplemental
Interest Trust Trustee shall have no responsibility for the contents, adequacy or sufficiency of the Swap
Agreement or the SB-A Swap Agreement, including, without limitation, any representations and warranties contained
herein.
(i) The Supplemental Interest Trust Trustee is hereby directed, on the Closing Date, to remit the
lesser of: (i) $630,000 and (ii) the amounts on deposit in the Supplemental Interest Trust received from the Swap
Counterparty pursuant to the Swap Agreement on the Closing Date to the Master Servicer.
(j) The Supplemental Interest Trust Trustee shall provide the Certificate Insurer written notice
promptly upon determining that there are insufficient funds to make any Net Swap Payments owed by the
Supplemental Interest Trust to the Swap Counterparty. The Certificate Insurer may, at its sole discretion,
advance any such required payments, and the Supplemental Interest Trust Trustee is hereby authorized to make such
payments on behalf of the Certificate Insurer.
Section 4.11. The Certificate Guaranty Insurance Policy.
(a) If pursuant to Section 4.04(a)(v), the Master Servicer determines and notifies a Responsible
Officer of the Trustee in writing that an Insured Payment is required and the amount of such Insured Payment for
any Distribution Date, the Trustee shall complete the Notice and submit such Notice in accordance with the
Certificate Guaranty Insurance Policy to the Certificate Insurer no later than 12:00 P.M., New York City time, on
the second Business Day immediately preceding each Distribution Date, as a claim for an Insured Payment in an
amount equal to such Insured Payment.
(b) The Trustee shall establish and maintain the Insurance Account on behalf of the Holders of the
Class A Certificates. Upon receipt of an Insured Payment from the Certificate Insurer on behalf of the Class A
Certificates, the Trustee shall deposit such Insured Payment in the Insurance Account. All amounts on deposit in
the Insurance Account shall remain uninvested with no liability for interest or other compensation thereon. On
each Distribution Date, the Trustee shall transfer any Insured Payment then on deposit in the Insurance Account
to the Certificate Account and distribute such Insured Payment pursuant to Section 4.02.
(c) The Trustee shall (i) receive as attorney-in-fact of each Class A Certificateholder any Insured
Payment from the Certificate Insurer and (ii) distribute such Insured Payment to the Class A Certificates as set
forth in subsection (b) above. Insured Payments disbursed by the Trustee from proceeds of the Certificate
Guaranty Insurance Policy shall not be considered payment by the Trust Fund with respect to the Class A
Certificates, nor shall such disbursement of such Insured Payments discharge the obligations of the Trust Fund
with respect to the amounts thereof, and the Certificate Insurer shall become owner of such amounts to the extent
covered by such Insured Payments as the deemed assignee of such Class A Certificateholders. The Trustee hereby
agrees on behalf of each Class A Certificateholder (and each Class A Certificateholder, by its acceptance of its
Class A Certificates, as applicable, hereby agrees) for the benefit of the Certificate Insurer that the Trustee
shall recognize that to the extent the Certificate Insurer pays Insured Payments, either directly or indirectly
(as by paying through the Trustee), to the Class A Certificates, the Certificate Insurer will be entitled to be
subrogated to the rights of the Class A Certificateholders to the extent of such payments.
Section 4.12. Posted Collateral Account
(a) On the Closing Date, the Supplemental Interest Trust Trustee, on behalf of the Supplemental
Interest Trust, shall establish and maintain a Posted Collateral Account pursuant to the terms of the Swap
Agreement.
(b) The Supplemental Interest Trust Trustee, on behalf of the Supplemental Interest Trust, shall
deposit in the Posted Collateral Account all collateral posted by the Swap Counterparty pursuant to Paragraph
13(g)(i) of the credit support annex to the Swap Agreement and held by the Supplemental Interest Trust Trustee,
on behalf of the Supplemental Interest Trust, pursuant to the credit support annex to the Swap Agreement. Assets
deposited into the Posted Collateral Account (i) shall not be commingled or used with any other asset held by the
Supplemental Interest Trust Trustee and (ii) shall not be transferred to any other person or entity except as may
be provided in the Swap Agreement.
(c) The Posted Collateral Account shall be an Eligible Account. The Supplemental Interest Trust
Trustee shall, at the written direction of the Master Servicer, invest amounts on deposit in the Posted
Collateral Account in Permitted Investments. In the absence of written direction to the Supplemental Interest
Trust Trustee from the Master Servicer, all funds in the Posted Collateral Account shall remain uninvested.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Class A Certificates, Class SB Certificates and Class R Certificates shall be
substantially in the forms set forth in Exhibits A, C and D, respectively, and shall, on original issue,
be executed and delivered by the Trustee to the Certificate Registrar for authentication and delivery to
or upon the order of the Depositor upon receipt by the Trustee or the Custodian of the documents
specified in Section 2.01. Each Class of Class A Certificates shall be issuable in minimum dollar
denominations of $100,000 and integral multiples of $1 in excess thereof. The Class SB Certificates
shall be issuable in registered, certificated form in minimum percentage interests of 5.00% and integral
multiples of 0.01% in excess thereof. The Class R Certificates shall be issued in registered,
certificated form in minimum percentage interests of 20.00% and integral multiples of 0.01% in excess
thereof; provided, however, that one Class R Certificate of each Class will be issuable to the REMIC
Administrator as “tax matters person” pursuant to Section 10.01(c) in a minimum denomination
representing a Percentage Interest of not less than 0.01%. The Certificates shall be executed by manual
or facsimile signature on behalf of an authorized officer of the Trustee. Certificates bearing the
manual or facsimile signatures of individuals who were at any time the proper officers of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificate or did not hold such offices at the
date of such Certificates. No Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless there appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by the Certificate Registrar by manual signature,
and such certificate upon any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication.
(b) The Class A Certificates shall initially be issued as one or more Certificates registered in
the name of the Depository or its nominee and, except as provided below, registration of such Certificates may
not be transferred by the Trustee except to another Depository that agrees to hold such Certificates for the
respective Certificate Owners with Ownership Interests therein. The Certificate Owners shall hold their
respective Ownership Interests in and to each Class A Certificate through the book-entry facilities of the
Depository and, except as provided below, shall not be entitled to Definitive Certificates in respect of such
Ownership Interests. All transfers by Certificate Owners of their respective Ownership Interests in the
Book-Entry Certificates shall be made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository Participant shall transfer the Ownership
Interests only in the Book-Entry Certificates of Certificate Owners it represents or of brokerage firms for which
it acts as agent in accordance with the Depository’s normal procedures.
The Trustee, the Master Servicer and the Depositor may for all purposes (including the making of
payments due on the respective Classes of Book-Entry Certificates) deal with the Depository as the authorized
representative of the Certificate Owners with respect to the respective Classes of Book-Entry Certificates for
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 with respect to any Book-Entry Certificate (i)(A) the Depositor advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its responsibilities as Depository with respect
to such Book-Entry Certificate and (B) the Depositor is unable to locate a qualified successor, or (ii) (A) the
Depositor at its option advises the Trustee in writing that it elects to terminate the book-entry system for such
Book-Entry Certificate through the Depository and (B) upon receipt of notice from the Depository of the
Depositor’s election to terminate the book-entry system for such Book-Entry Certificate, the Depository
Participants holding beneficial interests in such Book-Entry Certificates agree to initiate such termination, the
Trustee shall notify all Certificate Owners of such Book-Entry Certificate, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Book-Entry Certificates by the Depository, accompanied by
registration instructions from the Depository for registration of transfer, the Trustee shall issue the
Definitive Certificates.
In addition, if an Event of Default has occurred and is continuing, each Certificate Owner materially
adversely affected thereby may at its option request a Definitive Certificate evidencing such Certificate Owner’s
Percentage Interest in the related Class of Certificates. In order to make such request, such Certificate Owner
shall, subject to the rules and procedures of the Depository, provide the Depository or the related Depository
Participant with directions for the 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 to contain information regarding the Class of
Certificates and the Certificate Principal Balance being exchanged, the Depository Participant account to be
debited with the decrease, the registered holder of and delivery instructions for the Definitive 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 amount of the Definitive Certificates.
None of the Depositor, 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 this 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) Each of the Certificates is intended to be a “security” governed by Article8 of the Uniform
Commercial Code as in effect in the State of New York and any other applicable jurisdiction, to the extent that
any of such laws may be applicable.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies to be appointed by the
Trustee in accordance with the provisions of Section 8.12 a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee is initially appointed Certificate
Registrar for the purpose of registering Certificates and transfers and exchanges of Certificates as herein
provided. The Certificate Registrar, or the Trustee, shall provide the Master Servicer with a certified list of
Certificateholders as of each Record Date prior to the related Determination Date.
(b) Upon surrender for registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 8.12 and, in the case of any Class SB Certificate or
Class R Certificate, upon satisfaction of the conditions set forth below, the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver, in the name of the designated transferee or transferees,
one or more new Certificates of a like Class and aggregate Percentage Interest.
(c) At the option of the Certificateholders, Certificates may be exchanged for other Certificates
of authorized denominations of a like Class and aggregate Percentage Interest, upon surrender of the Certificates
to be exchanged at any such office or agency. Whenever any Certificates are so surrendered for exchange the
Trustee shall execute and the Certificate Registrar shall authenticate and deliver the Certificates of such Class
which the Certificateholder making the exchange is entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall (if so required by the Trustee or the Certificate Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class SB Certificate or Class R Certificate
shall be made unless such transfer, sale, pledge or other disposition is exempt from the registration
requirements of the Securities Act of 1933, as amended (the “1933 Act”), and any applicable state securities laws
or is made in accordance with said Act and laws. Except as otherwise provided in this Section 5.02(d), in the
event that a transfer of a Class SB Certificate or Class R Certificate is to be made, (i) unless the Depositor
directs the Trustee otherwise, the Trustee shall require a written Opinion of Counsel acceptable to and in form
and substance satisfactory to the Trustee and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense of the Trustee, the Trust Fund,
the Depositor or the Master Servicer, and (ii) the Trustee shall require the transferee to execute a
representation letter, substantially in the form of Exhibit I hereto, and the Trustee shall require the
transferor to execute a representation letter, substantially in the form of Exhibit J hereto, each acceptable to
and in form and substance satisfactory to the Depositor and the Trustee certifying to the Depositor and the
Trustee the facts surrounding such transfer, which representation letters shall not be an expense of the Trustee,
the Trust Fund, the Depositor or the Master Servicer. In lieu of the requirements set forth in the preceding
sentence, transfers of Class SB Certificates or Class R Certificates may be made in accordance with this Section
5.02(d) if the prospective transferee of such a Certificate provides the Trustee and the Master Servicer with an
investment letter substantially in the form of Exhibit N attached hereto, which investment letter shall not be an
expense of the Trustee, the Depositor, or the Master Servicer, and which investment letter states that, among
other things, such transferee (i) is a “qualified institutional buyer” as defined under Rule144A, acting for its
own account or the accounts of other “qualified institutional buyers” as defined under Rule 144A, and (ii) is
aware that the proposed transferor intends to rely on the exemption from registration requirements under the 1933
Act provided by Rule 144A. The Holder of a Class SB Certificate or Class R Certificate desiring to effect any
transfer, sale, pledge or other disposition shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Insurer, the Master Servicer and the Certificate Registrar against any liability that
may result if the transfer, sale, pledge or other disposition is not so exempt or is not made in accordance with
such federal and state laws and this Agreement.
(e) (i) In the case of any Class SB Certificate 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 Depositor, the Certificate Insurer and the Master Servicer to the
effect that the purchase or holding of such Class SB Certificate or Class R Certificate is permissible under
applicable law, will not constitute or result in any non-exempt prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code (or comparable provisions of any subsequent enactments), and will not subject the
Trustee, the Depositor, the Master Servicer, the Certificate Insurer or the Trust Fund to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense of the Trustee, the Depositor, the
Master Servicer, the Certificate Insurer or the Trust Fund, or (B) the prospective transferee shall be required
to provide the Trustee, the Depositor, the Certificate Insurer and the Master Servicer with a certification to
the effect set forth in Exhibit P (with respect to a Class SB Certificate) or in paragraph fifteen of Exhibit H-1
(with respect to a Class R Certificate), which the Trustee may rely upon without further inquiry or
investigation, or such other certifications as the Trustee may deem desirable or necessary in order to establish
that such transferee or the Person in whose name such registration is requested is not an employee benefit plan
or other plan or arrangement subject to the prohibited transaction provisions of ERISA or Section 4975 of the
Code, or any Person (including an insurance company investing its general accounts, an investment manager, a
named fiduciary or a trustee of any such plan) who is using “plan assets” of any such plan to effect such
acquisition (each of the foregoing, a “Plan Investor”).
(ii) Each Holder of a Class A Certificate or any interest therein acquired by a Plan
Investor as of any date prior to the termination of the Supplemental Interest Trust 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.
(iii) If any Certificate (or interest therein) is acquired or held by any Person that does
not satisfy the conditions described in paragraph (i) or (ii), as applicable, above, then the last preceding
Transferee that satisfies such conditions 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 Certificate. The
Trustee shall be under no liability to any Person for making any payments due on such Certificate to such
preceding Transferee.
(iv) Any purported Certificate Owner whose acquisition or holding of any Certificate (or
interest therein) was effected in violation of the restrictions in this Section 5.02(e) shall indemnify and hold
harmless the Depositor, the Trustee, the Master Servicer, the Certificate Insurer, any Subservicer, any
underwriter and the Trust Fund from and against any and all liabilities, claims, costs or expenses incurred by
such parties as a result of such acquisition or holding.
(f) (i) Each Person who has or who acquires any Ownership Interest in a Class R Certificate
shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trustee or its designee under clause (iii)(A) below
to deliver payments to a Person other than such Person and to negotiate the terms of any mandatory sale under
clause (iii)(B) below and to execute all instruments of transfer and to do all other things necessary in
connection with any such sale. The rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a Class R
Certificate shall be a Permitted Transferee and shall promptly notify the Trustee of any change or impending
change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership Interest in a
Class R Certificate, the Trustee shall require delivery to it, and shall not register the Transfer of any Class R
Certificate until its receipt of:
(I) an affidavit and agreement (a “Transfer Affidavit and Agreement,” in
the form attached hereto as Exhibit H-1) from the proposed Transferee, in form and substance satisfactory to the
Master Servicer, representing and warranting, among other things, that it is a Permitted Transferee, that it is
not acquiring its Ownership Interest in the Class R Certificate that is the subject of the proposed Transfer as a
nominee, trustee or agent for any Person who is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Class R Certificate, it will endeavor to remain a Permitted Transferee, and that it has
reviewed the provisions of this Section 5.02(f) and agrees to be bound by them, and
(II) a certificate, in the form attached hereto as Exhibit H-2, from the
Holder wishing to transfer the Class R Certificate, in form and substance satisfactory to the Master Servicer,
representing and warranting, among other things, that no purpose of the proposed Transfer is to impede the
assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and Agreement by a
proposed Transferee under clause (B) above, if a Responsible Officer of the Trustee who is assigned to this
Agreement has actual knowledge that the proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a Class R
Certificate shall agree (x) to require a Transfer Affidavit and Agreement from any other Person to whom such
Person attempts to transfer its Ownership Interest in a Class R Certificate and (y) not to transfer its Ownership
Interest unless it provides a certificate to the Trustee in the form attached hereto as Exhibit H-2.
(E) Each Person holding or acquiring an Ownership Interest in a Class R
Certificate, by purchasing an Ownership Interest in such Certificate, agrees to give the Trustee written notice
that it is a “pass-through interest holder” within the meaning of Temporary Treasury Regulations
Section1.67-3T(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 H-2 and all of such other documents as shall have been reasonably required by
the Trustee as a condition to such registration. Transfers of the Class R Certificates to Non-United States
Persons and Disqualified Organizations (as defined in Section 860E(e)(5) of the Code) are prohibited.
(A) If any Disqualified Organization shall become a holder of a Class R
Certificate, then the last preceding Permitted Transferee shall be restored, to the extent permitted by law, to
all rights and obligations as Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. If a Non-United States Person shall become a holder of a Class R Certificate, then the last
preceding United States Person shall be restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such Transfer of such Class R Certificate. If a
transfer of a Class R Certificate is disregarded pursuant to the provisions of Treasury Regulations
Section1.860E-1 or Section1.860G-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, will be remitted by the Master Servicer to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be determined in the sole discretion of the Master
Servicer, and the Master Servicer shall not be liable to any Person having an Ownership Interest in a Class R
Certificate as a result of its exercise of such discretion.
(iii) The Master Servicer, on behalf of the Trustee, shall make available, upon
written request from the Trustee, all information necessary to compute any tax imposed
(A) as a result of the Transfer of an Ownership Interest in a Class R
Certificate to any Person who is a Disqualified Organization, including the information regarding “excess
inclusions” of such Class R Certificates required to be provided to the Internal Revenue Service and certain
Persons as described in Treasury Regulations Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and
(B) as a result of any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate or organization described in Section 1381 of the Code that
holds an Ownership Interest in a Class R Certificate having as among its record holders at any time any Person
who is a Disqualified Organization. Reasonable compensation for providing such information may be required by
the Master Servicer from such Person.
(iv) The provisions of this Section 5.02(f) set forth prior to this clause (iv) may
be modified, added to or eliminated, provided that there shall have been delivered to the Trustee the following:
(A) written consent of the Certificate Insurer and written notification from
each Rating Agency to the effect that the modification, addition to or elimination of such provisions will not
cause such Rating Agency to downgrade its then-current ratings, if any, of the Class A Certificates below the
lower of the then-current rating or the rating assigned to such Certificates as of the Closing Date by such
Rating Agency; and
(B) a certificate of the Master Servicer stating that the Master Servicer has
received an Opinion of Counsel, in form and substance satisfactory to the Master Servicer, to the effect that
such modification, addition to or absence of such provisions will not cause any REMIC created hereunder to cease
to qualify as a REMIC and will not cause (x) any REMIC created hereunder to be subject to an entity-level tax
caused by the Transfer of any Class R Certificate to a Person that is a Disqualified Organization or (y) a
Certificateholder or another Person to be subject to a REMIC-related tax caused by the Transfer of a Class R
Certificate to a Person that is not a Permitted Transferee.
(g) No service charge shall be made for any transfer or exchange of Certificates of any Class, but
the Trustee may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange shall be destroyed by the Certificate
Registrar.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate Registrar, or the Trustee and the
Certificate Registrar receive evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Trustee and the Certificate Registrar such security or indemnity
as may be required by them to save each of them harmless, then, in the absence of notice to the Trustee or the
Certificate Registrar that such Certificate has been acquired by a bona fide purchaser, the Trustee shall execute
and the Certificate Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor, Class and Percentage Interest but bearing
a number not contemporaneously outstanding. Upon the issuance of any new Certificate under this Section, the
Trustee may require the payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee and the
Certificate Registrar) connected therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust Fund, as if originally issued, whether or
not the lost, stolen or destroyed Certificate shall be found at any time.
Section 5.04. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of transfer, the Depositor, the Master
Servicer, the Trustee, the Certificate Insurer, the Certificate Registrar and any agent of the Depositor, the
Master Servicer, the Certificate Insurer, the Trustee or the Certificate Registrar may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.02 and for all other purposes whatsoever, except as and to the extent provided in the
definition of “Certificateholder,” and neither the Depositor, the Master Servicer, the Certificate Insurer, the
Trustee, the Certificate Registrar nor any agent of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar shall be affected by notice to the contrary except as provided in Section 5.02(f).
Section 5.05. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making distributions to Certificateholders
pursuant to Section 4.02. In the event of any such appointment, on or prior to each Distribution Date the Master
Servicer on behalf of the Trustee shall deposit or cause to be deposited with the Paying Agent a sum sufficient
to make the payments to Certificateholders in the amounts and in the manner provided for in Section 4.02, such
sum to be held in trust for the benefit of Certificateholders. The Trustee shall cause each Paying Agent to
execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee that
such Paying Agent will hold all sums held by it for the payment to Certificateholders in trust for the benefit of
the Certificateholders entitled thereto until such sums shall be paid to such Certificateholders. Any sums so
held by such Paying Agent shall be held only in Eligible Accounts to the extent such sums are not distributed to
the Certificateholders on the date of receipt by such Paying Agent.
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the Master Servicer.
The Depositor and the Master Servicer shall each be liable in accordance herewith only to the extent of
the obligations specifically and respectively imposed upon and undertaken by the Depositor and the Master
Servicer herein. By way of illustration and not limitation, the Depositor is not liable for the servicing and
administration of the Mortgage Loans, nor is it obligated by Section 7.01 or 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 Depositor or the Master Servicer; Assignment of Rights
and Delegation of Duties by Master Servicer.
(a) The Depositor and the Master Servicer shall each keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation and as a limited liability company
under the laws of the state of its organization, respectively, and will each obtain and preserve its
qualification to do business as a foreign corporation or other Person in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties under this Agreement.
(b) Any Person into which the Depositor or the Master Servicer may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the
Depositor or the Master Servicer shall be a party, or any Person succeeding to the business of the Depositor or
the Master Servicer, shall be the successor of the Depositor or the Master Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on the part of any of the parties
hereto, anything in this Section 6.02(b) 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 (i) the Master Servicer (or the Depositor, as applicable) shall notify
each Rating Agency, the Trustee and the Certificate Insurer in writing of any such merger, conversion or
consolidation at least 30 days prior to the effective date of such event and (ii) each Rating Agency’s ratings,
if any, of the Class A Certificates in effect immediately prior to such merger or consolidation (without taking
into account the Certificate Insurance Guaranty Policy) will not be qualified, reduced or withdrawn as a result
thereof (as evidenced by a letter to such effect from each Rating Agency).
(c) Notwithstanding anything else in this Section 6.02 and Section 6.04 to the contrary, the Master
Servicer may assign its rights and delegate its duties and obligations under this Agreement; provided that the
Person accepting such assignment or delegation shall be a Person which is qualified to service mortgage loans on
behalf of Xxxxxx Xxx or Xxxxxxx Mac, is reasonably satisfactory to the Trustee, the Certificate Insurer and the
Depositor, is willing to service the Mortgage Loans and executes and delivers to the Depositor, the Certificate
Insurer and the Trustee an agreement, in form and substance reasonably satisfactory to the Depositor, the
Certificate Insurer and the Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or observed by the Master Servicer
under this Agreement; provided further that each Rating Agency’s rating of the Classes of Certificates that have
been rated in effect immediately prior to such assignment and delegation (without taking into account the
Certificate Guaranty Insurance Policy) 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 Depositor, the Master Servicer and Others.
None of the Depositor, the Master Servicer or any of the directors, officers, employees or agents of the
Depositor or the Master Servicer shall be under any liability to the Trust Fund or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the Depositor, the Master Servicer
or any such Person against any breach of warranties, representations or covenants made herein or any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and duties hereunder. The Depositor, the
Master Servicer and any director, officer, employee or agent of the Depositor or the Master Servicer may rely in
good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor, the Master Servicer and any director, officer, employee or agent of
the Depositor or the Master Servicer shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense incurred in connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific Mortgage Loan or Mortgage Loans (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties hereunder. Neither the
Depositor nor the Master Servicer shall be under any obligation to appear in, prosecute or defend any legal or
administrative action, proceeding, hearing or examination that is not incidental to its respective duties under
this Agreement and which in its opinion may involve it in any expense or liability; provided, however, that the
Depositor or the Master Servicer may in its discretion undertake any such action, proceeding, hearing or
examination that it may deem necessary or desirable in respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders or the Certificate Insurer hereunder. In such event,
the legal expenses and costs of such action, proceeding, hearing or examination and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the Depositor and the Master Servicer
shall be entitled to be reimbursed therefor out of amounts attributable to the Mortgage Loans on deposit in the
Custodial Account as provided by Section 3.10 and, on the Distribution Date(s) following such reimbursement, the
aggregate of such expenses and costs shall be allocated in reduction of the Accrued Certificate Interest on each
Class entitled thereto in the same manner as if such expenses and costs constituted a Prepayment Interest
Shortfall.
Section 6.04. Depositor and Master Servicer Not to Resign.
Subject to the provisions of Section 6.02, neither the Depositor nor the Master Servicer shall resign
from its respective obligations and duties hereby imposed on it except upon determination that its duties
hereunder are no longer permissible under applicable law. Any such determination permitting the resignation of
the Depositor or the Master Servicer shall be evidenced by an Opinion of Counsel (at the expense of the resigning
party) to such effect delivered to the Trustee and the Certificate Insurer. No such resignation by the Master
Servicer shall become effective until the Trustee or a successor servicer shall have assumed the Master
Servicer’s responsibilities and obligations in accordance with Section 7.02.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
Event of Default, wherever used herein, means any one of the following events (whatever reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any administrative or
governmental body):
(i) the Master Servicer shall fail to distribute or cause to be distributed to Holders of
Certificates of any Class any distribution required to be made under the terms of the Certificates of
such Class and this Agreement and, in either case, such failure shall continue unremedied for a period
of 5 days after the date upon which written notice of such failure, requiring such failure to be
remedied, shall have been given to the Master Servicer by the Trustee, the Certificate Insurer or the
Depositor or to the Master Servicer, the Depositor and the Trustee by the Holders of Certificates of
such Class evidencing Percentage Interests aggregating not less than 25%; or
(ii) the Master Servicer shall fail to observe or perform in any material respect any other
of the covenants or agreements on the part of the Master Servicer contained in the Certificates of any
Class or in this Agreement and such failure shall continue unremedied for a period of 30 days (except
that such number of days shall be 15 in the case of a failure to pay the premium for any Required
Insurance Policy) after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee, the Certificate Insurer or the
Depositor, or to the Master Servicer, the Depositor and the Trustee by the Holders of Certificates of
any Class evidencing, as to such Class, Percentage Interests aggregating not less than 25%; or
(iii) a decree or order of a court or agency or supervisory authority having jurisdiction in
the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency
or similar law or appointing a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
(iv) the Master Servicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities, or similar
proceedings of, or relating to, the Master Servicer or of, or relating to, all or substantially all of
the property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay its debts generally as
they become due, file a petition to take advantage of, or commence a voluntary case under, any
applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(vi) the Master Servicer shall notify the Trustee pursuant to Section 4.04(b) that it is
unable to deposit in the Certificate Account an amount equal to the Advance.
If an Event of Default described in clauses (i)-(v) of this Section shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been remedied, either the Depositor or the
Trustee shall at the direction of the Certificate Insurer (unless a Certificate Insurer Default is continuing, in
which case at the direction of the Holders of Certificates entitled to at least 51% of the Voting Rights by
notice in writing to the Master Servicer (and to the Depositor and the Certificate Insurer if given by the
Trustee or to the Trustee and the Certificate Insurer if given by the Depositor)), terminate all of the rights
and obligations of the Master Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, other than its rights as a Certificateholder hereunder; provided, however, that a successor to the
Master Servicer is appointed pursuant to Section 7.02 and such successor Master Servicer shall have accepted the
duties of Master Servicer effective upon the resignation of the Master Servicer. If an Event of Default
described in clause (vi) hereof shall occur, the Trustee with the written consent of the Certificate Insurer
shall, by notice to the Master Servicer, the Certificate Insurer and the Depositor, immediately terminate all of
the rights and obligations of the Master Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder as provided in Section 4.04(b). On or
after the receipt by the Master Servicer of such written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates (other than as a Holder thereof) or the Mortgage
Loans or otherwise, shall subject to Section 7.02 pass to and be vested in the Trustee or the Trustee’s designee
appointed pursuant to Section 7.02; and, without limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and endorsement or assignment of the
Mortgage Loans and related documents, or otherwise. The Master Servicer agrees to cooperate with the Trustee (or
its designee) as successor Master Servicer in effecting the termination of the Master Servicer’s responsibilities
and rights hereunder, including, without limitation, the transfer to the Trustee or its designee for
administration by it of all cash amounts which shall at the time be credited to the Custodial Account or the
Certificate Account or thereafter be received with respect to the Mortgage Loans. No such termination shall
release the Master Servicer for any liability that it would otherwise have hereunder for any act or omission
prior to the effective time of such termination. Notwithstanding any termination of the activities of
Residential Funding in its capacity as Master Servicer hereunder, Residential Funding shall be entitled to
receive, out of any late collection of a Monthly Payment on a Mortgage Loan which was due prior to the notice
terminating Residential Funding’s rights and obligations as Master Servicer hereunder and received after such
notice, that portion to which Residential Funding would have been entitled pursuant to Sections 3.10(a)(ii), (vi)
and (vii) as well as its Servicing Fee in respect thereof, and any other amounts payable to Residential Funding
hereunder the entitlement to which arose prior to the termination of its activities hereunder. Upon the
termination of Residential Funding as Master Servicer hereunder the Depositor shall deliver to the Trustee, as
successor Master Servicer, a copy of the Program Guide and upon the request of the Certificate Insurer, a copy of
the Program Guide to the Certificate Insurer.
Section 7.02. Trustee or Depositor to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of termination pursuant to Section
7.01 or resigns in accordance with Section 6.04, so long as no Certificate Insurer Default exists, the
Certificate Insurer may appoint a successor Master Servicer, and if the Certificate Insurer fails to do so within
30 days or a Certificate Insurer Default exists, the Trustee or, upon notice to the Certificate Insurer and the
Depositor and with the Depositor’s consent and, so long as no Certificate Insurer Default exists, the Certificate
Insurer’s consent (which consent shall not be unreasonably withheld) a designee (which meets the standards set
forth below) of the Trustee, shall be the successor in all respects to the Master Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the Master Servicer (except for the
responsibilities, duties and liabilities contained in Sections 2.02 and 2.03(a), excluding the duty to notify
related Subservicers as set forth in such Sections, and its obligations to deposit amounts in respect of losses
incurred prior to such notice or termination on the investment of funds in the Custodial Account or the
Certificate Account pursuant to Sections 3.07(c) and 4.01(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 successor Master Servicer. As compensation therefor, the Trustee as successor Master Servicer shall
be entitled to all funds relating to the Mortgage Loans which the Master Servicer would have been entitled to
charge to the Custodial Account or the Certificate Account if the Master Servicer had continued to act hereunder
and, in addition, shall be entitled to the income from any Permitted Investments made with amounts attributable
to the Mortgage Loans held in the Custodial Account or the Certificate Account. If the Trustee has become the
successor to the Master Servicer in accordance with Section 6.04 or Section 7.01, then notwithstanding the above,
so long as no Certificate Insurer Default exists, the Certificate Insurer may appoint a successor Master
Servicer, and if the Certificate Insurer fails to do so within 30 days or a Certificate Insurer Default exists,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable to so act, appoint, or petition a
court of competent jurisdiction to appoint, any established housing and home finance institution, which is also a
Xxxxxx Xxx or Xxxxxxx Mac-approved mortgage servicing institution, having a net worth of not less than
$10,000,000 as the successor to the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder. Pending appointment of a successor to
the Master Servicer hereunder, the Trustee shall become successor to the Master Servicer and shall act in such
capacity as hereinabove provided. In connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage Loans as it and such successor
shall agree; provided, however, that no such compensation shall be in excess of that permitted the initial Master
Servicer hereunder. The Depositor, the Trustee, the Custodian and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such succession. Any successor Master
Servicer appointed pursuant to this Section 7.02 shall not receive a Servicing Fee with respect any Mortgage Loan
not directly serviced by the Master Servicer on which the Subservicing Fee (i) accrues at a rate of less than
0.50% per annum and (ii) has to be increased to a rate of 0.50% per annum in order to hire a Subservicer. The
Master Servicer shall pay the reasonable expenses of the Trustee in connection with any servicing transfer
hereunder.
(b) In connection with the termination or resignation of the Master Servicer hereunder, either (i)
the successor Master Servicer, including the Trustee if the Trustee is acting as successor Master Servicer, shall
represent and warrant that it is a member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are
registered with MERS, in which case the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to revise its records to reflect the transfer of servicing to the successor Master
Servicer as necessary under MERS’ rules and regulations, or (ii)the predecessor Master Servicer shall cooperate
with the successor Master Servicer in causing MERS to execute and deliver an assignment of Mortgage in recordable
form to transfer the Mortgage from MERS to the Trustee and to execute and deliver such other notices, documents
and other instruments as may be necessary or desirable to effect a transfer of such Mortgage Loan or servicing of
such Mortgage Loan on the MERS® 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 Certificate Insurer and 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 and the Certificate Insurer notice of each such Event of Default hereunder known
to the Trustee, unless such Event of Default shall have been cured or waived as provided in Section 7.04 hereof.
Section 7.04. Waiver of Events of Default.
The Certificate Insurer or the Holders representing at least 66% of the Voting Rights of Certificates
affected by a default or Event of Default hereunder, with the written consent of the Certificate Insurer, which
consent shall not be unreasonably withheld, may waive any default or Event of Default; provided, however, that
(a) a default or Event of Default under clause (i) of Section 7.01 may be waived with the written consent of the
Certificate Insurer, only by all of the Holders of Certificates affected by such default or Event of Default
(which Voting Rights of the Class A Certificateholders may be exercised by the Certificate Insurer without the
consent of such Holders and may only be exercised by Holders with the prior written consent of the Certificate
Insurer so long as there is no Certificate Insurer Default) and (b) no waiver pursuant to this Section 7.04 shall
affect the Holders of Certificates in the manner set forth in Section 11.01(b)(i), (ii) or (iii). Upon any such
waiver of a default or Event of Default by the Certificate Insurer or the Holders representing the requisite
percentage of Voting Rights of Certificates affected by such default or Event of Default with the consent of the
Certificate Insurer, which consent shall not be unreasonably withheld, 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.
Section 7.05. Servicing Trigger; Removal of Master Servicer.
(a) Upon determination by the Certificate Insurer that a Servicing Trigger has occurred, the
Certificate Insurer shall give written notice of such Servicing Trigger to the Master Servicer, the Depositor,
the Trustee and to each Rating Agency.
(b) At any time after such determination and while a Servicing Trigger is continuing, the
Certificate Insurer may direct the Trustee in writing to remove the Master Servicer if the Certificate Insurer
makes a determination that the manner of master servicing was a factor contributing to the size of the
delinquencies or losses incurred in the Trust Fund.
(c) Upon receipt of directions to remove the Master Servicer pursuant to the preceding clause (b),
the Trustee shall notify the Master Servicer that it has been terminated and the Master Servicer shall be
terminated in the same manner as specified in Sections 7.01 and 7.02.
(d) After notice of occurrence of a Servicing Trigger has been given and while a Servicing Trigger
is continuing, until and unless the Master Servicer has been removed as provided in clause (b), the Master
Servicer covenants and agrees to act as the Master Servicer for a term from the occurrence of the Servicing
Trigger to the end of the Calendar Quarter in which such Servicing Trigger occurs, which term may at the
Certificate Insurer’s discretion be extended by written notice to the Trustee and the Master Servicer for
successive terms of three (3) calendar months each, until the termination of the Trust Fund. The Master Servicer
will, upon the receipt of each such notice of extension (a “Master Servicer Extension Notice”) become bound for
the duration of the term covered by such Master Servicer Extension Notice to continue as Master Servicer subject
to and in accordance with this Agreement. If, as of the fifteenth (15th) day prior to the last day of any term
as the Master Servicer, the Trustee shall not have received any Master Servicer Extension Notice from the
Certificate Insurer, the Trustee shall, within five (5) days thereafter, give written notice of such nonreceipt
to the Certificate Insurer and the Master Servicer. If any such term expires without a Master Servicer Extension
Notice then the Trustee shall act as successor Master Servicer as provided in Section 7.02.
(e) No provision of this Section 7.05 shall have the effect of limiting the rights of the
Depositor, the Trustee, the Certificateholders or the Certificate Insurer under Section 7.01.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events
of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically
set forth in this Agreement. In case an Event of Default has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent investor would exercise or use under the circumstances in the
conduct of such investor’s own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine whether they conform to the
requirements of this Agreement. The Trustee shall notify the Certificateholders and the Certificate Insurer 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, 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 and the Trustee shall furnish in a timely fashion to the
Certificate Insurer such information in its possession as the Certificate Insurer may reasonably request from
time to time for the Certificate Insurer to protect its interests and to fulfill its duties under the Certificate
Guaranty Insurance Policy. The Trustee covenants and agrees that it shall perform its obligations hereunder in
a manner so as to maintain the status of each REMIC created hereunder as a REMIC under the REMIC Provisions 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 Depositor or the Master Servicer and which on their face, do not
contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of judgment made in good faith
by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any action taken, suffered
or omitted to be taken by it in good faith in accordance with the direction of the Certificate Insurer
or the Certificateholders holding Certificates which evidence, Percentage Interests aggregating not less
than 25% of the affected Classes as to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iv) The Trustee shall not be charged with knowledge of any default (other than a default
in payment to the Trustee) specified in clauses (i) and (ii) of Section 7.01 or an Event of Default
under clauses (iii), (iv) and (v) of Section 7.01 unless a Responsible Officer of the Trustee assigned
to and working in the Corporate Trust Office obtains actual knowledge of such failure or event or the
Trustee receives written notice of such failure or event at its Corporate Trust Office from the Master
Servicer, the Certificate Insurer, the Depositor or any Certificateholder; and
(v) Except to the extent provided in Section 7.02, no provision in this Agreement shall
require the Trustee to expend or risk its own funds (including, without limitation, the making of any
Advance) or otherwise incur any personal financial liability in the performance of any of its duties as
Trustee hereunder, or in the exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that repayment of funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) The Trustee shall timely pay, from its own funds, the amount of any and all federal, state and
local taxes imposed on the Trust Fund or its assets or transactions including, without limitation, (A)“prohibited
transaction” penalty taxes as defined in Section 860F of the Code, if, when and as the same shall be due and
payable, (B) any tax on contributions to a REMIC after the Closing Date imposed by Section 860G(d) of the Code
and (C) any tax on “net income from foreclosure property” as defined in Section 860G(c) of the Code, but only if
such taxes arise out of a breach by the Trustee of its obligations hereunder, which breach constitutes negligence
or willful misconduct of the Trustee.
(e) Each Class SB Certificateholder agrees to provide any certification acceptable to the Trustee
to enable the Trust to make payments of principal and interest on the Class SB Certificates without withholding
or backup withholding taxes. Each Class SB Certificateholder agrees to update or replace such form or
certification in accordance with its terms or its subsequent amendments and consents to the delivery by the
Supplemental Interest Trust Trustee to the Swap Counterparty of any such certification. Such certification may
include Form W-8BEN, Form W-8IMY, Form W-9 or Form W-8ECI or any successors to such IRS forms. If the Trust Fund
becomes subject to deduction, withholding, or other charge or assessment from, or with respect to, payments to
any Class SB Certificateholder for any present or future tax, duty, assessment, or governmental charge, then the
Trustee shall indicate the amount withheld to such Class SB Certificateholders. Such amounts shall be deemed to
have been distributed to such Class SB Certificateholders for all purposes of this Agreement.
(f) The Supplemental Interest Trust Trustee, on behalf of the Supplemental Interest Trust, upon
receipt of the requisite tax identification number from or on behalf of RFC, (i) shall authorize, execute and
deliver a United States Internal Revenue Service Form W-9 or successor applicable form, or other appropriate
United States tax forms as may be required to prevent withholding or backup withholding taxes on payments to the
Supplemental Interest Trust under the Swap Agreement, to the Swap Counterparty on or before the first payment
date under the Swap Agreement and thereafter prior to the expiration or obsolescence of such form and (ii) if
permitted by the Class SB Certificateholders, shall, if requested by the Swap Counterparty, deliver to the Swap
Counterparty promptly upon receipt each certification received from the Class SB Certificateholders pursuant to
Section 8.01(e).
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, or the 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
the Certificate Insurer or any of the Certificateholders pursuant to the provisions of this Agreement,
unless (a) the Certificate Insurer or such Certificateholders, as applicable, shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby and (b) the Certificate Insurer has given its consent; nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default
(which has not been cured), to exercise such of the rights and powers vested in it by this Agreement,
and to use the same degree of care and skill in their exercise as a prudent investor would exercise or
use under the circumstances in the conduct of such investor’s own affairs;
(iv) The Trustee shall not be personally liable for any action taken, suffered or omitted
by it in good faith and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and after the curing of all
Events of Default which may have occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document, unless requested in writing
to do so by the Certificate Insurer or the Holders of Certificates of any Class evidencing, as to such
Class, Percentage Interests, aggregating not less than 50% with the written consent of the Certificate
Insurer; 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 (or the Certificate Insurer, if the Certificate requested
the investigation);
(vi) The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys provided that the Trustee shall remain
liable for any acts of such agents or attorneys; and
(vii) To the extent authorized under the Code and the regulations promulgated thereunder,
each Holder of a Class R Certificate hereby irrevocably appoints and authorizes the Trustee to be its
attorney-in-fact for purposes of signing any Tax Returns required to be filed on behalf of the Trust
Fund. The Trustee shall sign on behalf of the Trust Fund and deliver to the Master Servicer in a timely
manner any Tax Returns prepared by or on behalf of the Master Servicer that the Trustee is required to
sign as determined by the Master Servicer pursuant to applicable federal, state or local tax laws,
provided that the Master Servicer shall indemnify the Trustee for signing any such Tax Returns that
contain errors or omissions.
(b) Following the issuance of the Certificates (and except as provided for in Section 2.04), the
Trustee shall not accept any contribution of assets to the Trust Fund unless (subject to Section 10.01(f)) it
shall have obtained or been furnished with an Opinion of Counsel to the effect that such contribution will not
(i) cause any REMIC created hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding or (ii) cause the Trust Fund to be subject to any federal tax as a result of such contribution
(including the imposition of any federal tax on “prohibited transactions” imposed under Section 860F(a) of the
Code).
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the execution of the Certificates and
relating to the acceptance and receipt of the Mortgage Loans) shall be taken as the statements of the Depositor
or the Master Servicer as the case may be, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this Agreement or of the Certificates
(except that the Certificates shall be duly and validly executed and authenticated by it as Certificate
Registrar) or of any Mortgage Loan or related document, or of MERS or the MERS® System. Except as otherwise
provided herein, the Trustee shall not be accountable for the use or application by the Depositor or the Master
Servicer of any of the Certificates or of the proceeds of such Certificates, or for the use or application of any
funds paid to the Depositor or the Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Custodial Account or the Certificate Account by the Depositor or the Master Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner or pledgee of Certificates with
the same rights it would have if it were not Trustee.
Section 8.05. Master Servicer to Pay Trustee’s Fees and Expenses; Indemnification.
(a) The Master Servicer covenants and agrees to pay to the Trustee and any co-trustee from time to
time, and the Trustee and any co-trustee shall be entitled to, reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an express trust) for all services
rendered by each of them in the execution of the trusts hereby created and in the exercise and performance of any
of the powers and duties hereunder of the Trustee and any co-trustee, and the Master Servicer shall pay or
reimburse the Trustee and any co-trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee or any co-trustee in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not
regularly in its employ, and the expenses incurred by the Trustee or any co-trustee in connection with the
appointment of an office or agency pursuant to Section 8.12) except any such expense, disbursement or advance as
may arise from its negligence or bad faith.
(b) The Master Servicer agrees to indemnify the Trustee for, and to hold the Trustee harmless
against, any loss, liability or expense incurred without negligence or willful misconduct on its part, arising
out of, or in connection with, the acceptance and administration of the Trust Fund, including its obligation to
execute the DTC Letter in its individual capacity, and 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 Swap Agreement, provided that:
(i) with respect to any such claim, the Trustee shall have given the Master Servicer
written notice thereof promptly after the Trustee shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee shall cooperate and
consult fully with the Master Servicer in preparing such defense; and
(iii) notwithstanding anything in this Agreement to the contrary, the Master Servicer shall
not be liable for settlement of any claim by the Trustee entered into without the prior consent of the Master
Servicer which consent shall not be unreasonably withheld. No termination of this Agreement shall affect the
obligations created by this Section 8.05(b) of the Master Servicer to indemnify the Trustee under the conditions
and to the extent set forth herein. Notwithstanding the foregoing, the indemnification provided by the Master
Servicer in this Section 8.05(b) shall not pertain to any loss, liability or expense of the Trustee, including
the costs and expenses of defending itself against any claim, incurred in connection with any actions taken by
the Trustee at the direction of Certificateholders pursuant to the terms of this Agreement.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a national banking association or a New York banking
corporation having its principal office in a state and city acceptable to the Depositor and organized and doing
business under the laws of such state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority and having a sufficient rating so as to maintain the then current
ratings of the Certificates. If such corporation or national banking association publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority,
then for purposes of this Section the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
Section 8.07. Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Depositor, the Master Servicer and the Certificate Insurer. Upon receiving such
notice of resignation, the Depositor shall promptly appoint a successor trustee acceptable to the Certificate
Insurer by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of resignation then the Certificate Insurer
may appoint a successor trustee and if the Certificate Insurer fails to do so within 30 days, 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 Certificate Insurer or the Depositor
with the consent of the Certificate Insurer, which such consent shall not be unreasonably withheld, 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
Certificate Insurer or the Depositor (with the consent of the Certificate Insurer, which such consent shall not
be unreasonably withheld), 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 Certificate Insurer or the Depositor determines that the
Trustee has failed (i) to make a required claim under the Certificate Guaranty Insurance Policy of which it has
been notified pursuant to Section 4.11(a) or failed to distribute or cause to be distributed to
Certificateholders any amount required to be distributed hereunder (including any Insured Payment), if such
amount is held by the Trustee or its Paying Agent (other than the Master Servicer or the Depositor) for
distribution or (ii) to otherwise observe or perform in any material respect any of its covenants, agreements or
obligations hereunder, and such failure shall continue unremedied for a period of 5 days (in respect of clause
(i) above) or 30 days (in respect of clause (ii) above, other than any failure to comply with the provisions of
Article XII, in which case no notice or grace period shall be applicable) after the date on which written notice
of such failure, requiring that the same be remedied, shall have been given to the Trustee by the Depositor or
the Certificate Insurer, then the Depositor with the consent of the Certificate Insurer, which consent shall not
be unreasonably withheld, may remove the Trustee and appoint a successor trustee by written instrument delivered
as provided in the preceding sentence. In connection with the appointment of a successor trustee pursuant to the
preceding sentence, the Depositor shall, on or before the date on which any such appointment becomes effective,
obtain from each Rating Agency written confirmation that the appointment of any such successor trustee will not
result in the reduction of the ratings on any Class of the Certificates below the lesser of the then current or
original ratings on such Certificates (without taking into account the Certificate Guaranty Insurance Policy).
(c) During the continuance of a Certificate Insurer Default, the Holders of Certificates entitled
to at least 51% of the Voting Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or their attorneys-in-fact duly
authorized, one complete set of which instruments shall be delivered to the Depositor, one complete set to the
Trustee so removed and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to
any of the provisions of this Section shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 8.08.
Section 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 8.07 shall execute, acknowledge and
deliver to the Depositor, the Certificate Insurer 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 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 Depositor, the Master Servicer and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this Section unless at the time of
such acceptance such successor trustee shall be eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as provided in this Section, the
Depositor shall mail notice of the succession of such trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register. If the Depositor fails to mail such notice within 10days after
acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Depositor.
Section 8.09. Merger or Consolidation of Trustee.
Any corporation or national banking association into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any corporation or national banking
association succeeding to the business of the Trustee, shall be the successor of the Trustee hereunder, provided
such corporation or national banking association shall be eligible under the provisions of Section 8.06, without
the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding. The Trustee shall mail notice of any such merger or consolidation to the
Certificateholders at their address as shown in the Certificate Register.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust Fund or property securing the same may at the
time be located, the Master Servicer and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees, of all or any part of the Trust
Fund, and to vest in such Person or Persons, in such capacity, such title to the Trust Fund, or any part thereof,
and, subject to the other provisions of this Section 8.10, such powers, duties, obligations, rights and trusts as
the Master Servicer and the Trustee may consider necessary or desirable. If the Master Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request so to do, or in case an Event of
Default shall have occurred and be continuing, the Trustee alone shall have the power to make such appointment.
No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 8.06 hereunder, and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee pursuant to this Section
8.10, all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee, and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to
each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article
VIII. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including
every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the Trustee, its agent or
attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts
shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
Section 8.11. Appointment of the Custodian.
The Trustee may, with the consent of the Master Servicer, the Certificate Insurer and the Depositor, or
shall, at the direction of the Master Servicer, the Certificate Insurer and the Depositor, appoint custodians who
are not Affiliates of the Depositor or the Master Servicer to hold all or a portion of the Custodial Files as
agent for the Trustee, by entering into a Custodial Agreement. The Trustee is hereby directed to enter into a
Custodial Agreement with Xxxxx Fargo Bank, N.A. Subject to Article VIII, the Trustee agrees to comply with the
terms of each Custodial Agreement 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.
The Trustee shall maintain an office or agency in the City of St. Xxxx, Minnesota where Certificates may
be surrendered for registration of transfer or exchange. The Trustee initially designates its offices located at
the Corporate Trust Office for the purpose of keeping the Certificate Register. The Trustee shall maintain an
office at the address stated in Section 11.05(c) hereof where notices and demands to or upon the Trustee in
respect of this Agreement may be served.
Section 8.13. DTC Letter of Representations.
The Trustee is hereby authorized and directed to, and agrees that it shall, enter into the DTC Letter on
behalf of the Trust Fund and in its individual capacity as agent thereunder.
Section 8.14. Swap Agreements.
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-A Swap
Agreement on behalf of (i) the Class A Certificateholders on the one hand, and (ii) the Class SB
Certificateholders on the other hand. The Supplemental Interest Trust Trustee shall be afforded all the rights
and protections provided to the Trustee as described in this Article VIII.
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase or Liquidation of All Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and responsibilities of the Depositor, the
Master Servicer and the Trustee created hereby in respect of the Certificates (other than the obligation of the
Trustee to make certain payments after the Final Distribution Date to Certificateholders and the obligation of
the Depositor to send certain notices as hereinafter set forth) shall terminate upon the last action required to
be taken by the Trustee on the Final Distribution Date pursuant to this Article IX following the earlier of:
(i) the later of the final payment or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan, or
(ii) 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) (and if such purchase is made by the Master Servicer only, 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) plus
the Certificate Insurer Premium Modified Rate, to, but not including, the first day of the month in
which such repurchase price is distributed, including payments of any amounts due to the Certificate
Insurer pursuant to the Insurance Agreement and (B) any unpaid Swap Termination Payment and any Net Swap
Payments 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 21years 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 date of such purchase occurring on or after the Optional Termination Date. If such right is
exercised by the Master Servicer, the Master Servicer shall be deemed to have been reimbursed for the full amount
of any unreimbursed Advances theretofore made by it with respect to the Mortgage Loans being purchased. In
addition, the Master Servicer shall provide to the Trustee the certification required by Section 3.15, and the
Trustee and the Custodian shall, promptly following payment of the purchase price, release to the Master Servicer
the Custodial Files pertaining to the Mortgage Loans being purchased. No purchase pursuant to clause (ii) of this
Section 9.01(a) is permitted if it would result in a draw on the Certificate Guaranty Insurance Policy, unless
the Certificate Insurer consents in writing.
In addition to the foregoing, on any Distribution Date on or after the Optional Termination Date, the
Master Servicer shall have the right, at its option, to purchase the Class A Certificates and Class SB
Certificates in whole, but not in part, at a price equal to the sum of the outstanding Certificate Principal
Balance of such Certificates plus the sum of one month’s Accrued Certificate Interest thereon, 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
through the date of such optional termination. If the Master Servicer exercises this right to purchase the
outstanding Class A 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, the Swap
Counterparty (so long as the Swap Agreement has not previously been terminated) and the Certificate Insurer 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 (if it is
exercising the right to purchase the Mortgage Loans or to purchase the outstanding Certificates), or by the
Trustee (in any other case) by letter to the Certificateholders (with a copy to the Certificate Registrar and the
Certificate Insurer) mailed not earlier than the 15th day and not later than the 25th day of the month next
preceding the month of such final distribution specifying:
(i) the anticipated Final Distribution Date upon which final payment of the Certificates
is anticipated to be made upon presentation and surrender of Certificates at the office or agency of the Trustee
therein designated 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 made,
(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 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. 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 provided above, and provide notice
of such deposit to the Trustee and the Certificate Insurer. The Trustee shall 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) Upon presentation and surrender of the Class A Certificates and Class SB Certificates by the
Certificateholders thereof, the Trustee and the Supplemental Interest Trust Trustee, as applicable, shall
distribute to such Certificateholders (i) the amount otherwise distributable on such Distribution Date, if not in
connection with the Master Servicer’s election to repurchase the Mortgage Loans or the outstanding Class A
Certificates and Class SB Certificates, or (ii) if the Master Servicer elected to so repurchase the Mortgage
Loans or the outstanding Class A Certificates and Class SB Certificates, an amount equal to the price paid
pursuant to Section 9.01(a) as follows: first, with respect to the Class A Certificates, pari passu, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate Interest thereon for the related
Interest Accrual Period and any previously unpaid Accrued Certificate Interest, second, with respect to the
Certificate Insurer, the amount of any Cumulative Insurance Payment; third, with respect to the Class A
Certificates, the amount of any Prepayment Interest Shortfalls allocated thereto for such Distribution Date or
remaining unpaid from prior Distribution Dates and accrued interest thereon at the applicable Pass-Through Rate,
on a pro rata basis based on Prepayment Interest Shortfalls allocated thereto for such Distribution Date or
remaining unpaid from prior Distribution Dates, fourth, to the Certificate Insurer, any amounts owed to it
pursuant to the Insurance Agreement, fifth, 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 sixth, with respect to the Class SB Certificates, all remaining amounts.
(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 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.
Section 9.02. Additional Termination Requirements.
(a) Any REMIC hereunder, as the case may be, shall be terminated in accordance with the following
additional requirements, unless (subject to Section 10.01(f)) the Trustee, the Certificate Insurer and the Master
Servicer have received an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the Trustee or
the Certificate Insurer) to the effect that the failure of any REMIC created hereunder as the case may be, to
comply with the requirements of this Section 9.02 will not (i) result in the imposition on the Trust Fund of
taxes on “prohibited transactions,” as described in Section 860F of the Code, or (ii) cause any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificate is outstanding:
(i) The Master Servicer shall establish a 90 day liquidation period for REMIC I, REMIC II
or REMIC III, as applicable, and any other related terminating REMICs, and specify the first day of such
period in a statement attached to REMIC I’s, REMIC II's or REMIC III’s, as applicable, and any other
related terminating REMICs’, final Tax Return pursuant to Treasury Regulations Section 1.860F 1. The
Master Servicer also shall satisfy all of the requirements of a qualified liquidation for each of REMIC
I, REMIC II and REMIC III under Section 860F of the Code and the regulations thereunder;
(ii) The Master Servicer shall notify the Trustee at the commencement of such 90-day
liquidation period and, at or prior to the time of making of the final payment on the Certificates, the
Trustee shall sell or otherwise dispose of all of the remaining assets of the liquidating REMICs in
accordance with the terms hereof; and
(iii) If the Master Servicer is exercising its right to purchase the assets of the Trust
Fund, the Master Servicer shall, during the 90-day liquidation period and at or prior to the Final
Distribution Date, purchase all of the assets of the liquidating REMICs 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 any REMIC hereunder at the
expense of the Trust Fund in accordance with the terms and conditions of this Agreement.
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The REMIC Administrator shall make an election to treat all REMICs created hereunder as a REMIC
under the Code and, if necessary, under applicable state law. Each such election will be made on Form 1066 or
other appropriate federal tax or information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the Certificates are issued. The REMIC I
Regular Interests shall be designated as the “regular interests” and Component I of the Class R Certificates
shall be designated as the sole Class of “residual interests” in REMIC I. The REMIC II Regular Interests shall
be designated as the “regular interests” and Component II of the Class R Certificates shall be designated as the
sole Class of “residual interests” in REMIC II. The REMIC III Regular Interests shall be designated as the
“regular interests” and Component III of the Class R Certificates shall be designated as the sole Class of
“residual interests” in REMIC III. The REMIC Administrator and the Trustee shall not permit the creation of any
“interests” (within the meaning of Section 860G of the Code) in REMIC I, REMIC II or REMIC III other than the
REMIC I Regular Interests, the REMIC II Regular Interests, REMIC III Regular Interest IO and the Certificates.
(b) The Closing Date is hereby designated as the “startup day” of each REMIC created hereunder
within the meaning of Section 860G(a)(9) of the Code (the “Startup Date”).
(c) The REMIC Administrator shall hold a Class R Certificate in each REMIC representing a 0.01%
Percentage Interest of the Class R Certificates in each REMIC and shall be designated as the “tax matters person”
with respect to each REMIC in the manner provided under Treasury Regulations Section1.860F-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 the REMICs created hereunder and the Supplemental Interest Trust and
deliver such Tax Returns in a timely manner to the Trustee or the Supplemental Interest Trust Trustee, as
applicable, and the Trustee or the Supplemental Interest Trust Trustee, as applicable 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 or the Supplemental Interest Trust Trustee, as applicable, with respect to any tax or liability arising
from the Trustee’s or the Supplemental Interest Trust Trustee’s, as applicable, signing of Tax Returns that
contain errors or omissions. The Trustee, the Supplemental Interest Trust Trustee and Master Servicer shall
promptly provide the REMIC Administrator with such information as the REMIC Administrator may from time to time
request for the purpose of enabling the REMIC Administrator to prepare Tax Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a Class R Certificate such
information as is necessary for the application of any tax relating to the transfer of a Class R Certificate to
any Person who is not a Permitted Transferee, (ii) to the Trustee and the Trustee shall forward to the
Certificateholders such information or reports as are required by the Code or the REMIC Provisions including
reports relating to interest, original issue discount, if any, and market discount or premium (using the
Prepayment Assumption) and (iii) to the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each REMIC created hereunder.
(f) The Master Servicer and the REMIC Administrator shall take such actions and shall cause each
REMIC created hereunder to take such actions as are reasonably within the Master Servicer’s or the REMIC
Administrator’s control and the scope of its duties more specifically set forth herein as shall be necessary or
desirable to maintain the status thereof as a REMIC under the REMIC Provisions (and the Trustee shall assist the
Master Servicer and the REMIC Administrator, to the extent reasonably requested by the Master Servicer and the
REMIC Administrator to do so). In performing their duties as more specifically set forth herein, the Master
Servicer and the REMIC Administrator shall not knowingly or intentionally take any action, cause the Trust Fund
to take any action or fail to take (or fail to cause to be taken) any action reasonably within their respective
control and the scope of duties more specifically set forth herein, that, under the REMIC Provisions, if taken or
not taken, as the case may be, could (i)endanger the status of any REMIC created hereunder as a REMIC or (ii)
result in the imposition of a tax upon any REMIC created hereunder (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code (except as provided in Section 2.04) and the
tax on contributions to a REMIC set forth in Section 860G(d) of the Code) (either such event, in the absence of
an Opinion of Counsel or the indemnification referred to in this sentence, an “Adverse REMIC Event”) unless the
Certificate Insurer and 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 (and is not adverse to the interest of the Certificate
Insurer), at the expense of the Trust Fund, but in no event at the expense of the Master Servicer, the REMIC
Administrator or the Trustee) to the effect that the contemplated action will not, with respect to the Trust Fund
created hereunder, endanger such status or, unless the Master Servicer or the REMIC Administrator or both, as
applicable, determine in its or their sole discretion to indemnify the Trust Fund against the imposition of such
a tax, result in the imposition of such a tax. Wherever in this Agreement a contemplated action may not be taken
because the timing of such action might result in the imposition of a tax on the Trust Fund, or may only be taken
pursuant to an Opinion of Counsel that such action would not impose a tax on the Trust Fund, such action may
nonetheless be taken provided that the indemnity given in the preceding sentence with respect to any taxes that
might be imposed on the Trust Fund has been given and that all other preconditions to the taking of such action
have been satisfied. The Trustee shall not take or fail to take any action (whether or not authorized hereunder)
as to which the Master Servicer or the REMIC Administrator, as applicable, has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could occur with respect to such action
or inaction, as the case may be. In addition, prior to taking any action with respect to the Trust Fund or its
assets, or causing the Trust Fund to take any action, which is not expressly permitted under the terms of this
Agreement, the Trustee shall consult with the Certificate Insurer and the Master Servicer or the REMIC
Administrator, as applicable, or its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to the Trust Fund and the Trustee shall not take any such action or
cause the Trust Fund to take any such action as to which the Master Servicer or the REMIC Administrator, as
applicable, has advised it in writing that an Adverse REMIC Event could occur. The Master Servicer or the REMIC
Administrator, as applicable, may consult with counsel to make such written advice, and the cost of same shall be
borne by the party seeking to take the action not expressly permitted by this Agreement, but in no event at the
expense of the Master Servicer or the REMIC Administrator. At all times as may be required by the Code, the
Master Servicer or the REMIC Administrator, as applicable, will to the extent within its control and the scope of
its duties more specifically set forth herein, maintain substantially all of the assets of the REMIC as
“qualified mortgages” as defined in Section 860G(a)(3) of the Code and “permitted investments” as defined in
Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on “prohibited transactions” of any REMIC created
hereunder as defined in Section 860F(a)(2) of the Code, on “net income from foreclosure property” of any REMIC as
defined in Section 860G(c) of the Code, on any contributions to any REMIC after the Startup Date therefor
pursuant to Section 860G(d) of the Code, or any other tax imposed by the Code or any applicable provisions of
state or local tax laws, such tax shall be charged (i) to the Master Servicer, if such tax arises out of or
results from a breach by the Master Servicer in its role as Master Servicer or REMIC Administrator of any of its
obligations under this Agreement or the Master Servicer has in its sole discretion determined to indemnify the
Trust Fund against such tax, (ii) to the Trustee, if such tax arises out of or results from a breach by the
Trustee of any of its obligations under this Article X, or (iii) otherwise against amounts on deposit in the
Custodial Account as provided by Section 3.10 and on the Distribution Date(s) following such reimbursement the
aggregate of such taxes shall be allocated in reduction of the Accrued Certificate Interest on each Class
entitled thereto in the same manner as if such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Master Servicer shall, for federal income tax purposes, maintain books and
records with respect to each REMIC on a calendar year and on an accrual basis or as otherwise may be required by
the REMIC Provisions.
(i) Following the Startup Date, neither the Master Servicer nor the Trustee shall accept any
contributions of assets to any REMIC unless (subject to Section 10.01(f)) the Master Servicer, the Certificate
Insurer and the Trustee shall have received an Opinion of Counsel (at the expense of the party seeking to make
such contribution) to the effect that the inclusion of such assets in any REMIC will not cause any REMIC created
hereunder to fail to qualify as a REMIC at any time that any Certificates are outstanding or subject any such
REMIC to any tax under the REMIC Provisions or other applicable provisions of federal, state and local law or
ordinances.
(j) Neither the Master Servicer nor the Trustee shall (subject to Section 10.01(f)) enter into any
arrangement by which any REMIC created hereunder will receive a fee or other compensation for services nor permit
any REMIC created hereunder to receive any income from assets other than “qualified mortgages” as defined in
Section 860G(a)(3) of the Code or “permitted investments” as defined in Section 860G(a)(5) of the Code.
(k) Solely for purposes of Section1.860G-1(a)(4)(iii) of the Treasury Regulations, the “latest
possible maturity date” by which the principal balance of each regular interest in each REMIC would be reduced to
zero is January 25, 2037, which is the Distribution Date in the month following the last scheduled payment on any
Mortgage Loan.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall prepare and file with the
Internal Revenue Service Form 8811, “Information Return for Real Estate Mortgage Investment Conduits (REMIC) and
Issuers of Collateralized Debt Obligations” for the Trust Fund.
(m) Neither the Trustee nor the Master Servicer shall sell, dispose of or substitute for any of the
Mortgage Loans (except in connection with (i) the default, imminent default or foreclosure of a Mortgage Loan,
including but not limited to, the acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of any REMIC pursuant to Article IX of
this Agreement or (iv) a purchase of Mortgage Loans pursuant to Article II or III of this Agreement) or acquire
any assets for any REMIC or sell or dispose of any investments in the Custodial Account or the Certificate
Account for gain, or accept any contributions to any REMIC after the Closing Date unless it and the Certificate
Insurer have received an Opinion of Counsel that such sale, disposition, substitution or acquisition will not (a)
affect adversely the status of any REMIC created hereunder as a REMIC or (b)unless the Master Servicer has
determined in its sole discretion to indemnify the Trust Fund against such tax, cause any REMIC to be subject to
a tax on “prohibited transactions” or “contributions” pursuant to the REMIC Provisions.
Section 10.02. Master Servicer, REMIC Administrator and Trustee Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Certificate Insurer, the Depositor, the
REMIC Administrator and the Master Servicer for any taxes and costs including, without limitation, any reasonable
attorneys fees imposed on or incurred by the Trust Fund, the Certificate Insurer, the Depositor or the Master
Servicer, as a result of a breach of the Trustee’s covenants set forth in Article VIII or this Article X. In the
event that Residential Funding is no longer the Master Servicer, the Trustee shall indemnify Residential Funding
for any taxes and costs including, without limitation, any reasonable attorneys fees imposed on or incurred by
Residential Funding as a result of a breach of the Trustee’s covenants set forth in Article VIII or this Article
X.
(b) The REMIC Administrator agrees to indemnify the Trust Fund, the Depositor, the Certificate
Insurer, the Master Servicer and the Trustee for any taxes and costs (including, without limitation, any
reasonable attorneys’ fees) imposed on or incurred by the Trust Fund, the Depositor, the Certificate Insurer, the
Master Servicer or the Trustee, as a result of a breach of the REMIC Administrator’s covenants set forth in this
Article X with respect to compliance with the REMIC Provisions, including without limitation, any penalties
arising from the Trustee’s execution of Tax Returns prepared by the REMIC Administrator that contain errors or
omissions; provided, however, that such liability will not be imposed to the extent such breach is a result of an
error or omission in information provided to the REMIC Administrator by the Master Servicer in which case Section
10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund, the Depositor, the Certificate Insurer,
the REMIC Administrator and the Trustee for any taxes and costs (including, without limitation, any reasonable
attorneys’ fees) imposed on or incurred by the Trust Fund, the Depositor, the Certificate Insurer, the REMIC
Administrator or the Trustee, as a result of a breach of the Master Servicer’s covenants set forth in this
Article X or in Article III with respect to compliance with the REMIC Provisions, including without limitation,
any penalties arising from the Trustee’s execution of Tax Returns prepared by the Master Servicer that contain
errors or omissions.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
(a) This Agreement or any Custodial Agreement may be amended from time to time by the Depositor,
the Master Servicer and the Trustee, with the consent of the Certificate Insurer but 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 any REMIC created hereunder as a REMIC at all
times that any Certificate is outstanding or to avoid or minimize the risk of the imposition of any tax
on the Trust Fund pursuant to the Code that would be a claim against the Trust Fund, provided that the
Trustee has received an Opinion of Counsel to the effect that (A)such action is necessary or desirable
to maintain such qualification or to avoid or minimize the risk of the imposition of any such tax and
(B) such action will not adversely affect in any material respect the interests of any Certificateholder,
(iv) to change the timing and/or nature of deposits into the Custodial Account or the
Certificate Account or to change the name in which the Custodial Account is maintained, provided that
(A) the Certificate Account Deposit Date shall in no event be later than the related Distribution Date,
(B) such change shall not, as evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Certificateholder and (C) such change shall not result in a reduction of
the rating assigned to any Class of Certificates below the lower of the then-current rating or the
rating assigned to such Certificates as of the Closing Date (without taking into account the Certificate
Guaranty Insurance Policy), as evidenced by a letter from each Rating Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section 5.02(f) or any other
provision hereof restricting transfer of the Class R Certificates by virtue of their being the “residual
interests” in the Trust Fund provided that (A) such change shall not result in reduction of the rating
assigned to any such Class of Certificates below the lower of the then-current rating or the rating
assigned to such Certificates as of the Closing Date, as evidenced by a letter from each Rating Agency
to such effect, and (B) such change shall not (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
the Trust Fund or any of the Certificateholders (other than the transferor) to be subject to a federal
tax caused by a transfer to a Person that is not a Permitted Transferee, or
(vi) to make any other provisions with respect to matters or questions arising under this
Agreement or such Custodial Agreement which shall not be materially inconsistent with the provisions of
this Agreement, provided that such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder and is authorized or permitted
under Section 11.01.
(b) This Agreement or any Custodial Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Trustee and the Holders of Certificates evidencing in the aggregate not less
than 66% of the Percentage Interests of each Class of Certificates with a Certificate Principal Balance greater
than zero affected thereby for the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or such Custodial Agreement or of modifying in any manner the rights of
the Holders of Certificates of such Class; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of, payments which are
required to be distributed on any Certificate without the consent of the Holder of such Certificate,
(ii) adversely affect in any material respect the interest of the Holders of Certificates
of any Class in a manner other than as described in clause (i) hereof without the consent of Holders of
Certificates of such Class evidencing, as to such Class, Percentage Interests aggregating not less than 66%, or
(iii) reduce the aforesaid percentage of Certificates of any Class the Holders of which are
required to consent to any such amendment, in any such case without the consent of the Holders of all
Certificates of such Class then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee shall not consent to any
amendment to this Agreement unless it and the Certificate Insurer shall have first received an Opinion of Counsel
(at the expense of the party seeking such amendment) to the effect that such amendment or the exercise of any
power granted to the Master Servicer, the Depositor or the Trustee in accordance with such amendment will not
result in the imposition of a federal tax on the Trust Fund or cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Certificate is outstanding; provided, that if the indemnity described in
Section 10.01(f) with respect to any taxes that might be imposed on the Trust Fund has been given, the Trustee
shall not require the delivery to it of the Opinion of Counsel described in this Section 11.01(c). The Trustee
may but shall not be obligated to enter into any amendment pursuant to this Section that affects its rights,
duties and immunities and this Agreement or otherwise; provided, however, such consent shall not be unreasonably
withheld.
(d) Promptly after the execution of any such amendment the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder. It shall not be necessary for the
consent of Certificateholders under this Section 11.01 to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
(e) The Depositor shall have the option, in its sole discretion, to obtain and deliver to the
Trustee any corporate guaranty, payment obligation, irrevocable letter of credit, surety bond, insurance policy
or similar instrument or a reserve fund, or any combination of the foregoing, for the purpose of protecting the
Holders of the Class SB 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 SB Certificateholders, but shall not be and
shall not be deemed to be under any circumstances included in any REMIC. To the extent that any such instrument
or fund constitutes a reserve fund for federal income tax purposes, (i) any reserve fund so established shall be
an outside reserve fund and not an asset of such REMIC, (ii) any such reserve fund shall be owned by the
Depositor, and (iii) amounts transferred by such REMIC to any such reserve fund shall be treated as amounts
distributed by such REMIC to the Depositor or any successor, all within the meaning of Treasury Regulations
Section1.860G-2(h) in effect 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 Depositor and such related
insurer but without the consent of any Certificateholder and without the consent of the Master Servicer or the
Trustee being required unless any such amendment would impose any additional obligation on, or otherwise
adversely affect the interests of the Certificateholders or the Certificate Insurer, the Master Servicer or the
Trustee, as applicable; provided that the Depositor obtains an Opinion of Counsel (which need not be an opinion
of Independent counsel) to the effect that any such amendment will not cause (a) any federal tax to be imposed on
the Trust Fund, including without limitation, any federal tax imposed on “prohibited transactions” under Section
860F(a)(1) of the Code or on “contributions after the startup date” under Section 860G(d)(1) of the Code and (b)
any REMIC created hereunder to fail to qualify as a REMIC at any time that any Certificate is outstanding. In
the event that the Depositor elects to provide such coverage in the form of a limited guaranty provided by GMAC
LLC, the Depositor may elect that the text of such amendment to this Agreement shall be substantially in the form
attached hereto as Exhibit K (in which case Residential Funding’s Subordinate Certificate Loss Obligation as
described in such exhibit shall be established by Residential Funding’s consent to such amendment) and that the
limited guaranty shall be executed in the form attached hereto as Exhibit L, with such changes as the Depositor
shall deem to be appropriate; it being understood that the Trustee has reviewed and approved the content of such
forms and that the Trustee’s consent or approval to the use thereof is not required.
(f) [Reserved]
Section 11.02. Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Agreement is subject to recordation in all
appropriate public offices for real property records in all the counties or other comparable jurisdictions in
which any or all of the properties subject to the Mortgages are situated, and in any other appropriate public
recording office or elsewhere, such recordation to be effected by the Master Servicer and at its expense on
direction by the Trustee (pursuant to the request of the Certificate Insurer or the Holders of Certificates
entitled to at least 25% of the Voting Rights), but only upon direction accompanied by an Opinion of Counsel to
the effect that such recordation materially and beneficially affects the interests of the Certificateholders or
the Certificate Insurer.
(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 and the Certificate Insurer 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 Certificate Insurer shall have given
its written consent 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, without regard to the conflict of law principles thereof, other than Sections 5-1401 and
5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Section 11.05. Notices.
All demands and notices hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid (except for notices to the Trustee which
shall be deemed to have been duly given only when received), to (a) in the case of the Depositor, 0000 Xxxxxxxxxx
Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:President (RASC), or such other address as may
hereafter be furnished to the Master Servicer and the Trustee in writing by the Depositor; (b) in the case of the
Master Servicer, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000, Attention: Bond Administration or
such other address as may be hereafter furnished to the Depositor and the Trustee by the Master Servicer in
writing; (c) in the case of the Trustee, the Corporate Trust Office or such other address as may hereafter be
furnished to the Depositor and the Master Servicer in writing by the Trustee; (d) in the case of Standard &
Poor’s, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; Attention: Mortgage Surveillance or such other address as may
be hereafter furnished to the Depositor, Trustee and Master Servicer by Standard & Poor’s; (e) in the case of
Moody’s, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: ABS Monitoring Department, or such other address
as may be hereafter furnished to the Depositor, the Trustee and the Master Servicer in writing by Moody’s, and
(f) in the case of the Swap Counterparty, Bear Xxxxxxx Financial Products Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or such other address as may be hereafter furnished to the Depositor, the Trustee and the Master
Servicer in writing by the Swap Counterparty, and (g) in the case of the Certificate Insurer, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Surveillance - RASC 2007-EMX1, or such other address as
may be hereafter furnished to the Depositor, the Trustee and the Master Servicer in writing by the Certificate
Insurer. Any notice required or permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such holder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or
not the Certificateholder receives such notice.
Section 11.06. Notices to Rating Agencies and the Certificate Insurer.
The Depositor, the Master Servicer or the Trustee, as applicable, shall notify each Rating Agency, the
Certificate Insurer and each Subservicer at such time as it is otherwise required pursuant to this Agreement to
give notice of the occurrence of, any of the events described in clause (a), (b), (c), (d), (g), (h), (i) or (j)
below or provide a copy to each Rating Agency, the Certificate Insurer and each Subservicer 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) the termination or appointment of a successor Master Servicer or 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) a change in the location of the Custodial Account or 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, the Certificate Insurer and each Subservicer of any such
event known to the Master Servicer. Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Certificateholders receives such notice.
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 or the Certificate Insurer.
Section 11.08. Supplemental Provisions for Resecuritization.
(a) This Agreement may be supplemented by means of the addition of a separate Article hereto (a
“Supplemental Article”) for the purpose of resecuritizing any of the Certificates issued hereunder, under the
following circumstances. With respect to any Class or Classes of Certificates issued hereunder, or any portion
of any such Class, as to which the Depositor or any of its Affiliates (or any designee thereof) is the registered
Holder (the “Resecuritized Certificates”), the Depositor may deposit such Resecuritized Certificates into a new
REMIC, grantor trust or custodial arrangement (a“Restructuring Vehicle”) to be held by the Trustee pursuant to a
Supplemental Article. The instrument adopting such Supplemental Article shall be executed by the Depositor, the
Master Servicer and the Trustee; provided, that neither the Master Servicer nor the Trustee shall withhold their
consent thereto if their respective interests would not be materially adversely affected thereby. To the extent
that the terms of the Supplemental Article do not in any way affect any provisions of this Agreement as to any of
the Certificates initially issued hereunder, the adoption of the Supplemental Article shall not constitute an
“amendment” of this Agreement. Each Supplemental Article shall set forth all necessary provisions relating to the
holding of the Resecuritized Certificates by the Trustee, the establishment of the Restructuring Vehicle, the
issuing of various classes of new certificates by the Restructuring Vehicle and the distributions to be made
thereon, and any other provisions necessary to the purposes thereof. In connection with each Supplemental
Article, the Depositor shall deliver to the Trustee an Opinion of Counsel to the effect that (i) the
Restructuring Vehicle will qualify as a REMIC, grantor trust or other entity not subject to taxation for federal
income tax purposes and (ii) the adoption of the Supplemental Article will not endanger the status of any REMIC
created hereunder as a REMIC or result in the imposition of a tax upon the Trust Fund (including but not limited
to the tax on prohibited transaction as defined in Section 860F(a)(2) of the Code and the tax on contributions to
a REMIC as set forth in Section 860G(d) of the Code.
Section 11.09. Third Party Beneficiary.
The Swap Counterparty is an express third party beneficiary of Sections 4.02(c)(x) and 4.10 of this
Agreement, and shall have the right to enforce the provisions of Sections 4.02(c)(x) and 4.10 of this Agreement
as if it were a party hereto
Section 11.10. Rights of the Certificate Insurer.
(a) The Certificate Insurer is an express third-party beneficiary of this Agreement.
(b) The Trustee shall provide to the Certificate Insurer copies of any report, notice, Opinion of
Counsel, Officers’ Certificate, request for consent or request for amendment to any document related hereto
promptly upon the Trustee’s production or receipt thereof.
(c) Unless a Certificate Insurer Default exists, the Trustee and the Depositor shall not agree to
any amendment to this Agreement without first having obtained the prior written consent of the Certificate
Insurer.
(d) So long as there does not exist a failure by the Certificate Insurer to make a required payment
under either Certificate Guaranty Insurance Policy, the Certificate Insurer shall have the right to exercise all
rights of the Holders of the Class A Certificates under this Agreement without any consent of such Holders, and
such Holders may exercise such rights only with the prior written consent of the Certificate Insurer, except as
provided herein.
The Certificate Insurer shall not be entitled to exercise any of its rights hereunder so long as there
exists a failure by the Certificate Insurer to make a required payment under the Certificate Guaranty Insurance
Policy.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01. Intent of Parties; Reasonableness.
The Depositor, the Trustee and the Master Servicer acknowledge and agree that the purpose of this
Article XII is to facilitate compliance by the Depositor with the provisions of Regulation AB and related rules
and regulations of the Commission. The Depositor shall not exercise its right to request delivery of information
or other performance under these provisions other than in good faith, or for purposes other than compliance with
the Securities Act, the Exchange Act and the rules and regulations of the Commission under the Securities Act and
the Exchange Act. Each of the Master Servicer and the Trustee acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Depositor in good faith for delivery of
information under these provisions on the basis of evolving interpretations of Regulation AB. Each of the Master
Servicer and the Trustee shall cooperate reasonably with the Depositor to deliver to the Depositor (including any
of its assignees or designees), any and all disclosure, statements, reports, certifications, records and any
other information necessary in the reasonable, good faith determination of the Depositor to permit the Depositor
to comply with the provisions of Regulation AB.
Section 12.02. Additional Representations and Warranties of the Trustee.
(a) The Trustee shall be deemed to represent to the Depositor as of the Closing Date and on each
date on which information is provided to the Depositor under Sections 12.01, 12.02(b) or 12.03 that, except as
disclosed in writing to the Depositor prior to such date: (i) it is not aware and has not received notice that
any default, early amortization or other performance triggering event has occurred as to any other Securitization
Transaction due to any default of the Trustee; (ii) there are no aspects of its financial condition that could
have a material adverse effect on the performance by it of its trustee obligations under this Agreement or any
other Securitization Transaction as to which it is the trustee; (iii) there are no material legal or governmental
proceedings pending (or known to be contemplated) against it that would be material to Certificateholders; (iv)
there are no relationships or transactions relating to the Trustee with respect to the Depositor or any sponsor,
issuing entity, servicer, trustee, originator, significant obligor, enhancement or support provider or other
material transaction party (as such terms are used in Regulation AB) relating to the Securitization Transaction
contemplated by the Agreement, as identified by the Depositor to the Trustee in writing as of the Closing Date
(each, a “Transaction Party”) that are outside the ordinary course of business or on terms other than would be
obtained in an arm's length transaction with an unrelated third party, apart from the Securitization Transaction,
and that are material to the investors' understanding of the Certificates; and (v) the Trustee is not an
affiliate of any Transaction Party. The Depositor shall notify the Trustee of any change in the identity of a
Transaction Party after the Closing Date.
(b) If so requested by the Depositor on any date following the Closing Date, the Trustee shall,
within five Business Days following such request, confirm in writing the accuracy of the representations and
warranties set forth in paragraph (a) of this Section or, if any such representation and warranty is not accurate
as of the date of such confirmation, provide the pertinent facts, in writing, to the Depositor. Any such request
from the Depositor shall not be given more than once each Calendar Quarter, unless the Depositor shall have a
reasonable basis for a determination that any of the representations and warranties may not be accurate.
Section 12.03. Information to be Provided by the Trustee.
For so long as the Certificates are outstanding, for the purpose of satisfying the Depositor's reporting
obligation under the Exchange Act with respect to any Class of Certificates, the Trustee shall provide to the
Depositor a written description of (a) any litigation or governmental proceedings pending against the Trustee as
of the last day of each calendar month that would be material to Certificateholders, and (b) any affiliations or
relationships (as described in Item 1119 of Regulation AB) that develop following the Closing Date between the
Trustee and any Transaction Party of the type described in Section 12.02(a)(iv) or 12.02(a)(v) as of the last day
of each calendar year. Any descriptions required with respect to legal proceedings, as well as updates to
previously provided descriptions, under this Section 12.03 shall be given no later than five Business Days prior
to the Determination Date following the month in which the relevant event occurs, and any notices and
descriptions required with respect to affiliations, as well as updates to previously provided descriptions, under
this Section 12.03 shall be given no later than January 31 of the calendar year following the year in which the
relevant event occurs. As of the date the Depositor or Master Servicer files each Report on Form 10-D and Report
on Form 10-K with respect to the Certificates, the Trustee will be deemed to represent that any information
previously provided under this Article XII is materially correct and does not have any material omissions unless
the Trustee has provided an update to such information. The Depositor will allow the Trustee to review any
disclosure relating to material litigation against the Trustee prior to filing such disclosure with the
Commission to the extent the Depositor changes the information provided by the Trustee.
Section 12.04. Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Trustee shall:
(a) deliver to the Depositor a report (in form and substance reasonably satisfactory to the
Depositor) regarding the Trustee’s assessment of compliance with the applicable Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122
of Regulation AB. Such report shall be addressed to the Depositor and signed by an authorized officer of the
Trustee, and shall address each of the Servicing Criteria specified on Exhibit S hereto; and
(b) deliver to the Depositor a report of a registered public accounting firm reasonably acceptable
to the Depositor that attests to, and reports on, the assessment of compliance made by the Trustee and delivered
pursuant to the preceding paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g)
of Regulation S-X under the Securities Act and the Exchange Act.
Section 12.05. Indemnification; Remedies.
(a) The Trustee shall indemnify the Depositor, each affiliate of the Depositor, the Master Servicer
and each broker dealer acting as underwriter, placement agent or initial purchaser of the Certificates or each
Person who controls any of such parties (within the meaning of Section15 of the Securities Act and Section 20 of
the Exchange Act); and the respective present and former directors, officers, employees and agents of each of the
foregoing, and shall hold each of them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or alleged to be contained
in any information, report, certification, accountants’ attestation or other material provided under this Article
XII by or on behalf of the Trustee (collectively, the “Trustee Information”), or (B) the omission or alleged
omission to state in the Trustee Information a material fact required to be stated in the Trustee Information or
necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided, by way of clarification, that clause (B) of this paragraph shall be construed solely by
reference to the Trustee Information and not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Trustee Information or any portion thereof is presented
together with or separately from such other information; or
(ii) any failure by the Trustee to deliver any information, report, certification, or other
material when and as required under this Article XII, other than a failure by the Trustee to deliver the
accountants’ attestation.
(b) In the case of any failure of performance described in clause (ii) of Section 12.05(a), the
Trustee shall (i) promptly reimburse the Depositor for all costs reasonably incurred by the Depositor in order to
obtain the information, report, certification, accountants’ attestation or other material not delivered as
required by the Trustee and (ii) cooperate with the Depositor to mitigate any damages that may result from such
failure.
(c) The Depositor and the Master Servicer shall indemnify the Trustee, each affiliate of the
Trustee or each Person who controls the Trustee (within the meaning of Section15 of the Securities Act and
Section 20 of the Exchange Act), and the respective present and former directors, officers, employees and agents
of the Trustee, and shall hold each of them harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain arising out of or based upon (i) any untrue statement of a material fact contained or
alleged to be contained in any information provided under this Agreement by or on behalf of the Depositor or
Master Servicer for inclusion in any report filed with Commission under the Exchange Act (collectively, the “RFC
Information”), or (ii) the omission or alleged omission to state in the RFC Information a material fact required
to be stated in the RFC Information or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by way of clarification, that clause (ii) of
this paragraph shall be construed solely by reference to the RFC Information and not to any other information
communicated in connection with a sale or purchase of securities, without regard to whether the RFC Information
or any portion thereof is presented together with or separately from such other information.
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.
RESIDENTIAL ASSET SECURITIES CORPORATION
By:_____________________________________
Name:
Title: Vice President
RESIDENTIAL FUNDING COMPANY, LLC
By:______________________________________
Name:
Title: Associate
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:______________________________________
Name:
Title:
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the ____ day of February 2007 before me, a notary public in and for said State, personally appeared
_______________, known to me to be a Vice President of Residential Asset Securities Corporation, one of the
corporations that executed the within instrument, and also known to me to be the person who executed it on behalf
of said corporation, and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
Notary Public
________________________________________
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the ____ day of February 2007 before me, a notary public in and for said State, personally appeared
_______________, known to me to be an Associate of Residential Funding Company, LLC, one of the limited liability
companies that executed the within instrument, and also known to me to be the person who executed it on behalf of
said limited liability company, and acknowledged to me that such limited liability company executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
Notary Public
________________________________
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF XXXXXX )
On the ____ day of February 2007 before me, a notary public in and for said State, personally appeared
_____________________, known to me to be a _____________________ of U.S. Bank National Association, a banking
association organized under the laws of the United States that executed the within instrument, and also known to
me to be the person who executed it on behalf of said banking association and acknowledged to me that such
banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this
certificate first above written.
Notary Public
____________________________________
[Notarial Seal]
EXHIBIT A
FORM OF CLASS A-[_] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR INTEREST" IN A
"REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986 COUPLED WITH AN INTEREST IN THE SB-AM SWAP AGREEMENT.
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE PRINCIPAL
PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE,
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
ANY TRANSFEREE OF THIS CERTIFICATE THAT IS A PLAN INVESTOR WILL BE DEEMED TO HAVE REPRESENTED
THAT AS OF ANY DATE PRIOR TO THE TERMINATION OF THE SUPPLEMENTAL INTEREST TRUST, AT LEAST ONE OF U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTIONS 84-14, 90-1, 91-38, 95-60, 96-23 OR OTHER
APPLICABLE EXEMPTION APPLIES TO SUCH HOLDER'S RIGHT TO RECEIVE PAYMENTS FROM THE SUPPLEMENTAL INTEREST
TRUST.
IF THIS CERTIFICATE (OR ANY INTEREST THEREIN) IS ACQUIRED OR HELD BY ANY PERSON THAT DOES NOT
SATISFY THE CONDITIONS DESCRIBED IN THE PRECEDING PARAGRAPH, THEN THE LAST PRECEDING TRANSFEREE THAT IS
NOT A PLAN INVESTOR OR SATISFIES SUCH CONDITIONS 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
THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION 5.02(e) OF THE POOLING AND SERVICING
AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, ANY
SUBSERVICER, 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.
CUSIP: _____________________ Certificate No. A-[__]-__
Date of Pooling and Servicing Agreement [Adjustable Pass-Through Rate]
and Cut-off Date: March 1, 2007
First Distribution Date: April 25, 2007 Aggregate Initial Certificate Principal
Balance of the Class A-[_] Certificates:
$___________________________
Master Servicer: Initial Certificate Principal Balance of this
Residential Funding Company, LLC Class A-[_] Certificate:
$___________________________
Final Scheduled Distribution Date:
__________ __, 20__
HOME EQUITY MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2007-KS3
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 [fixed] [adjustable] interest rate, first [and
junior] lien mortgage loans on one- to four-family residential
properties sold by RESIDENTIAL ASSET SECURITIES CORPORATION
This Certificate is payable solely from the assets of the Trust Fund, and does not represent an
obligation of or interest in Residential Asset Securities Corporation, the Master Servicer, the Trustee
referred to below or GMAC Mortgage Group, LLC or any of their affiliates. Neither this Certificate nor
the underlying mortgage loans are guaranteed or insured by any governmental agency or instrumentality or
by Residential Asset Securities Corporation, the Master Servicer, the Trustee or GMAC Mortgage Group,
LLC or any of their affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, LLC 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 [fixed] [adjustable] interest rate, first [and junior] lien mortgage loans on one-
to four- family residential properties (the "Mortgage Loans"), sold by Residential Asset Securities
Corporation (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 A-[_] Certificates on such
Distribution Date.
Distributions on this Certificate will be made either by the Master Servicer acting on behalf
of the Trustee or by a Paying Agent appointed by the Trustee in immediately available funds (by wire
transfer or otherwise) for the account of the Person entitled thereto if such Person shall have so
notified the Master Servicer or such Paying Agent, or by check mailed to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate Register.
Each holder of this certificate is deemed to represent that as of any date prior to the
termination of the Supplemental Interest Trust, either it is not a Plan Investor or at least one of U.S.
Department of Labor Prohibited Transaction Class Exemptions 84-14, 90-1, 91-38, 95-60, 96-23 or other
applicable exemption applies to such holder's right to receive payments from the Supplemental Interest
Trust. 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 Depositor, the Trustee, the Master Servicer, any
Subservicer, and the Trust Fund from and against any and all liabilities, claims, costs or expenses
incurred by such parties as a result of such acquisition or holding.
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 Initial Certificate Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced [from time to time pursuant to the Agreement].
This Certificate is one of a duly authorized issue of Certificates issued in several Classes
designated as Home Equity 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 there upon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons in Classes and in
denominations specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or exchange, but the
Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Depositor, the Master Servicer, the Trustee, and the Certificate Registrar and any agent of
the Depositor, the Master Servicer, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes, and 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 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.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ________________________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class A-[_] Certificates referred to in the within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By: _______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of assignee) the beneficial
interest evidenced by the within Trust Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate to the following
address:
___________________________________________________________________________________________________________________
Dated:_____________________ ____________________________________
Signature by or on behalf of assignor
______________________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available 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 B
FORM OF CLASS M-[_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES AS DESCRIBED
IN THE AGREEMENT (AS DEFINED HEREIN).
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE PRINCIPAL
PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL
BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE 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 AN INTEREST IN THE SB-AM SWAP
AGREEMENT.
ANY TRANSFEREE OF THIS CERTIFICATE (OR INTEREST THEREIN) ACQUIRED AFTER TERMINATION OF THE
SUPPLEMENTAL INTEREST TRUST WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE OR HOLDING OF
THIS CERTIFICATE (OR INTEREST THEREIN) THAT EITHER (A) 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 (EACH OF THE
FOREGOING, A "PLAN INVESTOR"), (B) IT HAS ACQUIRED AND IS HOLDING THIS CERTIFICATE IN RELIANCE ON U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION EXEMPTION ("PTE") 94-29, 59 FED. REG. 14674 (MARCH 29, 1994),
AS MOST RECENTLY AMENDED BY PTE 2002-41, 67 FED. REG. 54487 (AUGUST 22, 2002) (THE "RFC EXEMPTION"), AND
THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE RFC EXEMPTION INCLUDING
THAT THIS 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 USED TO PURCHASE OR HOLD THIS CERTIFICATE 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 PTCE 95-60 HAVE BEEN SATISFIED (EACH ENTITY THAT SATISFIES THIS CLAUSE (C),
A "COMPLYING INSURANCE COMPANY"). EACH HOLDER OF THIS CERTIFICATE THAT IS A PLAN INVESTOR IS DEEMED TO
REPRESENT THAT AS OF ANY DATE PRIOR TO THE TERMINATION OF THE SUPPLEMENTAL INTEREST TRUST, AT LEAST ONE
OF U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTIONS 84-14, 90-1, 91-38, 95-60, 96-23 OR
OTHER APPLICABLE EXEMPTION APPLIES TO SUCH HOLDER'S RIGHT TO RECEIVE PAYMENTS FROM THE SUPPLEMENTAL
INTEREST TRUST.
IF THIS CERTIFICATE (OR ANY INTEREST THEREIN) 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 OR (II) ACQUIRED SUCH CERTIFICATE IN COMPLIANCE WITH THE CONDITIONS
DESCRIBED ABOVE 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
THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION 5.02(e) OF THE POOLING AND SERVICING
AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, ANY
SUBSERVICER, 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.
CUSIP: _____________________ Certificate No. M-[__]-__
Date of Pooling and Servicing Agreement [Adjustable Pass-Through Rate]
and Cut-off Date: March 1, 2007 [Fixed Pass-Through Rate]
First Distribution Date: April 25, 2007 Aggregate Initial Certificate Principal
Balance of the Class M-[_] Certificates:
$___________________________
Master Servicer: Initial Certificate Principal Balance of this
Residential Funding Company, LLC Class M-[_] Certificate:
$___________________________
Final Scheduled Distribution Date:
__________ __, 20__
HOME EQUITY MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2007-KS3
evidencing a percentage interest in the distributions allocable to
the Class M-[_] Certificates with respect to a Trust Fund consisting
primarily of a pool of [fixed] [adjustable] interest rate, first [and
junior] lien mortgage loans on one- to four-family residential
properties sold by RESIDENTIAL ASSET SECURITIES CORPORATION
This Certificate is payable solely from the assets of the Trust Fund, and does not represent an
obligation of or interest in Residential Asset Securities Corporation, the Master Servicer, the Trustee
referred to below or GMAC Mortgage Group, LLC or any of their affiliates. Neither this Certificate nor
the underlying mortgage loans are guaranteed or insured by any governmental agency or instrumentality or
by Residential Asset Securities Corporation, the Master Servicer, the Trustee or GMAC Mortgage Group,
LLC or any of their affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, LLC 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 [fixed] [adjustable] interest rate, first [and junior] lien mortgage loans on one-
to four- family residential properties (the "Mortgage Loans"), sold by Residential Asset Securities
Corporation (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 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.
Any Transferee of this Certificate (or interest therein) acquired after termination of the
Supplemental Interest Trust will be deemed to have represented by virtue of its purchase or holding of
this Certificate (or interest therein) that either (a) 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 (each of the
foregoing, a "Plan Investor"), (b) it has acquired and is holding this Certificate in reliance on U.S.
Department of Labor Prohibited Transaction Exemption ("PTE") 94-29, 59 Fed. Reg. 14674 (March 29, 1994),
as most recently amended by PTE 2002-41, 67 Fed. Reg. 54487 (August 22, 2002) (the "RFC Exemption"), and
that it understands that there are certain conditions to the availability of the RFC Exemption including
that this 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 used to purchase or hold this certificate 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 PTCE 95-60 have been satisfied (each entity that satisfies this clause (c),
a "Complying Insurance Company"). Each holder of this Certificate that is a Plan Investor is deemed to
represent that as of any date prior to the termination of the Supplemental Interest Trust at least one
of U.S. Department of Labor Prohibited Transaction Class Exemptions 84-14, 90-1, 91-38, 95-60, 96-23 or
other applicable exemption applies to such holder's right to receive payments from the Supplemental
Interest Trust.
If this Certificate (or any interest therein) 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 or (ii) acquired such Certificate in compliance with the conditions
described above 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 therein) was effected in violation of the restrictions in Section 5.02(e) of the Pooling
and Servicing Agreement shall indemnify and hold harmless the Depositor, the Trustee, the Master
Servicer, any Subservicer, 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.
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 Initial Certificate Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of distributions allocable to principal and any
Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of Certificates issued in several Classes
designated as Home Equity 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 there upon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without coupons in Classes and in
denominations specified in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest, as requested by the Holder
surrendering the same.
No service charge will be made for any such registration of transfer or exchange, but the
Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Depositor, the Master Servicer, the Trustee, and the Certificate Registrar and any agent of
the Depositor, the Master Servicer, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes, and 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 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.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: _________________________________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class M-[_] Certificates referred to in the within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By: _______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of assignee) the beneficial
interest evidenced by the within Trust Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate to the following
address:
___________________________________________________________________________________________________________________
Dated:_____________________ ____________________________________
Signature by or on behalf of assignor
_____________________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available 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 C
CLASS SB CERTIFICATE
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 AN INTEREST IN THE SB-AM SWAP
AGREEMENT AND THE SWAP AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT (THE "AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE MADE TO ANY 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 ANY 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
(EACH OF THE FOREGOING, A "PLAN INVESTOR") UNLESS THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER ARE
PROVIDED WITH AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE,
THE DEPOSITOR AND THE MASTER SERVICER TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE IS
PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN ANY NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT
ENACTMENTS), AND WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE MASTER SERVICER TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO
THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
DEPOSITOR OR THE MASTER SERVICER.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE (OR INTEREST
THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION 5.02(e) OF THE POOLING AND SERVICING
AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, ANY
SUBSERVICER, 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.
__________________NO TRANSFER OF ANY CLASS SB CERTIFICATE SHALL BE MADE UNLESS THE PROPOSED TRANSFEREE
OF SUCH CLASS SB CERTIFICATE PROVIDES TO THE TRUSTEE THE APPROPRIATE TAX CERTIFICATION FORM (I.E., IRS
FORM W-9 OR IRS FORM W-8BEN, W-8IMY, W-8EXP OR W-8ECI, AS APPLICABLE (OR ANY SUCCESSOR FORM THERETO))
AND AGREES TO UPDATE SUCH FORMS (I) UPON EXPIRATION OF ANY SUCH FORM, (II) AS REQUIRED UNDER THEN
APPLICABLE U.S. TREASURY REGULATIONS AND (III) PROMPTLY UPON LEARNING THAT SUCH FORM HAS BECOME OBSOLETE
OR INCORRECT, AS A CONDITION TO SUCH TRANSFER. UNDER THE AGREEMENT, UPON RECEIPT OF ANY SUCH TAX
CERTIFICATION FORM FROM A TRANSFEREE OF ANY CLASS SB CERTIFICATE, THE TRUSTEE (INCLUDING IN ITS CAPACITY
AS SUPPLEMENTAL INTEREST TRUST TRUSTEE) SHALL FORWARD SUCH TAX CERTIFICATION FORM PROVIDED TO IT TO THE
SWAP COUNTERPARTY. EACH HOLDER OF A CLASS SB CERTIFICATE AND EACH TRANSFEREE THEREOF SHALL BE DEEMED TO
HAVE CONSENTED TO THE TRUSTEE FORWARDING TO THE SWAP COUNTERPARTY ANY SUCH TAX CERTIFICATION FORM IT HAS
PROVIDED AND UPDATED IN ACCORDANCE WITH THESE TRANSFER RESTRICTIONS. ANY PURPORTED SALES OR TRANSFERS OF
ANY CLASS SB CERTIFICATE TO A TRANSFEREE WHICH DOES NOT COMPLY WITH THESE REQUIREMENTS SHALL BE DEEMED
NULL AND VOID UNDER THE AGREEMENT.
CUSIP: _____________________ Certificate No. SB-1
Date of Pooling and Servicing Agreement Percentage Interest: [__]%
and Cut-off Date: March 1, 2007
First Distribution Date: April 25, 2007 Initial Certificate Principal Balance of the Class SB
Certificates:
$___________________________
Master Servicer: Aggregate Initial Notional Certificate Principal
Residential Funding Company, LLC Balance of this Class SB Certificate:
$___________________________
Maturity Date:
__________ __, 20__
HOME EQUITY MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2007-KS3
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] [adjustable] interest rate, first [and
junior] lien mortgage loans on one- to four-family residential
properties sold by RESIDENTIAL ASSET SECURITIES CORPORATION
This Certificate is payable solely from the assets of the Trust Fund, and does not represent an
obligation of or interest in Residential Asset Securities Corporation, the Master Servicer, the Trustee
referred to below, GMAC Mortgage Group, LLC or any of their affiliates. Neither this Certificate nor the
underlying mortgage loans are guaranteed or insured by any governmental agency or instrumentality or by
Residential Asset Securities Corporation, the Master Servicer, the Trustee, GMAC Mortgage Group, LLC or
any of their affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, LLC or any of
their affiliates will have any obligation with respect to any certificate or other obligation secured by
or payable from payments on the Certificates.
This certifies that [______________________________] is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a pool of [fixed] [adjustable] interest rate, first [and junior]
lien mortgage loans on one- to four-family residential properties (the "Mortgage Loans"), sold by
Residential Asset Securities Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among the Depositor, the
Master Servicer and U.S. Bank National Association, as trustee (the "Trustee"), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof, assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each
month or, if such 25th day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing as described in the Agreement, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of the month 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.
No transfer of this Certificate will be made unless such transfer is exempt from the
registration requirements of the Securities Act of 1933, as amended, and any applicable state securities
laws or is made in accordance with said Act and laws. In the event that such a transfer is to be made,
(i) the Trustee or the Depositor may require an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee and the Depositor that such transfer is exempt (describing the
applicable exemption and the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, and of any applicable statute of any state and
(ii) the transferee shall execute an investment letter in the form described by the Agreement. The
Holder hereof desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Depositor, the Master Servicer and the Certificate Registrar acting on behalf of the Trustee against
any liability that may result if the transfer is not so exempt or is not made in accordance with such
Federal and state laws.
No transfer of this Certificate or any interest therein shall be made to any employee benefit
plan or other plan or arrangement subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code, or any 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 (each of the foregoing, a "Plan Investor") unless the Trustee, the
Depositor and the Master Servicer are provided with an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Depositor and the Master Servicer to the effect that the
purchase or holding of this Certificate is permissible under applicable law, will not constitute or
result in any non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
(or comparable provisions of any subsequent enactments), and will not subject the Trustee, the Depositor
or the Master Servicer to any obligation or liability (including obligations or liabilities under ERISA
or Section 4975 of the Code) in addition to those undertaken in the Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Depositor or the Master Servicer.
Any purported Certificate owner whose acquisition or holding of this Certificate (or interest
therein) was effected in violation of the restrictions in Section 5.02(e) of the Pooling and Servicing
Agreement shall indemnify and hold harmless the Depositor, the Trustee, the Master Servicer, any
Subservicer, and the Trust Fund from and against any and all liabilities, claims, costs or expenses
incurred by such parties as a result of such acquisition or holding.
This Certificate is one of a duly authorized issue of Certificates issued in several Classes
designated as Home Equity 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 Master Servicer 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 Master Servicer (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 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.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: _________________________________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class SB Certificates referred to in the within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By: _______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of assignee) the beneficial
interest evidenced by the within Trust Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate to the following
address:
___________________________________________________________________________________________________________________
Dated:_____________________ ____________________________________
Signature by or on behalf of assignor
_____________________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available 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 D
FORM OF CLASS R CERTIFICATE
THE CLASS R CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS CONSTITUTING THE AVAILABLE
DISTRIBUTION AMOUNT UNTIL SUCH TIME AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN (THE "AGREEMENT").
THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE CLASS A, CLASS M AND CLASS SB CERTIFICATES, TO
THE EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT.
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON OR A
DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL INTEREST" IN A
"REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT (THE "AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE MADE TO ANY 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 ANY 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
(EACH OF THE FOREGOING, A "PLAN INVESTOR") UNLESS THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER ARE
PROVIDED WITH AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE,
THE DEPOSITOR AND THE MASTER SERVICER TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE IS
PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN ANY NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT
ENACTMENTS), AND WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE MASTER SERVICER TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO
THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
DEPOSITOR OR THE MASTER SERVICER.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE (OR INTEREST
THEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION 5.02(e) OF THE POOLING AND SERVICING
AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, ANY
SUBSERVICER, 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.
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. R-1 Percentage Interest: 100.00%
Date of Pooling and Servicing Agreement Master Servicer:
and Cut-off Date: March 1, 2007 Residential Funding Company, LLC
HOME EQUITY MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2007-KS3
evidencing a percentage interest in the distributions allocable to
the Class R Certificates with respect to a Trust Fund consisting
primarily of a pool of [fixed] [adjustable] interest rate, first [and
junior] lien mortgage loans on one- to four-family residential
properties sold by RESIDENTIAL ASSET SECURITIES CORPORATION
This Certificate is payable solely from the assets of the Trust Fund and does not represent an
obligation of or interest in Residential Asset Securities Corporation, the Master Servicer, the Trustee
referred to below, GMAC Mortgage Group, LLC or any of their affiliates. Neither this Certificate nor the
underlying mortgage loans are guaranteed or insured by any governmental agency or instrumentality or by
Residential Asset Securities Corporation, the Master Servicer, the Trustee, GMAC Mortgage Group, LLC or
any of their affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, LLC 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 Funding Company, LLC] is the registered owner of the
Percentage Interest evidenced by this Certificate in certain distributions with respect to the Trust
Fund consisting primarily of a pool of [fixed] [adjustable] interest rate, first [and junior] lien
mortgage loans on one- to four-family residential properties (the "Mortgage Loans"), sold by Residential
Asset Securities Corporation (hereinafter called the "Depositor," which term includes any successor
entity under the Agreement referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement) among the Depositor, the Master Servicer
and U.S. Bank National Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the 25th day of each
month or, if such 25th day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing as described in the Agreement, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of the month immediately
preceding the month of such distribution (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 the 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, (ii) any attempted or purported transfer of any Ownership Interest in this
Certificate in violation of such restrictions will be absolutely null and void and will vest no rights
in the purported transferee, and (iv) if any person other than a United States Person and a Permitted
Transferee acquires any Ownership Interest in this Certificate in violation of such restrictions, then
the Master Servicer will have the right, in its sole discretion and without notice to the Holder of this
Certificate, to sell this Certificate to a purchaser selected by the Master Servicer, which purchaser
may be the Master Servicer, or any affiliate of the Master Servicer, on such terms and conditions as the
Master Servicer may choose.
Notwithstanding the above, the final distribution on this Certificate will be made after due
notice of the pendency of such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose in St. Xxxx, Minnesota. The Holder of
this Certificate may have additional obligations with respect to this Certificate, including tax
liabilities.
No transfer of this Certificate will be made unless such transfer is exempt from the
registration requirements of the Securities Act of 1933, as amended, and any applicable state securities
laws or is made in accordance with said Act and laws. In the event that such a transfer is to be made,
(i) the Trustee or the Depositor may require an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee and the Depositor that such transfer is exempt (describing the
applicable exemption and the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, and of any applicable statute of any state and
(ii) the transferee shall execute an investment letter in the form described by the Agreement. The
Holder hereof desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Depositor, the Master Servicer and the Certificate Registrar acting on behalf of the Trustee against
any liability that may result if the transfer is not so exempt or is not made in accordance with such
Federal and state laws.
No transfer of this Certificate or any interest therein shall be made to any employee benefit
plan or other plan or arrangement subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code, or any 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 (each of the foregoing, a "Plan Investor") unless the Trustee, the
Depositor and the Master Servicer are provided with an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Depositor and the Master Servicer to the effect that the
purchase or holding of this Certificate is permissible under applicable law, will not constitute or
result in any non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
(or comparable provisions of any subsequent enactments), and will not subject the Trustee, the Depositor
or the Master Servicer to any obligation or liability (including obligations or liabilities under ERISA
or Section 4975 of the Code) in addition to those undertaken in the Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Depositor or the Master Servicer.
This Certificate is one of a duly authorized issue of Certificates issued in several Classes
designated as Home Equity 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.
Unless the certificate of authentication hereon has been executed by the Certificate
Registrar, by manual signature, this Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: _________________________________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class R Certificates referred to in the within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Certificate Registrar
By: _______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
___________________________________________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of assignee) the beneficial
interest evidenced by the within Trust Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate to the following
address:
___________________________________________________________________________________________________________________
Dated:_____________________ ____________________________________
Signature by or on behalf of assignor
_____________________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately available 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 E
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time, the "Agreement"),
dated as of March 1, 2007, by and among U.S. BANK NATIONAL ASSOCIATION, as trustee (including its
successors under the Pooling Agreement defined below, the "Trustee"), RESIDENTIAL ASSET SECURITIES
CORPORATION (together with any successor in interest, the "Company"), RESIDENTIAL FUNDING COMPANY, LLC,
as master servicer (together with any successor in interest or successor under the Pooling Agreement
referred to below, the "Master Servicer") and XXXXX FARGO BANK, NATIONAL ASSOCIATION (together with any
successor in interest or any successor appointed hereunder, the "Custodian").
W I T N E S S E T H T H A T:
WHEREAS, the Company, the Master Servicer, and the Trustee have entered into a Pooling and
Servicing Agreement, dated as of March 1, 2007, relating to the issuance of Residential Asset Securities
Corporation, Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2007-KS3 (as in effect
on the date of this Agreement, the "Original Pooling Agreement," and as amended and supplemented from
time to time, the "Pooling Agreement"); and
WHEREAS, the Custodian has agreed to act as agent for the Trustee for the purposes of receiving
and holding certain documents and other instruments delivered by the Company and the Master Servicer
under the Pooling Agreement, all upon the terms and conditions and subject to the limitations
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter set forth, the Trustee, the Company, the Master Servicer and the Custodian hereby agree as
follows:
ARTICLE I
Definitions
Capitalized terms used in this Agreement and not defined herein shall have the meanings
assigned in the Original Pooling Agreement, unless otherwise required by the context herein.
ARTICLE II
Custody of Mortgage Documents
Section 2.1 Custodian to Act as Agent: Acceptance of Custodial Files. The Company and the
Master Servicer hereby direct the Trustee to appoint Xxxxx Fargo Bank, National Association as the
Custodian hereunder. The Custodian, as the duly appointed agent of the Trustee for these purposes,
acknowledges receipt of the Custodial Files relating to the Mortgage Loans identified on the schedule
attached hereto (the "Custodial Files") and declares that it holds and will hold the Custodial Files as
agent for the Trustee, in trust, for the use and benefit of all present and future Certificateholders.
Section 2.2 Recordation of Assignments. If any Custodial File includes one or more
assignments of the related Mortgages to the Trustee that have not been recorded, each such assignment
shall be delivered by the Custodian to the Company for the purpose of recording it in the appropriate
public office for real property records, and the Company, at no expense to the Custodian, shall promptly
cause to be recorded in the appropriate public office for real property records each such assignment
and, upon receipt thereof from such public office, shall return each such assignment to the Custodian.
Section 2.3 Review of Custodial Files.
(a) On or prior to the Closing Date, the Custodian shall deliver to the Trustee an
Initial Certification in the form annexed hereto as Exhibit One evidencing receipt of a Custodial File
for each Mortgage Loan listed on the Schedule attached hereto (the "Mortgage Loan Schedule"). The
parties hereto acknowledge that certain documents referred to in Subsection 2.01(b)(i) of the Pooling
Agreement may be missing on or prior to the Closing Date and such missing documents shall be listed as a
Schedule to Exhibit One.
(b) Within 45 days after the Closing Date, the Custodian agrees, for the benefit
of Certificateholders, to review each Custodial File and to deliver to the Trustee an Interim
Certification in the form annexed hereto as Exhibit Two to the effect that all documents required to be
delivered pursuant to Section 2.01 (b) of the Pooling Agreement have been executed and received and that
such documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule, except for any
exceptions listed on Schedule A attached to such Interim Certification. For purposes of such review, the
Custodian shall compare the following information in each Custodial File to the corresponding
information in the Mortgage Loan Schedule: (i) the loan number, (ii) the borrower name and (iii) the
original principal balance. In the event that any Mortgage Note or Assignment of Mortgage has been
delivered to the Custodian by the Company in blank, the Custodian, upon the direction of the Company,
shall cause each such Mortgage Note to be endorsed to the Trustee and each such Assignment of Mortgage
to be completed in the name of the Trustee prior to the date on which such Interim Certification is
delivered to the Trustee. Within 45 days of receipt of the documents required to be delivered pursuant
to Section 2.01(c) of the Pooling Agreement, the Custodian agrees, for the benefit of the
Certificateholders, to review each such document, and upon the written request of the Trustee to deliver
to the Trustee an updated Schedule A to the Interim Certification. The Custodian shall be under no duty
or obligation to inspect, review or examine said documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable, or appropriate for the represented purpose or that
they have actually been recorded or that they are other than what they purport to be on their face, or
that the MIN is accurate. If in performing the review required by this Section 2.3 the Custodian finds
any document or documents constituting a part of a Custodial File to be missing or defective in respect
of the items reviewed as described in this Section 2.3(b), the Custodian shall promptly so notify the
Company, the Master Servicer and the Trustee.
(c) Upon receipt of all documents required to be in the Custodial Files the
Custodian shall deliver to the Trustee a Final Certification in the form annexed hereto as Exhibit Three
evidencing the completeness of the Custodial Files.
Upon receipt of written request from the Trustee, the Company or the Master Servicer, the
Custodian shall as soon as practicable supply the Trustee with a list of all of the documents relating
to the Mortgage Loans required to be delivered pursuant to Section 2.01(b) of the Pooling Agreement not
then contained in the Custodial Files.
Section 2.4 Notification of Breaches of Representations and Warranties. If the Custodian
discovers, in the course of performing its custodial functions, a breach of a representation or warranty
made by the Master Servicer or the Company as set forth in the Pooling Agreement with respect to a
Mortgage Loan relating to a Custodial File, the Custodian shall give prompt written notice to the
Company, the Master Servicer and the Trustee.
Section 2.5 Custodian to Cooperate: Release of Custodial Files. Upon the repurchase or
substitution of any Mortgage Loan pursuant to Article II of the Pooling Agreement or payment in full of
any Mortgage Loan, or the receipt by the Master Servicer of a notification that payment in full will be
escrowed in a manner customary for such purposes, the Master Servicer shall immediately notify the
Custodian by delivering to the Custodian a Request for Release (in the form of Exhibit Four attached
hereto or a mutually acceptable electronic form) and shall request delivery to it of the Custodial File.
The Custodian agrees, upon receipt of such Request for Release, promptly to release to the Master
Servicer the related Custodial File. Upon receipt of a Request for Release from the Master Servicer,
signed by a Servicing Officer, stating that (i) the Master Servicer or a Subservicer, as the case may
be, has made a deposit into the Certificate Account in payment for the purchase of the related Mortgage
Loan in an amount equal to the Purchase Price for such Mortgage Loan or (ii) the Company has chosen to
substitute a Qualified Substitute Mortgage Loan for such Mortgage Loan, the Custodian shall release to
the Master Servicer the related Custodial File. Upon written notification of a substitution, the Master
Servicer shall deliver to the Custodian and the Custodian agrees to accept the Mortgage Note and other
documents constituting the Custodial File with respect to any Qualified Substitute Mortgage Loan, upon
receiving written notification from the Master Servicer of such substitution.
From time to time as is appropriate for the servicing or foreclosures of any Mortgage Loan,
including, for this purpose, collection under any Primary Insurance Policy or any Mortgage Pool
Insurance Policy, the Master Servicer shall deliver to the Custodian a Request for Release certifying as
to the reason for such release. Upon receipt of the foregoing, the Custodian shall deliver the Custodial
File or such document to the Master Servicer. All Custodial Files so released to the Master Servicer
shall be held by it in trust for the Trustee for the use and benefit of all present and future
Certificateholders. The Master Servicer shall cause each Custodial File or any document therein so
released to be returned to the Custodian when the need therefor by the Master Servicer no longer exists,
unless (i) the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or (ii) the Custodial File or such document has been
delivered to an attorney, or to a public trustee or other public official as required by law, for
purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non-judicially, and the Master Servicer has delivered to the
Custodian an updated Request for Release signed by a Servicing Officer certifying as to the name and
address of the Person to which such Custodial File or such document was delivered and the purpose or
purposes of such delivery. Immediately upon receipt of any Custodial File returned to the Custodian by
the Master Servicer, the Custodian shall deliver a signed acknowledgement to the Master Servicer,
confirming receipt of such Custodial File.
Upon the written request of the Master Servicer, the Custodian will send to the Master Servicer
copies of any documents contained in the Custodial File.
Section 2.6 Assumption Agreements. In the event that any assumption agreement or
substitution of liability agreement is entered into with respect to any Mortgage Loan subject to this
Agreement in accordance with the terms and provisions of the Pooling Agreement, the Master Servicer
shall notify the Custodian that such assumption or substitution agreement has been completed by
forwarding to the Custodian the original of such assumption or substitution agreement, which shall be
added to the related Custodial File and, for all purposes, shall be considered a part of such Custodial
File to the same extent as all other documents and instruments constituting parts thereof.
ARTICLE III
Concerning the Custodian
Section 3.1 Custodian a Bailee and Agent of the Trustee. With respect to each Mortgage
Note, Mortgage and other documents constituting each Custodial File which are delivered to the
Custodian, the Custodian is exclusively the bailee and agent of the Trustee and has no instructions to
hold any Mortgage Note or Mortgage for the benefit of any person other than the Trustee, holds such
documents for the benefit of Certificateholders and undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement. Except upon compliance with the provisions of
Section 2.5 of this Agreement, no Mortgage Note, Mortgage or other document constituting a part of a
Custodial File shall be delivered by the Custodian to the Company or the Master Servicer or otherwise
released from the possession of the Custodian.
The Master Servicer shall promptly notify the Custodian in writing if it shall no longer be a
member of MERS, or if it otherwise shall no longer be capable of registering and recording Mortgage
Loans using MERS. In addition, the Master Servicer shall (i) promptly notify the Custodian in writing
when a MERS Mortgage Loan is no longer registered with and recorded under MERS and (ii) concurrently
with any such deregistration of a MERS Mortgage Loan, prepare, execute and record an original assignment
from MERS to the Trustee and deliver such assignment to the Custodian.
Section 3.2 Indemnification. The Company hereby agrees to indemnify and hold the
Custodian harmless from and against all claims, liabilities, losses, actions, suits or proceedings at
law or in equity, or any other expenses, fees or charges of any character or nature, which the Custodian
may incur or with which the Custodian may be threatened by reason of its acting as custodian under this
Agreement, including indemnification of the Custodian against any and all expenses, including attorney's
fees if counsel for the Custodian has been approved by the Company, and the cost of defending any
action, suit or proceedings or resisting any claim. Notwithstanding the foregoing, it is specifically
understood and agreed that in the event any such claim, liability, loss, action, suit or proceeding or
other expense, fee or charge shall have been caused by reason of any negligent act, negligent failure to
act or willful misconduct on the part of the Custodian, or which shall constitute a willful breach of
its duties hereunder, the indemnification provisions of this Agreement shall not apply.
Section 3.3 Custodian May Own Certificates. The Custodian in its individual or any other
capacity may become the owner or pledgee of Certificates with the same rights it would have if it were
not Custodian.
Section 3.4 Master Servicer to Pay Custodian's Fees and Expenses. The Master Servicer
covenants and agrees to pay to the Custodian from time to time, and the Custodian shall be entitled to,
reasonable compensation for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer shall pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and advances incurred or made by
the Custodian in accordance with any of the provisions of this Agreement (including the reasonable
compensation and the expenses and disbursements of its counsel and of all persons not regularly in its
employ), except any such expense, disbursement or advance as may arise from its negligence or bad faith.
Section 3.5 Custodian May Resign; Trustee May Remove Custodian. The Custodian may resign
from the obligations and duties hereby imposed upon it as such obligations and duties relate to its
acting as Custodian of the Mortgage Loans. Upon receiving such notice of resignation, the Trustee shall
either take custody of the Custodial Files itself and give prompt notice thereof to the Company, the
Master Servicer and the Custodian, or promptly appoint a successor Custodian by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning Custodian and one copy to
the successor Custodian. If the Trustee shall not have taken custody of the Custodial Files and no
successor Custodian shall have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The Trustee, at the direction of the Master Servicer and the Company, may remove the Custodian
at any time. In such event, the Trustee shall appoint, or petition a court of competent jurisdiction to
appoint, a successor Custodian hereunder. Any successor Custodian shall be a depository institution
subject to supervision or examination by federal or state authority and shall be able to satisfy the
other requirements contained in Section 3.7 and shall be unaffiliated with the Master Servicer or the
Company.
Any resignation or removal of the Custodian and appointment of a successor Custodian pursuant
to any of the provisions of this Section 3.5 shall become effective upon acceptance of appointment by
the successor Custodian. The Trustee shall give prompt notice to the Company and the Master Servicer of
the appointment of any successor Custodian. No successor Custodian shall be appointed by the Trustee
without the prior approval of the Company and the Master Servicer.
Section 3.6 Merger or Consolidation of Custodian. Any Person into which the Custodian may
be merged or converted or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Custodian shall be a party, or any Person succeeding to the
business of the Custodian, shall be the successor of the Custodian hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided that such successor is a depository institution subject to
supervision or examination by federal or state authority and is able to satisfy the other requirements
contained in Section 3.7 and is unaffiliated with the Master Servicer or the Company.
Section 3.7 Representations of the Custodian. The Custodian hereby represents that it is
a depository institution subject to supervision or examination by a federal or state authority, has a
combined capital and surplus of at least $15,000,000 and is qualified to do business in the
jurisdictions in which it will hold any Custodial File.
ARTICLE IV
Compliance with Regulation AB
Section 4.1 Intent of the Parties; Reasonableness. The parties hereto acknowledge and
agree that the purpose of this Article IV is to facilitate compliance by the Company with the provisions
of Regulation AB and related rules and regulations of the Commission. The Company shall not exercise
its right to request delivery of information or other performance under these provisions other than in
good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the
rules and regulations of the Commission under the Securities Act and the Exchange Act. Each of the
parties hereto acknowledges that interpretations of the requirements of Regulation AB may change over
time, whether due to interpretive guidance provided by the Commission or its staff, consensus among
participants in the mortgage-backed securities markets, advice of counsel, or otherwise, and agrees to
comply with requests made by the Company in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. The Custodian shall cooperate
reasonably with the Company to deliver to the Company (including any of its assignees or designees), any
and all disclosure, statements, reports, certifications, records and any other information necessary in
the reasonable, good faith determination of the Company to permit the Company to comply with the
provisions of Regulation AB.
Section 4.2 Additional Representations and Warranties of the Custodian.
(a) The Custodian hereby represents and warrants that the information set forth
under the caption "Pooling and Servicing Agreement—Custodial Arrangements" (the "Custodian Disclosure")
in the preliminary prospectus supplement relating to the Certificates and the final prospectus
supplement relating to the Certificates does not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(b) The Custodian shall be deemed to represent to the Company as of the date
hereof and on each date on which information is provided to the Company under Section 4.3 that, except
as disclosed in writing to the Company prior to such date: (i) there are no aspects of its financial
condition that could have a material adverse effect on the performance by it of its Custodian
obligations under this Agreement or any other Securitization Transaction as to which it is the
custodian; (ii) there are no material legal or governmental proceedings pending (or known to be
contemplated) against it; and (iii) there are no affiliations, relationships or transactions relating to
the Custodian with respect to the Company or any sponsor, issuing entity, servicer, trustee, originator,
significant obligor, enhancement or support provider or other material transaction party (as such terms
are used in Regulation AB) relating to the Securitization Transaction contemplated by the Agreement, as
identified by the Company to the Custodian in writing as of the Closing Date (each, a "Transaction
Party").
(c) If so requested by the Company on any date following the Closing Date, the
Custodian shall, within five Business Days following such request, confirm in writing the accuracy of
the representations and warranties set forth in paragraph (a) of this Section or, if any such
representation and warranty is not accurate as of the date of such confirmation, provide reasonably
adequate disclosure of the pertinent facts, in writing, to the requesting party. Any such request from
the Company shall not be given more than once each calendar quarter, unless the Company shall have a
reasonable basis for a determination that any of the representations and warranties may not be accurate.
Section 4.3 Additional Information to Be Provided by the Custodian. For so long as the
Certificates are outstanding, for the purpose of satisfying the Company's reporting obligation under the
Exchange Act with respect to any class of Certificates, the Custodian shall (a) notify the Company in
writing of any material litigation or governmental proceedings pending against the Custodian that would
be material to Certificateholders, and (b) provide to the Company a written description of such
proceedings. Any notices and descriptions required under this Section 4.3 shall be given no later than
five Business Days prior to the Determination Date following the month in which the Custodian has
knowledge of the occurrence of the relevant event. As of the date the Company or Master Servicer files
each Report on Form 10-D or Form 10-K with respect to the Certificates, the Custodian will be deemed to
represent that any information previously provided under this Section 4.3, if any, is materially correct
and does not have any material omissions unless the Custodian has provided an update to such
information. For purposes of this Section 4.3, "Determination Date" shall mean, with respect to any
Distribution Date, the 20th day (or if such 20th day is not a Business Day, the Business Day immediately
following such 20th day) of the month of the related Distribution Date and "Distribution Date" shall
mean, the 25th day of any month beginning in March 2007 or, if such 25th day is not a Business Day, the
Business Day immediately following such 25th day.
Section 4.4 Report on Assessment of Compliance and Attestation. On or before March 15 of
each calendar year, the Custodian shall:
(a) deliver to the Company a report (in form and substance reasonably satisfactory
to the Company) regarding the Custodian's assessment of compliance with the Servicing Criteria during
the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act
and Item 1122 of Regulation AB. Such report shall be addressed to the Company and signed by an
authorized officer of the Custodian, and shall address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit Five hereto; and
(b) deliver to the Company a report of a registered public accounting firm
reasonably acceptable to the Company that attests to, and reports on, the assessment of compliance made
by the Custodian and delivered pursuant to the preceding paragraph. Such attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange
Act.
Section 4.5 Indemnification; Remedies.
(a) The Custodian shall indemnify the Company, each affiliate of the Company, the
Master Servicer and each broker dealer acting as underwriter, placement agent or initial purchaser of
the Certificates or each Person who controls any of such parties (within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act); and the respective present and former directors,
officers, employees and agents of each of the foregoing, and shall hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them may sustain arising out of or based
upon:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in the Custodian Disclosure and any information, report, certification, accountants'
attestation or other material provided under this Article IV by or on behalf of the Custodian
(collectively, the "Custodian Information"), or (B) the omission or alleged omission to state in the
Custodian Information a material fact required to be stated in the Custodian Information or necessary in
order to make the statements therein, in the light of the circumstances under which they were made, not
misleading; or
(ii) any failure by the Custodian to deliver any information, report,
certification, accountants' attestation or other material when and as required under this Article IV.
(b) In the case of any failure of performance described in clause (ii) of
Section 4.5(a), the Custodian shall promptly reimburse the Company for all costs reasonably incurred by
the Company in order to obtain the information, report, certification, accountants' letter or other
material not delivered as required by the Custodian.
ARTICLE V
Miscellaneous Provisions
Section 5.1 Notices. All notices, requests, consents and demands and other communications
required under this Agreement or pursuant to any other instrument or document delivered hereunder shall
be in writing and, unless otherwise specifically provided, may be delivered personally, by telegram or
telex, or by registered or certified mail, postage prepaid, return receipt requested, at the addresses
specified on the signature page hereof (unless changed by the particular party whose address is stated
herein by similar notice in writing); in each case the notice will be deemed delivered when received.
Section 5.2 Amendments. No modification or amendment of or supplement to this Agreement
shall be valid or effective unless the same is in writing and signed by all parties hereto, and none of
the Company, the Master Servicer or the Trustee shall enter into any amendment of or supplement to this
Agreement except as permitted by the Pooling Agreement. The Trustee shall give prompt notice to the
Custodian of any amendment or supplement to the Pooling Agreement and furnish the Custodian with written
copies thereof.
Section 5.3 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF, OTHER
THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
Section 5.4 Recordation of Agreement. To the extent permitted by applicable law, this
Agreement is subject to recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the properties subject to the
Mortgages are situated, and in any other appropriate public recording office or elsewhere, such
recordation to be effected by the Master Servicer and at its expense on direction by the Trustee
(pursuant to the request of holders of Certificates evidencing undivided interests in the aggregate of
not less than 25% of the Trust Fund), but only upon direction accompanied by an Opinion of Counsel
reasonably satisfactory to the Master Servicer to the effect that the failure to effect such recordation
is likely to materially and adversely affect the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein provided and for
other purposes, this Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 5.5 Severability of Provisions. If any one or more of the covenants, agreements,
provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates or the rights of the
holders thereof.
[Signatures begin on following page]
IN WITNESS WHEREOF, this Agreement is executed as of the date first above written.
Address: U.S. BANK NATIONAL ASSOCIATION,
as Trustee
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000
By:_____________________________________
Attention: Structured Finance/RASC Series 2007-KS3 Name:
Title:
Address: RESIDENTIAL ASSET SECURITIES CORPORATION
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000 By:_____________________________________
Name:
Title:
Address: RESIDENTIAL FUNDING COMPANY, LLC, as Master Servicer
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000 By:_____________________________________
Name:
Title:
Address: XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Custodian
Mortgage Document Custody
One Meridian Crossings - LL
Xxxxxxxxx, Xxxxxxxxx 00000 By:_____________________________________
Name:
Title:
STATE OF MINNESOTA )
)ss.:
COUNTY OF XXXXXX )
On the ____ day of February 2007, before me, a notary public in and for said State,
personally appeared _____________, known to me to be a _________ of U.S. BANK NATIONAL ASSOCIATION, a
national banking association that executed the within instrument, and also known to me to be the person
who executed it on behalf of said national banking association and acknowledged to me that such national
banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day
and year in this certificate first above written.
___________________________________
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
)ss.:
COUNTY OF HENNEPIN )
On the ____ day of February 2007, before me, a notary public in and for said State,
personally appeared ___________________, known to me to be a ______________ of Residential Asset
Securities Corporation, one of the corporations that executed the within instrument, and also known to
me to be the person who executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day
and year in this certificate first above written.
___________________________________
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
)ss.:
COUNTY OF HENNEPIN )
On the ____ day of February 2007, before me, a notary public in and for said State,
personally appeared ___________________, known to me to be a ______________ of Residential Funding
Company, LLC, a limited liability company that executed the within instrument, and also known to me to
be the person who executed it on behalf of said limited liability company, and acknowledged to me that
such limited liability company executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day
and year in this certificate first above written.
___________________________________
Notary Public
[Notarial Seal]
STATE OF )
)ss.:
COUNTY OF )
On the ____ day of February 2007, before me, a notary public in and for said State,
personally appeared ______________________, known to me to be a ______________________________ Xxxxx
Fargo Bank, National Association, one of the entities that executed the within instrument, and also
known to me to be the person who executed it on behalf of said national banking association, and
acknowledged to me that such national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day
and year in this certificate first above written.
____________________________________
Notary Public
[Notarial Seal]
EXHIBIT ONE
FORM OF CUSTODIAN
INITIAL CERTIFICATION
February ___, 2007
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Structured Finance/RASC Series 2007-KS3
Re: Custodial Agreement, dated as of March 1, 2007, by and among U.S. Bank
National Association, Residential Asset Securities Corporation, Residential
Funding Company, LLC and Xxxxx Fargo Bank, National Association, relating to
Home Equity Mortgage Asset-Backed Pass-Through Certificates Series 2007-KS3
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement, and subject
to Section 2.02 of the Pooling Agreement, the undersigned, as Custodian, hereby certifies that it has
received a Custodial File (which contains an original Mortgage Note or an original Lost Note Affidavit
with a copy of the related Mortgage Note) to the extent required in Section 2.01(b) of the Pooling
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan Schedule, with any exceptions
listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective meanings assigned
to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By:________________________________
Name:______________________________
Title:_______________________________
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
February ___, 2007
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Structured Finance, RASC Series 2007-KS3
Re: Custodial Agreement, dated as of March 1, 2007, by and among U.S. Bank
National Association, Residential Asset Securities Corporation, Residential
Funding Company, LLC and Xxxxx Fargo Bank, National Association, relating to
Home Equity Mortgage Asset-Backed Pass-Through Certificates Series 2007-KS3
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement, the
undersigned, as Custodian, hereby certifies that it has received a Custodial File to the extent required
pursuant to Section 2.01(b) of the Pooling Agreement with respect to each Mortgage Loan listed in the
Mortgage Loan Schedule, and it has reviewed the Custodial File and the Mortgage Loan Schedule and has
determined that: all required documents have been executed and received and that such documents relate
to the Mortgage Loans identified on the Mortgage Loan Schedule, with any exceptions listed on Schedule A
attached hereto.
Capitalized words and phrases used herein shall have the respective meanings assigned
to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By:________________________________
Name:______________________________
Title:_______________________________
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
February ___, 2007
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attn: Structured Finance, RASC Series 2007-KS3
Re: Custodial Agreement, dated as of March 1, 2007, by and among U.S. Bank
National Association, Residential Asset Securities Corporation, Residential
Funding Company, LLC and Xxxxx Fargo Bank, National Association, relating to
Mortgage Asset-Backed Pass-Through Certificates, Series 2007-KS3
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement, the
undersigned, as Custodian, hereby certifies that it has received a Custodial File with respect to each
Mortgage Loan listed in the Mortgage Loan Schedule and it has reviewed the Custodial File and the
Mortgage Loan Schedule and has determined that: all required documents referred to in Section 2.01(b) of
the Pooling Agreement have been executed and received and that such documents relate to the Mortgage
Loans identified on the Mortgage Loan Schedule.
Capitalized words and phrases used herein shall have the respective meanings assigned
to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By:________________________________
Name:______________________________
Title:_______________________________
EXHIBIT FOUR
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you for the referenced pool,
we request the release of the Mortgage Loan File described below.
Pooling and Servicing Agreement, Dated:
Series#:
Account#:
Pool#:
Loan#:
MIN#:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection with such payments which
are required to be deposited have been or will be so deposited as provided in the Pooling and Servicing
Agreement."
______________________________
Residential Funding Company, LLC
Authorized Signature
****************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off documents being enclosed with a
copy of this form. You should retain this form for your files in accordance with the terms of the
Pooling and Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other: ________________________
___________________________
Name
___________________________
Title
___________________________
Date
EXHIBIT FIVE
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Custodian 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.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(1)(ii) activities.
------------------------------- --------------------------------------------------------------------- --------------------------
Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii) back-up servicer for the pool assets are maintained.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(1)(iv) agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Cash Collection and Administration
------------------------------- --------------------------------------------------------------------- --------------------------
Payments on pool assets are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
1122(d)(2)(i) days specified in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Disbursements made via wire transfer on behalf of an obligor or to
1122(d)(2)(ii) an investor are made only by authorized personnel.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(2)(iii) transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(2)(v) 13k-1(b)(1) of the Securities Exchange Act.
------------------------------- --------------------------------------------------------------------- --------------------------
Unissued checks are safeguarded so as to prevent unauthorized
1122(d)(2)(vi) access.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(2)(vii) specified in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Investor Remittances and Reporting
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(3)(i) servicer.
------------------------------- --------------------------------------------------------------------- --------------------------
Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth in
1122(d)(3)(ii) 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
1122(d)(3)(iii) days specified in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank
1122(d)(3)(iv) statements.
------------------------------- --------------------------------------------------------------------- --------------------------
Pool Asset Administration
------------------------------- --------------------------------------------------------------------- --------------------------
Collateral or security on pool assets is maintained as required by
1122(d)(4)(i) the transaction agreements or related asset pool documents. X
------------------------------- --------------------------------------------------------------------- --------------------------
Pool assets and related documents are safeguarded as required by
1122(d)(4)(ii) the transaction agreements. X
------------------------------- --------------------------------------------------------------------- --------------------------
Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or
1122(d)(4)(iii) requirements in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(iv) (e.g., escrow) in accordance with the related pool asset documents.
------------------------------- --------------------------------------------------------------------- --------------------------
The servicer's records regarding the pool assets agree with the
servicer's records with respect to an obligor's unpaid principal
1122(d)(4)(v) balance.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(vi) transaction agreements and related pool asset documents.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(vii) established by the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(viii) temporary (e.g., illness or unemployment).
------------------------------- --------------------------------------------------------------------- --------------------------
Adjustments to interest rates or rates of return for pool assets
with variable rates are computed based on the related pool asset
1122(d)(4)(ix) documents.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(x) of days specified in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(xi) other number of days specified in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(xii) 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 days specified in the transaction
1122(d)(4)(xiii) agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained
1122(d)(4)(xv) as set forth in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
EXHIBIT F-1
GROUP I LOAN SCHEDULE
[ON FILE AT RFC]
EXHIBIT F-2
GROUP II LOAN SCHEDULE
[ON FILE AT RFC]
EXHIBIT G
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you for the referenced pool,
we request the release of the Mortgage Loan File described below.
Pooling and Servicing Agreement, Dated:
Series#:
Account#:
Pool#:
Loan#:
MIN#:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection with such payments which
are required to be deposited have been or will be so deposited as provided in the Pooling and Servicing
Agreement."
______________________________
Residential Funding Company, LLC
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 H-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
Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2007-KS3, 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 Section 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 an electing large partnership 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. 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.
6. 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.
7. 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.
8. The Owner's Taxpayer Identification Number is ____________________.
9. 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.
10. 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
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 Annex I.
11. 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.
12. 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.
13. 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.
14. 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.
15. The Owner hereby certifies, represents and warrants to, and covenants with the
Depositor, the Trustee and the Master Servicer that the following statements in (a) or (b) are accurate:
(a) The Certificates are not being acquired by, and will not be transferred to, any
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 Internal Revenue Code of 1986, as amended (the "Code"), or any 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 (each of
the foregoing, a "Plan Investor"); or
(b) The Owner has provided the Trustee, the Depositor and the Master Servicer with an Opinion
of Counsel acceptable to and in form and substance satisfactory to the Trustee, the Depositor
and the Master Servicer to the effect that the purchase or holding of Certificates is permissible under
applicable law, will not constitute or result in any nonexempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Trustee, the Depositor, or the Master Servicer to any
obligation or liability (including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be at the expense of the Trustee, the Depositor or the Master Servicer.
In addition, the Owner hereby certifies, represents and warrants to, and covenants with, the
Depositor, the Trustee and the Master Servicer that the Owner will not transfer such Certificates to any
Plan Investor or person unless either such Plan Investor or person meets the requirements set forth in
either (a) or (b) above.
Capitalized terms used but not defined herein shall have the meanings assigned in the Pooling
and Servicing Agreement.
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on its behalf, pursuant
to the authority of its Board of Directors, by its [Title of Officer] and its corporate seal to be
hereunto attached, attested by its [Assistant] Secretary, this ____ day of ______________ 200__.
[NAME OF OWNER]
By: ___________________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
______________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known or proved to me
to be the same person who executed the foregoing instrument and to be the [Title of Officer] of the
Owner, and acknowledged to me that he executed the same as his free act and deed and the free act and
deed of the Owner.
Subscribed and sworn before me this_______________________ day of _________, 200_.
__________________________________________
NOTARY PUBLIC
COUNTY OF ______________________________
STATE OF ________________________________
My Commission expires the ___ day of __________,
20__
ANNEX I TO EXHIBIT H-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:
o 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;
o The accuracy of the estimated burden associated with the collection of information (see
below);
o How the quality, utility, and clarity of the information to be collected may be enhanced;
o 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
o Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of
service to provide information.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection
of information unless it displays a valid control number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on an estimated number of
respondents of 470 and an estimated average annual burden hours per respondent of one hour.
Books or records relating to a collection of information must be retained as long as their
contents may become material in the administration of any internal revenue law. Generally, tax returns
and tax return information are confidential, as required by 26 U.S.C. 6103.
Background
This document contains final regulations regarding the proposed amendments to 26 CFR part 1
under section 860E of the Internal Revenue Code (Code). The regulations provide the circumstances under
which a transferor of a noneconomic REMIC residual interest meeting the investigation and representation
requirements may avail itself of the safe harbor by satisfying either the formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules governing the transfer of
noneconomic REMIC residual interests. In general, a transfer of a noneconomic residual interest is
disregarded for all tax purposes if a significant purpose of the transfer is to enable the transferor to
impede the assessment or collection of tax. A purpose to impede the assessment or collection of tax (a
wrongful purpose) exists if the transferor, at the time of the transfer, either knew or should have
known that the transferee would be unwilling or unable to pay taxes due on its share of the REMIC's
taxable income. Under a safe harbor, the transferor of a REMIC noneconomic residual interest is
presumed not to have a wrongful purpose if two requirements are satisfied: (1) the transferor conducts a
reasonable investigation of the transferee's financial condition (the investigation requirement); and
(2) the transferor secures a representation from the transferee to the effect that the transferee
understands the tax obligations associated with holding a residual interest and intends to pay those
taxes (the representation requirement).
The IRS and Treasury have been concerned that some transferors of noneconomic residual
interests claim they satisfy the safe harbor even in situations where the economics of the transfer
clearly indicate the transferee is unwilling or unable to pay the tax associated with holding the
interest. For this reason, on February 7, 2000, the IRS published in the Federal Register (65 FR 5807) a
notice of proposed rulemaking (REG-100276-97; REG-122450-98) designed to clarify the safe harbor by
adding the "formula test," an economic test. The proposed regulation provides that the safe harbor is
unavailable unless the present value of the anticipated tax liabilities associated with holding the
residual interest does not exceed the sum of: (1) The present value of any consideration given to the
transferee to acquire the interest; (2) the present value of the expected future distributions on the
interest; and (3) the present value of the anticipated tax savings associated with holding the interest
as the REMIC generates losses.
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 February 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 November 19, 2002.
It is anticipated that when final regulations are adopted with respect to 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 November 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 H-2
FORM OF TRANSFEROR CERTIFICATE
______________, 20__
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Structured Finance/RASC Series 2007-KS3
Re: Mortgage Asset-Backed Pass-Through Certificates, Series 2007-KS3
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 2007-KS3, Class R (the
"Certificates"), pursuant to Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of March 1, 2007 among Residential Asset Securities Corporation, as
depositor (the "Depositor"), Residential Funding Company, LLC, as master servicer, and U.S. Bank
National Association, as trustee (the "Trustee"). All terms used herein and not otherwise defined shall
have the meanings set forth in the Pooling and Servicing Agreement. The Seller hereby certifies,
represents and warrants to, and covenants with, the Depositor 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 H-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 I
FORM OF INVESTOR REPRESENTATION LETTER
______________, 20__
Residential Asset Securities Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Structured Finance/RASC Series 0000-XX0
Xxxxxxxxxxx Funding Company, LLC
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Residential Funding Company, LLC Series 2007-KS3
Re: Home Equity Mortgage Asset-Backed Pass-Through Certificates,
Series 2007-KS3, Class [SB] [R]
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") $_____________ Initial Certificate Principal Balance of Home
Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2007-KS3, Class [SB] [R] (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of March 1, 2007 among Residential Asset Securities Corporation, as depositor (the
"Depositor"), Residential Funding Company, LLC, as master servicer (the "Master Servicer"), and U.S.
Bank National Association, as trustee (the "Trustee"). All terms used herein and not otherwise defined
shall have the meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Depositor, 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 Depositor 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 and (b) able to bear the economic risks of such an investment.
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 Depositor as has been requested by the Purchaser from the Depositor 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 Depositor 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 Depositor, the Purchaser acknowledges that such Memorandum was provided to it
by the Seller, that the Memorandum was prepared by the Depositor solely for use in
connection with the Original Sale and the Depositor 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
Depositor with respect to any damage, liability, claim or expense arising out of,
resulting from or in connection with (a) error or omission, or alleged error or
omission, contained in the Memorandum, or (b) any information, development or event
arising after the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security to any
person in any manner, (b) solicit any offer to buy or to accept a pledge, disposition
of other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) otherwise approach or negotiate
with respect to any Certificate, any interest in any Certificate or any other similar
security with any person in any manner, (d) make any general solicitation by means of
general advertising or in any other manner or (e) take any other action, that (as to
any of (a) through (e) above) would constitute a distribution of any Certificate under
the Act, that would render the disposition of any Certificate a violation of Section 5
of the Act or any state securities law, or that would require registration or
qualification pursuant thereto. The Purchaser will not sell or otherwise transfer any
of the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.
6. The Purchaser hereby certifies, represents and warrants to, and
covenants with the Depositor, the Trustee and the Master Servicer that the following
statements in (a) or (b) are correct:
(a) The Purchaser 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
Internal Revenue Code of 1986, as amended (the "Code"), or any 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 (each of the foregoing, a "Plan Investor"); or
(b) the Purchaser has provided the Trustee, the Depositor and the Master
Servicer with an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee, the Depositor and the Master Servicer to the effect that
the purchase or holding of Certificates is permissible under applicable law, will not
constitute or result in any nonexempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Trustee, the Depositor or the Master Servicer to
any obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the Pooling and Servicing
Agreement, which Opinion of Counsel shall not be an expense of the Trustee, the
Depositor or the Master Servicer.
In addition, the Purchaser hereby certifies, represents and warrants to, and covenants with,
the Depositor, the Trustee and the Master Servicer that the Purchaser will not transfer such
Certificates to any Plan Investor or person unless either such Plan Investor or person meets the
requirements set forth in either (a) or (b) above.
Very truly yours,
_____________________________________________________
(Purchaser)
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________
EXHIBIT J
FORM OF TRANSFEROR REPRESENTATION LETTER
______________, 20__
Residential Asset Securities Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Structured Finance/RASC Series 2007-KS3
Re: Home Equity Mortgage Asset-Backed Pass-Through Certificates,
Series 2007-KS3, Class [SB] [R]
Ladies and Gentlemen:
In connection with the sale by __________ (the "Seller") to __________ (the
"Purchaser") of $__________ Initial Certificate Principal Balance of Home Equity Mortgage Asset- Backed
Pass-Through Certificates, Series 2007-KS3, Class [SB] [R] (the "Certificates"), issued pursuant to the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of March 1, 2007 among
Residential Asset Securities Corporation, as depositor (the "Depositor"), Residential Funding Company,
LLC, as master servicer, and U.S. Bank National Association, as trustee (the "Trustee"). The Seller
hereby certifies, represents and warrants to, and covenants with, the Depositor 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,
_____________________________________________________
(Purchaser)
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________
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 Subservicer will
be entitled to any reimbursement pursuant to Section 3.10 on such Distribution Date for Advances or
Subservicer Advances previously made, (which will not be Advances or Subservicer Advances that were made
with respect to delinquencies which were subsequently determined to be Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses) and, if so, the Master Servicer
shall demand payment from Residential Funding of an amount equal to the amount of any Advances or
Subservicer Advances reimbursed pursuant to Section 3.10, to the extent such Advances or Subservicer
Advances have not been included in the amount of the Realized Loss in the related Mortgage Loan, and
shall distribute the same to the Class SB Certificateholders in the same manner as if such amount were
to be distributed pursuant to Section 4.02.
(b) Subject to subsection (c) below, prior to the later of the third Business Day
prior to each Distribution Date or the related Determination Date, the Master Servicer shall determine
whether any Realized Losses (other than Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess
Fraud Losses and Extraordinary Losses) will be allocated to the Class SB Certificates on such
Distribution Date pursuant to Section 4.05, and, if so, the Master Servicer shall demand payment from
Residential Funding of the amount of such Realized Loss and shall distribute the same to the Class SB
Certificateholders in the same manner as if such amount were to be distributed pursuant to Section 4.02;
provided, however, that the amount of such demand in respect of any Distribution Date shall in no event
be greater than the sum of (i) the additional amount of Accrued Certificate Interest that would have
been paid for the Class SB Certificateholders on such Distribution Date had such Realized Loss or Losses
not occurred plus (ii) the amount of the reduction in the Certificate Principal Balances of the Class SB
Certificates on such Distribution Date due to such Realized Loss or Losses. Notwithstanding such
payment, such Realized Losses shall be deemed to have been borne by the Certificateholders for purposes
of Section 4.05. Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses and
Extraordinary Losses allocated to the Class SB Certificates will not be covered by the Subordinate
Certificate Loss Obligation.
(c) Demands for payments pursuant to this Section shall be made prior to the later
of the third Business Day prior to each Distribution Date or the related Determination Date by the
Master Servicer with written notice thereof to the Trustee. The maximum amount that Residential Funding
shall be required to pay pursuant to this Section on any Distribution Date (the "Amount Available")
shall be equal to the lesser of (X) ________ minus the sum of (i) all previous payments made under
subsections (a) and (b) hereof and (ii) all draws under the Limited Guaranty made in lieu of such
payments as described below in subsection (d) and (Y) the then outstanding Certificate Principal
Balances of the Class SB Certificates, or such lower amount as may be established pursuant to Section
13.02. Residential Funding's obligations as described in this Section are referred to herein as the
"Subordinate Certificate Loss Obligation."
(d) The Trustee will promptly notify GMAC LLC 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 GMAC LLC, 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 GMAC LLC a written demand for payment by wire transfer, not later than the
second Business Day prior to the Distribution Date for such month, with a copy to the Master Servicer.
(e) All payments made by Residential Funding pursuant to this Section or amounts
paid under the Limited Guaranty shall be deposited directly in the Certificate Account, for distribution
on the Distribution Date for such month to the Class SB Certificateholders.
(f) The Depositor 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 Depositor obtains (subject to the provisions
of Section 10.01(f) as if the Depositor 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 GMAC LLC as of the date of
issuance of the Limited Guaranty and (b) the rating of the long term debt obligations of GMAC LLC at the
date of such substitution and (C) if the Class SB Certificates have been rated, the Depositor obtains
written confirmation from each Rating Agency that rated the Class SB Certificates at the request of the
Depositor that such substitution shall not lower the rating on the Class SB Certificates below the
lesser of (a) the then-current rating assigned to the Class SB Certificates by such Rating Agency and
(b) the original rating assigned to the Class SB Certificates by such Rating Agency. Any replacement of
the Limited Guaranty or Subordinate Certificate Loss Obligation pursuant to this Section shall be
accompanied by a written Opinion of Counsel to the substitute guarantor or obligor, addressed to the
Master Servicer and the Trustee, that such substitute instrument constitutes a legal, valid and binding
obligation of the substitute guarantor or obligor, enforceable in accordance with its terms, and
concerning such other matters as the Master Servicer and the Trustee shall reasonably request. Neither
the Depositor, 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 Depositor 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 Depositor shall also obtain a letter from each Rating Agency
that rated the Class SB Certificates at the request of the Depositor to the effect that such amendment,
reduction, deletion or cancellation will not lower the rating on the Class SB Certificates below the
lesser of (a) the then-current rating assigned to the Class SB Certificates by such Rating Agency and
(b) the original rating assigned to the Class SB Certificates by such Rating Agency, unless (A) the
Holder of 100% of the Class SB Certificates is Residential Funding or an Affiliate of Residential
Funding, or (B) such amendment, reduction, deletion or cancellation is made in accordance with Section
11.01(e) and, provided further that the Depositor obtains (subject to the provisions of Section 10.01(f)
as if the Depositor was substituted for the Master Servicer solely for the purposes of such provision),
in the case of a material amendment or supersession (but not a reduction, cancellation or deletion of
the Limited Guaranty or the Subordinate Certificate Loss Obligation), an Opinion of Counsel (which need
not be an opinion of independent counsel) to the effect that any such amendment or supersession will not
cause either (a) any federal tax to be imposed on the Trust Fund, including without limitation, any
federal tax imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code or (b) the Trust Fund to fail
to qualify as a REMIC at any time that any Certificate is outstanding. A copy of any such instrument
shall be provided to the Trustee and the Master Servicer together with an Opinion of Counsel that such
amendment complies with this Section 13.02.
EXHIBIT L
FORM OF LIMITED GUARANTY
RESIDENTIAL ASSET SECURITIES CORPORATION
Home Equity Mortgage Asset-Backed Pass-Through Certificates
Series 2007-KS3
__________, 20__
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Structured Finance/RASC Series 2007-KS3
Ladies and Gentlemen:
WHEREAS, Residential Funding Company, LLC, a Delaware limited liability company
("Residential Funding"), an indirect wholly-owned subsidiary of GMAC LLC, a Delaware limited liability
company ("GMAC"), plans to incur certain obligations as described under Section 12.01 of the Pooling and
Servicing Agreement dated as of March 1, 2007 (the "Servicing Agreement"), among Residential Asset
Securities Corporation (the "Depositor"), Residential Funding and U.S. Bank National Association (the
"Trustee") as amended by Amendment No. ___ thereto, dated as of ________, with respect to the Home Equity
Mortgage Asset-Backed Pass-Through Certificates, Series 2007-KS3 (the "Certificates"); and
WHEREAS, pursuant to Section 12.01 of the Servicing Agreement, Residential Funding
agrees to make payments to the Holders of the Class SB Certificates with respect to certain losses on
the Mortgage Loans as described in the Servicing Agreement; and
WHEREAS, GMAC desires to provide certain assurances with respect to the ability of
Residential Funding to secure sufficient funds and faithfully to perform its Subordinate Certificate
Loss Obligation;
NOW THEREFORE, in consideration of the premises herein contained and certain other
good and valuable consideration, the receipt of which is hereby acknowledged, GMAC agrees as follows:
2. 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 12.01 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 12.01(f) of the Servicing Agreement, or (y) the termination of the Trust Fund pursuant to the
Servicing Agreement.
3. 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 non-action on the part of Residential Funding or the
Trustee.
4. 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 12.02 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.
5. Successor. Except as otherwise expressly provided herein, the guarantee
herein set forth shall be binding upon GMAC and its respective successors.
6. Governing Law. This Limited Guaranty shall be governed by the laws of the
State of New York.
7. 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. __ to the
Servicing Agreement and GMAC hereby authorizes the Depositor and the Trustee to rely on the covenants
and agreements set forth herein.
8. Definitions. Capitalized terms used but not otherwise defined herein shall
have the meaning given them in the Servicing Agreement.
9. 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.
GMAC LLC
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________
Acknowledged by:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________
RESIDENTIAL ASSET SECURITIES
CORPORATION
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________
EXHIBIT M
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
__________, 20__
Residential Asset Securities Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Structured Finance/RASC Series 2007-KS3
Re: Home Equity Mortgage Asset-Backed Pass-Through Certificates,
Series 2007-KS3 Assignment of Mortgage Loan
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by U.S Bank National
Association (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 March 1, 2007 among Residential Asset Securities Corporation, as depositor (the
"Depositor"), Residential Funding Company, LLC, 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:
(ii) 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;
(iii) 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;
(iv) 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
(v) such assignment is at the request of the borrower under the related Mortgage
Loan.
Very truly yours,
_____________________________________________________
(Lender)
By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________
EXHIBIT N-1
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, pursuant to Section 5.02 of the Pooling and Servicing Agreement
(the "Agreement"), dated as of March 1, 2007 among Residential Funding Company, LLC, as master servicer
(the "Master Servicer"), Residential Asset Securities Corporation, as depositor (the "Depositor"), and
U.S. Bank National Association, as trustee (the "Trustee") warrants and represents to, and covenants
with, the Seller, the Trustee and the Master Servicer 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 I or Annex II. 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 of Class SB Certificates or Class R Certificates:
a. is not an employee benefit plan or other plan or arrangement subject
to the prohibited transaction provisions of ERISA or Section 4975 of the Code, or any 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; or
b. has provided the Trustee, the Depositor and the Master Servicer with
the Opinion of Counsel described in Section 5.02(e)(i) of the Agreement, which shall be
acceptable to and in form and substance satisfactory to the Trustee, the Depositor, and the
Master Servicer to the effect that the purchase or holding of this Certificate is permissible
under applicable law, will not constitute or result in any nonexempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), and will not subject the Trustee, the Depositor, or the Master Servicer
to any obligation or liability (including obligations or liabilities under ERISA or Section
4975 of the Code) in addition to those undertaken in the Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Depositor or the Master Servicer.
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 Purchaser
By: ___________________________________________________ By: ___________________________________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No._____________________________________________________ No._____________________________________________________
Date:___________________________________________________ Date:___________________________________________________
ANNEX I TO EXHIBIT N-1
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, as amended ("ERISA").
___ 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 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 II TO EXHIBIT N-1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A Investment
Representation to which this Certification is attached:
8. As indicated below, the undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified institutional buyer" as that term
is defined in Rule 144A under the Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family
of Investment Companies (as defined below), is such an officer of the Adviser.
9. In connection with purchases by Buyer, the Buyer is a "qualified institutional
buyer" as defined in SEC Rule 144A because (i) the Buyer is an investment company registered under the
Investment Company Act of 1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For purposes of determining
the amount of securities owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used.
____ The Buyer owned $___________________ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in the aggregate
$______________ in securities (other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
10. The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same investment adviser or investment
advisers that are affiliated (by virtue of being majority owned subsidiaries of the same parent or
because one investment adviser is a majority owned subsidiary of the other).
11. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of Investment Companies,
(ii) bank deposit notes and certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement and (vi) currency, interest rate
and commodity swaps.
12. The Buyer is familiar with Rule 144A and understands that each of the parties
to which this certification is made are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In addition, the Buyer will
only purchase for the Buyer's own account.
13. The undersigned will notify each of the parties to which this certification is
made of any changes in the information and conclusions herein. Until such notice, the Buyer's purchase
of Rule 144A Securities will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
______________________________________________________________
Print Name of Buyer
By: _____________________________________________________
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date: _____________________________________________________
EXHIBIT N-2
FORM OF REGULATION S TRANSFEREE CERTIFICATE
_____________________, 20__
Residential Asset Securities Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Structured Finance/RASC Series 2007-KS3
Re: Home Equity Mortgage Asset-Backed Pass-Through Certificates,
Series 2007-KS3
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") $_____________ Initial Certificate Principal Balance of Home
Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2007-KS3, Class SB (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as
of March 1, 2007 among Residential Asset Securities Corporation, as depositor (the "Depositor"),
Residential Funding Company, LLC, as master servicer (the "Master Servicer"), and U.S. Bank National
Association, as trustee (the "Trustee"). All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee and the Master Servicer that:
In connection with the undersigned's purchase of the Certificates, the undersigned
hereby represents, acknowledges and agrees as follows:
1. It is a Person that is not a "U.S. person" as defined in Regulation S under
the Securities Act that purchased the Certificates in an Offshore Transaction as defined in Regulation S
under the Securities Act and understands that the sale of the Certificates to it is being made in
reliance on the exemption from the registration requirements of the Securities Act provided by
Regulation S thereunder; and
2. (a) It is not an employee benefit plan or other plan or arrangement subject to
the prohibited transaction provisions of ERISA or Section 4975 of the Code, or any 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; or (b) it has
provided the Trustee, the Depositor and the Master Servicer with the Opinion of Counsel described in
Section 5.02(e)(i) of the Agreement, which shall be acceptable to and in form and substance satisfactory
to the Trustee, the Depositor, and the Master Servicer to the effect that the purchase or holding of
this Certificate is permissible under applicable law, will not constitute or result in any nonexempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code (or comparable provisions
of any subsequent enactments), and will not subject the Trustee, the Depositor, or the Master Servicer
to any obligation or liability (including obligations or liabilities under ERISA or Section 4975 of the
Code) in addition to those undertaken in the Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Depositor or the Master Servicer.
This certificate and the statements contained herein are made for your benefit.
[INSERT NAME OF TRANSFEREE]
By:_________________________________________
Name:_______________________________________
Title:______________________________________
Dated: ______________, 20__
EXHIBIT O
SWAP AGREEMENT
[ON FILE WITH THE TRUSTEE]
EXHIBIT P
FORM OF ERISA REPRESENTATION LETTER
__________, 20__
Residential Asset Securities Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bank National Association
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Structured Finance/RASC Series 0000-XX0
Xxxxxxxxxxx Funding Company, LLC
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Residential Asset Securities Corporation Series 2007-KS3
Re: Home Equity Mortgage Asset-Backed Pass-Through Certificates,
Series 2007-KS3, Class [__]
Ladies and Gentlemen:
[____________________________________] (the "Purchaser") intends to purchase from
[______________________________] (the "Seller") $[____________] Initial Certificate Principal Balance of
Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2007-KS3, Class ____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of March 1, 2007 among Residential Asset Securities Corporation, as the depositor
(the "Depositor"), Residential Funding Company, LLC, as master servicer (the "Master Servicer") and U.S.
Bank National Association, as trustee (the "Trustee"). All terms used herein and not otherwise defined
shall have the meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Depositor, the Trustee and the Master
Servicer that:
(a) The Purchaser 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 Internal Revenue Code of 1986, as amended (the "Code"), or
any 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 (each of the foregoing, a "Plan Investor"); or
(b) The Purchaser has provided the Trustee, the Depositor and the Master Servicer with
the Opinion of Counsel described in Section 5.02(e)(i) of the Agreement, which shall be
acceptable to and in form and substance satisfactory to the Trustee, the Depositor and the Master
Servicer to the effect that the purchase or holding of Certificates is permissible under applicable
law, will not constitute or result in any non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code (or comparable provisions of any subsequent enactments), and will
not subject the Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code) in addition to
those undertaken in the Pooling and Servicing Agreement, which Opinion of Counsel shall not be at the
expense of the Trustee, the Depositor or the Master Servicer.
In addition, the Purchaser hereby certifies, represents and warrants to, and covenants with,
the Depositor, the Trustee and the Master Servicer that the Purchaser will not transfer such
Certificates to any Plan Investor or person unless such Plan Investor or person meets the requirements
set forth in either (a) or (b) above.
.
Very truly yours,
_______________________________________
(Purchaser)
By: ____________________________________
Name: __________________________________
Title: ___________________________________
EXHIBIT Q
FORM OF SB-AM SWAP AGREEMENT
DATE: February 23, 2007
TO: U.S. Bank National Association, not in its individual capacity
but solely as supplemental interest trust trustee for the
benefit of RASC Series 2007-KS3 Supplemental Interest Trust,
acting on behalf of the Class A Certificateholders and Class M
Certificateholders under the Pooling and Servicing Agreement
identified below ("Party A")
ATTENTION: RASC Series 2007-KS3
FROM: U.S. Bank National Association, not in its individual capacity
but solely as supplemental interest trust trustee for the
benefit of RASC Series 2007-KS3 Supplemental Interest Trust,
acting on behalf of the Class SB Certificateholders under the
Pooling and Servicing Agreement identified below ("Party B")
SUBJECT: Payment Swap Confirmation and Agreement
REFERENCE NUMBER
The purpose of this letter agreement (the "Agreement") is to confirm the terms and conditions of the
Transaction entered into on the Trade Date specified below (the "Transaction") between Party A and Party
B. This Agreement, which evidences a complete and binding agreement between you and us to enter into the
Transaction on the terms set forth below, constitutes a "Confirmation" as referred to in the ISDA Form
Master Agreement (as defined below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement.
1. This Agreement is subject to and incorporates the 2000 ISDA Definitions (the "Definitions"), as
published by the International Swaps and Derivatives Association, Inc. ("ISDA"). You and we have agreed
to enter into this Agreement in lieu of negotiating a Schedule to the 1992 ISDA Master Agreement
(Multicurrency-Cross Border) form (the "ISDA Form Master Agreement") but, rather, an ISDA Form Master
Agreement shall be deemed to have been executed by you and us on the date we entered into the
Transaction. In the event of any inconsistency between the provisions of this Agreement and the
Definitions or the ISDA Form Master Agreement, this Agreement shall prevail for purposes of the
Transaction. Terms used and not otherwise defined herein, in the ISDA Form Master Agreement or the
Definitions shall have the meanings assigned to them in the Pooling and Servicing Agreement, dated as of
February 23, 2007, among Residential Asset Securities Corporation, as depositor, Residential Funding
Company, LLC, as master servicer, and U.S. Bank National Association, as trustee and supplemental
interest trust trustee (the "Pooling and Servicing Agreement"). Each reference to a "Section" or to a
"Section" "of this Agreement" will be construed as a reference to a Section of the 1992 ISDA Form Master
Agreement. Each capitalized term used herein that is not defined herein or in the 1992 ISDA Form Master
Agreement shall have the meaning defined in the Pooling and Servicing Agreement. Notwithstanding
anything herein to the contrary, should any provision of this Agreement conflict with any provision of
the Pooling and Servicing Agreement, the provision of the Pooling and Servicing Agreement shall apply.
2. The terms of the particular Transaction to which this Confirmation relates are as follows:
Trade Date:
Effective Date:
Termination Date: February 25, 2037 subject to adjustment in accordance with the
Business Day Convention.
Business Days: California, Minnesota, Texas, New York, Illinois.
Business Day Convention: Following.
Party A Payments:
Party A Payment Dates: Each Distribution Date under the Pooling and Servicing
Agreement.
Party A Payment Amounts: On each Party A Payment Date, the amount, if any, equal to the
aggregate amount of Net Swap Payments and Swap Termination
Payments owed to the Swap Counterparty remaining unpaid after
application of the sum of (A) from the Adjusted Available
Distribution Amount that would have remained had the Adjusted
Available Distribution Amount been applied on such
Distribution Date to make the distributions for such
Distribution Date under Section 4.02(c) clauses (i) through
(x) of the Pooling and Servicing Agreement, the sum of (I)
Accrued Certificate Interest on the Class SB Certificates,
(II) the amount of any Overcollateralization Reduction Amount
and (III) for each 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, (B) from prepayment charges on
deposit in the Certificate Amount, any prepayment charges
received on the Mortgage Loans during the related Prepayment
Period and (C) the amount distributable with respect to
REMIC IV Regular Interest IO.
Party B Payments:
Party B Payment Dates: Each Distribution Date under the Pooling and Servicing
Agreement
Party B Payment Amounts: On each Party B Payment Date, an amount equal to the lesser of
(a) the Available Distribution Amount remaining on such
Distribution Date after the distributions on such Distribution
Date under Section 4.02(c) clauses (i) through (vi) of the
Pooling and Servicing Agreement and (b) the aggregate unpaid
Basis Risk Shortfalls allocated to the Class A
Certificateholders and the Class M Certificateholders for such
Distribution Date.
3. Additional Provisions: Each party hereto is hereby advised and acknowledges that the other
party has engaged in (or refrained from engaging in) substantial financial transactions and has taken
(or refrained from taking) other material actions in reliance upon the entry by the parties into the
Transaction being entered into on the terms and conditions set forth herein and in the ISDA Form Master
Agreement relating to such Transaction, as applicable.
4. Provisions Deemed Incorporated in a Schedule to the ISDA Form Master Agreement:
1) Termination Provisions. For purposes of the ISDA Form Master Agreement:
(a) "Specified Entity" is not applicable to Party A or Party B for any
purpose.
(b) "Specified Transaction" is not applicable to Party A or Party B for
any purpose, and, accordingly, Section 5(a)(v) shall not apply to Party A or
Party B.
(c) The "Cross Default" provisions of Section 5(a)(vi) shall not apply to
Party A or Party B.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will
not apply to Party A or Party B.
(e) With respect to Party A and Party B, the "Bankruptcy" provision of
Section 5(a)(vii)(2) of the ISDA Form Master Agreement will be deleted in its
entirety.
(f) The "Automatic Early Termination" provision of Section 6(a) will not
apply to Party A or to Party B.
(g) Payments on Early Termination. For the purpose of Section 6(e) of the
ISDA Form Master Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(h) "Termination Currency" means United States Dollars.
(i) The provisions of Sections 5(a)(ii), 5(a)(iii) and 5(a)(iv) shall not
apply to Party A or Party B.
(j) Tax Event. The provisions of Section 2(d)(i)(4) and 2(d)(ii) of the
ISDA Form Master Agreement shall not apply to Party A and Party A shall not be
required to pay any additional amounts referred to therein.
2) Tax Representations.
(a) Payer Representations. For the purpose of Section 3(e) of the ISDA Form Master
Agreement, each of Party A and Party B will make the following representations:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of
any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of
the ISDA Form Master Agreement) to be made by it to the
other party under this Agreement. In making this
representation, it may rely on:
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of the ISDA Form Master Agreement;
(ii) the satisfaction of the agreement contained in Sections
4(a)(i) or 4(a)(iii) of the ISDA Form Master Agreement and the
accuracy and effectiveness of any document provided by the other
party pursuant to Sections 4(a)(i) or 4(a)(iii) of the ISDA Form
Master Agreement; and
(iii) the satisfaction of the agreement of the other party
contained in Section 4(d) of the ISDA Form Master Agreement, provided
that it shall not be a breach of this representation where reliance
is placed on clause (ii) and the other party does not deliver a form
or document under Section 4(a)(iii) by reason of material prejudice
to its legal or commercial position.
(iv) Payee Representations. For the purpose of Section 3(f) of the ISDA
Form Master Agreement, Party A and Party B make the following representations:
None
3) Documents to be Delivered. For the purpose of Section 4(a) (i) and 4(a) (iii):
(1) Tax forms, documents, or certificates to be delivered are:
Party required to Form/Document/ Date by which to
deliver document Certificate Be delivered
Party A and Party B Any documents required or Promptly after the earlier of (i) reasonable
reasonably requested to allow demand by either party or (ii) learning that such
the other party to make form or document is required
payments under this Agreement
without any deduction or
withholding for or on the
account of any Tax or with
such deduction or withholding
at a reduced rate
(2) Other documents to be delivered are:
Party required Form/Document/ Date by which to be Covered by
to deliver Certificate delivered Section 3(d)
document Representation
Party A and Party B Any documents required by the Upon execution and Yes
receiving party to evidence the delivery of this
authority of the delivering party Agreement and such
for it to execute and deliver this Confirmation
Agreement, any Confirmation to
which it is a party, and to
evidence the authority of the
delivering party to perform its
obligations under this Agreement
and such Confirmation.
Party A and Party B A certificate of an authorized Upon the execution Yes
officer of the party, as to the and delivery of this
incumbency and authority of the Agreement and such
respective officers of the party Confirmation
signing this Agreement
4) Miscellaneous. Miscellaneous
(a) Address for Notices: For the purposes of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address: RASC Series 2007-KS3 Supplemental Interest Trust
c/o U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000
with a copy to: Residential Funding Company, LLC
0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Facsimile: (000) 000-0000
(For all purposes)
Address for notices or communications to Party B:
Address: RASC Series 2007-KS3 Supplemental Interest Trust
c/o U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000
with a copy to: Residential Funding Company, LLC
0000 Xxxxxxxxxx Xxxx Xxxx., Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Facsimile No.: (000) 000-0000
(For all purposes)
(b) Process Agent. For the purpose of Section 13(c):
Party A: Not Applicable
Party B: Not Applicable
(c) Offices. The provisions of Section 10(a) will not apply to this
Agreement; neither Party A nor Party B have any Offices other than as set
forth in the Notices Section.
(d) Multibranch Party. For the purpose of Section 10(c) of the ISDA Form
Master Agreement, neither Party A nor Party B is a Multibranch. Party.
(e) Calculation Agent. The Calculation Agent is Residential Funding
Company, LLC.
(f) Credit Support Document.
Not Applicable
(g) Credit Support Provider.
Not Applicable
(h) Governing Law. The parties to this ISDA Agreement hereby agree that
the law of the State of New York shall govern their rights and duties in
whole, without regard to the conflict of law provision thereof, other than New
York General Obligations Law Sections 5-1401 and 5-1402.
(i) Non-Petition. Party A and Party B each hereby irrevocably and
unconditionally agrees that it will not institute against, or join any other
person in instituting against or cause any other person to institute against
RASC Series 2007-KS3 Supplemental Interest Trust, Mortgage Asset-Backed
Pass-Through Certificates, Series 2007-KS3, or the other party any bankruptcy,
reorganization, arrangement, insolvency, or similar proceeding under the laws
of the United States, or any other jurisdiction for the non-payment of any
amount due hereunder or any other reason until the payment in full of the
Certificates and the expiration of a period of one year plus ten days (or, if
longer, the applicable preference period) following such payment.
(j) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue
in full force and effect as if this Agreement had been executed with the
invalid or unenforceable portion eliminated, so long as this Agreement as so
modified continues to express, without material change, the original
intentions of the parties as to the subject matter of this Agreement and the
deletion of such portion of this Agreement will not substantially impair the
respective benefits or expectations of the parties.
The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid or
enforceable term, provision, covenant or condition, the economic effect of which comes
as close as possible to that of the invalid or unenforceable term, provision, covenant
or condition.
(k) [Intentionally Omitted].
(l) Waiver of Jury Trial. Each party to this Agreement respectively
waives any right it may have to a trial by jury in respect of any Proceedings
relating to this Agreement or any Credit Support Document.
(m) Set-Off. Notwithstanding any provision of this Agreement or any
other existing or future agreement, each party irrevocably waives any and all
rights it may have to set off, net, recoup or otherwise withhold or suspend or
condition payment or performance of any obligation between it and the other
party hereunder against any obligation between it and the other party under
any other agreements. The provisions for Set-off set forth in Section 6(e) of
the ISDA Form Master Agreement shall not apply for purposes of this
Transaction.
(n) This Agreement may be executed in several counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
(o) Supplemental Interest Trust Trustee Liability Limitations. It is
expressly understood and agreed by the parties hereto that (a) this Agreement
is executed and delivered by U.S. Bank National Association, not individually
or personally but solely as Supplemental Interest Trust Trustee of Party A and
Party B, in the exercise of the powers and authority conferred and vested in
it and that U.S. Bank National Association shall perform its duties and
obligations hereunder in accordance with the standard of care set forth in
Article VIII of the Pooling and Servicing Agreement, (b) each of the
representations, undertakings and agreements herein made on the part of Party
A and Party B is made and intended not as personal representations,
undertakings and agreements by U.S. Bank National Association but is made and
intended for the purpose of binding only Party A and Party B, (c) nothing
herein contained shall be construed as creating any liability on U.S. Bank
National Association, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties hereto and by any Person claiming by,
through or under the parties hereto; provided that nothing in this paragraph
shall relieve U.S. Bank National Association from performing its duties and
obligations hereunder and under the Pooling and Servicing Agreement in
accordance with the standard of care set forth therein, and (d) under no
circumstances shall U.S. Bank National Association be personally liable for
the payment of any indebtedness or expenses of Party A or Party B or be
liable for the breach or failure of any obligation, representation, warranty
or covenant made or undertaken by Party A or Party B under this Agreement or
any other related documents; provided, that nothing in this paragraph shall
relieve U.S. Bank National Association from performing its duties and
obligations hereunder and under the Pooling and Servicing Agreement in
accordance with the standard of care set forth herein and therein.
5) "Affiliate". Party A and Party B shall be deemed to not have any Affiliates
for purposes of this Agreement, including for purposes of Section 6(b)(ii).
6) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at the
end thereof the following subsection (g):
"(g) Relationship Between Parties.
Each party represents to the other party on each date when it enters into a
Transaction that:--
(1) Nonreliance. (i) It is not relying on any statement or
representation of the other party regarding the Transaction (whether written or oral), other than the
representations expressly made in this Agreement or the Confirmation in respect of that Transaction and
(ii) it has consulted with its own legal, regulatory, tax, business, investment, financial and
accounting advisors to the extent it has deemed necessary, and it has made its own investment, hedging
and trading decisions based upon its own judgment and upon any advice from such advisors as it has
deemed necessary and not upon any view expressed by the other party.
(2) Evaluation and Understanding.
(i) It has the capacity to evaluate (internally or
through independent professional advice) the Transaction and has made its own decision to enter into the
Transaction and has been directed by the Pooling and Servicing Agreement to enter into this Transaction;
and
(ii) It understands the terms, conditions and risks of
the Transaction and is willing and able to accept those terms and conditions and to assume those risks,
financially and otherwise.
(3) Purpose. It is entering into the Transaction for the
purposes of managing its borrowings or investments, hedging its underlying assets or liabilities or in
connection with a line of business.
(4) Status of Parties. The other party is not acting as agent,
fiduciary or advisor for it in respect of the Transaction.
(5) Eligible Contract Participant. It is an "eligible swap
participant" as such term is defined in Section 35.1(b)(2) of the regulations (17 C.F.R 35) promulgated
under, and it constitutes an "eligible contract participant" as such term is defined in Section 1(a)12
of the Commodity Exchange Act, as amended."
7) Account Details and Settlement Information:
Payments to Party A:
Payments to Party A shall be made in the same manner as
provided for in the Pooling and Servicing Agreement with
respect to the Class A Certificateholders and Class M
Certificateholders.
Payments to Party B:
Payments to Party B shall be made in the same manner as
provided for in the Pooling and Servicing Agreement with
respect to the Class SB Certificateholders.
Please sign and return to us a copy of this Agreement.
Very truly yours,
U.S. BANK NATIONAL ASSOCIATION, not in its
individual capacity but solely as supplemental
interest trust trustee for the benefit of RASC
Series 2007-KS3 Supplemental Interest Trust, acting
on behalf of the Class SB Certificateholders
By:________________________________________________
Name:
Title:
AGREED AND ACCEPTED AS OF THE TRADE DATE
U.S. BANK NATIONAL ASSOCIATION, not in its
individual capacity but solely as supplemental
interest trust trustee for the benefit of RASC
Series 2007-KS3 Supplemental Interest Trust, acting
on behalf of the Class A Certificateholders and
Class M Certificateholders
By:________________________________________________
Name:
Title:
EXHIBIT R
ASSIGNMENT AGREEMENT
[ON FILE WITH TRUSTEE]
EXHIBIT S
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.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(1)(ii) activities.
------------------------------- --------------------------------------------------------------------- --------------------------
Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii) back-up servicer for the pool assets are maintained.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(1)(iv) agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Cash Collection and Administration
------------------------------- --------------------------------------------------------------------- --------------------------
Payments on pool assets are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no more X (as to accounts held
than two business days following receipt, or such other number of by Trustee)
1122(d)(2)(i) days specified in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Disbursements made via wire transfer on behalf of an obligor or to X (as to investors
1122(d)(2)(ii) an investor are made only by authorized personnel. only)
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(2)(iii) transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with X (as to accounts held
respect to commingling of cash) as set forth in the transaction by Trustee)
1122(d)(2)(iv) agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(2)(v) 13k-1(b)(1) of the Securities Exchange Act.
------------------------------- --------------------------------------------------------------------- --------------------------
Unissued checks are safeguarded so as to prevent unauthorized
1122(d)(2)(vi) access.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(2)(vii) specified in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Investor Remittances and Reporting
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(3)(i) servicer.
------------------------------- --------------------------------------------------------------------- --------------------------
Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth in X
1122(d)(3)(ii) 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 X
1122(d)(3)(iii) days specified in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank X
1122(d)(3)(iv) statements.
------------------------------- --------------------------------------------------------------------- --------------------------
Pool Asset Administration
------------------------------- --------------------------------------------------------------------- --------------------------
Collateral or security on pool assets is maintained as required by
1122(d)(4)(i) the transaction agreements or related asset pool documents.
------------------------------- --------------------------------------------------------------------- --------------------------
Pool assets and related documents are safeguarded as required by
1122(d)(4)(ii) the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or
1122(d)(4)(iii) requirements in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(iv) (e.g., escrow) in accordance with the related pool asset documents.
------------------------------- --------------------------------------------------------------------- --------------------------
The servicer's records regarding the pool assets agree with the
servicer's records with respect to an obligor's unpaid principal
1122(d)(4)(v) balance.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(vi) transaction agreements and related pool asset documents.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(vii) established by the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(viii) temporary (e.g., illness or unemployment).
------------------------------- --------------------------------------------------------------------- --------------------------
Adjustments to interest rates or rates of return for pool assets
with variable rates are computed based on the related pool asset
1122(d)(4)(ix) documents.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(x) of days specified in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(xi) other number of days specified in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
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
1122(d)(4)(xii) 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 days specified in the transaction
1122(d)(4)(xiii) agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained X
1122(d)(4)(xv) as set forth in the transaction agreements.
------------------------------- --------------------------------------------------------------------- --------------------------
EXHIBIT T-1
FORM OF FORM 10-K CERTIFICATION
I, [identify the certifying individual], certify that:
1. I have reviewed the annual report on Form 10-K for the fiscal year [____], and all
reports on Form 8-K containing distribution or servicing reports filed in respect of periods included in
the year covered by that annual report, of the trust (the "Trust") created pursuant to the Pooling and
Servicing Agreement dated as of March 1, 2007 (the "P&S Agreement") among Residential Asset Securities
Corporation (the "Depositor"), Residential Funding Company, LLC (the "Master Servicer") and U.S. Bank
National Association (the "Trustee");
2. Based on my knowledge, the information in these reports, taken as a whole, does 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 as
of the last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required to be provided to the
Trustee by the Master Servicer under the P&S Agreement for inclusion in these reports is included in
these reports;
4. I am responsible for reviewing the activities performed by the Master Servicer under
the P&S Agreement and based upon my knowledge and the annual compliance review required under the P&S
Agreement, and, except as disclosed in the reports, the Master Servicer has fulfilled its obligations
under the P&S Agreement; and
5. The reports disclose all significant deficiencies relating to the Master Servicer's
compliance with the minimum servicing standards based upon the report provided by an independent public
accountant, after conducting a review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers as set forth in the P&S Agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied on the information provided to me
by the following unaffiliated parties: [the Trustee].
IN WITNESS WHEREOF, I have duly executed this certificate as of _________, 20__.
____________________________
Name:
Title:
* to be signed by the senior officer in charge of the servicing functions of the Master Servicer
EXHIBIT T-2
FORM OF BACK-UP CERTIFICATE TO FORM 10-K CERTIFICATION
The undersigned, a Responsible Officer of [______________] (the "Trustee") certifies that:
1. The Trustee has performed all of the duties specifically required to be performed by it
pursuant to the provisions of the Pooling and Servicing Agreement dated as of March 1, 2007
(the "Agreement") by and among Residential Asset Securities Corporation, as depositor,
Residential Funding Company, LLC, as master servicer, and the Trustee in accordance with the
standards set forth therein.
2. Based on my knowledge, the list of Certificateholders as shown on the Certificate Register as
of the end of each calendar year that is provided by the Trustee pursuant to
Section 4.03(e)(I) of the Agreement is accurate as of the last day of the 20[ ] calendar year.
Capitalized terms used and not defined herein shall have the meanings given such terms in the
Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of _________, 20__.
____________________________
Name:
Title:
EXHIBIT U
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 V
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 2007-KS3, Class SB, issued pursuant to the Pooling
and Servicing Agreement dated as of March 1, 2007 among Residential Asset Securities
Corporation, Residential Funding Company, LLC, and
U.S. Bank National Association, 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 W
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR OR CEDEL
U.S. Bank National Association
Re: Residential Asset Securities Corporation, Home Equity Mortgage Asset-Backed
Pass-Through Certificates, Series 2007-KS3, Class SB, issued pursuant to the Pooling
and Servicing Agreement dated as of March 1, 2007 among Residential Asset Securities
Corporation, Residential Funding Company, LLC, and U.S. Bank
National Association, 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, Société anonyme
